Exhibit 10.4
EMC CORPORATION
2001 STOCK OPTION PLAN, AS AMENDED JUNE 7, 2002
1. PURPOSE.
The purpose of the EMC Corporation 2001 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 2001 Stock Option Plan set forth
herein.
2.10 "Subsidiary" or "Subsidiaries" means a corporation or corporations in
which the Company owns, directly or indirectly, stock possessing 50 percent or
more of the total combined voting power of all classes of stock.
2.11 "Ten Percent Stockholder" means any person who, at the time an option
is granted, owns or is deemed to own stock (as determined in accordance with
Sections 422 and 424 of the Code) possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or its parent
or a subsidiary.
3. ADMINISTRATION.
3.1 The Plan shall be administered by the Committee and, to the extent
provided herein, the Board of Directors. A majority of the members of the
Committee shall constitute a quorum, and all determinations of the Committee
shall be made by a majority of its members. Any determination of the Committee
under the Plan may be made without notice or meeting of the Committee by a
writing signed by a majority of the Committee members.
3.2 Subject to the provisions set forth herein, each of the Committee and
the Board of Directors shall have full authority to determine the provisions of
options to be granted under the Plan. Subject to the provisions set forth
herein, the Committee shall have full authority to interpret the terms of the
Plan and of options granted under the Plan, to adopt, amend and rescind rules
and guidelines for the administration of the Plan and for its own acts and
proceedings and to decide all questions and settle all controversies and
disputes which may arise in connection with the Plan; PROVIDED, HOWEVER, that
any change to the terms of an option granted hereunder shall be approved by the
Board of Directors to the extent such change would be deemed to be a new option
grant or such terms relate to a subsequent transaction that would not be exempt
from Section 16(b) of the Securities Exchange Act of 1934 in the absence of such
approval.
3.3 The decision of the Committee or the Board of Directors, as applicable,
on any matter as to which the Committee or the Board of Directors, as
applicable, is given authority under subsection 3.2 shall be final and binding
on all persons concerned.
3.4 Nothing in the Plan shall be deemed to give any officer or employee, or
his legal representatives or assigns, any right to participate in the Plan,
except to such extent, if any, as the Committee or the Board, as applicable, may
have determined or approved pursuant to the provisions of the Plan.
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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 80,000,000, 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), or if shares of Common Stock are reacquired by the
Company upon the rescission of an exercise of an option, the number of shares of
Common Stock as to which an option has not been exercised prior to termination,
or have been reacquired upon the rescission of an option, shall be available for
future grants within the limits set forth in subsection 4.1.
4.3 Shares of Common Stock delivered upon the exercise of options shall
consist of shares of authorized and unissued Common Stock, except that the Board
of Directors may from time to time in its discretion determine in any case the
shares to be so delivered shall consist of shares of authorized and issued
Common Stock reacquired by the Company and held in its Treasury. No fractional
shares of Common Stock shall be delivered upon the exercise of an option.
5. ELIGIBILITY FOR OPTIONS.
Employees eligible to receive options under the Plan shall be those key
employees of the Company and its Subsidiaries, if any, who, in the opinion of
the Committee, are in a position to have a significant effect upon the Company's
business and earnings. Members of the Board of Directors of the Company or a
Subsidiary who are not employed as regular salaried officers or employees of the
Company or a Subsidiary may not participate in the Plan.
6. GRANT OF OPTIONS.
6.1 From time to time while the Plan is in effect, each of the Committee
and the Board of Directors may, in its absolute discretion, select from among
the persons eligible to receive options (including persons to whom options were
previously granted) those persons to whom options are to be granted.
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 9,
2011, but options theretofore granted may extend beyond that date.
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7. PROVISIONS OF OPTIONS.
7.1 INCENTIVE STOCK OPTIONS OR OTHER OPTIONS. Options granted under the
Plan may be either Incentive Stock Options or options which do not qualify as
Incentive Stock Options, as the Committee or the Board of Directors shall
determine at the time of each grant of options hereunder.
7.2 STOCK OPTION CERTIFICATES OR AGREEMENTS. Options granted under the Plan
shall be evidenced by certificates or agreements in such form as the Committee
shall from time to time approve. Such certificates or agreements shall comply
with the terms and conditions of the Plan and may contain such other provisions
not inconsistent with the terms and conditions of the Plan as the Committee
shall deem advisable. In the case of options intended to qualify as Incentive
Stock Options, the certificates or agreements shall contain such provisions
relating to exercise and other matters as are required of incentive stock
options under the Code.
7.3 TERMS AND CONDITIONS. All options granted under the Plan shall be
subject to the following terms and conditions to the extent applicable and to
such other terms and conditions not inconsistent therewith as the Committee or
the Board of Directors shall determine:
7.3.1 EXERCISE PRICE. The exercise price per share of Common Stock
with respect to each option shall be as determined by the Committee but in
the case of an Incentive Stock Option not less than 100% (110% in the case
of an Incentive Stock Option granted to a Ten Percent Stockholder) of the
Fair Market Value per share at the time the option is granted. In the case
of an option which does not qualify as an Incentive Stock Option, the
exercise price per share of Common Stock shall be not less than par value.
7.3.2 VALUE OF SHARES OF COMMON STOCK SUBJECT TO INCENTIVE STOCK
OPTIONS. Each eligible employee may be granted Incentive Stock Options only
to the extent that, in the aggregate under this Plan and all incentive
stock option plans of the Company and any related corporation, such
Incentive Stock Options do not become exercisable for the first time by
such employee during any calendar year in a manner which would entitle the
employee to purchase more than $100,000 in fair market value (determined at
the time the Incentive Stock Options were granted) of Common Stock in that
year. Any options granted to an employee in excess of such amount will be
granted as Non-Qualified Options.
7.3.3 PERIOD OF OPTIONS. An option shall be exercisable during such
period of time as the Committee or Board of Directors may specify (subject
to subsection 7.4 below), but in the case of an Incentive Stock Option not
after the expiration of ten years (five years in the case of an Incentive
Stock Option granted to a Ten Percent Stockholder) from the date the option
is granted.
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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 office of Stock
Option Administration 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 the individual
exercising the option to remit to the Company an amount sufficient to
satisfy any federal, state, or local withholding tax requirements (or
to 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. 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.
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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 to
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 expressly permitted by the terms of the option, in shares of
unrestricted Common Stock at the time of such exercise or, if so permitted,
a combination of such cash and Common Stock. A Participant shall not have
the rights of a stockholder with respect to awards under the Plan except as
to stock actually issued to him.
7.3.6 LISTING OF STOCK, WITHHOLDING AND OTHER LEGAL REQUIREMENTS. The
Company shall not be obligated to deliver any stock until all federal,
state and international 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.
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7.3.8 DEATH, DISABILITY OR RETIREMENT OF A PARTICIPANT.
7.3.8.1 If a Participant's employment terminates by reason of
death, all options held by the Participant, to the extent exercisable
on the date of his death, may be exercised by his executor or
administrator or the person or persons to whom the option is
transferred by will or the applicable laws of descent and distribution
at any time or times within three years after the date of the
Participant's death. The options shall expire at the end of such
three-year period.
7.3.8.2 If a Participant's employment terminates by reason of
"Disability" (as defined below), all options held by the Participant,
to the extent exercisable on the date of termination by reason of
Disability (the "Disability Date"), may be exercised by the
Participant at any time or times within three years after the
Disability Date. The options shall expire at the end of such
three-year period. Notwithstanding the foregoing, in the event the
Participant fails to exercise an Incentive Stock Option within twelve
months after the Disability Date, such option will be treated as an
option which does not qualify as an Incentive Stock Option. Disability
means the disability of the Participant within the meaning of Section
22(e)(3) of the Code.
7.3.8.3 If a Participant's employment terminates by reason of
"Retirement" (as defined below), all options held by the Participant,
to the extent exercisable on the date of termination by reason of
Retirement (the "Retirement Date"), may be exercised by the
Participant at any time or times within three years after the
Retirement Date, The options shall expire at the end of such
three-year period. Notwithstanding the foregoing, in the event the
Participant fails to exercise an Incentive Stock Option within three
months after the Retirement Date, such option will be treated as an
option which does not qualify as an Incentive Stock Option. Retirement
means the voluntary retirement by a Participant from service with the
Company or any of its Subsidiaries (i) after the Participant has
attained at least fifty-five years of age and at least five years of
continuous service with the Company or any of its Subsidiaries or (ii)
after the Participant has attained at least twenty years of continuous
service with the Company or any of its Subsidiaries.
7.3.8.4 The provisions of this Section 7.3.8 shall not apply to
options held by a Participant who engages or has engaged in
Detrimental Activity (as defined in Section 7.3.10).
7.3.8.5 Notwithstanding anything in this Section 7.3.8 to the
contrary, (i) no option granted under the Plan may be exercised beyond
the date on which such option would otherwise expire pursuant to the
terms thereof, and (ii) no Incentive Stock Option granted under the
Plan may 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.
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7.3.9 TERMINATION OF EMPLOYMENT. If the employment of a Participant
terminates for any reason other than his death, Disability or Retirement,
all options held by the Participant shall thereupon expire at 5 p.m. United
States eastern time on the date of termination unless the option by its
terms, or the Committee or the Board of Directors by resolution, shall
expressly allow the Participant to exercise any or all of the options held
by him after termination; provided, that notwithstanding any such express
allowance, any such option which is an Incentive Stock Option shall in any
event expire no later than 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. The
Company shall have the sole discretion to set the date of termination for
purposes of the Plan, without regard to any notice period or other
obligation under the labor laws of the jurisdiction where the Participant
is employed. 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 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 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 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. 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
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reasonable attorneys' fees. 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.
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 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 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
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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 will become effective immediately upon its approval by the
stockholders of the Company at the Annual Meeting on May 9, 2001.
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