On Apple and Dante’s Inferno…

When it comes to reading SEC filings, like Dante’s Inferno, there’s definitely levels circles of hell. And bylaw changes clearly qualify as being close to the center of the earth because of the legalistic language that takes more than a few cups of coffee to get through. But yesterday, Apple (AAPL) filed this 8K with some fairly extensive changes to a section of its bylaws and since everything that Apple does — except apparently changes to its bylaws — is met with lots of navel-gazing, the coffee grinder was working over-time this morning.

First, here’s what Apple says the changes are all about: “On August 20, 2008, the Board of Directors of Apple Inc. (the “Company”) adopted the Amended Bylaws of the Company, amending Article V, Section 5.14 of the Company’s existing Bylaws to clarify the requirements for shareholders to provide timely notice to the Company for director nominations and other business intended to be brought before a shareholder meeting.”

It’s only after going back to the last time that Apple changed its bylaws back in February 2007, and then use 10K Wizard’s Compare Wizard feature that you can pick up on some of the changes which focus on how shareholders can nominate directors to Apple’s board. Here’s an example of some of the new language:

ii) For nominations or other business to be properly brought before an annual meeting of shareholders by a shareholder, the shareholder must have given timely notice thereof in proper written form to the Secretary of the Corporation and any such proposed business must constitute a proper matter for shareholder action under the Code. To be timely, a shareholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the first anniversary of the preceding year’s annual meeting (provided, however, that in the event that the date of the annual meeting is more than thirty days before or more than sixty (60) days after such anniversary date, notice by the shareholder must be so delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation).

Since I’m not a lawyer, it’s hard to say whether this is a routine check-up. It’s been about 18 months since Apple’s bylaws were last changed, so this could be routine. Or it could be some sort of defensive move meant to deter a potential shareholder activist.

What is clear, however, is that reading bylaws and interpreting the changes are Dante-esque, even with lots of coffee. If footnoted readers have some further interpretations to what some of these changes are all about, I’m sure everyone would appreciate it. You can download a copy of the marked up version here.


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