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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
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ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2000
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 1-9853
EMC Corporation 401(k) Savings Plan
(Full title of the Plan)
EMC Corporation
(Name of issuer of the securities held pursuant to the Plan)
35 Parkwood Drive, Hopkinton, Massachusetts 01748
(address of principal executive office)
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EMC CORPORATION
PAGE NO
Reports of Independent Accountants 2
Financial Statements:
Statement of Assets Available for Plan Benefits as of December 31, 2000 and 1999 3
Statement of Changes in Assets Available for Plan Benefits for the Years Ended 4
December 31, 2000 and 1999
Notes to Financial Statements 5-8
Supplemental Schedules*
Assets Held for Investment Purposes as of December 31, 2000 9
Signature 10
Exhibit Index 11
Exhibit 23.1 Consent of Independent Accountants 12
*Other schedules required by Section 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974 have been omitted because such schedules are not
applicable.
1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Plan Administrator of the
EMC Corporation 401(k) Savings Plan
In our opinion, the accompanying statements of assets available for benefits and
the related statements of changes in assets available for benefits present
fairly, in all material respects, the assets available for benefits of the EMC
Corporation 401(k) Savings Plan (the "Plan") at December 31, 2000 and 1999, and
the changes in assets available for benefits for the years then ended in
conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
As discussed in Note 1, the Data General Corporation Savings and Investment Plan
was merged into the Plan on January 1, 2000.
/s/ PricewaterhouseCoopers LLP
June 28, 2001
2
EMC CORPORATION
EMC CORPORATION 401(K) SAVINGS PLAN
STATEMENT OF ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 2000 AND 1999
2000 1999
ASSETS
Investments at fair value:
Common collective trust:
Fidelity Managed Income Portfolio Fund $ 50,561,019 * $ 11,671,606
------------------- -------------------
Mutual funds:
Fidelity Equity Income Fund 55,955,157 * 30,662,701 *
Fidelity Equity Income II Fund 28,106,229 28,832,326 *
Fidelity Independence Fund 56,339,953 * -
Fidelity Magellan Fund 157,472,593 * 102,602,595 *
Fidelity Puritan Fund 42,640,509 * 24,479,025 *
Fidelity Retirement Growth Fund - 32,763,979 *
Vanguard U.S. Growth Fund 22,031,324 17,604,505 *
Other mutual funds 172,004,624 56,340,445
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Total mutual funds 534,550,389 293,285,576
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EMC Corporation Stock Fund:
EMC Corporation common stock 23,942,128 11,468,519
Interest bearing cash 206,447 70,671
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Total EMC Corporation Stock Fund 24,148,575 11,539,190
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Loans to participants 12,438,538 5,864,808
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Total investments 621,698,521 322,361,180
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Receivables:
Employer contributions 7,746,205 4,219,316
Participant contributions 1,990,730 -
Investment income receivable 2,085 610
Receivable for investments sold - 160,130
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Total receivables 9,739,020 4,380,056
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Assets available for benefits $ 631,437,541 $ 326,741,236
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*Represents 5% or more of assets available for benefits.
The accompanying notes are an integral part of these financial statements.
3
EMC CORPORATION
EMC CORPORATION 401(K) SAVINGS PLAN
STATEMENT OF CHANGES IN ASSETS
AVAILABLE FOR PLAN BENEFITS FOR THE YEARS
ENDED DECEMBER 31, 2000 AND 1999
2000 1999
Additions:
Investment income:
Net appreciation (depreciation) of investments:
Mutual funds $ (73,396,752) $ 21,992,525
EMC Corporation common stock 1,586,182 5,681,930
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Total net appreciation (depreciation) of investments (71,810,570) 27,674,455
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Dividends and interest 50,449,885 23,964,802
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(21,360,685) 51,639,257
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Contributions:
Employer contributions 23,747,714 12,855,061
Participant contributions 75,226,508 38,464,491
Participant rollovers from other qualified plans 31,199,984 22,046,745
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130,174,206 73,366,297
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Total additions 108,813,521 125,005,554
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Deductions:
Benefits paid to participants 33,306,222 7,667,131
Administrative fees 11,239 -
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Total deductions 33,317,461 7,667,131
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Net increase prior to plan merger 75,496,060 117,338,423
Merger of plan assets from Data General
Corporation Savings and Investment Plan 229,200,245 -
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Net increase 304,696,305 117,338,423
Assets available for benefits:
Beginning of year 326,741,236 209,402,813
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End of year $ 631,437,541 $ 326,741,236
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The accompanying notes are an integral part of these financial statements.
4
EMC CORPORATION
EMC CORPORATION 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following description of the EMC Corporation 401(k) Savings Plan
(the "Plan") provides only general information. Participants should
refer to the Plan agreement for a more complete description of the
Plan's provisions.
GENERAL
The Plan is a contributory defined contribution plan established
January 1, 1983 for the purpose of providing an opportunity for
retirement income and increased savings to the employees of EMC
Corporation (the "Company") who meet the length of service
requirements. Plan assets acquired under this Plan as a result of
contributions, investment income, and other additions to the Plan will
be administered for the exclusive benefit of the participants and their
beneficiaries. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
CONTRIBUTIONS
During 2000, participants could elect to contribute an amount not to
exceed, in the aggregate, between 1% and 17% (19% as of January 1,
2001) of their compensation on a pretax basis while participating in
the Plan. Participants may also contribute amounts representing
distributions from other qualified plans. In any Plan year, the
Company may contribute to participants' accounts a quarterly matching
contribution equal to a percentage of the participant's compensation
contributed to the Plan as determined by the Company's Board of
directors up to a maximum quarterly matching contribution of $750.
In addition, discretionary Company profit sharing contributions
based on different discretionary goals established for separate
business units within the Company may be made upon a vote of the Board
of Directors. To be eligible for an allocation of Company quarterly
matching contributions, a participant must be employed by the Company
on the last day of the calendar quarter. To be eligible for an
allocation of discretionary Company profit sharing contributions, a
participant must have completed at least 1,000 hours of service during
the Plan year and be employed by the Company on the last day of the
Plan year. Contributions are subject to certain limitations under the
Internal Revenue Code of 1986, as amended (the "Code"). During 2000,
the Company did not make any discretionary profit sharing
contributions.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution, the Company's discretionary matching contribution and an
allocation of the profit sharing contributions and Plan earnings and
debited with applicable expenses. Allocations are based on participant
earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
VESTING AND FORFEITURE
Participants are immediately vested 100% in their voluntary
contributions, rollover contributions, Company discretionary matching
contributions plus the investment earnings arising from these
contributions. Company discretionary profit sharing contributions are
subject to a vesting schedule based on the number of years of
continuous service as follows:
5
YEARS OF SERVICE VESTED PERCENTAGE
Less than 1 year 0%
1 year but less than 2 25%
2 years but less than 3 50%
3 years but less than 4 75%
4 years or more 100%
Participants' interest in their accounts shall become 100% vested and
nonforfeitable without regard to their credited years of service if
they are employed by the Company on or after age 65, incur a permanent
and total disability or die while employed by the Company.
If a participant who is not fully vested terminates employment with the
Company, the participant shall be entitled to the vested portion of
their account. The nonvested portion is forfeited and will be applied
to the payment of Plan expenses.
INVESTMENT OPTIONS
Participants elect to invest the contributions to their accounts in
five percent increments in the following options:
FIDELITY FUNDS AMERICAN FUNDS
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Fidelity Managed Income Portfolio Fund Washington Mutual Fund
(Stable Value Fund) Europacific Growth Fund
Fidelity Magellan Fund T. ROWE PRICE FUNDS
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Fidelity Puritan Fund Mid Cap Growth Fund
Fidelity Equity Income Fund Value Fund
Fidelity Retirement Money Market Fund Brandywine Growth Fund
Fidelity Equity Income II Fund Domini Social Equity Fund
Fidelity Conservative Strategy Fund Janus Worldwide Fund
Fidelity Moderate Strategy Fund PIMCO Total Return Adm Fund
Fidelity Aggressive Strategy Fund Franklin Small Cap Growth Fund
Fidelity Spartan U.S. Equity Index Fund Templeton Foreign A Fund
Fidelity Independence Fund (formerly known as Vanguard U.S. Growth Fund
the Fidelity Retirement Growth EMC Corporation Stock Fund
Fund)
Fidelity Low Price Stock Fund
Fidelity Freedom Income Fund
Fidelity Freedom 2000 Fund
Fidelity Freedom 2010 Fund
Fidelity Freedom 2020 Fund
Fidelity Freedom 2030 Fund
Fidelity Spartan Extended Market Index
Fund
Participants may change their investment options as determined by the
rules applicable to each investment.
6
PAYMENT OF BENEFITS
Benefits are payable upon normal retirement age (65), death, separation
from service or proven hardship. Participants who were a Plan member as
of December 31, 1988 may elect to receive the value of their vested
interest in his or her account in the form of an installment or in a
lump-sum distribution. Plan members after such date will receive their
vested interest in his or her account in a lump-sum distribution. In
any event, payment of benefits must commence when the participant
reaches age 70 1/2 or, if later, following the year they terminate
employment. However, a 5% owner of the CompanY will be required to
begin receiving minimum distributions from their account by the April 1
following attainment of age 70 1/2 regardless of whether they have
terminated employment at that time.
PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their fund accounts a minimum of $1,000 up
to a maximum equal to the lesser of $50,000 or one-half of the
participant's vested account balance. Loan terms range from 1-5 years
or up to 10 years for the purchase of a primary residence. The loans
are secured by the balance in the participant's account and bear
interest at a rate commensurate with local prevailing rates as
determined by the Company, as Plan administrator. Interest rates ranged
from 8.25% - 10.5% for 2000 and 8.75% - 10% for 1999. Principal and
interest are paid ratably through payroll deductions.
MERGER INTO PLAN
On October 12, 1999, the Company acquired Data General Corporation. In
connection with the acquisition, the Data General Corporation Savings
and Investment Plan (the "Data General Plan") merged into the Plan on
January 1, 2000 resulting in the transfer of assets of $223,571,109 and
the transfer of participant loans of $5,629,136 into the Plan. Former
participants of the Data General Plan, eligible to participate in the
Plan, began to participate in the Plan on January 1, 2000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared using the accrual
method of accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
the Plan administrator to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual results
may differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments are valued at fair value. Investments in shares of mutual
funds and the common collective trust are valued based on net asset
value announced by the fund at year-end. The Company's common stock,
par value $.01 per share ("Common Stock"), is valued at the quoted
market price on the last business day of the Plan year. Loans to
participants are valued at cost plus accrued interest, which
approximates fair value.
The Plan presents in the statements of changes in assets available for
plan benefits net appreciation (depreciation) in the fair value of its
investments which consists of realized gains or losses and unrealized
appreciation (depreciation) on investments. The cost of investments is
determined on the average cost basis in calculating realized gains or
losses.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.
7
EXPENSES OF THE PLAN
Administrative expenses, including legal and participant accounting,
and other costs of administrating the Plan, and all expenses directly
relating to the investments are charged to and paid by the Plan unless
paid by the Company. The Company pays the majority of expenses except
certain transaction fees.
TERMINATION OF THE PLAN
Although it has not expressed any intent to do so, the Company has the
right to terminate the Plan. The Plan administrator, upon termination,
shall cause the assets of the Plan to be allocated as described in the
Plan agreement. In the event of Plan termination, participants will
become 100% vested in their accounts.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
3. TAX STATUS OF THE PLAN
The Internal Revenue Service has determined and informed the Plan
sponsor by a letter dated November 18, 1998 that the Plan and related
trust are designed in accordance with applicable sections of the Code.
The Plan has since been amended and a new letter has not been
requested. Management has asserted the Plan, as amended, and its
operations have been and continue to be in accordance with all
applicable provisions of the Code and ERISA. Therefore, no provisions
for income taxes are required.
4. RELATED PARTY TRANSACTIONS
The Plan invests in Common Stock. During the years ended December 31,
2000 and 1999, the Plan purchased shares of Common Stock having values
of $12,916,668 and $10,822,030, respectively, and sold shares of Common
Stock having values of $1,778,738 and $389,052, respectively. The total
value of shares held of Common Stock was $23,942,128 and $11,468,519 at
December 31, 2000 and 1999, respectively.
Certain Plan investments are shares of mutual funds managed by FMR
Corp. FMR Corp. is a related party to the trustee as defined by the
Plan and, therefore, these transactions qualify as party-in-interest
transactions. Fees paid by the Plan for the investment management and
recordkeeping services amounted to $11,239 for the year ended December
31, 2000. Loans to participants also qualify as party-in-interest
transactions.
5. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND PRESENTATION OF ASSET
INFORMATION IN FORM 5500
As described in Note 1 of these financial statements, the Data General
Plan was merged into the Plan as of January 1, 2000 and the December
31, 1999 financial statements of the Plan do not reflect the merger.
The Form 5500 for the Plan shows the transfer of assets occurring on
December 31, 1999. The two approaches reflect agreement that the assets
and participants had moved to the respective recipient plan as of
January 1, 2000. The only difference concerns whether the transfer in
from the Data General Plan occurred as of January 1, 2000 or, instead,
occurred the moment before that - i.e., as of the close of business on
December 31, 1999.
8
EMC CORPORATION
EMC CORPORATION 401(K) SAVINGS PLAN
ASSETS HELD FOR INVESTMENT PURPOSES
SUPPLEMENTAL SCHEDULE
DECEMBER 31, 2000
CURRENT
SHARES/UNITS DESCRIPTION VALUE
Common Collective Trust:
50,561,019 Fidelity Managed Income Portfolio Fund* $50,561,019
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Mutual Funds:
Fidelity Investment Mutual Funds:
1,319,971 Magellan Fund* 157,472,593
2,264,499 Puritan Fund* 42,640,509
1,047,261 Equity Income Fund* 55,955,157
13,767,634 Retirement Money Market Fund* 13,767,634
1,177,964 Equity Income II Fund* 28,106,229
67,732 Conservative Strategy Fund* 860,878
206,309 Moderate Strategy Fund* 2,805,806
418,974 Aggressive Strategy Fund* 6,326,508
2,559,743 Independence Fund* 56,339,953
313,099 Low Price Stock Fund* 7,238,857
12,445 Freedom Income Fund* 139,014
42,740 Freedom 2000 Fund* 504,761
167,770 Freedom 2010 Fund* 2,321,930
309,839 Freedom 2020 Fund* 4,511,259
363,666 Freedom 2030 Fund* 5,454,984
45,559 Spartan Extended Market Index Fund* 1,217,328
473,885 Spartan U.S. Equity Index Fund* 22,182,574
American Funds:
155,092 Washington Mutual Fund 4,502,312
419,382 Europacific Growth Fund 13,147,627
T. Rowe Price Funds:
205,998 Mid Cap Growth Fund 8,196,646
145,870 Value Fund 2,793,415
450,520 Brandywine Growth Fund 13,240,783
420,478 Janus Worldwide 23,908,407
25,571 Domini Social Equity 890,203
638,439 PIMCO Total Return Adm Fund 6,633,381
732,596 Franklin Small Cap Growth Fund 28,812,988
246,357 Templeton Foreign A Fund 2,547,329
796,793 Vanguard U.S. Growth Fund 22,031,324
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360,032 Total mutual funds 534,550,389
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EMC Corporation common stock* 23,942,128
Interest bearing cash 206,447
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Total EMC Corporation Stock Fund 24,148,575
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Loans to participants* 12,438,538
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Total $621,698,521
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*Party-in-interest.
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustee (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
EMC CORPORATION 401(K) SAVINGS PLAN
By: EMC Corporation, Plan Administrator
Date: June 28, 2001 By: /s/ William J. Teuber, Jr.
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William J. Teuber, Jr.
Senior Vice President and Chief Financial Officer
(PRINCIPAL FINANCIAL OFFICER AND CHIEF ACCOUNTING
OFFICER)
10
EXHBIT INDEX
Exhibit 23.1 Consent of Independent Accountants
11