Posted in: Sports, TV, WWE | Tagged: Vince McMahon, wrestling, wwe

WWE SEC Filing Details Vince McMahon's Power Grab

Yesterday, the wrestling world was shocked to learn that Vince McMahon intends to use his power as primary shareholder when it comes to voting power to reinstate himself as the Executive Chairman of the Board of WWE and initiate a strategic review process to consider selling the company. McMahon, who was ousted from power amidst a scandal involving hush money payments made in response to sexual misconduct claims, announced the plans himself in a press release, and though reports claim the board is against McMahon's return, it's not clear what, if anything, they can do to stop him.

Vince McMahon Takeover Plan Details Revealed

A new SEC filing published on WWE's corporate website goes into more detail about McMahon's plans, including naming which current members of the board will be ousted to make room for McMahon and his two associates, former WWE Co-Presidents George Barrios and Michelle Wilson:

On January 5, 2023, the Reporting Person acted by written consent (the "Written Consent") to remove JoEllen Lyons Dillon, Jeffrey R. Speed and Alan M. Wexler without cause as directors of the Issuer and to fill such vacancies by electing the Reporting Person, George Barrios and Michelle Wilson as directors of the Issuer.

Changes to WWE Bylaws

The filing goes on to list relevant portions of the company's bylaws, some of which have been changed by decree of McMahon. According to the filing, McMahon "also amended and restated the bylaws (the "A&R By-laws") of the Issuer to ensure that Issuer's corporate governance continues to properly enable and support stockholder rights."

Amongst the relevant changes are one that changes the number of board members required to call a meeting to enable McMahon or his associates to call one on their own:

provide that special meetings of the Board be called by or at the request of the Chairman, the President or at least two directors (rather than the Chairman, the President or a majority of the Board);

Additionally, the restated bylaws purport to prevent the board from overruling McMahon's decision as primary voting stockholder:

prohibit the Board from amending, altering, repealing or re-adopting any bylaw adopted, amended, altered or repealed by the stockholders of the Issuer;

And perhaps most notably, claim to grant McMahon as primary stockholder the ability to reject any new media deal, which would effectively prevent WWE from being able to access its primary revenue source, TV rights deals, without McMahon's approval, as well as preventing the board from making changes that could remove McMahon from his newly asserted power:

require approval of the stockholders of the Issuer prior to the Issuer (i) entering into, materially modifying or taking certain other actions with respect to certain media rights contracts or transactions, (ii) issuing stock or other voting securities (subject to certain exemptions) or (iii) entering into, modifying or taking certain other actions with respect to any contract or transaction that includes a "change of control" or similar provision related to the composition of the Board;

The filing also describes exactly how large a majority of voting power McMahon retains, which is stated as 81%:

The Reporting Person intends to participate in and influence the affairs of the Issuer, including with respect to the matters discussed above, through the exercise of his voting rights with respect to his shares of Class A Common Stock and Class B Common Stock. The Reporting Person currently controls approximately 81.0% of the Issuer's total voting power.

Here's What Vince McMahon Told the Board of Directors

Perhaps most interestingly, the document reveals the notice McMahon sent the WWE board to inform them of his plans, which you can read in full below:

WORLD WRESTLING ENTERTAINMENT, INC.

ACTION BY CONSENT OF STOCKHOLDER IN LIEU OF MEETING

JANUARY 5, 2023

The undersigned stockholder (the "Stockholder") of World Wrestling Entertainment, Inc. (the "Corporation"), a Delaware corporation, being the holder of record of outstanding shares of capital stock of the Corporation having not less than the minimum number of votes that would be necessary to authorize or take the following actions at a meeting of stockholders of the Corporation at which all shares entitled to vote thereon were present and voted, hereby consents to the adoption of, and hereby adopts, the following resolutions and does hereby take the following actions by consent without a meeting, without prior notice and without a vote, pursuant to Section 228 of the General Corporation Law of the State of Delaware (the "DGCL"), and hereby directs that this consent (this "Consent") be filed with the minutes of the proceedings of the Corporation:

WHEREAS, Section 228 of the DGCL provides that stockholders of the Corporation may act by a consent or consents in lieu of a meeting if such stockholder or stockholders hold the number of shares representing not less than the minimum number of votes that would be necessary to authorize or take such actions at a meeting at which all shares entitled to vote thereon were present and voted; and

AMENDMENT AND RESTATEMENT OF THE BYLAWS

WHEREAS, under Delaware law and pursuant to Section 9.01(ii) of the Amended and Restated By-Laws of the Corporation (as amended, the "Bylaws"), the stockholders entitled to vote are empowered to adopt, amend or repeal the Bylaws, and the Amended and Restated Certificate of Incorporation of the Corporation (as amended, the "Charter") contains no restrictions on the power of the Corporation's stockholders to amend the Bylaws.

NOW, THEREFORE, IT IS HEREBY RESOLVED, that, effective immediately, the Bylaws be, and hereby are, amended and restated in their entirety in the form attached hereto as Exhibit A, with a redline comparison to the prior form of the Bylaws attached hereto as Exhibit B.

REMOVAL OF MEMBERS OF THE BOARD OF DIRECTORS

WHEREAS, under Delaware law, the power to remove any director resides in the stockholders entitled to vote for the election of such director, and Article VI of the Charter and Article II, Section 2.12 of the Bylaws provide in relevant part that any director may be removed, with or without cause, by the stockholders entitled to vote for the election of such director.

NOW, THEREFORE, IT IS HEREBY RESOLVED, that, effective immediately, each of the following individuals be, and hereby is, removed, without cause, from the Board of Directors of the Corporation (the "Board of Directors") (the "Removal Resolution"):

JoEllen Lyons Dillon
Jeffrey R. Speed
Alan M. Wexler

FILLING OF VACANCIES ON THE BOARD OF DIRECTORS

WHEREAS, under Delaware law the power to fill director vacancies resides inherently in the stockholders, Article VI of the Charter grants the Board exclusive authority to fill newly created directorships but does not grant the Board exclusive authority to fill other vacant directorships, and Article II, Section 2.12 of the Bylaws provides in relevant part that any vacancy in the Board caused by the removal of a director by the stockholders may be filled by the stockholders entitled to vote for the election of the director so removed.

NOW, THEREFORE, IT IS HEREBY RESOLVED, that, effective immediately, each of the following individuals be, and hereby is, elected to fill a vacancy on the Board of Directors caused by the Removal Resolution:

George Barrios
Vincent K. McMahon
Michelle Wilson

The above resolutions and actions taken by this Consent shall have the same force and effect as if taken at a meeting of the stockholders of the issued and outstanding shares of capital stock of the Corporation entitled to vote thereon duly called and constituted pursuant to the Bylaws and the laws of the State of Delaware.

This consent may be executed in two or more counterparts, each of which shall be deemed an original and together constitute one and the same consent.

IN WITNESS WHEREOF, the undersigned Stockholder has executed this Consent as of the date first written above.

STOCKHOLDER
/s/ Vincent K. McMahon
Vincent K. McMahon

As of now, there has been no official response from WWE or its Board of Directors to McMahon's power play. Along with everyone else in the wrestling world, we'll be watching this story closely for new developments or statements from either Vince McMahon or WWE. You can read the complete filing here.

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