EMC 2006 Annual Report Download - page 95

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
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 shareholders.
Equity Plans
The EMC Corporation 2003 Stock Plan (the "2003 Plan") provides for the grant of stock options, stock appreciation rights, 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 our common stock on the date of grant.
Options generally become exercisable in annual installments over a period of three to five years after the date of grant and expire ten years after the date of
grant. Incentive stock options will 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 only by the passage of time will not vest fully in less than three years after the date of grant. The
2003 Plan allows us to grant up to 200.0 million shares of common stock, no more than 60.0 million shares of which may be issued pursuant to awards of
restricted stock or restricted stock units.
In addition to the 2003 Plan, we have three employee stock option plans (the "1985 Plan," the "1993 Plan," and the "2001 Plan"). Under the terms of
each of the three plans, the exercise price of incentive stock options issued must be equal to at least the fair market value of our 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, not less than par value (which is $0.01 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.
A total of 748.0 million shares of common stock have been reserved for issuance under the above four plans.
We have a stock option plan that provides for the grant of stock options to members of our Board of Directors (the "Directors Plan"). A total of
14.4 million shares of common stock have been reserved for issuance under the Directors Plan. The exercise price for each option granted under the Directors
Plan will be at a price per share determined at the time the option is granted, but not less than 50% of the fair market value of common stock on the date of
grant.
At December 31, 2006, there was an aggregate of approximately 68.0 million shares of common stock available for issuance pursuant to future grants
under the 1985 Plan, the 1993 Plan, the 2001 Plan, the 2003 Plan and the Directors Plan, which includes up to 28.2 million shares available for future issuance
under the 2003 Stock Plan in the form of awards of restricted stock or restricted stock units.
We have, in connection with the acquisition of various companies, assumed the stock option plans of these companies. We do not intend to make future
grants under any of such plans.
On July 1, 2004, the Massachusetts Business Corporation Act (the "MBCA") became effective and eliminated treasury shares. Under the MBCA, shares
repurchased by Massachusetts corporations constitute authorized but unissued shares. As a result, all of our former treasury shares were automatically
converted to unissued shares on July 1, 2004 and have been accounted for as a reduction of common stock (at par value) and additional paid-in capital.
We utilize both authorized and unissued shares (including repurchased shares) to satisfy all shares issued under our equity plans. Our Board of
Directors has authorized the repurchase of 500.0 million shares of our common stock. In 2006, we repurchased 227.3 million shares of our common stock. Of
the 500.0 million shares authorized for repurchase, we have cumulatively repurchased 359.8 million shares at a total cost of $4.4 billion, leaving a remaining
balance of 140.2 million shares authorized for future repurchases. In 2006, the Board also authorized a one-time repurchase of up to 100.0 million shares in
conjunction with our issuance of the Notes. Of this amount, 75.0 million shares were repurchased using $945.8 million of the net proceeds from the Notes.
In 2006, we repurchased approximately $3.7 billion of our common stock and redeemed the Documentum Notes for $126.1 million.
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