8-KLeadership Changes

CISCO SYSTEMS, INC. 8-K Report, Executive Changes (Aug 2, 2012)

Filed August 2, 2012For Securities:CSCO

Summary

This Form 8-K filing by Cisco Systems, Inc. (CSCO) reports significant changes to its Board of Directors. On August 1, 2012, the company appointed two new independent directors: Marc Benioff, Chairman and CEO of salesforce.com, inc., and Kristina M. Johnson, Ph.D., CEO of Enduring Hydro, LLC. These appointments bring new leadership perspectives to the board, potentially influencing strategic decisions and corporate governance. Both new directors will receive Cisco's standard compensation for non-employee directors, which includes an annual retainer and equity awards in the form of restricted stock units (RSUs). The RSUs will vest over time and are subject to specific conditions related to board service, changes in control, death, or disability. The company also entered into standard indemnification agreements with each new director, providing them with legal protection related to their service.

Key Highlights

  • 1Appointment of two new independent directors to the Board of Directors.
  • 2Marc Benioff, CEO of salesforce.com, and Kristina M. Johnson, CEO of Enduring Hydro, LLC, have joined the board.
  • 3New directors will receive standard non-employee director compensation, including cash retainers and equity awards.
  • 4Each new director will receive an initial restricted stock unit (RSU) award for 16,666 shares.
  • 5RSU awards will vest in two equal annual installments, contingent on continued board service.
  • 6Standard director indemnification agreements have been executed with the new appointees.
  • 7The appointments are effective as of August 1, 2012.

Frequently Asked Questions

Cisco appointed Marc Benioff, Chairman and Chief Executive Officer of salesforce.com, inc., and Kristina M. Johnson, Ph.D., Chief Executive Officer of Enduring Hydro, LLC, to its Board of Directors.

The new directors will receive Cisco’s standard non-employee director compensation, which includes a pro rata annual retainer of $75,000 and an initial restricted stock unit (RSU) award covering 16,666 shares. They may also receive fees for committee meetings attended.

The RSUs will vest in two equal annual installments upon completion of each year of board service measured from the initial appointment date. Vesting will also occur immediately in full upon certain changes in control or ownership of Cisco, or upon death or disability while a member of the Board.

The indemnification agreements ensure that Cisco will hold harmless and indemnify the new directors to the fullest extent authorized by law, protecting them against expenses, judgments, fines, and settlement amounts incurred in connection with their service as directors.