-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G3eSaBs4Z8UE6gSwuPLKBYKBMCfRH4n04W0tOrsO5pP6G1QmfuZk4BQs366f9Qxj MAF9m3a+bSDqSCSlTZkeKQ== 0000927016-99-003085.txt : 19990824 0000927016-99-003085.hdr.sgml : 19990824 ACCESSION NUMBER: 0000927016-99-003085 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990823 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMC CORP CENTRAL INDEX KEY: 0000790070 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER STORAGE DEVICES [3572] IRS NUMBER: 042680009 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-09853 FILM NUMBER: 99697870 BUSINESS ADDRESS: STREET 1: 35 PARKWOOD DRIVE CITY: HOPKINTON STATE: MA ZIP: 01748-9103 BUSINESS PHONE: 5084351000 MAIL ADDRESS: STREET 1: 35 PARKWOOD DRIVE CITY: HOPKINTON STATE: MA ZIP: 01748-9103 11-K 1 FORM 11-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________ FORM 11-K ________________________ 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, 1998 [_] 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) ================================================================================ Financial Statements of EMC Corporation 401(k) Savings Plan The following audited financial statements with independent auditors' report thereon are enclosed with this report: 1. Statement of Net Assets Available for Plan Benefits as of December 31, 1998 and 1997. 2. Statement of Changes in Net Assets Available for Plan Benefits for the years ended December 31, 1998 and 1997. Exhibit 23.1 Consent of Independent Auditors. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. EMC Corporation 401(k) Savings Plan Date: August 23, 1999 By: /s/ William J. Teuber, Jr. -------------------------- William J. Teuber, Jr. Vice President and Chief Financial Officer 3 EMC CORPORATION 401(K) SAVINGS PLAN Financial Statements and Supplemental Schedules December 31, 1998 and 1997 (With Independent Auditors' Report Thereon) TABLE OF CONTENTS
Independent Auditors' Report ...................................................... 1 Statement of Net Assets Available for Plan Benefits, December 31, 1998 and 1997 ... 2-4 Statement of Changes in Net Assets Available for Plan Benefits, for the years ended December 31, 1998 and 1997 .............................. 5-7 Notes to Financial Statements...................................................... 8-14 Supplemental Schedules: Line 27a, Schedule of Assets Held for Investment Purposes, December 31, 1998 and 1997............................................... 15-16 Line 27d, Schedule of Reportable Transactions, December 31, 1998 and 1997............................................... 17-18
[LETTERHEAD OF RATTET & COHEN, P.C. APPEARS HERE] Independent Auditors' Report ---------------------------- To the Trustees of EMC Corporation 401(k) Savings Plan We have audited the accompanying statements of net assets available for benefits of EMC Corporation 401(k) Savings Plan as of December 31, 1998 and 1997, and the related statements of changes in net assets available for benefits for the years then ended. 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 in accordance with generally accepted auditing standards. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of EMC Corporation 401(k) Savings Plan as of December 31, 1998 and 1997, and the changes in its net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transactions are presented for purposes of additional analysis and are not a required part of the basic financial statements but are 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. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Rattet & Cohen, P.C. /s/ Rattet & Cohen P.C. Certified Public Accountants July 26, 1999 EMC CORPORATION 401(K) SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1998
Fidelity Fidelity Retirement Fidelity Stable Fidelity Fidelity Equity Money Retirement Value Magellan Puritan Income Market Growth Fund* Fund Fund Fund Fund Fund ------ ------- -------- -------- ---------- ---------- ASSETS Investments: Investment in common collective trust 10,530,937 0 0 0 0 0 Mutual funds, at fair value 0 64,889,425 22,976,627 27,911,933 7,182,063 17,867,953 EMC Corporation Stock, at fair value 0 0 0 0 0 0 Participant notes receivable 0 0 0 0 0 0 Receivables: Employer's match contributions 0 0 0 0 0 0 Participant's contributions 0 0 0 0 0 0 ---------- ---------- ---------- ---------- --------- ---------- NET ASSETS AVAILABLE FOR BENEFITS 10,530,937 64,889,425 22,976,627 27,911,933 7,182,063 17,867,953 ========== ========== ========== ========== ========= ========== American American Pimco Fidelity Funds Funds Total Equity Brandywine Washington Europacific Return Income II Growth Mutual Growth Adm Fund Fund Fund Fund Fund --------- ---------- ---------- ----------- ------------ ASSETS Investments: Investment in common collective trust 0 0 0 0 0 Mutual funds, at fair value 26,502,922 1,068,416 2,000,267 854,220 1,028,949 EMC Corporation Stock, at fair value 0 0 0 0 0 Participant notes receivable 0 0 0 0 0 Receivables: Employer's match contributions 0 0 0 0 0 Participant's contributions 0 0 0 0 0 ---------- --------- --------- ------- --------- NET ASSETS AVAILABLE FOR BENEFITS 26,502,922 1,068,416 2,000,267 854,220 1,028,949 ========== ========= ========= ======= =========
* Consists of the Managed Income Portfolio Fund, part of the Fidelity Group Trust. The accompanying notes are an integral part of these financial statements 2 EMC CORPORATION 401(K) SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1998 (continued)
Franklin Vanguard Small Cap Templeton U.S. Strategy Funds ------------------------------------ Growth Foreign A Growth Conservative Moderate Aggressive Fund Fund Fund Fund Fund Fund --------- --------- -------- ------------ -------- ---------- ASSETS Investments: Investment in common collective trust 0 0 0 0 0 0 Mutual funds, at fair value 2,510,045 532,404 6,639,457 485,136 978,175 2,317,380 EMC Corporation Stock, at fair value 0 0 0 0 0 0 Participant notes receivable 0 0 0 0 0 0 Receivables: Employer's match contributions 0 0 0 0 0 0 Participant's contributions 0 0 0 0 0 0 --------- --------- --------- ------- ------- --------- NET ASSETS AVAILABLE FOR BENEFITS 2,510,045 532,404 6,639,457 485,136 978,175 2,317,380 ========= ========= ========= ======= ======= ========= Spartan EMC U.S. Corporation Participant Total Equity Index Stock Notes All Fund Fund Fund Other Funds ------------ ----------- ----------- -------------- ------------ ASSETS Investments: Investment in common collective trust 0 0 0 0 10,530,937 Mutual funds, at fair value 4,527,546 0 0 0 190,272,918 EMC Corporation Stock, at fair value 0 1,266,735 0 0 1,266,735 Participant notes receivable 0 0 4,539,226 0 4,539,226 Receivables: Employer's match contributions 0 0 0 2,110,964 2,110,964 Participant's contributions 0 0 0 682,033 682,033 ------------ ----------- ----------- -------------- ----------- NET ASSETS AVAILABLE FOR BENEFITS 4,527,546 1,266,735 4,539,226 2,792,997 209,402,813 ============ =========== =========== ============== ===========
The accompanying notes are an integral part of these financial statements 3 EMC CORPORATION 401(K) SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1997
Fidelity Fidelity Retirement Stable Fidelity Fidelity Equity Money Value Magellan Puritan Income Market Fund* Fund Fund Fund Fund -------- ---------- ---------- ---------- ------------ ASSETS - Investments: Investment in common collective trust 8,737,070 0 0 0 0 Mutual funds, at fair value 0 43,342,966 17,996,065 24,527,485 5,933,100 Participant notes receivable 0 0 0 0 0 Receivables: Employer's match contributions 0 0 0 0 0 Miscellaneous 0 0 0 0 0 --------- ---------- ---------- ---------- --------- NET ASSETS AVAILABLE FOR BENEFITS 8,737,070 43,342,966 17,996,065 24,527,485 5,933,100 ========= ========== ========== ========== ========= American Fidelity Fidelity Funds Retirement Equity Brandywine Washington Participant Growth Income II Growth Mutual Notes Fund Fund Fund Fund Fund ------------ ----------- ------------ ------------ ------------- ASSETS - Investments: Investment in common collective trust 0 0 0 0 0 Mutual funds, at fair value 11,467,279 19,952,003 324 346 0 Participant notes receivable 0 0 0 0 3,230,904 Receivables: Employer's match contributions 0 0 0 0 0 Miscellaneous 0 0 0 0 0 ---------- ---------- ---------- ---------- --------- NET ASSETS AVAILABLE FOR BENEFITS 11,467,279 19,952,003 324 346 3,230,904 ========== ========== ========== ========== ========= Total All Other Funds --------- ----------- ASSETS - Investments: Investment in common collective trust 0 8,737,070 Mutual funds, at fair value 0 123,219,568 Participant notes receivable 0 3,230,904 Receivables: Employer's match contributions 1,536,979 1,536,979 Miscellaneous 1,085 1,085 --------- ---------- NET ASSETS AVAILABLE FOR BENEFITS 1,538,064 136,725,606 ========= ===========
* Consists of the Managed Income Portfolio Fund, part of the Fidelity Group Trust. The accompanying notes are an integral part of these financial statements. 4 EMC CORPORATION 401(K) SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1998
Fidelity Fidelity Retirement Stable Fidelity Fidelity Equity Money Value Magellan Puritan Income Market Fund* Fund Fund Fund Fund -------- ---------- ---------- ---------- ------------ Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments 0 12,634,647 867,663 1,533,190 0 Interest and divided income 527,931 2,901,804 2,286,817 1,572,585 336,828 ---------- ---------- ---------- ---------- --------- 527,931 15,536,451 3,154,480 3,105,775 336,828 ---------- ---------- ---------- ---------- --------- Contributions: Employer's match contributions 366,450 1,672,418 754,219 944,348 313,026 Participants' contributions 1,243,248 6,415,496 2,888,571 3,705,435 1,027,069 Participants' rollovers 357,192 2,841,598 794,749 926,525 551,944 ---------- ---------- ---------- ---------- --------- 1,966,890 10,929,512 4,437,539 5,576,308 1,892,039 ---------- ---------- ---------- ---------- --------- Total additions 2,494,821 26,465,963 7,592,019 8,682,083 2,228,867 Deductions from net assets attributed to: Benefit payments to participants 255,393 2,262,709 641,586 1,309,299 683,366 ---------- ---------- ---------- ---------- --------- Increase prior to interfund transfers 2,239,428 24,203,254 6,950,433 7,372,784 1,545,501 Interfund transfers (445,561) (2,656,795) (1,969,871) (3,988,336) (296,538) ---------- ---------- ---------- ---------- --------- Net increase 1,793,867 21,546,459 4,980,562 3,384,448 1,248,963 Net assets available for benefits: Beginning of year 8,737,070 43,342,966 17,996,065 24,527,485 5,933,100 ---------- ---------- ---------- ---------- --------- End of year 10,530,937 64,889,425 22,976,627 27,911,933 7,182,063 ========== ========== ========== ========== ========= American Fidelity Fidelity Funds Retirement Equity Brandywine Washington Growth Income II Growth Mutual Fund Fund Fund Fund ------------ ----------- ------------ ------------ Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments 2,528,406 2,347,437 (8,431) 38,727 Interest and divided income 1,783,051 2,391,715 10,697 185,333 ---------- ---------- --------- --------- 4,311,457 4,739,152 2,266 224,060 ---------- ---------- --------- --------- Contributions: Employer's match contributions 677,833 900,790 45,554 56,991 Participants' contributions 2,535,294 3,497,924 245,385 301,832 Participants' rollovers 692,166 1,054,334 155,598 347,454 ---------- ---------- --------- --------- 3,905,293 5,453,048 446,537 706,277 ---------- ---------- --------- --------- Total additions 8,216,750 10,192,200 448,803 930,337 Deductions from net assets attributed to: Benefit payments to participants 819,559 1,107,446 17,606 2,507 ---------- ---------- --------- --------- Increase prior to interfund transfers 7,397,191 9,084,754 431,197 927,830 Interfund transfers (996,517) (2,533,835) 636,895 1,072,091 ---------- ---------- --------- --------- Net increase 6,400,674 6,550,919 1,068,092 1,999,921 Net assets available for benefits: Beginning of year 11,467,279 19,952,003 324 346 ---------- ---------- --------- --------- End of year 17,867,953 26,502,922 1,068,416 2,000,267 ========== ========== ========= ========= American Pimco Funds Total Europacific Return Growth Adm Fund Fund ------------- --------- Additions to net assets attributed to : Investment income: Net appreciation (depreciation) in fair value of investments 14,480 (27,675) Interest and divided income 37,663 71,256 ------- --------- 52,143 43,581 ------- --------- Contributions: Employer's match contributions 22,375 17,919 Participants' contributions 115,530 99,353 Participants' rollovers 257,018 242,294 ------- --------- 394,923 359,566 ------- --------- Total additions 447,066 403,147 Deductions form net assets attributed to: Benefit payments to participants 3,535 3 ------- --------- Increase prior to interfund transfers 443,531 403,144 Interfund transfers 410,689 625,805 ------- --------- Net increase 854,220 1,028,949 Net assets available for benefits: Beginning of year 0 0 ------- --------- End of year 854,220 1,028,949 ======= =========
* Consists of the Managed Income Portfolio Fund, part of the Fidelity Group Trust. The accompanying notes are an integral part of these financial statements 5 EMC CORPORATION 401(K) SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1998 (Continued)
Franklin Vanguard Strategy Funds Small Cap Templeton U.S. ------------------------------------ Growth Foreign A Growth Conservative Moderate Aggressive Fund Fund Fund Fund Fund Fund ---------- --------- -------- ------------ ------- ---------- Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments (54,243) (83,988) 505,541 17,557 68,120 254,309 Interest and dividend income 32,771 48,576 386,179 0 0 0 ---------- --------- ------- ----------- -------- ---------- (21,472) (35,412) 891,720 17,557 68,120 254,309 ---------- --------- ------- ----------- -------- ---------- Contributions: Employer's match contributions 71,411 19,105 112,812 4,566 25,663 90,050 Participants' contributions 404,702 100,416 663,974 27,029 169,554 505,373 Participants' rollovers 477,962 115,171 961,824 207,059 545,564 920,779 ---------- ------- --------- ----------- -------- ---------- 954,075 234,692 1,738,610 238,654 740,781 1,516,202 ---------- ------- --------- ----------- -------- ---------- Total additions 932,603 199,280 2,630,330 256,211 808,901 1,770,511 Deductions from net assets attributed to: Benefit payments to participants 6,700 3,999 16,648 243 168 15,537 ---------- ------- --------- ----------- -------- ---------- Increase prior to interfund transfers 925,903 195,281 2,613,682 255,968 808,733 1,754,974 Interfund transfers 1,584,142 337,123 4,025,775 229,168 169,442 562,406 ---------- ------- --------- ----------- -------- ---------- Net increase 2,510,045 532,404 6,639,457 485,136 978,175 2,317,380 Net assets available for benefits: Beginning of Year 0 0 0 0 0 0 ---------- ------- --------- ----------- -------- ---------- End of year 2,510,045 532,404 6,639,457 485,136 978,175 2,317,380 ========= ======= ========= =========== ======== ========== Spartan EMC U.S. Corporation Participant Total Equity Index Stock Notes All Fund Fund Fund Other Funds ------------ ----------- ----------- --------- ----------- Additions to net assets attributed to: Investment Income: Net appreciation (depreciation) in fair value of investments 518,278 378,498 0 0 21,532,516 Interest and dividend income 42,485 0 354,626 (1,085) 12,969,232 ------------ ----------- ----------- --------- ----------- 560,763 378,498 354,626 (1,085) 34,501,748 ------------ ----------- ----------- --------- ----------- Contributions: Employer's match contributions 108,352 128,381 0 573,985 6,906,248 Participants' contributions 582,610 574,714 0 682,033 25,785,542 Participants' rollovers 1,377,063 151,961 0 0 12,978,255 ----------- ----------- ----------- --------- ----------- 2,068,025 855,056 0 1,256,018 45,670,045 ----------- ----------- ----------- --------- ----------- Total additions 2,628,788 1,233,554 354,626 1,254,933 80,171,793 Deductions from net assets attributed to: Benefit payments to participants 14,263 6,426 327,593 0 7,494,586 ----------- ----------- ----------- --------- ----------- Increase prior to interfund transfers 2,614,525 1,227,128 27,033 1,254,933 72,677,207 Interfund transfers 1,913,021 39,607 1,281,289 0 0 ----------- ----------- ----------- --------- ----------- Net Increase 4,527,546 1,266,735 1,308,322 1,254,933 72,677,207 Net assets available for benefits: Beginning of Year 0 0 3,230,904 1,538,064 136,725,606 ----------- ----------- ----------- --------- ----------- End of year 4,527,546 1,266,735 4,539,226 2,792,997 209,402,813 =========== ========= =========== ========= ===========
The accompanying notes are an integral part of these financial statements 6 EMC CORPORATION 401(K) SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997
Fidelity Fidelity Retirement Fidelity Stable Fidelity Fidelity Equity Money Retirement Value Magellan Puritan Income Market Growth Fund* Fund Fund Fund Fund Fund -------- --------- -------- -------- ---------- ---------- Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value 0 5,605,587 1,576,067 3,656,562 0 (440,510) of investments Interest and dividend income 483,668 2,677,351 1,374,452 1,253,434 293,728 1,982,644 ------- ---------- ---------- ---------- --------- --------- 483,668 8,282,938 2,950,519 4,909,996 293,728 1,542,134 ------- ---------- ---------- ---------- --------- --------- Contributions: Employer's match contributions 338,458 1,414,917 630,608 737,251 281,251 533,885 Participants' contributions 1,072,907 5,110,925 2,377,235 2,811,341 927,926 2,049,261 Participants' rollovers 297,605 1,631,663 1,031,970 1,156,148 435,449 637,824 --------- ---------- ---------- ---------- --------- --------- 1,708,970 8,157,505 4,039,813 4,704,740 1,644,626 3,220,970 --------- ---------- ---------- ---------- --------- --------- Total additions 2,192,638 16,440,443 6,990,332 9,614,736 1,938,354 4,763,104 Deductions from net assets attributed to: Benefit payments to participants 339,039 1,666,547 613,858 637,098 484,049 544,320 --------- ---------- ---------- ---------- --------- --------- Increase prior to interfund transfers 1,853,599 14,773,896 6,376,474 8,977,638 1,454,305 4,218,784 Interfund transfers (740,712) (1,372,418) (192,040) 2,664,547 (272,931) (802,069) --------- ---------- ---------- ---------- --------- --------- Net increse 1,112,887 13,401,478 6,184,434 11,642,185 1,181,374 3,416,715 Net assets available for benefits: Beginning of year 7,624,183 29,941,488 11,811,631 12,885,300 4,751,726 8,050,564 --------- ---------- ---------- ---------- --------- --------- End of year 8,737,070 43,342,966 17,996,065 24,527,485 5,933,100 11,467,279 ========= ========== ========== ========== ========= ========== American Fidelity Funds Equity Brandywine Washington Participant Total Income II Growth Mutual Notes All Fund Fund Fund Fund Other Funds --------- ---------- ---------- ----------- ------ ---------- Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value 1,742,184 (14) (7) 0 0 12,139,869 of investments 1,975,847 0 15 220,928 1,085 10,263,152 Interest and dividend income ---------- --- -- --------- --------- ----------- 3,718,031 (14) 8 220,928 1,085 22,403,021 ---------- --- -- --------- --------- ----------- Contributions: Employer's match contributions 721,767 0 0 0 336,371 4,994,508 Participants' contributions 2,819,710 338 338 0 (39,400) 17,130,581 Participants' rollovers 1,349,646 0 0 0 0 6,540,305 ---------- --- --- --------- --------- ----------- 4,891,123 338 338 0 296,971 28,665,394 ---------- --- --- --------- --------- ----------- Total additions 8,609,154 324 346 220,928 298,056 51,068,415 Deductions from net assets attributed to: Benefit payments to participants 631,725 0 0 53,456 0 4,970,092 ---------- --- --- --------- --------- ----------- Increase prior to interfund transfers 7,977,429 324 346 167,472 298,056 46,098,323 Interfund transfers (229,833) 0 0 945,456 0 0 ---------- --- --- --------- --------- ----------- Net increse 7,747,596 324 346 1,112,928 298,056 46,098,323 Net assets available for benefits: Beginning of year 12,204,407 0 0 2,117,976 1,240,008 90,627,283 ---------- --- --- --------- --------- ----------- End of year 19,952,003 324 346 3,230,904 1,538,064 136,725,606 ========== === === ========= ========= ===========
* Consists of the Managed Income Portfolio Fund, part of the Fidelity Group Trust. The accompanying notes are an integral part of these financial statements. 7 EMC CORPORATION 401(K) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 NOTE 1 - DESCRIPTION OF THE PLAN - -------------------------------- The following description of 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 employee contributions, discretionary Company matching and profit sharing 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 - ------------- Participants may elect to contribute an amount not to exceed, in the aggregate, between 1% and 15% 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 $500. 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. Participant Accounts - -------------------- Each participant's account is credited with the participant's contribution, allocations of the Company's discretionary matching and profit sharing contributions and Plan earnings. 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. 8 EMC CORPORATION 401(K) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 NOTE 1 - DESCRIPTION OF THE PLAN (continued) - -------------------------------------------- Vesting and Forfeitures - ----------------------- Participants are immediately 100% vested 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: 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 Managed Income Portfolio Fund Pimco Total Return Adm Fund (Stable Value Fund) Franklin Small Cap Growth Fund Fidelity Magellan Fund Templeton Foreign A Fund Fidelity Puritan Fund Vanguard U.S. Growth Fund Fidelity Equity Income Fund Conservative Strategy Fund Fidelity Retirement Money Market Fund Moderate Strategy Fund Fidelity Retirement Growth Fund Aggressive Strategy Fund Fidelity Equity Income II Fund Spartan U.S. Equity Index Fund Brandywine Growth Fund EMC Corporation Stock Fund American Funds: Washington Mutual Fund American Funds: Europacific Growth Fund Participants may change their investment options as determined by the rules applicable to each investment. 9 EMC CORPORATION 401(K) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 NOTE 1 - DESCRIPTION OF THE PLAN (continued) - -------------------------------------------- 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. The Plan agreement contains a more complete description of these provisions and should be referred to by participants. 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 transactions are treated as a transfer to (from) the investment fund from (to) the Participant Notes Fund. 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 Plan Administrator. Interest rates ranged from 8.75% - 10.0% for 1998. Principal and interest are paid ratably through payroll deductions. NOTE 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 generally accepted accounting principles requires the Plan Administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. 10 EMC CORPORATION 401(K) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) - --------------------------------------------------------------- Investment Valuation and Income Recognition - ------------------------------------------- Investments in shares of Fidelity Mutual Funds, Brandywine Mutual Funds, American Funds, Pimco Total Return Adm Fund, Franklin Small Cap Growth Fund, Templeton Foreign A Fund, Vanguard U.S. Growth Fund, Conservative Fund, Moderate Fund, Aggressive Fund, Spartan U.S. Equity Index Fund and EMC Corporate Stock Fund are valued at the quoted market value on the last business day of the Plan year. Investment in a common collective trust consisting of an interest in the Fidelity Managed Income Portfolio Fund is valued at fair value. Participant notes receivable are valued at cost, which approximates fair value. The Plan presents in the statements of changes in net assets available for benefits the net appreciation (depreciation) in the fair value of its investments which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those 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. Expenses of the Plan - -------------------- Administrative expenses, including legal and participant accounting, and other costs of administering the Plan, and all expenses directly relating to the investments are charged to and paid by the Plan unless paid by the Company. Termination of the Plan - ----------------------- Although it has not expressed any intent to do so, the Company has the right to terminate the Plan. The Administrator, upon termination, shall cause the assets of the Plan to be allocated for the purposes set forth and in the order of priorities established by ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. Payment of Benefits - ------------------- Benefits are recorded when paid. NOTE 3 - TAX STATUS OF THE PLAN - ------------------------------- The Internal Revenue Service has determined and informed the Company by a letter dated November 18, 1998 that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). 11 EMC CORPORATION 401(K) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 NOTE 4 - INVESTMENTS - -------------------- The Plan's investments are administered by Fidelity Investments, the investment manager of the Plan. The following presents the fair value of investments. Investments that represent 5% or more of the Plan's net assets, are separately indentified:
Number of Fair Value Shares December 31, 1998 ------ ----------------- Investment at Fair Value: Fidelity Managed Income Portfolio Fund 10,530,937 ---------- Investments at Fair Value as Determined By Quoted Market Price: Fidelity Mutual Funds: Magellan Fund 537,075 64,889,425 Puritan Fund 1,144,824 22,976,627 Equity Income Fund 502,465 27,911,933 Retirement Money Market Fund 7,182,063 7,182,063 Retirement Growth Fund 871,182 17,867,953 Equity Income II Fund 883,136 26,502,922 Brandywine Growth Fund 35,284 1,068,416 American Funds: Washington Mutual Fund 60,779 2,000,267 Europacific Growth Fund 30,078 854,220 Pimco Total Return Adm Fund 97,623 1,028,949 Franklin Small Cap Growth Fund 111,211 2,510,045 Templeton Foreign A Fund 63,456 532,404 Vanguard U.S. Growth Fund 177,099 6,639,457 Conservative Fund 43,393 485,136 Moderate Fund 84,252 978,175 Aggressive Fund 193,923 2,317,380 Spartan U.S. Equity Index Fund 102,992 4,527,546 EMC Corporation Stock Fund 67,487 1,266,735 --------- 191,539,653 ----------- Participant Notes Receivable 4,539,226 --------- 206,609,816 ===========
12 EMC CORPORATION 401(K) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 NOTE 4 - INVESTMENTS (continued) - --------------------------------
Number of Fair Value Shares December 31, 1997 --------- ----------------- Investment at Fair Value: Fidelity Managed Income Portfolio Fund 8,737,070 ----------- Investments at Fair Value as Determined By Quoted Market Price: Fidelity Mutual Funds: Magellan Fund 454,948 43,342,966 Puritan Fund 928,589 17,996,065 Equity Income Fund 467,992 24,527,485 Retirement Money Market Fund 5,933,099 5,933,100 Retirement Growth Fund 680,550 11,467,279 Equity Income II Fund 738,689 19,952,003 Brandywine Growth Fund 10 324 American Funds: Washington Mutual Fund 11 346 ----------- 123,219,568 ----------- Participant Notes Receivable 3,230,904 ----------- 135,187,542 ===========
The Plan's investments (including investments bought, sold and held during the year) appreciated (depreciated) in value during the years as follows:
Investments at Fair Value as Determined By Quoted Market Price: 1998 1997 ---- ---- Fidelity Mutual Funds: Magellan Fund 12,634,647 5,605,587 Puritan Fund 867,663 1,576,067 Equity Income Fund 1,533,190 3,656,562 Retirement Growth Fund 2,528,406 (440,510) Equity Income II Fund 2,347,437 1,742,184 Brandywine Growth Fund (8,431) (14) American Funds: Washington Mutual Fund 38,727 (7) Europacific Growth Fund 14,480 0 Pimco Total Return Adm Fund (27,675) 0 Franklin Small Cap Growth Fund (54,243) 0 Templeton Foreign A Fund (83,988) 0 Vanguard U.S. Growth Fund 505,541 0 Conservative Fund 17,557 0 Moderate Fund 68,120 0 Aggressive Fund 254,309 0 Spartan U.S. Equity Index Fund 518,278 0 EMC Corporation Stock Fund 378,498 0 ---------- ---------- 21,532,516 12,139,869 ========== ==========
13 EMC CORPORATION 401(K) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 NOTE 5 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 - ------------------------------------------------------------ The following is a reconciliation of investment income per the financial statements to earnings on investments on Form 5500 for the year ended December 31, 1998: Net appreciation in fair value of investments per the financial statements 21,532,516 Add: Interest and dividend income 12,969,232 ---------- Subtotal 34,501,748 Less: Interest income on Money Market Funds (336,828) Interest income on Common Collective Trust (527,931) Interest income on Participant Notes Receivable (354,626) Gain on sale of assets (2,131) Unrealized appreciation of assets (376,367) ---------- Net investment gain from registered investment entities per Form 5500 32,903,865 ==========
14 EMC CORPORATION 401(K) SAVINGS PLAN LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES EMPLOYER I.D. #04-2680009 PLAN NUMBER 001 DECEMBER 31, 1998
Identity of Issue, Borrower Description Current Lessor or Similar Party of Investment Cost Value - ----------------------------------------- --------------- ------------ ------------- Fidelity Managed Income Portfolio Fund 10,530,937 10,530,937 ----------- ----------- Fidelity Mutual Funds: Magellan Fund 537,075 shs 52,939,709 64,889,425 Puritan Fund 1,144,824 shs 22,247,923 22,976,627 Equity Income Fund 502,465 shs 26,636,901 27,911,933 Retirement Money Market Fund 7,182,063 shs 7,182,063 7,182,063 Retirement Growth Fund 871,182 shs 15,772,938 17,867,953 Equity Income II Fund 883,136 shs 24,473,813 26,502,922 Brandywine Growth Fund 35,284 shs 1,072,529 1,068,416 American Funds: Washington Mutual Fund 60,779 shs 1,970,015 2,000,267 Europacific Growth Fund 30,078 shs 841,435 854,220 Pimco Total Return Adm Fund 97,623 shs 1,052,751 1,028,949 Franklin Small Cap Growth Fund 111,211 shs 2,518,487 2,510,045 Templeton Foreign A Fund 63,456 shs 613,937 532,404 Vanguard U.S. Growth Fund 177,099 shs 6,124,514 6,639,457 Conservative Fund 43,393 shs 467,141 485,136 Moderate Fund 84,252 shs 910,355 978,175 Aggressive Fund 193,923 shs 2,080,585 2,317,380 Spartan U.S. Equity Index Fund 102,992 shs 4,023,824 4,527,546 EMC Corporation Stock Fund 67,487 shs 890,368 1,266,735 ----------- ----------- 171,819,288 191,539,653 ----------- ----------- Participant Notes Receivable 8.75% - 10.0% 0 4,539,226 ----------- ----------- 182,350,225 206,609,816 =========== ===========
15 EMC CORPORATION 401(K) SAVINGS PLAN LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES EMPLOYER I.D. #04-2680009 PLAN NUMBER 001 DECEMBER 31, 1997
Identity of Issue, Borrower Description Current Lessor or Similar Party of Investment Cost Value - -------------------------------------- --------------- ----------- ----------- Fidelity Managed Income Portfolio Fund 8,737,070 8,737,070 ----------- ----------- Fidelity Mutual Funds: Magellan Fund 454,948 shs 38,118,810 43,342,966 Puritan Fund 928,589 shs 16,565,829 17,996,065 Equity Income Fund 467,992 shs 21,145,479 24,527,485 Retirement Money Market Fund 5,933,099 shs 5,933,100 5,933,100 Retirement Growth Fund 680,550 shs 12,127,868 11,467,279 Equity Income II Fund 738,689 shs 18,480,551 19,952,003 Brandywine Growth Fund 10 shs 338 324 American Funds: Washington Mutual Fund 11 shs 353 346 ----------- ----------- 112,372,328 123,219,568 ----------- ----------- Participant Notes Receivable 9.0% - 15.0% 0 3,230,904 ----------- ----------- 121,109,398 135,187,542 =========== ===========
16 EMC CORPORATION 401(K) SAVINGS PLAN LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS EMPLOYER I.D. #04-2680009 PLAN NUMBER 001 DECEMBER 31, 1998
Cost Purchase Selling of Net Description of Asset Price Price Asset Gain - ----------------------------------------- ----------- ----------- ----------- ----------- Fidelity Managed Income Portfolio Fund 4,640,826 3,374,890 3,374,890 0 Fidelity Mutual Funds: Magellan Fund 14,383,089 8,373,080 7,688,149 684,931 Puritan Fund 5,424,731 3,598,649 3,459,690 138,959 Equity Income Fund 6,728,312 6,449,639 6,191,481 258,158 Retirement Money Market Fund 4,761,001 3,849,208 3,849,208 0 Retirement Growth Fund 5,917,710 3,828,492 3,395,101 433,391 Equity Income II Fund 7,184,405 5,372,638 5,054,310 318,328
17 EMC CORPORATION 401(K) SAVINGS PLAN LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS EMPLOYER I.D. #04-2680009 PLAN NUMBER 001 DECEMBER 31, 1997
Cost Purchase Selling of Net Description of Asset Price Price Asset Gain - --------------------------------------- -------------- ------------ ------------ ---------- Fidelity Managed Income Portfolio Fund 2,992,582 2,363,355 2,363,355 0 Fidelity Mutual Funds: Magellan Fund 9,972,221 4,853,681 4,472,249 381,432 Puritan Fund 4,957,265 1,723,349 1,577,518 145,831 Equity Income Fund 8,707,153 1,974,963 1,700,407 274,556 Retirement Money Market Fund 3,645,102 2,757,449 2,757,449 0 Retirement Growth Fund 4,297,645 2,423,065 2,202,985 220,080 Equity Income II Fund 6,883,303 2,853,738 2,583,008 270,730
18 EX-23.1 2 CONSENT OF INDEPENDENT AUDITORS Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (333-57263) of EMC Corporation 401(k) Savings Plan of our report dated July 26, 1999 relating to the statements of assets available for plan benefits of EMC Corporation 401(k) Savings Plan as of December 31, 1998 and 1997, and the related statements of changes in assets available for plan benefits for the years then ended, which report appears in the December 31, 1998 annual report on Form 11-K of EMC Corporation 401(k) Savings Plan. Rattet & Cohen, P.C. /s/ Rattet & Cohen, P.C. -----END PRIVACY-ENHANCED MESSAGE-----