EXHIBIT 10.1
EMC CORPORATION
1985 STOCK OPTION PLAN, as amended January 22, 1997
1. PURPOSE.
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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.
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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.
3. ADMINISTRATION.
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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
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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.
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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 36,000,000, 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.
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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.
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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.
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7. PROVISIONS OF OPTIONS.
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7.1 Incentive Stock Options or Other Options. Options granted under
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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
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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
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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
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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
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Options. Each eligible employee may be granted Incentive Stock Options
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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
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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.
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7.3.4 Exercise of Options.
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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
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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
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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 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.
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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
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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
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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
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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
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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
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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.
7.4 Authority of the Committee. The Committee shall have the authority,
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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.
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8. CHANGES IN STOCK.
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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 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.
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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.
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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
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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.
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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.
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