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  • Treatment of the EMC Stock Fund in the EMC 401(k) Savings Plan

     

    As we know, on October 12, 2015, EMC Corporation (“EMC”), Dell Inc. and its parent company, Denali Holding Inc. (“Denali”) entered into a definitive merger agreement under which Denali will acquire EMC, with VMware remaining a publicly-traded company.

    Upon the closing of the merger, there will be changes to the EMC stock fund in the EMC Corporation 401(k) Savings Plan (“Plan”).

    The EMC Stock Fund will receive, as merger consideration, $24.05 in cash plus approximately 0.111 shares of tracking stock for each share of EMC stock. The tracking stock will be a new Class V Common Stock issued by Denali and initially intended to track a portion of Denali’s economic interest in the VMware business following the completion of the transaction. The tracking stock will remain in the Plan immediately after the closing, but it will be frozen to any new investments. Although you will not be able to make any new investments on the tracking stock, you will be able to transfer your investment in the tracking stock to any of the other available investment options under the Plan after the closing date. You may find more information on the tracking stock here.

    The cash from the sale of the stock remaining in the EMC Stock Fund upon the closing of the merger will be invested in the FIAM Index Target Date Commingled Pool with the target retirement year closest to the year you will turn age 65 on or shortly after the Delist Date of EMC Stock.

    If you do not wish to receive merger consideration you can move your money out of the EMC Stock Fund at any time before the closing of the merger, other than during the blackout period described below. You can also change your investment elections for new contributions at any time, other than during the blackout period described below. Unless you change your investment election prior to the closing date, effective as of the closing date, all new contributions previously directed to the EMC Stock Fund will be directed instead to a FIAM Index Target Date Commingled Pool with the target retirement year closest to the year you will turn age 65 (see chart below). 

    FIAM Index Target Date Commingled Pools Chart

    Reference the chart below to determine which FIAM Index Target Fund Commingled Pool your future contributions and proceeds from the sale of stock in the EMC Stock Fund will be invested. Brief descriptions of each fund are provided in the “FIAM Index Target Date Commingled Pool Descriptions” section. 

    Date of Birth*

    Retirement Date
    Range

    Your Designated Default
    Investment Option

    Gross Expense Ratio**

    Before 1938

    Before 2003

    FIAM Index Target Date Income Commingled Pool – Class V

    0.11%

    1/1/1938–12/31/1942

    2003–2007

    FIAM Index Target Date 2005 Commingled Pool – Class V

    0.11%

    1/1/1943–12/31/1947

    2008–2012

    FIAM Index Target Date 2010 Commingled Pool – Class V

    0.11%

    1/1/1948–12/31/1952

    2013–2017

    FIAM Index Target Date 2015 Commingled Pool – Class V

    0.11%

    1/1/1953–12/31/1957

    2018–2022

    FIAM Index Target Date 2020 Commingled Pool – Class V

    0.11%

    1/1/1958–12/31/1962

    2023–2027

    FIAM Index Target Date 2025 Commingled Pool – Class V

    0.11%

    1/1/1963–12/31/1967

    2028–2032

    FIAM Index Target Date 2030 Commingled Pool – Class V

    0.11%

    1/1/1968–12/31/1972

    2033–2037

    FIAM Index Target Date 2035 Commingled Pool – Class V

    0.11%

    1/1/1973–12/31/1977

    2038–2042

    FIAM Index Target Date 2040 Commingled Pool – Class V

    0.11%

    1/1/1978–12/31/1982

    2043–2047

    FIAM Index Target Date 2045 Commingled Pool – Class V

    0.11%

    1/1/1983–12/31/87

    2048–2052

    FIAM Index Target Date 2050 Commingled Pool – Class V

    0.11%

    1/1/1988 and later

    2053 and later

    FIAM Index Target Date 2055 Commingled Pool – Class V

    0.11%

    *Dates selected by Plan Sponsor
    **Expense ratios as of June 15, 2016

    Blackout Period

    As a result of the above described changes, you temporarily will be unable to change your investments in the EMC Stock Fund. This period, during which you will be unable to exercise these rights otherwise available under the Plan, is called a “blackout period.” We encourage you to carefully consider how this blackout period may affect your retirement planning, as well as your overall financial plan. The blackout period for the plan is expected to begin immediately before the closing and end approximately three days after the closing. During these weeks, you can determine whether the blackout period has started or ended by either calling 800-421-3844 and speaking with a Fidelity Service Representative, Monday through Friday, between 8:30 a.m. and midnight Eastern time, or logging on to Fidelity NetBenefits® at www.netbenefits.com/emc.

    During the blackout period you will be unable to direct or diversify the assets held in the EMC Stock Fund. For this reason, it is very important that you review and consider the appropriateness of your current investments in light of your inability to direct or diversify those investments during the blackout period. For your long-term retirement security, you should give careful consideration of the importance of a well-balanced and diversified investment portfolio, taking into account all of your assets, income and investments. 

    Key Dates To Know

    Please carefully review the following key dates so you can make an informed and thoughtful decision regarding your balance in the EMC Stock Fund.

    Plan Activity

    What Will Happen

    What It Means To You

    Anticipated Timing

    Blackout period begins

    No transactions will be allowed in or out of the EMC Stock Fund.

    After this date, you cannot request transactions dealing with the EMC Stock Fund.

    One business day prior to the date of the merger closing.

    Exchange Processed

    The EMC Stock Fund will receive $24.05 in cash plus 0.111 shares of tracking stock for each share of EMC Stock held.

     

    All future employee contributions directed to the EMC Stock Fund after the closing date will be directed to a FIAM Index Target Fund Commingled Pool with the target retirement year closest to the year you will turn age 65.

    The cash proceeds will be invested in the FIAM Index Target Fund Commingled Pool with the target retirement year closest to the year you will turn age 65.

     

    Participants invested in the EMC Stock Fund will not be able to request an exchange in or out of the fund or make asset allocation changes involving the fund during the blackout period.

     

    Blackout period ends.

    All transactions are available again.

    You will have access to the balances now invested in the FIAM Index Target Fund Commingled Pool with the target retirement year closest to the year you will turn age 65.

     

    No new investments can be made in the EMC Stock Fund.  Participants may elect to exchange any tracking stock in the EMC Stock Fund that was received as merger consideration for any of the other investment options available under the Plan.

    Anticipated to end within three business days after the merger closing.

    What Do I Need To Do?

    Unless you use the Automatic Rebalance feature (see below), no action is necessary if you are satisfied with how your future contributions to the EMC Stock Fund and how proceeds from the sale of stock in the EMC Stock Fund will be invested as described above. Alternatively, you may elect to direct your future contributions and proceeds from the sale to another investment option offered under the Plan. To do so you can either call 800-421-3844 and speak with a Fidelity Service Representative, Monday through Friday, between 8:30 a.m. and midnight Eastern time, or log on to Fidelity NetBenefits® at www.netbenefits.com/emc.

    Important Note If You Use Automatic Rebalance

    If you are currently using the Automatic Rebalance feature offered through the Plan, and would like to continue doing so, you need to update your rebalance elections given the changes described in this notice. Fidelity is not able to adjust your rebalance elections to reflect the upcoming plan-directed fund reallocation changes. As a result, your Automatic Rebalance elections will not occur as scheduled if you have a current investment option that will no longer be offered.

    FIAM Index Target Date Commingled Pool Descriptions

    FIAM Index Target Date Income Commingled Pool Class V
    Objective: The pool's objective will be to seek high current income and as a secondary objective, capital appreciation.
    Strategy: The Strategy employs a pool-of-pools approach by investing in a diversified portfolio of equity, fixed income and/or short-term products. The underlying strategies may use futures, options, swaps, and exchange traded funds to enable the strategies to remain fully invested, while being able to respond to participant cash flows and to take advantage of changes in interest rates and other factors affecting value. The target asset allocation is designed for investors already in retirement. The current and/or projected target asset allocation percentages are available in the fact sheet.

    In general, investment values fluctuate in response to adverse issuer, political, regulatory, market or economic developments in the United States and abroad. An investment in a FIAM Target Date Pool may be risky and may not be suitable for an investor's goals, objectives and risk tolerance. Investors should be aware that an investment's value may be volatile and any investment involves the risk that you may lose money. Past performance is no guarantee of future results. Unit price and return may vary.
    Risk: This pool is designed for investors already in retirement. The pool is subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after retirement.
    Who may want to invest: Someone who is seeking an investment option intended for people in retirement and who is willing to accept the volatility of diversified investments in the market; Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option and looking primarily for the potential for income and, secondarily, for share-price appreciation.


    The investment option is a collective investment trust. The trustee is Fidelity Institutional Asset Management Trust Company. It is managed by Fidelity Institutional Asset Management. This description is only intended to provide a brief overview of the fund.

    This investment option is not a mutual fund.

    The inception date of this V share class of the Pool was 08/04/2011. The earliest share class of this pool had an inception date of 07/02/2007.

    Performance between the inception date of the earliest share class and the inception date of this V share class was calculated by subtracting Class V's management fee and the Pool's net administrative expenses for that period from the Pool's gross performance.

    Expense ratios: Expense ratios listed are as of 9/30/15 and do not reflect a reduction in management fee rate to 0.10% that became effective on 6/15/15.

    As of February 12, 2016, this fund changed its name from Pyramis Index Lifecycle Income Commingled Pool.

    FIAM Index Target Date 2005, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050, and 2055 Commingled Pool Class V
    Objective:
    Each target date strategy seeks high total return until their respective targeted retirement date. Thereafter, the pool's objective will be to seek high current income and as a secondary objective, capital appreciation.

    Strategy: The Strategy employs a pool-of-pools approach by investing in a diversified portfolio of equity, fixed income and/or short-term products. The underlying strategies may use futures, options, swaps, and exchange traded funds to enable the strategies to remain fully invested, while being able to respond to participant cash flows and to take advantage of changes in interest rates and other factors affecting value. The target asset allocation percentages will change over time to become more conservative, by gradually reducing allocations to equity and increasing allocations to fixed income and/or short-term products. The current and/or projected target asset allocation percentages are available in the fact sheet. In general, investment values fluctuate in response to adverse issuer, political, regulatory, market or economic developments in the United States and abroad. An investment in a FIAM Target Date Pool may be risky and may not be suitable for an investor's goals, objectives and risk tolerance. Investors should be aware that an investment's value may be volatile and any investment involves the risk that you may lose money. Past performance is no guarantee of future results. Unit price and return may vary. 

    Risk: The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available.

    Who may want to invest: Someone who is seeking an investment option intended for people in or very near retirement and who is willing to accept the volatility of diversified investments in the market; Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time.

    The investment option is a collective investment trust. The trustee is Fidelity Institutional Asset Management Trust Company. It is managed by Fidelity Institutional Asset Management. This description is only intended to provide a brief overview of the fund.

    This investment option is not a mutual fund.

    The inception date of this V share class of the Pool was 08/04/2011. The earliest share class of this pool had an inception date of 07/02/2007.

    Performance between the inception date of the earliest share class and the inception date of this V share class was calculated by subtracting Class V's management fee and the Pool's net administrative expenses for that period from the Pool's gross performance.

    Expense ratios: Expense ratios listed are as of 9/30/15 and do not reflect a reduction in management fee rate to 0.10% that became effective on 6/15/15.

    As of February 12, 2016, this fund changed its name from Pyramis Index Lifecycle 2005 Commingled Pool.   

    A mutual fund expense ratio is the total annual fund or class operating expenses (before waivers or reimbursements) paid by the fund and stated as a percentage of the fund's total net assets. For other types of investments, the figure in the expense ratio field reflects similar information, but may have been calculated differently than for mutual funds. Mutual fund data comes from the fund's prospectus. For non–mutual fund investment options, the information has been provided by the plan sponsor, the investment option's manager, or the trustee. When no ratio is shown for these options, it is because none was available. There may be fees and expenses associated with the investment option. Expense information changes periodically. Please consult NetBenefits for updates.

    This document provides only a summary of the main features of the EMC Corporation 401(k) Savings Plan and the Plan document will govern in the event of any discrepancies.

    Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

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