LW - Anthropic's Certificate of Incorporation by Zach Stein-Perlman

The Nonlinear Library: LessWrong

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Welcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: Anthropic's Certificate of Incorporation, published by Zach Stein-Perlman on June 12, 2024 on LessWrong.
Yesterday I obtained Anthropic's[1]
Certificate of Incorporation, and
its past versions, from the State of Delaware. I don't recommend reading it.[2] This post is about what the CoI tells us about Anthropic's
Long-Term Benefit Trust (context:
Maybe Anthropic's Long-Term Benefit Trust is powerless).
Tl;dr: the only new information of moderate importance is the voting thresholds necessary to modify Trust stuff. My concerns all still stand in some form. Absence of badness is a small positive update.
Anthropic has vaguely
described stockholders' power over the Trust:
a series of "failsafe" provisions . . . allow changes to the Trust and its powers without the consent of the Trustees if sufficiently large supermajorities of the stockholders agree. The required supermajorities increase as the Trust's power phases in
The CoI has details: amending the CoI to modify the Trust requires a vote reaching the "Transfer Approval Threshold," defined as:
(1) prior to the date that is the one-year anniversary of the Final Phase-In Date [note: "the Final Phase-In Date"
is in November 2024], either (a)(i) a majority of the Voting Common Stock then-outstanding and held by the Founders (as defined in the Voting Agreement), (ii) a majority of the Series A Preferred Stock then-outstanding and (iii) a majority of the voting power of the outstanding Preferred Stock entitled to vote generally (which for the avoidance of doubt shall exclude the Non-Voting Preferred Stock), but excluding the Series A Preferred Stock or (b) at least seventy-five percent (75%) of the
voting power of the then-outstanding shares of the Corporation's capital stock entitled to vote generally (which for the avoidance of doubt shall exclude the Non-Voting Preferred Stock and any voting power attributable to the Class T Common Stock) and
(2) on and following the date that is the one-year anniversary of the Final Phase-In Date, either (x)(i) at least seventy-five percent (75%) of the Voting Common Stock then outstanding and held by the Founders (as defined in the Voting Agreement), (ii) at least at least fifty percent (50%) of the Series A Preferred Stock then-outstanding and (iii) at least seventy-five percent (75%) of the voting power of the outstanding Preferred Stock entitled to vote generally (which for the avoidance of
doubt shall exclude the Non-Voting Preferred Stock), but excluding the Series A Preferred Stock or (y) at least eighty-five [percent] (85%) of the voting power of the then-outstanding shares of the Corporation's capital stock entitled to vote generally (which for the avoidance of doubt shall exclude the Non-Voting Preferred Stock and any voting power attributable to the Class T Common Stock)
If Anthropic's description above is about this, it's odd and misleading. Perhaps Anthropic's description is about the Trust Agreement, not just the CoI.
Per Article IX,[3] amending the CoI to modify the Trust also requires at least 75% of the board. This will apparently give the Trust tons of independence after it elects 3/5 of the board! Or at least, it will give the Trust tons of protection from CoI amendments - but not necessarily from Trust Agreement shenanigans; see below.
Before reading the CoI, I had 4 main questions/concerns about the Trust:[4]
1.
Morley et al.: "the Trust Agreement also authorizes the Trust to be enforced by the company and by groups of the company's stockholders who have held a sufficient percentage of the company's equity for a sufficient period of time," rather than the Trustees.
1. I don't really know what this means. And it's vague. It sounds like a straightforward way for Anthropic/stockholders to subvert the Trust.
2.
Morley et al.: the Trust and its powers can be amended "by a ...