01—Abstract
Summary
Summary of the 10-K/A filed November 21, 2002. Cited figures are marked; the original filing is the authoritative source.
This Form 10-K/A is a narrow amendment to Cisco Systems' annual report, filed solely to correct clerical errors in the Equity Compensation Plan Information table and related footnotes (4) and (5) in Item 12.
It contains no new financial statements, operating results, or business discussion. The amendment states that it does not reflect events after the original Form 10-K and does not otherwise modify the original disclosures. The corrected Note 10 data in the original filing (pages 41-44 of the Annual Report to Shareholders) is the reference point for the figures.
As of July 27, 2002, the corrected table shows 1,175,637,039 shares issuable upon exercise of outstanding options under shareholder-approved plans at a weighted average exercise price of $27.57a, with 745,197,399 shares remaining available for future issuance. Plans not approved by shareholders (the 1997 Supplemental Stock Incentive Plan) had 2,728,273 options outstanding at $34.89 and 6,186,799 shares available. In total, 1,178,365,312 options were outstanding at a weighted average price of $27.59, with 751,384,198 shares available for future grants.
The table excludes 27,922,526 shares issuable under options assumed through acquisitions, at a weighted average exercise price of $9.57b, on which no new grants may be made. For investors, the key takeaway is the scale of potential equity dilution from employee compensation plans, which the corrected figures quantify more accurately than the original Item 12 table.
Because the amendment changes only disclosure tables, it does not alter Cisco's reported revenue, earnings, or balance sheet. Readers should refer to the original 10-K and the financial statements for those.
02—Key points
Key Highlights
- The filing is a Form 10-K/A (Amendment #1) that corrects only clerical errors in the Item 12 equity compensation table and footnotes (4) and (5); it does not restate financial results.
- Shareholder-approved plans (1996 Stock Incentive Plan and Employee Stock Purchase Plan) had 1,175,637,039 options outstanding at a weighted average exercise price of $27.57 as of July 27, 2002.
- Shares available for future issuance under shareholder-approved plans were 745,197,399, comprising 657,661,375 under the 1996 Stock Incentive Plan and 87,536,024 under the Purchase Plans.
- Total options outstanding across all disclosed plans were 1,178,365,312 at a weighted average exercise price of $27.59, with 751,384,198 shares available for future grants.
- The 1997 Supplemental Stock Incentive Plan, not approved by shareholders, had 2,728,273 options outstanding at $34.89 and 6,186,799 shares available; no options under it were held by directors or executive officers.
- Options assumed from acquisitions totaled 27,922,526 shares at a weighted average exercise price of $9.57; no new grants can be made under those plans.
- The Purchase Plans carry a combined shareholder-approved reserve of 221,400,000 shares, with purchases at 85% of the lower of the entry-date or purchase-date closing price.
03—Questions
Frequently Asked Questions
Why did Cisco file this amendment?
Cisco filed the 10-K/A solely to correct clerical errors in the Equity Compensation Plan Information table in Item 12 and the related footnotes (4) and (5). The correct figures had already appeared in Note 10 to the financial statements in the original 10-K and in the Annual Report to Shareholders.
Does this amendment change Cisco's financial results or outlook?
No. The amendment contains no financial statements and states that it does not modify the original disclosures beyond the corrected equity compensation information. It does not reflect events occurring after the original 10-K was filed.
How much potential dilution do Cisco's equity plans represent?
As of July 27, 2002, there were 1,178,365,312 options outstanding across all disclosed plans, and 751,384,198 shares were available for future grants. Investors can compare these figures with the company's total shares outstanding in the original filing to gauge dilution. The table excludes an additional 27,922,526 shares under assumed plans.
What is the difference between the shareholder-approved and non-approved plans?
Shareholder-approved plans (the 1996 Stock Incentive Plan and the Employee Stock Purchase Plan) hold the vast majority of outstanding options and available shares. The 1997 Supplemental Stock Incentive Plan, which lacks shareholder approval, has far smaller balances, with 2,728,273 options outstanding and 6,186,799 shares available. No options under that plan are held by directors or executive officers.
04—Continue