SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Quarter Ended: July 1, 1995 Commission File Number 1-9853
EMC CORPORATION
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(Exact name of registrant as specified in its charter)
Massachusetts 04-2680009
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
organization or incorporation)
171 South Street
Hopkinton, Massachusetts 01748-9103
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(Address of principal executive offices, including zip code)
(508) 435-1000
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
YES X NO ________
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Common Stock, par value $.01 per share 214,647,790
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Class Outstanding as of July 1, 1995
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EMC CORPORATION
Page No.
Part I - Financial Information
Consolidated Balance Sheets
July 1, 1995 and December 31, 1994 3
Consolidated Statements of Operations
for the Three and Six Months Ended
July 1, 1995 and July 2, 1994 4
Consolidated Statements of Cash Flows
for the Six Months Ended July 1, 1995
and July 2, 1994 5
Notes to Interim Consolidated Financial Statements 6 - 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 14
Part II - Other Information 15 - 16
Signatures 17
Exhibit Index 18
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EMC CORPORATION
CONSOLIDATED BALANCE SHEETS
(amounts in thousands except share amounts)
July 1, December 31,
ASSETS 1995 1994
Current assets:
Cash and cash equivalents $221,688 $240,506
Trade and notes receivable less allowance for
doubtful accounts of $5,920 and $6,272,
respectively 446,310 361,191
Inventories 297,473 251,096
Deferred income taxes 39,201 40,754
Other assets 11,886 8,258
Total current assets 1,016,558 901,805
Long-term investments 157,542 175,631
Notes receivable, net 48,873 38,945
Property, plant and equipment, net 191,769 173,016
Deferred income taxes 7,256 4,473
Other assets, net 41,901 23,630
Total assets $1,463,899 $1,317,500
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $764 $9,502
Accounts payable 66,351 122,264
Accrued expenses 105,115 106,107
Income taxes payable 95,423 55,521
Deferred revenue 9,458 8,070
Total current liabilities 277,111 301,464
Deferred revenue 6,004 2,289
Long-term obligations:
4 1/4% convertible subordinated notes due 2001 229,598 229,598
6 1/4% convertible sub. debentures due 2002 --- 39,536
Notes payable and capital lease obligations 17,320 16,972
Total liabilities 530,033 589,859
Stockholders' equity:
Series Preferred Stock, par value $.01;
authorized 25,000,000 shares --- ---
Common Stock, par value $.01; authorized
500,000,000 shares; issued 217,292,192 and
201,738,042, in 1995 and 1994 respectively 2,173 2,017
Additional paid-in capital 329,844 281,625
Deferred compensation (2,097) (2,607)
Retained earnings 601,495 443,713
Cumulative translation adjustment 3,642 3,716
Treasury stock, at cost, 2,644,402 and
2,627,467 shares, respectively (1,191) (823)
Total stockholders' equity 933,866 727,641
Total liabilities and stockholders' equity $1,463,899 $1,317,500
The accompanying notes are an integral part of the consolidated
financial statements.
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EMC CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
July 1, July 2, July 1, July 2,
1995 1994 1995 1994
Revenues:
Net sales $423,473 $300,140 $834,250 $557,860
Service and rental 11,794 7,976 21,615 17,314
435,267 308,116 855,865 575,174
Costs and expenses:
Cost of sales and service 213,454 146,383 418,820 270,790
Research and development 41,134 26,245 78,572 48,593
Selling, general and administrativ 73,414 59,725 144,126 111,329
Operating income 107,265 75,763 214,347 144,462
Investment income 5,642 4,951 11,967 9,930
Interest expense (3,044) (3,793) (6,532) (7,595)
Other income / (expense), net 207 490 899 (118)
Income before taxes 110,070 77,411 220,681 146,679
Income tax provision 30,269 22,842 62,899 43,270
Net income $79,801 $54,569 $157,782 $103,409
Net income per weighted average share,
primary $0.35 $0.26 $0.70 $0.49
Net income per weighted average share,
fully diluted $0.35 $0.24 $0.69 $0.46
Weighted average number of common
shares outstanding, primary 234,494 217,064 227,973 215,640
Weighted average number of common
shares outstanding, fully diluted 235,015 232,966 234,970 233,207
The accompanying notes are an integral part of the consolidated
financial statements.
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EMC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
For the Six Months Ended
July 1, July 2,
1995 1994
Cash flows from operating activities:
Net income $157,782 $103,409
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 25,952 15,084
Deferred income taxes (1,230) (3,021)
Net loss/(gain) on disposal of property and equipment 424 (295)
Minority interest in consolidated subsidiaries --- 932
Changes in assets and liabilities:
Trade and notes receivable (94,944) (94,844)
Inventories (46,427) (64,680)
Other assets (25,099) (12,035)
Accounts payable (55,918) 51,596
Accrued expenses (1,014) 16,540
Income taxes payable 39,896 (6,192)
Deferred revenue 5,090 1,567
Net cash provided by operating activities 4,512 8,061
Cash flows from investing activities:
Additions to property and equipment (41,926) (48,742)
Proceeds from sales of property and equipment --- 445
Net maturity/(purchase) of long-term investments 18,089 (122,921)
Net cash used by investing activities (23,837) (171,218)
Cash flows from financing activities:
Issuance of common stock 9,349 7,562
Purchase of treasury stock (368) (140)
Issuance of 4 1/4% convertible subordinated notes
due 2001, net of issuance costs --- 29,350
Payment of long-term and short-term obligations (8,935) (895)
Issuance of long-term and short-term obligations 545 1,536
Net cash provided by financing activities 591 37,413
Effect of exchange rate changes on cash (84) 396
Net decrease in cash and cash equivalents (18,734) (125,744)
Cash and cash equivalents at beginning of period 240,506 345,300
Cash and cash equivalents at end of period $221,688 $219,952
Non-Cash Activity - Conversions of Debentures 39,536 13,429
The accompanying notes are an integral part of the consolidated
financial statements.
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EMC CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Company
EMC Corporation and its subsidiaries ("EMC" or the "Company") design,
manufacture, market and support high performance storage products and
provide related services for mainframe and midrange computer systems
manufactured primarily by International Business Machines Corporation
("IBM"). The Company also designs, manufactures, markets and supports a
family of products aimed at the open systems storage marketplace.
Accounting
The accompanying consolidated financial statements are unaudited and have been
prepared in accordance with generally accepted accounting principles. These
statements include the accounts of EMC and its subsidiaries. Certain
information and footnote disclosures normally included in the Company's
annual consolidated financial statements have been condensed or omitted. The
interim consolidated financial statements, in the opinion of management, reflect
all adjustments (consisting only of normal recurring accruals) necessary for
a fair statement of the results for the interim periods ended July 1, 1995
and July 2, 1994.
The results of operations for the interim periods are not necessarily indicative
of the results of operations to be expected for the entire fiscal year. It
is suggested that these interim consolidated financial statements be read in
conjunction with the audited consolidated financial statements for the year
ended December 31, 1994, which are contained in the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission on March 29, 1995.
2. Inventory
July 1, 1995 December 31, 1994
Inventories consist of:
Purchased parts $ 7,658,000 $ 8,946,000
Work-in-process 142,999,000 133,116,000
Finished goods 146,816,000 109,034,000
$297,473,000 $251,096,000
3. Convertible Subordinated Debentures
In March 1992, the Company issued $60,000,000 of 6 1/4% convertible
subordinated debentures due 2002 (the "Debentures"). The Debentures were
generally convertible at the option of the holder at any time prior to
maturity into shares of Common Stock of the Company at a conversion price of
$3.063 per share, subject to adjustment in certain events. In February 1995,
the Company notified holders of the Debentures that the Company intended to
redeem the Debentures on April 1, 1995, unless the holders chose to convert
on or prior to such date. The Company redeemed $1,000 of the Debentures on
April 1, 1995. All other Debentures were converted on or prior to that date.
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EMC CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
4. Net Income Per Share
Net income per share was computed on the basis of weighted average common and
dilutive common equivalent shares outstanding. Weighted average shares
outstanding and earnings used in primary per share computations for the three
and six months ended July 1, 1995 and July 2, 1994, and used in fully diluted
per share computations for the second quarter of 1995, reflect the dilutive
effects of the 4 1/4% convertible subordinated notes due 2001 (the "Notes")
and outstanding stock options. Weighted average shares outstanding and
earnings used in fully diluted per share computations for the six months
ended July 1, 1995 and the three and six months ended July 2, 1994, reflect
the dilutive effects of the Debentures, in addition to the dilutive effect of
the Notes and outstanding stock options.
5. Litigation
On June 10, 1993, Storage Technology Corporation ("STK") filed suit against
EMC in the United States District Court for the District of Colorado alleging
that EMC is infringing three patents. In the complaint, STK seeks injunctive
relief, unspecified damages, including treble damages, plus attorney's fees
and costs. On July 20, 1993, EMC answered the complaint, denied STK's
allegations and counterclaimed. In the counterclaims, EMC seeks unspecified
damages, attorney's fees, costs and interest. In a court hearing on October
12, 1994, STK's claims on two of the three patents were dismissed with
prejudice.
On September 23, 1994, EMC filed suit against STK in the United States District
Court for Delaware alleging that STK is infringing one EMC patent. In the
complaint, EMC seeks injunctive relief and unspecified damages, including
treble damages, plus attorney's fees and costs. On October 12, 1994, STK
answered the complaint, denied any infringement and counterclaimed. STK has
subsequently filed an additional counterclaim. EMC has denied STK's
allegations.
The Company is a party to other litigation which it considers routine and
incidental to its business. Management does not expect the results of any of
these actions to have a material adverse effect on the Company's business or
financial condition.
<PAGE>
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EMC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations - Second Quarter of 1995 compared to
Second Quarter of 1994
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Revenues
Revenues for the quarter ended July 1, 1995 were $435,267,000 compared to
$308,116,000 for the second quarter of 1994, an increase of $127,151,000 or
41%. While the Company expects revenue to continue to increase in all of its
markets throughout 1995 as compared to the respective periods in 1994, such
increase may not, on a percentage basis, continue at the levels experienced
in the second quarter of 1995.
The increase in revenues was due to continued strong demand for the Company's
series of Integrated Cached Disk Array ("ICDA") based products, which include
the Symmetrix series of products for the mainframe market, the Harmonix
series of products for the midrange market, the Centriplex series of products
for the open systems storage market, and the Symmetrix 3000 series of products
for the open systems storage market, which was introduced in April 1995.
Revenues from the Symmetrix series of products in the mainframe market increased
by $112,576,000, or 42%, to $378,233,000 in the second quarter of 1995 from
$265,657,000 in the second quarter of 1994. Revenues from the Harmonix series
of IBM compatible disk products for the midrange market decreased by $4,731,000,
or 21%, to $17,473,000 in the second quarter of 1995 from $22,204,000 in the
second quarter of 1994. Revenues from the Company's products in the open
systems storage market increased $10,816,000, or 208%, to $16,007,000 in the
second quarter of 1995, from $5,191,000 in the second quarter of 1994.
Revenues on sales and service into the markets of North and South America
increased by $59,486,000, or 29%, to $263,719,000 in the second quarter of 1995
from $204,233,000 in the second quarter of 1994. This increase was primarily
due to growth in unit sales of the Symmetrix 5000 series of products in the
IBM mainframe storage market.
Revenues on sales and service into the markets of Europe, Africa and the Middle
East increased by $55,094,000, or 62%, to $143,365,000 in the second quarter of
1995 from $88,271,000 in the second quarter of 1994, due primarily to growth in
unit sales of the Symmetrix 5000 series of products in the IBM and Compagnie
des Machines Bull S.A. ("Bull") mainframe storage markets.
Revenues on sales and service into the markets in the Asia Pacific region
increased by $12,571,000, or 81%, to $28,183,000 in the second quarter of 1995
from $15,612,000 in the second quarter of 1994, due to growth in unit sales of
the Symmetrix series of products in the IBM mainframe storage market.
<PAGE>
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EMC CORPORATION
The Company purchases certain components and products from suppliers who the
Company believes are currently the only suppliers of those components or
products that meet the Company's requirements. Among the most important
components that the Company uses are high density memory components ("DRAMs")
and 5 1/4" and 3 1/2" disk drives, which the Company purchases from a small
number of qualified suppliers. In some instances, there is only a single source
for such components. A failure by any supplier of high density DRAMs or disk
drives to meet the Company's requirements for an extended period of time could
have a material adverse effect on the Company. From time to time, because of
high industry demand and/or the inability of certain vendors to consistently
meet on a timely basis the Company's component quality standards, the Company
has experienced delays in deliveries of high density DRAMs and disk drives
needed to satisfy orders for ICDA products. The Company is currently working
with vendors to correct these problems and is also seeking alternative sources
of supply. If shortages and quality problems were to intensify, the Company
could lose some time-sensitive customer orders and this could affect quarterly
revenues and earnings.
Cost of Sales and Service
As a percentage of revenues, cost of sales and service increased to 49.0% in the
second quarter of 1995 from 47.5% in the second quarter of 1994, primarily due
to a change in the mix of products sold in the second quarter of 1995 as
compared to the second quarter of 1994.
Research and Development
Research and development ("R&D") expenses were $41,134,000 and $26,245,000 in
the second quarters of 1995 and 1994, respectively, an increase of $14,889,000,
or 57%. R&D expenses were 9.5% and 8.5% of revenues in the second quarters of
1995 and 1994, respectively. Dollar increases in R&D spending reflect additional
purchases of state-of-the-art CAE/CAD design tools, the cost of additional
technical staff and costs to develop new products for the open systems storage
market. The Company expects to continue to spend substantial amounts for R&D
throughout 1995.
Selling, General and Administrative
Selling, general and administrative ("SG&A") expenses were $73,414,000 and
$59,725,000 in the second quarters of 1995 and 1994, respectively, an increase
of $13,689,000 or 23%. SG&A expenses were 16.9% and 19.4% of revenues in the
second quarters of 1995 and 1994, respectively. The dollar increase is due
primarily to costs associated with additional sales and support personnel and
their related overhead costs, both domestically and internationally, in
connection with the Company's increased revenue levels and the Company's
initiative to expand its open systems storage group and OEM and international
distribution programs. SG&A expenses are expected to increase throughout 1995
approximately in proportion to growth in revenues.
<PAGE>
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EMC CORPORATION
Investment Income and Interest Expense
Investment income was $5,642,000 in the second quarter of 1995 compared with
$4,951,000 in the same period a year ago. Interest income was earned from
investments in cash equivalents and long-term investments and, to a lesser
extent, from sales-type leases of the Company's products. Investment income
increased in 1995 primarily due to increased rates of interest in the second
quarter of 1995 over the same period in 1994.
Interest expense decreased slightly in the second quarter of 1995 from the
second quarter of 1994, primarily due to conversions of the Debentures.
Provision for Income Taxes
The provision for income taxes was $30,269,000 and $22,842,000 in the second
quarters of 1995 and 1994, respectively, which resulted in effective tax rates
of 27.5% and 29.5%, respectively. The change in rate to 27.5% in the second
quarter of 1995 from 29.5% in the first quarter of 1995 was made to arrive at
a blended rate of 28% for the 1995 fiscal year. The Company provides for
income taxes based upon its estimate of full year earnings on a
country-by-country basis.
Earnings Fluctuations
Due to (i) customers' tendencies to make purchase decisions late in each fiscal
quarter, (ii) the desire by customers to evaluate new, more expensive products
for longer periods of time, (iii) the timing of product and technology
announcements by the Company and its competitors, and (iv) fluctuating currency
exchange rates, the Company's period to period revenues and earnings can
fluctuate significantly.
<PAGE>
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EMC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations - First Six Months of 1995 compared to
First Six Months of 1994
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Revenues
Revenues for the six months ended July 1, 1995 were $855,865,000 compared to
$575,174,000 for the first six months of 1994, an increase of $280,691,000 or
49%. While the Company expects revenue to continue to increase in all of its
markets throughout 1995 as compared to the respective periods in 1994, such
increase may not, on a percentage basis, continue at the levels experienced in
the first six months of 1995.
The increase in revenues was due to continued strong demand for the Company's
series of Integrated Cached Disk Array ("ICDA") based products, which include
the Symmetrix series of products in the mainframe market, the Harmonix series
of products in the midrange market, the Centriplex series of products in the
open systems storage market and the Symmetrix 3000 series of products in the
open systems storage market, which was introduced in April 1995. Revenues
from the Symmetrix series of products in the mainframe market increased by
$269,642,000, or 56%, to $747,095,000 in the first six months of 1995 from
$477,453,000 in the first six months of 1994. Revenues from the Harmonix
series of IBM compatible disk products in the midrange market decreased by
$12,712,000, or 24%, to $40,832,000 in the first six months of 1995 from
$53,544,000 in the first six months of 1994. Revenues from the Company's
products in the open systems storage market were $25,616,000 in the first six
months of 1995, an increase of $14,501,000, or 130%, over the $11,115,000 for
the first six months of 1994.
Revenues on sales and service into the markets of North and South America
increased by $130,978,000, or 35%, to $510,993,000 in the first six months of
1995 from $380,015,000 in the same period of 1994. This increase was primarily
due to growth in unit sales of the Symmetrix 5000 series of products in the
IBM mainframe storage market.
Revenues on sales and service into the markets of Europe, Africa and the Middle
East increased by $105,109,000, or 64%, to $269,865,000 in the first six months
of 1995 from $164,756,000 in the same period of 1994, due primarily to growth
in unit sales of the Symmetrix 5000 series of products in the IBM and Bull
mainframe storage markets.
Revenues on sales and service into the markets in the Asia Pacific region
increased by $44,604,000, or 147%, to $75,007,000 in the first six months of
1995 from $30,403,000 in the same period of 1994, due to growth in unit sales
of the Symmetrix series of products in the IBM mainframe storage market.
<PAGE>
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EMC CORPORATION
The Company purchases certain components and products from suppliers who the
Company believes are currently the only suppliers of those components or
products that meet the Company's requirements. Among the most important
components that the Company uses are high density memory components ("DRAMs")
and 5 1/4" and 3 1/2" disk drives, which the Company purchases from a small
number of qualified suppliers. In some instances, there is only a single
source for such components. A failure by any supplier of high density DRAMs
or disk drives to meet the Company's requirements for an extended period of time
could have a material adverse effect on the Company. From time to time, because
of high industry demand and/or the inability of certain vendors to consistently
meet on a timely basis the Company's component quality standards, the Company
has experienced delays in deliveries of high density DRAMs and disk drives
needed to satisfy orders for ICDA products. The Company is currently working
with vendors to correct these problems and is also seeking alternative sources
of supply. If shortages and quality problems were to intensify, the Company
could lose some time-sensitive customer orders and this could affect quarterly
revenues and earnings.
Cost of Sales and Service
As a percentage of revenues, cost of sales and service increased to 48.9% in
the first six months of 1995 from 47.1% in the first six months of 1994,
primarily due to a change in the mix of products sold in the first six months
of 1995 as compared to the same period in 1994.
Research and Development
Research and development ("R&D") expenses were $78,572,000 and $48,593,000 in
the first six months of 1995 and 1994, respectively, an increase of $29,979,000,
or 62%. R&D expenses were 9.2% and 8.4% of revenues in the first six months of
1995 and 1994, respectively. Dollar increases in R&D spending reflect additional
purchases of state-of-the-art CAE/CAD design tools, the cost of additional
technical staff and costs to develop new products for the open systems storage
market. The Company expects to continue to spend substantial amounts for R&D
throughout 1995.
Selling, General and Administrative
Selling, general and administrative ("SG&A") expenses were $144,126,000 and
$111,329,000 in the first six months of 1995 and 1994, respectively, an
increase of $32,797,000 or 29.5%. SG&A expenses were 16.8% and 19.4% of revenues
in the first six months of 1995 and 1994, respectively. The dollar increase is
due primarily to costs associated with additional sales and support personnel
and their related overhead costs, both domestically and internationally, in
connection with the Company's increased revenue levels and the Company's
initiative to expand its open systems storage group and OEM and international
distribution programs. SG&A expenses are expected to increase throughout 1995
approximately in proportion to growth in revenues.
<PAGE>
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EMC CORPORATION
Investment Income and Interest Expense
Investment income was $11,967,000 in the first six months of 1995 compared with
$9,930,000 in the same period a year ago. Interest income was earned from
investments in cash equivalents and long-term investments and, to a lesser
extent, from sales-type leases of the Company's products. Investment income
increased in 1995 primarily due to increased rates of interest in the first six
months of 1995 over the same period in 1994.
Interest expense decreased slightly in the first six months of 1995 from the
first six months of 1994, primarily due to conversions of the Debentures.
Provision for Income Taxes
The provision for income taxes was $62,899,000 and $43,270,000 in the first six
months of 1995 and 1994, respectively, which resulted in an effective tax rate
of 28.5% and 29.5%, respectively. The Company provides for income taxes based
upon its estimate of full year earnings on a country-by-country basis.
Earnings Fluctuations
Due to (i) customers' tendencies to make purchase decisions late in each fiscal
quarter, (ii) the desire by customers to evaluate new, more expensive products
for longer periods of time, (iii) the timing of product and technology
announcements by the Company and its competitors, and (iv) fluctuating currency
exchange rates, the Company's period to period revenues and earnings can
fluctuate significantly.
<PAGE>
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EMC CORPORATION
FINANCIAL CONDITION
Cash and cash equivalents were $221,688,000 and $240,506,000 at July 1, 1995 and
December 31, 1994. In the first six months of 1995, the Company's working
capital increased by $139,106,000 from $600,341,000 at December 31, 1994 to
$739,447,000 at July 1, 1995. In the first six months of 1994, the Company's
working capital decreased by $26,794,000, from $516,876,000 at January 1, 1994
to $490,082,000 at July 2, 1994.
In the first six months of 1995, cash and cash equivalents decreased by
$18,818,000. Cash provided by operating activities was $4,512,000 consisting
primarily of net income and increased taxes payable balances, offset by
increased trade and notes receivable, inventory and other asset balances, and
decreased accounts payable balances. Cash used by investing activities was
$23,837,000 caused by additions to property, plant and equipment of
$41,926,000, offset by net maturities of long-term investments of $18,089,000.
Cash provided by financing activities was $591,000 caused primarily by issuances
of common stock of $9,349,000, pursuant to stock option exercises and stock
purchase plan activity, partially offset by payments of long-term obligations
of $8,935,000.
At July 1, 1995, the Company had available for use its credit lines of
$65,000,000. Based on its current operating and capital expenditure forecasts,
the Company believes funds currently available, funds generated from operations
and its available lines of credit will be adequate to finance its operations.
To date, inflation has not had a material impact on the Company's financial
results.
<PAGE>
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EMC CORPORATION
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings
On June 10, 1993, Storage Technology Corporation ("STK") filed suit against EMC
in the United States District Court for the District of Colorado alleging that
EMC is infringing three patents. In the complaint, STK seeks injunctive relief,
unspecified damages, including treble damages, plus attorney's fees and costs.
On July 20, 1993, EMC answered the complaint, denied STK's allegations and
counterclaimed. In the counterclaims, EMC seeks unspecified damages, attorney's
fees, costs and interest. In a court hearing on October 12, 1994, STK's claims
on two of the three patents were dismissed with prejudice.
On September 23, 1994, EMC filed suit against STK in the United States District
Court for Delaware alleging that STK is infringing one EMC patent. In the
complaint, EMC seeks injunctive relief and unspecified damages, including
treble damages, plus attorney's fees and costs. On October 12, 1994, STK
answered the complaint, denied any infringement and counterclaimed. STK has
subsequently filed an additional counterclaim. EMC has denied STK's
allegations.
The Company is a party to other litigation which it considers routine and
incidental to its business. Management does not expect the results of any of
these actions to have a material adverse effect on the Company's business or
financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders was held on May 10, 1995. There was no
solicitation in opposition to the management's nominees as listed in the
Company's proxy statement and all such nominees were elected as Class II
directors for a three-year term. In addition, the stockholders approved
amendments to the Company's Articles of Organization to increase the number of
shares of authorized common stock, $.01 par value, to 500,000,000 shares and
to increase the number of shares available for grant under the Company's 1993
Stock Option Plan to 8,000,000 shares. The results of the votes for each of
these proposals were as follows:
1. Election of Class II Directors:
For Withheld
John R. Egan 171,181,280 1,477,965
Joseph F. Oliveri 171,196,374 1,462,871
Michael C. Ruettgers 171,182,608 1,476,637
<PAGE>
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EMC CORPORATION
Item 4. Submission of Matters to a Vote of Security Holders (continued)
2. To amend the Articles of Organization:
For: 163,838,815
Against: 8,082,972
Abstain: 737,458
3. To amend the EMC Corporation 1993 Stock Option Plan:
For: 131,985,100
Against: 38,608,000
Abstain: 2,066,145
There were no broker non-votes on any of the proposals.
Item 5. Other Information
On July 21, 1995, the Company's Board of Directors amended in part Section 2.2
of the Company's By-laws to provide that a special meeting of the stockholders
may be called by the holders of 85% of the shares of the capital stock of the
Company entitled to vote at the proposed meeting, instead of the 66 2/3%
previously required.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 By-laws of EMC Corporation, as amended on July 21, 1995
(filed herewith).
11.1 Computation of Primary and Fully Diluted Net Income Per Share
(filed herewith).
(b) Reports on Form 8-K
On May 26, 1995, the registrant filed a report (Date of Report:
May 10, 1995) on Form 8-K containing as an exhibit the Company's
Articles of Organization, as amended.
<PAGE>
- -17-
EMC CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EMC CORPORATION
Date: August 11, 1995 By: /s/ Colin G. Patteson
Colin G. Patteson
Vice President, Chief Financial Officer
and Treasurer (Principal Financial
and Accounting Officer)
<PAGE>
- -18-
EMC CORPORATION
EXHIBIT INDEX
Exhibit 3.1 By-laws of EMC Corporation, as amended on July 21, 1995
Exhibit 11.1 Computation of Primary and Fully Diluted Net Income Per Share
<PAGE>
EMC CORPORATION
EXHIBIT 3.1
July 21, 1995
AMENDED AND RESTATED BYLAWS
of
EMC CORPORATION
(as amended 2-26-86, 3-10-86, 10-28-86, 1-26-87, 9-19-89, 10-16-92 and 7-21-95)
Section 1. ARTICLES OF ORGANIZATION
The name and purposes of the corporation shall be as set forth in the articles
of organization. These bylaws, the powers of the corporation and of its
directors and stockholders, or of any class of stockholders if there shall be
more than one class of stock, and all matters concerning the conduct and
regulation of the business and affairs of the corporation shall be subject to
such provisions in regard thereto, if any, as are set forth in the articles of
organization as from time to time in effect.
Section 2. STOCKHOLDERS
2.1. Annual Meeting. The annual meeting of stockholders of the corporation
for the election of directors and the transaction of such other business as may
properly come before the meeting shall be held on such date and at such time
as shall be determined by the board of directors each year, which date and time
may subsequently be changed at any time, including the year any such
determination occurs.
2.2. Special Meetings. Except as provided in the articles of organization with
respect to the ability of holders of preferred stock to call a special meeting
in certain circumstances, special meetings of the stockholders may be called by
the president at the direction of the chairman of the board or by a majority of
the directors, and shall be called by the clerk, or in case of the death,
absence, incapacity or refusal of the clerk, by any other officer upon the
written application of stockholders who hold eighty-five percent (85%) in
interest of the capital stock of the corporation entitled to be voted at the
proposed meeting. Such request shall state the purpose or purposes of the
proposed meeting and may designate the place, date and hour of such meeting;
provided, however, that no such request shall designate a date not a full
business day or an hour not within normal business hours as the date or hour of
such meeting.
As used in these bylaws, the expression "business day" means a day other than a
day which, at a particular place, is a public holiday or a day other than a
day on which banking institutions at such place are allowed or required, by
law or otherwise, to remain closed.
2.3. Place of Meeting; Adjournment. Meetings of the stockholders may be held
at the principal office of the corporation in the Commonwealth of Massachusetts,
or at such places within or without the Commonwealth of Massachusetts as may
be specified in the notices of such meetings; provided, that, when any meeting
is convened, the chairman of the board or other presiding officer may adjourn
the meeting for a period of time not to exceed 30 days if (a) no quorum is
present for the transaction of business or (b) the chairman of the board or
other presiding officer determines that adjournment is necessary or appropriate
to enable the stockholders (i) to consider fully information which such officer
determines has not been made sufficiently or timely available to stockholders
or (ii) otherwise to exercise effectively their voting rights. The chairman of
the board or other presiding officer in such event shall announce the
adjournment and date, time and place of reconvening and shall cause notice
thereof to be posted at the place of meeting designated in the notice which was
sent to the stockholders, and if such date is more than 10 days after the
original date of the meeting, the clerk shall give notice thereof in the
manner provided in Section 2.4.
2.4. Notice of Meetings. A written notice of each meeting of stockholders,
stating the place, date and hour and the purposes of the meeting, shall be given
at least seven days before the meeting to each stockholder entitled to vote
thereat and to each stockholder who, by law, by the articles or organization or
by these bylaws, is entitled to notice, by leaving such notice with him or at
his residence or usual place of business, or by mailing it, postage prepaid,
addressed to such stockholder at his address as it appears in the records of
the corporation. Such notice shall be given by the clerk or an assistant clerk
or by an officer designated by the directors. Whenever notice of a meeting is
required to be given to a stockholder under any provision of the Business
Corporation Law of the Commonwealth of Massachusetts or of the articles of
organization or these bylaws, a written waiver thereof, executed before or after
the meeting by such stockholder or his attorney thereunto authorized and filed
with the records of the meeting, shall be deemed equivalent to such notice.
No business may be transacted at a meeting of the stockholders except that
(a) specified in the notice thereof, or in a supplemental notice given also in
compliance with the provisions hereof, (b) brought before the meeting by or at
the direction of the Board of Directors or the presiding officer, or (c)
properly brought before the meeting by or on behalf of any stockholder who
shall have been a stockholder of record at the time of giving of notice provided
for in this paragraph and who shall continue to be entitled to vote thereat and
who complies with the notice procedures set forth in this paragraph or, with
respect to the election of directors, Section 3.2 of these by-laws. In addition
to any other applicable requirements, for business to be properly brought before
a meeting by a stockholder (other than a stockholder proposal included in the
corporation's proxy statement pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the stockholder must
have given timely notice thereof in writing to the Clerk of the corporation.
In order to be timely given, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of the corporation (a)
not less than 75 nor more than 125 days prior to the anniversary date of the
immediately preceding annual meeting of stockholders of the corporation or (b)
in the case of a special meeting or in the event that the annual meeting is
called for a date (inlcuding any change in a date determined by the board
pursuant to Section 2.1) more than 75 days prior to such anniversary date,
notice by the stockholder to be timely given must be so received not later
than the close of business on the 20th day following the day on which notice
of the date of such meeting was mailed or public disclosure of the date of such
meeting was made, whichever first occurs. Such stockholder's notice to the
clerk shall set forth as to each matter the stockholder proposes to bring
before the meeting (a) a brief description of the business desired to be
brought before the meeting and the reasons for conducting such business at
the meeting, (b) the name and record address of the stockholder proposing such
business, (c) the class and number of shares of capital stock of the corporation
held of record, owned beneficially and represented by proxy by such stockholder
as of the record date for the meeting (if such date shall then have been made
publicly available) and as of the date of such notice by the stockholder, and
(d) all other information which would be required to be included in a proxy
statement or other filings required to be filed with the Securities and Exchange
Commission if, with respect to any such item of business, such stockholder were
a participant in a solicitation subject to Regulation 14A under the Exchange
Act (the "Proxy Rules").
Notwithstanding anything in these bylaws to the contrary, no business shall be
conducted at any meeting except in accordance with the procedures set forth in
this Section 2.4; provided, however, that nothing in this Section 2.4 shall be
deemed to preclude discussion by any stockholder of any business properly
brought before such meeting.
The chairman of the board or other presiding officer of the meeting may, if
the facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the foregoing procedures,
and if he or she should so determine, he or she shall so declare to the meeting
and that business shall be disregarded.
2.5. Quorum of Stockholders. At any meeting of the stockholders, a quorum
shall consist of a majority in interest of all stock issued and outstanding and
entitled to vote at the meeting, except when a larger quorum is required by law,
by the articles of organization or by these bylaws. Stock owned directly or
indirectly by the corporation, if any, shall not be deemed outstanding for this
purpose. Any meeting may be adjourned from time to time by a majority of the
votes properly cast upon the question, whether or not a quorum is present, and
the meeting may be held as adjourned without further notice.
2.6. Action by Vote. When a quorum is present at any meeting, a plurality of
the votes properly cast for election to any office shall elect to such office,
and a majority of the votes properly cast upon any question other than an
election to an office shall decide the question, except when a larger vote is
required by law, by the articles of organization or by these bylaws. No ballot
shall be required for any election unless requested by a stockholder present or
represented at the meeting and entitled to vote in the election.
2.7. Voting. Stockholders entitled to vote shall have one vote for each share
of stock entitled to vote held by them of record according to the records of the
corporation, unless otherwise provided by the articles of organization. The
corporation shall not, directly or indirectly, vote any share of its own stock.
2.8. Action by Writing. Any action required or permitted to be taken at any
meeting of the stockholders may be taken without a meeting if all stockholders
entitled to vote on the matter consent to the action in writing and the written
consents are filed with the records of the meetings of stockholders. Such
consents shall be treated for all purposes as a vote at a meeting.
2.9. Proxies. To the extent permitted by law, stockholders entitled to vote
may vote either in person or by proxy. No proxy dated more than six months
before the meeting named therein shall be valid. Unless otherwise specifically
limited by their terms, such proxies shall entitle the holders thereof to vote
at any adjournment of such meeting but shall not be valid after the final
adjournment of such meeting.
Section 3. BOARD OF DIRECTORS
3.1. Number. At the annual meeting of stockholders such stockholders
as have the right to vote for the election of directors shall fix the number
of directors at not less than three directors and shall elect the number of
directors so fixed; provided, however, that the number of directors shall be
fixed at not less than two whenever there shall be only two stockholders and
not less than one whenever there shall be only one stockholder. The number of
directors may be increased at any time or from time to time either by the
stockholders or by the directors by vote of a majority of the directors then
in office. The number of directors may be decreased to any number permitted by
law at any time or from time to time either by the stockholders or by the
directors by a vote of a majority of the directors then in office, but only
to eliminate vacancies existing by reason of the death, resignation, removal or
disqualification of one or more directors. No director need be a stockholder.
3.2. Nominations for Director. Only persons who are nominated in accordance
with the following procedures shall be eligible for election as directors,
except as provided in the articles of organization with respect to nominations
by holders of preferred stock in certain circumstances. Nominations of persons
for election to the board of directors at the annual meeting may be made at the
annual meeting of stockholders (a) by or at the direction of the board of
directors by any nominating committee or person appointed by the Board or (b)
by any stockholder of record at the time of giving of notice provided for in
this Section 3.2. Nominations by stockholders shall be made only after timely
notice in writing to the clerk of the corporation. In order to be timely given,
a stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the corporation not less than 75 nor more than
100 days prior to the anniversary date of the immediately preceding annual
meeting of stockholders of the corporation; provided, however, that in the
event that the meeting is called for a date, including any change in a date
determined by the Board pursuant to Section 2.1, more than 75 days prior to
such anniversary date, notice by the stockholder to be timely given must be so
received no later than the close of business on the 20th day following the day
on which notice of the date of the meeting was mailed or public disclosure of
the date of the meeting was made, whichever first occurs. Such stockholder's
notice to the clerk shall set forth (a) as to each person whom the stockholder
proposes to nominate for election or reelection as a director, (i) the name,
age, business address and residence address of the person, (ii) the principal
occupation or employment of the person, (iii) the class and number of shares of
capital stock of the corporation, if any, which are beneficially owned by the
person, (iv) any other information regarding the nominee as would be required
to be included in a proxy statement or other filings required to be filed
pursuant to the Proxy Rules, and (v) the consent of each nominee to serve as
a director of the corporation if so elected; and (b) as to the stockholders
giving the notice, (i) the name and record address of thestockholder, (ii) the
class and number of shares of capital stock of the corporation which are
beneficially owned by the stockholder as of the record date for the meeting
(if such date shall then have been made publicly available) and as of the date
of such notice, (iii) a representation that the stockholder intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice, (iv) a representation that the stockholder (and any party on
whose behalf such stockholder is acting) is qualified at the time of giving
such notice to have such individual serve as the nominee of such stockholder
(and any party on whose behalf such stockholder is acting) if such individual
is elected, accompanied by copies of any notification or filings with, or orders
or other actions by, and governmental authority which are required in order for
such stockholder (and any party on whose behalf such stockholder is acting)
to be so qualified, (v) a description of all arrangements or understandings
between such stockholders and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination or nominations
are to be made by such stockholders, and (vi) such other information regarding
such stockholder as would be required to be included in a proxy statement or
other filings required to be filed pursuant to the Proxy Rules. The corporation
may require any proposed nominee to furnish such other information as may
reasonably be required by the corporation to determine the eligibility of such
proposed nominee to serve as director. No person shall be eligible for
election as a director unless nominated in accordance with the provisions set
forth herein.
The Chairman of the Board or other presiding officer of the meeting may, if the
facts warrant, determine and declare to the meeting that a nomination was not
made in accordance with the foregoing procedures, and if he or she should so
determine, he or she shall so declare to the meeting and the defective
nomination shall be disregarded.
3.3. Powers. Except as reserved to the stockholders by law, by the articles
of organization or by these bylaws, the business of the corporation shall be
managed by the directors who shall have and may exercise all the powers of the
corporation. In particular, and without limiting the generality of the
foregoing, the directors may at any time issue all or from time to time any
part of the unissued capital stock of the corporation from time to time
authorized under the articles of organization and may determine, subject to
any requirements of law, the consideration for which stock is to be issued
and the manner of allocating such consideration between capital and surplus.
3.4. Committees. The directors may, by vote of a majority of the directors
then in office, elect from their number an executive committee and other
committees and delegate to any such committee or committees some or all of the
power of the directors except those which by law, by the articles of
organization or by these bylaws they are prohibited from delegating. Except
as the directors may otherwise determine, any such committee may make rules
for the conduct of its business, but unless otherwise provided by the directors
or such rules, its business shall be conducted as nearly as may be in the same
manner as is provided by these bylaws for the conduct of business by the
directors.
3.5. Regular Meetings. Regular meetings of the directors may be held without
call or notice at such places and at such times as the directors may from time
to time determine, provided that reasonable notice of the first regular meeting
following any such determination shall be given to absent directors. A regular
meeting of the directors may be held without call or notice immediately after
and at the same place as the annual meeting of the stockholders.
3.6. Special Meetings. Special meetings of the directors may be held at any
time and at any place designated in the call of the meeting, when called by the
president or the treasurer or by two or more directors, reasonable notice
thereof being given to each director by the secretary or an assistant secretary,
or, if there be none, by the clerk or an assistant clerk, or by the officer or
one of the directors calling the meeting.
3.7. Notice. It shall be sufficient notice to a director to send notice by
mail at least forty-eight hours or by telegram at least twenty-four hours before
the meeting addressed to him at this usual or last known business or residence
address or to give notice to him in person or by telephone at least twenty-four
hours before the meeting. Notice of a meeting need not be given to any director
if a written waiver of notice, executed by him before or after the meeting, is
filed with the records of the meeting, or to any director who attends the
meeting without protesting prior thereto or at its commencement the lack of
notice to him. Neither notice of a meeting nor a waiver of a notice need
specify the purposes of the meeting.
3.8. Quorum. At any meeting of the directors a majority of the directors then
in office shall constitute a quorum. Any meeting may be adjourned from time to
time by a majority of the votes cast upon the question, whether or not a quorum
is present, and the meeting may be held as adjourned without further notice.
3.9. Action by Vote. When a quorum is present at any meeting, a majority of
the directors present may take any action, except when a larger vote is required
by law, by the articles of organization or by these bylaws.
3.10. Action by Writing. Unless the articles of organization otherwise
provide, any action required or permitted to be taken at any meeting of the
directors may be taken without a meeting if all the directors consent to the
action in writing and the written consents are filed with the records of the
meetings of the directors. Such consents shall be treated for all purposes as
a vote taken at a meeting.
3.11. Presence Through Communications Equipment. Unless otherwise provided
by law the articles of organization, members of the board of directors may
participate in a meeting of such board by means of a conference telephone or
similar communications equipment by means of which all persons participating
in the meeting can hear each other at the same time and participation by such
means shall constitute presence in person at a meeting.
July 21, 1995
Section 4. OFFICERS AND AGENTS
4.1. Enumeration; Qualification. The officers to the corporation shall be a
president, a treasurer, a clerk, and such other officers, if any, as the
incorporators at their initial meeting, or the directors from time to time, may
in their discretion elect or appoint. The corporation may also have such
agents, if any, as the incorporators at their initial meeting, or the directors
from time to time, may in their discretion appoint. Any officer may be but none
need be a director or stockholder. The clerk shall be a resident of
Massachusetts unless the corporation has a resident agent appointed for the
purpose of service of process. Any two or more officers may be held by the
same person. Any officer may be required by the directors to give bond for the
faithful performance of his duties to the corporation in such amount and with
such sureties as the directors may determine.
4.2. Powers. Subject to law, to the articles of organization and to the other
provisions of these bylaws, each officer shall have, in addition to the duties
and powers herein set forth, such duties and powers as are commonly incident
to his office and such duties and powers as the directors may from time to
time designate.
4.3. Election. The president, the treasurer and the clerk shall be elected
annually by the directors at their first meeting following the annual meeting of
the stockholders. Other officers, if any, may be elected or appointed by the
board of directors at said meeting or at any other time.
4.4. Tenure. Except as otherwise provided by law or by the articles of
organization or by these bylaws, the president, the treasurer and the clerk
shall hold office until the first meeting of the board of directors following
the next annual meeting of the stockholders and until their respective
successors are chosen and qualified, and each other officer shall hold office
until the first meeting of the directors following the next annual meeting of
the stockholders unless a shorter period shall have been specified by the
terms of his election or appointment, or in each case until he sooner dies,
resigns, is removed or becomes disqualified. Each agent shall retain his
authority at the pleasure of the directors.
4.5. Chief Executive Officer. The chief executive officer of the corporation
shall be the president or such other officer as is designated by the directors
and shall, subject to the control of the directors, have general charge and
supervision of the business of the corporation and, except as the directors
shall otherwise determine, preside at all meetings of the stockholders and of
the directors. If no such designation is made, the president shall be the
chief executive officer.
4.6. President and Vice President. The president shall have the duties and
powers specified in these bylaws and shall have such other duties and powers
as may be determined by the directors.
Any vice presidents shall have such duties and powers as shall be designated
from time to time by the directors.
4.7. Treasurer and Assistant Treasurers. Except as the directors shall
otherwise determine, the treasurer shall be the chief financial and accounting
officer of the corporation and shall be in charge of its funds and valuable
papers, books of account and accounting records, and shall have such other
duties and powers as may be designated from time to time by the directors.
Any assistant treasurers shall have such duties and powers as shall be
designated from time to time by the directors.
4.8. Clerk and Assistant Clerks. The clerk shall record all proceedings
of the stockholders in a book or series of books to be kept therefor, which
book or books shall be kept at the principal office of the corporation or at
the office of its transfer agent or of its clerk and shall be open at all
reasonable times to the inspection of any stockholder. In the absence of the
clerk from any meeting of stockholders, an assistant clerk, or if there be
none or he is absent, a temporary clerk chosen at the meeting, shall record
the proceedings thereof in the aforesaid book. Unless a transfer agent has
been appointed the clerk shall keep or cause to be kept the stock and transfer
records of the corporation, which shall contain the names and record addresses
of all stockholders and the amount of stock held by each. If no secretary is
elected, the clerk shall keep a true record of the proceedings of all meetings
of the directors and in his absence from any such meeting an assistant clerk,
or if there be none or he is absent, a temporary clerk chosen at the meeting,
shall record the proceedings thereof.
Any assistant clerks shall have such other duties and powers as shall be
designated from time to time by the directors.
4.9. Secretary and Assistant Secretaries. If a secretary is elected, he
shall keep a true record of the proceedings of all meetings of the directors and
in his absence from any such meeting an assistant secretary, or if there be
none or he is absent, a temporary secretary chosen at the meeting, shall record
the proceedings thereof.
Any assistant secretaries shall have such other duties and powers as shall be
designated from time to time by the directors.
Section 5. RESIGNATIONS AND REMOVALS
Any director or officer may resign at any time by delivering his resignation
in writing to the president, the treasurer or the clerk or to a meeting of the
directors. Such resignation shall be effective upon receipt unless specified
to be effective at some other time. A director (including persons elected by
directors to fill vacancies in the board) may be removed from office (a) with
or without cause by the vote of the holders of a majority of the shares issued
and outstanding and entitled to vote in the election of directors, provided that
the directors of a class elected by a particular class of stockholders may be
removed only by the vote of the holders of a majority of the shares of such
class, or (b) with cause by the vote of a majority of the directors then in
office. The directors may remove any officer elected by them with or without
cause by the vote of a majority of the directors then in office. A director
or officer may be removed for cause only after reasonable notice and opportunity
to be heard before the body proposing to remove him. No director or officer
resigning, and (except where a right to receive compensation shall be expressly
provided in a duly authorized written agreement with the corporation) no
director or officer removed, shall have any right to any compensation as such
director or officer for any period following his resignation or removal, or any
right to damages on account of such removal, whether his compensation be by
the month or by the year or otherwise; unless in the case of a resignation,
the directors, or in the case of a removal, the body acting on the removal,
shall in their or its discretion provide for compensation.
Section 6. VACANCIES
Any vacancy in the board of directors, including a vacancy resulting from the
enlargement of the board, may be filled by the stockholders or, in the absence
of stockholder action, by the directors by vote of a majority of the directors
then in office. If the office of the president or the treasurer or the clerk
becomes vacant, the directors may elect a successor. If the office of any other
officer becomes vacant, the directors may elect or appoint a successor by vote
of a majority of the directors present. Each such successor shall hold office
for the unexpired term, and in the case of the president, the treasurer and the
clerk, until his successor is chosen and qualified, or in each case until he
sooner dies, resigns, is removed or becomes disqualified. The directors shall
have and exercise all their powers notwithstanding the existence of one or more
vacancies in their number.
Section 7. CAPITAL STOCK
7.1. Number and Par Value. The total number of shares and the par value, if
any, of each class of stock which the corporation is authorized to issue shall
be as stated in the articles of organization.
7.2. Stock Certificates. Each stockholder shall be entitled to a certificate
stating the number and the class and the designation of the series, if any, of
the shares held by him, in such form as shall, in conformity to law, be
prescribed from time to time by the directors. Such certificate shall be signed
by the president or a vice president and by the treasurer or an assistant
treasurer. Such signatures may be facsimiles if the certificate is signed by
a transfer agent, or by a registrar, other than a director, officer or employee
of the corporation. In case any officer who has signed or whose facsimile
signature has been placed on such certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the corporation
with the same effect as if he were such officer at the time of its issue.
7.3. Loss of Certificates. In the case of the alleged loss or destruction
or the mutilation of a certificate of stock, a duplicate certificate may be
issued in place thereof, upon such conditions as the directors may prescribe.
Section 8. TRANSFER OF SHARES OF STOCK
8.1. Transfer on Books. Subject to the restrictions, if any, stated or noted
on the stock certificates, shares of stock may be transferred on the books of
the corporation by the surrender to the corporation or its transfer agent of
the certificate therefor properly endorsed or accompanied by a written
assignment and power of attorney properly executed, with necessary transfer
stamps affixed, and with such proof of the authenticity of signature as the
directors or the transfer agent of the corporation may reasonably require.
Except as may be otherwise required by law, by the articles of organization
or by these bylaws, the corporation shall be entitled to treat the record holder
of stock as shown on its books as the owner of such stock for all purposes,
including the payment of dividends and the right to receive notice and to vote
with respect thereto, regardless of any transfer, pledge or other disposition
of such stock until the shares have been transferred on the books of the
corporation in accordance with the requirements of these bylaws. It shall be
the duty of each stockholder to notify the corporation of his post office
address.
8.2. Record Date and Closing Transfer Books. The directors may fix in advance
a time, which shall not be more than sixty days before the date of any meeting
of stockholders or the date for the payment of any dividend or making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the recorded date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after
the record date; or without fixing such record date the directors may for any
of such purposes close the transfer books for all or any part of such period.
If no record date is fixed and the transfer books are not closed
(1) The record date for determining stockholders having the right to notice
of or to vote at a meeting of stockholders shall be at the close of business on
the date next preceding the date on which notice is given.
(2) The record date for determining stockholders for any other purpose shall
be at the close of business on the day on which the board of directors acts with
respect thereto.
Section 9. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The corporation shall, to the extent legally permissible, indemnify each of its
directors and officers (including persons who were at its request as directors,
officers or trustees of another organization or in any capacity with respect
to any employee benefit plan) against all liabilities and expenses, including
amounts paid in satisfaction of judgments, in compromise or has fines and
penalties, and counsel fees, reasonably incurred by him in connection with the
defense or disposition of any action, suit or other proceeding, whether civil
or criminal, in which he may be involved or with which he may be threatened,
while in office or thereafter, by reason of his being or having been such a
director or officer, except with respect to any matter as to which he shall
have been adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that his action was in the best interests of the corporation
(any person serving another organization in one or more of the indicated
capacities at the request of the corporation who shall have acted in good faith
in the reasonable belief that his action was in the best interests of such
other organization to be deemed as having acted in such manner with respect
to the corporation) or, to the extent that such matter relates to service with
respect to any employee benefit plan, in the best interest of the participants
or beneficiaries of such employee benefit plan; provided, however, that as to
any matter disposed of by a compromise payment by such director or officer,
pursuant to a consent decree or otherwise, no indemnification either for said
payment or for any other expenses shall be provided unless such compromise
shall be approved as in the best interests of the corporation, after notice
that it involves such indemnification: (a) by a disinterested majority of the
directors then in office; or (b) by a majority of the disinterested directors
then in office, provided that there has been obtained an opinion in writing
of independent legal counsel to the effect that such director or officer appears
to have acted in good faith in the reasonable belief that his action was in the
best interests of the corporation; or (c) by the holders of a majority of the
outstanding stock at the time entitled to vote for directors, voting as a single
class, exclusive of any stock owned by any interested director or officer.
Expenses, including counsel fees, reasonably incurred by any director or officer
in connection with the defense or disposition of any such action, suit or other
proceeding may be paid from time to time by the corporation in advance of the
final disposition thereof upon receipt of an undertaking by such director or
officer to repay the amounts so paid to the corporation if it is ultimately
determined that indemnification for such expenses is not authorized under this
section. The right of indemnification hereby provided shall not be exclusive
of or affect any other rights to which any director or officer may be entitled.
As used in this section, the terms, "director" and "officer" include their
respective heirs, executors and administrators, and an "interested" director
or officer is one against whom in such capacity the proceedings in question or
another proceeding on the same or similar grounds is then pending. Nothing
contained in this section shall affect any right s to indemnification to which
corporate personnel other than directors and officer may be entitled by contract
or otherwise under law.
Section 10. CORPORATE SEAL
The seal of the corporation shall, subject to alteration by the directors,
consist or a flat-faced circular die with the word "Massachusetts", together
with the name of the corporation and the year of its organization, cut or
engraved thereon.
Section 11. EXECUTION OF PAPERS
Except as the directors may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed
by the corporation shall be signed by the president or by one of the vice
presidents or by the treasurer.
Section 12. FISCAL YEAR
The fiscal year of the corporation shall end on December 31.
Section 13. AMENDMENTS
The by-laws may be altered, amended or repealed at any annual or special
meeting of the stockholders called for the purpose, of which the notice shall
specify the subject matter of the proposed alteration, amendment or repeal or
the sections to be affected thereby, by vote of the stockholders. These by-laws
may also be altered, amended or repealed by vote of a majority of the directors
then in office, except that the directors shall not take any action which
provides for indemnification of directors nor any action to amend this Section
13, and except that the directors shall not take any action unless permitted
by law.
Any by-law so altered, amended or repealed by the directors may be further
altered or amended or reinstated by the stockholders in the above manner.
Section 14. MASSACHUSETTS CONTROL SHARE ACQUISITIONS ACT
The provisions of Chapter 110D shall not apply to control share acquisitions
of the corporation.
If the provisions of Chapter 110D shall become applicable to control
acquisitions of the corporation through amendment of these By-laws or otherwise,
the following provisions shall apply:
(a) The corporation is authorized to redeem shares acquired in a control
share acquisition to the extent and in accordance with the procedures specified
in Section 6 of Chapter 110D and in this Section.
(b) The additional procedures for redemption specified in this Section are as
follows:
(i) Fair value shall be determined by the board of directors or a
committee of the board of director of the corporation, and the
amount so determined shall be included in the notice of
redemption given by the corporation pursuant to Section 6 of
Chapter 110D.
(ii) The person whose shares are being redeemed (the "Holder") may
within ten days after the date of the notice of redemption advise
the corporation in writing that the Holder believes that the value
so determined is not fair, and in the event the corporation shall,
within the 30-day period following its receipt of the Holder's
notice, permit the Holder to submit such written and oral evidence
of value as the Holder may wish and the board of directors or committee
considers appropriate. The board of directors or committee shall affirm
or revise its determination of fair value within fifteen days after the
completion of the 30-day period, and shall promptly advise the Holder
in writing of its decision.
(iii) The notice of redemption shall specify a redemption date, which
shall be 30 days after the date of the notice (or the first business
day after the 30-day period), and a redemption office, which shall be
the principal office the corporation or an office of a commercial
bank specified by the corporation in the notice. The redemption
date so fixed shall not be deferred by a request of the Holder for a
redetermination of fair value. The Holder shall cause the certificate
or certificates representing the shares being redeemed to be delivered
to the redemption office not later than the redemption date, duly endorsed
or assigned for transfer, with signature guaranteed, if such an endorsement
or assignment is required in the notice of redemption.
(iv) The certificate or certificates representing the shares being
redeemed having been deposited in accordance with item (iii)
above, the redemption price shall be paid by the corporation on
the redemption date specified in its notice of redemption or such
later date as the redemption price may be determined if the Holder
has duly requested a redetermination of fair value.
(v) Notice of redemption having been given, from and after the
redemption date the shares being redeemed shall no longer be
deemed to be outstanding, and all rights of the holder or holders
thereof as a stockholder or stockholders of the corporation shall
cease, except the right to receive the redemption price. If the
corporation shall default in payment of the redemption price,
interest shall accrue thereon from the date of default at the base or
prime rate of the corporation's principal lending bank or if none,
the base or prime rate of Bank of New England, N.A., as in effect
from time to time during the period of default.
(vi) Notice given by the corporation by first class mail or delivered in
person on the basis of a good faith determination by the corporation of
the identity and address of the person who had made a control share
acquisition shall be deemed to have been duly given.
(vii) Any person who makes a control share acquisition of the
corporation shall be deemed to have consented to and shall be
bound by the provisions of this Section and shall indemnify and
hold the corporation harmless from and against any damage, loss
or expense which the corporation may suffer as a result of any
non-compliance with the provisions of this Section.
References in this Section to Chapter 110D mean Chapter 110D of the
Massachusetts General Laws as in effect from time to time.
Section 15. MASSACHUSETTS BUSINESS COMBINATION ACT
The provisions of Chapter 110F of the Massachusetts General Laws shall
not apply to "business combinations" (as defined therein) involving the
Corporation.
<PAGE>
EMC CORPORATION
Exhibit 11.1 Computation of Primary and Fully Diluted Net Income Per Share
(Amounts in thousands except share and per share data)
Three months ended Six months ended
July 1, July 2, July 1, July 2,
1995 1994 1995 1994
Primary
Net income $79,801 $54,569 $157,782 $103,409
Add back interest expense
on convertible notes 2,440 2,440 7,318 4,852
Less tax effect on interest
expense on convertible notes (976) (976) (4,391) (1,941)
Net income for purposes of calculating
primary net income per share $81,265 $56,033 $160,709 $106,320
Weighted average shares out-
standing during the period 213,938,127 192,986,404 207,207,725 190,729,785
Common equivalent shares 20,555,515 4,077,765 20,764,971 24,910,665
Common and common equivalent
shares outstanding for purpose of
calculating primary net income
per share 234,493,642 217,064,169 227,972,696 215,640,450
Primary net income
per share (Note 4) $0.35 $0.26 $0.70 $0.49
Fully Diluted
Net income $79,801 $54,569 $157,782 $103,409
Add back interest expense on
convertible notes and debentures 2,440 3,156 5,495 6,488
Less tax effect on interest expense
on convertible notes and debentures(976) (1,263) (2,198) (2,596)
Net income for purpose of
calculating fully diluted net
income per share $81,265 $56,462 $161,079 $107,301
Common and common equivalent
shares outstanding for purpose
of calculating primary net
income per share 234,493,642 217,064,169 227,972,696 215,640,450
Incremental shares to reflect
full dilution (Note 4) 521,035 15,901,873 6,997,650 17,566,576
Total shares for purpose of
calculating fully diluted net
income per share 235,014,677 232,966,042 234,970,346 233,207,026
Fully diluted net income
per share (Note 4) $0.35 $0.24 $0.69 $0.46
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from EMC
Corporation financial statements and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> JUL-01-1995
<CASH> 221,688
<SECURITIES> 0
<RECEIVABLES> 452,230
<ALLOWANCES> 5,920
<INVENTORY> 297,473
<CURRENT-ASSETS> 1,016,558
<PP&E> 292,292
<DEPRECIATION> 100,523
<TOTAL-ASSETS> 1,463,899
<CURRENT-LIABILITIES> 277,111
<BONDS> 246,918
<COMMON> 2,173
0
0
<OTHER-SE> 931,693
<TOTAL-LIABILITY-AND-EQUITY> 1,463,899
<SALES> 855,865
<TOTAL-REVENUES> 855,865
<CGS> 418,820
<TOTAL-COSTS> 418,820
<OTHER-EXPENSES> 222,698
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,532
<INCOME-PRETAX> 220,681
<INCOME-TAX> 62,899
<INCOME-CONTINUING> 157,782
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 157,782
<EPS-PRIMARY> $0.70
<EPS-DILUTED> $0.69
</TABLE>
