8-KLeadership ChangesOther EventsExhibits & Filings

CISCO SYSTEMS, INC. 8-K Report, Executive Changes (Feb 17, 2010)

Filed February 17, 2010For Securities:CSCO

Summary

This Form 8-K filing by Cisco Systems, Inc. (CSCO) primarily reports on two key executive-related events. First, the company has extended the international assignment agreement for Wim Elfrink, Executive Vice President, Cisco Services and Chief Globalization Officer, for up to an additional three years. This extension, effective from January 3, 2010, indicates continuity in executive leadership for global services and international operations. Second, the filing discloses that Robert W. Lloyd, Executive Vice President, Worldwide Operations, has adopted a pre-arranged stock trading plan under Rule 10b5-1. This plan allows Mr. Lloyd to sell up to 1,052,021 shares of Cisco stock, acquired through stock option exercises and restricted stock unit vesting, by December 2011. The adoption of this plan, while not indicative of negative sentiment, is a common practice for executives to diversify their holdings over time and will be publicly reported through subsequent SEC filings.

Key Highlights

  • 1Extension of International Assignment Agreement for EVP Wim Elfrink for up to three additional years, starting January 3, 2010.
  • 2Robert W. Lloyd, EVP of Worldwide Operations, adopted a Rule 10b5-1 trading plan.
  • 3Mr. Lloyd's trading plan permits the sale of up to 1,052,021 Cisco shares.
  • 4The shares eligible for sale include those acquired through stock option exercises and restricted stock unit vesting.
  • 5The stock trading plan is scheduled to terminate in December 2011.
  • 6Transactions under Mr. Lloyd's plan will be disclosed via Form 144 and Form 4 filings.
  • 7The plan was adopted in compliance with Rule 10b5-1 guidelines and company policies.

Frequently Asked Questions

The extension of Wim Elfrink's agreement indicates Cisco's commitment to retaining key executive talent for its global services and international operations. It suggests continuity and a strategic focus on these areas for the foreseeable future.

Robert W. Lloyd is selling shares through a pre-arranged trading plan (Rule 10b5-1), which is a common and legally permissible method for executives to diversify their personal investments over time without trading on material non-public information. This plan does not necessarily signal a lack of confidence in the company but rather a personal financial planning strategy.

A Rule 10b5-1 trading plan allows company insiders to set up a predetermined schedule for buying or selling company stock at a time when they do not possess material non-public information. This protects them from accusations of insider trading and allows for orderly diversification of their holdings.

Under his trading plan, Robert W. Lloyd may sell up to 1,052,021 shares of Cisco stock. The plan is set to terminate in December 2011, meaning these sales could occur gradually between now and then.