8-KMaterial Agreements

CISCO SYSTEMS, INC. 8-K Report, Material Agreement (Feb 28, 2006)

Filed February 28, 2006For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) filed an 8-K report on February 28, 2006, detailing actions taken by its Compensation and Management Development Committee. The key event reported is the award of mid-fiscal year advances on year-end target incentive payments under the Professional and Leadership Incentive Plan—FY 2006 (PLI Plan) to certain named executive officers. These advances were granted based on the committee's determination that Cisco met its mid-fiscal year revenue and profit targets. Specifically, Senior Vice President Charles H. Giancarlo received $120,000, Senior Vice President Richard J. Justice received $120,000, and Senior Vice President James Richardson received $115,336. Notably, CEO John T. Chambers does not participate in this specific incentive plan and his compensation will be determined at year-end.

Key Highlights

  • 1Cisco's Compensation Committee approved mid-fiscal year advances for incentive payments under the FY 2006 PLI Plan.
  • 2The advances were awarded to specific Senior Vice Presidents: Charles H. Giancarlo ($120,000), Richard J. Justice ($120,000), and James Richardson ($115,336).
  • 3The company met its mid-fiscal year revenue and profit before interest and tax targets, triggering eligibility for these advances.
  • 4CEO John T. Chambers is not part of the PLI Plan and his incentive compensation is determined separately at the end of the fiscal year.
  • 5This filing indicates positive performance against interim financial targets for the fiscal year 2006.
  • 6The report was filed on February 28, 2006, with the earliest event date being February 23, 2006.

Frequently Asked Questions

This 8-K filing announces that Cisco Systems, Inc.'s Compensation and Management Development Committee has approved mid-fiscal year advances for incentive payments to certain executive officers under the Professional and Leadership Incentive Plan for fiscal year 2006.

The advances were granted because the Compensation Committee determined that Cisco had achieved its mid-fiscal year worldwide revenue and profit before interest and tax targets, as stipulated by the PLI Plan.

No, CEO John T. Chambers does not participate in the Professional and Leadership Incentive Plan (PLI Plan). His incentive payment, if any, will be determined at the end of the fiscal year at the Committee's discretion.

The granting of these advances indicates that Cisco successfully met its internal revenue and profit targets for the mid-point of its fiscal year 2006, suggesting positive operational performance.