8-KLeadership Changes

CISCO SYSTEMS, INC. 8-K Report, Executive Changes (Jul 31, 2014)

Filed July 31, 2014For Securities:CSCO

Summary

This 8-K filing from Cisco Systems, Inc. announces a change in its Board of Directors. Gregory Q. Brown, who is also the CEO of Motorola Solutions, Inc., has resigned from Cisco's Board of Directors effective July 31, 2014. This resignation is a proactive measure to comply with Section 8 of the Clayton Antitrust Act of 1914 concerning interlocking directorates. The departure stems from a situation where the overlapping revenue between Cisco and Motorola Solutions no longer falls within the Clayton Act's safe harbor. While a pending sale of Motorola Solutions' Enterprise business to Zebra Technologies Corporation, if closed, would potentially allow Mr. Brown to be reappointed, the current circumstances necessitate his resignation to avoid antitrust concerns. The Board size has been adjusted accordingly.

Key Highlights

  • 1Gregory Q. Brown, CEO of Motorola Solutions, Inc., resigned from Cisco's Board of Directors.
  • 2The resignation is effective July 31, 2014.
  • 3The reason for resignation is to comply with Section 8 of the Clayton Antitrust Act regarding interlocking directorates.
  • 4The companies' overlapping revenue no longer meets the safe harbor provision of the Clayton Act.
  • 5Mr. Brown may be eligible for reappointment upon the closing of Motorola Solutions' Enterprise business sale to Zebra Technologies Corporation.
  • 6The size of Cisco's Board of Directors has been reduced to eleven members.

Frequently Asked Questions

Gregory Q. Brown resigned from Cisco's Board of Directors to comply with Section 8 of the Clayton Antitrust Act of 1914, which addresses potential antitrust issues arising from interlocking directorates between companies.

The Clayton Antitrust Act is a U.S. federal law that prohibits certain business practices that lessen competition, including interlocking directorates where a person serves on the boards of competing companies. In this case, Mr. Brown's role as CEO of Motorola Solutions and his directorship at Cisco created a situation where the companies' overlapping revenue was no longer within the 'safe harbor' provided by the Act, necessitating his resignation.

Yes, the filing states that Mr. Brown would be eligible for reappointment to the Board upon the closing of the announced sale of Motorola Solutions' Enterprise business to Zebra Technologies Corporation, as this transaction is expected to bring the companies' overlapping revenue back within the Clayton Act's safe harbor.

Yes, the size of Cisco's Board of Directors has been reduced to eleven members effective with Mr. Brown's resignation.