JPMorgan Updates By-laws In Case Of "Nuclear Disaster" Or World War III

In the most bizarre news of the day, Bloomberg"s Hugh Son noticed that in a late Thursday filing, the board of JPMorgan approved a series of revisions to the bank"s by-laws, including a particularly notable one: a new section defining what constitutes a quorum in an emergency resulting from "an attack on the United States" or a “nuclear or atomic disaster.” That scenario is listed among emergencies that - understandably - might make it hard to hold a normal meeting for board members of America"s largest bank.

The clause can be activated not just in case of a nuclear disaster or World War III, but also in a variety of situations including "without limitation apparent terrorist activity or the imminent threat of such activity, chemical and biological attacks, natural disasters, or other hazards or causes commonly known as acts of God."

In short, JPMorgan"s Board has decided it is time to seriously consider a TEOTWAWKI scenario.

As Son notes, in such an event, any member of the board or the firm’s operating committee can call a meeting using “any available means of communication.” And, just in case everyone else on the Board happens to die, one person will be sufficient to constitute a quorum. Vacancies can be filled by a majority vote of available directors. And if none are around, then designated officers can stand in. No officer, director or employee can be held liable in such a situation, except for “willful misconduct.”

The revised Emergency By-Laws are reposted below (highlights ours):

ARTICLE XI

Emergency By-laws

Section 11.01. Emergency By-laws. This Article XI shall be operative during any emergency resulting from an attack on the United States or on a locality in which the Corporation conducts its business or customarily holds meetings of its Board or its stockholders, or during any nuclear or atomic disaster, or during the existence of any catastrophe or other similar emergency condition (including without limitation apparent terrorist activity or the imminent threat of such activity, chemical and biological attacks, natural disasters, or other hazards or causes commonly known as acts of God), as a result of which a quorum of the Board or the Executive Committee thereof cannot readily be convened for action (an “Emergency”), notwithstanding any different or conflicting provisions in the preceding Articles of these By-laws, the Certificate of Incorporation or the General Corporation Law. To the extent not inconsistent with the provisions of this Article XI, the By-laws provided in the other Articles of these By-laws and the provisions of the Certificate of Incorporation shall remain in effect during such Emergency and upon termination of such Emergency, the provisions of this Article XI shall cease to be operative.

Section 11.02. Meetings. During any Emergency, a meeting of the Board, or any committee thereof, may be called by the Chairman or any other member of the Board or the Chief Executive Officer, or any member of the Corporation’s Operating Committee (each, a “Designated Officer” and collectively, the “Designated Officers”), or the Secretary. Notice of the time and place of any meeting of the Board or any committee thereof during an Emergency shall be given by any available means of communication by the individual calling the meeting to such of the directors and/or Designated Officers who shall be deemed to be directors of the Corporation for purposes of obtaining a quorum during an Emergency if a quorum of directors cannot otherwise be obtained during such Emergency, in each case, as it may be feasible to reach. Such notice shall be given at such time in advance of the meeting as, in the judgment of the individual calling the meeting, circumstances permit.

Section 11.03. Quorum. At any meeting of the Board, or any committee thereof, called in accordance with Section 11.02 above, the presence of one director shall constitute a quorum for the transaction of business. Vacancies on the Board, or any committee thereof, may be filled by a majority vote of the directors in attendance at the meeting. In the event that no directors are able to attend the meeting of the Board, then the Designated Officers in attendance shall serve as directors for the meeting, without any additional quorum requirement and will have full powers to act as directors of the Corporation for such meeting.

Section 11.04. Amendments. At any meeting called in accordance with Section 11.02 above, the Board or a committee of the Board, as the case may be, may modify, amend or add to the provisions of this Article XI so as to make any provision that may be practical or necessary for the circumstances of the Emergency.

Section 11.05. Management Contingency Plan. During an Emergency, the Corporation shall be managed by the Operating Committee under the direction of the Chief Executive Officer. In the absence of the Chief Executive Officer or his or her successor, the Operating Committee shall act under the direction of the Operating Committee member with the longest tenure with the Corporation.

Section 11.06. Liability. No officer, director or employee of the Corporation acting in accordance with the provisions of this Article XI shall be liable except for willful misconduct.

Section 11.07. Repeal or Change. The provisions of this Article XI shall be subject to repeal or change by further action of the Board or by action of the stockholders, but no such repeal or change shall modify the provisions of Section 11.06 of this Article XI with regard to action taken prior to the time of such repeal or change.

Section 11.08. Termination of Emergency. The provisions of this Article XI shall cease to be operative upon the termination of the Emergency as determined by a quorum of the Board or the Executive Committee thereof in accordance with Sections 2.06 and 3.01, respectively, of these By-laws.

Look Who Kalanick Just Appointed To The Uber Board Without Consulting Anyone

It looks like Travis Kalanick is preparing for all-out war in the Uber boardroom.

The Uber co-founder and former chief executive officer - who retains control over three board seats, including his own - has finally filled his long-vacant seats. And guess whom he picked to fill them? Former Xerox Corp. Chairwoman and CEO Ursula Burns...and former Merrill Lynch Chairman and CEO John Thain, "ratcheting up a Machiavellian battle for control of the world’s most valuable startup" as Bloomberg put it. Uber immediately challenged the appointments, calling them "a complete surprise."

“I am appointing these seats now in light of a recent board proposal to dramatically restructure the board and significantly alter the company’s voting rights,” Kalanick said in a statement emailed to Bloomberg. “It is therefore essential that the full board be in place for proper deliberation to occur, especially with such experienced board members as Ursula and John.”

As many may remember, Thain was the last CEO and chairman of Merrill Lynch before it was absorbed by Bank of American during the financial crisis. The last leader of an independent Merrill Lynch was roundly criticized for the same venal behavior as other too-big-to-fail CEOs - BOA paid a $16.7 billion fine in 2014, at the time the largest single settlement in US history, partly for Merrill"s witholding of crucial information (namely, that the products were stuffed with garbage subprime loans while being marketed as AAA) to buyers of its MBS and CDO products. There was, of course, also the whole $35,000 "commode on legs" incident as part of Thain"s $1.2 million office redecoration (which also included $17,100 traveling toilet boxes and a $15,000 dog umbrella stand).

Thain was, appropriately, singled out for criticism by former President Barack Obama, who accused him of "lining his pockets" - and those of his employees - at the taxpayers" expense by handing out massive bonuses after BofA accepted $45 billion in TARP funds.

Kalanick - who resigned as CEO on June 20 after a longrunning battle between him and the company"s largest shareholder, Benchmark Capital - is making the appointments without consulting the rest of the board, according to the Wall Street Journal, which broke the story. He was granted control of three board seats as part of $3.5 billion investment from a Saudi wealth fund in 2016.

The appointment is particularly controversial because Kalanick is presently being sued by Benchmark, who claim he mislead the company"s investors in order to gain control over an additional board seat, and as such the appointments appear to be the latest salvo in Kalanick"s war with Benchmark.

As WSJ noted, the appointments could serve to push back against Benchmark, which also holds a board seat and led other members in a coup to push Kalanick out, which has proposed a new voting structure for shareholders allowing them to vote based on the size of their stake, rather than the current system which rewards the earliest investors with greater voting power. Travis confirmed as much in a statement to WSJ, when he said he believed the "full board should be in place" before boardmembers vote on the proposal.

“I am appointing these seats now in light of a recent board proposal to dramatically restructure the board and significantly alter the company’s voting rights,” Mr. Kalanick said in the statement. “It is therefore essential that the full board be in place for proper deliberation to occur, especially with such experienced board members as Ursula and John.”

It"s also notable that the appointments come just days after Softbank, which is in talks to potentially invest as much as $10 billion in the cash-burning ride-sharing company, reportedly struck a deal with Benchmark to do everything in its power to oppose Kalanick"s efforts to be reinstated as CEO if it becomes an Uber shareholder and gains a board seat.

According to Bloomberg, Uber expressed concern at Kalanick’s announcement: "The appointments of Ms. Burns and Mr. Thain to Uber’s board of directors came as a complete surprise to Uber and its board," the company said. “That is precisely why we are working to put in place world-class governance to ensure that we are building a company every employee and shareholder can be proud of.”

Uber’s board had been scheduled to vote Tuesday on a plan to revamp the company’s corporate governance, a person familiar with the matter said.

Kalanick remains supportive of Khosrowshahi, the person said. The former CEO saw the two appointments as a way to improve the company’s board of directors ahead of the impending vote on Uber’s governance structure, the person said.

To be sure, Kalanick has reportedly told friends and family that he has no intention of returning as CEO - though he might be interested in some kind of senior-level operations position. However, his actions would suggest something entirely different. Of course, considering the astounding run of scandals that erupted under his watch - from claims of sexual harassment, a federal bribery investigation, and the revelation that Uber intentionally blocked law enforcement agents from using its app - the notion of Kalanick returning as CEO seems almost incongruous. Since leaving, his legacy has only been further tarnished by the London taxi regulator"s decision to revoke the company"s operating license, citing abuses that largely occurred during his tenure.

But regardless of whether Kalanick"s ultimate aim is to return as CEO, there"s a more pressing matter at hand: Preventing Benchmark, his primary boardroom nemisis, from asserting even more control even as skepticism continues to grow about the mega valuation of the cash-burning, regulator-flouting Silicon Valley unicorn he helped create.

Wells Meeting Turns Into Screaming Match, Shareholder Kicked Out After "Physical Approach" Toward Board Member

What may be the most controversial annual shareholder meeting in Wells Fargo history, in which the board is seeking re-election after last year"s misselling scandal, devolved into a screaming match on Tuesday morning and was briefly halted following interruptions by angry shareholders as the bank"s chairman and chief executive tried to calm nerves ahead of a vote that could oust the majority of its board.

According to Reuters, at least one shareholder was ejected and the meeting went into recess after he made what Chairman Stephen Sanger called a "physical approach" toward a board member. Others were escorted out and the meeting was interrupted several times as investors demanded answers related to the bank having created as many as 2.1 million unauthorized accounts in customers" names without their permission.

"You"re saying we"re out of order. Wells Fargo has been out of order for years!" the first angry shareholder said, before being ejected. Board Chairman Sanger and Chief Executive Tim Sloan repeatedly asked him to sit down because he was out of order, and then called a recess, only to have other shareholders stand and shout.

The meeting is unusual in that a dozen of Wells Fargo"s 15 directors on the ballot, who have come under fire after it was discovered that employees in its retail banking business had been creating accounts under customer"s names without their knowledge for years, face a rare negative recommendations from Institutional Shareholder Services (ISS). The influential proxy adviser argued that the group, including Chairman Stephen Sanger, failed in their oversight duties, although Wells Fargo"s top investor Berkshire Hathaway has already voted in favor of the bank"s board. According to the WSJ the board is expected to remain having clinched a majority of the votes.

Wells Fargo"s guidelines require that directors offer to resign if they fail to receive a majority of votes cast. But in practice, directors who win with less than 80 percent support should consider exiting the board, said Charles Elson, a University of Delaware expert on corporate governance, Reuters notes. "If they"re below 80 (percent) I"d say they have a lot of soul-searching to do," he said.

The bank"s board and management have said steps taken to fix problems and punish employees responsible for abuses show there is now strong oversight, and that directors nominated deserve to be elected. But the public firestorm that hammered its shares and led to the resignation of then-Chairman and Chief Executive John Stumpf last year was not forgotten. They repeated those messages on Tuesday.

"It"s been a busy seven months but we are focused on making things right," Sloan said.

At most S&P 500 companies, director support averages around 95 percent of votes cast, according to pay consulting firm Semler Brossy. Typically a recommendation from ISS that investors vote "against" a director will reduce the support they receive by an average of 17 to 18 percentage points.

Should Wells Fargo directors win narrow majorities - between 50 to 80 percent of votes cast - the board would have to decide whether to accept any individual director"s resignation. University of Pennsylvania law professor Jill Fisch said a likely outcome, in the event of a close vote, would be for the board to bring in fresh faces over a period of months or longer. "From a business perspective that may be the best response you could make," she said. "You don"t want the whole leadership to be in flux."

Marissa Mayer Resigns From Yahoo Board; Yahoo To Be Renamed To Altaba

Four-and-a-half years after taking over as CEO of Yahoo, the company announced today, via an 8-K that Marissa Mayer is resigning from the board. Additionally the comany"s name with be change to Altaba (well it"s better than "Bahoo").

It"s been a bumpy ride...

Statement via 8-K

In connection with the previously announced pending sale by Yahoo! Inc. (“Yahoo” or the “Company”) of its operating business (the “Sale Transaction”) to Verizon Communications Inc. (“Verizon”) pursuant to the terms of a Stock Purchase Agreement, dated as of July 23, 2016, between the Company and Verizon, the Board of Directors of the Company (the “Board”) has made certain determinations with respect to the size and composition of the Board following the closing of the Sale Transaction (the “Closing”).

In light of the fact that following the Closing the Company will operate as an investment company under the Investment Company Act of 1940, the Board has determined that, immediately following the Closing, the size of the Board will be reduced to five (5) directors. Tor Braham, Eric Brandt, Catherine Friedman, Thomas McInerney and Jeffrey Smith will continue to serve as directors of the Company following the Closing, and Mr. Brandt will serve as Chairman of the Board. Each of David Filo, Eddy Hartenstein, Richard Hill, Marissa Mayer, Jane Shaw and Maynard Webb has indicated that he or she intends to resign from the Board effective upon the Closing, and that his or her intention to resign is not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

To facilitate the transition of the Company to an investment company following the Closing, the Board also determined that, effective January 9, 2017, Mr. Brandt will become Chairman of the Board and Mr. Webb will become Chairman Emeritus of the Board.

The Board also determined that, following the Closing, it intends to cause the Company’s name to be changed to Altaba Inc.

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On the bright side, she will ge to do a lot more of this.