<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[_] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
EMC CORPORATION
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
EMC CORPORATION
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF EMC CORPORATION APPEARS HERE]
April 7, 1995
Dear Stockholder:
We cordially invite you to attend our 1995 Annual Meeting, which will be held
on Wednesday, May 10, 1995, at 10:00 a.m. at the Company's facility located at
5-9 Technology Drive, Milford, Massachusetts. At this meeting you are being
asked to elect three Class II members to the Board of Directors for a three-year
term and to approve an increase in the number of shares of authorized common
stock of the Company and the addition of 2,000,000 shares of common stock to the
1993 Stock Option Plan.
Your Board of Directors recommends that you vote in favor of each of these
proposals. You should read with care the attached Proxy Statement, which
contains detailed information about these proposals.
Your vote is important regardless of the number of shares you own.
Accordingly, we urge you to complete, sign, date and return your Proxy card
promptly in the enclosed postage-paid envelope. The fact that you have returned
your Proxy in advance will in no way affect your right to vote in person should
you attend the meeting. However, by signing and returning the Proxy, you have
assured representation of your shares.
Following completion of the scheduled business, we will report on the
Company's operations and plans and answer questions from the floor. We hope that
you will be able to join us on May 10th.
Very truly yours,
RICHARD J. EGAN
Chairman of the Board
<PAGE>
EMC CORPORATION
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
MAY 10, 1995
To the Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of EMC
Corporation, a Massachusetts corporation ("EMC" or the "Company"), will be held
at the Company's facility located at 5-9 Technology Drive, Milford,
Massachusetts, on Wednesday, May 10, 1995, at 10:00 a.m. for the following
purposes:
1. To elect three members to the Board of Directors to serve for a three-
year term as Class II Directors.
2. To amend the Company's Articles of Organization to increase the number
of shares of authorized common stock, $.01 par value, to 500,000,000 shares from
the current authorization of 330,000,000 shares.
3. To amend the Company's 1993 Stock Option Plan to increase the number
of shares available for grant under the plan to 8,000,000 from 6,000,000.
4. To transact any and all other business that may properly come before
the meeting or any adjournment thereof.
All stockholders of record at the close of business on March 31, 1995 are
entitled to notice of and to vote at this meeting and any adjournment thereof.
Stockholders are requested to sign and date the enclosed Proxy and return
it in the enclosed envelope. The envelope requires no postage if mailed in the
United States.
EMC's 1995 Annual Report to Stockholders is enclosed herewith.
By order of the Board of Directors
DAVID B. WALEK, Clerk
April 7, 1995
<PAGE>
EMC CORPORATION
PROXY STATEMENT
___________
INFORMATION CONCERNING SOLICITATION AND VOTING
General.
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of EMC Corporation, a Massachusetts
corporation ("EMC" or the Company"), for the Annual Meeting of Stockholders of
EMC to be held May 10, 1995, and any adjournment thereof, for the purposes set
forth in the Notice of the Annual Meeting. EMC was incorporated in 1979, and its
principal executive offices are located at 171 South Street, Hopkinton,
Massachusetts 01748 (telephone 508-435-1000). This Proxy Statement is first
being distributed to stockholders on or about April 7, 1995.
All per share amounts of the common stock, $.01 par value (the "Common
Stock"), of the Company noted in this Proxy Statement have been adjusted to give
effect to all stock splits.
Voting Rights and Outstanding Shares.
As of March 31, 1995, EMC had outstanding _______ shares of Common Stock.
Each share of Common Stock entitles the holder of record thereof at the close of
business on March 31, 1995 to one vote on each of the matters to be voted upon
at the meeting.
The expenses of preparing, printing and assembling the materials used in
the solicitation of proxies will be borne by EMC. In addition to the
solicitation of proxies by use of the mails, EMC may utilize the services of
certain of its officers and employees (who will receive no compensation therefor
in addition to their regular salaries) to solicit proxies personally and by
mail, telephone and telegraph from brokerage houses and other stockholders.
If the enclosed form of Proxy is properly signed and returned, the shares
represented thereby will be voted. If the stockholder specifies in the Proxy how
the shares are to be voted, they will be voted as specified. If the stockholder
does not specify how the shares are to be voted,
1
<PAGE>
they will be voted in favor of electing as Class II Directors, the three persons
listed under "Election of Directors" to serve until their successors are elected
and qualified and in favor of each of the additional items set forth in the
accompanying Notice of the Annual Meeting. Should any person so named be unable
or unwilling to serve as director, the persons named in the enclosed form of
Proxy for the Annual Meeting intend to vote for such other person as management
may recommend. Any stockholder has the right to revoke his or her Proxy at any
time before it is voted by attending the meeting and voting in person or filing
with the Clerk of the Company either a written instrument revoking the Proxy or
another newly executed proxy bearing a later date.
An automated system administered by the Company's transfer agent tabulates
all votes cast at the Annual Meeting. Abstentions and broker non-votes are each
included in the determination of the number of shares present and voting for
purposes of determining the presence of a quorum. Each is tabulated separately.
If a quorum is present, the three nominees who receive the greatest number of
votes properly cast will be elected as Class II Directors. Neither abstentions
nor broker non-votes will have any effect upon the outcome of voting with
respect to the election of directors. The effect of an abstention or a broker
non-vote will be the same as a vote against adoption of Proposal 2. A broker
non-vote will have no effect upon the outcome of voting on Proposal 3. However,
an abstention will have the same effect as a vote against Proposal 3.
As of the date hereof, management of EMC has no knowledge of any business
other than that described in the Notice of the Annual Meeting that will be
presented for consideration at such meeting. If any other business should come
before such meeting, the persons appointed by the enclosed form of Proxy shall
have discretionary authority to vote all such Proxies as they shall decide.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Pursuant to Section 50A of Chapter 156B of the Massachusetts General Laws,
the Board of Directors is presently divided into three classes, having staggered
terms of three years each after an initial transition period. Under Section 50A
and the by-laws of the Company, the Board of Directors may determine the total
number of directors and the number of directors to be elected at any Annual
Meeting of Stockholders or Special Meeting in lieu thereof. The Board of
Directors has fixed at eight the total number of directors and has fixed at
three the number of directors to be elected at the 1995 Annual Meeting. Of the
current total of eight directors, three Class II Directors have terms expiring
at the 1995 Annual Meeting, three Class III Directors have terms expiring at the
1996 Annual Meeting and two Class I Directors have terms expiring at the 1997
Annual Meeting. The three directors whose terms expire at the 1995 Annual
Meeting have been nominated by the Board of Directors for election at such
meeting. All of the nominees for director are now Class II members of the Board
of Directors. Each Class II Director elected at the 1995 Annual Meeting will
serve until the 1998 Annual Meeting of Stockholders or Special Meeting in lieu
thereof, and until that director's successor is elected and qualified.
Information With Respect to Nominees.
Set forth below is information with respect to each nominee for Class II
Director to be elected at the Annual Meeting and for each Class I Director and
Class III Director. All of the directors were previously elected by the
stockholders.
NOMINEES TO SERVE AS DIRECTORS FOR A THREE-YEAR TERM EXPIRING
AT THE 1998 ANNUAL MEETING (CLASS II DIRECTORS)
John R. Egan
Mr. Egan, age 37, became Executive Vice President, Sales and Marketing of
EMC in January 1992 and was elected a Director in May 1992. From October 1986 to
January 1992, he served in a number of executive positions with the Company
including Executive Vice President, Operations and Executive Vice President,
International Sales.
3
<PAGE>
Joseph F. Oliveri
Mr. Oliveri, age 46, has been a Director of the Company since March 1993.
From March 1983 to the present, Mr. Oliveri has been President and Chief
Executive Officer of Interface Electronics Corporation, a distributor of a
diversified group of semiconductor, electronic component and subsystem component
products. Mr. Oliveri is a member of the Audit Committee and the Mergers and
Acquisitions Committee of EMC.
Michael C. Ruettgers
Mr. Ruettgers, age 52, has been President of the Company since October 1989
and in January 1992 he also became Chief Executive Officer of EMC. In May 1992,
he was elected a Director of the Company. Mr. Ruettgers was Executive Vice
President, Operations of EMC from July 1988 to October 1989 and Chief Operating
Officer from September 1989 to January 1992. Before joining EMC, he was Chief
Operating Officer at Technical Financial Services, Incorporated, a high-
technology publishing and research firm. Previously, he was a Senior Vice
President of Keane, Inc., a software application consulting firm. He is also a
Director of Keane, Inc. and Cross Comm Corporation, a manufacturer of computer
network products.
DIRECTORS SERVING A TERM EXPIRING AT THE 1996 ANNUAL MEETING
(CLASS III DIRECTORS)
Michael J. Cronin
Mr. Cronin, age 56, has been a Director of the Company since May 1990. He
was Chief Executive Officer and President of Automatix, Inc., an industrial
vision systems manufacturer, from June 1984 to September 1990. He has been Chief
Executive Officer of Cognition Corporation from September 1987 to the present.
Mr. Cronin is also Chairman of the Board of Cognition Corporation. He is also a
Director of Leeman Labs, Inc., a manufacturer of analytical instruments for the
environmental and industrial markets. Mr. Cronin is a member of the Audit
Committee, the Executive Compensation and Stock Option Committee and the Mergers
and Acquisitions Committee of EMC.
4
<PAGE>
Maureen E. Egan
Mrs. Egan, age 57, has been a Director of the Company since March 1993.
She was one of the Company's initial investors and its first employee. Mrs. Egan
was employed in a number of administrative capacities from the Company's
inception in 1979 until her retirement in 1985. Mrs. Egan is a founder and
member of the Hopkinton Technology for Education Trust, a non-profit
organization in Hopkinton, Massachusetts.
W. Paul Fitzgerald
Mr. Fitzgerald, age 54, has been a Director of the Company since March
1991. From January 1988 to March 1995, he was Senior Vice President, Finance and
Administration and Chief Financial Officer of EMC. From October 1991 to March
1995, Mr. Fitzgerald was Treasurer of the Company. From January 1985 to January
1988, he was Vice President, Finance of EMC. Mr. Fitzgerald resigned as an
employee of the Company effective March 31, 1995. He will, however, remain as a
Director of the Company.
DIRECTORS SERVING A TERM EXPIRING AT THE 1997 ANNUAL MEETING
(CLASS I DIRECTORS)
Richard J. Egan
Mr. Egan, age 59, is a founder of the Company and has served as a Director
since the Company's inception in 1979, and was elected Chairman of the Board in
January 1988. Prior to January 1988, he was also President of EMC. From 1979 to
January 1992 he was Chief Executive Officer of the Company. He is also a
Director of Cognition Corporation, a CAD/CAM software supplier. Mr. Egan is a
member of the Executive Compensation and Stock Option Committee and the Mergers
and Acquisitions Committee of EMC.
John F. Cunningham
Mr. Cunningham, age 52, has been a Director of the Company since November
1991. He was a consultant to the Company from January 1992 to December 1993. He
has been Chairman and Chief Executive Officer of Cunningham & Company, a
corporation involved in private investments and financial consulting from
February 1989 to the present. From July 1985
5
<PAGE>
to January 1989 he was Chairman of the Board and Chief Executive Officer of
Computer Consoles, Inc., a manufacturer of computers and telecommunications
equipment. Prior to such time, Mr. Cunningham served in various capacities at
Wang Laboratories, Inc., a manufacturer of computers, most recently as President
and Chief Operating Officer and a Director. He is also a Director of
Computervision Corporation, a CAD/CAM software company. Mr. Cunningham is a
member of the Executive Compensation and Stock Option Committee and the Mergers
and Acquisitions Committee of EMC.
During the fiscal year ended December 31, 1994, the EMC Board of Directors
held five meetings. Each incumbent director who is a nominee for election at
the Annual Meeting attended at least 75% of the aggregate number of meetings of
the Board of Directors and the committees of which he was a member in 1994.
The Audit Committee, which held one meeting in 1994, reviews with
management and the Company's independent public accountants the Company's
financial statements, the accounting principles applied in their preparation,
the scope of the audit, any comments made by the public accountants upon the
financial condition of the Company and its accounting controls and procedures,
and such other matters as the Committee deems appropriate.
The Executive Compensation and Stock Option Committee, which held four
meetings during 1994, reviews salary policies and compensation of executive
officers, officers and other members of management and approves compensation
plans. This Committee also administers the Company's stock option plans and
employee stock purchase plan.
The Mergers and Acquisitions Committee reviews with management of EMC
possible acquisitions of technologies, product lines or related businesses.
This committee held no formal meetings in 1994 but did consult informally
several times during 1994.
The Board of Directors does not have a Nominating Committee.
6
<PAGE>
The Company compensates each director who is not an employee of the Company
$10,000 per annum, $2,000 for each regularly scheduled director's meeting
attended and $1,500 per annum for each committee on which they serve.
___________________
Richard J. Egan, Chairman of the Board and a Director, is the husband of
Maureen E. Egan, a Director of the Company. He also is the brother-in-law of W.
Paul Fitzgerald, a Director and former executive officer of the Company. W. Paul
Fitzgerald is the brother of Maureen E. Egan. John R. Egan, Executive Vice
President, Sales and Marketing and a Director of the Company is the son of
Richard J. and Maureen E. Egan.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the Company's
Common Stock owned on March 15, 1995 (i) by each person who is known by the
Company to own beneficially more than 5% of the Company's Common Stock, (ii) by
each of the Company's directors and nominees for director owning stock in the
Company, (iii) by each of the executive officers named in the Summary
Compensation Table on page _____, and (iv) by all directors and executive
officers as a group.
<TABLE>
<CAPTION>
Number of Shares Percent of
Beneficially Outstanding
Name of Beneficial Owner Owned(1) Shares
- ------------------------ ---------------- -----------
<S> <C> <C>
Richard J. Egan(2)........................................... 14,750,080 %
Maureen E. Egan(3)........................................... 3,726,701
Harold P. Ano (4)............................................ 89,227 **
Michael J. Cronin (5)........................................ ** **
John F. Cunningham(6)........................................ ** **
John R. Egan*(7)............................................. **
W. Paul Fitzgerald........................................... 585,854 **
Frank M. Keaney.............................................. ** **
Joseph F. Oliveri*(8)........................................ ** **
Michael C. Ruettgers*(9)..................................... 311,154 **
FMR Corp.(10)................................................ 25,917,075 13.06
The Equitable Companies Incorporated (11).................... 10,105,005 5.1
All directors and officers as a group (18 persons)(12).......
</TABLE>
8
<PAGE>
_________________
* Nominee for director
** Less than 1%
(1) Except as otherwise noted, all persons have sole voting and investment
power with respect to their shares. All amounts shown in this column
include shares obtainable upon exercise of stock options exercisable within
60 days from the date of this table.
(2) Excludes ________ shares held by Mr. Egan's wife, Maureen E. Egan, and John
R. Egan, as to which Mr. Egan disclaims beneficial ownership.
(3) Excludes ________ shares held by Mrs. Egan's husband, Richard J. Egan, and
John R. Egan, as to which Mrs. Egan disclaims beneficial ownership.
(4) Mr. Ano is deemed to own 160,000 of these shares by virtue of a currently
exercisable option to purchase these shares.
(5) Mr. Cronin is deemed to own 48,000 of these shares by virtue of a currently
exercisable option to purchase these shares.
(6) Mr. Cunningham is deemed to own 48,000 of these shares by virtue of a
currently exercisable option to purchase these shares.
(7) John R. Egan is deemed to own ______ of these shares by virtue of currently
exercisable options to purchase these shares.
(8) Mr. Oliveri is deemed to own 32,000 of these shares by virtue of a
currently exercisable option to purchase these shares.
(9) Excludes 3,900 shares owned by Mr. Ruettgers' children, as to which he
disclaims beneficial ownership.
(10) EMC has relied on the Schedule 13G of FMR Corp. dated February 13, 1995
for information relating to its share ownership. Of these shares, FMR Corp.
has the sole power to vote or direct the vote of 1,541,800 shares and the
sole power to dispose of or direct the disposition of 25,917,075 shares.
The number of shares of Common Stock beneficially owned by FMR Corp.
includes 2,612,248 shares of Common Stock resulting from the assumed
conversion of $8,000,000 principal amount of the EMC 6.25% Convertible
Subordinated Debentures due 2002.
(11) EMC has relied on the Schedule 13G filed jointly by The Equitable Companies
Incorporated ("Equitable"), Alpha Assurances I.A.R.D. Mutuelle, Alpha
Assurances Vie Mutuelle, AXA Assurances I.A.R.D. Mutuelle, AXA Assurances
Vie Mutuelle, Uni Europe Assurance Mutuelle and AXA dated February 10, 1995
for information relating to their share ownership. Of these shares,
Equitable, through its subsidiaries, has the sole power to vote or direct
the vote of 9,547,605 shares and the sole power to dispose of or direct the
disposition of 10,105,005 shares. The number of shares of Common Stock
beneficially owned by Equitable, through its subsidiaries, includes
1,210,305 shares of Common Stock resulting from the assumed conversion of
$3,706,559 principal amount of the EMC 6.25% Convertible Subordinated
Debentures due 2002.
(12) Includes _______ shares of Common Stock beneficially owned by all officers
and directors as a group based upon stock options exercisable within 60
days from the date of this table. Excludes shares as to which the named
individuals have disclaimed beneficial ownership as described above. Also
excludes shares held by Mr. Keaney, who resigned as an executive officer of
the Company as of December 31, 1994.
The address of all persons listed above other than FMR Corp. and Equitable is
c/o EMC Corporation, 171 South Street, Hopkinton, Massachusetts 01748. The
address of FMR Corp. is 82 Devonshire Street,
9
<PAGE>
Boston, Massachusetts 02109. The address of Equitable is 787 Seventh Avenue, New
York, New York 10019.
10
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received by the Company's Chief
Executive Officer and the four remaining most highly paid executive officers for
the three fiscal years ended December 31, 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual -------------
Compensation Awards
---------------------------------------- ------------- All Other
Name and Principal Position Year Salary($) Bonus($)(1) Options (#) Compensation
--------------------------- -------- ------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
Michael C. Ruettgers................... 1994 260,000 366,660 ---- 2,000(2)
President, Chief Executive........... 1993 225,000 536,363 ---- 2,000(2)
Officer and Director................. 1992 207,800 365,000 1,200,000 2,000(2)
Richard J. Egan........................ 1994 260,000 366,660 ---- 371,147(3)
Chairman of The Board................ 1993 225,000 536,363 ---- 278,971(4)
and Director......................... 1992 163,556 181,500 ---- 2,000(2)
Frank M. Keaney(5)..................... 1994 175,000 293,250 ---- 2,000(2)
Senior Vice President................ 1993 175,000 383,116 100,000 2,000(2)
North American Sales................. 1992 156,600 297,100 ---- 2,000(2)
John R. Egan........................... 1994 200,000 266,425 ---- 2,000(2)
Executive Vice President............. 1993 175,000 490,389 ---- 2,000(2)
Sales and Marketing and Director..... 1992 156,500 304,000 1,800,000 2,000(2)
Harold P. Ano.......................... 1994 160,000 224,060 ---- 2,000(2)
Senior Vice President................ 1993 160,000 306,493 100,000 2,000(2)
Marketing............................ 1992 131,000 145,000 ---- 2,000(2)
</TABLE>
(1) Includes performance bonuses and commissions accrued in year of service
whether paid during year of service or in succeeding year.
(2) The amount noted was paid to such executive officer's account in the EMC
401K Plan.
(3) Includes the amount of $2,000 paid to Mr. Egan's account in the EMC 401K
Plan. Also includes $369,147 reflecting the present value of the economic
benefit to Mr. Egan of the non-term portion of the premium advanced, on a
non-interest bearing basis, by the Company during 1994 ($768,131) with
respect to a split-dollar insurance agreement (see "Certain Transactions"
below for a description of such agreement), based on the earliest possible
date on which the Company may terminate the split dollar agreement and
receive back all funds advanced, which is August 16, 2002. The Company did
not pay any portion of the term life insurance portion of the premium in
1994.
(4) Includes the amount of $2,000 paid to Mr. Egan's account in the EMC 401K
Plan. Also includes $276,971 reflecting the present value of the economic
benefit to Mr. Egan of the non-term portion of the premium advanced, on a
non-interest bearing basis, by the Company during 1993 ($611,439) with
respect to the split-dollar insurance agreement described in Note 3 above.
The Company did not pay any portion of the term life insurance portion of
the premium in 1993.
(5) Mr. Keaney resigned as an executive officer of the Company as of
December 31, 1994.
11
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
There were no option grants in fiscal 1994 to the named executive officers. The
following table provides information on option exercises in fiscal 1994 by the
named executive officers and the value of such officers' unexercised options at
December 31, 1994.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Shares Options at In-the-Money Options
Acquired Fiscal Year End(#) at Fiscal Year End($)(1)
on Value -------------------------- --------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael C. Ruettgers..... 300,876 5,722,743 --- 801,552 --- 16,193,192
Richard J. Egan.......... --- --- --- --- --- ---
Frank M. Keaney.......... 20,000 208,100 --- 60,000 --- 909,300
John R. Egan............. 798,000 14,055,942 379,200 1,140,000 7,845,178 23,053,800
Harold P. Ano............ 280,000 4,790,208 20,000 260,000 303,100 4,851,180
</TABLE>
(1) Fiscal year ended December 31, 1994. The closing price of the Common Stock
on December 30, 1994 (which was the last trading day in 1994) on the New
York Stock Exchange was $21.63 per share.
1993 STOCK OPTION PLAN
As of February 28, 1995, there were options to purchase __________ shares of
Common Stock outstanding under the 1993 Stock Option Plan (the "1993 Plan") and
_________ shares remained available for future grant under the 1993 Plan. A
more detailed description of the 1993 Plan is described below at "Approval of
Amendment to the Company's 1993 Stock Option Plan."
The following table shows certain information regarding options to purchase
shares of Common Stock pursuant to the 1993 Stock Option Plan:
<TABLE>
<CAPTION>
Number of Shares
Covered by Options Average Per Share
Granted From Exercise Price of
Person 1/1/92 to 12/31/94 Such Options(1)
------ ------------------ -----------------
<S> <C> <C>
Michael C. Ruettgers................ --- ---
Richard J. Egan..................... --- ---
Frank M. Keaney..................... --- ---
John R. Egan........................ --- ---
Harold P. Ano....................... --- ---
Joseph F. Oliveri................... --- ---
All current executive officers as a
group (14 persons)(2).............
All current directors who are not --- ---
executive officers as a group
(4 persons).......................
</TABLE>
(1) All options to current officers and directors were granted at a price at
least equal to the fair market value of EMC Common Stock on the date of
grant.
(2) Excludes options held by Mr. Keaney, who resigned as an executive officer
of the Company as of December 31, 1994.
12
<PAGE>
Between January 1, 1992 and December 31, 1994, options for ________ shares were
granted under the 1993 Plan to all employees as a group, excluding directors and
executive officers, at an average per share exercise price of $______.
13
<PAGE>
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that might incorporate
future filings, including this Proxy Statement, in whole or in part, the
following report and the Stock Price Performance Graph on page ____ shall not be
incorporated by reference into any such filings.
REPORT OF THE EXECUTIVE COMPENSATION
AND STOCK OPTION COMMITTEE
EMC's executive compensation program is directly linked to corporate
performance and returns to stockholders. The Company has developed an overall
compensation strategy that ties a significant portion of executive compensation
to the Company's success in meeting one or more specified performance goals and
to appreciation in the Company's market valuation. The overall objectives of
this strategy are to attract and retain top-notch executive talent, to motivate
these executives to achieve the goals inherent in the Company's business
strategy, to link executive and stockholder interests through equity-based
plans, and to provide a compensation program that recognizes individual
contributions as well as overall business results.
Each year the Executive Compensation and Stock Option Committee (the
"Compensation Committee") conducts a full review of the Company's executive
compensation program. This review often includes a comprehensive report from
independent executive compensation consultants evaluating the effectiveness of
the program and comparing the Company's executive compensation, corporate
performance, stock price appreciation and total return to stockholders to a peer
group of public high technology companies with revenues comparable to those of
the Company. The Compensation Committee reviews the selection of peer companies
used for compensation analysis. The companies in the peer group used for
compensation analysis are generally not the same as those in the peer group
index in the Performance Graph included in this Proxy Statement.
14
<PAGE>
The peer group in the Performance Graph is comprised of companies in the
computer storage field. The Compensation Committee is of the opinion that EMC
is not comparable to any of such companies in terms of revenue and therefore
uses other high technology companies with comparable revenue for compensation
analysis. The annual compensation reviews permit an ongoing evaluation of the
link between the Company's performance and its executive compensation in the
context of the compensation programs of other companies.
The Compensation Committee determines the compensation of the five most
highly compensated executive officers, which is detailed in this Proxy
Statement, and sets policies for and reviews the compensation awarded to the
other executive officers and officers of the Company. This is designed to ensure
consistency throughout the executive compensation programs. In reviewing the
individual performance of the executives whose compensation is detailed in this
Proxy Statement (other than Michael C. Ruettgers) the Compensation Committee
takes into account the views of Mr. Ruettgers, the Company's Chief Executive
Officer.
The key elements of the Company's executive compensation usually consist of
base salary, executive bonus and stock options. The Compensation Committee's
policies with respect to each of the elements, including the base salary for the
compensation awarded to Mr. Ruettgers, are discussed below. In addition, while
the elements of compensation described are considered separately, the
Compensation Committee takes into account the complete compensation package
provided by the Company to the individual.
Base Salaries
Base salaries for executive officers and officers are determined by
evaluating the responsibilities of the position held and the experience of the
individual, and by reference to the competitive marketplace for pertinent
executive talent, including a comparison to base salaries for comparable
positions at other companies. The base salaries of the Company's executive
officers, generally, and the Chief Executive Officer, in particular, are low in
comparison to base salaries for comparable positions at other companies. This
is due to the fact that the Company's executive
15
<PAGE>
compensation program is weighted heavily towards bonuses and other incentives.
Annual salary adjustments are determined by evaluating the financial
performance of the Company and of each executive officer and officer. All
financial performance targets for 1994 were met or exceeded. The Compensation
Committee, where appropriate, also considers non-financial performance measures.
For 1994, the non-financial performance factors used were increase in market
share, manufacturing efficiency gains, improvements in product quality and
improvements in relations with customers, suppliers and employees.
With respect to the base salary granted to Mr. Ruettgers in 1994, the
Compensation Committee took into account base salaries of chief executive
officers of peer companies, the Company's success in meeting its return on
equity goals in 1993, the performance of the Common Stock and the assessment by
the Compensation Committee of Mr. Ruettgers individual performance. The
Compensation Committee also took into account the longevity of Mr. Ruettgers'
services to the Company and its belief that Mr. Ruettgers is an excellent
representative of the Company to the public by virtue of his stature in the
industry. On these bases, the Compensation Committee believes that the increase
in Mr. Ruettgers' 1994 base salary from that of 1993 is well justified.
Executive Bonus
The Company's executive officers and officers are eligible for an annual
cash bonus. Individual and corporate performance objectives are established at
the beginning of each year by the Compensation Committee. Eligible executives
are assigned target bonus levels. The corporate performance measure for bonus
payments for 1994 was based on a fractional percentage of the Company's pre-tax
profits, based on each executive's job level and responsibilities. As in the
case of base salary, the Compensation Committee also considers individual non-
financial performance measures and, where appropriate, unit performance
measures, in determining bonuses.
In awarding these bonuses, the Compensation Committee also considered on a
subjective basis the performance of the Common Stock and the role of Mr.
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<PAGE>
Ruettgers and the other executive officers and officers in promoting the long-
term strategic growth of the Company and, in particular, the Company's growth in
market share.
Stock Options
Under the Company's 1985 Stock Option Plan (the "1985 Plan") and the 1993
Plan, stock options may be granted to the Company's executive officers and
officers and other key employees. The Compensation Committee sets guidelines for
the size of stock option awards based on similar factors, including competitive
compensation data, as are used to determine base salaries and annual bonus
amounts. In the event of poor corporate performance, the Compensation Committee
can elect not to award options.
Stock options are designed to align the interests of executive officers,
officers and key employees with those of the stockholders. Generally, stock
options are granted with an exercise price equal to the market price of the
Common Stock on the date of grant and vest in equal increments over five years.
This approach is designed to act as an incentive for the creation of stockholder
value over the long term since the full benefit of the compensation package
cannot be realized unless stock price appreciation occurs over a number of
years.
On occasion (but not during 1994), some discounted stock option grants have
been made to employees of the Company, including Mr. Ruettgers. The reasons for
these discounted grants are that the Compensation Committee wanted to reward the
individuals for their past performance and to grant further incentives to these
individuals for expected future performance.
The Compensation Committee may make additional discounted stock option
grants to employees of the Company who have performed in an extraordinary manner
and such actions have had a direct tangible effect on the Company and its
results of operations. It is for these reasons that these types of stock option
grants will not be made routinely.
The Compensation Committee has a set of guidelines that is used to
determine the size of stock option awards. These guidelines take into account
the duties
17
<PAGE>
and responsibilities of the individual, years of service to the Company, the
number of outstanding options and the size of the option award. These guidelines
were used by the Compensation Committee in making the stock option grants to Mr.
Ruettgers and all other key employees of the Company.
If necessary, the Compensation Committee retains the discretion to keep
individual items of compensation constant in the future to provide that total
compensation fairly reflects overall corporate performance and individual
achievement. The Compensation Committee believes that significant equity
interests held by Mr. Ruettgers and the other executive officers and officers
align the interests of stockholders and management.
Conclusion
Through the programs described above, a very significant portion of the
Company's executive compensation is linked directly to individual and corporate
performance and stock price appreciation. In 1994, as in previous years, the
majority of the Company's executive compensation consisted of compensation with
performance-based variable elements. The Compensation Committee intends to
continue the policy of linking executive compensation to corporate performance
and returns to stockholders.
Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), under certain circumstances, executive compensation in excess of $1
million may not be deductible. The Compensation Committee has determined that
due to the current compensation levels, this limitation does not at this time
affect the executive compensation policy noted above and has therefore not
adopted any policy with respect to the $1 million limitation on deductibility.
EXECUTIVE COMPENSATION
AND
STOCK OPTION COMMITTEE
Michael J. Cronin,
Chairman
John F. Cunningham
Richard J. Egan
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<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Michael J. Cronin and John F. Cunningham, non-employee directors, serve on
the Compensation Committee of the Company's Board of Directors. Richard J. Egan,
Chairman of the Board of the Company, is also a member of the Compensation
Committee.
Richard J. Egan is a member of the Board of Directors of Cognition
Corporation. Michael J. Cronin, the Chief Executive Officer of Cognition
Corporation, serves as Chairman of the Compensation Committee of EMC.
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<PAGE>
STOCK PRICE PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG EMC CORPORATION, S&P 500
INDEX AND PEER GROUP SIC CODE 3572 (COMPUTER STORAGE DEVICES)**
<TABLE>
<CAPTION>
YEAR EMC PEER S&P500
<S> <C> <C> <C>
1989 100 100 100
1990 250 121 97
1991 358 157 126
1992 1095 228 136
1993 3044 295 150
1994 3992 297 152
</TABLE>
* $100 invested on 12/30/89 in Company stock, index or peer group including
reinvestment of dividends, if any.
** 23 companies comprise the peer group. The Company will provide a list of the
peer group companies to stockholders upon request.
Note: The stock price performance shown on the graph above is not necessarily
indicative of future price performance.
20
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CERTAIN TRANSACTIONS
In 1994, the Company retained the Thomas A. Fitzgerald Company to provide
various forms of corporate insurance and paid premiums of approximately
$620,732. Thomas A. Fitzgerald is the brother of W. Paul Fitzgerald, a Director
of the Company and of Maureen E. Egan, a Director of the Company.
In 1994, the Company purchased approximately $1,543,580 of electronic
components from Interface Electronics Corporation. Joseph F. Oliveri, a Director
of EMC, is the President and Chief Executive Officer of Interface Electronics
Corporation.
In January 1993, the Company entered into a "split dollar" life insurance
agreement with the Egan Family Irrevocable Insurance Trust, for the benefit of
the Richard J. Egan family. Richard J. Egan is Chairman of the Board and Maureen
E. Egan is a Director of the Company. Under the agreement, premiums equivalent,
in general terms, to the aggregate annual increase in the cash value of the
policies will be advanced by the Company to the Egan Family Irrevocable
Insurance Trust and will be required to be repaid to the Company (without
interest) upon death or at such time as the aggregate cash value of the fully
funded policies equals the Company's total premium advances. All Company
advances will be collateralized by the aggregate cash value of the policies. In
1994, the Company paid $768,131 in premiums pursuant to this agreement.
The Company believes that the terms of the arrangements described above
were fair and not less favorable to the Company than could have been obtained
from unaffiliated parties.
21
<PAGE>
PROPOSAL 2
Approval of Amendment to the Company's Articles of
Organization
The Articles of Organization of the Company currently authorizes the
issuance of 330,000,000 shares of Common Stock, $.01 par value, and no other
class of capital stock. On March 14, 1995, the Board of Directors voted to
propose and declare advisable an amendment to the Company's Articles of
Organization to increase the number of authorized shares of Common Stock from
330,000,000 shares to 500,000,000.
This proposal will not take effect unless it is approved by the affirmative
vote by the holders of a majority of the outstanding shares. The Board of
Directors believes that this amendment to the Company's Articles of Organization
is in the best interest of the Company and its stockholders and recommends a
vote "FOR" Proposal 2.
As of February 28, 1995, there were a total of _____ shares of Common
Stock issued or reserved for issuance, which includes _____ shares held as
treasury stock. This total number of shares also includes shares available for
issuance under the 1985 Plan, the Company's 1989 Employee Stock Purchase Plan
(the "1989 Plan"), the 1992 Stock Option Plan for Directors (the "1992 Plan"),
and the 1993 Plan, the shares issuable upon conversion of the 6 1/4% convertible
subordinated debentures due 2002 (the "6 1/4% Debentures") (all of which
debentures were redeemed or converted into Common Stock on or prior to April 1,
1995) and the shares issuable upon conversion of the 4 1/4% convertible
subordinated notes due 2001 (the "4 1/4% Notes").
The proposed amendment would increase the number of shares of the existing
class of Common Stock available for issuance by the Company, but would have no
effect upon the terms of the Company's Common Stock or the rights of holders of
such Common Stock. Holders of Common Stock are entitled to one vote for each
share held and have no preemptive or other rights to subscribe for additional
shares from the Company. There are no cumulative voting rights, with the result
that holders of more than 50% of the shares of Common Stock are able to elect
100% of the class of the Company's directors to be elected at any Annual Meeting
of Stockholders or Special Meeting in lieu thereof. All outstanding shares of
Common Stock are, and those issuable upon the exercise of options and the
conversion of the 4 1/4% Notes will be, when issued and fully paid for,
validly
22
<PAGE>
issued and fully paid and non-assessable. Holders of Common Stock are entitled
to such dividends as may be declared by the Board of Directors out of funds
legally available therefor. On liquidation, dissolution or winding up of the
Company, the holders of Common Stock are entitled to receive their pro rata
portion of the net assets of the Company remaining after the payment of all
creditors and liquidation preferences, if any.
The Board of Directors believes that the proposed increase in authorized
shares of Common Stock is desirable to enhance the Company's flexibility in
connection with possible future actions, such as stock splits, stock dividends,
financings, corporate mergers, acquisitions, use in employee benefit plans or
other corporate purposes. Having such authorized shares available for issuance
in the future would allow shares of Common Stock to be issued without the
expense and delay of a special stockholders meeting. If this proposal is
adopted, the shares of Common Stock would be available for issuance without
further action by the stockholders, subject, however, to the requirements of the
New York Stock Exchange that stockholder approval be obtained for certain
issuances of additional shares of Common Stock in excess of 20% of the number of
shares then outstanding.
As of the date of this Proxy Statement, the Company has no agreements,
commitments, or plans with respect to the sale or issuance of additional shares
of Common Stock except as described under the 1985 Plan, the 1989 Plan, the 1992
Plan, the 1993 Plan and the obligation to issue shares of common stock upon
conversion of the 4 1/4% Notes.
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<PAGE>
PROPOSAL 3
APPROVAL OF AMENDMENT TO THE COMPANY'S 1993 STOCK OPTION
PLAN
On May 12, 1993, the Company's stockholders adopted and approved the 1993
Plan and 6,000,000 shares of Common Stock were reserved for issuance thereunder
to employees of the Company and its subsidiaries. As of February 28, 1995,_____
of these shares remained available for future issuances under this plan.
On March 14, 1995, the Board of Directors approved an amendment to the 1993
Plan to increase the number of shares available under the plan from 6,000,000
shares to 8,000,000 shares. The affirmative vote of a majority of the shares
present, in person or by proxy, and entitled to vote at the Annual Meeting is
required to approve this amendment to the 1993 Plan. The Company's current
forecast for the 1993 Plan indicates that there are currently sufficient shares
for projected grants of options through approximately the end of 1995.
Additional shares are needed for use in the 1993 Plan so that stock option
grants can continue to be made to attract and retain key employees of the
Company and its subsidiaries. This amendment to the 1993 Plan will not take
effect unless it is approved by a majority of the votes cast at the Annual
Meeting. If this amendment to the 1993 Plan is not approved by the
stockholders, no grants of options will be made under the 1993 Plan once the
presently available number of options are granted. The Board of Directors
believes that the amendment to the 1993 Plan is in the best interests of the
Company and its stockholders and recommends a vote "FOR" Proposal 3.
Members of the Board of Directors of the Company who are not employed as
regular salaried officers or employees of the Company may not participate in the
1993 Plan. The closing price of a share of Common Stock on the New York Stock
Exchange on March 31, 1995 was $_____. The proceeds received by the Company
from the sale of Common Stock pursuant to the 1993 Plan will be used for the
general corporate purposes of the Company.
Summary of the 1993 Plan
If the March 14, 1995 amendment adding 2,000,000 shares is approved, a
total of 8,000,000 shares of Common Stock will be reserved for issuance to
employees and officers of
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<PAGE>
the Company and its subsidiaries under the 1993 Plan. Options granted pursuant
to the 1993 Plan may, at the discretion of the Compensation Committee be
incentive stock options. The 1993 Plan is not qualified under Section 401(a) of
the Code and is not subject to the provisions of the Employee Retirement Income
Security Act of 1974.
The Compensation Committee was appointed by and serves at the pleasure of
the Board of Directors and, subject to the 1993 Plan, has full authority to
determine the provisions of options to be granted under the 1993 Plan, to
interpret the terms of the 1993 Plan and of options granted under the 1993 Plan,
to adopt, amend and rescind rules and guidelines for the administration of the
1993 Plan and for its own acts and proceedings and to decide all questions and
settle all controversies and disputes which may arise in connection with the
1993 Plan.
Among other matters, the Compensation Committee is authorized to determine
conclusively, consistent with the 1993 Plan, who will receive options, the
number and exercise price of the options, the time when the options become
exercisable, and whether such options will be incentive stock options. Members
of the Compensation Committee are not eligible to be granted options under the
1993 Plan.
The shares of Common Stock subject to the 1993 Plan may be adjusted to give
effect to stock dividends, stock splits and the like. The Common Stock delivered
to option holders upon the exercise of options may, in the discretion of the
Board of Directors, be either authorized but unissued shares or shares held by
the Company in treasury.
The Compensation Committee may, at its discretion, select any eligible
person to participate in the 1993 Plan. An eligible person to participate in the
1993 Plan is any employee of the Company or any of its subsidiaries. As of
February 28, 1995, there were approximately 3,200 employees eligible to
participate in the 1993 Plan and approximately _____ employees participating in
the 1993 Plan. The number of options which may be granted to any eligible person
is also within the discretion of the Compensation Committee, subject to certain
conditions concerning incentive stock options.
Options granted under the 1993 Plan are exercisable at such time or times
as the Compensation Committee shall determine. However, no incentive stock
option may be exercisable after ten years from the date of its grant (five years
in the case of a 10% or more stockholder).
25
<PAGE>
Under the 1993 Plan, options are transferable only by will or the laws of
descent and distribution, and may be exercised by a person other than the option
holder only in the circumstances outlined below.
Under the 1993 Plan, all previously unexercised options terminate and are
forfeited automatically upon the termination of the option holder's employment
with the Company, unless the Compensation Committee or the Board of Directors
specifies otherwise. However, if an option holder dies at a time when he or she
is entitled to exercise an option, then the portion formerly exercisable by the
option holder may be exercised by the option holder's executor or administrator,
or by the person to whom the option is transferred under the applicable laws of
descent or distribution, within three years of the death of the option holder,
subject, in the case of incentive stock options, to the limitations stated above
on their exercise. Shares which are not delivered because of termination of
options may be reused for other options.
The exercise price of stock options granted under the 1993 Plan is
determined by the Compensation Committee on the date of grant, subject to
limitations contained in the 1993 Plan, including the limitation that the
exercise price may not be less than par value. However, there are certain
pricing restrictions for incentive stock options as set forth below.
Payment for shares to be granted upon exercise of options must be made in
full in cash or by bank draft, check or money order before the shares are
delivered. Part or all of the purchase price may also be paid in shares of
Common Stock. A person electing to exercise an option must give written notice
to the Company of the election, accompanied by any documents required by the
Compensation Committee and the purchase price. The Compensation Committee may
require the person to fulfill any conditions it stipulates that are not
inconsistent with the terms of the 1993 Plan. When options other than incentive
stock options are exercised or any options are exercised by an individual
subject to taxation in a foreign jurisdiction, the Company may require the
option holder to remit to the Company applicable taxes prior to the delivery of
any shares of Common Stock. If at the time an incentive stock option is
exercised, the Compensation Committee determines that the Company could be
liable for withholding applicable taxes upon a disposition of the underlying
Common Stock, the Compensation Committee may require as a condition of exercise
that the option holder agree to notify the Company of any disposition of the
underlying Common Stock and provide the Company with such
26
<PAGE>
security as the Compensation Committee deems adequate to meet the potential
liability of the Company for withholding of taxes.
The Compensation Committee may at any time discontinue granting options
under the 1993 Plan. The Board of Directors may amend the 1993 Plan except that
no such amendment may adversely affect the rights of any option holder without
his or her consent and except that no such amendment will, without the approval
of the stockholders of the Company, increase the number of shares available
under the 1993 Plan, change the group of employees eligible to receive options,
reduce the exercise price of outstanding incentive stock options, reduce the
price at which future incentive stock options may be granted, extend the time
within which options may be granted, alter the 1993 Plan so that options
intended to qualify as incentive stock options under the Code would not do so,
or change the amendment provisions of the 1993 Plan.
No grant of incentive stock options can be made under the 1993 Plan after
May 12, 2003, but options granted before that day may be exercised after it.
In the event of a stock dividend, stock split or other change in corporate
structure or capitalization affecting the Common Stock, the number and kind of
shares of stock or securities of the Company to be subject to the 1993 Plan and
the options then outstanding or to be granted thereunder, and the option price,
will be appropriately adjusted by the Compensation Committee, whose
determination will be binding on all persons. In the event of a dissolution,
liquidation, consolidation or merger in which the Company is not the surviving
corporation, all outstanding options will thereupon terminate, provided that at
least twenty days prior to the effective date of any such dissolution,
liquidation, consolidation or merger, the Company will either (i) make all
outstanding options immediately exercisable or (ii) arrange to have the
surviving corporation grant replacement options to the option holders.
The exercise price of incentive stock options may not be less than 100% of
the fair market value of the Common Stock at the time the option is granted,
except as stated otherwise below. The aggregate fair market value, determined at
the time the option is granted, of the stock for which any person may be granted
incentive stock options which become exercisable for the first time by such
person in any calendar year under the 1993 Plan cannot exceed the sum of
$100,000 (determined at the time such option is granted). No incentive stock
option will be granted to a person who is
27
<PAGE>
not an "employee" as defined in the applicable provisions of the Code and
regulations issued thereunder. No incentive stock option will be granted to any
person who at the time of the grant owns, directly or indirectly through
application of the attribution rules of the Code, stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company or of
its subsidiaries unless the option price at the time of the grant is at least
110% of the fair market value of the stock subject to the option and the period
of the option does not exceed five years from the date of grant.
Federal Income Tax Consequences
In general, neither the grant nor the exercise of an incentive stock option
granted under the 1993 Plan will result in taxable income to the option holder
or a deduction to the Company. If the option holder does not dispose of stock
received upon exercise of an incentive stock option within two years from the
date the option is granted or within one year after the date of exercise, any
later sale of such stock will result in a long-term capital gain or loss.
If shares received upon exercising an incentive stock option are disposed
of before the holding period requirements described above have been satisfied,
the option holder will generally realize ordinary income at the time of
disposition of the stock. The amount of such ordinary income will generally be
equal to the difference between the fair market value of the stock on the date
of exercise and the option price. In the case of a disqualifying disposition
which is a sale with respect to which loss (if sustained) would be recognized,
then the amount of ordinary income will not exceed the excess of the amount
realized on such sale over the adjusted basis of the stock, that is, in general,
the price paid for the stock. The Company will generally be entitled to a
deduction for Federal income tax purposes equal to the amount of ordinary income
realized by the option holder, subject to certain withholding and reporting
requirements.
Certain option holders exercising incentive stock options may become
subject to the alternative minimum tax, under which the difference between (i)
the fair market value of stock purchased under incentive stock options,
determined on the date of exercise, and (ii) the exercise price will be an item
of tax preference in the year of exercise for purposes of the alternative
minimum tax.
28
<PAGE>
Options granted under the 1993 Plan which are not incentive stock options
are "nonstatutory options". No income results upon the grant of a nonstatutory
option. When an option holder exercises a nonstatutory option he or she will
realize ordinary income subject to withholding. Generally such income will be
realized at the time of exercise and in an amount equal to the excess, measured
at the time of exercise, of the then fair market value of the Common Stock over
the option price. The Company will generally be entitled to a deduction for
Federal income tax purposes equal to the amount of ordinary income realized by
the option holder, subject to certain withholding and reporting requirements.
The foregoing summary is not a complete description of Federal income tax
aspects of the 1993 Plan. Moreover, the foregoing summary relates only to
Federal income taxes; there may also be Federal estate and gift tax consequences
associated with the 1993 Plan, as well as foreign, state and local tax
consequences.
STOCKHOLDER PROPOSALS
To be eligible for inclusion in the Company's Proxy Statement, stockholder
proposals intended to be presented at the 1996 Annual Meeting of Stockholders
must be received at EMC's principal executive offices no later than December 8,
1995.
INDEPENDENT PUBLIC ACCOUNTANTS
The Directors have appointed Coopers & Lybrand, who have served as the
Company's auditors since 1984, to examine the financial statements of the
Company for fiscal year 1995. The Company expects that representatives of
Coopers & Lybrand will be present at the Annual Meeting, and will be given the
opportunity to make a statement if they desire to do so and to respond to
appropriate questions.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than 10% of the Company's Common Stock,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission ("SEC") and the New York Stock Exchange.
29
<PAGE>
Executive officers, directors and greater than ten percent stockholders are
required by SEC regulations to furnish the Company with all copies of Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during the fiscal year
ended December 31, 1994, all filing requirements were complied with in a timely
fashion except for the following: Paul E. Noble, Jr., an executive officer of
the Company, made one late filing, reporting one transaction; and Michael R.
Grilli, an executive officer of the Company, made one late filing, reporting two
transactions.
30
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EMC CORPORATION
1993 STOCK OPTION PLAN, as amended December 31, 1994
1. PURPOSE.
-------
The purpose of the EMC Corporation 1993 Stock Option Plan is to enable EMC
Corporation to provide a special incentive to a limited number of key employees
of the Company and its Subsidiaries, if any, who are in a position to have a
significant effect upon the Company's business and earnings. In order to
accomplish this purpose, the Plan authorizes the grant to such key employees of
options to purchase Common Stock of the Company. Increased ownership of Common
Stock will provide such key employees with an additional incentive to take into
account the long-term interests of the Company.
2. DEFINITIONS.
-----------
As used herein, the following words or terms have the meanings set forth
below. The masculine gender is used throughout the Plan but is intended to
apply to members of both sexes.
2.1 "Board of Directors" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute.
2.3 "Committee" means the Committee (which, following registration of the
Common Stock under the Securities Exchange Act of 1934, shall consist of not
less than three members of the Board of Directors) appointed by the Board of
Directors to administer the Plan or the Board of Directors as a whole if no
appointment is made.
2.4 "Common Stock" means the Common Stock of the Company.
2.5 "Company" means EMC Corporation, a corporation established under the
laws of The Commonwealth of Massachusetts.
2.6 "Fair Market Value" in the case of a share of Common Stock on a
particular day, means the fair market value as determined from time to time by
the Board of Directors or, where appropriate, by the Committee, taking into
account all information which the Board of Directors, or the Committee,
considers relevant.
2.7 "Incentive Stock Option" means a stock option that satisfies the
requirements of Section 422 of the Code.
Page 1 of 9
<PAGE>
2.8 "Participant" means an individual holding a stock option or stock
options granted to him under the Plan.
2.9 "Plan" means the EMC Corporation 1993 Stock Option Plan set forth
herein.
2.10 "Subsidiary" or "Subsidiaries" means a corporation or corporations in
which the Company owns, directly or indirectly, stock possessing 50 percent or
more of the total combined voting power of all classes of stock.
2.11 "Ten Percent Stockholder" means any person who, at the time an option
is granted, owns or is deemed to own stock (as determined in accordance with
Sections 422 and 424 of the Code) possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or its parent
or a subsidiary.
3. ADMINISTRATION.
--------------
3.1 The Plan shall be administered by the Committee. A majority of the
members of the Committee shall constitute a quorum, and all determinations of
the Committee shall be made by a majority of its members. Any determination of
the Committee under the Plan may be made without notice or meeting of the
Committee by a writing signed by a majority of the Committee members. Following
registration of the Common Stock under the Securities Exchange of 1934, all
members of the Committee shall be disinterested persons within the meaning of
Rule 16b-3 under that Act.
3.2 Subject to the provisions set forth herein, the Committee shall have
full authority to determine the provisions of options to be granted under the
Plan, to interpret the terms of the Plan and of options granted under the Plan,
to adopt, amend and rescind rules and guidelines for the administration of the
Plan and for its own acts and proceedings and to decide all questions and settle
all controversies and disputes which may arise in connection with the Plan.
3.3 The decision of the Committee on any matter as to which the Committee
is given authority under subsection 3.2 shall be final and binding on all
persons concerned.
3.4 Nothing in the Plan shall be deemed to give any officer or employee,
or his legal representatives or assigns, any right to participate in the Plan,
except to such extent, if any, as the Committee may have determined or approved
pursuant to the provisions of the Plan.
Page 2 of 9
<PAGE>
4. SHARES SUBJECT TO THE PLAN.
--------------------------
4.1 The maximum number of shares of Common Stock that may be delivered
upon the exercise of options granted under the Plan shall be 6,000,000, subject
to adjustment in accordance with the provisions of Section 8.
4.2 If any option granted under the Plan terminates without having been
exercised in full (including an option which terminates by agreement between the
Company and the Participant), the number of shares of Common Stock as to which
such option has not been exercised prior to termination shall be available for
future grants within the limits set forth in subsection 4.1.
4.3 Shares of Common Stock delivered upon the exercise of options shall
consist of shares of authorized and unissued Common Stock, except that the Board
of Directors may from time to time in its discretion determine in any case the
shares to be so delivered shall consist of shares of authorized and issued
Common Stock reaquired by the Company and held in its Treasury. No fractional
shares of Common Stock shall be delivered upon the exercise of an option.
5. ELIGIBILITY FOR OPTIONS.
-----------------------
Employees eligible to receive options under the Plan shall be those key
employees of the Company and its Subsidiaries, if any, who, in the opinion of
the Committee, are in a position to have a significant effect upon the Company's
business and earnings. Members of the Board of Directors of the Company or a
Subsidiary who are not employed as regular salaried officers or employees of the
Company or a Subsidiary may not participate in the Plan.
6. GRANT OF OPTIONS.
----------------
6.1 From time to time while the Plan is in effect the Committee may, in
its absolute discretion, select from among the persons eligible to receive
options (including persons to whom options were previously granted) those
persons to whom options are to be granted.
6.2 The Committee shall, in its absolute discretion, determine the number
of shares of Common Stock to be subject to each option granted under the Plan.
6.3 No Incentive Stock Option may be granted under the Plan after May 12,
2003, but options theretofore granted may extend beyond that date.
7. PROVISIONS OF OPTIONS.
---------------------
7.1 Incentive Stock Options or Other Options. Options granted under the
----------------------------------------
Plan may be either Incentive Stock Options or options which do not qualify as
Incentive
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<PAGE>
Stock Options, as the Committee shall determine at the time of each grant of
options hereunder.
7.2 Stock Option Certificates or Agreements. Options granted under the
---------------------------------------
Plan shall be evidenced by certificates or agreements in such form as the
Committee shall from time to time approve. Such certificates or agreements
shall comply with the terms and conditions of the Plan and may contain such
other provisions not inconsistent with the terms and conditions of the Plan as
the Committee shall deem advisable. In the case of options intended to qualify
as Incentive Stock Options, the certificates or agreements shall contain such
provisions relating to exercise and other matters as are required of incentive
stock options under the Code.
7.3 Terms and Conditions. All options granted under the Plan shall be
--------------------
subject to the following terms and conditions to the extent applicable and to
such other terms and conditions not inconsistent therewith as the Committee
shall determine:
7.3.1 Exercise Price. The exercise price per share of Common Stock
--------------
with respect to each option shall be as determined by the Committee but in
the case of an Incentive Stock Option not less than 100% (110% in the case
of an Incentive Stock Option granted to a Ten Percent Stockholder) of the
Fair Market Value per share at the time the option is granted. In the case
of an option which does not qualify as an Incentive Stock Option, the
exercise price per share of Common Stock shall be not less than par value.
7.3.2 Value of Shares of Common Stock Subject to Incentive Stock
----------------------------------------------------------
Options. Each eligible employee may be granted Incentive Stock Options
-------
only to the extent that, in the aggregate under this Plan and all incentive
stock option plans of the Company and any related corporation, such
Incentive Stock Options do not become exercisable for the first time by
such employee during any calendar year in a manner which would entitle the
employee to purchase more than $100,000 in fair market value (determined at
the time the Incentive Stock Options were granted) of Common Stock in that
year. Any options granted to an employee in excess of such amount will be
granted as Non-Qualified Options.
7.3.3 Period of Options. An option shall be exercisable during such
-----------------
period of time as the Committee may specify (subject to subsection 7.4
below), but in the case of an Incentive Stock Option not after the
expiration of ten years (five years in the case of an Incentive Stock
Option granted to a Ten Percent Stockholder) from the date the option is
granted.
7.3.4 Exercise of Options.
-------------------
7.3.4.1 Each option shall be made exercisable at such time or
times as the Committee shall determine. In the case of an option made
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<PAGE>
exercisable in installments, the Committee may later determine to
accelerate the time at which one or more of such installments may be
exercised.
7.3.4.2 Any exercise of an option shall be in writing signed by
the proper person and delivered or mailed to the General Counsel of
the Company, accompanied by an option exercise notice and payment in
full for the number of shares in respect to which the option is
exercised.
7.3.4.3 In the event an option is exercised by the executor or
administrator of a deceased Participant, or by the person or persons
to whom the option has been transferred by the Participant's will or
the applicable laws of descent and distribution, the Company shall be
under no obligation to deliver stock thereunder until the Company is
satisfied that the person or persons exercising the option is or are
the duly appointed executor or administrator of the deceased
Participant or the person or persons to whom the option has been
transferred by the Participant's will or by the applicable laws of
descent and distribution.
7.3.4.4 The Committee may at the time of grant condition the
exercise of an option upon agreement by the Participant to subject the
Common Stock to any restrictions on transfer or repurchase rights in
effect on the date of exercise, upon representations of continued
employment and upon other terms not inconsistent with this Plan. Any
such conditions shall be set forth in the option certificate or other
document evidencing the option.
7.3.4.5 In the case of an option that is not an Incentive
Stock Option, the Committee shall have the right to require that the
individual exercising the option to remit to the Company an amount
sufficient to satisfy any federal, state, or local withholding tax
requirements (or makes other arrangements satisfactory to the Company
with regard to such taxes) prior to the delivery of any Common Stock
pursuant to the exercise of the option. In the case of an Incentive
Stock Option, if at the time the Incentive Stock Option is exercised
the Committee determines that under applicable law and regulations the
Company could be liable for the withholding of any federal or state
tax with respect to a disposition of the Common Stock received upon
exercise, the Committee may require as a condition of exercise that
the individual exercising the Incentive Stock Option agree (i) to
inform the Company promptly of any disposition (within the meaning of
Section 422 (a) (1) of the Code and the regulations thereunder) of
Common Stock received upon exercise, and (ii) to give such security as
the Committee deems adequate to meet the potential liability of the
Company for the withholding of tax, and to augment such security from
time to time in any amount reasonably
Page 5 of 9
<PAGE>
deemed necessary by the Committee to preserve the adequacy of such
security.
7.3.4.6 In the case of an option that is exercised by an
individual that is subject to taxation in a foreign jurisdiction, the
Committee shall have the right to require the individual exercising
the option to remit to the Company an amount sufficient to satisfy any
federal or withholding requirement of that foreign jurisdiction (or
make other arrangements satisfactory to the Company with regard to
such taxes prior to the delivery of any Common Stock pursuant to the
exercise of the option).
7.3.5 Payment for and Delivery of Stock. The shares of stock
---------------------------------
purchased on any exercise of an option granted hereunder shall be paid for
in full in cash or, if permitted by the terms of the option, in shares of
unrestricted Common Stock at the time of such exercise or, if so permitted,
a combination of such cash and Common Stock. A Participant shall not have
the rights of a stockholder with respect to awards under the Plan except as
to stock actually issued to him.
7.3.6 Listing of Stock, Withholding and Other Legal Requirements.
----------------------------------------------------------
The Company shall not be obligated to deliver any stock until all federal
and state laws and regulations which the Company may deem applicable have
been complied with, nor, in the event the outstanding Common Stock is at
the time listed upon any stock exchange, until the stock to be delivered
has been listed or authorized to be added to the list upon official notice
of issuance to such exchange. In addition, if the shares of stock subject
to any option have not been registered in accordance with the Securities
Act of 1933, as amended, the Company may require the person or persons who
wishes or wish to exercise such option to make such representation or
agreement with respect to the sale of stock acquired on exercise of the
option as will be sufficient, in the opinion of the Company's counsel, to
avoid violation of said Act, and may also require that the certificates
evidencing said stock bear an appropriate restrictive legend.
7.3.7 Non-transferability of Options. No option may be transferred
------------------------------
by the Participant otherwise than by will or by the laws of descent and
distribution, and during the Participant's lifetime the option may be
exercised only by him.
7.3.8 Death. If a Participant dies at a time when he is entitled
-----
to exercise an Incentive Stock Option, then at any time or times within
three years after his death such Incentive Stock Option may be exercised,
as to all or any of the shares which the Participant was entitled to
purchase thereunder immediately prior to his death, by his executor or
administrator or the person or persons to whom the Incentive Stock Option
is transferred by will or the applicable laws of descent and distribution,
and except as so exercised such Incentive Stock Option shall expire at the
end of such three-year period. In no event, however, may
Page 6 of 9
<PAGE>
any Incentive Stock Option granted under the Plan be exercised after the
expiration of ten years (five years in the case of an Incentive Stock
Option granted to a Ten Percent Stockholder) from the date the Incentive
Stock Option was granted.
7.3.9 Termination of Employment. If the employment of a Participant
-------------------------
terminates for any reason other than his death, all options held by the
Participant shall thereupon expire on the date of termination unless the
option by its terms, or the Committee by resolution, shall allow the
Participant to exercise any or all of the options held by him after
termination. In the case of an Incentive Stock Option, the Incentive Stock
Option shall in any event expire at the end of three months after such
termination of employment, or after the expiration of ten years (five years
in the case of an Incentive Stock Option granted to a Ten Percent
Stockholder) from the date the Incentive Stock Option was granted,
whichever occurs first. If the Committee so decides, an option may
provide that a leave of absence granted by the Company or Subsidiary is not
a termination of employment for the purpose of this subsection 7.3.9, and
in the absence of such a provision the Committee may in any particular case
determine that such a leave of absence is not a termination of employment
for such purpose. The Committee shall also determine all other matters
relating to continuous employment.
7.4 Authority of the Committee. The Committee shall have the authority,
--------------------------
either generally or in particular instances, to waive compliance by a
Participant with any obligation to be performed by him under an option and to
waive any condition or provision of an option, except that the Committee may not
(i) increase the total number of shares covered by any Incentive Stock Option
(except in accordance with Section 8), (ii) reduce the option price per share of
any Incentive Stock Option (except in accordance with Section 8) or (iii) extend
the term of any Incentive Stock Option to more than ten years, subject, however,
to the provisions of Section 10.
8. CHANGES IN STOCK.
----------------
In the event of a stock dividend, stock split or other change in corporate
structure or capitalization affecting the Common Stock that becomes effective
after the adoption of the Plan by the Board of Directors, the Committee shall
make appropriate adjustments in (i) the number and kind of shares of stock on
which options may thereafter be granted hereunder, (ii) the number and kind of
shares of stock remaining subject to each option outstanding at the time of such
change and (iii) the option price. The Committee's determination shall be
binding on all persons concerned. Subject to any required action by the
stockholders, if the Company shall be the surviving corporation in any merger or
consolidation (other than a merger or consolidation in which the Company
survives but in which a majority of its outstanding shares are converted into
securities of another corporation or are exchanged for other consideration), any
option granted hereunder shall pertain and apply to the securities
Page 7 of 9
<PAGE>
which a holder of the number of shares of stock of the Company then subject to
the option would have been entitled to receive, but a dissolution or liquidation
of the Company or a merger or consolidation in which the Company is not the
surviving corporation or in which a majority of its outstanding shares are so
converted or exchanged shall cause every option hereunder to terminate; provided
that if any such dissolution, liquidation, merger or consolidation is
contemplated, the Company shall either arrange for any corporation succeeding to
the business and assets of the Company to issue to the Participants replacement
options (which, in the case of Incentive Stock Options, satisfy, in the
determination of the Committee, the requirements of Section 424 of the Code) on
such corporation's stock which will to the extent possible preserve the value of
the outstanding options or shall make the outstanding options fully exercisable
at least 20 days before the effective date of any such dissolution, liquidation,
merger or consolidation. The existence of the Plan shall not prevent any such
change or other transaction and no Participant thereunder shall have any right
except as herein expressly set forth.
9. EMPLOYMENT RIGHTS.
-----------------
Neither the adoption of the Plan nor any grant of options confers upon any
employee of the Company or a Subsidiary any right to continued employment with
the Company or a Subsidiary, as the case may be, nor does it interfere in any
way with the right of the Company or a Subsidiary to terminate the employment of
any of its employees at any time.
10. DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION.
-------------------------------------------------------
The Committee may at any time discontinue granting options under the Plan
and, with the consent of the Participant, may at any time cancel an existing
option in whole or in part and grant another option to the Participant for such
number of shares as the Committee specifies. The Board of Directors may at any
time or times amend the Plan for the purpose of satisfying the requirements of
any changes in applicable laws or regulations or for any other purpose which may
at the time be permitted by law or may at any time terminate the Plan as to any
further grants of options, provided that no such amendment shall without the
approval of the stockholders of the Company (a) increase the maximum number of
shares available under the Plan, (b) change the group of employees eligible to
receive options under the Plan, (c) reduce the exercise price of outstanding
incentive options or reduce the price at which incentive options may be granted,
(d) extend the time within which options may be granted, (e) alter the Plan in
such a way that incentive options granted or to be granted hereunder would not
be considered incentive stock options under Section 422 of the Code, or (f)
amend the provisions of this Section 10, and no such amendment shall adversely
affect the rights of any employee (without his consent) under any option
previously granted.
Page 8 of 9
<PAGE>
11. EFFECTIVE DATE.
--------------
The Plan shall become effective immediately upon its approval by the
stockholders of the Company at the Annual Meeting on May 12, 1993.
Page 9 of 9
<PAGE>
PROXY PROXY
EMC CORPORATION
ANNUAL MEETING OF STOCKHOLDERS, MAY 10, 1995
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned, hereby appoints Colin G. Patteson and Paul T. Dacier, and each
of them, proxies with full power of substitution to each, to represent and to
vote at the Annual Meeting of Stockholders of EMC Corporation, to be held May
10, 1995, at 10:00 a.m., local time at EMC's facility at 5-9 Technology Drive,
Milford, Massachusetts, and at any adjournment thereof, all the shares of Common
Stock, $.01 par value per share, of EMC Corporation that the undersigned would
be entitled to vote if personally present. The undersigned instructs such
proxies or their substitutes to act on the following matters as specified by the
undersigned, and to vote in such manner as they may determine on any other
matters that may properly come before the meeting.
The Board of Directors recommends a vote FOR each of the proposals.
PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this proxy exactly as your name appears on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED?
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With For All
For hold Except
[_] [_] [_]
1.) Election of Directors:
Electing three directors to serve
a three-year term as Class II Directors
and for all nominees.
John R. Egan
Joseph F. Oliveri
Michael C. Ruettgers
If you do not wish your shares voted "For" a
particular nominee, mark the "For All Except"
box and strike a line through the nominee(s) name.
Your shares will be voted for the remaining nominee(s).
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Date:
_________________________________________________________
Stockholder sign here Co-owner sign here
For Against Abstain
2. To amend the Articles of [_] [_] [_]
Organization to increase the
number of shares of authorized
Common Stock, $.01 par value,
to 500,000,000 shares.
For Against Abstain
3. To approve the addition of [_] [_] [_]
2,000,000 shares of Common
Stock, $.01 par value, to the
1993 Stock Option Plan.
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED
AS SPECIFIED. IF NO CHOICE IS SPECIFIED, THEN
THIS PROXY WILL BE VOTED IN FAVOR OF ELECTING THE
THREE NOMINEES NOTED HEREON TO THE BOARD OF
DIRECTORS TO SERVE FOR A THREE-YEAR TERM AS CLASS
II DIRECTORS AND APPROVING THE AMENDMENT TO THE
ARTICLES OF ORGANIZATION AND THE ADDITION OF
SHARES TO EMC CORPORATION'S 1993 STOCK OPTION
PLAN. A VOTE FOR THE ELECTION OF DIRECTORS
INCLUDES DISCRETIONARY AUTHORITY TO VOTE FOR A
SUBSTITUTE IF ANY NOMINEE IS UNABLE TO SERVE OR
FOR GOOD CAUSE WILL NOT SERVE. IN THEIR
DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE
UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
Mark box at right if a change of [_]
address has been noted on the reverse
side of this card.
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DETACH CARD
