EMC 2004 Annual Report Download - page 97

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
to 98.0 million shares from 73.0 million shares. Options to purchase shares are granted twice yearly, on January 1 and July 1, and are exercisable on the
succeeding June 30 or December 31. Grants for the last three years are as follows (shares in thousands):
2004 2003 2002
Shares 9,758 10,155 11,012
Weighted average exercise price $ 9.58 $ 6.69 $ 5.81
Weighted average fair value $ 3.51 $ 2.40 $ 2.09
O. Related Party Transactions
We have retained a company owned by an individual who is the brother and uncle of certain members of our Board of Directors as a broker to provide
various forms of corporate insurance. We paid such company approximately $8,000 and $0.6 million in 2003 and 2002, respectively. Such amounts include
broker's fees of $75,000 in 2002.
In 2004, 2003 and 2002, we leased certain real estate from a company owned by a member of our Board of Directors and such Director's siblings, for
which payments aggregated approximately $2.9 million, $2.5 million and $2.2 million, respectively. Such leases were initially assumed by us as a result of
our acquisition of Data General in 1999 and one lease was renewed for a ten-year term in 2003.
We purchased from two companies, upgrades to and licenses to, software products, for which payments aggregated approximately $0.3 million,
$0.3 million and $0.1 million in 2004, 2003 and 2002, respectively. We sublet facilities to one of these companies from which we were paid $30,000 in 2004.
A member of our Board of Directors is Chairman of the Board of Directors of one of these companies and is managing partner and general partner in a limited
partnership which is currently a stockholder of both such companies.
EMC is a large global organization which engages in thousands of purchase, sales and other transactions annually. We enter into purchase and sales
transactions with other publicly and privately held companies, universities and hospitals in which members of our Board of Directors or executive officers are
executive officers or members of boards of these entities. We enter into these arrangements in the ordinary course of our business.
From time to time, we make strategic investments in privately-held companies that develop software, hardware and other technologies or provide services
supporting our technologies. We may purchase from or make sales to these organizations.
We believe that the terms of each of these arrangements described above were fair and not less favorable to us than could have been obtained from
unaffiliated parties.
P. Risks and Uncertainties
Our future results of operations involve a number of risks and uncertainties. Factors that could affect our future operating results and cause actual results
to vary materially from expectations include, but are not limited to: adverse changes in general economic or market conditions; delays or reductions in
information technology spending; risks associated with acquisitions and investments, including the challenges and costs of integration, restructuring and
achieving anticipated synergies; competitive factors, including but not limited to pricing pressures and new product introductions; the relative and varying
rates of product price and component cost declines and the volume and mixture of product and services revenues; component and product quality and
availability; the transition to new products, the uncertainty of customer acceptance of new product offerings, and rapid technological and market change;
insufficient, excess or obsolete inventory; war or acts of terrorism; the ability to attract and retain highly qualified
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