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Table of Contents
VMWARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
VMware Equity Plan
In June 2007, VMware adopted its 2007 Equity and Incentive Plan (the “2007 Plan”). In May 2009, VMware amended its 2007 Plan to
increase the number of shares available for issuance by 20.0 million shares for total shares available for issuance of 100.0 million. Awards under
the 2007 Plan may be in the form of stock options or other stock-based awards, including awards of restricted stock. The exercise price for a
stock option awarded under the 2007 Plan shall not be less than 100% of the fair market value of VMware Class A common stock on the date of
grant. Most options granted under the 2007 Plan vest 25% after the first year and then monthly thereafter over the following three years. All
options granted pursuant to the 2007 Plan expire between six and seven years from the date of grant. Most restricted stock awards granted under
the 2007 Plan have a three-year to four-year period over which they vest. VMware utilizes both authorized and unissued shares to satisfy all
shares issued under the 2007 Plan.
VMware Employee Stock Purchase Plan
In 2009, 0.9 million shares of Class A common stock were purchased under the Employee Stock Purchase Plan (the “ESPP”) at a purchase
price per share of $20.14. The total cash proceeds from the purchase of these shares under the ESPP were $18.3 million. In 2008, 1.7 million
shares of Class A common stock were purchased under the ESPP at a weighted-average purchase price per share of $28.05. The total cash
proceeds from the purchase of these shares under the ESPP were $46.9 million. As part of the 1.7 million shares purchased in 2008, employees
purchased 0.6 million shares under the ESPP at a purchase price per share of $24.65. The purchase of 0.6 million shares related to the
December 31, 2007 purchase, which was completed in January 2008. The total cash proceeds from the December 31, 2007 purchase under the
ESPP were $15.7 million. In 2007, no shares were purchased under the ESPP. In 2009, the timing of the purchase plan was amended, and as a
result, the next option to purchase shares occurred in January 2010. $21.6 million of ESPP withholdings were accrued as of December 31, 2009
for this purchase.
In June 2007, VMware adopted its 2007 Employee Stock Purchase Plan that is intended to be qualified under Section 423 of the Code. A
total of 6.4 million shares of VMware Class A common stock were reserved for future issuance. Under the ESPP, eligible VMware employees
are granted options to purchase shares at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market
value at the time of exercise. Options to purchase shares were first granted under the ESPP on August 13, 2007, the date on which VMware’s S-
1 Registration Statement was declared effective by the SEC, and became exercisable on December 31, 2007. Options to purchase shares are
generally granted twice yearly.
EMC Stock Purchase Plan
Historically, under EMC’s 1989 Employee Stock Purchase Plan (the “1989 Plan”), eligible VMware employees were allowed to purchase
shares of EMC’s common stock through payroll deductions at the lower of 85% of the fair market value of the stock at the time of grant or 85%
of the fair market value at the time of exercise, however this look-back feature was eliminated as of July 1, 2009. Options to purchase shares
were granted twice yearly, on January 1 and July 1, and were exercisable on the succeeding June 30 and December 31. As a result of the
completion of the IPO in August 2007, employees eligible for the VMware 2007 Employee Stock Purchase Plan were no longer able to
participate in the EMC 1989 Employee Stock Purchase Plan after the June 30, 2007 purchase. In 2007, 0.6 million shares, were purchased under
the 1989 Plan by VMware employees at weighted-average purchase price per share of $11.36. Total cash proceeds to EMC from the purchase of
shares under the 1989 Plan by VMware employees in 2007 were $7.2 million. These amounts were not material in 2009 and 2008.
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