8-KLeadership Changes

CISCO SYSTEMS, INC. 8-K Report, Executive Changes (Sep 10, 2009)

Filed September 10, 2009For Securities:CSCO

Summary

This Form 8-K filing by Cisco Systems, Inc. (CSCO) reports on the appointment of Arun Sarin to its Board of Directors, effective September 9, 2009. Mr. Sarin, a former CEO of Vodafone Group Plc, brings a wealth of experience, having previously served on Cisco's Board from 1998 to 2003. His appointment is significant as it adds another seasoned executive to the company's governance structure, particularly during a period of evolving technology and market dynamics. Investors should note that Mr. Sarin will receive standard compensation for non-employee directors, including an annual retainer and equity awards in the form of restricted stock units. The details of his compensation package, including vesting schedules and potential for deferral, are outlined. The filing also confirms that Mr. Sarin will enter into Cisco's standard director indemnification agreement, a common practice to protect directors against potential liabilities arising from their service.

Key Highlights

  • 1Cisco Systems appointed Arun Sarin, former CEO of Vodafone Group Plc, to its Board of Directors.
  • 2Mr. Sarin has prior experience serving on Cisco's Board of Directors from 1998 to 2003.
  • 3He will receive standard compensation for non-employee directors, including an annual retainer and equity awards.
  • 4Mr. Sarin received an initial restricted stock unit award for 16,666 shares, vesting in two annual installments.
  • 5The restricted stock units vest fully upon certain changes in control, death, or disability.
  • 6Cisco and Mr. Sarin entered into a standard director indemnification agreement.

Frequently Asked Questions

Arun Sarin is a former CEO of Vodafone Group Plc and brings extensive leadership experience in the telecommunications sector. His prior service on Cisco's Board (1998-2003) suggests a familiarity with the company and its strategic direction, making his re-appointment a potential asset for governance and oversight.

Mr. Sarin will receive Cisco's standard compensation for non-employee directors. This includes a pro rata annual retainer of $75,000, potential committee meeting fees ($2,000 per meeting), and an initial restricted stock unit award of 16,666 shares. These stock units vest over two years or immediately under specific circumstances like a change in control.

The director indemnification agreement is a standard legal protection for directors. It ensures that Cisco will protect Mr. Sarin from liabilities, expenses, judgments, fines, and settlement amounts that he might incur in connection with his service as a director, provided these arise from his directorial duties and are within the limits of California law and Cisco's charter.

The 16,666 restricted stock units granted to Mr. Sarin will vest in two equal annual installments upon the completion of each year of board service. They will also vest immediately and in full upon certain changes in control or ownership of Cisco, or upon his death or disability while serving as a Board member.