April 11, 2013 Forum Report: Dell Board’s Choice Between Accepting Fiduciary Duty or Respecting Investor Rights to Ask Questions

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Project Status

Forum participants were encouraged to consider appraisal rights in June 2013 as a means of realizing the same long term intrinsic value that the company's founder and private equity partner sought in an opportunistic market-priced buyout, and legal research of court valuation standards was commissioned to support the required investment decisions.

The buyout transaction became effective on October 28, 2013 at an offer price of $13.75 per share, and the appraisal case was initiated on October 29, 2013, by the Forum's representative petitioner, Cavan Partners, LP. The Delaware Chancery Court issued its decision on May 31, 2016, establishing the intrinsic fair value of Dell shares at the effective date as $17.62 per share, approximately 28.1% more than the offer price, with definitive legal explanations confirming the foundations of Shareholder Forum support for appraisal rights.

Each of the Dell shareholders who chose to rely upon the Forum's support satisfied the procedural requirements to be eligible for payment of the $17.62 fair value, plus interest on that amount compounding since the effective date at 5% above the Federal Reserve discount rate.

Note: On December 14, 2017, the Delaware Supreme Court reversed and remanded the decision above, encouraging reliance upon market pricing of the transaction as a determination of "fair value." The Forum accordingly reported that it would resume support of marketplace processes instead of judicial appraisal for the realization of intrinsic value in opportunistically priced but carefully negotiated buyouts.

For a printable copy of this report with a copy of the letter as transmitted, click here.

Forum Report: Fair Investor Access (Dell Valuation Project)

Dell Board’s Choice Between Accepting Fiduciary Duty or Respecting Investor Rights to Ask Questions

Following up on last week’s letter,[*] Dell’s board has been asked to let me know if any director needs more time to consider acceptance of the additional fiduciary duty to determine each stockholder’s interest, as would be required according to the company’s recently presented legal theory that board responsibility for reporting relieves the company of any obligation to respond to stockholder demands for information. In the absence of the board members’ explicitly accepted fiduciary duty, or of a different legal theory supporting a suspension of conventional investor rights to ask questions and get answers, the company should proceed without further delay to comply with the demands for information needed to consider the proposed buyout.

The text of yesterday’s letter is copied below.

Please let me know if you have any questions or comments. I will of course continue to report the progress of Dell’s response to investor information requirements.

GL – April 11, 2013

Gary Lutin

Chairman, The Shareholder Forum

575 Madison Avenue, New York, New York 10022

Tel: 212-605-0335

Email: gl@shareholderforum.com

[*] See April 3, 2013 Forum Report: Do Dell Directors Want Responsibility for Investor Decisions?

For a printable copy of this letter as transmitted, click here.

[letterhead of The Shareholder Forum]

April 10, 2013

By email

Mr. Michael S. Dell

Chairman, Board of Directors

and

Mr. Alex J. Mandl

Presiding Director and Chairman of the Special Committee, Board of Directors

Dell Inc.

One Dell Way

Round Rock, Texas 78682

Dear Messrs. Dell and Mandl:

Please let me know by the end of this week if any Dell director requires more time to consider acceptance of the additional fiduciary duty suggested by the company’s legal theory to determine each stockholder’s interest. As indicated in my April 2, 2013 letter, investors cannot be expected to rely upon unconventional views of board responsibility for investor interests unless the board explicitly accepts this new duty.

Please also tell me by the end of this week if the company plans to introduce any additional legal theories suggesting a suspension of fundamental stockholder rights to ask questions and get answers.

In the absence of either reason to defer a response to my demand for records, I assume the company’s representatives will proceed without further delay to propose confidentiality provisions and procedural arrangements for access to the information required by a stockholder.

Sincerely yours,

Gary Lutin,

as Delegate

cc: Ms. Janet B. Wright

This project was conducted as part of the Shareholder Forum's public interest program for "Fair Investor Access," which is open free of charge to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants. It is a Forum rule that participants will not be identified or quoted without their explicit permission.

The management of Dell Inc. declined the Forum's invitation to provide leadership of this project, but was encouraged to collaborate in its progress to assure cost-efficient, timely delivery of information relevant to investor decisions. As the project evolved, those information requirements were ultimately satisfied in the context of an appraisal proceeding.

Inquiries about this project and requests to be included in its distribution list may be addressed to dell@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.