ValueAct Capital was founded in June 2000 and is owned 25% or more by ValueAct Holdings II, L.P. (“VA Holdings II”). ValueAct Capital Management, LLC serves as the general partner of the Company and is owned 25% or more by VA Holdings II. None of the members of VA Holdings II own 25% or more of ValueAct Capital.

As of February 29, 2020, the Company managed approximately $12.3 billion of regulatory assets under management on a discretionary basis on behalf of nineteen clients.

ValueAct Capital provides discretionary investment advice and management services to private investment funds (the “Legacy Fund,” “Spring Fund,” “Co-Invest Fund,” and certain other investment vehicles that may include, but are not limited to, special purpose vehicles, collectively referred to as “Co-Investment Vehicles,” each a “private fund” and collectively the “private funds”), which may be organized as onshore or offshore limited partnerships. ValueAct Capital’s private funds generally conduct their trading activities through a master-feeder structure. In a master-feeder structure, each feeder fund contributes its investible assets to a master fund and participates on a pro rata basis in the profits and losses of the master fund and bears a pro rata portion of the expenses of the master fund, based on the respective capital account balances of all private funds investing through the master fund. An affiliate of ValueAct Capital serves as the general partner to each onshore feeder fund, offshore feeder fund, and master fund. Each private fund is managed only in accordance with its own investment objectives and is not tailored to any particular private fund investor (each an “investor”). ValueAct Capital currently manages various families of private funds, one of which employs long-term, concentrated, active value investing in a select number of companies generally with a market capitalization over $3 billion (the “Legacy Fund”). ValueAct Capital also manages a family of private funds that employs long-term, concentrated, active investing in companies that seek to responsibly and creatively address certain environmental and societal problems (the “Spring Fund”). Additionally, ValueAct Capital manages a family of co-invest funds which seeks to make long-term, strategic- block equity co-investments along with the Legacy Fund in a limited number of public companies (the “Co-Invest Fund”). Finally, ValueAct Capital also manages single security investment vehicles designed to make long-term, strategic-block equity co-investments along with the Legacy Fund, Co-Invest Fund, or Spring Fund in certain public companies (“Co-Investment Vehicles”).

Since ValueAct Capital does not provide individualized advice to the investors in private funds, investors must consider whether a particular private fund meets their investment objectives and risk tolerance prior to investing. Information about each private fund can be found in its
offering documents, including its Confidential Memorandum (“CM”). However, the private
funds rely on certain registration exclusions available under the Investment Company Act
of 1940, as amended (“IC Act”) and exemptions available under the Securities Act of 1933,
as amended (“Securities Act”). Therefore, this brochure is designed solely to provide
information about ValueAct Capital and should not be considered an offer of interests in any
ValueAct Capital private fund. Any such offer may only be made by delivery to the
prospective investor of the CM for the private fund under consideration.

ValueAct Capital currently provides advice to private funds but reserves the right to provide advice to other types of clients. Any other client accounts would be managed in accordance with the client’s stated investment strategies, objectives, restrictions, and any other agreed upon guidelines. please register to get more info

ValueAct Capital and/or the general partner of the private funds have the authority to (1) deduct management and performance-based fees from the assets of the private funds, and (2) authorize the payment or reimbursement of other fees or expenses to third-parties from the assets of the private funds. Management Fees Except for the Co-Invest Fund and Co-Investment Vehicles, which do not incur management fees, ValueAct Capital’s private funds, and consequently the underlying investors, incur an annual management fee ranging from 50 bps to 2.0% (depending on the particular tranche and size of limited partnership interests in which an underlying investor has invested) based on the investor’s capital account balance as of the end of the specified fee period. The management fee is charged quarterly, in arrears. If the general partner allows an investor in a private fund to withdraw capital from the private fund prior to the end of a quarter, the investor incurs a pro-rated management fee for the period in which the withdrawn assets remained invested in the private fund. Personnel of ValueAct Capital may from time to time serve on the boards of directors of public and private companies, including those in which the private funds invest (“portfolio companies”). In the case of portfolio companies, ValueAct Capital’s personnel are required to give any directors’ fees to ValueAct Capital, which will offset the management fees paid by the relevant private fund(s) by the amount of the directors’ fees. In addition, ValueAct Capital is required to give to the relevant private fund(s) any equity awards, stock options, or other non-cash compensation received by the Company’s personnel in connection with serving on the boards of directors of portfolio companies. Finally, ValueAct Capital will offset the management fees paid by the relevant private fund(s) by the amount of any transaction or monitoring fees paid to ValueAct Capital or its affiliates in connection with a private fund’s investment activities. The Co-Invest Fund and Co-Investment Vehicles do not incur management fees, therefore the offsetting of fees described above is not applicable to those entities.

To the extent that ValueAct Capital secures an appointment to the board of a portfolio company in which both the Legacy Fund and the Spring Fund are invested, and such director is compensated for its services, such compensation will generally be shared pro rata between the Legacy Fund and the Spring Fund based upon the value of each fund’s investment in such portfolio company.

Finally, ValueAct Capital reserves the right to charge reduced or no management and performance-based fees to ValueAct Capital, its affiliates, current and former employees and their immediate family members, and consultants. ValueAct Capital has no obligation to disclose the specific details of such arrangements or to offer such additional rights, terms, or conditions to all investors.

Performance-Based Fees Please see the “Performance-Based Fees and Side-by-Side Management” section.

Private Fund Expenses ValueAct Capital and/or the general partner of the private funds are authorized to incur expenses on behalf of the private funds; when this occurs, the appropriate private fund reimburses ValueAct Capital and/or the general partner in the amount of such expenses.

The general partner or ValueAct Capital will be responsible for certain ordinarily recurring and other reasonable expenses of the private funds such as rent, travel (except for travel related to Private Portfolio Investments, as defined in Item 8 herein), supplies, secretarial expenses, charges for furniture and fixtures, telephone, stationery, employee insurance, payroll taxes, compensation of the general partner’s professional and administrative personnel, expenses related to the Company’s or any of its affiliates’ registration with the Securities and Exchange Commission or any international regulatory body or regime, such as expenses incurred in connection with preparing and updating Form ADV (“Overhead Expenses”). The private funds shall be responsible for all their expenses, other than Overhead Expenses, including expenses for investments specific to the relevant private fund. The Company shall be authorized to incur and pay all expenses on behalf of the private funds in connection with the private fund’s business which it deems necessary or desirable, and to charge or to be reimbursed by the private funds for those expenses. The private funds may share certain expenses. With respect to any expenses, other than Overhead Expenses (“Partnership Expenses”), that are allocated to a specific investment: (i) such expenses shall be borne by the private funds, pro rata to the market value of that specific investment held by each of the private funds, provided;


• that the expenses of the Legacy Fund incurred in connection with the preparation, research, and making of an initial investment in a specified issuer (investments made by the Legacy Fund before ValueAct Capital has determined to offer such investment to investors in the Co-Invest Fund or Co-Investment Vehicle) shall not be allocated to the Co-Invest Fund (or a Co-Investment Vehicle as applicable);

(ii) any Partnership Expense allocated to the Co-Invest Fund (or a Co-Investment Vehicle as applicable) shall be allocated to investors pro rata to the amount of capital commitments to such investment.

With respect to any Partnership Expense not allocated to a specific investment:

(i) to the extent any such expense is not related to a particular private fund but relates to more than one of the private funds, such Partnership Expense shall be borne by the relevant private funds, pro rata based on the net asset value of the private funds, or such other method as deemed equitable, in good faith, by the general partner, taking into account the type of Partnership Expense;

(ii) any Partnership Expense allocated to a Co-Investment Vehicle or the Co-Invest Fund shall be allocated to the investors pro rata based on overall capital commitments; and

(iii) organizational expenses shall only be borne by the relevant private fund.

The Legacy, Spring, Co-Invest, and certain Co-Investment Vehicle feeder funds (the “feeder funds”) and certain Co-Investment Vehicles bear their own expenses as well as a pro rata share of the relevant master fund’s (as applicable) expenses including, but not limited to, transaction and trading-related expenses (e.g., commissions and brokerage charges, other prime brokerage fees, clearing and settlement charges, interest expenses, expenses relating to short sales, stock borrow fees, financing expenses, data services, investment bankers, appraisers, bank service fees and related transactional expenses)1; order management systems, as well as other analytical systems; compensation payable to research consultants engaged to evaluate or appraise particular investments; any reimbursement expenses for costs incurred (including but not limited to first- class or business-class travel and lodging costs) by members of the Spring Fund Science Advisory Board; all research-related expenses with respect to potential and actual investments; all travel- related expenses (including first-class or business-class travel) incurred in connection with Private 1 Please see the “Brokerage Practices” section below for further information about ValueAct Capital’s brokerage practices and other trading-related matters. Portfolio Investments only; appraisals for Private Portfolio Investments and any other difficult to value investments; news and quotation equipment and services (including Bloomberg and similar subscriptions); systems and software used in connection with the operation of the private funds and investment related activities; costs associated with shareholder engagement of portfolio companies, such as expenses related to event hosting and production, public presentations, websites, public relations and public affairs, government relations, consultants, forensic and other analyses, investigations, litigation, proxy contests, solicitations, tender offers, and any expenses of director or executive nominees proposed by the Company; defending the private funds (or the Company, the general partner or any other indemnified party) against any threatened or actual litigation associated with any potential or actual portfolio company investments; any other legal fees related to the investment activities of the private funds, including potential or actual investments of the private funds; legal expenses related to potential or actual government or regulatory actions with respect to the private funds (including but not limited to expenses relating to regulatory or similar investigations, inquiries, “sweeps,” and any resulting fines and any litigation or threatened litigation); expenses related to regulatory filings (e.g., Form PF, blue sky, Hart-Scott-Rodino, Sections 13 and 16 of the Securities Exchange Act of 1934, as amended, non- U.S. and other corporate filing fees and expenses) made in connection with the private funds’ business and other regulatory expenses; taxes (including but not limited to partnership taxes); organizational expenses and initial and ongoing offering expenses (including legal fees); governmentally imposed expenses; administrative expenses; custodians; expenses related to the organization and continued operation of the Irish Collective Asset-Management Vehicles held by the private funds, including litigation, regulatory advisors or consultants, regulatory expenses, legal expenses; expenses relating to the offering and sale of interests in compliance with the Directive 2011/61/EU on Alternative Investment Fund Managers, expenses of and relating to any Alternative Investment Fund Managers; directors expenses and other similar expenses; accounting expenses (including third party accounting services, if any), audit (including custody audit, if any) and tax preparation expenses (including preparation costs of financial statements, tax returns and reports to private fund investors); any and all fees and expenses relating to representation by the tax matters partner or the partnership representative, as applicable, of the relevant private fund and the private fund investors; expenses to which the indemnification provisions of the relevant governing document apply; the costs of adding the private funds as an insured party under the general partner’s Directors & Officers and Errors & Omissions insurance policies; the costs of such insurance as may be obtained to provide for the protection of the private funds and indemnified parties against claims covered by the indemnification provisions of the relevant governing document (except as otherwise provided in such agreement); management fee; other ordinary and extraordinary expenses associated with the operation of the private funds; and any other similar expenses to those described above. For the avoidance of doubt, “similar expenses” refers to any expenses that are similar in type and nature to the expenses described above. ValueAct Capital seeks to allocate expenses fairly, equitably, and consistent with the documents governing the Company’s relationship with each private fund. When allocating expenses, ValueAct Capital must interpret the private funds’ governing documentation and make determinations whether expenses are allocated and paid in full or in part by a private fund, by private funds, and/or by the Company, which creates a conflict of interest. The Company has implemented policies, procedures, and guidelines designed to mitigate such conflicts of interest. Further information with respect to the fees and other expenses incurred by the private funds, and ultimately the underlying investors, can be found in each private fund’s CM. Private Fund Withdrawal Rights and Associated Fees The Co-Invest Fund generally does not allow for withdrawals until the liquidation (or distribution in kind) of the last investment in which an investor participated. The Co-Investment Vehicles generally do not allow for withdrawals until the liquidation (or distribution in kind) of the single security investment in which an investor participated. Investors in the Legacy Fund and Spring Fund generally may withdraw their capital at the time periods specified in each private fund’s CM, subject to the specified notice periods and lockup periods, as applicable, depending on the tranche of limited partnership interests in which an underlying investor has invested. Where lockup periods apply, investors in certain tranches of the private funds generally have early withdrawal rights, subject to limitations as to the withdrawal amount and early withdrawal fees, depending on the amount of capital withdrawn and the timing of the withdrawal.

ValueAct Capital and/or the general partner of the private funds have the authority to allow withdrawals other than at the time periods specified in each private fund’s CM. In these instances, ValueAct Capital has the authority to require the investor to pay to the applicable private fund an amount that reflects the expenses incurred in facilitating the withdrawal. If ValueAct Capital and/or the general partner of the private funds allow an investor in a private fund to withdraw capital from the private fund prior to the end of a quarter, the investor, in the case of the Legacy Fund and Spring Fund, incurs a pro-rated management fee for the period in which the withdrawn assets remained invested in the Legacy Fund or Spring Fund. The private funds’ general partner reserves the right to waive the applicable notice period and/or allow other than annual withdrawals for certain current and former ValueAct Capital employees and their immediate family members. Additionally, the general partner is not subject to lockup periods with respect to its interests in the private funds.

Any investor that makes a withdrawal from a private fund will not be able to withdraw that portion of its capital account that is in Private Portfolio Investments until such Private Portfolio Investments are liquidated, determined by the general partner to no longer be Private Portfolio Investments, or otherwise allowed at the discretion of the general partner. In addition, the general partner may, in its sole discretion, reserve and withhold from distribution a reasonable estimate of expenses due with respect to such withdrawing investor’s capital account.

Side Letters ValueAct Capital may enter into side letter agreements with certain large or strategic investors granting them, among other things, greater portfolio transparency, additional rights to reports, reductions in fees, and more favorable redemption rights in comparison to the standard investment terms applicable to other investors per the disclosures in each private fund’s CM. Side letter agreements may also include most favored nation clauses, key man provisions, restrictions with respect to permitted investment sectors, and allocations of Private Portfolio Investments. ValueAct Capital has no obligation to disclose the specific details of such arrangements or to offer such additional rights, terms, or conditions to all investors. please register to get more info

The Legacy Fund and Spring Fund charge a “performance allocation” generally equal to 20% of the net profits, in certain cases after a performance hurdle or preferred return, attributable to each investor, which is paid to ValueAct Capital, or the general partner of the private funds, either at the end of the year, at the end of a year that a lockup period expires (as applicable based on the tranche invested in), upon expiration of a lockup period, upon withdrawal of capital, or upon transfer by an investor from one tranche to another. For withdrawals and transfers, the performance allocation only applies with respect to the amount of capital withdrawn or transferred.

Investors in the Co-Invest Fund and Co-Investment Vehicles are subject to carried interest provisions. Each investor will first receive a return of capital on all realized investments plus other allocated expenses borne by such investor, and a preferred return on the above amounts.

The performance allocation, or in the case of the Co-Invest Fund and Co-Investment Vehicles the carried interest distribution, is calculated as specified in each private fund’s CM. Depending on the private fund (and the different investor tranches, as available for the relevant private fund), high water marks, hurdle rates, and preferred returns may apply to the performance allocation.

Performance-based fees are charged in compliance with Rule 205-3 under the Investment Advisers Act of 1940 (“Advisers Act”).

Performance-based fees may create an incentive for ValueAct Capital to make riskier or more speculative investments on behalf of the private funds than would be the case in the absence of such fees. In addition, except in the case of the Co-Invest Fund and Co-Investment Vehicles, the performance-based fees received by the general partner of the Legacy Fund and Spring Fund reflect both realized and unrealized gains and losses. Accordingly, members of the general partner of the Legacy Fund and Spring Fund could earn performance-based fees on unrealized gains that the Legacy Fund and Spring Fund might ultimately never realize.

Trading activities of the private funds will overlap at times and conflicts could arise in managing those activities. Please see Item 12 Trade Aggregation and Allocation for information relating to ValueAct Capital’s management of those entities.

Finally, ValueAct Capital reserves the right to charge reduced or no management and performance-based fees to ValueAct Capital, its affiliates, current and former employees and their immediate family members, and consultants. ValueAct Capital has no obligation to disclose the specific details of such arrangements or to offer such additional rights, terms, or conditions to all investors. please register to get more info

ValueAct Capital provides investment advisory services to private funds, which are generally organized as limited partnerships under the laws of the State of Delaware or another appropriate jurisdiction or, in the case of offshore private funds, as limited partnerships under the laws of the British Virgin Islands. ValueAct Capital expects each private fund to qualify for an exclusion from having to register as an investment company under the IC Act pursuant to Section 3(c)(1) or Section 3(c)(7) thereunder, and to offer interests to investors pursuant to Regulation D or Regulation S under the Securities Act. Thus, this disclosure brochure may discuss information relevant to such investors, as necessary or appropriate. Nonetheless, this brochure is designed
solely to provide information about ValueAct Capital and should not be considered as an
offer of interests in any ValueAct Capital private fund. Any such offer may be made only by
delivery to the prospective investor of the CM for the private fund under consideration. Private fund investors may include high net worth individuals and a variety of institutional investors (e.g., trusts, employee benefit plans, endowments, foundations, public pension plans, sovereign wealth funds, corporations, private funds of funds, and other types of entities).

Certain investors in the private funds may expose ValueAct Capital to potential conflicts of interest. For example, officers and directors of companies in which the private funds invest have invested in the private funds. Investments in the private funds by such parties may expose ValueAct Capital to potential conflicts of interest with respect to proxy voting decisions and investment decisions and could expose ValueAct Capital to risks relating to the receipt of material non-public information or other confidential information relating to the company in question. In addition, ValueAct Capital employees have made, or may make, contributions to charitable organizations that have invested in the private funds. ValueAct Capital may have a conflict between acting in the best interest of the private funds and making decisions that build goodwill with the aforementioned types of investors so they will maintain or increase their investments in the private funds. Please see the “Code of Ethics, Participation or Interest in Client Transactions and Personal Trading” section for additional information about ValueAct Capital’s insider trading policy and the “Voting Client Securities” section for additional information about ValueAct Capital’s proxy voting policies and procedures.

When accepting new investors, the private funds (except for certain Co-Investment Vehicles) generally require a minimum investment of $10 million but may accept lesser amounts at the discretion of ValueAct Capital and/or the general partner of the private funds. please register to get more info

Investment Strategy The Legacy Fund concentrates on acquiring significant ownership stakes in a limited number of companies that it believes are fundamentally undervalued. The ValueAct Capital investment team seeks to identify companies that are out of favor or may be undergoing significant transition. The investment team believes that such companies may be temporarily mispriced for a variety of reasons, including perceived unfavorable industry conditions, poor business performance, changes in management or ownership, reorganizations, or other external factors. These conditions can often result in fundamentally “good” businesses that are available at depressed valuations. In most of ValueAct Capital’s core2 investments, the goal is to work productively with management and/or Core investments reflect those made by the relevant private fund since that particular private fund’s inception:
• (i) for which the relevant private fund had a designee or nominee on the board of the portfolio company; the company’s board to implement a strategy or strategies that maximize returns for all shareholders. The Spring Fund’s investment objective is to seek to achieve superior returns by making long-term investments in companies that seek to responsibly and creatively address certain environmental and societal problems. The Co-Invest Fund’s investment objective is to seek superior returns by co-investing with the Legacy Fund in a limited number of public companies.

The Co-Investment Vehicles’ investment objectives are to seek superior returns by co-investing with the other private funds in certain public companies.

ValueAct Capital’s investment strategy is described in greater detail in each private fund’s CM.

Types of Investments Legacy Fund and Spring Fund Investing in securities involves risk of loss that investors should be prepared to bear. ValueAct Capital invests primarily in equity and equity-linked securities of an issuer. ValueAct Capital utilizes financial instruments both for investment purposes and to seek to hedge against fluctuations in the value of the private funds’ portfolios as a result of changes in currency exchange rates, market interest rates, and equity prices. Such instruments may include forward contracts, stock index futures, options, swaps, caps, and floors. Although not a significant part of the investment strategy, ValueAct Capital may also engage in short sales and invest in corporate debt securities. Corporate debt securities include corporate bonds, debentures, notes, convertible securities, and other similar corporate debt instruments. Finally, the Legacy Fund and Spring Fund generally may not invest more than 25% of their assets, as of the date of the investment, in the securities of any one issuer.

ValueAct Capital has the ability to invest, as described in the applicable CM, a specified percentage (depending on the relevant tranche of interests) of the net asset value of each investor’s capital account balance, in “Private Portfolio Investments,” which are defined to include: (i) securities of companies or other entities the shares or interests of which are held by fewer than 300 stockholders; (ii) any other company or entity that has, in the determination of the general partner, predominantly similar characteristics of such company or entity; (iii) any company or entity which, following the investment, will not have publicly traded common equity; and (iv) any other investments deemed by the general partner, in its sole discretion, to present difficult valuation issues.


• (ii) for which the relevant private fund filed a Schedule 13D or 13G or made a similar non-U.S. filing or other notification with respect to the investment; and/or
• (iii) that, in the case of the Legacy Fund only, were discussed in a Legacy Fund investor quarterly letter as a core investment, which is determined by the chief investment officer based on such factors such as relative size of the investment as a percentage of the fund (generally 4-20% of the portfolio) or dollar size of the investment (current representative size of a core investment generally ranging from $500 million to $2 billion), or in the case of the Spring Fund only, is determined to be core by the Spring Fund portfolio manager based on such factors such as relative size of the investment as a percentage of the fund (generally 4-20% of the portfolio). It should not be assumed that any or all of these investments were or will be profitable. Each Private Portfolio Investment will be held in a separate sub-account on behalf of the private fund and capital allocated to each Private Portfolio Investment generally may not be withdrawn by an investor until the investment is liquidated or deemed liquidated by ValueAct Capital. Generally, only those Legacy Fund and Spring Fund investors who are admitted to a private fund on or prior to the date a Private Portfolio Investment is made participate in the profits and losses associated with the Private Portfolio Investment. Certain investors in the Legacy Fund have been given the ability, through side letters, to elect not to participate in any Private Portfolio Investments made after the date of their admission.

Finally, in its discretion, ValueAct Capital and/or the general partner of a private fund may permit or require certain investors to be excluded from making or holding a specific investment. As such, only the non-excluded investors will participate in such investment.

Co-Invest Fund The Co-Invest Fund generally may not invest in a non-core holding (determined as of the date the applicable Co-Invest Fund issues a capital call notice for a specific investment), or Private Portfolio Investments, or securities of an issuer not held by the Legacy Fund. The Co-Invest Fund may not invest more than 25% of the capital commitments of each investor in any single issuer, as of the business day immediately prior to the time a binding commitment is made in respect of an investment, unless otherwise approved by the Advisory Board. With the approval of the Advisory Board, the Co-Invest Fund can, but currently does not intend to, invest in Private Portfolio Investments and investors in the Co-Invest Fund have the option not to invest in a given Private Portfolio Investment.

Co-Investment Vehicles The Co-Investment Vehicles are single security investment vehicles and therefore can only invest in a core holding of the Legacy and/or Spring Fund. No other types of investments can be made by these vehicles at this time.

Sources of Information Although ValueAct Capital utilizes information, reports, and data from various external sources, including consulting arrangements that assist with conducting investment due diligence, consulting arrangements with independent analysts, and meetings with the management of current and prospective portfolio companies, its investment decision-making with respect to the private funds it manages is based primarily upon its internal research and analytical capabilities, including the research and analytical experience and expertise of its investment team. Material Risks All investing involves a risk of loss and the private funds and their underlying investors could lose money over short or long periods. An investment in the private funds may be deemed a speculative investment and is not intended as a complete investment program. It is designed for sophisticated investors who fully understand and can bear the risk of an investment in the private funds. No guarantee or representation is made that the private funds will achieve their investment objective or that investors will receive a return of their capital. The descriptions contained below are an overview of different risks related to the private funds but are not intended to serve as an exhaustive list or comprehensive description of all risks and conflicts that may arise regarding the management and operations of the private funds. Investors should review the risks listed in the private funds’ CMs prior to investing. Prospective investors should consult their own legal, tax, and financial advisors as to all these risks, and as to an investment in a private fund generally. Reliance on the Company – All of the private fund’s investment opportunities will be selected by the Company, and the quality of its decisions will determine each private fund’s success or failure. Investors will not have an opportunity to select or evaluate any investments, or to review the related securities positions at any time. Past performance is not indicative of future returns for any particular private fund.

Dependence on Key Individuals – The success of the private funds depends upon the ability of ValueAct Capital’s investment team to continue to develop and implement investment strategies that achieve the private funds’ investment objectives. If ValueAct Capital were to lose the services of Mr. Ubben (or both Mr. Ubben and Mr. Morfit depending on the private fund, date of investment or tranche exchange, as outlined in each private fund’s CM) or were to lose a significant number of other key investment team members, the consequence to the private funds could be material and adverse and could lead to the premature termination of the private funds.
Other Funds Managed by the Company and General Partner – The Company currently serves
as the investment manager to multiple private funds and will not devote its resources and time exclusively to a specific private fund’s business. The Company may in the future manage additional investment vehicles, which may require attention. Similarly, the general partner may serve in the future as the general partner of any additional investment vehicles, which may require attention. In the instance of additional investment vehicles, neither the Company nor the general partner will devote its resources and time exclusively to the current private funds business. The general partner, the Company and their respective affiliates will devote so much of their time to the affairs of the current private funds as they deem necessary and appropriate to manage the business and activities of the current private funds.

Expedited Transactions – Investment analyses and decisions by ValueAct Capital will often be undertaken on an expedited basis in order for the private funds to take advantage of investment opportunities. In such cases, the information available to ValueAct Capital at the time of an investment decision may be limited, and ValueAct Capital may not have access to the detailed information necessary for a full evaluation of the investment opportunity. In addition, ValueAct Capital may rely upon independent consultants in connection with its evaluation of proposed investments. There can be no assurance that these consultants will accurately evaluate such investments. Third-Party Involvement – The private funds may co-invest with affiliated parties, such as the other private funds, and/or unaffiliated third parties through partnerships, joint ventures, or other entities. Such investments may involve risks not present in investments where the other private funds, or a third party is not involved, including the possibility that the other private funds or a third-party co-venturer or partner may at any time have economic or business interests or goals that are inconsistent with those of the private funds, or may be in a position to take action contrary to the investment objectives of the private funds. In addition, the private funds may in certain circumstances be liable for actions of its third party co-venturer or partner. Inside Information – From time to time, the members or employees of the general partner and/or ValueAct Capital may come into possession of material non-public information concerning an entity in which the private funds have invested or propose to invest. This is particularly relevant to ValueAct Capital because its employees or representatives often serve as directors of the private funds’ portfolio companies. Applicable law may limit the ability of the private funds to trade securities of such entity while such information remains non-public and material. The resulting illiquidity may result in delays and additional costs and transactions may be possible only at substantial discounts.

Concentration of Investments – Each private fund’s investment portfolio may be confined to the securities of relatively few issuers. This is particularly relevant for the Co-Investment Vehicles, which are only invested in a single security that investors opted-in to, and the Co-Invest Fund, which will have fewer investments than the Legacy Fund and Spring Fund and, due to the opt- in/opt-out rights of investors, the investors can be very highly concentrated and exposed to very few investments. The general partner may not permit any of the private funds to invest (indirectly, through the applicable master fund) up to a certain percentage of its net asset value (as specified in the applicable CM and measured as of the date the investment is made) in any single issuer or security. As a result of these factors, each private fund’s portfolio may be heavily concentrated, which will increase the volatility and risk of an investment in a private fund by increasing the relative impact which each portfolio investment will have on the overall performance of the private fund. As a result of this concentration, a significant loss in any single issuer, or a material economic, regulatory or other change affecting a particular industry, may have a material adverse effect on the performance of a private fund.

Sector Concentration – ValueAct Capital may from time to time concentrate each private fund’s portfolio of investments in a particular commercial sector. Concentration in a particular commercial sector means that the relevant private fund’s performance may be materially impacted by the performance of that particular sector and may present more risks than if the relevant private funds were more broadly diversified across industries and sectors.

Active Investing Strategies – “Active investing” strategies may prove ineffective for a variety of reasons, including, among other things: (i) opposition of the management or shareholders of the subject company, which may result in litigation; (ii) intervention of a governmental agency; (iii) efforts by the subject company to pursue a “defensive” strategy, including a merger with, or a friendly tender offer by, a company other than the offeror; (iv) market conditions resulting in material changes in securities prices; (v) corporate governance mechanisms such as composition of the board appointed by the management; and (vi) inability of the private funds to acquire sufficient securities of such portfolio companies at a sufficiently attractive price. In addition, opponents of a proposed corporate governance change may seek to involve regulatory agencies in investigating the transaction or the private funds and such regulatory agencies may independently investigate the participants in a transaction as to compliance with securities or other law. Further, successful execution of active investing strategies may depend on the active cooperation of shareholders and others with an interest in the subject company. Some of such actors may have interests which diverge significantly from those of the private funds and some of those actors may be indifferent to the actions proposed by ValueAct Capital. Moreover, securities which ValueAct Capital believes are fundamentally undervalued or incorrectly valued may not ultimately be valued in the capital markets at the price and/or within the time frame ValueAct Capital anticipates even if an active investing strategy is successfully implemented. Risk of Realization of Investments and Limited Liquidity of Some Portfolio Securities – There is a significant risk that the private funds will be unable to realize their investment objectives by the sale or other disposition of portfolio companies at attractive prices or that the private funds will otherwise be unable to complete any exit strategy from portfolio companies. Some portfolio securities may be thinly traded and relatively illiquid, even if such securities are publicly traded, and generally no more than a significant minority of the relevant private fund’s portfolio may consist of securities not publicly traded at all. The private funds often own a relatively large percentage of an issuer’s equity securities and/or in certain situations ValueAct Capital’s employees or representatives serve on the issuer’s board of directors. In those cases, and where the private funds and/or ValueAct Capital substantially participates in or influences the conduct of affairs or management of portfolio companies, the private funds and/or ValueAct Capital may be deemed to be “affiliates” or “control” persons with respect to certain portfolio companies. The private funds and/or ValueAct Capital may then become subject to trading restrictions pursuant to the internal trading policies of such companies or as a result of applicable law or regulations. The private funds also invest in securities and other financial instruments or obligations for which no market exists, and/or which are restricted as to their transferability under federal or state securities laws. In addition, in respect of portfolio companies in which ValueAct Capital holds a long position, even if the price for a portfolio company’s securities increases, no guarantee can be made that there will be sufficient liquidity in the markets to allow ValueAct Capital to dispose of all or any of its securities therein or to realize any increase in the price of such securities. The converse applies equally in respect of portfolio companies in which ValueAct Capital holds a short position. Therefore, significant legal or practical limitations may inhibit the private funds’ ability to liquidate certain of its investments promptly, which could adversely affect its gain or loss on the investment. The sale of any such investments may be subject to delays and additional costs and may be possible only at substantial discounts.

Market Disruptions – The private funds are exposed to market risk. Among other things, this means that the prices of financial and derivative instruments in which the private funds may invest can be highly volatile. Price movements of equity, debt and other securities and instruments in which the private funds’ assets may be invested are influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments and national and international political and economic events and policies. Moreover, war, political or economic crises, natural disasters and pandemics or public health events and policies, or other events may occur which can be highly disruptive to the markets, regardless of the strategies being employed. Governments may from time to time intervene, directly and by regulation, in certain markets, particularly those in currencies, financial instrument futures and options. Such intervention often is intended directly to influence prices and may, together with other factors, cause such markets to move rapidly in the same direction because of, among other things, interest rate fluctuations. The private funds may incur major losses in the event of disrupted markets and other extraordinary events in which historical pricing relationships (on which ValueAct Capital bases a number of its trading positions) become materially distorted. The risk of loss from pricing distortions is compounded by the fact that in disrupted markets many positions become illiquid, making it difficult or impossible to close out positions against which the markets are moving. The financing available to the private funds from its banks, dealers and other counterparties is typically reduced in disrupted markets. Such a reduction may result in substantial losses to the private funds. Market disruptions caused by unexpected natural disasters and pandemics or public health events and policies, political, military and terrorist events may from time to time cause dramatic losses for the private funds, and such events can result in otherwise historically low-risk strategies performing with unprecedented volatility and risk.

Private Portfolio Investments – Valuation and/or liquidation of the private funds’ investments in certain Private Portfolio Investments may not be possible at the time an investor seeks to withdraw any portion of its capital accounts invested in a Private Portfolio Investment. Withdrawals from the private funds with respect to such Private Portfolio Investments cannot be made until the investments can be liquidated or until the general partner determines that a Private Portfolio Investment is no longer a Private Portfolio Investment. Therefore, investors may not be able to readily liquidate their entire capital accounts with respect to the private funds for a significant period of time.

Investment and Trading Risks – The private funds will invest substantially all available capital in securities, especially in equity securities. Equity markets in general are subject to fluctuations, and fluctuations are often greater within certain sectors (oil and gas, healthcare, and technology, for example). Furthermore, fluctuations tend to be greater for securities that have limited liquidity, and a relatively low per-share price. No assurance can be given that the investment portfolio will generate any income or appreciate in value or avoid substantial losses. To a limited extent, the private funds’ investment programs may utilize such investment techniques as margin transactions, short sales, leverage, and options on securities, which practices can, in certain circumstances, significantly increase the risks to which the private funds may be subject. The private funds are also subject to the risk of the failure of any exchanges on which its positions trade and of their clearinghouses.

Leveraged Investments – The private funds may invest in companies that have a significant amount of indebtedness. In addition, certain investments may incur significant indebtedness in connection with various corporate transactions, such as acquisitions, self-tender offers, recapitalizations, and others. A highly leveraged company is generally more sensitive to downturns in its business and to changes in prevailing economic conditions than is a company with a lower level of debt. In addition, companies with a significant level of debt may be limited in their ability to fund expenditures and to react to changes in their businesses and industries and may be restricted in their ability to borrow additional funds. Foreign Securities – The private funds trade foreign securities. Investments in securities of non- U.S. issuers (including foreign governments) and securities denominated or whose prices are quoted in non-U.S. currencies pose currency exchange risks (including blockage, devaluation, and non-exchangeability) as well as a range of other potential risks which could include, depending on the country involved, expropriation, confiscatory taxation, political or social instability, illiquidity, price volatility, and market manipulation. In addition, less information may be available regarding securities of non-U.S. issuers, and there may be less government regulation and supervision of non-U.S. companies and investments. Non-U.S. companies may not be subject to accounting, auditing, and financial reporting standards and requirements comparable to or as uniform as those of U.S. companies. There may also be difficulty in enforcing legal rights outside of the United States. Transaction costs of investing in non-U.S. securities markets are generally higher than in the U.S. Investments in securities denominated or whose prices are quoted in non-U.S. currencies also pose particular risks. Such risks include blockage, devaluation, non-exchangeability and fluctuations in the rate of exchange, and costs associated with currency conversion. Currency exchange rates may fluctuate significantly over short periods of time. Currency exchange rates generally are determined by the forces of supply and demand in the foreign exchange markets and the relative merits of investments in different countries, actual or perceived changes in interest rates, and other complex factors. Currency exchange rates also can be affected unpredictably by intervention by the U.S. or non-U.S. governments or central banks, by the failure to so intervene, or by currency controls or political developments in the U.S. or elsewhere.

Additional risks include: (i) the imposition or modification of foreign exchange controls; (ii) the unpredictability of international trade patterns; (iii) the possible imposition of non-U.S. taxes on income and gains recognized with respect to such non-U.S. investments; (iv) differences between U.S. and non-U.S. markets, including, without limitation, potential price volatility in, and relative illiquidity of, some non-U.S. markets; (v) different bankruptcy laws and customs; (vi) less developed corporate laws regarding, among other things, fiduciary duties and the protection of investors; (vii) price volatility; and (viii) economic, social and political risks, including, without limitation, restrictions on non-U.S. investment and repatriation of income and capital and the risks of economic, social, and political instability (including, without limitation, the risk of war, terrorism, social unrest, or conflicts). While ValueAct Capital will take these factors into consideration in making investment decisions for a private fund, no assurance can be given that ValueAct Capital will be able to successfully evaluate and minimize these risks.

Potential Exposure of Assets – The private funds may leverage their investment positions by borrowing funds from securities broker-dealers, banks, or others up to a limit of 15% of the net asset value of the private fund. Whenever a private fund uses financing extended by broker-dealers to leverage its portfolio, it may be subject to changes in the value that broker-dealers ascribe to a given security or position, the amount of margin required to support such security or position, the borrowing rate to finance such security or position, and/or such broker-dealers’ willingness to continue to provide any such credit to the private fund. Assets of a private fund may be deposited as margin with brokers. Securities or other assets held in a margin account need not be segregated and may become available to the creditors of such brokers in the event of the insolvency of such brokers. Securities pledged by a private fund as collateral with a prime broker may be available to the creditors of such prime broker in the event of such prime broker’s insolvency. As a result of rehypothecation or other events, pledged securities are subject to the risk of losing voting rights. In certain circumstances, a prime broker also may have the discretion to liquidate a private fund’s assets held by such prime broker on short notice, so that the private fund can meet its financing obligations. The forced liquidation of all or a portion of a private fund’s portfolio at distressed prices could result in significant losses to the private fund. In particular, it could be subject to a “margin call,” pursuant to which it would either be required to deposit additional funds or securities with the broker-dealer or suffer mandatory liquidation of the pledged securities to compensate for the decline in value. In the event of a sudden drop in the value of the private fund’s assets, the private fund might not be able to liquidate assets quickly enough to satisfy its margin requirements.
Derivatives – The private funds may, directly or indirectly, use various derivative instruments
including, but not limited to, options contracts, futures contracts, forward contracts, options on futures contracts, indexed securities and swap agreements for hedging and risk management purposes. The private funds may also use derivative instruments to approximate or achieve the economic equivalent of an otherwise permitted investment (as if a private fund directly invested in the loans, claims or securities of the subject issuer) or if such instruments are related to an otherwise permitted investment. The private funds’ use of derivative instruments involves investment risks and transaction costs to which the appropriate private fund would not be subject absent the use of these instruments and, accordingly, may result in losses greater than if they had not been used. The use of derivative instruments may have risks including, among others, leverage risk, volatility risk, duration mismatch risk, correlation risk and counterparty risk.

Derivative instruments, especially when traded in large amounts, may not be liquid in all circumstances, so that in volatile markets the private funds may not be able to close out a position without incurring a loss. In addition, daily limits on price fluctuations and speculative position limits on exchanges on which the private funds may conduct its transactions in derivative instruments may prevent prompt liquidation of positions, subjecting the private funds to the potential of greater losses. Derivative instruments that may be purchased or sold by the private funds may include instruments not traded on an exchange. Derivative instruments not traded on exchanges are also not subject to the same type of government regulation as exchange traded instruments, and many of the protections afforded to participants in a regulated environment may not be available in connection with such transactions. In addition, significant disparities may exist between “bid” and “asked” prices for derivative instruments that are not traded on an exchange. Additionally, when a company defaults or files for protection from creditors (e.g., U.S. chapter 11 proceedings), the use of derivative instruments presents special risks associated with the potential imbalance between the derivatives market and the underlying securities market. In such a situation, physical certificates representing such securities may be required to be delivered to settle trades and the potential shortage of such actual certificates relative to the number of derivative instruments may cause the price of the actual certificated debt securities to rise, which may adversely affect the holder of such derivative instruments. The risk of nonperformance by the counterparty on such an instrument may be greater and the ease with which the private funds can dispose of or enter into closing transactions with respect to such an instrument may be less than in the case of an exchange traded instrument. The stability and liquidity of derivative investments depend in large part on the creditworthiness of the parties to the transactions. If there is a default by the counterparty to such a transaction, the private funds will under most normal circumstances have contractual remedies pursuant to the agreements related to the transaction. However, exercising such contractual rights may involve delays or costs which could result in a loss to the private funds. Furthermore, there is a risk that any of such counterparties could become insolvent. It should be noted that in purchasing derivative instruments, the private funds typically will not have the right to vote on matters requiring a vote of holders of the underlying investment. Moreover, derivative instruments, and the terms relating to the purchase, sale or financing thereof, are also typically governed by complex legal agreements. As a result, there is a higher risk of dispute over interpretation or enforceability of the agreements. It should also be noted that the regulation of derivatives is evolving in the United States and in other jurisdictions and is expected to increase, which could impact the private funds’ ability to transact in such instruments and the liquidity of such instruments.

Hedging Transactions – Although ValueAct Capital is not obligated to, and often will not, hedge its exposure, the private funds utilize financial instruments both for investment purposes and to seek to hedge against fluctuations in the value of the private funds’ portfolios as a result of changes in currency exchange rates, market interest rates, and equity prices. Such instruments may include forward contracts, stock index futures, options, swaps, caps, and floors. Hedging against a decline in the value of a portfolio position does not eliminate fluctuations in the values of portfolio positions or prevent losses if the values of such positions decline, but establishes other positions designed to gain from those same developments, thus moderating the decline in the portfolio positions’ value. Such hedging transactions also limit the opportunity for gain if the value of the portfolio position should increase. Moreover, it may not be possible for the private funds to hedge against an exchange rate, interest rate or equity price fluctuation that is so generally anticipated that the private funds are not able to enter into a hedging transaction at a price sufficient to protect the private funds from the decline in value of the portfolio position anticipated as a result of such a fluctuation.

Although ValueAct Capital will attempt to limit the private funds’ derivative transactions to those with well-known and well-capitalized firms where it is permitted to trade over-the-counter, ValueAct Capital is not restricted from dealing with any particular counterparty or from concentrating any or all of its derivative transactions with one counterparty. Moreover, ValueAct Capital’s internal credit function which evaluates the creditworthiness of the Company’s counterparties could prove insufficient. The success of the private funds’ hedging transactions will be subject to ValueAct Capital’s ability to correctly predict movements in the direction of interest rates and equity prices. Therefore, while the private funds may enter into such transactions to seek to reduce interest rate or equity value risks, unanticipated changes in interest rates could result in a poorer overall performance for the private funds than if they had not engaged in any such hedging transaction. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio position being hedged may vary. Moreover, for a variety of reasons, ValueAct Capital might not seek to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Such imperfect correlation may prevent ValueAct Capital from achieving the intended hedge or expose ValueAct Capital to a risk of loss. The successful use of hedging and risk management transactions requires skills complementary to those needed in the selection of the private funds’ portfolio holdings.
No Operating History – Certain Co-Investment Vehicles were recently formed and have no
operating history upon which prospective investors can evaluate their likely performance. The past performance of other private funds managed by ValueAct Capital is not necessarily indicative of the future performance of the applicable Co-Investment Vehicles. The investment program of the applicable Co-Investment Vehicles should be evaluated on the basis that there can be no assurance that ValueAct Capital’s assessment of the short, intermediate, or long-term prospects of investments will prove accurate or that the applicable Co-Investment Vehicles will achieve their investment objectives or be able to avoid losses.
Mission-Oriented Investing – Certain private funds will take into account environmental and
social policies of companies when making decisions regarding the selection of the private fund’s investments. The private funds may pursue investment opportunities where the underlying company does not currently have a positive environmental or social impact, but ValueAct Capital believes that a more positive environmental or social impact can be created.

Certain private funds may invest or otherwise pursue courses of action that may not be in the short- term operating or financial interests of the private funds but aim to help promote environmental and social outcomes. For example, the private funds may invest in a company that has a lower expected financial return because of its environmental and social impact. Similarly, taking into account environmental and social policies may involve higher compliance expenses or costs. Nonetheless, ValueAct Capital believes that socially responsible investing has the potential to enhance the long-term value of portfolio companies and is an important element of responsible investing.

Certain private funds may also invest in certain companies that seek to address environmental and social problems at the time of the private fund’s investment but later cease to do so. As a result, there can be no assurance that the private fund’s portfolio companies will achieve successful economic, environmental, or social outcomes. There are no universally accepted standards applicable to mission-oriented investments and not all investors may agree on the appropriate standards to apply in a particular situation.

Litigation – ValueAct Capital, the general partner, and/or the private funds have been involved in litigation (whether initiated by ValueAct Capital on behalf of the private funds or defensive in posture). The transactional nature of the business of the private funds exposes ValueAct Capital, the general partner, and/or the private funds generally to the risk of third-party litigation and, historically, ValueAct Capital and certain of its affiliates have been subject to such litigation. The adoption of new laws and regulations may further increase the risk of litigation. Furthermore, ValueAct Capital and the general partner have been, and may in the future be, subject from time to time, to formal or informal investigations or inquiries by the SEC and other governmental and self-regulatory organizations in connection with its activities. There can be no assurance that any litigation or regulatory investigation, once begun, will be resolved in favor of the private funds. As a result, the private funds may be exposed to the risk of monetary damages and other sanctions or remedies. Litigation and regulatory investigations may require significant amounts of the Company’s time, and the expense of defending against claims by third parties and paying any amounts pursuant to settlements or judgments, and related indemnification expenses, would generally be borne by the private funds. Such expenses may be significant and will reduce returns and/or may result in losses, or could, under some circumstances, require investors to return to the private funds distributed capital and earnings. Additionally, active investing strategies often result in an employee or representative of ValueAct Capital sitting on the board of a portfolio company on the private fund’s behalf, which as a result will often preclude the applicable private fund(s) from participating in securities class action lawsuits and other securities lawsuits against the portfolio company. Accordingly, the private funds will be limited in the litigation they can pursue against a portfolio company during the time a ValueAct Capital employee or representative is on the board of such portfolio company. As a result of such board representation, the private fund’s returns may be lower than they would have been had the ValueAct Capital employee or representative not obtained board representation. Even without board representation, ValueAct Capital generally does not participate in litigation involving a portfolio company, even if the litigation has the potential to recover damages that would enhance the returns for the private funds. ValueAct Capital generally refrains from participating in such litigation because it believes that doing so is not in the best interest of the funds it manages and is inconsistent with, and indeed may undermine, its investment strategy to work constructively with portfolio company management and/or the board (including in some instances participating as a board member) to implement strategies that maximize shareholder value. Moreover, participating in these lawsuits may be more expensive than any potential gain that may be derived therefrom.

Cash Management – The Company may, in its discretion, at any time elect to hold a significant or insignificant percentage of the capital of the private funds in cash or cash equivalents for a variety of reasons. The percentage of capital held in cash or cash equivalents, including considering leverage, could have a material adverse impact on the performance of the private funds, depending on a variety of factors including fund performance.

Terms – The percentage of profits ValueAct Capital is entitled to receive and the terms applicable to such performance allocations may vary among clients of ValueAct Capital. Because the opportunity to receive performance allocations is based on the success of portfolio investments, to the extent performance allocation percentages or terms applicable to performance allocations differ among clients of ValueAct Capital, the Company may be incentivized to dedicate increased resources and allocate more profitable investment opportunities to clients of ValueAct Capital bearing higher performance allocation percentages or to clients of ValueAct Capital whose governing documents contain less restrictive terms regarding performance allocations (such as higher “catch-up” rates).

Expense Allocation – ValueAct Capital seeks to allocate expenses fairly, equitably, and consistent with the documents governing the Company’s relationship with each private fund. When allocating expenses, ValueAct Capital must interpret each private fund’s governing documentation and make determinations whether expenses are allocated and paid, in full or in part, by a private fund, private funds, and/or the Company, which creates a conflict of interest. Such determinations are inherently subjective and there can be no assurance that a different manner of calculation would not result in a particular private fund bearing less (or more) expenses. ValueAct Capital may be incentivized to allocate expenses to the Legacy Funds rather than to the Spring Funds because of the general partner’s differing relative interests in the funds. please register to get more info

Department of Justice Settlement In April 2016, the U.S. Department of Justice (“DOJ”) alleged that ValueAct Capital Master Fund, L.P., ValueAct Co-Invest International, L.P. and the general partner, VA Partners I, LLC (collectively, “ValueAct Capital”), violated the notice and waiting period requirements of the Hart- Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) with respect to ValueAct Capital’s investments in two publicly-traded companies, and that ValueAct Capital was not eligible to use the relied-upon exemption to the notification requirements for those acquisitions made “solely for the purpose of investment” under 15 U.S.C. § 18A(C)(9). ValueAct Capital denied any wrongdoing, and consented to a final judgment, entered by the court on November 1, 2016, without admission of fact or law. As part of the settlement, the general partner, on behalf of the funds, paid an $11 million penalty and the final judgment specified inter alia when the funds must file a notification under the HSR Act during the ten years starting on November 1, 2016. In ValueAct Capital’s judgment, the final judgment does not place ValueAct Capital under any material limitations in its present or future investment activities.

SEC Investigation In March 2008, the U.S. Securities and Exchange Commission (“SEC”) commenced an investigation into irregular trading patterns of certain individuals connected with ValueAct Capital’s former CFO. Upon learning of that investigation, ValueAct Capital suspended the former CFO, who later resigned in June 2008, and alerted its investors. ValueAct Capital cooperated fully with the investigations by the SEC and, subsequently, the U.S. Attorney’s Office for the Northern District of California (“USAO”). In January 2009, the SEC issued a “No Action” letter to ValueAct Capital, indicating that ValueAct Capital was not implicated in any way with the alleged conduct of individual defendants. On October 30, 2009, the SEC filed a complaint against seven individuals, including the former CFO, alleging he shared inside information with his brother-in-law, who in turn tipped certain friends and family members. ValueAct Capital’s name did not appear in the SEC complaint. On March 7, 2013, the court entered final judgments that were consented to by four defendants, including the former CFO. As a result of the final judgment entered against him, the former CFO, without admitting or denying the allegations against him, was permanently enjoined from violating certain U.S. securities laws and paid a civil penalty of $62,545.66. The former CFO’s brother-in-law, but not ValueAct Capital’s former CFO, was charged by the USAO on February 5, 2010 with conspiracy to commit securities fraud and securities fraud in connection with the alleged insider trading, and the charges describe the former CFO and others as co-conspirators. On April 15, 2010, the brother-in-law pleaded guilty to insider trading charges and asserted, in connection with that plea, that he received certain inside information from the former CFO. The brother-in-law was sentenced on February 28, 2013 to one year in prison and three years of probation. please register to get more info

VA Partners I, LLC, an affiliate of ValueAct Capital, serves as the general partner of the private funds. please register to get more info

Personal Trading
ValueAct Capital has adopted a code of ethics (see “Code of Ethics” section below) and implemented procedures relating to personal securities transactions and insider trading that are designed to detect and prevent (or otherwise mitigate) conflicts of interest. ValueAct Capital access persons are not permitted to transact in the securities of individual public companies in their personal brokerage accounts (except pre-cleared sales, as noted below), nor are they permitted to invest in third-party private investment funds that primarily invest in equity securities of individual public companies. The Chief Compliance Officer (“CCO”) or her designee, among other things, monitors employee brokerage accounts in an attempt to prevent employees and the private funds from engaging in improper personal securities transactions and to otherwise detect and prevent potential conflicts of interest.

ValueAct Capital and/or its employees may give advice and take action for their own accounts that may differ from advice given and action taken on behalf of the private funds. ValueAct Capital’s employees may hold legacy investment positions or interests in the same securities recommended to or owned by the private funds. As such, ValueAct Capital may trade for the private funds securities of an issuer in which ValueAct Capital’s employees also have an investment position or interest.

Allowing employees to hold or sell the same securities as the private funds in the limited circumstances described further below could present certain potential conflicts of interest. For example, an employee could have an existing investment that opposes the position of the private funds (i.e., he or she has an existing long position when a private fund has or takes a short position, or vice versa) and thus the employee could potentially experience a conflict between acting in his or her own best interest versus the private funds’ best interests. An employee may also have an incentive to cause the private funds to invest in companies in which he or she already has an interest, especially if the employee believes that such an investment by the private funds may increase the value of his or her personal stake.

Code of Ethics (“Code”) ValueAct Capital and its affiliates have adopted the Code in accordance with Rule 204A-1 under the Advisers Act to govern, among other things, personal securities transactions by employees and to ensure that the interests of employees do not conflict with the interests of clients, including the private funds, and their underlying investors. A basic tenet of ValueAct Capital’s Code is that the interest of clients is always placed first. The Code includes standards of conduct requiring ValueAct Capital’s employees to comply with federal securities laws and the fiduciary duties an investment adviser owes to its clients. Under the Code, and except as noted below, no employee designated as an “access person” may engage in a transaction in any security of a public company. Current access persons with existing positions in securities of public companies or any new access persons who hold positions in securities of public companies as of the date of their employment may sell such positions with pre- clearance or under the direction of the CCO or her designee. The Code also requires access persons to pre-clear any transactions in securities acquired in any initial public offering or limited offering (e.g., investments in private investment funds). All access persons must provide to ValueAct Capital quarterly reports of their personal transactions within 30 days of the end of each calendar quarter, which may consist of brokerage statements for all accounts in which they have a beneficial interest, except for accounts that only hold securities exempt from the reporting requirements. The Code also requires all employees of ValueAct Capital to comply with ethical restraints relating to investors and their accounts, including restrictions on giving gifts to, and receiving gifts from, investors and certain other third parties as well as provisions intended to prevent violations of laws prohibiting “insider trading,” as discussed below.

Statement on Insider Trading ValueAct Capital and/or its employees may come into possession of material non-public or other confidential information which, if disclosed, might affect an investor’s decision to buy, sell, or hold a security. Under applicable law, ValueAct Capital and its employees are prohibited from improperly disclosing or using such information for their personal benefit or for the benefit of any other third party. Accordingly, should ValueAct Capital and/or its employees come into possession of material non-public or other confidential information with respect to any company, they may be prohibited from communicating such information to, or using such information for the benefit of, ValueAct Capital’s private funds and their underlying investors. ValueAct Capital has adopted a Statement on Insider Trading (“insider trading policy”) in accordance with Section 204A under the Advisers Act, which establishes procedures to prevent the misuse of material non- public information by ValueAct Capital and its employees.

A copy of the Code and insider trading policy is available to any investor or prospective investor upon request by contacting ValueAct Capital at 415-362-3700.

Participation by ValueAct Capital Personnel in Private Fund Profits Certain partners and other employees of ValueAct Capital are permitted to invest directly in the private funds and will participate in the private funds’ investments, pro rata, in accordance with their capital account balances. In addition, ValueAct Capital’s partners hold interests indirectly in the general partner and management companies of the private funds and in this manner, share in revenue generated by private funds (e.g., performance allocation and management fee revenue). Finally, investments by ValueAct Capital consultants and current and former employees and their immediate family members are generally not subject to the management fees or performance fees incurred by investors in the private funds in the discretion of the general partner. please register to get more info

Prime Broker ValueAct Capital may select one or more firms to serve as prime broker (“prime broker”) to hold the funds and securities of, and execute transactions for, the private funds, consistent with its duty to seek to achieve best execution. In addition to custody and execution, a prime broker may provide other core functions (including, but not limited to, reporting, clearing, financing, securities lending, and client service) as well as value-added items (including, but not limited to, advanced research and analytics and technology services) to the private funds. ValueAct Capital may also select prime brokers that provide specific services to the private funds (including, but not limited to, electronic access to account information and trade confirmations and access to specialized customer service personnel) that it believes will allow the private funds to operate effectively and efficiently. ValueAct Capital is not required to maintain its relationship with any prime broker and may change or add additional prime brokerage relationships at any time.

Selection of Brokers ValueAct Capital’s investment strategy generally involves the acquisition of large ownership stakes in a limited number of companies where ValueAct Capital is often seeking a multi-year investment opportunity. Therefore, for ValueAct Capital, best execution tends to be different from many other strategies that are much more trading intensive due to their larger number of positions and shorter holding periods. ValueAct Capital’s research generally results in a price range at which ValueAct Capital is willing to acquire and eventually sell a position. The trader is given price parameters to buy or sell the position over a period of time, being cognizant of daily price fluctuations that may have nothing to do with the fundamental investment thesis. Therefore, the trader’s focus is on receiving an optimal blend of size, price, timing, financing costs, and confidentiality, among other considerations, rather than focusing solely on price.

Within this context, it is the policy of ValueAct Capital to seek best execution for its client accounts. In fulfilling its duty to seek best execution, ValueAct Capital seeks to obtain the most favorable terms for each transaction reasonably available under the circumstances. In placing brokerage, ValueAct Capital considers the full range and quality of a broker-dealer’s services including, among other things, the value of research provided, execution capability, the overall quality of execution, confidentiality, the commission rate charged, ability to trade under ISDA agreements, and responsiveness of the broker-dealer.

As mentioned above, because ValueAct Capital’s investment strategy generally involves seeking to obtain significant ownership stakes in public and private companies, particular focus may be given to placing transactions with broker-dealers who are able to effectuate trades in a manner that maximizes desired execution while minimizing market impact. In addition, ValueAct Capital may select broker-dealers based on the research, information, and other services provided by such broker-dealers that may benefit client accounts. It is not always possible to place a dollar value on the execution or research services ValueAct Capital receives from broker-dealers effecting transactions on behalf of clients. Accordingly, broker-dealers selected by ValueAct Capital may be paid commissions for effecting transactions for client accounts in excess of amounts other broker-dealers would have charged for effecting similar transactions if ValueAct Capital determines in good faith that such amounts are reasonable in relation to the value of the brokerage, execution, ISDA, and/or research services provided by those broker-dealers, viewed either in terms of a particular transaction or ValueAct Capital’s overall duty to client accounts. ValueAct Capital has negotiated a uniform commission rate schedule across a substantial portion of the broker-dealers it uses. When deemed appropriate, due to overall best execution considerations, ValueAct Capital may execute trades through ECNs at a rate higher or lower than the negotiated commission rate. The determination and evaluation of the reasonableness of the brokerage commissions paid in connection with portfolio transactions are based primarily on the professional opinions of the persons responsible for the placement and review of such transactions. These opinions are based on, among other things, the experience of these individuals in the securities industry and information available to them concerning the level of commissions being paid by other investors of comparable size and type.

From time to time, ValueAct Capital may establish target levels of commissions for a particular broker-dealer. The target levels of commissions generally will be determined on a case by case basis taking into consideration ValueAct Capital’s evaluation of the execution and research services provided by the relevant broker-dealer and the other factors listed above. However, if a broker-dealer indicates that a certain level of commissions is desired in return for certain research, execution, ISDA, and/or prime brokerage services provided by the broker, ValueAct Capital may take this factor into consideration.

It is possible that certain employees may have relatives that work for broker-dealers that have a trading or investment banking relationship with ValueAct Capital. While this could represent a potential conflict of interest involving ValueAct Capital’s selection of broker-dealers, ValueAct Capital may not, and does not, consider familial relationships in determining where to execute transactions on behalf of clients. To mitigate this, and any other potential conflicts of interest detected or reported, ValueAct Capital utilizes a Trading and Best Execution Committee to oversee ValueAct Capital’s trading practices, including best execution, investment allocation, and soft dollar arrangements. In addition, ValueAct Capital’s trader must consider the execution quality of each trade and report to the CCO any unexpected deviations in price, commission rate, market impact, execution speed, or other aspects of execution quality.

Soft Dollars In allocating brokerage, ValueAct Capital may take into consideration the receipt of brokerage and research products and services as long as such consideration does not jeopardize the objective of seeking best execution regarding the transaction. When appropriate under its discretionary authority and consistent with the duty to seek best execution, ValueAct Capital may direct brokerage transactions for client accounts to broker-dealers who provide ValueAct Capital with such products and services. The brokerage commissions used to acquire such products and services in these arrangements are known as “soft dollars.” Broker-dealers typically provide a bundle of services, including both research and brokerage (e.g., research ideas, investment strategies, block positioning capabilities, clearance, settlement, and custodial services). The research provided can be either proprietary (created and provided by the broker-dealer, including tangible research products and access to analysts and traders) or third- party (created by a third party but provided by broker-dealer). Broker-dealers do not generally charge separate fees for proprietary research and brokerage services. ValueAct Capital may direct brokerage transactions to acquire either type of research and execution services. SEC regulations provide a “safe harbor” which allows an investment adviser to pay for research and brokerage products and services with commission dollars generated by client account transactions. In determining whether a service or product qualifies as research or brokerage, ValueAct Capital evaluates, among other things, whether the service or product provides lawful and appropriate assistance to ValueAct Capital in carrying out its investment decision-making responsibilities. ValueAct Capital generally limits its use of soft dollars to pay for research and execution services that fall within the safe harbor. ValueAct Capital may use soft dollars to pay for a portion of “mixed-use” items (products or services that include both safe harbor eligible research or brokerage elements and non-safe harbor eligible research or brokerage elements). When ValueAct Capital acquires a product or service, it generally uses available soft dollar credits to pay for the portion of the product or service deemed to fall within the safe harbor and uses hard dollars to pay for the portion of the product or service that falls outside of the safe harbor. Although the allocation between soft dollars and cash cannot always be precisely calculated, ValueAct Capital will make a good faith effort to reasonably allocate the cost of mixed-use items among soft and hard dollars. The determination as to the percentage of the cost of products and services that ValueAct Capital will pay with soft dollars versus hard dollars typically does not involve a conflict of interest that would traditionally exist because the private funds otherwise would incur hard dollar costs and expenses associated with brokerage and research-related products and services (see “Fees and Compensation” section above). As such, ValueAct Capital does not have an incentive to inflate the percentage of the cost of a product or service that it believes falls under the category of “safe harbor eligible.”

The generation and use of soft dollars to acquire brokerage and research-related products and services benefits ValueAct Capital by allowing ValueAct Capital, at no cost to it, to supplement its own research and analysis activities, to receive the views and information of individuals and research staff of other securities firms, and to gain access to persons having special expertise on certain companies, industries, areas of the economy, and market factors. Research and brokerage products and services acquired with soft dollars include research on market trends and special reports on the economy, industries, sectors, and individual companies or issuers (including current and historical financial data on such companies, issuers, or industries); research as to the credit- worthiness of issuers; technical and statistical studies and information; accounting and tax law interpretations; political analyses; reports on legal developments affecting portfolio securities; information on technical market actions; online quotation and trading systems; investment risk measurement resources; analyses of corporate responsibility issues; online news services; and financial and market database services. ValueAct Capital may have an incentive to select or recommend a broker-dealer based on its interest in receiving the research or other products or services, rather than on its clients’ interest in receiving most favorable execution. However, as mentioned above, the acquisition of products and services using soft dollars versus hard dollars does not involve a conflict of interest that would traditionally exist because the private funds otherwise would incur hard dollar costs and expenses associated with brokerage- and research-related products and services. To control the use of soft dollars and detect and prevent potential compliance-related concerns, ValueAct Capital’s internal procedures require the CCO, in consultation with the Trading and Best Execution Committee as necessary, to approve in advance all soft dollar arrangements and review such arrangements as needed. They will consider:
• whether the product or service is eligible under the Section 28(e) safe harbor based on the nature of the product or service, the employees who use it, and how employees use it;
• whether the product or service should be paid for in whole or in part with hard dollars; and
• whether the use of soft dollars to obtain the product or service requires additional disclosures to clients or investors.

In connection with the approval by the Trading and Best Execution Committee, ValueAct Capital may execute trades that include a soft dollar component. Although the value of products and services may be a factor in ValueAct Capital’s determination to execute trades with a broker- dealer, ValueAct Capital must determine that the commission paid to the broker is reasonable in relation to the value of the brokerage and research services received, viewed either in terms of a particular transaction or ValueAct Capital’s overall duty to its client accounts. The research services provided by a broker may be used to service all client accounts and not exclusively regarding the client account that generated a specific soft dollar credit.

Brokerage for Referrals ValueAct Capital generally does not consider investor referrals from broker-dealers or other third parties in selecting or recommending a prime broker or broker-dealers to execute client transactions. However, from time to time ValueAct Capital may participate in capital introduction programs arranged by prime brokers or accept investors that were recommended by a prime broker.

To mitigate potential conflicts of interest detected or reported with respect to referral arrangements, ValueAct Capital uses a Trading and Best Execution Committee to oversee ValueAct Capital’s trading practices. The committee shall meet approximately semi-annually, and as necessary, and will review, among other things, potential conflicts of interest (including client or investor referrals) that influence, or may appear to influence, ValueAct Capital’s direction of brokerage.

Please see the “Client Referrals and Other Compensation” section, below, for additional information.

Directed Brokerage ValueAct Capital does not permit a client or investor to direct brokerage. Rather, ValueAct Capital has complete discretionary authority to select the broker-dealers used to execute client transactions. Trade Aggregation and Allocation ValueAct Capital’s private funds generally conduct their trading activities through master-feeder structures, and thus feeder funds and the underlying investors participate in investment activities pro rata based on their respective capital account balances in the applicable master fund. Trading activities of the private funds will overlap at times. While the private funds may invest in the same issuer(s), the purchase and sale of such investment(s) may be at different times and upon different terms, based on each private fund’s overall investment objectives and strategy, fund terms, legal or regulatory concerns, capital requirements, and/or other relevant considerations. Where the general partner determines that a conflict of interest exists between any of the ValueAct Capital private funds or accounts, the general partner may bring such conflict to the attention of the Advisory Board of each affected private fund ( conflicts affecting the Co-Investment Vehicles are addressed by the Legacy or Spring Fund Advisory Board as relevant). The Co-Invest Fund’s commitment period has ended and therefore no further investments will be allocated to the Co-Invest Fund.

If additional capacity in any investment opportunity exists, ValueAct Capital may offer such additional capacity in such investment opportunity (or portion thereof) to any third party, in its sole and absolute discretion. In the past, ValueAct Capital offered additional capacity in an investment opportunity in the securities of a single issuer to certain Co-Investment Vehicles (i) after both the Legacy Fund and, as applicable, the Co-Invest Fund had received an appropriate allocation or (ii) after the Spring Fund received an appropriate allocation.

When allocating an investment opportunity between the Spring Fund and the Legacy Fund, ValueAct Capital will allocate investment opportunities appropriate for the Spring Fund and the Legacy Fund in any manner that ValueAct Capital determines in its sole discretion to be equitable, which could be determined based on the respective Portfolio Manager's views of the investment profile and whether the investment meets the investment objective of the respective fund, the size of the investment, investment thesis, portfolio construction, portfolio cash needs, and other factors. For the avoidance of doubt, ValueAct Capital may initiate a non-pro rata allocation of purchases and sales with respect to any investment opportunity.

To the extent that ValueAct Capital purchases or sells the same securities at the same time for the private funds, ValueAct Capital may submit an aggregated trade for execution if ValueAct Capital believes that the use of an aggregated trade reasonably furthers its efforts to seek best execution. Participants in aggregated trades receive the average execution price and incur their pro rata share of the trading costs.

To the extent that partial fills occur, ValueAct Capital will allocate the results of the partially completed trade pro rata between the private funds as applicable, for transactions based on the initial allocation instructions submitted for execution. Impacted accounts receive the average execution price and incur their pro rata share of the trading costs with respect to the partially completed trade. With respect to buy transactions involving the Legacy Fund, Spring Fund and certain Co- Investment Vehicles, as applicable, generally the Legacy Fund or Spring Fund would be filled first and any remaining shares would be allocated to the appropriate Co-Investment Vehicle as applicable. Other exceptions to strict pro rata allocation of partially filled orders may include, without limitation, the avoidance of clients holding odd lots or similar de minimis numbers of shares, or the payment of additional ticket costs charged by broker-dealer custodians. In such cases, ValueAct Capital may increase or decrease the amount of securities that would otherwise be allocated to each account by reallocating the securities in a manner which ValueAct Capital deems fair and equitable to clients over time. With the exception of the Spring Fund, generally, sales of securities held by more than one of the private funds are made on a pro rata basis across the relevant private funds. Sales must be pro rata in the case of a change in investment conviction or to meet redemptions related to a key person event.

In a pro rata sale, the Co-Invest Fund’s (and Co-Investment Vehicles’ as applicable) position in securities of the relevant issuer shall be reduced at the same time as any sale by the Legacy Fund by an amount equivalent on a pro rata basis to the size of the sale by the Legacy Fund and on the same terms in all material respects, unless otherwise approved by the Advisory Boards of the private funds.

The general partner may exercise discretion in sales of securities held by more than one of the private funds in the following circumstances: (i) sales by the Spring Fund, (ii) for portfolio construction purposes, including but not limited to, sales by the Legacy Fund to meet redemptions (but not redemptions relating to a key person event) or for portfolio sizing purposes (rather than a change in investment conviction), (iii) sales subject to the fiduciary obligations of the general partner with respect to conflicts of interests under applicable securities laws, and (iv) sales by the Co-Invest Fund or other Co-Investment Vehicles as applicable, (a) at such times that the Legacy Fund is not selling shares of the relevant issuer or (b) in excess of an amount that would otherwise be pro rata.

“New Issues” ValueAct Capital allocates new issues of equity securities registered under the Securities Act (“new issues”) in accordance with FINRA Rules 5130 and 5131. This may, in certain circumstances, limit or restrict certain clients or investors from participating in any profits and losses from new issues.

Cross Trades When consistent with its duty to seek to obtain best execution, ValueAct Capital may use cross trades when the private funds wish to trade in opposite directions in the same securities. A cross trade occurs when ValueAct Capital purchases and sells a security between accounts under its management by instructing the broker-dealer to cross the trade. ValueAct Capital may utilize cross trades between the private funds as applicable, when it specifically deems the practice to be advantageous for its respective clients. In no instance will ValueAct Capital receive additional compensation when crossing trades for client accounts. ValueAct Capital will seek to ensure that the terms of the transaction, including the consideration to be paid or received, are fair and reasonable, and the transaction is done for the sole benefit of its clients. ValueAct Capital believes that its clients benefit from these types of transactions by obtaining a more favorable transaction price or liquidity for the securities being purchased or sold than may otherwise be available. ValueAct Capital will only engage in such transactions after determining that such securities are suitable and appropriate for each participating client. Broker-dealers who facilitate the execution of these cross transactions typically charge a reduced commission (i.e., agency commission or a mark-up or mark-down on the price of the security) for their efforts. Purchase and sale orders in the same security will be simultaneously entered through and affected by a non-affiliated broker-dealer at the then current market price as determined by the broker- dealer. ValueAct Capital will review such trades to confirm that the compensation paid to the broker-dealer to execute these types of transactions appears to be reasonable and commensurate with the level of services being provided.

In acting as investment adviser and fiduciary to both buyer and seller, ValueAct Capital, its affiliates, its partners, and its employees (“internal owners”) may be exposed to a conflict of interest to the extent that they own interests in the private funds involved in the cross trade. To the extent that internal owners only have interests in certain private funds involved in a cross trade, or if internal owners have a significantly greater interest in certain private funds involved in a cross trade, ValueAct Capital may be predisposed to favoring one side of the trade to maximize the benefit to internal owners. In addition, ValueAct Capital may have an incentive to favor one side of a cross trade to maximize its revenues, depending on the fee structure of the private funds involved in a cross trade. To mitigate this, and any other potential conflicts of interest detected or reported, ValueAct Capital uses a Trading and Best Execution Committee to oversee these trading practices. In addition, ValueAct Capital’s trader must consider the execution quality of each trade and report to the CCO any unexpected deviations in price, commission rate, market impact, execution speed, or other aspects of execution quality.

Trade Error Policy As a general practice, ValueAct Capital attempts to cause any broker or other service provider responsible for a trade error to reimburse affected clients for any losses resulting from the trade error. If ValueAct Capital causes a trade error, it generally does not reimburse its clients for any losses resulting from the error, unless the loss was the result of bad faith, gross negligence, or willful misconduct on the part of ValueAct Capital. In addition, ValueAct Capital will not compensate clients for lost opportunities associated with trade errors. Finally, if a trade error results in a gain, the gain generally will accrue to the benefit of the affected client accounts.

The limitation on ValueAct Capital’s liability to clients for losses is described in the offering documents for the private funds. The self-assessment by ValueAct Capital as to whether a trade error loss resulted from bad faith, gross negligence, or willful misconduct may expose ValueAct Capital to a potential conflict of interest. ValueAct Capital may have an incentive to determine that it does not have to reimburse its clients for trade error losses. To mitigate this conflict, ValueAct Capital’s trade error procedures require employees to notify the Legal and Compliance Department upon the discovery of a possible trade error. If the trade error is material in nature or cannot be easily resolved by the Legal and Compliance Department and the trader, one or more members of ValueAct Capital’s Compliance Committee shall be notified. The relevant members of the Compliance Committee shall investigate and arrange for appropriate action to take place with respect to the error. If deemed necessary, the members of the Compliance Committee shall consult with outside counsel regarding the resolution of the situation. Backup Trading Arrangements ValueAct Capital uses an unaffiliated broker-dealer as a backup outsourced trading solution. Per written agreement, outsourced executions cost $.005 per share in addition to standard trading costs. ValueAct Capital’s private funds incur the costs associated with backup trading solutions, which ValueAct Capital believes are reasonable considering the value of the backup trading services. please register to get more info

Each client account is reviewed by a committee comprised of certain partners and employees of ValueAct Capital generally on a weekly basis or more frequently if market circumstances warrant. Periodic account reviews consist of an analysis of the account’s performance to date considering its investment objectives and an evaluation of any appropriate changes which should be made to its portfolio in light of its current positions, the exposure of the portfolio to various forms of risk, and ValueAct Capital’s ongoing assessment of the overall market, current portfolio companies, and alternative investment opportunities.

Private fund investors receive written reports as described in the applicable CM. ValueAct Capital generally supplies monthly capital account balance statements and unaudited financial statements, and periodic reports to investors that may include investment and market summaries as well as the performance of the applicable private fund versus that of a benchmark selected for comparison to broad market performance. Each investor in an onshore private fund also receives a Schedule K- 1 for tax purposes; each investor in an offshore private fund also receives annual tax information for the preparation of their tax returns. To comply with Rule 206(4)-2 (the “Custody Rule”) of the Advisers Act, annual audit reports are generally provided within 120 days following a private fund’s fiscal year end.

Certain investors may receive additional information and reporting from ValueAct Capital and/or the general partner of the private funds, upon verbal request, through written side letter agreements, or consulting agreements, and such information may affect an investor’s decision to request a withdrawal of its interests or make additional subscriptions. ValueAct Capital’s CCO, CFO, COO, and/or Head of Investor Relations and Marketing, as relevant, internally reviews the information provided to investors in order to detect and prevent potential concerns with respect to information flow, such as a combination of enhanced transparency and liquidity that could benefit particular investors to the detriment of other investors. please register to get more info

Rule 206(4)-3 specifies certain standards that must be met by an investment adviser prior to the payment of a cash fee directly or indirectly, for a client solicitation or referral. If ValueAct Capital pays cash referral fees to obtain clients (as opposed to investors for its private funds), the referral agreement, disclosures, and all related activities must comply with Rule 206(4)-3 under the Advisers Act. Management fees charged by ValueAct Capital to clients or private fund investors introduced by a solicitor or capital introduction program will not be any higher than those charged to similar clients or investors not introduced by a solicitor or capital introduction program. Capital Introduction Program ValueAct Capital may benefit from the capital introduction services provided by its prime brokers. ValueAct Capital does not have any formal agreement to directly pay its prime brokers for referring investors to its private funds. However, when prime brokers refer investors to ValueAct Capital, ValueAct Capital may face a conflict of interest between directing trades to prime brokers’ associated trading desk and directing trades among various other broker-dealer options. Client Service/Marketing Agreements ValueAct Capital has an agreement with an affiliate to provide marketing and investor services to investors located in Australia and the Middle East. The affiliate will maintain communications with investors that it identifies as suitable leads for ValueAct Capital in an effort to develop such leads for ValueAct Capital and will assist ValueAct Capital in responding to requests for proposals and in assembling marketing materials once such prospective investors are identified. The affiliate pays for all fixed expenses associated with establishing and maintaining its presence in Australia and the Middle East. ValueAct Capital pays for a portion of the variable expenses. The affiliate provides these services at cost and the arrangement is solely designed to apply to prospective investors that wish to invest in private investment funds. please register to get more info

As investment manager and/or general partner of the private funds, ValueAct Capital and/or its affiliates have the authority to directly access the funds or securities of such private funds. ValueAct Capital and/or its affiliates have the authority to automatically deduct fees and expenses payable to ValueAct Capital, the general partner of the private funds, and/or third-party service providers with respect to each private fund by sending instructions directly to the custodian (or the prime broker, as relevant). In each such case, ValueAct Capital will be deemed to have custody of the client’s assets under the Custody Rule. ValueAct Capital will comply with the requirements of the Custody Rule regarding such custody. Investors in onshore and offshore private funds will receive audited financial statements annually, prepared in accordance with generally accepted accounting principles, within 120 days after the end of the fiscal year of each such private fund. please register to get more info

ValueAct Capital is retained with respect to its private funds on a discretionary basis and is authorized to make the following determinations in accordance with a private fund’s specified investment objectives without investor consultation or consent before a transaction is effected (unless consultation is required with respect to principal trades, which ValueAct Capital does not intend to employ as part of its standard investment strategy):
• the security selection;
• the total quantity or amount of securities;
• the type and timing of the transaction;
• the broker-dealer through which securities are transacted;
• the commission rates and/or financing terms at which securities transactions are effected; and
• the transaction price of securities, which may include dealer spreads, mark-ups or mark- downs, and transaction costs. ValueAct Capital has investment discretion over the private funds’ accounts, including the amount and price of securities traded, the timing of trades, the type of transaction, the preferred broker- dealer, and the commission rate. Investors generally cannot place restrictions on ValueAct Capital’s investment discretion with respect to the private funds. However, ValueAct Capital may enter into side letter agreements with certain large or strategic investors granting, among other things, requested restrictions with respect to permitted investment sectors and allocations of Private Portfolio Investments.

With respect to the Co-Invest Fund, investors had opt-in/opt-out rights and therefore gave their consent in order to commit to a particular investment opportunity presented by ValueAct Capital. Finally, the Co-Investment Vehicles only offered investors an opt-in right for single security investments. please register to get more info

ValueAct Capital has written proxy voting policies and procedures as required by Rule 206(4)-6 under the Advisers Act. ValueAct Capital’s policy is to vote proxies with the aim of furthering the best interests of its private funds, generally by promoting high levels of corporate governance and adequate disclosure of company policies and practices. ValueAct Capital will generally vote proxies as directed by the portfolio manager, or his designee, with assistance from the investment team, as necessary. Investors cannot direct ValueAct Capital as to how to vote in a specific ballot. ValueAct Capital reserves the right, on occasion, to abstain from voting a proxy or a specific proxy item when it concludes that the cost of voting outweighs the potential benefit or when ValueAct Capital otherwise does not believe voting serves its private funds’ best interests. The mechanics of proxy voting are handled by a third-party service provider.

Due to the nature of ValueAct Capital’s business and structure, ValueAct Capital does not believe it is likely that material conflicts of interest will arise in voting proxies of portfolio companies. However, material conflicts of interest could arise in certain circumstances, such as, for example, where an investor in a private fund is associated with the company soliciting the proxy or actively supporting or opposing a proxy proposal, or where a partner or executive officer of ValueAct Capital has personal or other business relationships with participants in a proxy contest (such as a company director or a proponent of the proxy proposal). ValueAct Capital takes steps to identify the existence of any material conflicts of interest relating to the securities to be voted and/or the issues at hand. For example, ValueAct Capital’s employees must disclose to the CCO any potential personal conflicts known to them and potential conflicts based on business relationships or dealings. In considering whether a material conflict of interest exists, the CCO may consult with the partners of ValueAct Capital and other persons she deems relevant in making a determination. In the absence of a finding of a material conflict of interest relating to the proxy vote at hand, the recommendation to vote the proxy as directed by the portfolio manager, or his designee, with assistance from the investment team, as necessary, or to abstain from voting the proxy, shall be deemed to have been made in the best interests of ValueAct Capital’s private funds. If, however, the CCO determines that the recommendation may have been influenced by a material conflict of interest, the proxy shall be voted in accordance with one of the following methods: (i) if feasible, in the manner determined to be in the best interests of the private funds by a ValueAct Capital partner not impacted by the conflict of interest or by ValueAct Capital’s Management Committee, (ii) in the manner determined to be appropriate by the CCO in consultation with outside counsel, or (iii) in accordance with the recommendations of an independent third-party proxy voting service.

Investors in ValueAct Capital’s private funds may obtain a copy of ValueAct Capital’s written proxy voting policies and procedures as well as information on how ValueAct Capital voted proxies for the private funds by requesting such information. Please contact ValueAct Capital at 415-362-3700.

Class Action and Other Lawsuits From time to time, ValueAct Capital is asked to participate, on behalf of the private funds, in lawsuits involving a portfolio company, class action or otherwise. ValueAct Capital generally does not participate in litigation involving a portfolio company, even if the litigation has the potential to recover damages that would enhance the return for the private fund. ValueAct Capital refrains from participating in such litigation because it believes that doing so is not in the best interest of the private funds and is inconsistent with, and indeed may undermine, its investment strategy to work constructively with portfolio company management and/or the board (including in some instances participating as a board member) to implement strategies that maximize shareholder value. Moreover, participating in these lawsuits may be more expensive than any potential gain that may be derived therefrom. please register to get more info

ValueAct Capital has never filed for bankruptcy and is not aware of any financial condition that is expected to affect its ability to manage client accounts. please register to get more info