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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, 1999
/ / 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)
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<PAGE>
EMC CORPORATION
<TABLE>
<CAPTION>
PAGE NO
-------
<S> <C>
Reports of Independent Accountants 3-4
Financial Statements:
Statement of Assets Available for Plan Benefits as of December 31, 1999 and 1998 5
Statement of Changes in Assets Available for Plan Benefits for the Years Ended 6
December 31, 1999 and 1998
Notes to Financial Statements 7-10
Supplemental Schedules*
Assets Held for Investment Purposes as of December 31, 1999 11
Signature 12
Exhibit Index 13
</TABLE>
*Other schedules have been omitted because such schedules are not applicable.
2
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Plan Administrator of the
EMC Corporation 401(k) Savings Plan
In our opinion, the accompanying statement of assets available for plan benefits
at December 31, 1999 and the related statement of changes in assets available
for plan benefits for the year then ended present fairly, in all material
respects, the assets available for plan benefits of the EMC Corporation 401(k)
Savings Plan (the "Plan") at December 31, 1999, and the changes in assets
available for plan benefits for the year then ended in conformity with
accounting principles generally accepted in the United States. 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 audit. We
conducted our audit of these statements in accordance with auditing standards
generally accepted in the United States which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for the opinion expressed
above. The financial statements for the year ended December 31, 1998 were
audited by other independent accountants, whose report dated July 26, 1999
expressed an unqualified opinion on those financial statements.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is 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. This supplemental schedule is the responsibility of the Plan's
management. The supplemental schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
June 27, 2000
PricewaterhouseCoopers LLP
Boston, Massachusetts
3
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Plan Administrator of the
EMC Corporation 401(k) Savings Plan
We have audited the accompanying statement of net assets available for benefits
of the EMC Corporation 401(k) Savings Plan as of December 31, 1998, and the
related statement of changes in net assets available for benefits for the year
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 audit.
We conducted our audit 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 audit provides 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 the EMC
Corporations 401(k) Savings Plan as of December 31, 1998, and the changes in its
net assets available for benefits for the year 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.
Dated: June 27, 2000 /s/ Rattet & Cohen, P.C.
Rattet & Cohen, P.C.
Certified Public Accountants
4
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EMC CORPORATION
EMC CORPORATION 401(k) SAVINGS PLAN
STATEMENT OF ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
ASSETS
Investments at fair value:
Common collective trust:
Fidelity Managed Income Portfolio Fund $ 11,671,606 $ 10,530,937 *
--------------- ---------------
Mutual funds:
Fidelity Equity Income Fund 30,662,701 * 27,911,933 *
Fidelity Equity Income II Fund 28,832,326 * 26,502,922 *
Fidelity Magellan Fund 102,602,595 * 64,889,425 *
Fidelity Puritan Fund 24,479,025 * 22,976,627 *
Fidelity Retirement Growth Fund 32,763,979 * 17,867,953 *
Vanguard U.S. Growth Fund 17,604,505 * 6,639,457
Other mutual funds 56,340,445 23,484,601
=============== ===============
Total mutual funds 293,285,576 190,272,918
--------------- ---------------
EMC Corporation Stock Fund:
EMC Corporation common stock 11,468,519 1,266,735
Interest bearing cash 70,671 -
--------------- ---------------
Total EMC Corporation Stock Fund 11,539,190 1,266,735
--------------- ---------------
Loans to participants 5,864,808 4,539,226
--------------- ---------------
Total investments 322,361,180 206,609,816
--------------- ---------------
Receivables:
Employer contributions 4,219,316 2,110,964
Participant contributions - 682,033
Investment income receivable 610 -
Receivable for investments sold 160,130 -
=============== ===============
Total receivables 4,380,056 2,792,997
--------------- ---------------
Assets available for plan benefits $ 326,741,236 $ 209,402,813
=============== ===============
</TABLE>
* Represents 5% or more of assets available for plan benefits.
The accompanying notes are an integral part of these financial statements.
5
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EMC CORPORATION
EMC CORPORATION 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN ASSETS
AVAILABLE FOR PLAN BENEFITS FOR THE YEARS
ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Additions:
Investment income:
Net appreciation of investments:
Mutual funds $ 21,992,525 $ 21,154,018
EMC Corporation common stock 5,681,930 378,498
--------------- ---------------
Total net appreciation of investments 27,674,455 21,532,516
Dividends and interest 23,964,802 12,969,232
--------------- ---------------
51,639,257 34,501,748
--------------- ---------------
Contributions:
Employer contributions 12,855,061 6,906,248
Participant contributions 38,464,491 25,785,542
Participant rollovers from other qualified plans 22,046,745 12,978,255
--------------- ---------------
73,366,297 45,670,045
--------------- ---------------
Total additions 125,005,554 80,171,793
Deductions:
Benefits paid to participants 7,667,131 7,494,586
--------------- ---------------
Net increase 117,338,423 72,677,207
Assets available for plan benefits:
Beginning of year 209,402,813 136,725,606
-------------- --------------
End of year $ 326,741,236 $ 209,402,813
============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
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EMC CORPORATION
EMC CORPORATION 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following description of the 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"), Plan sponsor, who meet the length of
service requirements. Plan assets acquired under this Plan as a
result of 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
(rollover contributions). 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 $750. 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 (the "Code").
PARTICIPANT ACCOUNTS
Fidelity Investments Institutional Operations Company, Inc. is the
Plan's recordkeeper. Each participant's account is credited with the
participant's contribution, the Company's discretionary matching
contribution and an allocation of the 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.
7
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VESTING AND FORFEITURE
Participants are immediately vested 100% in their voluntary
contributions, rollover contributions, Company 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:
<TABLE>
<CAPTION>
YEARS OF SERVICE VESTED PERCENTAGE
<S> <C>
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%
</TABLE>
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:
<TABLE>
<S> <C>
FIDELITY FUNDS Fidelity Aggressive Strategy Fund
Fidelity Managed Income Portfolio Fund Fidelity Spartan U.S. Equity Index Fund
(Stable Value Fund) AMERICAN FUNDS
Fidelity Magellan Fund Washington Mutual Fund
Fidelity Puritan Fund Europacific Growth Fund
Fidelity Equity Income Fund Brandywine Growth Fund
Fidelity Retirement Money Market Fund PIMCO Total Return Adm Fund
Fidelity Retirement Growth Fund Franklin Small Cap Growth Fund
Fidelity Equity Income II Fund Templeton Foreign A Fund
Fidelity Conservative Strategy Fund Vanguard U.S. Growth Fund
Fidelity Moderate Strategy Fund EMC Corporation Stock Fund
</TABLE>
Participants may change their investment options as determined by the
rules applicable to each investment. Fidelity Management Trust
Company is the Plan Trustee.
PAYMENT OF BENEFITS
Benefits are payable upon normal retirement age (65), death, and
separation from service or proven hardship. Participants who were a
Plan member as of December 31, 1998 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. Participants who became
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
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.
8
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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 terms range from 1-5 years
or up to 10 years if used 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% for 1999 and 1998. Principal and interest are paid
ratably through payroll deductions.
MERGER INTO PLAN
On October 12, 1999, the Company acquired Data General Corporation.
In connection with the acquisition, the Data General Corporation
Savings and Investment Plan (the "Data General Plan") merged into the
Plan on January 1, 2000 resulting in the transfer of assets of
$223,571,109 into the Plan. Former participants of the Data General
Plan, eligible to participate in the Plan, began to participate in the
Plan on January 1, 2000.
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 accounting
principles generally accepted in the United States requires the Plan
administrator to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results may
differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments are valued at fair value. Investments in shares of mutual
funds and the common collective trust are value based on net asset
value announced by the fund. EMC Corporation common stock is valued
at the quoted market price. Loans to participants are valued at cost
plus accrued interest, which approximates fair value.
The Plan presents in the statements of changes in assets available for
plan benefits net appreciation (depreciation) in the fair value of its
investments which consists of realized gains or losses and unrealized
appreciation (depreciation) on 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 administrating the Plan, and all expenses directly
relating to the investments are charged to and paid by the Plan unless
paid by the Company. For 1999 and 1998, the Company paid all Plan
expenses.
TERMINATION OF THE PLAN
Although it has not expressed any intent to do so, the Company has the
right to terminate the Plan. The Plan administrator, upon termination
of the Plan, shall cause the assets of the Plan to be allocated as
described in the Plan agreement. In the event of Plan termination,
participants will become 100% vested in their accounts.
9
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PAYMENT OF BENEFITS
Benefits are recorded when paid.
RECLASSIFICATIONS
Amounts shown by investment fund option on the statement of assets
available for plan benefits as of December 31, 1998 and the statement
of changes in assets available for plan benefits for the year ended
December 31, 1998 have been reclassified to be shown in total to
conform to current year presentation in order to adopt AICPA Statement
of Position 99-3, "Accounting for and Reporting of Certain Defined
Contribution Plan Investments and Other Disclosure Matters."
3. TAX STATUS OF THE PLAN
The Internal Revenue Service has determined and informed the Plan
sponsor by a letter dated November 18, 1998 that the Plan and
related trust are designed in accordance with applicable sections of
the Code. The Plan has since been amended and a new letter has not
been requested. Management has asserted the Plan, as amended, and
its operations have been and continue to be in accordance with all
applicable provisions of the Code and the Employee Retirement Income
Security Act of 1974. Therefore, a provision for income taxes is
not required.
4. EMC CORPORATION COMMON STOCK
The Plan invests in EMC Corporation common stock. During the years
ended December 31, 1999 and 1998, the Plan purchased shares of the
common stock in the amounts of $10,822,030 and $1,289,813,
respectively, and sold shares of the common stock in the amounts of
$389,052 and $23,079, respectively. The total value of shares held of
EMC Corporation common stock was $11,468,519 and $1,266,735 at
December 31, 1999 and 1998, respectively.
5. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND PRESENTATION OF ASSET
INFORMATION IN FORM 5500
As described in Note 1 of these financial statements, the Data General
Plan was merged into the Plan as of January 1, 2000 and the December
31, 1999 financial statements for the Plan do not reflect the merger.
The Form 5500 for the Plan shows the transfer of assets occurring on
December 31, 1999. The two approaches reflect agreement that the
assets and participants had moved to the respective recipient plan as
of January 1, 2000. The only difference concerns whether the transfer
in from the Data General Plan occurred as of January 1, 2000 or,
instead, occurred the moment before that - i.e., as of the close of
business on December 31, 1999.
10
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EMC CORPORATION
EMC CORPORATION 401(k) SAVINGS PLAN
ASSETS HELD FOR INVESTMENT PURPOSES
SUPPLEMENTAL SCHEDULE
DECEMBER 31, 1999
<TABLE>
<CAPTION>
CURRENT
SHARES/UNITS DESCRIPTION VALUE
<S> <C> <C>
Common Collective Trust:
11,671,606 Fidelity Managed Income Portfolio Fund* $ 11,671,606
---------------
Mutual Funds:
Fidelity Mutual Funds:
750,952 Magellan Fund* 102,602,595
1,286,339 Puritan Fund* 24,479,025
573,349 Equity Income Fund* 30,662,701
10,336,881 Retirement Money Market Fund* 10,336,881
1,267,465 Retirement Growth Fund* 32,763,979
1,053,428 Equity Income II Fund* 28,832,326
81,065 Conservative Strategy Fund* 1,010,879
251,824 Moderate Strategy Fund* 3,387,028
516,139 Aggressive Strategy Fund* 7,979,505
202,678 Spartan U.S. Equity Index Fund* 10,557,485
American Funds:
96,347 Washington Mutual Fund 2,848,026
103,981 Europacific Growth Fund 4,435,818
75,692 Brandywine Growth Fund 3,245,655
179,659 PIMCO Total Return Adm Fund 1,778,625
205,599 Franklin Small Cap Growth Fund 9,073,079
150,398 Templeton Foreign A Fund 1,687,464
404,422 Vanguard U.S. Growth Fund 17,604,505
---------------
Total mutual funds 293,285,576
---------------
104,975 EMC Corporation common stock* 11,468,519
Interest bearing cash 70,671
---------------
Total EMC Corporation Stock Fund 11,539,190
---------------
Loans to participants* 5,864,808
---------------
Total $ 322,361,180
===============
</TABLE>
* Party-in-interest.
11
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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: June 27, 2000 By: /s/ William J. Teuber, Jr.
--------------------------
William J. Teuber, Jr.
Senior Vice President and Chief Financial
Officer
(PRINCIPAL FINANCIAL OFFICER AND CHIEF
ACCOUNTING OFFICER)
12
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EXHBIT INDEX
Exhibit 23.1 Consent of Independent Accountants, PricewaterhouseCoopers LLP
Exhibit 23.2 Consent of Independent Accountants, Rattet & Cohen, P.C.
13
