[as presented in October
2013 for consideration of Forum participants]
The Dell Valuation Trust
has been organized to support independent investor interests in appraisal rights,
and has initiated the
proceedings for determination of intrinsic value with a petition
filed on the effective date of the buyout transaction, October 29,
2013. Following is a summary of provisions
for investor participation in the Trust, from an
October 8, 2013 Forum Report:
No need to file a petition, but free support to do so if
investor wants identification
Investors that authorize Trust management of their appraisal rights
investments will not have to file their own petitions or otherwise
appear formally in the Delaware court. The Trust will be filing a
single petition to establish its ability to represent the interests of
all Trust participants, using one participant’s Dell stock that had
been registered as directly owned prior to the record date so that
there could be no possible challenge to the petitioner’s status.
Any investor that wants to file its own petition, however, whether for
purposes of public identification in the court records or for any
other reason, will be able to do so with Trust support. There will be
no additional costs for this accommodation.
No need to engage attorney, but optional provisions for
Trust management of an investor’s appraisal rights will include the
legal services of Fish & Richardson to represent their interests in
the Delaware court appraisal proceedings, and for all related
requirements such as the engagement of experts. Since there will be no
need for Trust participants to file their own separate petitions,
there will be no need for them to engage separate legal representation
to appear for them in court.
Though not necessary, the Trust welcomes investors to designate legal
representatives who can guide them as well as the Trust in the
progress of the appraisal proceeding. Qualified attorneys designated
by participating investors may serve as either (a) co-counsel in the
court proceedings or (b) members of the Review Panel committee
described in the next section.
Review Panel reporting, investor designation of members
Investor participants will be encouraged
to propose members of a “Review Panel” committee to confer
confidentially with counsel for the appraisal rights proceeding and
provide public reports to Trust investors on developments and progress.
Payment for eligibility certification refunded upon proceeding
To allow investors the flexibility of assuring access to Trust support
of their appraisal rights before making final decisions about
proceeding with the rights or withdrawing, the Trust requires a
refundable cash payment for its review of the status of the rights and
certification of eligibility for Trust management.
The base payment for an eligibility certification was established at
one cent per share, subject to minimum amounts. This amount will
remain effective until the end of this week, October 11. After that
date, a supplemental charge of one-tenth of a cent ($0.001) per share
will be added each calendar day, and an additional half cent per share
will be added on the effective date of the merger.
The base penny-per-share payment will be fully refunded to the
investor in cash 90 days after the investor makes the Trust
responsible for managing the rights. The supplemental charges will not
Trust pays all costs of proceeding, no payments from investors
Investors will not be required to make
any payments other than the refundable charge for eligibility
certification. All costs of the appraisal proceeding, including the
conventionally non-contingent costs of experts and court fees, will be
paid by the Trust as part of its management responsibilities.
The only expense born by investors in Trust-managed appraisal rights
will be accruals of the Trust management fees that are to be deducted
from the proceeds when they are ultimately distributed, as described
in the next section.
Trust fees accrued and deducted from final
The contractual Trust management fees to be deducted from final
distributions of appraisal rights consist of a base charge of one cent
per month per share (an annual rate of 0.87% based on the $13.75 per
share offer price) starting on the effective date and a performance
fee equal to 20% of the amount by which the total payment for
appraisal rights exceeds the offer price plus the accrued base costs.
For simplified analysis, investors in Trust-managed appraisal rights
will have no payment requirements and be entitled to a net
distribution equal to
100% of the amount up to the original offer price with an effective
net interest accrual equal to 4.13% (the statutory 5% less the 0.87%
management fee accrual) over the Fed discount rate, and
80% of the “fair value” in excess of the offer price with interest at
5% (no adjustment for management fees) over the Fed discount rate.
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Inquiries about the
Dell Valuation Trust can be addressed to
email@example.com, or to the Shareholder Forum at