EMC 2003 Annual Report Download - page 63

2003 2002 2001
Net income (loss) $ 496,108 $ (118,706) $ (507,712)
Weighted average common shares outstanding 2,211,544 2,206,294 2,211,273
Weighted common stock equivalents 26,112 – –
Total weighted average shares 2,237,656 2,206,294 2,211,273
Net income (loss) per share, diluted $ 0.22 $ (0.05) $ (0.23)
Options to acquire 92.0 million, 177.6 million and 151.6 million shares of Common Stock as of December 31, 2003, 2002 and 2001, respectively were
excluded from the calculation of diluted earnings per share because of their antidilutive effect. The convertible debt (see Note D) was also excluded from the
calculation of diluted earnings per share in 2003 because of its antidilutive effect.
Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss), which is presented net of tax, consists of the following (table in thousands):
December 31,
2003
December 31,
2002
Foreign currency translation adjustments, net of taxes (benefit) of $5,737 and $(1,940) $ (10,873) $ (11,941)
Equity adjustment for minimum pension liability, net of tax benefit of $0 and $53,880 – (89,800)
Unrealized gains on investments, net of taxes of $7,706 and $27,789 13,070 48,253
$ 2,197 $ (53,488)
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EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Reclassification adjustments between other comprehensive income (loss) and the statement of operations, consist of the following (table in thousands):
Year Ended December 31,
2003 2002 2001
Realized gains on investments, net of taxes of $5,461, $16,397 and $8,223 $ 25,039 $47,403 $23,737
Realized gains (losses) on derivatives, net of taxes (benefit) of $(1,557), $(1,054) and $8,210 (14,017) (9,487) 22,197
Preferred Stock
Our Series Preferred Stock may be issued from time to time in one or more series, with such terms as our Board of Directors may determine, without
further action by our stockholders.
Stock Option Plans
In May 2003, our stockholders approved the EMC Corporation 2003 Stock Plan (the "2003 Plan"). The 2003 Plan provides for the grant of stock options,
restricted stock and restricted stock units. The exercise price for a stock option shall not be less than 100% of the fair market value of the Common Stock on
the date of grant. Incentive stock options expire no later than ten years after the date of grant. Restricted stock is Common Stock that is subject to a risk of
forfeiture or other restrictions that will lapse upon satisfaction of specified conditions. Restricted stock units represent the right to receive shares of Common
Stock in the future, with the right to future delivery of the shares subject to a risk of forfeiture or other restrictions that will lapse upon satisfaction of specified
conditions. Awards of restricted stock or restricted stock units that vest by the passage of time only will not vest fully in less than three years after the date of
grant. A total of 50.0 million shares of Common Stock have been reserved for issuance under the 2003 Plan, of which no more than 10.0 million shares of
Common Stock may be issued pursuant to awards of restricted stock or restricted stock units.
In addition, we have three stock option plans (the "1985 Plan", the "1993 Plan", and the "2001 Plan"). A total of 548.0 million shares of Common Stock
have been reserved for issuance under the plans. Under the terms of each of the plans, the exercise price of incentive stock options issued must be equal to at
least the fair market value of the Common Stock on the date of grant. In the event that non-qualified stock options are granted under the 1985 Plan, the
exercise price may be less than the fair market value at the time of grant, but in the case of employees not subject to Section 16 of the Securities Exchange Act
of 1934 ("Section 16"), not less than par value which is $.01 per share, and in the case of employees subject to Section 16, not less than 50% of the fair market
value on the date of grant. In the event that non-qualified stock options are granted under the 1993 Plan or the 2001 Plan, the exercise price may be less than
the fair market value at the time of grant but not less than par value.
In 2003, 2,207,500 shares of restricted stock were granted to certain employees under the 2003 Plan. Of the shares granted, 42,500 shares vest ratably
over three years. The remaining shares vest at the end of five years; however, in the event that certain performance-related criteria are met, the vesting
accelerates. The grants have been recorded as deferred compensation and are being amortized over the vesting periods of the awards.
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