<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM 11-K
________________________
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
[_] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 1-9853
EMC Corporation 401(k) Savings Plan
(Full title of the Plan)
EMC Corporation
(Name of issuer of the securities held pursuant to the Plan)
35 Parkwood Drive, Hopkinton, Massachusetts 01748
(address of principal executive office)
================================================================================
<PAGE>
Financial Statements of EMC Corporation 401(k) Savings Plan
The following audited financial statements with independent auditors'
report thereon are enclosed with this report:
1. Statement of Net Assets Available for Plan Benefits as of December 31,
1998 and 1997.
2. Statement of Changes in Net Assets Available for Plan Benefits for the
years ended December 31, 1998 and 1997.
Exhibit
23.1 Consent of Independent Auditors.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned thereunto duly authorized.
EMC Corporation 401(k) Savings Plan
Date: August 23, 1999
By: /s/ William J. Teuber, Jr.
--------------------------
William J. Teuber, Jr.
Vice President and Chief Financial Officer
3
<PAGE>
EMC CORPORATION 401(K) SAVINGS PLAN
Financial Statements and Supplemental Schedules
December 31, 1998 and 1997
(With Independent Auditors' Report Thereon)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Independent Auditors' Report ...................................................... 1
Statement of Net Assets Available for Plan Benefits, December 31, 1998 and 1997 ... 2-4
Statement of Changes in Net Assets Available for Plan Benefits,
for the years ended December 31, 1998 and 1997 .............................. 5-7
Notes to Financial Statements...................................................... 8-14
Supplemental Schedules:
Line 27a, Schedule of Assets Held for Investment Purposes,
December 31, 1998 and 1997............................................... 15-16
Line 27d, Schedule of Reportable Transactions,
December 31, 1998 and 1997............................................... 17-18
</TABLE>
<PAGE>
[LETTERHEAD OF RATTET & COHEN, P.C. APPEARS HERE]
Independent Auditors' Report
----------------------------
To the Trustees of
EMC Corporation 401(k) Savings Plan
We have audited the accompanying statements of net assets available for benefits
of EMC Corporation 401(k) Savings Plan as of December 31, 1998 and 1997, and the
related statements of changes in net assets available for benefits for the years
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of EMC Corporation
401(k) Savings Plan as of December 31, 1998 and 1997, and the changes in its net
assets available for benefits for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Rattet & Cohen, P.C. /s/ Rattet & Cohen P.C.
Certified Public Accountants
July 26, 1999
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
Fidelity
Fidelity Retirement Fidelity
Stable Fidelity Fidelity Equity Money Retirement
Value Magellan Puritan Income Market Growth
Fund* Fund Fund Fund Fund Fund
------ ------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Investment in common collective trust 10,530,937 0 0 0 0 0
Mutual funds, at fair value 0 64,889,425 22,976,627 27,911,933 7,182,063 17,867,953
EMC Corporation Stock, at fair value 0 0 0 0 0 0
Participant notes receivable 0 0 0 0 0 0
Receivables:
Employer's match contributions 0 0 0 0 0 0
Participant's contributions 0 0 0 0 0 0
---------- ---------- ---------- ---------- --------- ----------
NET ASSETS AVAILABLE FOR BENEFITS 10,530,937 64,889,425 22,976,627 27,911,933 7,182,063 17,867,953
========== ========== ========== ========== ========= ==========
<CAPTION>
American American Pimco
Fidelity Funds Funds Total
Equity Brandywine Washington Europacific Return
Income II Growth Mutual Growth Adm
Fund Fund Fund Fund Fund
--------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Investment in common collective trust 0 0 0 0 0
Mutual funds, at fair value 26,502,922 1,068,416 2,000,267 854,220 1,028,949
EMC Corporation Stock, at fair value 0 0 0 0 0
Participant notes receivable 0 0 0 0 0
Receivables:
Employer's match contributions 0 0 0 0 0
Participant's contributions 0 0 0 0 0
---------- --------- --------- ------- ---------
NET ASSETS AVAILABLE FOR BENEFITS 26,502,922 1,068,416 2,000,267 854,220 1,028,949
========== ========= ========= ======= =========
</TABLE>
* Consists of the Managed Income Portfolio Fund, part of the Fidelity Group
Trust.
The accompanying notes are an integral part of these financial statements
2
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998
(continued)
<TABLE>
<CAPTION>
Franklin Vanguard
Small Cap Templeton U.S. Strategy Funds
------------------------------------
Growth Foreign A Growth Conservative Moderate Aggressive
Fund Fund Fund Fund Fund Fund
--------- --------- -------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Investment in common collective trust 0 0 0 0 0 0
Mutual funds, at fair value 2,510,045 532,404 6,639,457 485,136 978,175 2,317,380
EMC Corporation Stock, at fair value 0 0 0 0 0 0
Participant notes receivable 0 0 0 0 0 0
Receivables:
Employer's match contributions 0 0 0 0 0 0
Participant's contributions 0 0 0 0 0 0
--------- --------- --------- ------- ------- ---------
NET ASSETS AVAILABLE FOR BENEFITS 2,510,045 532,404 6,639,457 485,136 978,175 2,317,380
========= ========= ========= ======= ======= =========
<CAPTION>
Spartan EMC
U.S. Corporation Participant Total
Equity Index Stock Notes All
Fund Fund Fund Other Funds
------------ ----------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Investment in common collective trust 0 0 0 0 10,530,937
Mutual funds, at fair value 4,527,546 0 0 0 190,272,918
EMC Corporation Stock, at fair value 0 1,266,735 0 0 1,266,735
Participant notes receivable 0 0 4,539,226 0 4,539,226
Receivables:
Employer's match contributions 0 0 0 2,110,964 2,110,964
Participant's contributions 0 0 0 682,033 682,033
------------ ----------- ----------- -------------- -----------
NET ASSETS AVAILABLE FOR BENEFITS 4,527,546 1,266,735 4,539,226 2,792,997 209,402,813
============ =========== =========== ============== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
3
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Fidelity
Fidelity Retirement
Stable Fidelity Fidelity Equity Money
Value Magellan Puritan Income Market
Fund* Fund Fund Fund Fund
-------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS -
Investments:
Investment in common collective trust 8,737,070 0 0 0 0
Mutual funds, at fair value 0 43,342,966 17,996,065 24,527,485 5,933,100
Participant notes receivable 0 0 0 0 0
Receivables:
Employer's match contributions 0 0 0 0 0
Miscellaneous 0 0 0 0 0
--------- ---------- ---------- ---------- ---------
NET ASSETS AVAILABLE FOR BENEFITS 8,737,070 43,342,966 17,996,065 24,527,485 5,933,100
========= ========== ========== ========== =========
<CAPTION>
American
Fidelity Fidelity Funds
Retirement Equity Brandywine Washington Participant
Growth Income II Growth Mutual Notes
Fund Fund Fund Fund Fund
------------ ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
ASSETS -
Investments:
Investment in common collective trust 0 0 0 0 0
Mutual funds, at fair value 11,467,279 19,952,003 324 346 0
Participant notes receivable 0 0 0 0 3,230,904
Receivables:
Employer's match contributions 0 0 0 0 0
Miscellaneous 0 0 0 0 0
---------- ---------- ---------- ---------- ---------
NET ASSETS AVAILABLE FOR BENEFITS 11,467,279 19,952,003 324 346 3,230,904
========== ========== ========== ========== =========
<CAPTION>
Total
All
Other Funds
--------- -----------
<S> <C> <C>
ASSETS -
Investments:
Investment in common collective trust 0 8,737,070
Mutual funds, at fair value 0 123,219,568
Participant notes receivable 0 3,230,904
Receivables:
Employer's match contributions 1,536,979 1,536,979
Miscellaneous 1,085 1,085
--------- ----------
NET ASSETS AVAILABLE FOR BENEFITS 1,538,064 136,725,606
========= ===========
</TABLE>
* Consists of the Managed Income Portfolio Fund, part of the Fidelity Group
Trust.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Fidelity
Fidelity Retirement
Stable Fidelity Fidelity Equity Money
Value Magellan Puritan Income Market
Fund* Fund Fund Fund Fund
-------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair value of investments 0 12,634,647 867,663 1,533,190 0
Interest and divided income 527,931 2,901,804 2,286,817 1,572,585 336,828
---------- ---------- ---------- ---------- ---------
527,931 15,536,451 3,154,480 3,105,775 336,828
---------- ---------- ---------- ---------- ---------
Contributions:
Employer's match contributions 366,450 1,672,418 754,219 944,348 313,026
Participants' contributions 1,243,248 6,415,496 2,888,571 3,705,435 1,027,069
Participants' rollovers 357,192 2,841,598 794,749 926,525 551,944
---------- ---------- ---------- ---------- ---------
1,966,890 10,929,512 4,437,539 5,576,308 1,892,039
---------- ---------- ---------- ---------- ---------
Total additions 2,494,821 26,465,963 7,592,019 8,682,083 2,228,867
Deductions from net assets attributed to:
Benefit payments to participants 255,393 2,262,709 641,586 1,309,299 683,366
---------- ---------- ---------- ---------- ---------
Increase prior to interfund transfers 2,239,428 24,203,254 6,950,433 7,372,784 1,545,501
Interfund transfers (445,561) (2,656,795) (1,969,871) (3,988,336) (296,538)
---------- ---------- ---------- ---------- ---------
Net increase 1,793,867 21,546,459 4,980,562 3,384,448 1,248,963
Net assets available for benefits:
Beginning of year 8,737,070 43,342,966 17,996,065 24,527,485 5,933,100
---------- ---------- ---------- ---------- ---------
End of year 10,530,937 64,889,425 22,976,627 27,911,933 7,182,063
========== ========== ========== ========== =========
<CAPTION>
American
Fidelity Fidelity Funds
Retirement Equity Brandywine Washington
Growth Income II Growth Mutual
Fund Fund Fund Fund
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair value of investments 2,528,406 2,347,437 (8,431) 38,727
Interest and divided income 1,783,051 2,391,715 10,697 185,333
---------- ---------- --------- ---------
4,311,457 4,739,152 2,266 224,060
---------- ---------- --------- ---------
Contributions:
Employer's match contributions 677,833 900,790 45,554 56,991
Participants' contributions 2,535,294 3,497,924 245,385 301,832
Participants' rollovers 692,166 1,054,334 155,598 347,454
---------- ---------- --------- ---------
3,905,293 5,453,048 446,537 706,277
---------- ---------- --------- ---------
Total additions 8,216,750 10,192,200 448,803 930,337
Deductions from net assets attributed to:
Benefit payments to participants 819,559 1,107,446 17,606 2,507
---------- ---------- --------- ---------
Increase prior to interfund transfers 7,397,191 9,084,754 431,197 927,830
Interfund transfers (996,517) (2,533,835) 636,895 1,072,091
---------- ---------- --------- ---------
Net increase 6,400,674 6,550,919 1,068,092 1,999,921
Net assets available for benefits:
Beginning of year 11,467,279 19,952,003 324 346
---------- ---------- --------- ---------
End of year 17,867,953 26,502,922 1,068,416 2,000,267
========== ========== ========= =========
<CAPTION>
American Pimco
Funds Total
Europacific Return
Growth Adm
Fund Fund
------------- ---------
<S> <C> <C>
Additions to net assets attributed to :
Investment income:
Net appreciation (depreciation) in fair value of investments 14,480 (27,675)
Interest and divided income 37,663 71,256
------- ---------
52,143 43,581
------- ---------
Contributions:
Employer's match contributions 22,375 17,919
Participants' contributions 115,530 99,353
Participants' rollovers 257,018 242,294
------- ---------
394,923 359,566
------- ---------
Total additions 447,066 403,147
Deductions form net assets attributed to:
Benefit payments to participants 3,535 3
------- ---------
Increase prior to interfund transfers 443,531 403,144
Interfund transfers 410,689 625,805
------- ---------
Net increase 854,220 1,028,949
Net assets available for benefits:
Beginning of year 0 0
------- ---------
End of year 854,220 1,028,949
======= =========
</TABLE>
* Consists of the Managed Income Portfolio Fund, part of the Fidelity Group
Trust.
The accompanying notes are an integral part of these financial statements
5
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
(Continued)
<TABLE>
<CAPTION>
Franklin Vanguard Strategy Funds
Small Cap Templeton U.S. ------------------------------------
Growth Foreign A Growth Conservative Moderate Aggressive
Fund Fund Fund Fund Fund Fund
---------- --------- -------- ------------ ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair
value of investments (54,243) (83,988) 505,541 17,557 68,120 254,309
Interest and dividend income 32,771 48,576 386,179 0 0 0
---------- --------- ------- ----------- -------- ----------
(21,472) (35,412) 891,720 17,557 68,120 254,309
---------- --------- ------- ----------- -------- ----------
Contributions:
Employer's match contributions 71,411 19,105 112,812 4,566 25,663 90,050
Participants' contributions 404,702 100,416 663,974 27,029 169,554 505,373
Participants' rollovers 477,962 115,171 961,824 207,059 545,564 920,779
---------- ------- --------- ----------- -------- ----------
954,075 234,692 1,738,610 238,654 740,781 1,516,202
---------- ------- --------- ----------- -------- ----------
Total additions 932,603 199,280 2,630,330 256,211 808,901 1,770,511
Deductions from net assets attributed to:
Benefit payments to participants 6,700 3,999 16,648 243 168 15,537
---------- ------- --------- ----------- -------- ----------
Increase prior to interfund transfers 925,903 195,281 2,613,682 255,968 808,733 1,754,974
Interfund transfers 1,584,142 337,123 4,025,775 229,168 169,442 562,406
---------- ------- --------- ----------- -------- ----------
Net increase 2,510,045 532,404 6,639,457 485,136 978,175 2,317,380
Net assets available for benefits:
Beginning of Year 0 0 0 0 0 0
---------- ------- --------- ----------- -------- ----------
End of year 2,510,045 532,404 6,639,457 485,136 978,175 2,317,380
========= ======= ========= =========== ======== ==========
<CAPTION>
Spartan EMC
U.S. Corporation Participant Total
Equity Index Stock Notes All
Fund Fund Fund Other Funds
------------ ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment Income:
Net appreciation (depreciation) in fair
value of investments 518,278 378,498 0 0 21,532,516
Interest and dividend income 42,485 0 354,626 (1,085) 12,969,232
------------ ----------- ----------- --------- -----------
560,763 378,498 354,626 (1,085) 34,501,748
------------ ----------- ----------- --------- -----------
Contributions:
Employer's match contributions 108,352 128,381 0 573,985 6,906,248
Participants' contributions 582,610 574,714 0 682,033 25,785,542
Participants' rollovers 1,377,063 151,961 0 0 12,978,255
----------- ----------- ----------- --------- -----------
2,068,025 855,056 0 1,256,018 45,670,045
----------- ----------- ----------- --------- -----------
Total additions 2,628,788 1,233,554 354,626 1,254,933 80,171,793
Deductions from net assets attributed to:
Benefit payments to participants 14,263 6,426 327,593 0 7,494,586
----------- ----------- ----------- --------- -----------
Increase prior to interfund transfers 2,614,525 1,227,128 27,033 1,254,933 72,677,207
Interfund transfers 1,913,021 39,607 1,281,289 0 0
----------- ----------- ----------- --------- -----------
Net Increase 4,527,546 1,266,735 1,308,322 1,254,933 72,677,207
Net assets available for benefits:
Beginning of Year 0 0 3,230,904 1,538,064 136,725,606
----------- ----------- ----------- --------- -----------
End of year 4,527,546 1,266,735 4,539,226 2,792,997 209,402,813
=========== ========= =========== ========= ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
6
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Fidelity
Fidelity Retirement Fidelity
Stable Fidelity Fidelity Equity Money Retirement
Value Magellan Puritan Income Market Growth
Fund* Fund Fund Fund Fund Fund
-------- --------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair value 0 5,605,587 1,576,067 3,656,562 0 (440,510)
of investments
Interest and dividend income 483,668 2,677,351 1,374,452 1,253,434 293,728 1,982,644
------- ---------- ---------- ---------- --------- ---------
483,668 8,282,938 2,950,519 4,909,996 293,728 1,542,134
------- ---------- ---------- ---------- --------- ---------
Contributions:
Employer's match contributions 338,458 1,414,917 630,608 737,251 281,251 533,885
Participants' contributions 1,072,907 5,110,925 2,377,235 2,811,341 927,926 2,049,261
Participants' rollovers 297,605 1,631,663 1,031,970 1,156,148 435,449 637,824
--------- ---------- ---------- ---------- --------- ---------
1,708,970 8,157,505 4,039,813 4,704,740 1,644,626 3,220,970
--------- ---------- ---------- ---------- --------- ---------
Total additions 2,192,638 16,440,443 6,990,332 9,614,736 1,938,354 4,763,104
Deductions from net assets attributed to:
Benefit payments to participants 339,039 1,666,547 613,858 637,098 484,049 544,320
--------- ---------- ---------- ---------- --------- ---------
Increase prior to interfund transfers 1,853,599 14,773,896 6,376,474 8,977,638 1,454,305 4,218,784
Interfund transfers (740,712) (1,372,418) (192,040) 2,664,547 (272,931) (802,069)
--------- ---------- ---------- ---------- --------- ---------
Net increse 1,112,887 13,401,478 6,184,434 11,642,185 1,181,374 3,416,715
Net assets available for benefits:
Beginning of year 7,624,183 29,941,488 11,811,631 12,885,300 4,751,726 8,050,564
--------- ---------- ---------- ---------- --------- ---------
End of year 8,737,070 43,342,966 17,996,065 24,527,485 5,933,100 11,467,279
========= ========== ========== ========== ========= ==========
<CAPTION>
American
Fidelity Funds
Equity Brandywine Washington Participant Total
Income II Growth Mutual Notes All
Fund Fund Fund Fund Other Funds
--------- ---------- ---------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair value 1,742,184 (14) (7) 0 0 12,139,869
of investments 1,975,847 0 15 220,928 1,085 10,263,152
Interest and dividend income ---------- --- -- --------- --------- -----------
3,718,031 (14) 8 220,928 1,085 22,403,021
---------- --- -- --------- --------- -----------
Contributions:
Employer's match contributions 721,767 0 0 0 336,371 4,994,508
Participants' contributions 2,819,710 338 338 0 (39,400) 17,130,581
Participants' rollovers 1,349,646 0 0 0 0 6,540,305
---------- --- --- --------- --------- -----------
4,891,123 338 338 0 296,971 28,665,394
---------- --- --- --------- --------- -----------
Total additions 8,609,154 324 346 220,928 298,056 51,068,415
Deductions from net assets attributed to:
Benefit payments to participants 631,725 0 0 53,456 0 4,970,092
---------- --- --- --------- --------- -----------
Increase prior to interfund transfers 7,977,429 324 346 167,472 298,056 46,098,323
Interfund transfers (229,833) 0 0 945,456 0 0
---------- --- --- --------- --------- -----------
Net increse 7,747,596 324 346 1,112,928 298,056 46,098,323
Net assets available for benefits:
Beginning of year 12,204,407 0 0 2,117,976 1,240,008 90,627,283
---------- --- --- --------- --------- -----------
End of year 19,952,003 324 346 3,230,904 1,538,064 136,725,606
========== === === ========= ========= ===========
</TABLE>
* Consists of the Managed Income Portfolio Fund, part of the Fidelity Group
Trust.
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 1 - DESCRIPTION OF THE PLAN
- --------------------------------
The following description of EMC Corporation 401(k) Savings Plan (the "Plan")
provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
General
- -------
The Plan is a contributory defined contribution plan established January 1, 1983
for the purpose of providing an opportunity for retirement income and increased
savings to the employees of EMC Corporation (the "Company") who meet the length
of service requirements. Plan assets acquired under this Plan as a result of
employee contributions, discretionary Company matching and profit sharing
contributions, investment income, and other additions to the Plan will be
administered for the exclusive benefit of the participants and their
beneficiaries. It is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Contributions
- -------------
Participants may elect to contribute an amount not to exceed, in the aggregate,
between 1% and 15% of their compensation on a pretax basis while participating
in the Plan. Participants may also contribute amounts representing distributions
from other qualified plans. In any Plan year the Company may contribute to
participants' accounts a quarterly matching contribution equal to a percentage
of the participant's compensation contributed to the Plan as determined by the
Company's Board of Directors up to a maximum quarterly matching contribution of
$500. In addition, discretionary Company profit sharing contributions based on
different discretionary goals established for separate business units within the
Company may be made upon a vote of the Board of Directors. To be eligible for an
allocation of Company quarterly matching contributions, a participant must be
employed by the Company on the last day of the calendar quarter. To be eligible
for an allocation of discretionary Company profit sharing contributions, a
participant must have completed at least 1,000 hours of service during the Plan
year and be employed by the Company on the last day of the Plan year.
Contributions are subject to certain limitations under the Internal Revenue
Code.
Participant Accounts
- --------------------
Each participant's account is credited with the participant's contribution,
allocations of the Company's discretionary matching and profit sharing
contributions and Plan earnings. Allocations are based on participant earnings
or account balances, as defined. The benefit to which a participant is entitled
is the benefit that can be provided from the participant's vested account.
8
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 1 - DESCRIPTION OF THE PLAN (continued)
- --------------------------------------------
Vesting and Forfeitures
- -----------------------
Participants are immediately 100% vested in their voluntary contributions,
rollover contributions, Company discretionary matching contributions plus the
investment earnings arising from these contributions. Company discretionary
profit sharing contributions are subject to a vesting schedule based on the
number of years of continuous service as follows:
Years of Service Vested Percentage
---------------- -----------------
Less than 1 year 0%
1 year but less than 2 25%
2 years but less than 3 50%
3 years but less than 4 75%
4 years or more 100%
Participants' interest in their accounts shall become 100% vested and
nonforfeitable without regard to their credited years of service if they are
employed by the Company on or after age 65, incur a permanent and total
disability or die while employed by the Company.
If a participant who is not fully vested terminates employment with the
Company, the participant shall be entitled to the vested portion of their
account. The nonvested portion is forfeited and will be applied to the payment
of Plan expenses.
Investment Options
- ------------------
Participants elect to invest the contributions to their accounts in five percent
increments in the following options:
Fidelity Managed Income Portfolio Fund Pimco Total Return Adm Fund
(Stable Value Fund) Franklin Small Cap Growth Fund
Fidelity Magellan Fund Templeton Foreign A Fund
Fidelity Puritan Fund Vanguard U.S. Growth Fund
Fidelity Equity Income Fund Conservative Strategy Fund
Fidelity Retirement Money Market Fund Moderate Strategy Fund
Fidelity Retirement Growth Fund Aggressive Strategy Fund
Fidelity Equity Income II Fund Spartan U.S. Equity Index Fund
Brandywine Growth Fund EMC Corporation Stock Fund
American Funds: Washington Mutual Fund
American Funds: Europacific Growth Fund
Participants may change their investment options as determined by the rules
applicable to each investment.
9
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 1 - DESCRIPTION OF THE PLAN (continued)
- --------------------------------------------
Payment of Benefits
- -------------------
Benefits are payable upon normal retirement age (65), death, separation from
service or proven hardship. Participants who were a Plan member as of December
31, 1988 may elect to receive the value of their vested interest in his or her
account in the form of an installment or in a lump-sum distribution. Plan
members after such date will receive their vested interest in his or her account
in a lump-sum distribution. In any event, payment of benefits must commence when
the participant reaches age 70 1/2 or, if later, following the year they
terminate employment. However, a 5% owner of the Company will be required to
begin receiving minimum distributions from their account by the April 1
following attainment of age 70 1/2 regardless of whether they have terminated
employment at that time. The Plan agreement contains a more complete description
of these provisions and should be referred to by participants.
Participant Notes Receivable
- ----------------------------
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or one-half of the participant's vested
account balance. Loan transactions are treated as a transfer to (from) the
investment fund from (to) the Participant Notes Fund. Loan terms range from 1-5
years or up to 10 years for the purchase of a primary residence. The loans are
secured by the balance in the participant's account and bear interest at a rate
commensurate with local prevailing rates as determined by the Plan
Administrator. Interest rates ranged from 8.75% - 10.0% for 1998. Principal and
interest are paid ratably through payroll deductions.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Basis of Accounting
- -------------------
The financial statements of the Plan are prepared using the accrual method of
accounting.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Plan Administrator to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results may differ from those estimates.
10
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
- ---------------------------------------------------------------
Investment Valuation and Income Recognition
- -------------------------------------------
Investments in shares of Fidelity Mutual Funds, Brandywine Mutual Funds,
American Funds, Pimco Total Return Adm Fund, Franklin Small Cap Growth Fund,
Templeton Foreign A Fund, Vanguard U.S. Growth Fund, Conservative Fund, Moderate
Fund, Aggressive Fund, Spartan U.S. Equity Index Fund and EMC Corporate Stock
Fund are valued at the quoted market value on the last business day of the Plan
year. Investment in a common collective trust consisting of an interest in the
Fidelity Managed Income Portfolio Fund is valued at fair value. Participant
notes receivable are valued at cost, which approximates fair value.
The Plan presents in the statements of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments. The cost of investments is
determined on the average cost basis in calculating realized gains or losses.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Expenses of the Plan
- --------------------
Administrative expenses, including legal and participant accounting, and other
costs of administering the Plan, and all expenses directly relating to the
investments are charged to and paid by the Plan unless paid by the Company.
Termination of the Plan
- -----------------------
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan. The Administrator, upon termination, shall cause the assets
of the Plan to be allocated for the purposes set forth and in the order of
priorities established by ERISA. In the event of Plan termination, participants
will become 100% vested in their accounts.
Payment of Benefits
- -------------------
Benefits are recorded when paid.
NOTE 3 - TAX STATUS OF THE PLAN
- -------------------------------
The Internal Revenue Service has determined and informed the Company by a letter
dated November 18, 1998 that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC).
11
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 4 - INVESTMENTS
- --------------------
The Plan's investments are administered by Fidelity Investments, the investment
manager of the Plan. The following presents the fair value of investments.
Investments that represent 5% or more of the Plan's net assets, are separately
indentified:
<TABLE>
<CAPTION>
Number of Fair Value
Shares December 31, 1998
------ -----------------
<S> <C> <C>
Investment at Fair Value:
Fidelity Managed Income Portfolio Fund 10,530,937
----------
Investments at Fair Value as Determined
By Quoted Market Price:
Fidelity Mutual Funds:
Magellan Fund 537,075 64,889,425
Puritan Fund 1,144,824 22,976,627
Equity Income Fund 502,465 27,911,933
Retirement Money Market Fund 7,182,063 7,182,063
Retirement Growth Fund 871,182 17,867,953
Equity Income II Fund 883,136 26,502,922
Brandywine Growth Fund 35,284 1,068,416
American Funds:
Washington Mutual Fund 60,779 2,000,267
Europacific Growth Fund 30,078 854,220
Pimco Total Return Adm Fund 97,623 1,028,949
Franklin Small Cap Growth Fund 111,211 2,510,045
Templeton Foreign A Fund 63,456 532,404
Vanguard U.S. Growth Fund 177,099 6,639,457
Conservative Fund 43,393 485,136
Moderate Fund 84,252 978,175
Aggressive Fund 193,923 2,317,380
Spartan U.S. Equity Index Fund 102,992 4,527,546
EMC Corporation Stock Fund 67,487 1,266,735
---------
191,539,653
-----------
Participant Notes Receivable 4,539,226
---------
206,609,816
===========
</TABLE>
12
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 4 - INVESTMENTS (continued)
- --------------------------------
<TABLE>
<CAPTION>
Number of Fair Value
Shares December 31, 1997
--------- -----------------
<S> <C> <C>
Investment at Fair Value:
Fidelity Managed Income Portfolio Fund 8,737,070
-----------
Investments at Fair Value as Determined
By Quoted Market Price:
Fidelity Mutual Funds:
Magellan Fund 454,948 43,342,966
Puritan Fund 928,589 17,996,065
Equity Income Fund 467,992 24,527,485
Retirement Money Market Fund 5,933,099 5,933,100
Retirement Growth Fund 680,550 11,467,279
Equity Income II Fund 738,689 19,952,003
Brandywine Growth Fund 10 324
American Funds: Washington Mutual Fund 11 346
-----------
123,219,568
-----------
Participant Notes Receivable 3,230,904
-----------
135,187,542
===========
</TABLE>
The Plan's investments (including investments bought, sold and held during the
year) appreciated (depreciated) in value during the years as follows:
<TABLE>
<CAPTION>
Investments at Fair Value as Determined
By Quoted Market Price: 1998 1997
---- ----
<S> <C> <C>
Fidelity Mutual Funds:
Magellan Fund 12,634,647 5,605,587
Puritan Fund 867,663 1,576,067
Equity Income Fund 1,533,190 3,656,562
Retirement Growth Fund 2,528,406 (440,510)
Equity Income II Fund 2,347,437 1,742,184
Brandywine Growth Fund (8,431) (14)
American Funds:
Washington Mutual Fund 38,727 (7)
Europacific Growth Fund 14,480 0
Pimco Total Return Adm Fund (27,675) 0
Franklin Small Cap Growth Fund (54,243) 0
Templeton Foreign A Fund (83,988) 0
Vanguard U.S. Growth Fund 505,541 0
Conservative Fund 17,557 0
Moderate Fund 68,120 0
Aggressive Fund 254,309 0
Spartan U.S. Equity Index Fund 518,278 0
EMC Corporation Stock Fund 378,498 0
---------- ----------
21,532,516 12,139,869
========== ==========
</TABLE>
13
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 5 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
- ------------------------------------------------------------
The following is a reconciliation of investment income per the financial
statements to earnings on investments on Form 5500 for the year ended December
31, 1998:
<TABLE>
<S> <C>
Net appreciation in fair value of investments per the financial statements 21,532,516
Add: Interest and dividend income 12,969,232
----------
Subtotal 34,501,748
Less: Interest income on Money Market Funds (336,828)
Interest income on Common Collective Trust (527,931)
Interest income on Participant Notes Receivable (354,626)
Gain on sale of assets (2,131)
Unrealized appreciation of assets (376,367)
----------
Net investment gain from registered investment entities per Form 5500 32,903,865
==========
</TABLE>
14
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
LINE 27A - SCHEDULE OF ASSETS
HELD FOR INVESTMENT PURPOSES
EMPLOYER I.D. #04-2680009
PLAN NUMBER 001
DECEMBER 31, 1998
<TABLE>
<CAPTION>
Identity of Issue, Borrower Description Current
Lessor or Similar Party of Investment Cost Value
- ----------------------------------------- --------------- ------------ -------------
<S> <C> <C> <C>
Fidelity Managed Income Portfolio Fund 10,530,937 10,530,937
----------- -----------
Fidelity Mutual Funds:
Magellan Fund 537,075 shs 52,939,709 64,889,425
Puritan Fund 1,144,824 shs 22,247,923 22,976,627
Equity Income Fund 502,465 shs 26,636,901 27,911,933
Retirement Money Market Fund 7,182,063 shs 7,182,063 7,182,063
Retirement Growth Fund 871,182 shs 15,772,938 17,867,953
Equity Income II Fund 883,136 shs 24,473,813 26,502,922
Brandywine Growth Fund 35,284 shs 1,072,529 1,068,416
American Funds:
Washington Mutual Fund 60,779 shs 1,970,015 2,000,267
Europacific Growth Fund 30,078 shs 841,435 854,220
Pimco Total Return Adm Fund 97,623 shs 1,052,751 1,028,949
Franklin Small Cap Growth Fund 111,211 shs 2,518,487 2,510,045
Templeton Foreign A Fund 63,456 shs 613,937 532,404
Vanguard U.S. Growth Fund 177,099 shs 6,124,514 6,639,457
Conservative Fund 43,393 shs 467,141 485,136
Moderate Fund 84,252 shs 910,355 978,175
Aggressive Fund 193,923 shs 2,080,585 2,317,380
Spartan U.S. Equity Index Fund 102,992 shs 4,023,824 4,527,546
EMC Corporation Stock Fund 67,487 shs 890,368 1,266,735
----------- -----------
171,819,288 191,539,653
----------- -----------
Participant Notes Receivable 8.75% - 10.0% 0 4,539,226
----------- -----------
182,350,225 206,609,816
=========== ===========
</TABLE>
15
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
LINE 27A - SCHEDULE OF ASSETS
HELD FOR INVESTMENT PURPOSES
EMPLOYER I.D. #04-2680009
PLAN NUMBER 001
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Identity of Issue, Borrower Description Current
Lessor or Similar Party of Investment Cost Value
- -------------------------------------- --------------- ----------- -----------
<S> <C> <C> <C>
Fidelity Managed Income Portfolio Fund 8,737,070 8,737,070
----------- -----------
Fidelity Mutual Funds:
Magellan Fund 454,948 shs 38,118,810 43,342,966
Puritan Fund 928,589 shs 16,565,829 17,996,065
Equity Income Fund 467,992 shs 21,145,479 24,527,485
Retirement Money Market Fund 5,933,099 shs 5,933,100 5,933,100
Retirement Growth Fund 680,550 shs 12,127,868 11,467,279
Equity Income II Fund 738,689 shs 18,480,551 19,952,003
Brandywine Growth Fund 10 shs 338 324
American Funds: Washington Mutual Fund 11 shs 353 346
----------- -----------
112,372,328 123,219,568
----------- -----------
Participant Notes Receivable 9.0% - 15.0% 0 3,230,904
----------- -----------
121,109,398 135,187,542
=========== ===========
</TABLE>
16
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
EMPLOYER I.D. #04-2680009
PLAN NUMBER 001
DECEMBER 31, 1998
<TABLE>
<CAPTION>
Cost
Purchase Selling of Net
Description of Asset Price Price Asset Gain
- ----------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Fidelity Managed Income Portfolio Fund 4,640,826 3,374,890 3,374,890 0
Fidelity Mutual Funds:
Magellan Fund 14,383,089 8,373,080 7,688,149 684,931
Puritan Fund 5,424,731 3,598,649 3,459,690 138,959
Equity Income Fund 6,728,312 6,449,639 6,191,481 258,158
Retirement Money Market Fund 4,761,001 3,849,208 3,849,208 0
Retirement Growth Fund 5,917,710 3,828,492 3,395,101 433,391
Equity Income II Fund 7,184,405 5,372,638 5,054,310 318,328
</TABLE>
17
<PAGE>
EMC CORPORATION
401(K) SAVINGS PLAN
LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
EMPLOYER I.D. #04-2680009
PLAN NUMBER 001
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Cost
Purchase Selling of Net
Description of Asset Price Price Asset Gain
- --------------------------------------- -------------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
Fidelity Managed Income Portfolio Fund 2,992,582 2,363,355 2,363,355 0
Fidelity Mutual Funds:
Magellan Fund 9,972,221 4,853,681 4,472,249 381,432
Puritan Fund 4,957,265 1,723,349 1,577,518 145,831
Equity Income Fund 8,707,153 1,974,963 1,700,407 274,556
Retirement Money Market Fund 3,645,102 2,757,449 2,757,449 0
Retirement Growth Fund 4,297,645 2,423,065 2,202,985 220,080
Equity Income II Fund 6,883,303 2,853,738 2,583,008 270,730
</TABLE>
18
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (333-57263) of EMC Corporation 401(k) Savings Plan of our
report dated July 26, 1999 relating to the statements of assets available for
plan benefits of EMC Corporation 401(k) Savings Plan as of December 31, 1998 and
1997, and the related statements of changes in assets available for plan
benefits for the years then ended, which report appears in the December 31, 1998
annual report on Form 11-K of EMC Corporation 401(k) Savings Plan.
Rattet & Cohen, P.C.
/s/ Rattet & Cohen, P.C.
