8-KOther Events

CISCO SYSTEMS, INC. 8-K Report, Corporate Update (Mar 21, 2008)

Filed March 21, 2008For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) filed a Form 8-K on March 21, 2008, to report on an executive's stock trading plan. Wim Elfrink, Executive Vice President, Customer Advocacy and Chief Globalization Officer, adopted a pre-arranged trading plan on March 19, 2008. This plan is designed to exercise stock options that are due to expire in April 2008 and subsequently sell the acquired Cisco stock. The plan allows for the sale of up to 320,000 shares and is set to conclude in April 2008. Importantly, the adoption of this plan complies with Rule 10b5-1 of the Securities Exchange Act of 1934 and Cisco's internal stock transaction policies. This rule enables individuals to establish trading plans when they are not in possession of material, non-public information, facilitating a structured diversification of their investment portfolios over time.

Key Highlights

  • 1Executive stock option exercise and sale plan adopted by Wim Elfrink.
  • 2Plan involves exercising stock options set to expire in April 2008.
  • 3Up to 320,000 shares of Cisco stock may be sold under the plan.
  • 4The trading plan was established on March 19, 2008, and terminates in April 2008.
  • 5The plan is pre-arranged and compliant with Rule 10b5-1.
  • 6Rule 10b5-1 allows trading when not in possession of material non-public information.
  • 7Transactions will be publicly disclosed via Form 144 and Form 4 filings.

Frequently Asked Questions

The primary purpose of this 8-K filing is to inform investors about a pre-arranged stock trading plan established by a Cisco executive, Wim Elfrink, for exercising and selling company stock that is nearing expiration.

Mr. Elfrink is exercising stock options that are scheduled to expire in April 2008. The sale of the acquired shares is part of a pre-arranged plan to manage his investment portfolio and diversify his holdings.

Generally, this type of transaction, when conducted under a Rule 10b5-1 plan, is not necessarily a negative indicator. These plans are established by executives to provide a pre-determined method for trading stock, particularly when options are nearing expiration, and are designed to avoid even the appearance of trading on material non-public information.

Rule 10b5-1 provides an affirmative defense against allegations of insider trading. It allows individuals to set up pre-arranged trading plans for buying or selling company stock at a time when they do not possess material non-public information. Its mention signifies that the executive's trades are being conducted in a compliant and transparent manner.