EXHIBIT 10.1
EMC CORPORATION
1985 STOCK OPTION PLAN, as amended January 17, 2001
1. PURPOSE.
-------
The purpose of the EMC Corporation 1985 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.
2.9 "Plan" means the EMC Corporation 1985 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.
Page 1 of 7
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 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 288,000,000,
subject to adjustment in accordance with the provisions of Section 8.
4.2 If any option granted under the Plan terminates without having been
exercised in full (including an option which terminates by agreement between the
Company and the Participant), the number of shares of Common Stock as to which
such option has not been exercised prior to termination shall be available for
future grants within the limits set forth in subsection 4.1.
4.3 Shares of Common Stock delivered upon the exercise of options shall
consist of shares of authorized and unissued Common Stock, except that the Board
of Directors may from time to time in its discretion determine in any case the
shares to be so delivered shall consist of shares of authorized and issued
Common Stock 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.
Page 2 of 7
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.
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
16, 1995, 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. However, for those employees subject
to Section 16 of the Securities Exchange Act of 1934, the per share
exercise price for an option which does not qualify as an Incentive
Stock Option shall not be less than 50% of the Fair Market Value at the
time the option is granted.
7.3.2 VALUE OF SHARES OF COMMON STOCK SUBJECT TO INCENTIVE
STOCK OPTIONS. Each eligible employee may be granted Incentive Stock
Options only to the extent that, in the aggregate under this Plan and
all incentive stock option plans of the Company and any related
corporation, such Incentive Stock Options do not become exercisable for
the first time by such employee during any calendar year in a manner
which would entitle the employee to purchase more than $100,000 in fair
market value (determined at the time the Incentive Stock Options were
granted) of Common Stock in that year. Any options granted to any
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 the 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.
Page 3 of 7
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 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
Page 4 of 7
combination of such cash and Common Stock. A Participant shall not have
the rights of a stockholder with respect to awards under the Plan
except as to stock actually issued to him.
7.3.6 LISTING OF STOCK, WITHHOLDING AND OTHER LEGAL
REQUIREMENTS. The Company shall not be obligated to deliver any stock
until all federal and state laws and regulations which the Company may
deem applicable have been complied with, nor, in the event the
outstanding Common Stock is at the time listed upon any stock exchange,
until the stock to be delivered has been listed or authorized to be
added to the list upon official notice of issuance to such exchange. In
addition, if the shares of stock subject to any option have not been
registered in accordance with the Securities Act of 1933, as amended,
the Company may require the person or persons who wishes or wish to
exercise such option to make such representation or agreement with
respect to the sale of stock acquired on exercise of the option as will
be sufficient, in the opinion of the Company's counsel, to avoid
violation of said Act, and may also require that the certificates
evidencing said stock bear an appropriate restrictive legend.
7.3.7 NON-TRANSFERABILITY OF OPTIONS. No option may be
transferred by the Participant otherwise than by will, 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 Committee shall
also determine all other matters relating to continuous employment.
7.3.10 CANCELLATION AND RESCISSION OF OPTIONS. The following
provisions of this Section 7.3.10 shall apply to options granted on or
after July 1, 1998 to (i) Participants who are classified by the
Company or a Subsidiary as an executive officer, senior officer, or
officer (collectively, an "Officer") of the Company or a Subsidiary;
and (ii) certain other Participants designated by the
Page 5 of 7
Committee or the Board of Directors to be subject to the terms of this
Section 7.3.10 (such designated Participants together with Officers
referred to collectively as "Senior Participants"). The Committee or
the Board of Directors may cancel, rescind, suspend or otherwise limit
or restrict any unexpired option at any time if the Senior Participant
engages in "Detrimental Activity" (as defined below). Furthermore, in
the event a Senior Participant engages in Detrimental Activity at any
time prior to or during the six months after any exercise of an option,
such exercise may be rescinded until the later of (i) two years after
such exercise or (ii) two years after such Detrimental Activity. Upon
such rescission, the Company at its sole option may require the Senior
Participant to (i) deliver and transfer to the Company the shares of
Common Stock received by the Senior Participant upon such exercise,
(ii) pay to the Company an amount equal to any realized gain received
by the Senior Participant from such exercise, or (iii) pay to the
Company an amount equal to the market price (as of the exercise date)
of the Common Stock acquired upon such exercise minus the respective
exercise price. The Company shall be entitled to set-off any such
amount owed to the Company against any amount owed to the Senior
Participant by the Company. As used in this subsection 7.3.10,
"Detrimental Activity"shall include: (i) the failure to comply with the
terms of the Plan or certificate or agreement evidencing the option;
(ii) the failure to comply with any term set forth in the Company's Key
Employee Agreement (irrespective of whether the Senior Participant is a
party to the Key Employee Agreement); (iii) any activity that results
in termination of the Senior Participant's employment for cause; (iv) a
violation of any rule, policy, procedure or guideline of the Company;
or (v) the Senior Participant being convicted of, or entering a guilty
plea with respect to a crime whether or not connected with the Company.
Further, if the Company commences an action against such Senior
Participant (by way of claim or counterclaim and including declaratory
claims), in which it is preliminarily or finally determined that such
Senior Participant engaged in Detrimental Activity or otherwise
violated this Section 7.3.10, the Senior Participant shall reimburse
the Company for all costs and fees incurred in such action, including
but not limited to, the Company's reasonable attorneys' fees.
7.3.11 JURISDICTION AND GOVERNING LAW. The parties submit to
the exclusive jurisdiction and venue of the federal or state courts of
the Commonwealth of Massachusetts, County of Middlesex, to resolve
issues that may arise out of or relate to the Plan or the same subject
matter. The Plan shall be governed by the laws of the Commonwealth of
Massachusetts, excluding its conflicts or choice of law rules or
principles that might otherwise refer construction or interpretation of
this Plan to the substantive law of another jurisdiction.
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
Page 6 of 7
liquidation of the Company or a merger or consolidation in which the Company is
not the surviving corporation or in which a majority of its outstanding shares
are so converted or exchanged shall cause every option hereunder to terminate;
provided that if any such dissolution, liquidation, merger or consolidation is
contemplated, the Company shall either arrange for any corporation succeeding to
the business and assets of the Company to issue to the Participants replacement
options (which, in the case of Incentive Stock Options, satisfy, in the
determination of the Committee, the requirements of Section 424 of the Code) on
such corporation's stock which will to the extent possible preserve the value of
the outstanding options or shall make the outstanding options fully exercisable
at least 20 days before the effective date of any such dissolution, liquidation,
merger or consolidation. The existence of the Plan shall not prevent any such
change or other transaction and no Participant thereunder shall have any right
except as herein expressly set forth.
9. EMPLOYMENT RIGHTS.
-----------------
Neither the adoption of the Plan nor any grant of options confers upon
any employee of the Company or a Subsidiary any right to continued employment
with the Company or a Subsidiary, as the case may be, nor does it interfere in
any way with the right of the Company or a Subsidiary to terminate the
employment of any of its employees at any time.
10. DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION.
-------------------------------------------------------
The Committee 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 shall become effective upon its adoption by the Board of
Directors, and options may be granted under the Plan from and after the date of
such adoption; provided, however, that if prior to May 16, 1986 the stockholders
of the Company have not approved the Plan, the Plan shall terminate to the
extent that it relates to the issuance of Incentive Stock Options and all
Incentive Stock Options theretofore granted shall terminate and cease to be of
any force or effect. No Incentive Stock Option granted hereunder shall be
exercisable unless and until the Plan has been so approved.
Page 7 of 7