Predecessor institutions

2009 and 2010 Initiatives –Actions taken during 2009 and 2010 include:

Special shareholder meetings –— The Board amendedof Directors is responsible for the By-laws in January 2010 to permit shareholders holding at least 20%oversight of the outstanding common shares (net of hedges) to call special meetings. This action reduced the ownership threshold required to call special meetings from 33 1/3% of outstanding common shares, and was taken in response to a shareholder proposal presented at our 2009 annual meeting calling for a 10% threshold. That proposal did not pass but received a substantial favorable vote.

Saymanagement on Pay –The Firm’s proxy statement for 2009 contained an advisory vote on executive compensation as required for participants in the U.S. Department of the Treasury’s Capital Purchase Program under the Troubled Asset Relief Program, or TARP. Shareholders approved the compensation of executives named in the Summary compensation table, as disclosed pursuant to the compensation disclosure rules of the U.S. Securities and Exchange Commission (SEC). The Firm repaid the TARP funds as soon as it was permitted to do so, on June 17, 2009.

Although the Firm is no longer required to do so, because of the current level of interest in executive compensation we are submitting to shareholders an advisory vote on both the Firm’s compensation principles and practices and their implementation for 2009. Please see Proposal 3 at page 33.

Compensation recovery policies –Our compensation recovery policies go beyond Sarbanes-Oxley and other minimum requirements. In addition to our long standing Board policy on recoupment in the event of a material restatementbehalf of the Firm’s financial results or a termination for cause, we have implemented provisions in 2009shareholders. The Board accomplishes this function acting directly and 2010 that enable cancellation or recovery if the award was based on materially inaccurate performance metrics or a misrepresentation by an employee, the employee engaged in conduct that causes material financial or reputational harm to the Firm orthrough its business activities, or, for certain senior employees, the employee failed to properly identify, raise or assess risks material to the Firm or its business activities. These policies are further described in the Compensation Discussion and Analysis section at page 12 and in Appendix D.

Majority voting for directors –In 2007, the Board amended the Firm’s By-laws to provide a majority voting standard for election of directors in uncontested elections (resignation by any incumbent director who is not re-elected) and plurality voting in any election that is contested.

Board leadership structure –JPMorgan Chase is governed by a Board of Directors.committees. Directors discharge their duties at Board and committee meetings and also through telephone contact and other communications with the Chairman and Chief Executive Officer (CEO)(“CEO”), management and others regarding matters of concern and interest to the Firm. Specific elements of our Board leadership structure are outlined in Appendix A and include:

Chairman of the Board – While the — The Firm’s Board of Directors has no setestablished policy on whether or not to have a non-executive chairman and believes that it should make that judgment based on circumstances and experience. The Board has determined that the most effective leadership model for ourthe Firm currently is that Mr. Dimon serveserves as both Chairman and Chief Executive Officer.

Presiding Director — The Firm’s Presiding Director –functions as a Lead Director, but the Board prefers the term Presiding Director to emphasize that all directors share equally in their responsibilities as members of the Board. The Presiding Director presides at executive sessions of non-managementindependent directors (generally held as part of each regularly scheduled Board meeting) and at all Board meetings at which the Chairman is not present, and has the authority to call meetings of non-managementindependent directors. The position rotates semi-annually,Presiding Director approves Board meeting agendas and schedules for each Board meeting, may add agenda items in his or her discretion, approves Board meeting materials for distribution to and consideration by the Board, facilitates communication between twothe Chairman and CEO and the independent directors, as appropriate, is available for consultation and communication with major shareholders where appropriate, upon reasonable request, and performs such other functions as the chair ofBoard directs. The Presiding Director is appointed annually by and from among the Compensation Committee, currently Mr. Raymond, serving from January through June, and the chair of the Governance Committee, currently Mr. Novak, serving from July through December. The duties are further described in Appendix A.

Committee Chairs – all — All are independent and are appointed annually appointed by the Board, approve agendas and material for respective committee meetings, and act as liaison between committee members and the Board and between committee members and senior management.

with laws and regulations. The Board of Directors exercises its oversight of risk management principally throughhas determined that Mr. Bell, Ms. Bowles and Mr. Jackson are audit committee financial experts as defined by the Board’s Risk PolicySEC.