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CISCO SYSTEMS, INC.
September 29, 2000
DEAR
CISCO SYSTEMS SHAREHOLDER:
You are cordially invited to attend the Annual Meeting of Shareholders
(“Annual Meeting”) of Cisco Systems, Inc. (the “Company”)
which will be held at Paramount’s Great America in the Paramount
Theater, located at 1 Great America Parkway, Santa Clara, California
95054 on Tuesday, November 14, 2000, at 10:00 a.m. You will
find a map with directions to the meeting on the outside back cover of
the Proxy Statement.
Details of the business to be conducted at the Annual Meeting are given
in the attached Notice of Annual Meeting and Proxy Statement.
If you do not plan to attend the Annual Meeting, please complete, sign,
date, and return the enclosed proxy promptly in the accompanying reply
envelope. Shareholders who elected to access the 2000 Proxy Statement
and Annual Report over the Internet and vote their proxy online will not
be receiving a paper proxy card. If you decide to attend the Annual Meeting
and wish to change your proxy vote, you may do so automatically by voting
in person at the Annual Meeting.
We look forward to seeing you at the Annual Meeting.
John T. Chambers
President and Chief
Executive Officer |
San Jose, California
|
YOUR VOTE IS IMPORTANT
In
order to assure your representation at the Annual Meeting, you are
requested to complete, sign, and date the enclosed proxy as promptly
as possible and return it in the enclosed envelope (to which no
postage need be affixed if mailed in the United States). Please
reference the Voting Electronically via the Internet or by Telephone
section on page 1 for alternative voting methods.
|
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|
CISCO
SYSTEMS, INC.
170
W. Tasman Drive
San
Jose, California 95134-1706
NOTICE
OF ANNUAL MEETING OF
SHAREHOLDERS
To
Be Held November 14, 2000
The Annual Meeting of Shareholders (“Annual Meeting”) of Cisco
Systems, Inc. (the “Company”) willbe held at Paramount’s
Great America in the Paramount Theater, located at 1 Great Am erica
Parkway, Santa Clara, California 95054, on Tuesday, November 14,
2000, at 10:00 a.m. for the following purposes:
- To
elect twelve members of the Board of Directors to serve until the next
Annual Meeting and until their successors have been elected and qualified;
- To
ratify the selection of PricewaterhouseCoopers LLP as the Company’s
independent accountants for the fiscal year ending July 28, 2001;
and
- To
act upon such other matters as may properly come before the meeting
or any adjournments or postponements thereof.
The
foregoing items of business are more fully described in the Proxy Statement
accompanying this Notice. The record date for determining those shareholders
who will be entitled to notice of, and to vote at, the Annual Meeting
and at any adjournment thereof is September 15, 2000. The stock transfer
books will not be closed between the record date and the date of the Annual
Meeting. A list of shareholders entitled to vote at the Annual Meeting
will be available for inspection at the offices of the Company.
Whether or not you plan to attend the Annual Meeting, please complete,
sign, date and return the enclosed proxy promptly in the accompanying
reply envelope. If you elected to receive the 2000 Proxy Statement and
Annual Report electronically over the Internet you will not receive a
paper proxy card and should vote online, unless you cancel your enrollment.
If your shares are held in a bank or brokerage account and you did not
elect to receive the materials through the Internet, you may be eligible
to vote your proxy electronically or by telephone. Please refer to the
enclosed voting form for instructions. Your proxy may be revoked at any
time prior to the Annual Meeting. If you decide to attend the Annual Meeting
and wish to change your proxy vote, you may do so automatically by voting
in person at the Annual Meeting.
BY
ORDER OF THE BOARD OF DIRECTORS
Larry R. Carter
Secretary
San
Jose, California
September 29, 2000 |
Back
to top
CISCO
SYSTEMS, INC.
170
W. Tasman Drive
San
Jose, California 95134-1706
PROXY
STATEMENT
FOR
ANNUAL
MEETING OF SHAREHOLDERS
These proxy materials are furnished in connection with the solicitation
of proxies by the Board of Directors of Cisco Systems, Inc., a California
corporation (the “Company”), for the Annual Meeting of the Shareholders
(the “Annual Meeting”) to be held at 10:00 a.m. on November 14,
2000, at Paramount’s Great America in the Paramount Theater, located
at 1 Great America Parkway, Santa Clara, California 95054, and at any
adjournments or postponements of the Annual Meeting. These proxy materials
were first mailed on or about September 29, 2000 to all shareholders
entitled to vote at the Annual Meeting.
All share numbers and share prices provided in this Proxy Statement
have been adjusted to reflect the two (2)-for-one (1) split of Common
Stock effected on March 22, 2000.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying Notice of Annual Meeting of Shareholders.
Each proposal is described in more detail in this Proxy Statement. |
|
VOTING RIGHTS AND SOLICITATION
Voting
The Company’s Common Stock is the only type of security entitled
to vote at the Annual Meeting. On September 15, 2000, the record
date for determination of shareholders entitled to vote at the Annual
Meeting, there were 7,164,005,490 shares of Common Stock outstanding.
Each shareholder of record on September 15, 2000 is entitled to one
vote for each share of Common Stock held by such shareholder on that date.
A majority of the outstanding shares of Common Stock must be present or
represented at the Annual Meeting in order to have a quorum. Abstentions
and broker non-votes are counted as present for the purpose of determining
the presence of a quorum for the transaction of business. In the election
of directors, the twelve candidates receiving the highest number of affirmative
votes will be elected. Proposal 2 requires the approval of the affirmative
vote of a majority of the outstanding voting shares of the Company present
or represented and entitled to vote at the Annual Meeting together with
the affirmative vote of a majority of the required quorum. Abstentions
and broker non-votes can have the effect of preventing approval of a proposal
where the number of affirmative votes, though a majority of the votes
cast, does not constitute a majority of the required quorum. All votes
will be tabulated by the inspector of election appointed for the Annual
Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes.
Voting
Electronically via the Internet or by Telephone
Shareholders whose shares are registered directly with EquiServe may vote
either via the Internet or by calling EquiServe. Specific instructions
to be followed by any registered shareholder interested in voting via
Internet or by telephone are set forth on the enclosed proxy card. The
Internet and telephone voting procedures are designed to authenticate
the shareholder’s identity and to allow shareholders to vote their
shares and confirm that their instructions have been properly recorded.
If your shares are registered in the name of a bank or brokerage firm
and you have not elected to receive your Annual Report and Proxy Statement
over the Internet, you may be eligible to vote your shares electronically
over the Internet or by telephone. A large number of banks and brokerage
firms are participating in
the ADP Investor Communication Services online program. This program provides
eligible shareholders who receive a paper copy of the Annual Report and
Proxy Statement the opportunity to vote via the Internet or by telephone.
If your bank or brokerage firm is participating in ADP’s program,
your voting form will provide instructions. If your voting form does not
reference Internet or telephone information, please complete and return
the paper proxy card in the self-addressed, postage paid envelope provided.
Shareholders who elected to receive the Annual Report and Proxy Statement
over the Internet will be receiving an e-mail by September 29, 2000
with information on how to access shareholder information and instructions
for voting.
Proxies
Whether or not you are able to attend the Annual Meeting, you are urged
to vote your proxy, which is solicited by the Company’s Board of
Directors and which will be voted as you direct on your proxy when properly
completed. In the event no directions are specified, such proxies will
be voted FOR the nominees of the Board of Directors (proposal 1), FOR
proposal 2 and, in the discretion of the proxy holders, as to other matters
that may properly come before the Annual Meeting. You may revoke or change
your proxy at any time before the Annual Meeting. To do this, send a written
notice of revocation or another signed proxy with a later date to the
Secretary of the Company at the Company’s principal executive offices
before the beginning of the Annual Meeting. You may also revoke your proxy
by attending the Annual Meeting and voting in person.
Solicitation
of Proxies
The Company will bear the entire cost of solicitation, including the preparation,
assembly, printing, and mailing of this Proxy Statement, the proxy, and
any additional solicitation material furnished to shareholders. Copies
of solicitation material will be furnished to brokerage houses, fiduciaries,
and custodians holding shares in their names that are beneficially owned
by others so that they may forward this solicitation material to such
beneficial owners. In addition, the Company has retained Corporate Investor
Communications, Inc. (“CIC”) to act as a proxy solicitor in
conjunction with the Annual Meeting. Under the terms of an agreement dated
August 22, 2000, the Company has agreed to pay $10,000, plus reasonable
out of pocket expenses, to CIC for proxy solicitation services. The original
solicitation of proxies by mail may be supplemented by a solicitation
by telephone, telegram, or other means by directors, officers, or employees
of the Company. No additional compensation will be paid to these individuals
for any such services. Except as described above, the Company does not
presently intend to solicit proxies other than by mail or via the Internet. |
|
PROPOSAL NO. 1
ELECTION
OF DIRECTORS
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General
The names of persons who are nominees for director and their positions
and offices with the Company are set forth in the table below. The proxy
holders intend to vote all proxies received by them in the accompanying
form for the nominees listed below unless otherwise instructed. In the
event any nominee is unable or declines to serve as a director at the
time of the Annual Meeting, the proxies will be voted for any nominee
who may be designated by the present Board of Directors to fill the vacancy.
As of the date of this Proxy Statement, the Board of Directors is not
aware of any nominee who is unable or will decline to serve as a director.
The twelve (12) nominees receiving the highest number of affirmative
votes of the shares entitled to vote at the Annual Meeting will be elected
directors of the Company to serve until the next Annual Meeting and until
their successors have been elected and qualified. Shareholders may not
cumulate votes in the election of directors.
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Nominees
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Positions and Offices Held With
the
Company
|
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|
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Carol A. Bartz |
|
Director |
|
|
|
|
|
|
|
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Larry R. Carter |
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Senior Vice President, Chief Financial Officer, Secretary, and Director |
|
|
|
|
|
|
|
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John T. Chambers |
|
President, Chief Executive Officer, and Director |
|
|
|
|
|
|
|
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Mary Cirillo |
|
Director |
|
|
|
|
|
|
|
|
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Dr. James F. Gibbons |
|
Director |
|
|
|
|
|
|
|
|
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Edward R. Kozel |
|
Director |
|
|
|
|
|
|
|
|
|
James C. Morgan |
|
Director |
|
|
|
|
|
|
|
|
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John P. Morgridge |
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Chairman of the Board |
|
|
|
|
|
|
|
|
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Arun Sarin |
|
Director |
|
|
|
|
|
|
|
|
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Donald T. Valentine |
|
Vice Chairman of the Board |
|
|
|
|
|
|
|
|
|
Steven M. West |
|
Director |
|
|
|
|
|
|
|
|
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Jerry Yang |
|
Director |
|
|
Business
Experience of Directors
Ms. Bartz, 52, has been a member of the Board of Directors since
November 1996. From April 1992 to present she has served as Chairman of
the Board and Chief Executive Officer of Autodesk, Inc. From April 1992
to September 1996 she was Chairman, Chief Executive Officer and President
of Autodesk, Inc. Prior to that, she was with Sun Microsystems from August
1983 to April 1992 most recently as Vice President of Worldwide Field
Operations. Ms. Bartz also currently serves on the Boards of Directors
of BEA Systems, Inc., Cadence Design Systems, Inc., Network Appliance,
Inc., and VA Linux Systems, Inc.
Mr. Carter, 57, was elected to the Board of Directors in July 2000.
He joined the Company in January 1995 as Vice President, Finance and Administration,
Chief Financial Officer and Secretary. In July 1997 he became the Senior
Vice President, Finance and Administration, Chief Financial Officer and
Secretary. Prior to his services at the Company he was with Advanced Micro
Devices, Inc. as the Vice President and Corporate Controller. Mr. Carter
currently serves on the Board of Directors of eSpeed, Inc., Network Appliance,
Inc., and Qlogic Corporation.
Mr. Chambers, 51, has been a member of the Board of Directors since
November 1993. He joined the Company as Senior Vice President in January
1991 and became Executive Vice President in June 1994. Mr. Chambers
became President and Chief Executive Officer of the Company as of January 31,
1995. Prior to his services at the Company, he was with Wang Laboratories
for eight years, most recently as Senior Vice President of U.S. Operations.
Mr. Chambers currently serves on the Board of Directors of Wal-Mart Stores,
Inc.
Ms. Cirillo, 53, has been a member of the Board of Directors since
February 1998. She has been Chairman and Chief Executive Officer of OPCENTER,
LLC since June 2000. She was at Deutsche Bank as Chief
Executive Officer of Global Institutional Services and Divisional Board
Member of Global Technology and Services since the merger with Bankers
Trust Company from June 1999 to June 2000. She was the Executive Vice
President and Managing Director at Bankers Trust Company from July 1997
to June 1999. Prior to joining Bankers Trust Company, she was with Citibank,
N.A. for twenty years, most recently as Senior Vice President. Ms. Cirillo
also currently serves on the Board of Directors of Quest Diagnostics,
Inc.
Dr. Gibbons, 69, has been a member of the Board of Directors since
May 1992. He is a Reid Weaver Dennis Professor of Electrical Engineering
at Stanford University and also Special Consul to the Stanford President
for Industrial Relations. He was Dean of the Stanford University School
of Engineering from 1984 to 1996. Dr. Gibbons also currently serves
on the Boards of Directors of Lockheed Martin Corporation, El Paso
Natural Gas Company, and Triton Network Systems.
Mr. Kozel, 45, has been a member of the Board of Directors since
November 1996. He has been the managing member of Open Ventures since
January 2000. He joined the Company as Director, Program Management in
March 1989. In April 1992, he became Director of Field Operations and
in February 1993, he became Vice President of Business Development. From
January 1996 to April 1998 he was Senior Vice President and Chief Technical
Officer. From April 1998 to January 2000, Mr. Kozel was the Senior
Vice President, Corporate Development of the Company. Mr. Kozel is
currently on an extended leave of absence as an employee of the Company.
Mr. Morgan, 62, has been a member of the Board of Directors since
February 1998. He has been Chief Executive Officer of Applied Materials,
Inc. since 1977 and also Chairman of the Board since 1987. He was President
of Applied Materials, Inc. from 1976 to 1987. He was previously a senior
partner with West Ven Management, a private venture capital partnership
affiliated with Bank of America Corporation.
Mr. Morgridge, 67, joined the Company as President and Chief Executive
Officer and was elected to the Board of Directors in October 1988. Mr.
Morgridge became Chairman of the Board on January 31, 1995. From
1986 to 1988 he was President and Chief Operating Officer at GRiD Systems,
a manufacturer of laptop computer systems.
Mr. Sarin, 45, has been a member of the Board of Directors since
September 1998. He has been the Chief Executive Officer of InfoSpace,
Inc., and a member of its Board of Directors since April 2000. He was
the Chief Executive Officer of the USA/ Asia Pacific Region for Vodafone
AirTouch, Plc from July 1999 to April 2000. From February 1997 to July
1999 he was the President and Chief Operating Officer of AirTouch Communications,
Inc., a wireless telecommunications services company. He served as President
and Chief Executive Officer of AirTouch International from April 1994
to February 1997. Mr. Sarin joined AirTouch Communications, Inc.
in 1984 and held a variety of positions, including Vice President and
General Manager, Vice President, Chief Financial Officer and Controller,
and Vice President of Corporate Strategy. Mr. Sarin currently serves
on the Boards of Directors of Vodafone Plc and Charles Schwab Corporation.
Mr. Valentine, 68, has been a member of the Board of Directors of
the Company since December 1987 and was elected Chairman of the Board
of Directors in December 1988. He became Vice Chairman of the Board on
January 31, 1995. He has been a general partner of Sequoia Capital
since 1974. Mr. Valentine currently serves as Chairman of the Board
of Directors of Network Appliance, Inc.
Mr. West, 45, has been a member of the Board of Directors since April
1996. He has been the President and Chief Executive Officer of Entera,
Inc. since September 1999. From January 1999 to August 1999 he was the
President of the Services Business Unit at Electronic Data Systems Corporation.
He was the President and Chief Executive Officer of Hitachi Data Systems,
a joint venture computer hardware services company owned by Hitachi, Ltd.
and Electronic Data Systems Corporation, from June 1996 to January 1999.
Prior to that, Mr. West was at Electronic Data Systems Corporation
from November 1984 to June of 1996, most recently as President of Electronic
Data Systems Corporation Infotainment Business Unit.
Mr. Yang, 31, has been a member of the Board of Directors since July
2000. He is a founder of Yahoo! Inc., and since March 1995 has been an
executive of Yahoo! Inc. and has served as a member of its Board of Directors.
Mr. Yang also currently serves on the Board of Directors of Ziff-Davis
Inc.
Board
Committees and Meetings
During the fiscal year that ended on July 29, 2000, the Board of
Directors held eight meetings. During this period, all of the directors
attended or participated in more than 75% of the aggregate of (i) the
total number of meetings of the Board of Directors and (ii) the total
number of meetings held by all Committees of the Board on which each such
director served.
The Company has eight standing Committees: the Acquisition Committee,
the Special Acquisition Committee, the Audit Committee, the Compensation/
Stock Option Committee, the Executive Committee, the Investment/ Finance
Committee, the Nomination Committee, and the Special Stock Option Committee.
The Acquisition Committee reviews acquisition strategies and candidates
with the Company’s management, approves acquisitions and also makes
recommendations to the Board of Directors. This Committee met on twelve
separate occasions during the last fiscal year. This Committee currently
consists of Messrs. Valentine, Chambers, Morgridge, and Sarin and
Ms. Bartz.
The Special Acquisition Committee reviews acquisition strategies and candidates
with the Company’s management, approves acquisitions valued below
a certain dollar threshold and also makes recommendations to the Board
of Directors. This committee held seven meetings during the last fiscal
year. The Committee currently consists of Messrs. Chambers and Kozel
and Ms. Bartz.
The Audit Committee is responsible for reviewing the Company’s financial
procedures and controls and for selecting and meeting with the independent
accountants. This Committee held four meetings during the last fiscal
year. This Committee currently consists of Ms. Cirillo and Messrs. Sarin
and West.
The Compensation/ Stock Option Committee is responsible for reviewing
the compensation arrangements in effect for the Company’s executive
officers and for administering all the Company’s employee benefit
plans, including the 1996 Stock Incentive Plan. This Committee acted by
unanimous written consent on thirteen separate occasions and met once
during the last fiscal year. This Committee currently consists of Messrs. Gibbons,
and Morgan and Ms. Bartz.
The Executive Committee’s duties include anything permitted by law
to be performed by the Board of Directors that does not require the full
Board. This Committee held one meeting during the last fiscal year. This
Committee currently consists of Messrs. Morgridge, Chambers, and
Valentine.
The Investment/ Finance Committee reviews and approves the Company’s
investment policy, real estate acquisitions and leasing, and the Company’s
currency, interest rate and equity risk management policies. The Committee
also reviews the Company’s minority investments, fixed income assets
and its insurance management policies and programs. This Committee held
three meetings during the last fiscal year. This Committee currently consists
of Messrs. Morgridge, Kozel and Valentine and Ms. Cirillo.
The Nomination Committee is responsible for nominating new members to
be considered for the Board of Directors. This Committee held three meetings
during the last fiscal year. This Committee currently consists of Messrs.
Chambers and Gibbons, and Ms. Bartz.
The Special Stock Option Committee has concurrent authorization with the
Compensation/ Stock Option Committee to make option grants under the 1996
Stock Incentive Plan to eligible individuals other than executive officers
of the Company. This committee held no meetings during the last fiscal
year with respect to the approval of such option grants. This committee
currently consists of Messrs. Chambers and Morgridge, and Ms. Bartz.
Director
Compensation
Non-employee directors were each paid a $32,000 annual retainer fee for
serving on the Board during the 2000 fiscal year except that no payment
was made to Mr. Yang who did not commence service until the end of
the fiscal year. During such fiscal year, non-employee directors were
also eligible to participate in the Discretionary Option Grant Program
in effect under the 1996 Stock Incentive Plan and to receive periodic
option grants under the Automatic Option Grant Program in effect under
the 1996 Plan. Directors who are also
employees of the Company are eligible to receive options under the Company’s
1996 Stock Incentive Plan and to participate in the Company’s 1989
Employee Stock Purchase Plan, the 401(k) Plan, and the Management Incentive
Plan.
At the Annual Meeting held on November 10, 1999, each of the following
non-employee directors re-elected to the Board received an option
grant under the Automatic Option Grant Program for 30,000 shares of Common
Stock with an exercise price of $39.75 per share: Ms. Bartz, Ms. Cirillo
and Messrs. Gibbons, Morgan, Sarin, Valentine, and West. Mr. Yang
received an initial automatic option grant for 30,000 shares on July 27,
2000 when he was first appointed to the Board, with an exercise price
of $68.00 per share. The exercise price in effect for each option is equal
to the fair market value per share of Common Stock on the grant date.
Each option has a maximum term of nine (9) years measured from the
grant date, subject to earlier termination following the optionee’s
cessation of Board service. The shares subject to each 30,000-share grant
will vest in two successive equal annual installments upon the optionee’s
completion of each year of Board service over the two (2)-year period
measured from the grant date. The shares subject to the 30,000-share grant
made to Mr. Yang will vest in four (4) successive equal annual
installments upon the completion of each year of Board service over the
four (4)-year period measured from the grant date. Each option is immediately
exercisable for all of the option shares; however, any shares purchased
under the option will be subject to repurchase by the Company, at the
option exercise price paid per share, upon the optionee’s cessation
of Board service prior to vesting in those shares. Lastly, the option
shares will immediately vest in full upon certain changes in control or
ownership of the Company or upon the optionee’s death or disability
while a Board member.
Recommendation
of the Board of Directors
The Board of Directors recommends a vote FOR the election of the
nominees listed herein. |
|
PROPOSAL NO. 2 RATIFICATION OF
INDEPENDENT ACCOUNTANTS
General
The Company is asking the shareholders to ratify the Board of Director’s
selection of PricewaterhouseCoopers LLP as the Company’s independent
accountants for the fiscal year ending July 28, 2001. The affirmative
vote of a majority of the outstanding voting shares of the Company present
or represented and entitled to vote at the Annual Meeting, together with
the affirmative vote of a majority of the required quorum, is required
to ratify the selection of PricewaterhouseCoopers LLP as the Company’s
independent accountants.
In the event the shareholders fail to ratify the appointment, the Board
of Directors will reconsider its selection. Even if the selection is ratified,
the Board of Directors, in its discretion, may direct the appointment
of a different independent accounting firm at any time during the year
if the Board of Directors determines that such a change would be in the
Company’s and its shareholders’ best interests.
PricewaterhouseCoopers LLP has audited the Company’s financial statements
annually since the 1988 fiscal year. Its representatives will be present
at the Annual Meeting, will have the opportunity to make a statement if
they desire to do so, and will be available to respond to appropriate
questions.
Recommendation
of the Board of Directors
The Board of Directors recommends that the shareholders vote FOR the
ratification of the selection of PricewaterhouseCoopers LLP to serve as
the Company’s independent accountants for the fiscal year ending
July 28, 2001. |
The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company’s Common Stock
as of July 29, 2000 for (i) all persons who are beneficial owners
of five percent or more of the Company’s Common Stock, (ii) each
director and nominee for director, (iii) the Company’s Chief
Executive Officer and the other executive officers named in the Summary
Compensation Table below, and (iv) all current executive officers
and directors as a group as of July 29, 2000:
| Name |
|
Number
of
Shares
Beneficially
Owned(1) |
|
Percent
Owned(2) |
|
|
|
|
|
|
Carol A. Bartz(3) |
|
|
302,928 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Larry R. Carter(4) |
|
|
3,017,935 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
John T. Chambers(5) |
|
|
17,011,915 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Mary A. Cirillo(6) |
|
|
205,584 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Gary J. Daichendt |
|
|
810,062 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
James F. Gibbons |
|
|
160,920 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Edward R. Kozel(7) |
|
|
1,082,973 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Donald J. Listwin(8) |
|
|
4,103,952 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Mario Mazzola |
|
|
3,217,762 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
James C. Morgan(9) |
|
|
199,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
John P. Morgridge(10) |
|
|
85,369,268 |
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
Carl Redfield |
|
|
2,190,849 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Arun Sarin |
|
|
113,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Donald T. Valentine(11) |
|
|
5,191,539 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Steven M. West(12) |
|
|
195,400 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Jerry Yang(13) |
|
|
69,721 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
All executive officers and directors as a group (20 Persons)(14) |
|
|
132,032,748 |
|
|
|
1.8 |
|
|
|
|
|
(1)
|
Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table
have sole voting and investment power with respect to all shares of
Common Stock. The number of shares beneficially owned includes Common
Stock of which such individual has the right to acquire beneficial
ownership either currently or within 60 days after July 29,
2000, including, but not limited to, upon the exercise of an option. |
|
|
|
(2)
|
Percentage of beneficial ownership is based upon 7,138,431,395 shares
of Common Stock, all of which were outstanding on July 29, 2000.
For each named person, this percentage includes Common Stock of which
such person has the right to acquire beneficial ownership either currently
or within 60 days of July 29, 2000, including, but not limited
to, upon the exercise of an option; however, such Common Stock shall
not be deemed outstanding for the purpose of computing the percentage
owned by any other person. Such calculation is required by General
Rule 13d-3(d)(1)(i) under the Securities Exchange Act of 1934.
Based upon a review of 13G filings made with the Securities and Exchange
Commission during fiscal year 2000, there were no 5% shareholders. |
|
|
|
(3)
|
Includes 2,928 shares held by Carol Bartz’s spouse, Bill Marr. |
|
|
|
(4)
|
Includes 30,796 shares held by the Carter Rev. Trust dated October 18,
1994. |
|
|
|
(5)
|
Includes 35,928 shares held by the Sequoia Capital VII Partnership. |
|
|
|
(6)
|
Includes 13,500 shares held by Mary Cirillo’s spouse, Jay Goldberg. |
|
|
|
(7)
|
Includes 37,374 shares held by Edward R. and Sara T. Kozel, Trustees
for the Kozel Revocable Trust dated December 27, 1994. |
|
|
|
(8)
|
Includes 103,452 shares held by Donald Listwin’s spouse, Lorene
Arey. |
|
|
|
(9)
|
Includes
9,000 shares held by James Morgan’s spouse, Rebecca Q. Morgan. |
|
|
|
|
(10)
|
Includes
82,026,691 shares held by John P. Morgridge and Tashia F. Morgridge
as Trustees of the Morgridge Family Trust (UTA DTD 6/30/88). Includes
98,188 shares held by John Morgridge’s spouse, Tashia F. Morgridge.
Includes 1,865,488 shares held in the Morgridge Family Foundation.
Includes 18,088 shares held by the Sequoia Technology VI Partnership. |
|
|
|
|
(11)
|
Includes
1,793,410 shares held by the Donald T. Valentine Family Trust Under
Agreement dated April 29, 1967. Includes 2,658,129 shares held
in total by the following partnerships in which Mr. Valentine
holds a partnership or other economic interest: 36,088 shares held
by Sequoia Technology Partners VI, 1,126 shares held by Sequoia XXIV,
124,874 shares held by Sequoia 1995, 1,508,382 shares held by Sequoia
Capital VII, 67,092 shares held by Sequoia Technology Partners VII,
656,988 shares held by Sequoia Capital VI, 14,368 shares held by Sequoia
International Partners, 66,223 shares held by Sequoia Capital VIII,
4,384 shares held by Sequoia International Partners VIII Q, 840 shares
held by Sequoia International Technology Partners VIII, 61,064 shares
held by Sequoia 1997, 108,050 shares held by SQP 1997 and 8,650 shares
held by CMS Partners (collectively the “Sequoia Entities”).
Mr. Valentine disclaims beneficial ownership of shares held
by the Sequoia Entities, except to the extent of his pecuniary interest
therein. |
|
|
|
|
(12)
|
Includes
400 shares held by Steven West’s spouse, Donna Karam. |
|
|
|
|
(13)
|
Includes
2,388 shares held in the Red Husley Foundation, 34,145 shares held
in the Jerry Yang Charitable Trust and 3,188 shares held in the Jerry
Yang Revocable Trust. |
|
|
|
|
(14)
|
Includes
outstanding options to purchase 37,298,447 shares of Common Stock
to the extent such options are either currently exercisable or will
become exercisable within 60 days after July 29, 2000. See
Note 2 with respect to shares that have been included herein. |
|
Compliance
with SEC Reporting Requirements
Under the securities laws of the United States, the Company’s directors,
executive officers, and any persons holding more than ten percent of the
Company’s Common Stock are required to report their initial ownership
of the Company’s Common Stock and any subsequent changes in their
ownership to the Securities and Exchange Commission (“SEC”).
Specific due dates have been established by the SEC, and the Company is
required to disclose in this Proxy Statement any failure to file by those
dates. Based upon (i) the copies of Section 16(a) reports that
the Company received from such persons for their 2000 fiscal year transactions
and (ii) the written representations received from one or more of
such persons that no annual Form 5 reports were required to be filed
for them for the 2000 fiscal year, the Company believes that there has
been compliance with all Section 16(a) filing requirements applicable
to such officers, directors, and ten-percent beneficial owners for such
fiscal year, except that the following individuals failed to file timely
reports for such fiscal year: Mr. Morgridge did not report his June 9,
2000 option grant for 100,000 shares on a timely filed Form 5 report for
the 2000 fiscal year but instead will report the grant on a late Form
5 filing; Ms. Cirillo failed to report on her initial Form 3 her holdings
of the Company’s Common Stock at the time she joined the Board of
Directors and failed to file Form 4 reports for certain acquisitions of
the Company’s Common Stock she or her spouse made during the 1999
and 2000 fiscal years and will file a late Form 5 report for fiscal 2000
for those holdings and acquisitions; and Mr. Valentine failed to file
Form 4 reports for certain acquisitions of the Company’s Common Stock
made by several partnerships in which he holds a partnership or other
economic interest and will file a late Form 5 report for those acquisitions;
and (ii) a Form 4 report that was filed timely for each of Messrs.
Carter, Daichendt, Gibbons, Listwin, Morgridge, and Redfield but was inadvertently
filed with the SEC without signatures. When this was discovered, a fully
executed amended Form 4 was filed for each individual. |
| Back
to top |
|
|
EXECUTIVE COMPENSATION AND RELATED INFORMATION
|
|
Compensation/Stock
Option Committee Report
The Compensation/ Stock Option Committee (the “Committee”) of
the Board of Directors sets the compensation of the Chief Executive Officer,
reviews the design, administration and effectiveness of compensation programs
for other key executives,
and approves stock option grants for all executive officers. The Committee,
serving under a charter adopted by the Board of Directors, is composed
entirely of outside directors who have never served as officers of the
Company.
Compensation Philosophy and Objectives
The Company operates in the extremely competitive and rapidly changing
high technology industry. The Committee believes that the compensation
programs for the executive officers should be designed to attract, motivate
and retain talented executives responsible for the success of the Company
and should be determined within a competitive framework and based on the
achievement of designated financial targets, individual contribution,
customer satisfaction and financial performance relative to that of the
Company’s competitors. Within this overall philosophy, the Committee’s
objectives are to:
|
|
|
|
•
|
Offer a total compensation program that takes into consideration the
compensation practices of a group of specifically identified peer
companies (the “Peer Companies”) and other selected companies
with which the Company competes for executive talent. |
|
|
|
•
|
Provide annual variable incentive awards that take into account the
Company’s overall financial performance in terms of designated
corporate objectives and the relative performance of the Peer Companies
as well as individual contributions and a measure of customer satisfaction. |
|
|
|
•
|
Align the financial interests of executive officers with those of
shareholders by providing significant equity-based, long-term incentives. |
|
|
Compensation Components and Process
The three major components of the Company’s executive officer compensation
are: (i) base salary, (ii) variable incentive awards, and (iii) long-term,
equity-based incentive awards.
The Committee determines the compensation levels for the executive officers
with the assistance of the Company’s Human Resources Department,
which works with an independent consulting firm that furnishes the Committee
with executive compensation data drawn from a nationally recognized survey
of similarly sized technology companies which have been identified as
the Peer Companies. A significant number of the Peer Companies are listed
in the Hambrecht & Quist Technology Index, which is included in the
Stock Performance Graph for this proxy statement. Certain companies not
included in this Index were considered Peer Companies because the Company
competes for executive talent with those companies. However, some organizations
in the Hambrecht & Quist Technology Index were excluded from the Peer
Company list because they were not considered competitors for executive
talent or because compensation information was not available.
The positions of the Company’s CEO and executive officers were compared
with those of their counterparts at the Peer Companies, and the market
compensation levels for comparable positions were examined to determine
base salary, target incentives and total cash compensation. In addition,
the practices of the Peer Companies concerning stock option grants were
reviewed and compared.
Base Salary. The base salary for each executive officer is determined
at levels considered appropriate for comparable positions at the Peer
Companies. The Company’s policy is to target base salary levels between
the 25th and 50th percentile of compensation practices at the Peer Companies.
Variable Incentive Awards. To reinforce the attainment of Company
goals, the Committee believes that a substantial portion of the annual
compensation of each executive officer should be in the form of variable
incentive pay. The annual incentive pool for executive officers is determined
on the basis of the Company’s achievement of the financial performance
targets established at the beginning of the fiscal year and also includes
a range for the executive’s contribution, a measure of customer satisfaction
and a strategic component tied to the Company’s performance relative
to a select group of competitors. The incentive plan sets a threshold
level of Company performance based on both revenue and profit before interest
and taxes that must be attained before any incentives are awarded. Once
the fiscal year’s threshold is reached, specific formulas are in
place to calculate the actual incentive payment for each officer. A target
is set for each executive officer based on targets for comparable positions
at the Peer Companies and is stated in terms of an escalating percentage
of the officer’s base salary for the year. In fiscal 2000, the Company
exceeded its corporate performance targets as well as the strategic target
tied to revenue performance relative to the selected competitor group.
Awards paid reflected those results plus individual accomplishments of
both corporate and functional objectives and a component based upon customer
satisfaction.
Long-Term, Equity-Based Incentive Awards. The goal of the Company’s
long-term, equity-based incentive awards is to align the interests of
executive officers with shareholders and to provide each executive officer
with a significant incentive to manage the Company from the perspective
of an owner with an equity stake in the business. The Committee determines
the size of long-term, equity-based incentives according to each executive’s
position within the Company and sets a level it considers appropriate
to create a meaningful opportunity for stock ownership. In addition, the
Committee takes into account an individual’s recent performance,
his or her potential for future responsibility and promotion, comparable
awards made to individuals in similar positions with the Peer Companies,
and the number of unvested options held by each individual at the time
of the new grant. The relative weight given to each of these factors varies
among individuals at the Committee’s discretion.
During fiscal 2000, the Committee made option grants to Messrs. Carter,
Chambers, Daichendt, Listwin, Mazzola and Redfield under the Company’s
1996 Stock Incentive Plan. Each grant allows the officer to acquire shares
of the Company’s Common Stock at a fixed price per share (the market
price on the grant date) over a specified period of time. Options granted
to this group of individuals in January 2000 and later vest in periodic
installments over a five (5)-year period, contingent upon the executive
officer’s continued employment with the Company. Accordingly, the
option grants will provide a return only if the officer remains with the
Company and only if the market price appreciates over the option term.
CEO Compensation. The annual base salary for Mr. Chambers
was established by the Committee on July 12, 1999, for the period
August 1, 1999 to July 29, 2000. The Committee’s decision
was based on both Mr. Chambers’ personal performance of his
duties and the salary levels paid to chief executive officers of the Peer
Companies, but set below the 25th percentile of the surveyed data in order
to have a substantial portion of his total compensation, in the form of
variable incentive awards and stock option grants, tied to Company performance
and stock price appreciation. The Committee continues to assess the market
data for chief executive officers’ salary levels at our Peer Companies
to ensure that Mr. Chambers’ compensation is consistent with
Cisco’s stated compensation objectives relative to base salary.
Mr. Chambers’ 2000 fiscal year incentive compensation was based
on the actual financial performance of the Company in achieving designated
corporate objectives and attaining a strategic revenue objective measured
against competitor performance and also included components based upon
customer satisfaction and Mr. Chambers’ personal performance.
Mr. Chambers’ incentive compensation was based on the incentive
plan used for all executive officers and provided no dollar guarantees.
The option grant made to Mr. Chambers during the 2000 fiscal year
was awarded within substantially the same timeframe the Committee granted
stock options to other employees under the Company’s broad-based
stock option program. The option grant made to Mr. Chambers was based
upon his performance and leadership with the Company and placed a significant
portion of his total compensation at risk, since the value of the option
grant depends upon the appreciation of the Company’s Common Stock
over the option term.
Compliance with Internal Revenue Code Section 162(m). Section 162(m)
of the Internal Revenue Code disallows a Federal income tax deduction
to publicly held companies for compensation paid to certain of their executive
officers, to the extent that compensation exceeds $1 million per
covered officer in any fiscal year. This limitation applies only to compensation
which is not considered to be performance based. The Company’s 1996
Stock Incentive Plan has been structured so that any compensation deemed
paid in connection with the exercise of option grants made under that
plan will qualify as performance-based compensation which will not be
subject to the $1 million limitation. Non-performance based compensation
paid to the Company’s executive officers for the 2000 fiscal year
exceeded the $1 million limit per officer for all of the Named Officers
subject to Section 162(m). The Committee has decided that it is not
appropriate at this time to take any action to limit the Company’s
discretion to design the cash compensation packages payable to the Company’s
executive officers.
Submitted
by the Compensation/ Stock Option Committee
Carol Bartz, Chairman
James F. Gibbons
James C. Morgan
Compensation
Committee Interlocks and Insider Participation
The members of the Compensation/ Stock Option Committee of the Company’s
Board of Directors for the 2000 fiscal year were those named above in
the Compensation/ Stock Option Committee Report. No
member of this Committee was at any time during the 2000 fiscal year or
at any other time an officer or employee of the Company.
No executive officer of Cisco Systems, Inc. has served on the board of
directors or compensation committee of any other entity that has or has
had one or more executive officers serving as a member of the Board of
Directors of Cisco Systems, Inc.
Summary
of Cash and Certain Other Compensation
The following table sets forth the compensation earned, by the Company’s
Chief Executive Officer and the four other highest-paid executive officers
and an additional individual who was no longer an executive officer at
the end of the fiscal year whose salary and bonus for the 2000 fiscal
year were in excess of $100,000, for services rendered in all capacities
to the Company and its subsidiaries for each of the last three fiscal
years. No executive officer who would have otherwise been includable in
such table on the basis of salary and bonus earned for the 2000 fiscal
year has been excluded by reason of his or her termination of employment
or change in executive status during that fiscal year. The individuals
included in the table will be collectively referred to as the “Named
Officers.”
|
|
|
|
|
|
|
|
|
SUMMARY COMPENSATION TABLE
|
|
|
Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term |
|
|
|
|
Annual
Compensation |
|
Other
Annual |
|
Compensation |
|
All
Other |
|
|
|
|
Compensation |
|
Awards |
|
Compensation |
|
Name
and
Principal Position
|
|
Year |
|
Salary($) |
|
Bonus($)(1) |
|
($)(2) |
|
Options(#) |
|
($)(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John T. Chambers |
|
|
2000 |
|
|
|
323,319 |
|
|
|
1,000,000 |
|
|
|
0 |
|
|
|
4,000,000 |
|
|
|
1,500 |
|
|
President, Chief Executive |
|
|
1999 |
|
|
|
305,915 |
|
|
|
637,184 |
|
|
|
0 |
|
|
|
5,000,000 |
|
|
|
1,500 |
|
|
Officer, Director |
|
|
1998 |
|
|
|
285,622 |
|
|
|
604,895 |
|
|
|
0 |
|
|
|
5,400,000 |
|
|
|
1,500 |
|
|
|
|
|
|
|
|
|
|
Donald J. Listwin(4) |
|
|
2000 |
|
|
|
455,702 |
|
|
|
902,174 |
|
|
|
0 |
|
|
|
1,000,000 |
|
|
|
0 |
|
|
Executive Vice President, |
|
|
1999 |
|
|
|
397,399 |
|
|
|
637,280 |
|
|
|
6,306 |
|
|
|
1,000,000 |
|
|
|
0 |
|
|
Service Provider and Consumer |
|
|
1998 |
|
|
|
332,261 |
|
|
|
598,407 |
|
|
|
21,341 |
|
|
|
1,650,000 |
|
|
|
0 |
|
|
Lines of Business, Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary J. Daichendt |
|
|
2000 |
|
|
|
454,591 |
|
|
|
902,174 |
|
|
|
0 |
|
|
|
1,000,000 |
|
|
|
0 |
|
|
Executive Vice President, |
|
|
1999 |
|
|
|
368,490 |
|
|
|
591,053 |
|
|
|
0 |
|
|
|
1,200,000 |
|
|
|
0 |
|
|
Worldwide Operations |
|
|
1998 |
|
|
|
322,132 |
|
|
|
547,697 |
|
|
|
0 |
|
|
|
1,200,000 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
Mario Mazzola(5) |
|
|
2000 |
|
|
|
412,520 |
|
|
|
850,958 |
|
|
|
|
|
|
|
500,000 |
|
|
|
1,500 |
|
|
Senior Vice President, |
|
|
1999 |
|
|
|
374,640 |
|
|
|
576,882 |
|
|
|
0 |
|
|
|
640,000 |
|
|
|
1,500 |
|
|
New Business Ventures |
|
|
1998 |
|
|
|
327,353 |
|
|
|
556,839 |
|
|
|
0 |
|
|
|
1,200,000 |
|
|
|
1,500 |
|
|
|
|
|
|
|
|
|
|
Larry R. Carter |
|
|
2000 |
|
|
|
386,262 |
|
|
|
861,750 |
|
|
|
0 |
|
|
|
850,000 |
|
|
|
1,500 |
|
|
Senior Vice President, |
|
|
1999 |
|
|
|
367,063 |
|
|
|
612,131 |
|
|
|
13,085 |
|
|
|
640,000 |
|
|
|
1,500 |
|
|
Finance and Administration, |
|
|
1998 |
|
|
|
326,439 |
|
|
|
555,152 |
|
|
|
22,431 |
|
|
|
1,350,000 |
|
|
|
1,500 |
|
|
Chief Financial Officer, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secretary and Director |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carl Redfield |
|
|
2000 |
|
|
|
342,228 |
|
|
|
763,773 |
|
|
|
0 |
|
|
|
750,000 |
|
|
|
1,500 |
|
|
Senior Vice President, |
|
|
1999 |
|
|
|
321,897 |
|
|
|
549,396 |
|
|
|
0 |
|
|
|
600,000 |
|
|
|
1,500 |
|
|
Manufacturing, WW |
|
|
1998 |
|
|
|
267,559 |
|
|
|
454,909 |
|
|
|
5,222 |
|
|
|
900,000 |
|
|
|
1,500 |
|
|
|
|
|
(1)
|
The amounts shown under the Bonus column represent cash bonuses earned for
the indicated fiscal years. |
|
|
|
(2)
|
The amounts reported consist of reimbursement for the payment of taxes attributable
to imputed interest income on certain loans made by the Company to the Named
Officer. |
|
|
|
(3)
|
Represents the matching contribution which the Company made on behalf of
each Named Officer to the Company’s 401(k) Plan. |
|
|
|
(4)
|
Following the end of the fiscal year, Mr. Listwin resigned his position
with the Company. |
|
|
|
(5)
|
Mr. Mazzola was no longer an executive officer subject to Section 16(a)
of the Securities Exchange Act of 1934, as amended, effective as of March 30,
2000. |
| |
|
|
Stock
Options
The following table provides information with respect to the stock option
grants made during the 2000 fiscal year under the Company’s 1996
Stock Incentive Plan to the Named Officers. No stock appreciation rights
were granted to the Named Officers during the fiscal year.
|
|
OPTION GRANTS IN LAST FISCAL YEAR
|
|
|
Individual Grants |
|
|
|
|
|
|
|
|
|
|
|
Number
of |
|
%
of Total |
|
|
|
Value
of Assumed Annual |
|
|
Securities |
|
Options |
|
|
|
Rates of Stock |
|
|
Underlying |
|
Granted
to |
|
|
|
Price
Appreciation |
|
|
Options |
|
Employees |
|
Exercise |
|
|
|
for
Option Term(2) |
|
|
Granted |
|
in
Fiscal |
|
Price |
|
Expiration |
|
|
| Name |
|
(1) |
|
Year |
|
($/Share) |
|
Date |
|
5%($) |
|
10%($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John T. Chambers |
|
|
4,000,000 |
|
|
|
1.3291 |
|
|
|
54.5313 |
|
|
|
01/24/09 |
|
|
$ |
120,258,577 |
|
|
$ |
296,202,611 |
|
|
|
|
|
|
|
|
|
|
Donald J. Listwin |
|
|
1,000,000 |
|
|
|
.3323 |
|
|
|
51.9063 |
|
|
|
01/12/09 |
|
|
|
28,617,408 |
|
|
|
70,486,040 |
|
|
|
|
|
|
|
|
|
|
Gary J. Daichendt |
|
|
1,000,000 |
|
|
|
.3323 |
|
|
|
51.9063 |
|
|
|
01/12/09 |
|
|
|
28,617,408 |
|
|
|
70,486,040 |
|
|
|
|
|
|
|
|
|
|
Mario Mazzola |
|
|
500,000 |
|
|
|
.1661 |
|
|
|
51.9063 |
|
|
|
01/12/09 |
|
|
|
14,308,704 |
|
|
|
35,243,020 |
|
|
|
|
|
|
|
|
|
|
Larry R. Carter |
|
|
750,000 |
|
|
|
.2492 |
|
|
|
51.9063 |
|
|
|
01/12/09 |
|
|
|
21,463,056 |
|
|
|
52,864,530 |
|
|
|
|
100,000 |
|
|
|
.0332 |
|
|
|
62.7500 |
|
|
|
05/09/09 |
|
|
|
3,459,585 |
|
|
|
8,521,122 |
|
|
|
|
|
|
|
|
|
|
Carl Redfield |
|
|
650,000 |
|
|
|
.2160 |
|
|
|
51.9063 |
|
|
|
01/12/09 |
|
|
|
18,601,315 |
|
|
|
45,815,926 |
|
|
|
|
100,000 |
|
|
|
.0332 |
|
|
|
62.7500 |
|
|
|
05/09/09 |
|
|
|
3,459,585 |
|
|
|
8,521,122 |
|
|
|
|
| (1) |
Options were granted on January 12, 2000, January 24, 2000 and
May 9, 2000 and have a maximum term of 9 years measured from the
applicable grant date, subject to earlier termination in the event of the
optionee’s cessation of service with the Company. The stock options
granted will become exercisable for 20% of the option shares upon the completion
of one year of service and will become exercisable for the remaining shares
in equal monthly installments over the next 48 months of service thereafter.
However, the option will immediately become exercisable for all of the option
shares in the event the Company is acquired by a merger or asset sale, unless
the options are assumed by the acquiring entity, or in the event there is
a hostile change in control or ownership of the Company. |
|
| (2) |
There is no assurance provided to any executive officer or any other holder
of the Company’s securities that the actual stock price appreciation
over the nine (9)-year option term will be at the assumed 5% or 10% annual
rates of compounded stock price appreciation or at any other defined level.
Unless the market price of the Common Stock appreciates over the option
term, no value will be realized from the option grants made to the executive
officers. |
| |
|
|
Option
Exercises and Holdings
The table below sets forth information with respect to the Named Officers
concerning their exercise of options during the 2000 fiscal year and the
unexercised options held by them as of the end of such year. No stock
appreciation rights were exercised during the fiscal year, and no stock
appreciation rights were outstanding at the end of the fiscal year.
|
|
AGGREGATED
OPTION EXERCISES IN LAST FISCAL YEAR
AND
FISCAL YEAR-END OPTION VALUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of Securities |
|
Value
of Unexercised |
|
|
|
|
|
|
Underlying
Unexercised |
|
In-the-Money
Options |
|
|
Number
of |
|
Value |
|
Options
at July 29, 2000 |
|
at
July 29, 2000($)(1) |
|
|
Shares
Acquired |
|
Realized |
|
|
|
|
| Name |
|
on
Exercise |
|
($)(2) |
|
Exercisable |
|
Unexercisable |
|
Exercisable |
|
Unexercisable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John T. Chambers |
|
|
2,500,000 |
|
|
$ |
155,980,290 |
|
|
|
14,275,000 |
|
|
|
11,125,000 |
|
|
$ |
779,459,996 |
|
|
$ |
346,539,354 |
|
|
|
|
|
|
|
|
|
|
Donald J. Listwin |
|
|
112,496 |
|
|
|
4,883,083 |
|
|
|
3,595,314 |
|
|
|
2,698,438 |
|
|
|
193,322,298 |
|
|
|
86,741,278 |
|
|
|
|
|
|
|
|
|
|
Gary J. Daichendt |
|
|
1,505,722 |
|
|
|
52,717,030 |
|
|
|
660,323 |
|
|
|
2,636,459 |
|
|
|
30,827,358 |
|
|
|
83,243,828 |
|
|
|
|
|
|
|
|
|
|
Mario Mazzola |
|
|
140,624 |
|
|
|
8,794,237 |
|
|
|
2,948,696 |
|
|
|
1,926,876 |
|
|
|
161,009,240 |
|
|
|
72,900,703 |
|
|
|
|
|
|
|
|
|
|
Larry R. Carter |
|
|
1,634,400 |
|
|
|
48,170,629 |
|
|
|
2,879,687 |
|
|
|
2,075,313 |
|
|
|
156,746,648 |
|
|
|
64,376,930 |
|
|
|
|
|
|
|
|
|
|
Carl Redfield |
|
|
790,000 |
|
|
|
37,265,767 |
|
|
|
2,032,812 |
|
|
|
1,857,188 |
|
|
|
109,227,769 |
|
|
|
57,583,209 |
|
|
|
|
| (1) |
Based upon the market price of $62.8125 per share, which was the closing
selling price per share of Common Stock on the Nasdaq National Market on
the last day of the 2000 fiscal year, less the option exercise price payable
per share. |
|
| (2) |
Based upon the market price of the purchased shares on the exercise date
less the option exercise price paid for such shares. |
| |
|
|
Employment
Contracts, Termination of Employment, and Change in Control Agreements
None of the Company’s executive officers have employment or severance
agreements with the Company, and their employment may be terminated at
any time at the discretion of the Board of Directors.
Each outstanding option under the Company’s 1996 Stock Incentive
Plan will vest and become immediately exercisable for all of the option
shares at the time subject to that option in the event there should occur
a hostile take-over of the Company, whether through a tender offer for
more than thirty-five percent (35%) of the Company’s outstanding
voting securities which the Board does not recommend the shareholders
to accept or a change in the majority of the Board as a result of one
or more contested elections for Board membership.
Certain
Relationships and Related Transactions
In January 1996, the Company loaned Gary J. Daichendt, Executive Vice
President, Worldwide Operations of the Company, $400,000. The loan was
paid in full in January 2000. The loan was interest free and was collaterized
by a deed of trust on real property.
STOCK PERFORMANCE GRAPH
The graph depicted below shows the Company’s stock price as an index
assuming $100 invested on July 28, 1995, along with the composite
prices of companies listed in the S&P 500 and the Hambrecht &
Quist Technology Index.
COMPARISON
OF FIVE-YEAR CUMULATIVE TOTAL RETURN
[PERFORMANCE
GRAPH]
| |
7/28/95
|
7/26/96
|
7/25/97
|
7/24/98
|
7/30/99
|
7/28/00
|
| Cisco
Systems, Inc. |
$100
|
$183
|
$284
|
$523
|
$997
|
$2,017
|
| S&P
500 |
100
|
117
|
177
|
212
|
254
|
277
|
| Hambrecht &
Quist Technology Index |
100
|
96
|
162
|
175
|
283
|
471
|
|
Notwithstanding anything to the contrary set forth in any of the Company’s
previous filings under the Securities Act of 1933 or the Securities Exchange
Act of 1934 that might incorporate future filings made by the Company
under those statutes, the preceding Compensation/ Stock Option Committee
Report on Executive Compensation and the Company Stock Performance Graph
will not be incorporated by reference into any of those prior filings,
nor will such report or graph be incorporated by reference into any future
filings made by the Company under those statutes.
Notes
|
|
| (1) |
The Company’s fiscal year ended on July 29, 2000. |
|
| (2) |
No cash dividends have been declared on the Company’s Common
Stock. Shareholder returns over the indicated period should not be
considered indicative of future shareholder returns. |
SHAREHOLDER PROPOSALS FOR 2001 PROXY STATEMENT
Shareholder proposals that are intended to be presented at the Company’s
Annual Meeting of Shareholders to be held in 2001 must be received by
the Company no later than June 1, 2001 in order to be included in
the proxy statement and related proxy materials. Please send any such
proposals to Cisco Systems, Inc., 170 W. Tasman Drive, San Jose,
California 95134-1706, Attn: Investor Relations, with a copy to the attention
of the Company’s Senior Vice President, Legal and Government Affairs.
In addition, the proxy solicited by the Board of Directors for the 2001
Annual Meeting of Shareholders will confer discretionary authority to
vote on any shareholder proposal presented at that meeting, unless the
Company is provided with notice of such proposal no later than August 15,
2001.
FORM 10-K
THE COMPANY WILL MAIL WITHOUT CHARGE, UPON WRITTEN REQUEST, A COPY
OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED JULY 29, 2000, INCLUDING THE FINANCIAL STATEMENTS,
SCHEDULES, AND LIST OF EXHIBITS. REQUESTS SHOULD BE SENT TO CISCO
SYSTEMS, INC., 170 W. TASMAN DRIVE, SAN JOSE, CALIFORNIA 95134-1706,
ATTN: INVESTOR RELATIONS.
OTHER MATTERS
The Board knows of no other matters to be presented for shareholder action
at the Annual Meeting. However, if other matters do properly come before
the Annual Meeting or any adjournments or postponements thereof, the Board
intends that the persons named in the proxies will vote upon such matters
in accordance with their best judgment.
| |
BY ORDER OF THE BOARD OF DIRECTORS
Larry R. Carter
Secretary |
Dated: September 29, 2000
1028-PSA-00
|
|
|
