EXHIBIT 10.1
EMC CORPORATION
EXECUTIVE DEFERRED COMPENSATION RETIREMENT PLAN
(ADOPTED EFFECTIVE JANUARY 1, 2001
AND AMENDED EFFECTIVE SEPTEMBER 5, 2001)
EMC CORPORATION
EXECUTIVE DEFERRED COMPENSATION RETIREMENT PLAN
(ADOPTED EFFECTIVE JANUARY 1, 2001
AND AMENDED EFFECTIVE SEPTEMBER 5, 2001)
ARTICLE 1. INTRODUCTION
1.1. ADOPTION OF PLAN. The EMC Corporation Executive Deferred Compensation
Retirement Plan has been adopted effective as of January 1, 2001. The Plan has
been amended effective as of September 5, 2001.
1.2. PURPOSE OF PLAN. The Company (as defined below) has adopted the Plan
(as defined below) to provide a competitive level of retirement benefits to
certain designated employees and directors of the Company or any of its
Subsidiaries by allowing them to defer receipt of designated percentages of
their Compensation (as defined below) and to provide, in the sole discretion of
the Company, Company Credits (as defined below).
1.3. STATUS OF PLAN. The Plan is intended to be "a plan which is unfunded
and is maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees"
within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA (as
defined below), and shall be interpreted and administered to the fullest extent
possible in a manner consistent with that intent.
ARTICLE 2. DEFINITIONS
Wherever used herein, the following terms shall have the meanings set forth
below, unless a different meaning is clearly required by the context:
2.1. "ACCOUNT" means, for each Participant, the account established for his
or her benefit under Section 5.1.
2.2. "ADMINISTRATOR" means initially the Executive Compensation and Stock
Option Committee of the Board (as defined below) as it may be constituted from
time to time, or otherwise means a committee comprised of such members of the
Board or executive officers of the Company as may be appointed by the Board or
the Company's President or Chief Executive Officer from time to time.
2.3. "BOARD" means the Board of Directors of the Company, as it may be
constituted from time to time.
2.4. "CHANGE OF CONTROL" means the determination by the Administrator, in
its sole discretion, that any of the following shall have occurred: (a) a
reorganization, consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation or
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pursuant to which the Company's common stock, par value $.01 per share (the
"Common Stock") is converted into cash, securities or other property, in either
case other than a reorganization, consolidation or merger of the Company in
which the holders of Common Stock immediately prior to the reorganization,
consolidation or merger hold, directly or indirectly, at least a majority of the
voting stock of the continuing or surviving corporation immediately after such
reorganization, consolidation or merger; or (b) the sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Company.
2.5. "CODE" means the Internal Revenue Code of 1986, as amended from time
to time. Reference to any section or subsection of the Code includes reference
to any comparable or succeeding provisions of any legislation which amends,
supplements or replaces such section or subsection.
2.6. "COMPANY" means EMC Corporation, a corporation formed under the laws
of The Commonwealth of Massachusetts.
2.7. "COMPANY CREDIT" means any credit from the Company which is received
by a Participant under Section 4.2.
2.8. "COMPANY CREDIT SUBACCOUNT" means the subaccount within the
Participant's Account to which Company Credits and allocable earnings credits,
if any, are credited.
2.9 "COMPANY CREDIT ELIGIBLE EMPLOYEE" means an employee of the Company or
any of its Subsidiaries selected by the Administrator as eligible for Company
Credits under Section 4.2 from among the group of highly compensated or
managerial employees of the Company or any of its Subsidiaries.
2.10. "COMPANY STOCK" means the Company's common stock, par value $.01 per
share.
2.11. "COMPENSATION" means any cash bonuses and directors' fees payable
from time to time by the Company or any of its Subsidiaries to a Participant and
a Participant's income from exercised vested stock options to purchase Company
Stock; provided, however, that with respect to each Participant, the
Administrator in its sole discretion may determine which specific types of
Compensation may be deferred under the Plan by such Participant; provided
further, however, that the Administrator may, in its sole discretion, amend this
Section 2.11 to cover other types of compensation payable from time to time by
the Company or any of its Subsidiaries to a Participant, including, without
limitation, cash commissions and salary.
2.12. "ELECTIVE DEFERRAL" means the portion of Compensation which is
deferred by a Participant under Section 4.1.
2.13. "ELECTIVE DEFERRAL SUBACCOUNT" means the subaccount within the
Participant's Account to which Elective Deferrals and allocable earnings credits
are credited.
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2.14. "ELECTIVE DEFERRAL ELIGIBLE EMPLOYEE" means an employee of the
Company or any of its Subsidiaries selected by the Administrator as eligible for
Elective Deferrals under Section 4.1 from among the group of highly compensated
or managerial employees of the Company or any of its Subsidiaries.
2.15 "ELIGIBLE EMPLOYEE" means an employee of the Company or any of its
Subsidiaries who is a Company Credit Eligible Employee, an Elective Deferral
Eligible Employee, or both.
2.16 "ELIGIBLE DIRECTOR" means any member of the Board.
2.17. "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to any section or subsection of ERISA
includes reference to any comparable or succeeding provisions of any legislation
which amends, supplements or replaces such section or subsection.
2.18. "PARTICIPANT" means any individual who participates in the Plan in
accordance with Article 3.
2.19. "PLAN" means the EMC Corporation Executive Deferred Compensation
Retirement Plan as set forth herein and all subsequent amendments hereto.
2.20. "PLAN YEAR" means in the case of the first Plan Year, the period
beginning January 1, 2001 and ending on December 31, 2001, and thereafter, the
12-month period ending each December 31.
2.21. "RESIGNATION OF SERVICE" means the voluntary resignation from service
for the Company by an Eligible Director.
2.22. "RETIREMENT" means the voluntary retirement by a Participant from
service with the Company (a) after such Participant has attained 55 years of age
and five years of service with the Company or (b) after such Participant has
attained twenty years of service with the Company or any of its Subsidiaries;
provided, in each such case, that such Participant complies with the terms set
forth in the Company's form of Key Employee Agreement (which agreement (i) shall
be deemed to apply to such Participant whether or not such Participant is a
party to a Key Employee Agreement and (ii) is expressly incorporated by
reference herein and made a part of the Plan).
2.23. "SUBSIDIARY" OR "SUBSIDIARIES" means a corporation or corporations in
which the Company owns, directly or indirectly, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock.
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ARTICLE 3. PARTICIPATION
3.1. COMMENCEMENT OF PARTICIPATION. Any individual who is an Eligible
Employee or an Eligible Director and who has elected to defer part of his or her
Compensation for the Plan Year in accordance with Section 4.1, or who has been
selected by the Company in its sole discretion to receive a Company Credit in
accordance with Section 4.2, shall become a Participant on the date such
election or credit is made.
3.2. CONTINUED PARTICIPATION. Subject to Section 3.3, an individual who has
become a Participant in the Plan shall continue to be a Participant so long as
any amount remains credited to his or her Account.
3.3. TERMINATION OF PARTICIPATION. The Administrator may terminate a
Participant's participation in the Plan prospectively or retroactively for any
reason, including but not limited to the Administrator's determination that such
termination is necessary in order to maintain the Plan as a "plan which is
unfunded and is maintained by an employer primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees" within the meaning of sections 201(2), 301(a)(3) and 401(a)(1) of
ERISA. Upon termination of a Participant's participation in the Plan, amounts
credited to a Participant's Account, if any, shall be paid to a Participant in a
single lump sum payment comprised of cash and (in the case of any portion of an
Elective Deferral Subaccount attributable to deferrals of stock option gain
Compensation) Company Stock.
ARTICLE 4. DEFERRALS AND CREDITS
4.1. ELECTIVE DEFERRALS
(a) IN GENERAL. An Elective Deferral Eligible Employee or Eligible
Director may elect to defer a designated portion of his or her Compensation
to be earned or payable during a Plan Year, by filing a written election
with the Administrator prior to the first day of the Plan Year in which
such Compensation is to be earned or by such other date as may be
determined by the Administrator in its sole discretion; provided, however,
that with respect to each Participant, the Administrator in its sole
discretion may determine which specific types of Compensation may be
deferred under the Plan by such Participant. An individual who first
becomes an Elective Deferral Eligible Employee or Eligible Director on or
after the first day of any Plan Year may elect to defer a designated
portion of his or her Compensation to be earned during the Plan Year by
filing a written election with the Administrator by such date as may be
determined by the Administrator in its sole discretion.
(b) NATURE OF ELECTION. Each election under this Section 4.1 for a
Plan Year (or the balance of a Plan Year) shall be made on a form
prescribed or approved by the Administrator, shall be irrevocable by the
Participant for the applicable Plan Year, and shall apply only to
Compensation earned after the date the election form is completed and filed
with the Administrator. The election form shall specify the whole
percentage or flat dollar amount of each type of Compensation that is to be
deferred for the applicable Plan Year. In accordance with Article 6, each
Participant shall indicate on the election form
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when the amount that is to be deferred for the applicable Plan Year is to
be paid (e.g., upon Retirement or Resignation of Service, upon a fixed
distribution date pursuant to Section 6.6, or upon a Change of Control) and
the method of payment (e.g., in a single lump sum payment, in a number of
annual installments or in any other method approved by the Administrator).
The deferred amounts shall be credited to the Participant's Elective
Deferral Subaccount as of the date such Compensation would otherwise have
been paid to the Participant.
4.2. COMPANY CREDITS. Notwithstanding any other provisions of the Plan, the
Company shall not be obligated to credit a Company Credit to the Company Credit
Subaccount of a Company Credit Eligible Employee. The Company may determine from
time to time, in its sole discretion, to credit a Company Credit, in an amount
the Company may determine in its sole discretion, to the Company Credit
Subaccount of a Company Credit Eligible Employee.
ARTICLE 5. ACCOUNTS; INTEREST
5.1. ACCOUNTS. The Administrator shall establish an Account for each
Participant consisting of an Elective Deferral Subaccount and Company Credit
Subaccount, reflecting Elective Deferrals and Company Credits, respectively, and
any adjustments hereunder. As soon as reasonably practical after the end of each
Plan Year, the Administrator shall provide the Participant with a statement of
his or her Account.
5.2. EARNINGS MEASUREMENT. The Administrator shall identify one or more
funds (such as mutual funds or bank collective funds) from time to time for the
purpose of measuring earnings credits to Participants' Accounts. Each
Participant may specify which one or more of such funds he or she wishes to be
used as a measuring vehicle for designated percentages of his or her Account, in
such form and manner, and with such notice, as the Administrator may prescribe,
provided that such directions may be given on a prospective basis only, and
further provided that any deferrals of stock option gain Compensation shall be
invested exclusively and permanently in Company Stock. Changes in Participant
directions hereunder may be made by a Participant no more than once every thirty
(30) days or at such other times or as frequently as the Administrator may
prescribe. Each Participant's Account shall be adjusted from time to time (at
least quarterly) to reflect the fair market value that would be ascribed to the
Account if the amounts credited to the Account were actually invested in the
funds as directed by the Participant. For purposes of Company Credits, earnings
credits (if any) shall begin to accrue as of the actual date of contribution and
investment by the Company of such funds into a grantor trust pursuant to Section
9.1.
5.3. PAYMENTS. Each Participant's Account shall be reduced by the amount of
any payment made to or on behalf of the Participant under Article 6 as of the
date such payment is made.
5.4. VESTING. A Participant will at all times be 100% vested in his or her
Elective Deferral Subaccount. A Participant will earn an interest to be vested
in his or her Company Credit Subaccount according to any vesting schedule(s)
adopted by the Company in its sole
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discretion; provided, however, that in the event (a) that a Participant becomes
totally and permanently disabled as determined in the sole discretion of the
Company or (b) of a Change of Control a Participant will become 100% vested in
his or her Company Credit Subaccount.
5.5 DETRIMENTAL ACTIVITY.
(a) Notwithstanding any other provisions of the Plan, in the event
that a Participant engages in "Detrimental Activity" (as defined below) at
any time, the Administrator may in its sole discretion (i) direct the
Company to pay the balance of the Participant's Account in the form of a
single lump sum payment comprised of cash and (in the case of any portion
of an Elective Deferral Subaccount attributable to deferrals of stock
option gain Compensation) Company Stock; and (ii) cancel, rescind, suspend
or otherwise limit or restrict at any time all amounts, if any, credited to
such Participant's Company Credit subaccount, whether or not fully vested.
Furthermore, in the event that a Participant engages in Detrimental
Activity at any time during the twelve (12) months after the termination of
his or her employment with the Company or any of its Subsidiaries for any
reason or termination of service as a director of the Company for any
reason, as the case may be, the Company may require such Participant at any
time until the later of (A) two years after such Participant's termination
of employment for any reason or termination of service as a director of the
Company for any reason, as the case may be, or (B) two years after such
Participant engaged in Detrimental Activity to pay to the Company (1) an
amount equal to any distributions previously made by the Company to such
Participant from such Participant's Company Credit Account and (2), if the
Company commences an action against such Participant (by way of a claim or
counterclaim and including declaratory claims), in which it is
preliminarily or finally determined that such Participant engaged in
Detrimental Activity or otherwise violated this Section 5.5, an amount
equal to the Company's costs and fees incurred in such action, including
but not limited to, the Company's reasonable attorneys' fees. The Company
shall be entitled to set off any such amounts owed to the Company against
any amounts owed to such Participant by the Company, including without
limitation, any amounts to be distributed from such Participant's Elective
Deferral Subaccount. For this purpose "Detrimental Activity" means, in the
Company's sole determination, that the Participant has, directly or
indirectly, (a) become associated in any capacity with any enterprise that
is, or may be deemed to be, in competition with any business of the Company
or any of its Subsidiaries, (b) solicited, induced or attempted to induce,
in any enterprise that is competitive with the Company or any of its
Subsidiaries, any customers or employees of the Company to curtail or
discontinue their relationship with the Company or any of its Subsidiaries,
(c) disclosed, communicated or misused, to the detriment of the Company or
any of its Subsidiaries, any confidential or proprietary information
relating to the Company or any of its Subsidiaries to any person or entity
not associated with the Company or any of its Subsidiaries, (d) failed to
comply with the terms of the Plan, (e) failed to comply with any term set
forth in the Company's Key Employee Agreement (irrespective of whether the
Participant is a party to the Key Employee Agreement), (f) engaged in any
activity that results in termination of the Participant's employment for
cause, (g) violated any rule, policy, procedure or guideline of the Company
or any of its Subsidiaries, or (h) been convicted of, or has entered a
guilty plea with respect to, a crime whether or not connected with the
Company or any of its Subsidiaries.
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(b) Notwithstanding anything herein to the contrary, this Section 5.5
shall not in any way amend, modify or affect any other plan, agreement,
instrument or understanding, including without limitation, any of the
Company's stock option plans, or any of the rights of the Company or any of
its Subsidiaries thereunder with respect to any Detrimental Activity or
similar activity committed by a Participant. The Company expressly reserves
all of its rights under any such other plan, agreement, instrument or
understanding and this Section 5.5 shall not be construed in any way as a
waiver of any such rights.
ARTICLE 6. - PAYMENTS
6.1 PAYMENT UPON RETIREMENT OR RESIGNATION OF SERVICE. In the event a
Participant's employment with the Company or any of its Subsidiaries is
terminated due to the Participant's Retirement, or in the event that a
Participant's service as a director of the Company is terminated due to the
Participant's Resignation of Service, then as soon as administratively
practicable thereafter, payments will be made to the Participant as follows:
(a) With respect to the Participant's Elective Deferral Subaccount,
unless the Participant elects an alternative form of payment as described
in Section 6.1(c) either in the initial Elective Deferral election
described in Section 4.1 or at least 13 months prior to Retirement or
Resignation of Service, payments to be made upon Retirement or Resignation
of Service will be made in a single lump sum payment comprised of cash and
(in the case of any portion of an Elective Deferral Subaccount attributable
to deferrals of stock option gain Compensation) Company Stock.
(b) With respect to the vested portion, if any, of the Participant's
Company Credit Subaccount, unless the Participant elects an alternative
form of payment as described in Section 6.1(c) at least 13 months prior to
Retirement, payments to be made upon Retirement will be made in a single
lump sum cash payment. The unvested portion, if any, of the Participant's
Company Credit Subaccount shall be forfeited automatically upon Retirement.
(c) A Participant may elect, either in the initial Elective Deferral
election described in Section 4.1 or at least 13 months prior to the
Participant's Retirement or Resignation of Service, to receive the balance
of the Participant's Account in payments of five, ten or fifteen annual
installment payments comprised of cash and (in the case of any portion of
an Elective Deferral Subaccount attributable to deferrals of stock option
gain Compensation) Company Stock. A Participant shall elect, either in the
initial Elective Deferral election described in Section 4.1 or at least 13
months prior to the Participant's Retirement or Resignation of Service, the
date upon which the first installment shall be made following Retirement or
Resignation of Service and succeeding installments shall be made on the
next four anniversaries of the date of Retirement or Resignation of Service
(for a total of five installments), on the next nine anniversaries of the
date of Retirement or Resignation of Service (for a total of ten
installments), or on the next fourteen anniversaries of the date of
Retirement or Resignation of Service (for a total of fifteen installments).
If a Participant shall fail to elect the date upon which the first
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installment shall be made following Retirement or Resignation of Service,
then the first installment shall be made as soon as administratively
practicable following Retirement or Resignation of Service and succeeding
installments shall be made on the next four anniversaries of the date of
Retirement or Resignation of Service (for a total of five installments), on
the next nine anniversaries of the date of Retirement or Resignation of
Service (for a total of ten installments), or on the next fourteen
anniversaries of the date of Retirement or Resignation of Service (for a
total of fifteen installments). The amount of each installment shall be
determined by dividing the Participant's applicable Account balance
(adjusted through the day before the installment is paid) by the number of
installments remaining. Notwithstanding the foregoing, subject to the prior
approval of the Administrator in its sole discretion, a Participant make
elect, either in the initial Elective Deferral election described in
Section 4.1 or at least 13 months prior to the Participant's Retirement or
Resignation of Service, to receive the balance of the Participant's Account
in such amounts and at such times as the Participant shall describe in such
election. Any election made under this Section 6.1(c) shall be made in
writing on a form prescribed or approved by the Administrator, and may be
revoked in writing on a form prescribed or approved by the Administrator at
any time if such revocation is made at least 13 months prior to the
Participant's Retirement or Resignation of Service.
Notwithstanding the foregoing, the Administrator may, in its sole discretion, at
any time after the Participant's Retirement or Resignation of Service, direct
the Company to pay the balance of the Participant's Account in the form of a
single lump sum payment comprised of cash and (in the case of any portion of an
Elective Deferral Subaccount attributable to deferrals of stock option gain
Compensation) Company Stock.
6.2 PAYMENT UPON TERMINATION OF EMPLOYMENT OR SERVICE AS A DIRECTOR DUE TO
DISABILITY. In the event a Participant's employment with the Company or any of
its Subsidiaries or service as a director of the Company is terminated due to
the Participant's disability as determined by the Administrator in its sole
discretion ("Disability"), then as soon as administratively practicable
thereafter, payments will be made to the Participant as follows:
(a) With respect to the Participant's Elective Deferral Subaccount,
payments will made at the same time and in the same manner as if the
Participant's employment had terminated due to his or her Retirement or as
if the Participant's service as a director of the Company had terminated
due to his or her Resignation of Service.
(b) With respect to the vested portion (after any acceleration of
vesting pursuant to Section 5.4, if applicable), if any, of the
Participant's Company Credit Subaccount, payments will made at the same
time and in the same manner as if the Participant's employment had
terminated due to his or her Retirement. The unvested portion, if any, of
the Participant's Company Credit Subaccount shall be forfeited
automatically upon termination of the Participant's employment with the
Company of any of its Subsidiaries due to Disability.
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Notwithstanding the foregoing, the Administrator may, in its sole discretion, at
any time after the termination of the Participant's employment with the Company
or any of its Subsidiaries or service as a director of the Company due to
Disability, direct the Company to pay the balance of the Participant's Account
in the form of a single lump sum payment comprised of cash and (in the case of
any portion of an Elective Deferral Subaccount attributable to deferrals of
stock option gain Compensation) Company Stock.
6.3 PAYMENT UPON TERMINATION OF EMPLOYMENT OR SERVICE AS A DIRECTOR DUE TO
DEATH. In the event a Participant's employment with the Company or any of its
Subsidiaries or service as a director of the Company is terminated due to the
Participant's death, then as soon as administratively practicable thereafter,
payments will be made to the Participant's beneficiary or estate, in accordance
with Section 6.3(c), as follows:
(a) With respect to the Participant's Elective Deferral Subaccount,
payments will be made at the same time and in the same manner as if the
Participant's employment had terminated due to his or her Retirement or as
if the Participant's service as a director of the Company had terminated
due to his or her Resignation of Service.
(b) With respect to the vested portion of the Participant's Company
Credit Subaccount, payments, if any, will made at the same time and in the
same manner as if the Participant's employment had terminated due to his or
her Retirement. The unvested portion of the Participant's Company Credit
Subaccount shall be forfeited automatically upon termination of the
Participant's employment with the Company or any of its Subsidiaries due to
death.
(c) A Participant shall designate his or her beneficiary or
beneficiaries who, in the event of the Participant's death, shall be
entitled to receive the balance of the Participant's Account. Such
designation shall be made in writing on a form prescribed or approved by
the Administrator, and may be revoked in writing on a form prescribed or
approved by the Administrator at any time prior to the Participant's death.
If a Participant fails to designate a beneficiary or no designated
beneficiary survives the Participant, then payments hereunder shall be made
to the Participant's estate.
Notwithstanding the foregoing, the Administrator may, in its sole discretion, at
any time after the Participant's death, direct the Company to pay the balance of
the Participant's Account to the Participant's beneficiary or estate, as the
case may be, in the form of a single lump sum payment comprised of cash and (in
the case of any portion of an Elective Deferral Subaccount attributable to
deferrals of stock option gain Compensation) Company Stock.
6.4 PAYMENT UPON TERMINATION OF EMPLOYMENT OR SERVICE AS A DIRECTOR FOR ANY
OTHER REASON. In the event a Participant's employment with the Company or any of
its Subsidiaries or service as a director of the Company is terminated for any
reason other than Retirement, Resignation of Service, Disability or death, then
as soon as administratively practicable thereafter, payments will be made to the
Participant as follows:
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(a) With respect to the Participant's Elective Deferral Subaccount,
payment will be made in a single lump sum payment comprised of cash and (in
the case of any portion of an Elective Deferral Subaccount attributable to
deferrals of stock option gain Compensation) Company Stock.
(b) With respect to the vested portion, if any, of the Participant's
Company Credit Subaccount, payment will be made in a single lump sum cash
payment. The unvested portion of the Participant's Company Credit
Subaccount shall be forfeited automatically upon the termination of the
Participant's employment with the Company or any of its Subsidiaries for
any reason other than Retirement, Disability or death.
Notwithstanding the foregoing, the Administrator may, in its sole discretion, at
any time after the termination of the Participant's employment with the Company
or any of its Subsidiaries for any reason other than Retirement, Disability or
death, direct the Company to pay the balance of the Participant's Account as if
the Participant's employment had terminated due to his or her Retirement or as
if the Participant's service as a director of the Company had terminated due to
his or her Resignation of Service.
6.5 SEVERE FINANCIAL HARDSHIP DISTRIBUTION. At any time, a Participant who
believes he or she is suffering a severe financial hardship may apply to the
Administrator for a distribution under the Plan in order to alleviate such
hardship. The Administrator, in its sole discretion (but after taking into
account, among other factors, the nature and foreseeability of the alleged
hardship, the Participant's other resources, and the effect of making a
distribution on the intended tax status of the deferrals made under the Plan),
may direct the Company to pay to the Participant an amount which it determines
is necessary or appropriate, not to exceed the Participant's Elective Deferral
Subaccount balance, if any, and the Company shall pay such amount to the
Participant in a single lump sum distribution to be paid in cash and (in the
case of any portion of an Elective Deferral Subaccount attributable to deferrals
of stock option gain Compensation) Company Stock.
6.6 IN-SERVICE DISTRIBUTION. In connection with his or her election to
defer Compensation pursuant to Section 4.1, a Participant may specify a fixed
distribution date for the commencement of payment of his or her Elective
Deferral Subaccount which may be prior to termination of employment or
termination of service as a director of the Company, which shall be payable in a
single lump sum distribution or in five annual installments commencing on the
fixed distribution date; provided, however, that such fixed distribution date
shall not be earlier than the third anniversary of the last day of the Plan Year
in which such Compensation was deferred. Any lump sum or installment
distributions shall be paid in cash and (in the case of any portion of an
Elective Deferral Subaccount attributable to deferrals of stock option gain
Compensation) Company Stock. Such distribution dates may be extended to later
dates so long as elections to extend are made at least 13 months prior to the
fixed distribution date. If such distribution is to be paid in five annual
installments, then the first installment shall be made on the fixed distribution
date and succeeding installments shall be made on the next four anniversaries of
the fixed distribution date (for a total of five installments). The amount of
each installment shall be determined by dividing the Participant's applicable
Account balance
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(adjusted through the day before the installment is paid) by the number of
installments remaining. Any election made under this Section 6.6 shall be made
in writing on a form prescribed or approved by the Administrator and may be
revoked in writing on a form prescribed or approved by the Administrator at any
time if such revocation is made at least 13 months prior to the fixed
distribution date.
In the event the Participant's employment with the Company or any of its
Subsidiaries or service as a director of the Company is terminated prior to the
fixed distribution date, then no payments shall be made pursuant to this Section
6.6 and, instead, the balance of the Participant's Elective Deferral Subaccount
shall be paid based on the Participant's termination of employment by reason of
Retirement, Disability, death or otherwise, or termination of service as a
director of the Company by reason of Resignation of Service, Disability, death
or otherwise, as the case may be. In the event the Participant's employment with
the Company or any of its Subsidiaries is terminated by reason of Retirement,
Disability or death or the Participant's service as a director of the Company is
terminated by reason of Resignation of Service, Disability or death, as the case
may be, after the fixed distribution date has occurred and the Participant had
elected to receive such distribution under this Section 6.6 in five annual
installments, then payments shall be made at the same time and in the same
manner as elected by the Participant under this Section 6.6. In the event the
Participant's employment with the Company or any of its Subsidiaries is
terminated for any reason other than Retirement, Disability or death or the
Participant's service as a director of the Company is terminated for any reason
other than Resignation of Service, Disability or death after the fixed
distribution date has occurred and the Participant had elected to receive such
distribution under this Section 6.6 in five annual installments, then
notwithstanding such election, the remaining portion of the distribution shall
be made in a single lump sum payment to the Participant as soon as
administratively practicable after the Participant's employment with the Company
or any of its Subsidiaries is terminated for any reason other than Retirement,
Disability or death or the Participant's service as a director of the Company is
terminated for any reason other than Resignation of Service, Disability or
death. Notwithstanding the foregoing, the Administrator may, in its sole
discretion, at any time after the termination of the Participant's employment
for any reason or the termination of the Participant's service as a director of
the Company for any reason, direct the Company to pay the balance of the
Participant's Account in the form of a single lump sum payment. Any lump sum or
installment distributions shall be paid in cash and (in the case of any portion
of an Elective Deferral Subaccount attributable to deferrals of stock option
gain Compensation) Company Stock.
6.7 IMMEDIATE DISTRIBUTION. At any time, a Participant may elect to have
all or any portion of the balance of the Participant's Elective Deferral
Subaccount distributed in a single lump sum distribution payable in cash and (in
the case of any portion of an Elective Deferral Subaccount attributable to
deferrals of stock option gain Compensation) Company Stock. Such distribution
shall be made as soon as administratively practicable following the
Administrator's receipt of the Participant's election. Any election made under
this Section 6.7 shall be made in writing on a form prescribed or approved by
the Administrator. The actual amount to be distributed to the Participant
hereunder shall equal ninety percent (90%) of the elected distribution amount
and the remaining ten percent (10%) of the elected distribution amount shall be
forfeited to the Company. The Participant shall not be eligible to make any
elective deferrals
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into the Plan at any time during the twelve month period immediately following
the date of such distribution.
6.8 PAYMENT UPON A CHANGE OF CONTROL. In connection with his or her
election to defer Compensation pursuant to Section 4.1, a Participant may elect
to receive the balance of the Participant's Account in a single lump sum
distribution payable in cash and (in the case of any portion of an Elective
Deferral Subaccount attributable to deferrals of stock option gain Compensation)
Company Stock upon a Change of Control. Any election made under this Section 6.8
shall be made in writing on a form prescribed or approved by the Administrator
and may be revoked in writing on a form prescribed or approved by the
Administrator at any time if such revocation is made at least 13 months prior to
the Change of Control.
6.9. PAYMENTS TO A PARTICIPANT WHO IS AN ELIGIBLE DIRECTOR AND AN ELIGIBLE
EMPLOYEE. Notwithstanding anything in this Article 6 to the contrary, in the
event that payments are to be made from a Participant's Account pursuant to this
Article 6 and such Participant is or was both an Eligible Director and an
Eligible Employee, then, subject to the discretion of the Administrator, the
payments shall be made such that the portion of the balance of the Participant's
Account attributable to Compensation earned by the Participant as an employee of
the Company or any of its Subsidiaries shall be paid in accordance with the
applicable provisions of this Article 6 relating to the termination of such
Participant's employment by reason of Retirement, Disability, death or
otherwise, as the case may be, and the portion of the balance of the
Participant's Account attributable to Compensation earned by the Participant for
his or her service as a director of the Company shall be paid in accordance with
the applicable provisions of this Article 6 relating to the termination of such
Participant's service as a director by reason of Resignation of Service,
Disability, death or otherwise, as the case may be.
ARTICLE 7. ADMINISTRATOR
7.1. PLAN ADMINISTRATION AND INTERPRETATION. The Administrator shall
oversee the administration of the Plan. The Administrator shall have complete
discretionary control and authority to administer all aspects of the Plan and to
determine the rights and benefits and all claims, demands and actions arising
out of the provisions of the Plan of any Participant, beneficiary, deceased
Participant, or any other person having or claiming to have any interest under
the Plan. The Administrator shall have the exclusive discretionary power to
interpret the Plan and to decide all matters under the Plan. The Administrator
also shall have the exclusive discretionary power to adopt, amend and rescind
rules and guidelines for the administration of the Plan and for its own acts and
proceedings. Such interpretation and decision shall be final, conclusive and
binding on all Participants and any person claiming under or through any
Participant, in the absence of clear and convincing evidence that the
Administrator acted arbitrarily and capriciously. Any individual serving as
Administrator, or on a committee acting as Administrator, who is a Participant,
shall not vote or act on any matter relating solely to himself or herself. When
making a determination or calculation, the Administrator shall be entitled to
conclusively rely on information furnished by a Participant, a beneficiary, or
any other person or entity. The Administrator shall be deemed to be the Plan
administrator with responsibility for complying with any reporting and
disclosure requirements of ERISA.
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The Administrator may employ such counsel, agents and advisers, and obtain
such administrative, clerical and other services, as it may deem necessary or
appropriate in carrying out the provisions of the Plan and its duties hereunder.
7.2. CLAIMS PROCEDURE.
(a) IN GENERAL. If any person believes he or she has been denied any
rights or benefits under the Plan, such person may file a claim in writing
with the Administrator. If any such claim is wholly or partially denied,
the Administrator will notify such person of its decision in writing. Such
notification will be given within 90 days after the claim is received by
the Administrator (or within 180 days, if special circumstances require an
extension of time for processing the claim, and if written notice of such
extension and circumstances is given to such person within the initial 90
day period). Notwithstanding the foregoing, if such notification is not
given within such 90 or 180 day period, the claim will be considered denied
as of the last day of such period and such person may request a review of
his or her claim in accordance with Section 7.2(b).
(b) APPEALS. Within 60 days after the date on which a person receives
a written notice of a denied claim (or, if applicable, within 60 days after
the date on which such denial is considered to have occurred) such person
(or his or her duly authorized representative) may file a written request
with the Administrator for a review of his or her denied claim. The
Administrator will notify such person of its decision on review in writing.
The decision on review will be made within 60 days after the request for
review is received by the Administrator (or within 120 days, if special
circumstances require an extension of time for processing the request, such
as an election by the Administrator to hold a hearing, and if written
notice of such extension and circumstances is given to such person within
the initial 60 day period). Notwithstanding the foregoing, if the decision
on review is not made within such 60 or 120 day period, the claim will be
considered denied.
The Administrator may, in its sole discretion amend or revise this
Section 7.2, provided, that the claims procedure for the Plan pursuant to
which persons may claim an interest in the Plan and appeal denials of such
claims, as amended or changed, shall meet the minimum standards of Section
503 of ERISA.
7.3. INDEMNIFICATION OF ADMINISTRATOR. The Company shall indemnify and
defend to the fullest extent permitted by law any director, officer or employee
of the Company or its Subsidiaries who serves as the Administrator or as a
member of a committee appointed to serve as Administrator, or who assists the
Administrator in carrying out its duties (including any such individual who
formerly served in any such capacity) against any and all liabilities, damages,
costs and expenses (including attorneys' fees and amounts paid in settlement of
any claims approved in writing by the Company) arising out of or relating to any
act or omission to act in connection with the Plan, if such act or omission is
in good faith.
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ARTICLE 8. AMENDMENT, TERMINATION AND ASSIGNMENT
8.1. AMENDMENTS. Prior to a Change of Control, the Company shall have the
right to amend the Plan from time to time, subject to Section 8.3, by an
instrument in writing which has been executed on its behalf by the Administrator
or by vote of the Board. No amendment to the Plan with respect to any
Participant may be made after a Change of Control without the written consent of
such Participant (or beneficiary, if applicable).
8.2. TERMINATION OF PLAN. The Company currently intends to continue the
Plan indefinitely. However, the Plan is voluntary on the part of the Company and
the Company expressly reserves the right to terminate the Plan at any time,
subject to Section 8.3, for any reason whatsoever. Subject to Section 8.1, the
Company from time to time may, by amendment to the Plan, suspend the Plan or
discontinue provisions thereof. The Company may terminate the Plan at any time
by an instrument in writing which has been executed on its behalf by the
Administrator or by vote of the Board.
8.3. EXISTING RIGHTS. No amendment or termination of the Plan shall
adversely affect the rights of any Participant with respect to amounts credited
to his or her Account as of the date of such amendment or termination (subject
to future adjustments as a result of investment measurements).
8.4. ASSIGNMENT. The rights and obligations of the Company shall inure to
the benefit of and shall be binding upon its successors and assigns.
ARTICLE 9. - MISCELLANEOUS
9.1. GRANTOR TRUST. The Company may establish a trust of which the Company
is treated as the owner under Subpart E of Subchapter J, Chapter 1 of the Code
(a "grantor trust"), and may deposit with the trustee of the grantor trust an
amount of cash or marketable securities sufficient to cause the fair market
value of the assets held in the grantor trust to be not less than the sum of the
Account balances under the Plan. Notwithstanding the foregoing, nothing in this
Plan will be construed to create a trust or to obligate the Company, any of its
Subsidiaries or any other person or entity to segregate a fund, purchase an
insurance contract, or in any other way currently to fund the future payment of
any distributions or payments hereunder, nor will anything herein be construed
to give any employee or any other person any right to any specific assets of the
Company, any of its Subsidiaries or of any other person or entity. Any
distributions or payments which become payable hereunder that are not paid out
of the grantor trust shall be paid from the general assets of the Company.
9.2. NATURE OF CLAIM FOR PAYMENT. Each Participant and beneficiary will be
an unsecured general creditor of the Company with respect to any distributions
or payments to be made under the Plan. Nothing in the Plan will be construed to
give any person any right to any specific assets of the Company, any of its
Subsidiaries or any other person or entity.
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9.3. NONALIENATION OF BENEFITS. No Participant, beneficiary or any other
person having any interest under the Plan shall alienate, anticipate, commute,
pledge, encumber, assign or otherwise transfer ("Alienate") any right or
interest under the Plan, including, without limitation, with respect to rights
to or interests in any payments, distributions, claims or other benefits which
he or she may expect to receive, contingently or otherwise, under this Plan
("Rights"). Any attempt to Alienate any Right shall be ineffective. No Right
shall be subject to any claim of, subject to attachment, execution, garnishment
or other legal process by, any creditor of such Participant, beneficiary or
other person.
9.4. NO EMPLOYMENT OR SERVICE CONTINUATION RIGHTS. Neither the adoption or
the establishment and maintenance of the Plan, the participation in the Plan nor
any action of the Company, any Subsidiary or the Administrator, shall be held or
construed to confer upon any employee or director of the Company or any of its
Subsidiaries any right to continued employment or service with the Company or
any of its Subsidiaries, as the case may be, nor does it interfere in any way
with the right of the Company or any of its Subsidiaries to terminate the
services of any of its employees or directors at any time. Each of the Company
and its Subsidiaries expressly reserves the right to terminate or discharge any
of its employees or directors at any time.
9.5. RECEIPT AND RELEASE. Any payment or distribution to any Participant or
beneficiary in accordance with the provisions of the Plan shall be, to the
extent thereof, in full satisfaction of all claims against the Company, its
Subsidiaries and the Administrator under the Plan, and the Administrator may
require such Participant or beneficiary, as a condition precedent to such
payment, to execute a receipt and release to such effect. If any Participant or
beneficiary is determined by the Administrator to be incompetent by reason of
physical or mental disability (including minority) to give a valid receipt and
release, the Administrator may cause the payment or payments becoming due to
such person to be made to another person for his or her benefit without
responsibility on the part of the Administrator or the Company to follow the
application of such funds.
9.6. SEVERABILITY OF PROVISION. If any provision of the Plan shall be held
by a court of competent jurisdiction to be invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provisions hereof, and
the Plan shall be construed and enforced to the fullest extent possible as if
such provision had not been included.
9.7. GOVERNMENT REGULATIONS. It is intended that the Plan comply with all
applicable laws and government regulations. Neither the Company, any of its
Subsidiaries, nor the Administrator shall not be obligated to perform any
obligation hereunder in any case where, in the opinion of the Company's counsel,
such performance would result in the violation of any law or regulation.
9.8. GOVERNING LAW; JURISDICTION. This Plan shall be construed,
administered, and governed in all respects under and by the laws of The
Commonwealth of Massachusetts without regard to the conflict of law provisions
thereof. The Company, the Administrator, the Participants and their
beneficiaries, and any persons having or claiming to have any interest
15
under the Plan submit to the exclusive jurisdiction and venue of the federal or
state courts of The Commonwealth of Massachusetts, County of Middlesex, to
resolve any and all issues that may arise out of or relate to the Plan or the
same subject matter.
9.9 HEADINGS AND SUBHEADINGS. Headings and subheadings in this Plan are
inserted for convenience only and are not to be considered in the construction
of the provisions hereof.
9.10 EXPENSES AND TAXES. Expenses, including fees and expenses associated
with the grantor trust, associated with the administration or operation of the
Plan shall be paid by the Company from its general assets unless, in the sole
discretion of the Administrator, the Administrator elects to charge such
expenses against the appropriate Participant's Account or Participants'
Accounts. Any taxes allocable to an Account (or subaccount or portion thereof)
maintained under the Plan which are payable prior to the distribution of the
Account (or subaccount or portion thereof), as determined by the Administrator
in its sole discretion, shall be charged against the appropriate Participant's
Account or Participants' Accounts.
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IN WITNESS WHEREOF, the Company has caused the Plan to be executed by its
duly authorized officer.
EMC Corporation
By: /S/ MICHAEL C. RUETTGERS
-----------------------------
Name: Michael C. Ruettgers
Title: Executive Chairman
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