Cisco CEO plans large sell-off
Chambers will keep 25 percent of take through options
By Dan Gallagher, CBS MarketWatch.com
Last Update: 6:17 PM ET Aug. 19, 2004
SAN FRANCISCO (CBS.MW) -- Cisco Systems President and CEO John Chambers sold $18.6 million worth of his company's stock this week and filed papers Thursday to sell as much as 17.6 million additional shares over the next four years under a fixed-trading plan.
According to filings with the Securities and Exchange Commission, Chambers sold more than 1 million shares of Cisco (CSCO: news, chart, profile) on Tuesday for a total of $18.6 million. The shares were sold through the exercise of options.
In a statement filed with the SEC, the company said Chambers has also adopted a 10b5-1 plan under which he will sell up to 17.6 million shares between November 2004 and April 2008. Chambers, who currently owns approximately 2.8 million shares of Cisco stock, will acquire any shares sold under the plan through the exercise of stock options set to expire during that period.
To avoid spooking investors, Chambers also plans to keep a portion of the shares that he exercises during that period. According to a Cisco spokeswoman, Chambers will keep shares in the equivalent of 25 percent of the net cash value of each stock sale.
According to the SEC statement, the plan was established as part of Chambers' individual long-term strategy for asset diversification and liquidity.
Shares of Cisco closed Thursday up 11 cents at $19.10. The stock has lost 34 percent since January.
Chambers' last previous insider sale came on Nov. 13, 2003, when he sold more than 2.1 million shares for nearly $49 million, according to data from Thomson Financial. Before that, his last sale came in February 1999.
So far this year, Cisco officers and board members have sold 1.9 million shares for approximately $44.6 million. Board member Michele Burns purchased 2,000 shares during that time, according to Thomson data.
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