Summary
This 8-K filing from Cisco Systems, Inc. (CSCO) on August 23, 2004, primarily announces the granting of significant stock options to its employees, including a substantial award to CEO John T. Chambers. This action reflects a company-wide merit-based grant program aimed at employee retention and motivation. The filing details the number of shares, exercise price, and vesting schedules for these options, providing transparency into Cisco's executive compensation and employee incentive strategies.
Key Highlights
- 1Cisco Systems granted John T. Chambers, CEO, stock options to purchase 1.5 million shares at an exercise price of $19.18 per share.
- 2The stock option for Mr. Chambers vests seven years from the grant date or three years after he ceases to be CEO, provided it's no earlier than the fifth anniversary of the grant.
- 3In total, Cisco approved merit-based stock options for employees to purchase approximately 162 million shares at $19.18 per share.
- 4The exercise price for all granted options is based on the closing selling price of Cisco's common stock on August 23, 2004.
- 5These grants are part of a company-wide, merit-based program for eligible employees.
- 6The filing serves as a disclosure mechanism for material definitive agreements and Regulation FD information regarding these option grants.
Frequently Asked Questions
The primary purpose of this filing is to report the entry into a material definitive agreement concerning stock option grants to employees, including a significant grant to CEO John T. Chambers, and to comply with Regulation FD disclosure requirements regarding these grants.
The exercise price for all stock options granted on August 23, 2004, is $19.18 per share, which was the closing selling price of Cisco's common stock on the Nasdaq National Market on that date.
Mr. Chambers' stock options will become exercisable upon his completion of seven years of service from the grant date, or sooner, three years after he ceases to be President and Chief Executive Officer. However, vesting cannot occur earlier than the fifth anniversary of the grant date, and continued service through that date is required, with immediate exercisability in the event of his death or permanent disability.
The filing indicates that Cisco from time to time makes merit-based, company-wide stock option grants to its employees. This specific grant on August 23, 2004, is described as part of such a program.