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[LOGO OF EMC CORPORATION APPEARS HERE]
March 20, 1998
Dear Stockholder:
We cordially invite you to attend our 1998 Annual Meeting, which will be
held on Wednesday, May 6, 1998, at 10:00 a.m. at the Company's facility 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, to approve the addition of 3,500,000 shares of common stock to the 1993
Stock Option Plan and to approve an amendment to the 1989 Employee Stock
Purchase 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 6th.
Very truly yours,
/s/ Richard J. Egan
RICHARD J. EGAN
Chairman of the Board
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EMC CORPORATION
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
MAY 6, 1998
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 at 5-9 Technology Drive, Milford,
Massachusetts, on Wednesday, May 6, 1998, 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 1993 Stock Option Plan to increase the number
of shares available for grant under the plan by 3,500,000 shares.
3. To amend the Company's 1989 Employee Stock Purchase Plan to provide
that employees whose customary employment is 20 hours or less per week
shall be ineligible to participate in the plan.
4. To transact any and all other business that may properly come before
the meeting or any adjournments thereof.
All stockholders of record at the close of business on March 9, 1998 are
entitled to notice of and to vote at this meeting and any adjournments
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 Annual Report on Form 10-K for 1997 is enclosed herewith.
By order of the Board of Directors
THOMAS J. DOUGHERTY, Clerk
March 20, 1998
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EMC CORPORATION
PROXY STATEMENT
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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 6, 1998, and any adjournments 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 35 Parkwood Drive,
Hopkinton, Massachusetts 01748. This Proxy Statement is first being
distributed to stockholders on or about March 20, 1998.
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 9, 1998, EMC had outstanding 497,102,028 shares of Common Stock.
Each share of Common Stock entitles the holder of record thereof at the close
of business on March 9, 1998 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. Also,
the Company has retained D.F. King & Co., Inc. to aid in the solicitation of
proxies. D.F. King & Co., Inc. will receive a fee and reimbursement of
expenses estimated not to exceed $10,000 in the aggregate, all of which will
be paid by the Company.
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, 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
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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. A
broker non-vote will have no effect upon the outcome of voting on Proposals 2
or 3. However, an abstention will have the same effect as a vote against
Proposals 2 and 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.
PROPOSAL 1
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
EACH OF THE NOMINEES LISTED BELOW.
Pursuant to Section 50A of Chapter 156B of the Massachusetts General Laws,
the Board of Directors is currently divided into three classes, having
staggered terms of three years each. 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 Class II Directors to be elected at the 1998 Annual Meeting. Of the current
total of eight directors, three Class II Directors have terms expiring at the
1998 Annual Meeting, three Class III Directors have terms expiring at the 1999
Annual Meeting and two Class I Directors have terms expiring at the 2000
Annual Meeting. The three directors whose terms expire at the 1998 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 1998 Annual Meeting
will serve until the 2001 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 III Director
and Class I Director. All of the directors were previously elected by the
stockholders.
NOMINEES TO SERVE AS DIRECTORS FOR A THREE-YEAR TERM EXPIRING AT
THE 2001 ANNUAL MEETING (CLASS II DIRECTORS)
JOHN R. EGAN
Mr. Egan, age 40, has been Executive Vice President, Products and Offerings
of the Company since May 1997. In May 1992, he was elected a Director of
the Company. 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. From January
1992 to June 1996, he was Executive Vice President, Sales and Marketing of
EMC. He was on a leave of absence as an executive officer of the Company
from June 1996 to May 1997. Mr. Egan is a member of the Mergers and
Acquisitions Committee of EMC.
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JOSEPH F. OLIVERI
Mr. Oliveri, age 49, 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
Stock Repurchase and Bond Redemption Oversight Committee of EMC.
MICHAEL C. RUETTGERS
Mr. Ruettgers, age 55, 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 October 1989 to January 1992. Before joining EMC, he
was Chief Operating Officer at Technical Financial Services, Incorporated,
a high-technology consulting company, from February 1987 to October 1989.
He is also a Director of Commonwealth Energy System, a public utility, and
EG&G Inc., a diversified technology company.
DIRECTORS SERVING A TERM EXPIRING AT THE
1999 ANNUAL MEETING (CLASS III DIRECTORS)
MICHAEL J. CRONIN
Mr. Cronin, age 59, has been a Director of the Company since May 1990. He
has been Chief Executive Officer of Cognition Corporation, a CAD/CAM
software supplier, from September 1987 to the present. Mr. Cronin is also
Chairman of the Board of Cognition Corporation. He was Chief Executive
Officer and President of Automatix, Inc., an industrial vision systems
manufacturer, from June 1984 to September 1990. 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.
MAUREEN E. EGAN
Mrs. Egan, age 60, 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 57, 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 retired as an employee of the Company in October 1995. Mr.
Fitzgerald is a member of the Audit Committee and the Stock Repurchase and
Bond Redemption Oversight Committee of EMC.
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DIRECTORS SERVING A TERM EXPIRING AT THE
2000 ANNUAL MEETING (CLASS I DIRECTORS)
RICHARD J. EGAN
Mr. Egan, age 62, is a founder of the Company and has served as a Director
since the Company's inception in 1979. He 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,
Boston Edison Company, a public utility, and Shiva Corporation, a provider
of remote access hardware, software and services. Mr. Egan is a member of
the Executive Compensation and Stock Option Committee and the Stock
Repurchase and Bond Redemption Oversight Committee of EMC.
JOHN F. CUNNINGHAM
Mr. Cunningham, age 55, 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 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. Mr. Cunningham is a
member of the Executive Compensation and Stock Option Committee, the
Mergers and Acquisitions Committee and the Stock Repurchase and Bond
Redemption Oversight Committee of EMC.
During the fiscal year ended December 31, 1997, the EMC Board of Directors
held eight meetings. Each incumbent director who is a nominee for election at
the Annual Meeting attended all of the meetings of the Board of Directors and
the committees of which they were a member in 1997.
PROPOSAL 2
APPROVAL OF AMENDMENT TO THE COMPANY'S 1993 STOCK OPTION PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 2.
On May 12, 1993, the Company's stockholders adopted and approved the
Company's 1993 Stock Option Plan (the "1993 Plan") and 12,000,000 shares of
Common Stock were reserved for issuance thereunder to employees of the Company
and its subsidiaries. On May 10, 1995 and on May 7, 1997, the 1993 Plan was
amended to include an additional 4,000,000 and 12,000,000 shares of Common
Stock, respectively. Currently, the total number of shares of Common Stock
that are authorized to be issued under the 1993 Plan is 28,000,000. As of
February 28, 1998, 6,549,494 shares remained available for future option
grants under this plan.
On January 21, 1998, the Board of Directors approved an amendment to the
1993 Plan to increase the number of shares available under the plan by
3,500,000 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 forecast for the 1993
Plan indicates that there are currently sufficient shares for projected grants
of options only through approximately the end of 1998. Additional shares are
needed for use
4
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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. 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.
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 February 27, 1998 was $37.75. 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 January 21, 1998 amendment adding 3,500,000 shares is approved, a
total of 31,500,000 shares of Common Stock will be reserved for issuance to
employees and officers of the Company and its subsidiaries under the 1993
Plan. Options granted pursuant to the 1993 Plan may, at the discretion of the
Board of Directors or the Executive Compensation and Stock Option Committee
(the "Compensation Committee"), be incentive stock options. The 1993 Plan is
not qualified under Section 401(a) of the Internal Revenue Code (the "Code")
and is not subject to the provisions of the Employee Retirement Income
Security Act of 1974.
The Board of Directors or the Compensation Committee approves all
transactions under the 1993 Plan and determines the provisions of options to
be granted under the 1993 Plan. The Compensation Committee was appointed by
and serves at the pleasure of the Board of Directors and, subject to the 1993
Plan, each of the Board of Directors and the Compensation Committee has full
authority to interpret the terms of the 1993 Plan and 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; provided that any change to the terms of an
option will be approved by the Board of Directors to the extent such change
would be deemed to be a new option grant or such terms relate to a subsequent
transaction that would not be exempt from Section 16(b) of the Securities
Exchange Act of 1934, in the absence of such approval.
The Board of Directors or the Compensation Committee approves conclusively,
consistent with the 1993 Plan, the individuals to 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.
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.
Each of the Board of Directors and the Compensation Committee may, at its
discretion, approve an option grant to an eligible person under 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, 1998, there were
approximately 6,200 employees eligible to participate in the 1993 Plan and
approximately 3,400 employees participating in the 1993 Plan. The number of
options which may be granted to any eligible person is also within the
discretion of each of the Board of Directors and the Compensation Committee,
subject to certain conditions concerning incentive stock options.
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Options granted under the 1993 Plan are exercisable at such time or times as
the Board of Directors or 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).
Under the 1993 Plan, options are transferable only by will, by the laws of
descent and distribution or pursuant to a qualified domestic relations order,
and may be exercised by a person other than the option holder only in the
circumstances outlined below; provided that the Board of Directors or the
Compensation Committee may allow for transferability of nonstatutory stock
options to immediate family members of the option holder or to trusts,
partnerships or other entities controlled by and of which the beneficiaries
are immediate family members of the option holder.
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 Board of Directors or 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. A person electing to exercise an option must give written notice to
the Company of the election, accompanied by any documents required by the
Board of Directors or the Compensation Committee and the purchase price. The
Board of Directors or 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 security as the Compensation Committee
deems adequate to meet the potential liability of the Company for withholding
of taxes.
The Board of Directors or 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.
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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 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 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 and within one year after the date of exercise, any
later sale of such stock will result in a 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 any necessary 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.
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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 the U.S. 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.
PROPOSAL 3
APPROVAL OF AMENDMENT TO THE COMPANY'S
1989 EMPLOYEE STOCK PURCHASE PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 3.
On May 10, 1989, the Company's stockholders adopted the Company's 1989
Employee Stock Purchase Plan (the "1989 Plan") and 1,800,000 shares of Common
Stock were reserved for purchase thereunder. On May 8, 1991, May 12, 1993 and
May 8, 1996, the 1989 Plan was amended to include an additional 3,600,000,
2,400,000 and 2,000,000 shares of Common Stock, respectively. Currently, the
total number of shares of Common Stock that are authorized to be purchased
under the 1989 Plan is 9,800,000. As of February 28, 1998, 1,923,464 of these
shares remained available for future purchases under the 1989 Plan.
On January 21, 1998, the Board of Directors approved an amendment to the
1989 Plan to provide that employees whose customary employment is 20 hours or
less per week shall be ineligible to participate in the 1989 Plan. Stockholder
approval of this amendment is required by the terms of the 1989 Plan and for
the 1989 Plan to remain qualified under the Code. This modification to
eligibility under the 1989 Plan is intended to make the 1989 Plan consistent
with the Company's employment and benefits policies. 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 1989 Plan.
As of February 28, 1998 there were approximately 5,300 employees of the
Company and its subsidiaries eligible to participate in the 1989 Plan and
approximately 2,400 employees participating in the 1989 Plan. The Company
cannot now determine the number of shares to be received by all current
executive officers as a group and all employees, including all current
officers, who are not executive officers, as a group, in the event they
participate in the 1989 Plan. 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 1989 Plan. Since inception of the 1989 Plan there
have been seventeen completed six-month offerings. The closing price of a
share of Common Stock on the New York Stock Exchange on February 27, 1998 was
$37.75. The proceeds received by the Company from the sale of Common Stock
pursuant to the 1989 Plan will be used for the general corporate purposes of
the Company.
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SUMMARY OF THE 1989 PLAN
A total of not more than 9,800,000 shares of Common Stock may be issued
under the 1989 Plan. Such shares may be issued from the Company's authorized
but unissued stock or may be shares of reacquired stock. The 1989 Plan
provides for the Company to grant six-month options to participating employees
to purchase shares. Each employee of the Company or a subsidiary of the
Company having at least six months of continuous service on the date of grant
of an option is eligible to participate in the 1989 Plan. However, any
employee who immediately after the grant of an option would be deemed under
the provisions of the Code to own 5% or more of the Common Stock will not be
eligible to receive such an option. In addition, if the January 21, 1998
amendment is approved, employees whose customary employment is 20 hours or
less per week shall be ineligible to participate in the 1989 Plan.
Furthermore, no employee will be granted an option under the 1989 Plan which
would permit his or her right to purchase shares to accrue at a rate which
exceeds $25,000 in fair market value of Common Stock (determined at the time
the option is granted) for any calendar year.
Options are granted twice yearly, on January 1 and July 1, and are
exercisable on the succeeding June 30 or December 31. Options are exercisable
through accumulations of payroll deductions. The amount of the deductions are
determined by the employee, but may not be less than 2% nor more than 10% of
the employee's compensation (up to a maximum of $2,500 in each option period,
less any amount rolled over from the preceding option period representing an
amount in lieu of a fractional share). The number of shares acquired in a
particular option period is determined by dividing the balance in the
employee's withholding account on the last day of the period by the purchase
price per share for the Common Stock determined under the 1989 Plan. In lieu
of a fractional share, any remaining balance in an employee's withholding
account at the end of an option period is rolled over to the opening balance
for the next option period. The purchase price for shares is the lower of 85%
of the fair market value of the Common Stock at the time of grant or 85% of
said value at the time of exercise.
In the event the number of shares then available under the 1989 Plan is
otherwise insufficient, the number of shares each employee is entitled to
purchase shall be proportionately reduced and the balance in each employee's
withholding account shall be returned to such employee.
An employee may at any time prior to exercise cancel his or her option, and
upon such cancellation, all accumulated payroll deductions in the employee's
withholding account shall be returned to him or her without interest. During
an employee's lifetime, his or her rights in an option will be exercisable
only by him or her and may not be sold, pledged, assigned, or otherwise
transferred. The employee may elect to have the amount credited to his or her
withholding account at the time of his or her death applied to the exercise of
his or her option for the benefit of named beneficiaries. Nothing in the 1989
Plan is to be construed so as to give an employee the right to be retained in
the service of the Company.
In the event there is a change in the Common Stock due to a stock dividend,
stock split, combination of shares, recapitalization, merger or other capital
change, the aggregate number of shares available under the 1989 Plan and under
any outstanding options, the option price and other relevant provisions of the
1989 Plan will be appropriately adjusted. The Company will have the right to
amend the 1989 Plan at any time, but cannot make an amendment (other than as
stated above) relating to the aggregate number of shares available under the
1989 Plan or the option price without the approval of the stockholders. The
Company may suspend or terminate the 1989 Plan at any time, but such
termination will not affect the rights of employees holding options at the
time of termination.
9
<PAGE>
The Compensation Committee administers the 1989 Plan, makes determinations
regarding all questions arising thereunder, and adopts, administers, and
interprets such rules and regulations relating to the 1989 Plan as it deems
necessary or advisable.
FEDERAL INCOME TAX CONSEQUENCES
The 1989 Plan is intended to qualify as an "Employee Stock Purchase Plan"
within the meaning of Section 423 of the Code. Under the Code, neither the
grant of an option under the 1989 Plan nor the acquisition of shares upon
exercise of such an option will result in taxable income to the employee or a
deduction for the Company.
The Federal income tax treatment of the employee's subsequent disposition of
shares acquired under a 1989 Plan option ("Plan Shares") will vary depending
upon the timing of the disposition. (For these purposes, a "disposition"
includes any transfer of shares other than certain transfers at death, certain
tax-free exchanges, or a mere pledge or hypothecation). If the employee
disposes of Plan Shares within two years after the corresponding option was
granted, or within one year after the Plan Shares were purchased, the employee
will recognize ordinary income on the date of disposition--and the Company
will receive a corresponding deduction--equal to the difference between the
price that the employee paid for the Plan Shares and the fair market value of
the Plan Shares on the date they were purchased. If, on the other hand, the
employee disposes of Plan Shares after both of the periods specified above, or
if the employee dies while owning the Plan Shares, then he or she will
recognize ordinary income (on the date of disposition or death) only to the
extent of the lesser of (i) the excess of the fair market value of the shares
at the time the option was granted over the option price (computed as of the
grant date); or (ii) the excess of the fair market value of the Plan Shares at
the time of death or disposition over the purchase price. In this case, the
Company will receive no corresponding deduction.
The foregoing summary is not a complete description of the U.S. Federal
income tax aspects of the 1989 Plan. Moreover, the foregoing summary relates
only to Federal income taxes; there may also be Federal estate and gift tax
consequences associated with the 1989 Plan, as well as foreign, state and
local tax consequences.
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the Company's
Common Stock owned on February 28, 1998 (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 Common
Stock in the Company, (iii) by each of the executive officers named in the
Summary Compensation Table on page 13, 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)................................... 6,117,600 1.2%
Maureen E. Egan(3)................................... 1,010,002 **
Michael J. Cronin.................................... 6,000 **
John F. Cunningham................................... 36,000 **
John R. Egan*(4)..................................... 1,424,300 **
W. Paul Fitzgerald(5)................................ 100,371 **
Raymond Fortune(6)................................... 42,098 **
Michael A. Klayko(7)................................. 41,150 **
Joseph F. Oliveri*................................... 53,400 **
Michael C. Ruettgers*(8)............................. 1,161,210 **
FMR Corp.(9)......................................... 40,503,272 8.1
Putnam Investments, Inc.(10)......................... 25,287,942 5.1
All directors and executive officers as a group (13
persons)(11)........................................ 10,419,072 2.1
</TABLE>
- --------
* 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 2,434,302 shares held by Mr. Richard Egan's wife, Maureen E.
Egan, and John R. Egan, as to which Mr. Richard Egan disclaims beneficial
ownership.
(3) Excludes 7,541,900 shares held by Mrs. Egan's husband, Richard J. Egan,
and John R. Egan, as to which Mrs. Egan disclaims beneficial ownership.
(4) Mr. John Egan is deemed to own 580,000 of these shares by virtue of a
currently exercisable option to purchase these shares.
(5) Mr. Fitzgerald is deemed to own 35,333 of these shares by virtue of a
currently exercisable option to purchase these shares.
(6) Excludes 10,902 shares held by Mr. Fortune's wife, as to which Mr. Fortune
disclaims beneficial ownership.
(7) Mr. Klayko is deemed to own 40,000 of these shares by virtue of currently
exercisable options to purchase these shares.
11
<PAGE>
(8) Mr. Ruettgers is deemed to own 480,000 of these shares by virtue of a
currently exercisable option to purchase these shares. Excludes 4,800
shares owned by Mr. Ruettgers' children, as to which he disclaims
beneficial ownership.
(9) Based solely on the Schedule 13G filed jointly by FMR Corp., Edward C.
Johnson 3d, Abigail P. Johnson and Fidelity Management & Research Company
dated February 14, 1998 indicating that (i) Fidelity Management & Research
Company, a wholly-owned subsidiary of FMR Corp., beneficially owns
35,976,021 shares of Common Stock as a result of serving as investment
adviser to various investment companies and as a result of acting as sub-
adviser to Fidelity American Special Situations Trust; (ii) Fidelity
Management Trust, a wholly-owned subsidiary of FMR Corp., beneficially
owns 4,091,151 shares of Common Stock as a result of serving as investment
manager to certain institutional accounts; (iii) Fidelity International
Limited beneficially owns 471,000 shares of Common Stock as a result of
serving as investment adviser to various non-U.S. investment companies;
(iv) FMR Corp., through its relationships with the foregoing entities, has
the sole power to vote or direct the voting of 3,522,722 of these shares
and the sole power to dispose of or direct the disposition of 40,503,272
of these shares; and (v) Mr. Johnson, through his relationship with FMR
Corp., has the sole power to vote or direct the voting of 3,051,722 of
these shares and the sole power to dispose of or direct the disposition of
40,503,272 of these shares.
(10) Based solely on the Schedule 13G filed jointly by Marsh & McLennan
Companies, Inc., Putnam Investments, Inc., Putnam Investment Management,
Inc. and The Putnam Advisory Company, Inc. dated January 16, 1998
indicating that (i) of the 25,287,942 shares of Common Stock beneficially
owned by Putnam Investments, Inc., 21,243,914 shares are beneficially
owned by Putnam Investment Management, Inc. and 4,044,028 shares of
Common Stock are beneficially owned by The Putnam Advisory Company, Inc.,
both registered investment advisers and wholly-owned subsidiaries of
Putnam Investments, Inc.; (ii) with respect to 2,557,136 shares, Putnam
Investments, Inc. and The Putnam Advisory Company, Inc. have shared power
to vote or direct the voting of such shares; (iii) Putnam Investments,
Inc. and Putnam Investment Management, Inc. have shared power to dispose
of or direct the disposition of 21,243,914 shares; and (iv) Putnam
Investments, Inc. and The Putnam Advisory Company, Inc. have shared power
to dispose of or direct the disposition of 4,044,028 shares. Putnam
Investments, Inc. is a wholly-owned subsidiary of Marsh & McLennan
Companies, Inc.
(11) Includes 1,314,293 shares of Common Stock beneficially owned by all
executive 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.
The address of all persons listed above other than FMR Corp. and Putnam
Investments, Inc. is c/o EMC Corporation, 171 South Street, Hopkinton,
Massachusetts 01748. The address of FMR Corp. is 82 Devonshire Street,
Boston, Massachusetts 02109. The address of Putnam Investments, Inc. is
One Post Office Square, Boston, Massachusetts 02109.
12
<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, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION COMPENSATION
--------------------------------------------- ------------
AWARDS
OTHER ANNUAL ------------ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($) OPTIONS(#) COMPENSATION($)
- --------------------------- ---- --------- ----------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Michael C. Ruettgers..... 1997 594,616 966,800 51,844(2) 500,000 2,000(3)
President, Chief 1996 397,808 661,479 -- 500,000 2,000(3)
Executive Officer and 1995 276,700 366,120 -- -- 2,000(3)
Director
Michael A. Klayko........ 1997 250,000 1,258,575 -- 50,000 2,000(3)
Senior Vice President 1996(4) 202,885 273,250 -- 150,000 1,500(3)
North American 1995 -- -- -- -- --
Sales/Services
Raymond Fortune.......... 1997 249,596 454,377 -- -- 2,000(3)
Senior Vice President 1996 234,327 396,434 -- -- 2,000(3)
International Sales 1995 190,192 217,450 -- 112,500 2,000(3)
John R. Egan............. 1997(5) 264,000 295,125 -- 500,000 2,000(3)
Executive Vice President 1996(5) 171,538 173,652 -- -- 1,500(3)
Products and Offerings 1995 212,844 284,609 -- -- 2,000(3)
and Director
Richard J. Egan.......... 1997 -- 433,334 483,333(6) -- 234,239(7)
Chairman of the Board 1996 105,500 236,400 100,000(6) 2,000,000(8) 291,840(7)
and Director 1995 276,700 366,120 -- -- 319,376(7)
</TABLE>
- --------
(1) Includes performance bonuses and commissions accrued in year of service
whether paid during year of service or in succeeding year.
(2) Includes the amount of $17,837 for tax planning advice and $24,228 for
personal use of the Company airplane.
(3) The amount noted was paid to such executive officer's account in the EMC
401(k) Plan.
(4) Mr. Klayko joined the Company on March 1, 1996.
(5) Mr. Egan was on a leave of absence from the Company effective June 12,
1996 to May 5, 1997.
(6) Represents consulting payments made to Mr. Egan, following his resignation
as an employee of the Company effective June 30, 1996.
(7) Includes the amount of $1,000 for 1996 and $2,000 for 1995 paid to Mr.
Egan's account in the EMC 401(k) Plan. Also includes $234,239, $290,840
and $317,376, respectively, for 1997, 1996 and 1995, 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 1997, 1996 and 1995 ($789,601, $794,496 and $829,568, respectively)
with respect to a split-dollar insurance agreement described below, based
on the earliest
13
<PAGE>
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 1997, 1996 or 1995.
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,
Maureen E. Egan is a Director and John R. Egan is a Director and an
executive officer 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.
(8) Mr. Egan transferred all of such options to a trust for the benefit of
"immediate family members" as defined in and pursuant to the terms and
conditions of such grants.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in fiscal 1997 to
the named executive officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------
PERCENT POTENTIAL REALIZED
NUMBER OF TOTAL VALUE AT ASSUMED
OF OPTIONS MARKET ANNUAL RATES OF
OPTIONS GRANTED TO PRICE PER STOCK PRICE
GRANTED EMPLOYEES EXERCISE SHARE ON APPRECIATION FOR OPTION TERM
IN IN FISCAL PRICE DATE OF EXPIRATION ---------------------------------
NAME 1997 YEAR(1) PER SHARE GRANT DATE 0% 5% 10%
---- ------- ---------- --------- --------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael C. Ruettgers
(2).................... 250,000 2.97% $12.23 $24.47 7/23/07 $3,060,000 $6,907,500 $12,810,000
250,000 2.97% 24.47 24.47 7/23/07 -- 3,847,500 9,750,000
Michael A. Klayko (3)... 50,000 0.60% 18.13 18.13 3/5/07 -- 570,000 1,444,500
Raymond Fortune......... -- -- -- -- -- -- -- --
John R. Egan (4)........ 250,000 2.97% 12.23 24.47 7/23/07 3,060,000 6,907,500 12,810,000
250,000 2.97% 24.47 24.47 7/23/07 -- 3,847,500 9,750,000
Richard J. Egan......... -- -- -- -- -- -- -- --
</TABLE>
- --------
(1) The Company granted options representing an aggregate of 8,406,194 shares
to 1,568 employees of EMC and its subsidiaries in fiscal 1997 under the
Company's 1985 Stock Option Plan (the "1985 Plan") and the 1993 Plan.
(2) Mr. Ruettgers' options become exercisable in increments of 20% over a
five-year period. The terms of such option grants are ten years from the
date of the grants, which was July 23, 1997. Such options are transferable
to "immediate family members," as defined in the grants.
(3) Mr. Klayko's options become exercisable in increments of 20% over a five-
year period. The term of such option grant is ten years from the date of
the grant, which was March 5, 1997.
(4) Mr. Egan's options become exercisable in increments of 20% over a five-
year period. The terms of such option grants are ten years from the date
of the grants, which was July 23, 1997. Such options are transferable to
"immediate family members," as defined in the grants.
14
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises in 1997 by the
named executive officers and the value of such officers' unexercised options at
December 31, 1997.
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED FISCAL YEAR END AT FISCAL YEAR END
ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael C. Ruettgers.... 100,000 $2,184,380 480,000 900,000 $12,828,720 $13,670,200
Michael A. Klayko....... 30,000 280,572 -- 170,000 -- 2,506,050
Raymond Fortune......... 52,500 778,831 -- 127,500 -- 2,309,850
John R. Egan............ 110,000 2,918,394 610,000 500,000 16,303,165 4,544,200
Richard J. Egan......... -- -- -- -- -- --
</TABLE>
15
<PAGE>
Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that might incorporate
other filings with the Securities and Exchange Commission, including this
Proxy Statement, in whole or in part, the following report and the Stock Price
Performance Graph on page 19 shall not be incorporated by reference into any
such filings.
REPORT OF THE EXECUTIVE COMPENSATION
AND STOCK OPTION COMMITTEE AND THE BOARD OF DIRECTORS
EMC's compensation philosophy is to tightly link executive pay to corporate
performance and returns to stockholders. A significant portion of executive
compensation is tied to the Company's success in meeting one or more specified
performance goals and to appreciation in the Company's market valuation. Thus,
a significant portion of an executive's compensation is at risk. The goals of
the compensation program are to attract and retain exceptional executive
talent, to motivate these executives to achieve the Company's business goals,
to link executive and stockholder interests through equity-based plans, and to
recognize individual contributions as well as overall business results.
Each year the Compensation Committee conducts a full review of the Company's
executive compensation program. As occurred in 1997, this review often
includes a comprehensive report from an independent executive compensation
consultant 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. The Compensation Committee
reviews the selection of peer companies used for compensation analysis
annually. 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.
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
generally does not compete with such companies for executive talent and
therefore uses other high technology companies for compensation analysis. The
companies used for compensation analysis are generally other leading high
technology companies which are comparable to the Company in terms of revenues,
workforce size or growth rate. The selected peer group for compensation
analysis may vary from year to year based upon market conditions and changes
in the Company's business. The annual compensation review provides an ongoing
comparison of the Company's executive compensation with the compensation
programs of similar companies.
The key elements of the Company's executive compensation are generally base
salary, bonus and stock options. The Compensation Committee's policies with
respect to each of the elements are discussed below. While the elements of
compensation are considered separately, the Compensation Committee also takes
into account the complete compensation package provided by the Company to the
individual executive.
BASE SALARIES
Base salaries for executive officers are determined by evaluating the
responsibilities of the position 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 are generally
low in comparison to base salaries for comparable positions at other
companies. This is due to the fact that the Company's executive compensation
program is weighted heavily towards bonuses and other incentives, more tightly
coupling executive interests with those of stockholders.
16
<PAGE>
Annual salary adjustments are determined by evaluating the financial
performance and, where appropriate, certain non-financial performance
measures, of the Company, and the performance of each executive officer. For
1997, 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 1997, 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 1996, 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'
service 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, in particular the continuing need to bring Mr.
Ruettgers' base salary more in line with base salaries of chief executive
officers of peer companies, the Compensation Committee believes that the
significant increase in Mr. Ruettgers' 1997 base salary from that of 1996 is
well justified.
EXECUTIVE BONUSES
The Company's executive officers are eligible for an annual cash bonus.
Individual and corporate performance objectives, both quarterly and annual,
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 1997 was based on a fractional
percentage of the Company's pre-tax profits. As in the case of base salary,
the Compensation Committee also considers individual non-financial performance
measures and, where appropriate, business unit performance measures, in
determining bonuses.
Mr. Ruettgers' bonus for 1997 was largely based on the Company's performance
in 1997. In 1997, the Company again exceeded its performance goals by a
significant margin. In awarding the bonus to Mr. Ruettgers, the Compensation
Committee also considered on a subjective basis the performance of the Common
Stock and the role of Mr. Ruettgers in promoting the long-term strategic
growth of the Company and, in particular, the Company's growth in market
share. Based on the above factors, Mr. Ruettgers received a significant
increase over the bonus paid to him in 1996.
STOCK OPTIONS
The purpose of the Company's stock option plans is to provide an additional
incentive to certain employees of the Company to work to maximize stockholder
value. Generally, stock options vest in equal increments over five years. This
approach is designed to act as a retention device for key employees and to
encourage employees to take into account the long-term interests of the
Company.
Stock options may be granted to the Company's executive officers under the
Company's 1985 and 1993 Plans. The Company has a set of guidelines that is
used to determine the size of stock option awards. These guidelines take into
account the duties and responsibilities of the individual, individual
performance, years of service to the Company, the number of outstanding
options and the size of prior option awards. These guidelines were used in
1997 by the Board of Directors in making the stock option grants to Mr.
Ruettgers and all other executive officers of the Company. In the event of
poor corporate performance, the Board of Directors may elect not to award
options.
In 1997, Mr. Ruettgers received options to purchase 250,000 shares at an
exercise price of fair market value on the date of grant and 250,000 shares at
an exercise price of 50% of fair market value on the date of grant.
17
<PAGE>
The Board of Directors believes that the above grants are justified on the
basis of the factors discussed above, in particular Mr. Ruettgers' and the
Company's performance in 1997 and recent years. The Board of Directors
believes that the equity interests held by Mr. Ruettgers and the other
executive officers align the interests of stockholders and management.
POLICY ON DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Code limits the tax deductibility by a company of
compensation in excess of $1 million paid to any of its five most highly
compensated executive officers. However, performance-based compensation that
has been approved by stockholders is excluded from the $1 million limit if,
among other requirements, the compensation is payable only upon attainment of
pre-established, objective performance goals and the board committee that
establishes such goals consists solely of "outside directors" (as defined for
purposes of Section 162(m)).
While the tax impact of any compensation arrangement is one factor to be
considered, such impact is evaluated in light of the Compensation Committee's
overall compensation philosophy. The Compensation Committee intends to
establish executive officer compensation programs which will maximize the
Company's tax deduction if the Compensation Committee determines that such
actions are consistent with its philosophy and in the best interests of the
Company and its stockholders. However, from time to time the Compensation
Committee may award compensation which is not fully deductible if the
Compensation Committee determines that such award is consistent with its
philosophy and in the best interests of the Company and its stockholders.
CONCLUSION
Through the programs described above, a very significant portion of the
Company's executive compensation is linked directly to corporate and
individual performance and stock price appreciation. In 1997, as in previous
years, the majority of the Company's executive compensation consisted of
compensation with performance-based elements. The Compensation Committee and
the Board of Directors intend to continue the policy of linking executive
compensation to corporate performance and returns to stockholders.
EXECUTIVE COMPENSATION AND
STOCK OPTION COMMITTEE
Michael J. Cronin, Chairman
John F. Cunningham
Richard J. Egan
As to the portion of the above report
relating to stock options,
BOARD OF DIRECTORS
Richard J. Egan, Chairman
Michael J. Cronin
John F. Cunningham
John R. Egan
Maureen E. Egan
W. Paul Fitzgerald
Joseph F. Oliveri
Michael C. Ruettgers
18
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee members are Michael J. Cronin, Chairman, John F.
Cunningham and Richard J. Egan. Richard J. Egan, Chairman of the Board of the
Company, is also a member of the Board of Directors of Cognition Corporation,
of which Michael J. Cronin is Chief Executive Officer and Chairman of the
Board. In addition to Messrs. Cronin and Cunningham, Richard J. Egan, Michael
C. Ruettgers and John R. Egan, who are executive officers and Directors of the
Company, and W. Paul Fitzgerald, who is a former executive officer and current
Director of the Company, participated in deliberations of the Board of
Directors concerning the stock option portion of executive compensation during
the last fiscal year.
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)**
[LINE GRAPH APPEARS HERE]
* $100 invested on 1/2/93 in
Company stock, index or peer
group including reinvestment of
dividends, if any.
** 24 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.
<TABLE>
<CAPTION>
FISCAL YEAR
---------------------------------------
1992 1993 1994 1995 1996 1997
---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
EMC Corporation......................... 100 277.89 369.99 258.94 563.08 932.79
Computer Storage Devices................ 100 129.67 130.45 196.80 354.64 387.81
S&P 500................................. 100 110.08 111.54 153.45 188.69 251.64
</TABLE>
19
<PAGE>
CERTAIN TRANSACTIONS
Periodically during 1997, the Company rented the private airplane of Richard
J. Egan for use for EMC business trips and sales activities, for which
payments aggregated approximately $320,000. Richard J. Egan is Chairman of the
Board of Directors of the Company.
In 1997, the Company retained the Thomas A. Fitzgerald Company to provide
various forms of corporate insurance and paid premiums of approximately
$450,000. 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, the
brother-in-law of Richard J. Egan, Chairman of the Board of Directors of the
Company and the uncle of John R. Egan, an executive officer and a Director of
the Company.
In December 1997, the Company purchased certain real property in Hopkinton,
Massachusetts from Sovereign Development Ltd. and Interface Realty Partnership
for $3,800,000. As part of the transaction, Interface Electronics Corporation
entered into a lease to remain at the property for a period of six months.
Joseph F. Oliveri, a Director of EMC, is a Director and stockholder of
Sovereign Development Ltd., a general partner of Interface Realty Partnership,
and a Director, stockholder and President and Chief Executive Officer of
Interface Electronics Corporation.
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.
COMMITTEES OF THE BOARD
The Audit Committee, the Executive Compensation and Stock Option Committee,
the Mergers and Acquisitions Committee and the Stock Repurchase and Bond
Redemption Oversight Committee are the standing committees of the Board of
Directors.
<TABLE>
<CAPTION>
STOCK REPURCHASE
EXECUTIVE COMPENSATION MERGERS AND AND BOND
AUDIT AND STOCK OPTION ACQUISITIONS REDEMPTION OVERSIGHT
- --------- ----------------------- ------------------- ---------------------
<S> <C> <C> <C>
W. Paul Fitzgerald* Michael J. Cronin* John F. Cunningham* Joseph F. Oliveri*
Michael J. Cronin John F. Cunningham Michael J. Cronin John F. Cunningham
Joseph F. Oliveri Richard J. Egan John R. Egan Richard J. Egan
W. Paul Fitzgerald
</TABLE>
- --------
* Chairman
The Audit Committee, which held two meetings in 1997, 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 independent 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 1997, reviews salary policies and compensation of executive
officers, officers and other members of management and approves compensation
plans. Although the full Board of Directors currently approves all
transactions under the Company's stock option plans, this committee makes
recommendations to the Board of Directors for option
20
<PAGE>
grants and has the authority to administer and interpret the provisions of
these option plans as well as the Company's employee stock purchase plan.
The Mergers and Acquisitions Committee, which held two meetings in 1997,
reviews with management of EMC potential acquisitions.
The Stock Repurchase and Bond Redemption Oversight Committee held no formal
meetings during 1997. This committee oversees and reviews with management the
redemption of any of the Company's bonds or convertible notes which may be
outstanding from time to time, and any common stock repurchase program of the
Company which may exist from time to time.
The Board of Directors does not have a Nominating Committee.
The Company compensates each director who is not an employee of the Company
$12,500 per annum, $2,000 for each regularly scheduled director's meeting
attended, and for each committee on which they serve, $1,500 per annum or
$2,000 per annum if they serve as Chairman.
Under the 1992 Directors Plan, each Eligible Director (as defined below) is
awarded an option to purchase up to 40,000 shares of Common Stock on the date
he or she first becomes an Eligible Director, subject to the conditions of the
1992 Directors Plan ( a "formula option"). An Eligible Director is any
director who (1) is not an employee of the Company; and/or (2) is not a five
percent stockholder of the Company or a person in control of such stockholder.
The exercise price for each option granted under the 1992 Directors Plan will
be at the price per share determined by the Compensation Committee or the
Board of Directors at the time the option is granted, which price shall not be
less than 50% of the fair market value per share of Common Stock on the date
of grant. Formula options become exercisable for one-third of the shares
covered thereby on each of the first through third anniversaries of the grant.
The 1992 Directors Plan also provides for the granting of discretionary, non-
formula based options to Eligible Directors. Such non-formula based options
may be on terms determined by the Compensation Committee or the Board of
Directors not inconsistent with the 1992 Directors Plan.
On July 23, 1997, pursuant to the 1992 Directors Plan, the Board of
Directors granted options to purchase 80,000 shares of Common Stock (after
giving effect to the 2-for-1 stock split effective November 17, 1997) to each
of Mrs. Egan and Mr. Cunningham, Directors of the Company, at an exercise
price of $12.23, equal to 50% of the fair market value of the Company's Common
Stock on the date of grant.
----------------
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 of the Company. W. Paul Fitzgerald is the
brother of Maureen E. Egan. John R. Egan, Executive Vice President, Products
and Offerings and a Director of the Company, is the son of Richard J. and
Maureen E. Egan.
ADVANCE NOTICE PROCEDURES
Under the Company's By-laws, nominations for a director may be made only by
the Board of Directors, a nominating committee of the Board of Directors, a
person appointed by the Board of Directors or by a stockholder entitled to
vote who has delivered notice to the principal executive offices of the
Company (containing certain information specified in the By-laws) (i) not less
than 75 days nor more than 100 days prior
21
<PAGE>
to the first anniversary of the preceding year's annual meeting, or (ii) if
the meeting is called for a date which is more than 75 days prior to such
anniversary date, not later than the close of business on the 20th day
following the date notice of such meeting is mailed or made public, whichever
is earlier.
The By-laws also provide that no business may be brought before an annual
meeting except as specified in the notice of the meeting or as otherwise
brought before the meeting by or at the direction of the Board of Directors,
the presiding officer or by a stockholder entitled to vote at such annual
meeting who has delivered notice to the principal executive offices of the
Company (containing certain information specified in the By-laws) (i) not less
than 75 days nor more than 125 days prior to the first anniversary of the
preceding year's annual meeting, or (ii) for a special meeting or an annual
meeting called for a date which is more than 75 days prior to such anniversary
date, not later than the close of business on the 20th day following the date
notice of such meeting is mailed or made public, whichever is earlier.
These requirements are separate and apart from and in addition to the
requirements that a stockholder must meet in order to have a stockholder
proposal included in the Company's Proxy Statement under Rule 14a-8 of the
Securities Exchange Act of 1934, as amended. A copy of the full text of the
By-laws provisions discussed above may be obtained by writing to the Clerk of
the Company at 35 Parkwood Drive, Hopkinton, Massachusetts 01748-9103.
STOCKHOLDER PROPOSALS
To be eligible for inclusion in the Company's Proxy Statement for the 1999
Annual Meeting of Stockholders, stockholder proposals must be received at
EMC's principal executive offices no later than November 20, 1998.
INDEPENDENT PUBLIC ACCOUNTANTS
The Directors have appointed Coopers & Lybrand L.L.P., who have served as
the Company's auditors since 1984, to examine the financial statements of the
Company for fiscal year 1998. The Company expects that representatives of
Coopers & Lybrand L.L.P. 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.
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, 1997, all filing requirements were complied with in a
timely fashion.
22
<PAGE>
EMC CORPORATION
1993 STOCK OPTION PLAN, as amended January 21, 1998
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 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.
2.8 "Participant" means an individual holding a stock option or stock
options granted to him under the Plan.
Page 1 of 10
<PAGE>
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 and, to the extent
provided herein, the Board of Directors. 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.
3.2 Subject to the provisions set forth herein, each of the Committee and
the Board of Directors shall have full authority to determine the provisions of
options to be granted under the Plan. Subject to the provisions set forth
herein, the Committee shall have full authority 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; provided, however, that
-------- -------
any change to the terms of an option granted hereunder shall be approved by the
Board of Directors to the extent such change would be deemed to be a new option
grant or such terms relate to a subsequent transaction that would not be exempt
from Section 16(b) of the Securities Exchange Act of 1934 in the absence of such
approval.
3.3 The decision of the Committee or the Board of Directors, as
applicable, on any matter as to which the Committee or the Board of Directors,
as applicable, 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
Page 2 of 10
<PAGE>
extent, if any, as the Committee or the Board, as applicable, may have
determined or approved pursuant to the provisions of the Plan.
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 31,500,000*,
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), or if shares of Common Stock are reacquired by the
Company upon the rescission of an exercise of an option, the number of shares of
Common Stock as to which an option has not been exercised prior to termination,
or have been reacquired upon the rescission of an option, 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 reacquired 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, each of the Committee
and the Board of Directors 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.
*Subject to stockholder approval at the Annual Meeting of Stockholders to
be held on May 6, 1998.
Page 3 of 10
<PAGE>
6.2 Each of the Committee and the Board of Directors shall, in its absolute
discretion, determine the number of shares of Common Stock to be subject to each
option granted by it 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 Stock Options, as the Committee or the Board of Directors 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 or
the Board of Directors 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
Page 4 of 10
<PAGE>
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 or Board of Directors 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 or the Board of Directors shall determine. In
the case of an option made exercisable in installments, the Committee
or the Board of Directors 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 or the Board of Directors 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
Page 5 of 10
<PAGE>
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 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.
Page 6 of 10
<PAGE>
7.3.7 Non-transferability of Options. No option may be transferred
------------------------------
by the Participant otherwise than by will, by the laws of descent and
distribution or pursuant to a qualified domestic relations order, and during
the Participant's lifetime the option may be exercised only by him or her;
provided, however, that the Board of Directors or the Committee, as
-------- -------
applicable, in its discretion, may allow for transferability of non-
qualified stock options by the Participant to "Immediate Family Members."
Immediate Family Members means children, grandchildren, spouse or common law
spouse, siblings or parents of the Participant or to bona fide trusts,
partnerships or other entities controlled by and of which the beneficiaries
are Immediate Family Members of the Participant. Any option grants that are
transferable are further conditioned on the Participant and Immediate Family
Members agreeing to abide by the Company's then current stock option
transfer guidelines.
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 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 or the Board of Directors 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 or the Board of Directors
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
Page 7 of 10
<PAGE>
Committee shall also determine all other matters relating to continuous
employment.
7.3.10 Cancellation and Rescission of Options. (A) Unless the
--------------------------------------
certificate or agreement evidencing the option specifies otherwise, the
Committee may cancel, rescind, suspend, withhold or otherwise limit or
restrict any unexpired option at any time if the Participant engages in
"Detrimental Activity." As used in this subsection 7.3.10, "Detrimental
Activity" shall include: (i) the rendering of services for any organization
or engaging directly or indirectly in any business which is or becomes
competitive with the Company, or which organization or business, or the
rendering of services to such organization or business, is or becomes
otherwise prejudicial to or in conflict with the interests of the Company;
(ii) the disclosure to anyone outside the Company, or the use in other than
the Company's business, without prior written authorization from the
Company, of any Confidential Information as defined in the Company's Key
Employee Agreement, relating to the business of the Company, acquired by the
Participant either during or after employment with the Company; (iii) the
failure or refusal to disclose promptly and to assign to the Company,
pursuant to the Company's Key Employee Agreement, all right, title and
interest in any invention or idea, patentable or not, made or conceived by
the Participant during employment by the Company, relating in any manner to
the actual or anticipated business, research or development work of the
Company or the failure or refusal to do anything reasonably necessary to
enable the Company to secure a patent where appropriate in the United States
and in other countries; (iv) activity that results in termination of the
Participant's employment for cause; (v) the Participant otherwise fails to
comply with the terms of the certificate or agreement evidencing the option,
the Plan or the Key Employee Agreement; (vi) a violation of any rules,
policies, procedures or guidelines of the Company, including but not limited
to the Company's Business Conduct Guidelines; (vii) any attempt directly or
indirectly to induce any employee of the Company to be employed or perform
services elsewhere or any attempt directly or indirectly to solicit the
trade or business of any current or prospective customer, supplier or
partner of the Company; (viii) the Participant being convicted of, or
entering a guilty plea with respect to a crime, whether or not connected
with the Company; or (ix) any other conduct or act determined to be
injurious, detrimental or prejudicial to any interest of the Company. (B)
Upon exercise of an option, the Participant shall certify, in a manner
acceptable to the Company, that he or she is in compliance with the terms
and conditions of the Plan. In the event a Participant engages in
Detrimental Activity prior to or during the six months after any exercise of
an option, such exercise may be rescinded within two years thereafter. In
the event of any such rescission, the Participant shall pay to the Company
the amount of any gain realized as a result of the rescinded exercise in
such a manner and on such terms and conditions as may be required, and the
Company
Page 8 of 10
<PAGE>
shall be entitled to set-off against the amount of any such gain any amount
owed to the Participant by the Company.
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 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.
Page 9 of 10
<PAGE>
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 or the Board of Directors 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 or the Board of Directors
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.
11. EFFECTIVE DATE.
--------------
The Plan became effective immediately upon its approval by the stockholders
of the Company at the Annual Meeting on May 12, 1993.
Page 10 of 10
<PAGE>
EMC CORPORATION
1989 EMPLOYEE STOCK PURCHASE PLAN, as amended January 21, 1998
Section 1. Purpose of Plan
The EMC Corporation 1989 Employee Stock Purchase Plan (the "Plan") is
intended to provide a method by which eligible employees of EMC Corporation and
its subsidiaries (collectively, the "Company") may use voluntary, systematic
payroll deductions to purchase the Company's common stock, $.01 par value,
("stock") and thereby acquire an interest in the future of the Company. For
purposes of the Plan, a subsidiary is any corporation in which the Company owns,
directly or indirectly, stock possessing 50% or more of the total combined
voting power of all classes of stock unless the Board of Directors of the
Company (the "Board of Directors") determines that employees of a particular
subsidiary shall not be eligible.
Section 2. Options to Purchase Stock
Under the Plan as now amended, no more than 9,800,000 shares are available
for purchase (subject to adjustment as provided in Section 16) pursuant to the
exercise of options ("options") granted under the Plan to employees of the
Company ("employees"). The stock to be delivered upon exercise of options under
the Plan may be either shares of the Company's authorized but unissued stock, or
shares of reacquired stock, as the Board of Directors shall determine.
Section 3. Eligible Employees
Except as otherwise provided in Section 20, each employee who has completed
six months or more of continuous service in the employ of the Company shall be
eligible to participate in the Plan.
Section 4. Method of Participation
The periods January 1 to June 30 and July 1 to December 31 of each year
shall be option periods. Each person who will be an eligible employee on the
first day of any option period may elect to participate in the Plan by executing
and delivering, at least 15 days prior to such day, a payroll deduction
authorization in accordance with Section 5. Such employee shall thereby become
a participant ("participant") on the first day of such option period and shall
remain a participant until his or her participation is terminated as provided in
the Plan.
<PAGE>
Section 5. Payroll Deductions
The payroll deduction authorization shall request withholding, at a rate of
not less than 2% nor more than 10% from the participant's compensation (subject
to a maximum of $2,500 per option period), by means of substantially equal
payroll deductions over the option period; provided, however, that in the event
-------- -------
any amount remaining in a participant's withholding account at the end of an
option period (which would be equal to a fractional share) is rolled over to the
opening balance in a participant's withholding account for the next option
period pursuant to Section 8 below (a "rollover"), such amount will be applied
to the last payroll deduction for the next option period, thereby reducing the
amount of that payroll deduction; further provided that the maximum of $2,500
----------------
per option period shall be reduced by the amount of any rollover. For purposes
of the Plan, "compensation" shall mean all cash compensation paid to the
participant by the Company. A participant may change the withholding rate of
his or her payroll deduction authorization by written notice delivered to the
Company at least 15 days prior to the first day of the option period as to which
the change is to be effective. All amounts withheld in accordance with a
participant's payroll deduction authorization shall be credited to a withholding
account for such participant.
Section 6. Grant of Options
Each person who is a participant on the first day of an option period shall
as of such day be granted an option for such period. Such option shall be for
the number of shares of stock to be determined by dividing (a) the balance in
the participant's withholding account on the last day of the option period by
(b) the purchase price per share of the stock determined under Section 7, and
eliminating any fractional share from the quotient. In the event that the
number of shares then available under the Plan is otherwise insufficient, the
Company shall reduce on a substantially proportionate basis the number of shares
of stock receivable by each participant upon exercise of his or her option for
an option period and shall return the balance in a participant's withholding
account to such participant.
Section 7. Purchase Price
The purchase price of stock issued pursuant to the exercise of an option
shall be 85% of the fair market value of the stock at (a) the time of grant of
the option or (b) the time at which the option is deemed exercised, whichever is
less. Fair market value shall be determined in accordance with the applicable
provisions of the Internal Revenue Code of 1986, as amended or restated from
time to time (the "Code"), or regulations issued thereunder, or, in the
absence of any such provisions or regulations, shall be deemed to be the last
sale price at which the stock is traded on the day in question or the last
prior date on which a trade occurred as reported in The Wall Street Journal; or,
-----------------------
if The Wall Street Journal is not published or does not list the stock, then in
-----------------------
such other appropriate newspaper of general circulation as the Board of
Directors
2
<PAGE>
may prescribe; or, if the last price at which the stock traded is not
generally reported then the mean between the reported bid and asked prices at
the close of the market on the day in question or the last prior date when such
prices were reported.
Section 8. Exercise of Options
If an employee is a participant in the Plan on the last business day of an
option period, he or she shall be deemed to have exercised the option granted to
him or her for that period. Upon such exercise, the Company shall apply the
balance of the participant's withholding account to the purchase of the number
of whole shares of stock determined under Section 6, and as soon as practicable
thereafter shall issue and deliver certificates for said shares to the
participant. The balance, if any, of the participant's withholding account in
excess of the total purchase price of the whole shares so issued shall be
applied to the opening balance in his or her withholding account for the next
option period. No fractional shares shall be issued hereunder.
Notwithstanding anything herein to the contrary, the Company shall not be
obligated to deliver any shares unless and until, in the opinion of the
Company's counsel, all requirements of applicable federal and state laws and
regulations (including any requirements as to legends) have been complied with,
nor, if the outstanding stock is at the time listed on any securities exchange,
unless and until the shares to be delivered have been listed (or authorized to
be added to the list upon official notice of issuance) upon such exchange, nor
unless or until all other legal matters in connection with the issuance and
delivery of shares have been approved by the Company's counsel.
Section 9. Interest
No interest will be payable on withholding accounts.
Section 10. Cancellation and Withdrawal
A participant who holds an option under the Plan may at any time prior to
exercise thereof under Section 8 cancel all (but not less than all) of his or
her option by written notice delivered to the Company. Upon such
cancellation, the balance in his or her withholding account shall be returned to
him or her.
A participant may terminate his or her payroll deduction authorization as
of any date by written notice delivered to the Company and shall thereby cease
to be a participant as of such date. Any participant who voluntarily terminates
his or her payroll deduction authorization prior to the last business day of an
option period shall be deemed to have cancelled his or her option.
3
<PAGE>
Section 11. Termination of Employment
Except as otherwise provided in Section 12, upon the termination of a
participant's employment with the Company for any reason whatsoever, he or she
shall cease to be a participant, and any option held by him or her under the
Plan shall be deemed cancelled, the balance of his or her withholding account
shall be returned to him or her, and he or she shall have no further rights
under the Plan. For purposes of this Section 11, a participant's employment
will not be considered terminated in the case of sick leave or other bona fide
leave of absence approved for purposes of this Plan by the Company or a
subsidiary or in the case of a transfer to the employment of a subsidiary or to
the employment of the Company.
Section 12. Death or Retirement of Participant
In the event a participant holds any option hereunder at the time his or
her employment with the Company is terminated (1) by his or her retirement with
the consent of the Company, and such retirement is within three months of the
time such option becomes exercisable, or (2) by his or her death, whenever
occurring, then such participant (or his or her legal representative), may, by a
writing delivered to the Company on or before the date such option is
exercisable, elect either (a) to cancel any such option and receive in cash the
balance in his or her withholding account, or (b) to have the balance in his or
her withholding account applied as of the last day of the option period to the
exercise of his or her option pursuant to Section 8, and have the balance, if
any, in such account in excess of the total purchase price of the whole shares
so issued returned in cash. In the event such participant (or his or her legal
representative) does not file a written election as provided above, any
outstanding option shall be treated as if an election had been filed pursuant to
subparagraph 12(a) above.
Section 13. Participant's Rights Not Transferable, etc.
All participants granted options under the Plan shall have the same rights
and privileges. Each participant's rights and privileges under any option
granted under the Plan shall be exercisable during his or her lifetime only by
him or her, and shall not be sold, pledged, assigned, or otherwise transferred
in any manner whatsoever except by will or the laws of descent and distribution.
In the event any participant violates the terms of this Section, any options
held by him or her may be terminated by the Company and, upon return to the
participant of the balance of his or her withholding account, all his or her
rights under the Plan shall terminate.
4
<PAGE>
Section 14. Employment Rights
Neither the adoption of the Plan nor any of the provisions of the Plan
shall confer upon any participant any right to continued employment with the
Company or a subsidiary or affect in any way the right of the Company to
terminate the employment of such participant at any time.
Section 15. Rights as a Shareholder
A participant shall have the rights of a shareholder only as to stock
actually acquired by him or her under the Plan.
Section 16. Change in Capitalization
In the event of a stock dividend, stock split or combination of shares,
recapitalization, merger in which the Company is the surviving corporation or
other change in the Company's capital stock, the number and kind of shares of
stock or securities of the Company to be subject to the Plan and to options then
outstanding or to be granted hereunder, the maximum number of shares or
securities which may be delivered under the Plan, the option price and other
relevant provisions shall be appropriately adjusted by the Board of Directors,
whose determination shall be binding on all persons. In the event of a
consolidation or merger in which the Company is not the surviving corporation or
in the event of the sale or transfer of substantially all the Company's assets
(other than by the grant of a mortgage or security interest), all outstanding
options shall thereupon terminate, provided that prior to the effective date of
any such merger, consolidation or sale of assets, the Board of Directors shall
either (a) return the balance in all withholding accounts and cancel all
outstanding options, or (b) accelerate the exercise date provided for in Section
8, or (c) if there is a surviving or acquiring corporation, arrange to have that
corporation or an affiliate of that corporation grant to the participants
replacement options having equivalent terms and conditions as determined by the
Board of Directors.
Section 17. Administration of Plan
The Plan will be administered by the Board of Directors. The Board of
Directors will have authority, not inconsistent with the express provisions of
the Plan, to take all action necessary or appropriate hereunder, to interpret
its provisions, and to decide all questions and resolve all disputes which may
arise in connection therewith. Such determinations of the Board of Directors
shall be conclusive and shall bind all parties.
The Board may, in its discretion, delegate its powers with respect to the
Plan to an Employee Benefit Plan Committee or any other committee (the
"Committee"), in which event all references to the Board of Directors hereunder,
including without limitation the references in Section 17, shall be deemed to
refer to the Committee. A
5
<PAGE>
majority of the members of any such 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.
Section 18. Amendment and Termination of Plan
The Board of Directors may at any time or times amend the Plan or amend any
outstanding option or options 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, provided that (except to the extent explicitly
required or permitted herein) no such amendment will, without the approval of
the shareholders of the Company, (a) increase the maximum number of shares
available under the Plan, (b) reduce the option price of outstanding options or
reduce the price at which options may be granted, (c) change the conditions for
eligibility under the Plan, or (d) amend the provisions of this Section 18 of
the Plan, and no such amendment will adversely affect the rights of any
participant (without his or her consent) under any option theretofore granted.
The Plan may be terminated at any time by the Board of Directors, but no
such termination shall adversely affect the rights and privileges of holders of
the outstanding options.
Section 19. Approval of Shareholders
The Plan shall be subject to the approval of the shareholders of the
Company, which approval shall be secured within twelve months after the date the
Plan is adopted by the Board of Directors. Notwithstanding any other provisions
of the Plan, no option shall be exercised prior to the date of such approval.
Section 20. Limitations
Notwithstanding any other provision of the Plan:
(a) An employee shall not be eligible to receive an option pursuant to the
Plan if, immediately after the grant of such option to him or her, he or she
would (in accordance with the provisions of Sections 423 and 425(d) of the Code)
own or be deemed to own stock possessing 5% or more of the total combined voting
power or value of all classes of stock of the employer corporation or of its
parent or subsidiary corporation, as defined in Section 425 of the Code.
(b) No employee shall be granted an option under this Plan that would
permit his or her rights to purchase shares of stock under this Plan of the
Company to accrue at a rate which exceeds $25,000 in fair market value of such
stock (determined at the
6
<PAGE>
time the option is granted) for each calendar year during which any such option
granted to such employee is outstanding at any time, as provided in Sections 423
and 425 of the Code.
(c) No employee shall be granted an option under this Plan that would
permit him or her to withhold more than $2,500 in each option period or $5,000
per calendar year, less the amount of any rollover.
(d) No employee whose customary employment is 20 hours or less per week
shall be eligible to participate in the Plan.*
(e) No independent contractor shall be eligible to participate in the
Plan.
*Subsection 20(d) is subject to stockholder approval at the Annual Meeting of
Stockholders to be held on May 6, 1998.
7
<PAGE>
PROXY EMC CORPORATION PROXY
ANNUAL MEETING OF STOCKHOLDERS - MAY 6, 1998
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 6,
1998 at 10:00 a.m., local time, at EMC's facility at 5-9 Technology Drive,
Milford, Massachusetts, and at any adjournments 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.
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PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appears(s) 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?
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[EMAM - EMC CORPORATION] [FILE NAME: EMACM2.ELX] [VERSION-3] [3/12/98]
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
- --------------------------------------------------------------------------------
EMC CORPORATION
- --------------------------------------------------------------------------------
THIS PROXY, THEN 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, APPROVING THE ADDITION OF SHARES TO EMC
CORPORATION'S 1993 STOCK OPTION PLAN AND APPROVING CERTAIN AMENDMENTS TO EMC
CORPORATION'S 1989 EMPLOYEE STOCK PURCHASE 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.
RECORD DATE SHARES:
1. Election of Directors:
Electing three directors to serve a three-year term as Class II
Directors and for all nominees.
With- For All
John R. Egan For held Except
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 name(s) of the nominee(s). Your
shares will be voted for the remaining nominee(s).
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THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES LISTED ABOVE
- --------------------------------------------------------------------------------
For Against Abstain
2. To approve the addition of 3,500,000 shares of
Common Stock, $.01 par value, to the 1993 Stock [_] [_] [_]
Option Plan.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 2.
- --------------------------------------------------------------------------------
For Against Abstain
3. To approve certain amendments to the 1989 Employee
Stock Purchase Plan as described in the Company's [_] [_] [_]
Proxy Statement.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 3.
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Mark box at right if an address change has been noted on the
reverse side at this card. [_]
Please be sure to sign and date this Proxy. Date
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Stockholder sign here Co-owner sign here
DETACH CARD DETACH CARD
[EMACM - EMC CORPORATION] [FILE NAME-EMACM1.ELX] [VERSION-2] [3/11/98]
