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This excerpt taken from the DELL DEF 14A filed Jun 1, 2009. Certain Relationships and Related Transactions We purchase services, supplies, and equipment in the normal course of business from many suppliers and sell or lease products and services to many customers. In some instances, these transactions occur with companies with which members of our Board have relationships as directors or executive officers. For Fiscal 2009, none of these transactions was material, either individually or collectively. Aircraft Reimbursement Prior to July 2008, certain of our executive officers owned private aircraft, either outright or through fractional share ownership arrangements. Under our executive travel policy, which was approved by the Leadership Development and Compensation Committee of the Board, Dell reimbursed certain executive officers for the cost of using their private aircraft while traveling on Dell business. The reimbursement covered variable costs, plus a pro rata portion of the management fees, attributable to the executive’s Dell business travel, but did not cover any depreciation or other reimbursement for capital costs or purchase price. Mr. Dell continues to own his own private aircraft and the company will continue to reimburse him for the covered variable costs, plus a pro rata portion of the management fees attributable to his business travel. As of, July 2008, all other executive officers authorized for use of private aircraft for business travel must use the Dell contracted aircraft service. During Fiscal 2009, we reimbursed the following executive officers (or wholly-owned entities through which they own their aircraft) the following amounts:
Acquisition of MessageOne Inc. On April 22, 2008, Dell acquired MessageOne Inc. pursuant to an Agreement and Plan of Merger, dated February 11, 2008, for approximately $164 million in cash plus an additional $10 million to be used for management retention. MessageOne, which provided Software-as-a-Service enabled, enterprise-class email business continuity, compliance, archiving and disaster recovery services, was co-founded by Adam Dell, the brother of Michael Dell, the company’s Chairman and Chief Executive Officer and the beneficial owner of approximately 11% of the outstanding Dell common stock. Adam Dell served as MessageOne’s non-executive chairman of the board, but was not a member of MessageOne management. Related Party Interests — The following information about the relationships between Dell family members and MessageOne was provided to Dell by MessageOne and representatives of the Dell family. Adam Dell is the sole owner and member of Impact Venture Advisors, LLC, which is the sole general partner of Impact Venture Partners, L.P. and Impact Entrepreneurs Fund, L.P. Michael Dell, Susan Dell and a trust for the Dell’s minor children collectively own a 25% limited partner interest in Impact Venture Partners and a 43% limited partner interest in Impact Entrepreneurs Fund. Alexander and Lorraine Dell, Mr. Dell’s parents, own a 14% limited partner interest in Impact Entrepreneurs Fund. These investments in Impact Venture Partners and Impact Entrepreneurs Fund were made in December 1999, and January 2000, respectively.
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Table of ContentsBoth Impact Venture Partners and Impact Entrepreneurs Fund were investors in MessageOne and held shares of capital stock in MessageOne (and options or warrants to acquire shares of capital stock) that represented 22.31% and 1.73%, respectively, of MessageOne’s total capital stock outstanding on a fully diluted and as-converted basis. As a result of their investments in MessageOne, Impact Venture Partners and Impact Entrepreneurs Fund received approximately $40.56 million and $2.93 million, respectively, of acquisition consideration. Of that consideration, the following amounts were distributed to Dell family members:
Michael and Susan Dell have donated the proceeds which they and their children’s trust received from the acquisition to charity. Board Governance Processes — The acquisition of MessageOne was identified and acknowledged by our Board from the outset as a potential related party transaction. Consequently, our Board directed that management implement a series of measures designed to ensure that the transaction was considered, analyzed, negotiated and approved objectively and independent of any control or influence from the related parties. Those measures included the following:
With those measures and after consideration and discussion of the relationships and the interests of Michael Dell and members of the Dell family, our independent directors concluded that the transaction was fair to, and in the best interests of, Dell Inc. and its stockholders and, on that basis, approved the transaction. Review and Approval of Transactions with Related Persons The Governance and Nominating Committee of the Board, pursuant to its written charter, is charged with the responsibility of reviewing and approving or ratifying any transaction required to be disclosed as a “related party” transaction under applicable law, rules, or regulations, including the rules and regulations of the Securities and Exchange Commission. The Governance and Nominating Committee has not adopted any specific procedures for conducting such reviews and considers each transaction in light of the specific facts and circumstances presented. The Governance and Nominating Committee reviewed each of the transactions described above.
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Table of ContentsThis excerpt taken from the DELL DEF 14A filed Jun 2, 2008. Certain
Relationships and Related Transactions
We purchase services, supplies, and equipment in the normal
course of business from many suppliers and sell or lease
products and services to many customers. In some instances,
these transactions occur with companies with which members of
our Board of Directors have relationships as directors or
executive officers. For Fiscal 2008, none of these transactions
was material, either individually or collectively.
Aircraft
Reimbursement
Certain of our executive officers own private aircraft, either
outright or through fractional share ownership arrangements.
Under our executive travel policy, which has been approved by
the Leadership Development and Compensation Committee of the
Board of Directors, we reimburse certain executive officers for
the cost of using their private aircraft while traveling on Dell
business. Our reimbursement covers variable costs, plus a pro
rata portion of the management fees, attributable to the
executive’s Dell business travel, but does not cover any
depreciation or other reimbursement for capital costs or
purchase price. During Fiscal 2008, we reimbursed the following
executive officers (or wholly-owned entities through which they
own their aircraft) the following amounts:
Acquisition of
MessageOne Inc.
On April 22, 2008, we acquired MessageOne Inc. pursuant to
an Agreement and Plan of Merger, dated February 11, 2008,
for approximately $155 million in cash plus an additional
$10 million to be used for management retention.
MessageOne, which provides Software-as-a-Service enabled,
enterprise-class email business continuity, compliance,
archiving and disaster recovery services, was co-founded by Adam
Dell, the brother of Michael Dell, our Chairman and Chief
Executive Officer and the beneficial owner of approximately 10%
of the outstanding Dell common stock. Adam Dell served as
MessageOne’s non-executive chairman of the board, but was
not a member of MessageOne management.
Table of Contents
The acquisition of MessageOne was identified and acknowledged by
our Board of Directors as a related party transaction because
Michael Dell and his family hold indirect ownership interests in
MessageOne. Consequently, our Board directed management to
implement a series of measures designed to ensure that the
transaction was considered, analyzed, negotiated and approved
objectively and independent of any control or influence from the
related parties.
Related Party Interests — The following
information about the relationships between Dell family members
and MessageOne was provided to us by MessageOne and
representatives of the Dell family.
Adam Dell is the sole owner and member of Impact Venture
Advisors, LLC, which is the sole general partner of Impact
Venture Partners, L.P. and Impact Entrepreneurs Fund, L.P.
Michael Dell, Susan Dell and a trust for the Dell’s minor
children collectively own a 25% limited partner interest in
Impact Venture Partners and a 43% limited partner interest in
Impact Entrepreneurs Fund. Alexander and Lorraine Dell,
Mr. Dell’s parents, own a 14% limited partner interest
in Impact Entrepreneurs Fund. These investments in Impact
Venture Partners and Impact Entrepreneurs Fund were made in
December 1999 and January 2000, respectively.
Both Impact Venture Partners and Impact Entrepreneurs Fund were
investors in MessageOne and held shares of capital stock in
MessageOne (and options or warrants to acquire shares of capital
stock) that represented 22.31% and 1.73%, respectively, of
MessageOne’s total capital stock outstanding on a fully
diluted and as-converted basis.
As a result of their investments in MessageOne, assuming that no
indemnification payments are required under the acquisition
agreement, Impact Venture Partners and Impact Entrepreneurs Fund
will receive approximately $40.56 million and
$2.93 million, respectively, of acquisition consideration.
Of that consideration, the following amounts will be distributed
to Dell family members:
Michael and Susan Dell indicated that the proceeds which they
and their children’s trust received from the acquisition
will be donated to charity.
Board Governance Processes — Our acquisition of
MessageOne was identified and acknowledged by our Board of
Directors from the outset as a potential related party
transaction. Consequently, our Board directed that management
implement a series of measures designed to ensure that the
transaction was considered, analyzed, negotiated and approved
objectively and independent of any control or influence from the
related parties. Those measures included the following:
Table of Contents
With those measures and after consideration and discussion of
the relationships and the interests of Michael Dell and members
of the Dell family, our independent directors concluded that the
transaction was fair to, and in the best interests of, Dell Inc.
and its stockholders and, on that basis, approved the
transaction.
Review and
Approval of Transactions with Related Persons
The Governance and Nominating Committee of the Board of
Directors, pursuant to its written charter, is charged with the
responsibility of reviewing and approving or ratifying any
transaction required to be disclosed as a “related
party” transaction under applicable law, rules, or
regulations, including the rules and regulations of the
Securities and Exchange Commission. The Governance and
Nominating Committee has not adopted any specific procedures for
conducting such reviews and considers each transaction in light
of the specific facts and circumstances presented. The
Governance and Nominating Committee reviewed each of the
transactions described above.
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