8-KLeadership Changes

CISCO SYSTEMS, INC. 8-K Report, Executive Changes (Jan 19, 2007)

Filed January 19, 2007For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) announced on January 17, 2007, a significant addition to its Board of Directors with the appointment of Brian L. Halla. Mr. Halla is a notable figure in the technology sector, currently serving as Chairman and CEO of National Semiconductor Corporation. His appointment is expected to bring valuable industry experience and strategic insight to Cisco's governance. This filing details the compensation structure for Mr. Halla as a non-employee director, which includes an annual retainer, potential committee meeting fees, and a substantial initial stock option grant. The stock option grant of 50,000 shares, under the 2005 Stock Incentive Plan, will vest over four years and is designed to align his interests with those of shareholders. The company also entered into a standard director indemnification agreement with Mr. Halla to ensure appropriate legal protection during his tenure.

Key Highlights

  • 1Appointment of Brian L. Halla to the Board of Directors.
  • 2Brian L. Halla's current role as Chairman and CEO of National Semiconductor Corporation adds significant industry expertise.
  • 3Mr. Halla will receive Cisco's standard non-employee director compensation package.
  • 4Standard compensation includes a pro rata annual retainer of $75,000 and potential committee meeting fees.
  • 5Initial stock option grant for 50,000 shares under the 2005 Stock Incentive Plan.
  • 6Stock options will vest over four years and are immediately exercisable.
  • 7Standard director indemnification agreement entered into with Mr. Halla.

Frequently Asked Questions

Brian L. Halla is a prominent executive in the semiconductor industry, currently serving as Chairman and CEO of National Semiconductor Corporation. His appointment to Cisco's Board of Directors is significant as it brings a wealth of experience and strategic perspective from a key player in a related technology sector, which can benefit Cisco's corporate governance and future strategic direction.

Mr. Halla will receive Cisco's standard compensation for non-employee directors. This includes a pro rata annual retainer of $75,000 for the remainder of the year and potential fees of $2,000 per committee meeting attended. Additionally, he will receive an initial stock option grant for 50,000 shares.

Mr. Halla will receive an option to purchase 50,000 shares of Cisco common stock under the 2005 Stock Incentive Plan. The exercise price will be the closing price on the grant date, which is set for February 12, 2007. The options have a nine-year term and will vest in four equal annual installments starting from the grant date, with accelerated vesting upon certain change-of-control events, death, or disability.

The indemnification agreement is a standard legal protection provided by Cisco to its directors. It aims to hold Mr. Halla harmless and indemnify him against expenses, judgments, fines, and settlement amounts incurred in connection with his services as a director, to the fullest extent permitted by Cisco's articles of incorporation and California law.