DEF 14A of Cisco Systems, Inc., Sep 26, 2012

DEF 14A of Cisco Systems, Inc.

Filed Sep 26, 2012 · FY20120001193125-12-404925

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS

  2. Business Experience and Qualifications of Nominees

    Business Experience and Qualifications of Nominees Ms. Bartz, 64, has been a member of the Board of Directors since November 1996. Since November 2005, she has served as Lead Independent Director. Ms. Bartz served as Chief Executive Officer and as a member of the board of directors of Yahoo! Inc. from January 2009 to September 2011 and as President of Yahoo! from April 2009 to September 2011. From May 2006 to February 2009, she was Executive Chairman of the Board of Autodesk, Inc. From April 1992 to April 2006, she served as Chairman of the Board and Chief Executive Officer of Autodesk. Prior to that, Ms. Bartz was employed by Sun Microsystems, Inc. from 1983 to April 1992. Ms. Bartz previously served as a director of Intel Corporation and NetApp, Inc., each ending in 2009, and as a director of Yahoo! ending in 2011. Ms. Bartz brings to the Board of Directors leadership experience, including service as the chief executive of two public technology companies. These roles have required technology industry expertise combined with operational and global management expertise. Ms. Bartz also has experience as a public company outside director. Mr. Benioff, 47, has been a member of the Board of Directors since August 2012. He has served as Chairman of the Board of Directors of salesforce.com, inc. since he co-founded it in February 1999 and as its Chief Executive Officer since November 2001. Prior to that, Mr. Benioff was employed from 1986 to 1999 by Oracle Corporation, where he held a number of positions in sales, marketing and product development, lastly as a Senior Vice President. Mr. Benioff also serves as Chairman of the Board of Directors of the salesforce.com/foundation. As a founder of a global technology company, Mr. Benioff contributes an information technology and technology development background. In addition, Mr. Benioff brings to the Board of Directors strategy and leadership skills from his experience as a chief executive of a public company, as well as sales, marketing and product development skills from his experience at technology companies. Ms. Burns, 54, has been a member of the Board of Directors since November 2003. She has served as the Executive Director and Chief Executive Officer of the Retirement Policy Center sponsored by Marsh & McLennan Companies, Inc. since October 2011. In this capacity, she also serves as the Center Fellow and Strategic Advisor to the Stanford Center on Longevity at Stanford University. From September 2006 to October 2011, Ms. Burns served as Chairman and Chief Executive Officer of Mercer LLC, a global leader for human resources and related financial advice and services. She assumed that role after joining Marsh & McLennan Companies, Inc. in March 2006 as Chief Financial Officer. From May 2004 to January 2006, Ms. Burns served as Chief Financial Officer and Chief Restructuring Officer of Mirant Corporation, where she successfully helped restructure and emerge Mirant from bankruptcy. In 1999, Ms. Burns joined Delta Air Lines, Inc. assuming the role of Chief Financial Officer in 2000 and holding that position through April 2004. Delta filed for protection under Chapter 11 of the U.S. Bankruptcy Code in September 2005. She began her career in 1981 at Arthur Andersen LLP and became a partner in 1991. Ms. Burns also serves on the boards of directors of The Goldman Sachs Group, Inc. and Wal-Mart Stores, Inc. Ms. Burns provides to the Board of Directors expertise in corporate finance, accounting and strategy, including experience gained as the chief financial officer of three public companies. Through her experience gained as chief executive officer of Mercer, she brings expertise in global and operational management, including a background in organizational leadership and human resources. Ms. Burns also has experience serving as a public company outside director. Mr. Capellas, 58, has been a member of the Board of Directors since January 2006. He has served as the Chairman of the Board of VCE Company, LLC (“VCE”) since January 2011 and as a member of the board of directors of VCE since May 2010. Mr. Capellas served as Chief Executive Officer of VCE from May 2010 to September 2011. He served as the Chairman of the Board of the Virtual Computing Environment Coalition from May 2010 until January 2011, at which time the activities of the Virtual Computing Environment Coalition were transferred into VCE. VCE is a joint venture between EMC Corporation and Cisco with investments from VMware, Inc. and Intel Corporation. Mr. Capellas has also served as a Senior Advisor at Kohlberg Kravis Roberts & Co. since March 2010. Mr. Capellas was the Chairman and Chief Executive Officer of First Data Corporation from September 2007 to March 2010. From October 2006 to July 2007, Mr. Capellas served as a Senior Advisor at Silver Lake Partners. From November 2002 to January 2006, he served as Chief Executive Officer of MCI, Inc. (“MCI”), which had filed for bankruptcy in July 2002 and which was known as WorldCom, Inc. prior to its emergence from bankruptcy in April 2004. From March 2004 to January 2006, he also served as that company’s President. From November 2002 to March 2004, he was also Chairman of the Board of WorldCom, and he continued to serve as a member of the board of directors of MCI until January 2006. Mr. Capellas left MCI as planned in early January 2006 upon its acquisition by Verizon Communications Inc. Previously, Mr. Capellas was President of Hewlett-Packard Company from May 2002 to November 2002. Before the merger of Hewlett-Packard and Compaq Computer Corporation in May 2002, Mr. Capellas was President and Chief Executive Officer of Compaq, a position he had held since July 1999, and Chairman of the Board of Compaq, a position he had held since September 2000. Mr. Capellas held earlier positions as Chief Information Officer and Chief Operating Officer of Compaq. Mr. Capellas brings to the Board of Directors experience in executive roles and a background of leading global organizations in the technology industry. Through this experience, he has developed expertise in several valued areas including strategic product development, business development, and finance. Mr. Carter, 69, has been a member of the Board of Directors since July 2000. He served as an executive officer of Cisco from January 1995 to November 2008. He joined Cisco in January 1995 as Vice President of Finance and Administration, Chief Financial Officer and Secretary. In July 1997, he was promoted to Senior Vice President of Finance and Administration, Chief Financial Officer and Secretary. In May 2003, upon his retirement as Chief Financial Officer and Secretary, he was appointed Senior Vice President, Office of the Chairman and Chief Executive Officer. He retired from that position and from his employment with Cisco in November 2008. Before joining Cisco, he was employed by Advanced Micro Devices, Inc. as Vice President and Corporate Controller. Mr. Carter previously served as a director of QLogic Corporation, ending in 2008. Mr. Carter’s background in finance, accounting and strategic planning is complemented by his knowledge of Cisco, its financial position and its industry, which he developed in part through his service as Cisco’s Chief Financial Officer and as an executive officer of Cisco. Mr. Carter’s contributions are augmented by his experience serving as an outside director of multiple public companies. Mr. Chambers, 63, has served as a member of the Board of Directors since November 1993 and as Chairman of the Board since November 2006. He joined Cisco as Senior Vice President in January 1991, was promoted to Executive Vice President in June 1994 and to Chief Executive Officer as of January 31, 1995. He also served as President from January 31, 1995 until November 2006. Before joining Cisco, he was employed by Wang Laboratories, Inc. for eight years, where, in his last role, he was the Senior Vice President of U.S. Operations.

  3. Business Experience and Qualifications of Nominees

    Mr. Chambers has led Cisco for more than 17 years. Since his appointment as Chief Executive Officer, Cisco’s annual revenue has grown from $2.0 billion in fiscal 1995 to $46.1 billion in fiscal 2012. As Chairman and Chief Executive Officer, Mr. Chambers brings to the Board of Directors his thorough knowledge of Cisco’s business, strategy, people, operations, competition and financial position. Mr. Chambers provides recognized executive leadership and vision. In addition, he brings with him a global network of customer, industry and government relationships. Mr. Halla, 66, has been a member of the Board of Directors since January 2007. He served as Chairman of the Board and Chief Executive Officer of National Semiconductor Corporation from May 1996 to November 2009, and continued to serve as Chairman of the Board of that company until May 2010. Additionally, he served as President of National Semiconductor Corporation from May 1996 to May 2005. Prior to May 1996, Mr. Halla served in several executive capacities at LSI Logic Corporation, where, in his last role, he was the Executive Vice President of LSI Logic Products. Prior to that, he held a variety of management positions at Intel Corporation. Mr. Halla has leadership experience as the chief executive officer of a global technology company. His management and operational expertise is accompanied by a semiconductor industry background and technology acumen. Dr. Hennessy, 60, has been a member of the Board of Directors since January 2002. He has been President of Stanford University since September 2000. He served as Provost of Stanford from June 1999 to August 2000, Dean of the Stanford University School of Engineering from June 1996 to June 1999, and Chair of the Stanford University Department of Computer Science from September 1994 to March 1996. Dr. Hennessy also currently serves on the board of directors of Google Inc. He previously served as a director of Atheros Communications, Inc., ending in 2010. Dr. Hennessy brings to the Board of Directors an engineering background as well as skill in the development of information technology businesses. In addition, he has leadership and management experience, both in an academic context at Stanford University and in a corporate context as a board member of public and private technology companies. Dr. Johnson, 55, has been a member of the Board of Directors since August 2012. Dr. Johnson has served as the President and Chief Executive Officer of Enduring Hydro, LLC, a clean energy development and consulting company, since January 2011. From May 2009 to October 2010, Dr. Johnson served as Under Secretary of Energy at the U.S. Department of Energy. Prior to this, Dr. Johnson was Provost and Senior Vice President for Academic Affairs at The Johns Hopkins University from 2007 to 2009 and Dean of the Pratt School of Engineering at Duke University from 1999 to 2007. Previously, she served as a professor in the Electrical and Computer Engineering Department, University of Colorado and as director of the National Science Foundation Engineering Research Center for Optoelectronics Computing Systems at the University of Colorado, Boulder. Dr. Johnson currently serves on the board of directors of Boston Scientific Corporation and The AES Corporation. Until her appointment to the Department of Energy when she resigned from all public boards, she had previously served as a director of Boston Scientific Corporation, The AES Corporation, Nortel Networks Corporation, and Minerals Technologies Inc., each ending in 2009. Dr. Johnson brings to the Board of Directors an engineering background as well as expertise in science, technology, business, education and government. In addition, she has leadership and management experience, both in an academic context as provost and dean of nationally recognized academic institutions and in a corporate context as a board member of public technology companies. Mr. Kovacevich, 68, has been a member of the Board of Directors since January 2005. He served as Chairman of the Board of Wells Fargo & Company from April 2001 to December 2009. He also served as Chief Executive Officer of that company from November 1998 to June 2007, and as its President from November 1998 to July 2005. From January 1993 to November 1998, he served as Chief Executive Officer of Norwest Corporation, which merged with Wells Fargo & Company in November 1998. He also served as President of Norwest Corporation from January 1993 through January 1997 and as Chairman of the Board of Norwest Corporation from May 1995 to November 1998. He became a member of the board of directors of Norwest Corporation in 1986. He previously served as a director of Target Corporation, ending in 2010. With his many years of experience leading banking and financial services companies, Mr. Kovacevich contributes financial management and strategy expertise. In addition, Mr. Kovacevich brings to the Board of Directors consumer market insights, including from his experience as an outside public company board member, and the Board of Directors benefits from his corporate governance knowledge. Mr. McGeary, 62, has been a member of the Board of Directors since July 2003. He served as Chairman of Tegile Systems, Inc. from June 2010 to June 2012. From November 2004 to December 2009, he served as Chairman of the Board of BearingPoint, Inc. and also was interim Chief Executive Officer of BearingPoint from November 2004 to March 2005. BearingPoint filed for protection under Chapter 11 of the U.S. Bankruptcy Code in February 2009 and its plan under Chapter 11 was declared effective as of December 30, 2009. Mr. McGeary served as Chief Executive Officer of Brience, Inc. from July 2000 to July 2002. From April 2000 to June 2000, he served as a Managing Director of KPMG Consulting LLC, a wholly owned subsidiary of BearingPoint, Inc. (formerly KPMG Consulting, Inc.). From August 1999 to April 2000, he served as Co-President and Co-Chief Executive Officer of BearingPoint, Inc. From January 1997 to August 1999, he was employed by KPMG LLP as its Co-Vice Chairman of Consulting. Prior to 1997 he served in several capacities with KPMG LLP, including audit partner for technology clients. Mr. McGeary is a Certified Public Accountant and holds a B.S. degree in Accounting from Lehigh University. Mr. McGeary also currently serves on the board of directors of PACCAR Inc. He previously served as a director of Dionex Corporation and National Semiconductor Corporation, each ending in 2011. Mr. McGeary brings to the Board of Directors a combination of executive experience in management and technology consulting. He also has expertise in leading talented teams, and skills in finance, accounting and auditing with technology industry experience.

  4. Business Experience and Qualifications of Nominees

    Mr. Sarin, 57, has been a member of the Board of Directors since September 2009 and previously served on the Board of Directors from September 1998 to July 2003. Mr. Sarin has served as a Senior Advisor at Kohlberg Kravis Roberts & Co. since October 2009. In April 2003, he became CEO designate of Vodafone Group Plc and served as its Chief Executive Officer from July 2003 to July 2008. He also served as a member of the board of directors of that company from 1999 to 2008. From July 2001 to January 2003 he was Chief Executive Officer of Accel-KKR Telecom. He was the Chief Executive Officer of InfoSpace, Inc., and a member of its board of directors from April 2000 to January 2001. 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 of AirTouch Communications, Inc. Prior to that, he served as President and Chief Executive Officer of AirTouch International from April 1994 to February 1997. Mr. Sarin joined AirTouch Communications, Inc. in 1994 as Senior Vice President Corporate Strategy and Development upon its demerger from Pacific Telesis Group which he joined in 1984. Mr. Sarin also currently serves on the boards of directors of Safeway Inc. and The Charles Schwab Corporation. He previously served as a member of the Court of Directors of the Bank of England, ending in 2009. In 2010, Mr. Sarin was named a Knight of the British Empire for services to the communications industry. In addition to his telecommunications industry and technology background, Mr. Sarin has leadership experience, including service as an outside board member of companies in the information technology, banking, financial services, and retail industries. He provides an international perspective as well as expertise in finance, marketing and operations. Mr. West, 57, has been a member of the Board of Directors since April 1996. He is a founder and partner of Emerging Company Partners LLC, which was formed in January 2004 and provides executive management advisory and consulting services for early to mid-stage technology companies. He served as Chief Operating Officer of nCUBE Corporation, a provider of on-demand media systems, from December 2001 to July 2003. Prior to joining nCUBE, he was the President and Chief Executive Officer of Entera, Inc. from September 1999 until it was acquired by Blue Coat Systems, Inc. (formerly CacheFlow Inc.) in January 2001. From June 1996 to September 1999, he was 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. Prior to that, Mr. West was at Electronic Data Systems Corporation from November 1984 to June 1996. Mr. West also currently serves on the board of directors of Autodesk, Inc. Mr. West’s experience in the information technology industry includes a variety of leadership and strategic positions, which have provided him with accumulated expertise in operational management, strategy, finance, and experience as an outside board member and audit committee member. In addition, Mr. West has knowledge of Cisco acquired through more than 16 years of service on the Board of Directors.

  5. Director Compensation

    Director Compensation This section provides information regarding the compensation policies for non-employee directors and amounts paid and securities awarded to these directors in fiscal 2012. Non-employee directors typically do not receive forms of remuneration, perquisites or benefits other than those described below, but are reimbursed for their expenses in attending meetings.

  6. Fiscal 2012 Total Director Compensation

    Fiscal 2012 Total Director Compensation The following table provides information as to compensation for services of the non-employee directors during fiscal 2012.

  7. Director Compensation

    Director Compensation

  8. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (5) | Option Awards ($) (6) | All Other Compensation ($) | Total ($) | | Carol A. Bartz | $105,000(2) | $187,500 | — | — | $292,500 | | Marc Benioff (1) | — | — | — | — | — | | M. Michele Burns | $119,000 | $187,500 | — | — | $306,500 | | Michael D. Capellas | $107,000(2) | $187,500 | — | $1,977,290(4) | $2,271,790 | | Larry R. Carter | $95,000(2) | $187,500 | — | — | $282,500 | | Brian L. Halla | $91,000(2) | $187,500 | — | — | $278,500 | | Dr. John L. Hennessy | $97,000 | $187,500 | — | — | $284,500 | | Dr. Kristina M. Johnson (1) | — | — | — | — | — | | Richard M. Kovacevich | $118,000 | $187,500 | — | — | $305,500 | | Roderick C. McGeary | $136,000 | $187,500 | — | — | $323,500 | | Arun Sarin | $105,000 | $187,500 | — | — | $292,500 | | Steven M. West | $148,000(2) | $187,500 | — | — | $335,500 | | Jerry Yang | $99,000(3) | $187,500 | — | — | $286,500 |

  9. Director Compensation

    | (1) Mr. Benioff and Dr. Johnson were appointed to the Board of Directors after the completion of fiscal 2012 and did not receive any compensation for fiscal 2012. |

  10. Director Compensation

    | (2) Includes the value of fully vested shares of Cisco common stock received in lieu of the non-employee director’s regular annual cash retainer based on the fair market value of the shares on December 7, 2011, the date the regular annual cash retainer would otherwise have been paid. Based on the prior election by each director, Ms. Bartz, Mr. Capellas, Mr. Carter and Mr. Halla each received 3,949 shares with a value of $74,992, and Mr. West received 987 shares with a value of $18,743, each based on the closing share price of Cisco common stock on December 7, 2011. |

  11. Director Compensation

    | (3) Includes the value of fully vested deferred stock units received in lieu of all or a specified portion of the non-employee director’s regular annual cash retainer based on the fair market value of the underlying shares on December 7, 2011, the date the regular annual cash retainer would otherwise have been paid. Based on his prior election, Mr. Yang received 3,949 deferred stock units with a value of $74,992 based on the closing share price of Cisco common stock on December 7, 2011. |

  12. Director Compensation

    | (4) Represents amounts earned by Mr. Capellas and paid or payable by VCE for services rendered in all capacities to VCE during Cisco’s fiscal 2012, including VCE base salary, a bonus under the VCE fiscal 2011 bonus plan for the second half of VCE’s fiscal 2011, a discretionary cash bonus for VCE’s fiscal 2011 and a bonus under a VCE fiscal 2012 short-term cash bonus plan for the first half of VCE’s fiscal 2012. Mr. Capellas currently serves as the Chairman of the Board of VCE. For a further description of VCE, see “Certain Transactions with Related Persons” on page 60 below. |

  13. Director Compensation

    Mr. Capellas’ annual base salary during VCE’s fiscal 2011 was $600,000 and was increased to $700,000 for VCE’s fiscal 2012. Mr. Capellas’ cash bonus for VCE’s fiscal 2011 had a target of $900,000 and a maximum of twice the target amount, based on the attainment of VCE financial and operational goals. In addition, VCE paid Mr. Capellas a $600,000 discretionary cash bonus for VCE’s fiscal 2011. Mr. Capellas’ cash bonus under a VCE short-term cash bonus plan for VCE’s fiscal 2012 has a target of $500,000 and a maximum of twice the target amount, based on the attainment of VCE financial and operational goals. Mr. Capellas’ cash bonus under a second VCE short-term cash bonus plan for VCE’s fiscal 2012 has a target (and maximum) of $500,000 based on the attainment of individual goals. In addition, Mr. Capellas participates in VCE’s 2012 long-term cash incentive plan and is eligible to receive an award with a target value of $3,000,000, which award will fully vest on the fifth anniversary of the award approval with the opportunity for performance accelerated vesting. Accelerated vesting of up to one-third of the award (with a maximum of twice that amount in each year) in each of the three VCE fiscal years 2012-2014 based on actual achievement against established financial and/or operational performance objectives is possible. The actual value of the award upon vesting will be dependent upon VCE performance relative to the established targets.

  14. Director Compensation

    | (5) The amounts in the Stock Awards column represent the aggregate grant date fair values using an annualized dividend yield based on the per share dividends declared by its Board of Directors, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, of restricted stock unit awards issued pursuant to the 2005 Stock Incentive Plan. The grant date fair value of the restricted stock unit award granted on December 7, 2011 to each non-employee director re-elected on that date was $187,500. There can be no assurance that these grant date fair values will ever be realized by the non-employee directors. For information regarding the number of unvested restricted stock units held by each non-employee director as of July 28, 2012, see the column “Unvested Restricted Stock Units Outstanding” in the table below. |

  15. Director Compensation

    | (6) No stock options were awarded to non-employee directors in fiscal 2012. For information regarding the number of outstanding stock options held by each non-employee director as of July 28, 2012, see the column “Stock Options Outstanding” in the table below. |

  16. Director Compensation

    The non-employee directors held the following numbers of stock options and unvested restricted stock units as of July 28, 2012.

  17. Director Compensation

    | Non-Employee Director | Stock Options Outstanding | Unvested Restricted Stock Units Outstanding | | Ms. Bartz | 90,000 | 10,000 | | Mr. Benioff | — | — | | Ms. Burns | 120,000 | 10,000 | | Mr. Capellas | 80,000 | 10,000 | | Mr. Carter | 214,000 | 10,619 | | Mr. Halla | 65,000 | 10,000 | | Dr. Hennessy | 90,000 | 10,000* | | Dr. Johnson | — | — | | Mr. Kovacevich | 100,000 | 10,000 | | Mr. McGeary | 70,000 | 10,000* | | Mr. Sarin | — | 10,000* | | Mr. West | 50,000 | 10,000 | | Mr. Yang | 90,000 | 10,000* |

  18. Director Compensation

    | * At the non-employee director’s election, the settlement of any vested shares underlying this award is deferred until after the non-employee director leaves the board. |

  19. Fiscal 2013 Director Compensation

    Fiscal 2013 Director Compensation Pursuant to the pre-existing policy adopted by the Board of Directors prior to the appointments of Mr. Benioff and Dr. Johnson, in connection with their appointments to the Board of Directors on August 1, 2012, each of these new non-employee director received a pro rata annual retainer of $23,110 and a restricted stock unit award covering 16,666 shares, which shares will vest in two equal annual installments upon the completion of each year of board service. The shares subject to the restricted stock units also will vest immediately in full upon certain changes in control or ownership of Cisco or upon the recipient’s death or disability while a member of the Board of Directors. The initial restricted stock unit awards for Mr. Benioff and Dr. Johnson were granted on September 12, 2012 and the grant date fair value of such awards was $18.24 per share. If elected at the 2012 annual meeting, pursuant to the pre-existing policy, Mr. Benioff and Dr. Johnson will not receive the annual equity grant for re-elected non-employee directors because they had not served as non-employee directors for at least six months prior to the election date. The Compensation Committee, having been advised by FWC, recommended modifications to compensation for non-employee directors. On August 1, 2012, the Board of Directors approved the following modifications to be effective as of the 2012 annual meeting:

  20. Fiscal 2013 Director Compensation

    | • | The cash annual retainer fee for serving as chair of the Compensation Committee was increased from $15,000 to $20,000. |

  21. Fiscal 2013 Director Compensation

    | • | The initial equity grant for non-employee directors will consist of a restricted stock unit award covering shares of Cisco common stock with a fair market value equal to a pro rata portion of $190,000 based on the portion of the year of the new non-employee director’s board service. The restricted stock unit award will fully vest upon the annual meeting of shareholders following the new non-employee director’s appointment or election. As described above, these initial equity grants are not applicable for Mr. Benioff or Dr. Johnson. |

  22. Fiscal 2013 Director Compensation

    | • | The annual equity grant for re-elected non-employee directors will consist of a restricted stock unit award covering shares of Cisco common stock with a fair market value equal to $190,000, which shares will fully vest upon the completion of one year of board service. Because of the proration of the initial equity grants, there will be no requirement that a non-employee director elected at an annual meeting of shareholders serve as a non-employee member of the Board of Directors for at least six months prior to the election date to be eligible to receive this annual restricted stock unit award. However, as described above, these annual equity grants for the 2012 annual meeting will not be applicable for Mr. Benioff or Dr. Johnson. |

  23. Fiscal 2013 Director Compensation

    In addition to the vesting described above, the shares subject to the restricted stock units for non-employee directors will vest immediately in full upon certain changes in control or ownership of Cisco or upon the recipient’s death or disability while a member of the Board of Directors. Non-employee directors may elect to defer receipt of the initial and annual restricted stock units such that, to the extent the restricted stock units are vested, the units would be settled in shares after the non-employee director leaves the board.

  24. Executive Summary

    In fiscal 2012, Cisco began to see the results of its plan to simplify and focus its operational model with a record year in revenue and earnings per share. Cisco’s revenue increased 7%, operating income increased 31%, operating cash flow increased 14% and earnings per share increased 27% from fiscal 2011. In addition, total shareholder return (“TSR”) based on 30 trading day averages improved in fiscal 2012, and Cisco ranked at the 73rd percentile of the companies that comprise the S&P 500 Information Technology Index. Cisco’s quarterly cash dividend for each of Cisco’s first and second quarters in fiscal 2012 was $0.06 per share and for each of Cisco’s third and fourth quarters in fiscal 2012 was $0.08 per share. Cisco also increased its quarterly cash dividend by 75% to $0.14 per share for the first quarter of fiscal 2013. Set forth below are tables that display Cisco’s financial performance and the cash incentive compensation, grants of time-based restricted stock units and PRSUs, and total direct compensation (annual base salary, variable cash incentive awards and long-term, equity-based incentive awards) for each named executive officer for fiscal 2012 as compared to fiscal 2011 and fiscal 2010. Cisco’s variable cash incentive awards for the named executive officers are determined and paid under the EIP. At the beginning of fiscal 2012, Cisco granted to executive officers (other than the CEO) approximately 25% of their target value of long-term, equity-based incentive awards for fiscal 2012 as restricted stock units with time-based vesting and approximately 75% of such target value as restricted stock units based on the achievement of three-year financial performance goals. Cisco granted to the CEO 100% restricted stock units based on the achievement of financial performance goals. The value of these equity awards was targeted at the median of the Initial Peer Group. Cisco’s Fiscal 2012 Financial Performance Compared to Fiscal 2011 and Fiscal 2010

  25. Executive Summary

    | | Fiscal 2010 Variable Cash Incentive Award | Fiscal 2011 Variable Cash Incentive Award | Fiscal 2012 Variable Cash Incentive Award | | John T. Chambers | $4,600,000 | $0 | $3,953,376 | | Frank A. Calderoni | $1,530,000 | $0 | $1,402,380 | | Gary B. Moore | N/A | $0 | $2,220,064 | | Robert W. Lloyd | $1,640,000 | $0 | $1,677,291 | | Wim Elfrink* | $1,600,000 | $0 | $1,352,608 |

  26. Executive Summary

    | * Mr. Elfrink’s cash incentive awards are paid in euros. The conversion rate from euros to U.S. dollars for each award is based on the exchange rate referenced by the Compensation Committee when the award was made. |

  27. Executive Summary

    | | Fiscal 2010 Equity Award Grant Value | Fiscal 2011 Equity Award Grant Value* | Fiscal 2012 Equity Award Grant Value* | | John T. Chambers | $13,878,638 | $6,250,050 | $9,919,910 | | Frank A. Calderoni | $7,930,650 | $3,618,450 | $3,672,290 | | Gary B. Moore | N/A | $6,900,450 | $5,281,167 | | Robert W. Lloyd | $7,930,650 | $3,618,450 | $4,878,472 | | Wim Elfrink | $9,913,313 | $3,618,450 | $4,158,293 |

  28. Executive Summary

    Individual and aggregate total direct compensation for the named executive officers are approximately between the 50th and the 75th percentile of the Updated Peer Group and the total direct compensation for the CEO is slightly below the median of the Updated Peer Group in fiscal 2012. More than 95% of target total direct compensation for the CEO was performance-based.

  29. Executive Summary

    | • | Cisco’s executive officers have no employment or severance agreements, special benefits, supplemental executive retirement plans, perquisites, tax gross-ups, or international tax-equalization payments other than in the limited instances described below that are for business-related purposes or in connection with an executive officer on international assignment. |

  30. Executive Summary

    | • | The Compensation Committee’s independent compensation consultant, FWC, is retained directly by the Committee and performs no other consulting or other services for Cisco. |

  31. Compensation Philosophy and Objectives

    | • | To provide annual variable cash incentive awards based on Cisco’s satisfaction of designated financial and non-financial objectives; and |

  32. Compensation Philosophy and Objectives

    | • | To align the financial interests of executive officers with those of shareholders by providing appropriate long-term, equity-based incentives and retention awards that encourage a culture of ownership consistent with established stock ownership guidelines with at least 75% of the total equity-based incentives based on Cisco’s satisfaction of designated financial objectives. |

  33. Compensation Process

    Compensation Process The Compensation Committee begins its process of deciding how to compensate Cisco’s named executive officers by considering the competitive market data provided by its independent compensation consultant and Cisco’s human resources staff. The Compensation Committee engaged FWC to provide advice and recommendations on competitive market practices and specific compensation decisions. For purposes of evaluating competitive practices, the Compensation Committee, with assistance from FWC, identified criteria to select a list of companies which comprise Cisco’s peer group. Two peer groups were used in fiscal 2012. The first peer group was established in March 2011 (the “Initial Peer Group”) and, along with a study of Initial Peer Group data prepared by FWC in June 2011, was used to establish most compensation targets and guide decisions prior to March 2012. The Initial Peer Group was updated in March 2012 (the “Updated Peer Group”) and, along with a study of Updated Peer Group data prepared by FWC in May 2012, was used for compensation decisions thereafter and for fiscal 2012 year-end compensation benchmarking. The Initial Peer Group consisted of a “primary peer group” portion and a “secondary peer group” portion. The primary peer group portion consisted of major information technology companies with related Global Industrial Classification System (GICS) codes, three-year rolling average market capitalizations greater than $15 billion (based on the three-year quarterly average) and revenues greater than $5 billion. It was primarily used to inform the Compensation Committee of pay levels and practices most relevant for the labor-market in which Cisco competes. The secondary peer group portion consisted of general-industry peers (excluding retail, media, energy, utilities and financial services companies where there are typically different basic pay models), with three-year rolling average market capitalizations of $60 billion or greater (based on the three-year quarterly average), and it was primarily used to provide the Compensation Committee with supplemental information on pay levels and practices of the overall market and best practices. The members of the Initial Peer Group and Updated Peer Group are set forth below. Similar to the Initial Peer Group, the Updated Peer Group consists of a “primary peer group” portion and a “secondary peer group” portion. However, the selection criteria for Cisco’s Updated Peer Group are generally the same as the Initial Peer Group, except the market capitalization threshold for both the primary and secondary peer groups were increased by $5 billion ($20 billion for the primary peer group and $65 billion for the secondary peer group) to delete smaller peers (Applied Materials, Yahoo! and UPS) and to prevent the inclusion of smaller companies that would have been added if the market capitalization threshold were not increased (Broadcom, Cognizant and Motorola Solutions). Primary Peer Group Accenture ADP Apple Applied Materials* Corning Dell eBay EMC Google Hewlett-Packard IBM Intel MasterCard Microsoft Oracle Qualcomm Texas Instruments Visa Yahoo!* Secondary Peer Group Abbott Labs AT&T Coca-Cola General Electric Johnson & Johnson Merck Pepsico Pfizer Philip Morris International Procter & Gamble United Technologies UPS* Verizon

  34. Compensation Process

    | * As stated above, Applied Materials, Yahoo! and UPS no longer fit the peer group selection criteria and are not part of the Updated Peer Group. |

  35. Compensation Components and Targets

    Compensation Components and Targets The three major elements of Cisco’s executive officer compensation are: (i) base salary, (ii) variable cash incentive awards, and (iii) long-term, equity-based incentive awards. For fiscal 2012, approximately 72% of target total direct compensation for the named executive officers other than the CEO, consisting of annual base salary, variable cash incentive awards and long-term, equity-based incentive awards, was performance-based, reflecting Cisco’s core compensation philosophy to pay for performance. More than 95% of target total direct compensation for the CEO was performance-based. For the named executive officers, the Compensation Committee decided that for fiscal 2012, it would target individual base salaries and at-target cash and equity incentive awards with reference to the 50th percentile of the Updated Peer Group. However, the compensation philosophy for Cisco’s CEO has been to set his base salary significantly below the 50th percentile of the Updated Peer Group in consideration of Mr. Chambers’ long-standing request that a greater percentage of his total cash compensation be tied to Cisco performance. The Compensation Committee believes that its compensation targets are appropriate in light of Cisco’s historical performance relative to its Initial and Updated Peer Groups and the compensation of Cisco’s named executive officers relative to the named executive officers of its Initial and Updated Peer Groups.

  36. Fiscal 2012 Compensation

    Fiscal 2012 Compensation Base Salary. Mr. Chambers’ annual base salary was set at $375,000, which is well below the 25th percentile of the Initial Peer Group in fiscal 2012 and has remained unchanged since fiscal 2008. Cisco usually establishes base salaries at the beginning of its fiscal year and based on fiscal 2011 performance, the base salaries for the other named executive officers remained unchanged from fiscal 2011, resulting in base salaries being generally targeted at the median of the Updated Peer Group, with the base salaries of Mr. Calderoni, Mr. Moore and Mr. Lloyd below the median. Variable Cash Incentive Awards. The Compensation Committee believes that the primary portion of the annual at-target cash compensation of each named executive officer should be in the form of variable cash incentive pay. Typically, the pay philosophy is to target annual cash compensation with reference to the 50th percentile of the peer group, with the opportunity to earn annual incentives in excess of that level based on achieving performance superior to the objectives the Compensation Committee has determined to reward. Annual cash incentives are paid to reward achievement of critical shorter-term operating, financial, strategic and individual measures and goals that are expected to contribute to shareholder value creation over time. Performance measures and goals for determining annual cash incentive awards for named executive officers for fiscal 2012 were pre-established under Cisco’s EIP and were intended to comply with the exemption for performance-based compensation under Code Section 162(m). The pre-established performance goals are based on Cisco’s achievement of established financial performance goals, customer satisfaction criteria and the executive’s individual contribution. The Compensation Committee established the annual financial performance goals so that they were consistent with the annual goals in Cisco’s fiscal 2012 financial plan established by the Board of Directors. The fact that the financial goals were not achieved at target levels in two out of the last four fiscal years reflects the general degree of difficulty that Cisco has experienced in satisfying the financial performance goals established by the Compensation Committee under the EIP from fiscal year to fiscal year. For each named executive officer, other than for the CEO, the cash incentive awards under the EIP are calculated by multiplying the individual’s annual base salary in effect at the beginning of the fiscal year by the individual’s target award percentage, and multiplying the result by a company performance factor (CPF), a customer satisfaction factor (CSF), and an individual performance factor (IPF), as follows: BONUS = BASE x TARGET x CPF x CSF x IPF The CEO’s cash incentive award is calculated using the median CEO base salary of the Initial Peer Group which was $1,200,000. The median CEO base salary of the Initial Peer Group was used because Mr. Chambers’ actual base salary is significantly below the 25th percentile and therefore, the Compensation Committee believed that it was necessary to use the median CEO base salary of the Initial Peer Group to design effective incentives. With that exception, Mr. Chambers’ cash incentive award under the EIP is calculated in the same manner as for the other named executive officers. At the beginning of fiscal 2012, a target award was established for each of the named executive officers and such target award was set at 185% of the median CEO base salary of the Initial Peer Group for the CEO and 125% of their respective annual base salaries for the other named executive officer. Unlike fiscal 2011, the company performance factor for fiscal 2012 was determined over an annual performance period, not two consecutive six-month performance periods. Due to greater certainty about the economy at the beginning of fiscal 2012, the Compensation Committee returned to its normal practice of using annual EIP goals. The annual company performance factor for fiscal 2012 was set within the first 90 days of fiscal 2012 and ranged from 0.0 to 1.37. The Compensation Committee retained negative discretion to reduce the company performance factor. The customer satisfaction factor was set at a maximum of 1.12, and the individual performance factor was set at a maximum of 2.0. The Compensation Committee retained negative discretion to reduce the customer satisfaction and individual performance factors for each named executive officer. In considering the appropriate individual performance factor for each named executive officer, the Compensation Committee considers the named executive officer’s leadership, strategic planning, implementation, innovation and contributions to Cisco’s achievement of its financial goals. The Compensation Committee uses its business judgment in reviewing each of these individual items and does not assign specific quantitative weighting to such items. The target for each of these two factors was 1.0. The maximum bonus under this EIP formula is 307% of target assuming maximum company performance, customer satisfaction and individual performance factors. However, the Compensation Committee limited the maximum bonuses under the EIP to 300% of target, or 555% of the median CEO base salary of the Initial Peer Group (300% x 185% of median CEO base salary of the Initial Peer Group) for the CEO and 375% of base salary (300% x 125% of base salary) for the other named executive officers. Worldwide revenue and operating income growth were used as the company performance factor for the performance period because they most directly align with Cisco’s growth strategy and generally represent the best correlation with shareholder value. The company performance factor and the individual performance factor are considered the most important factors in the EIP formula and, therefore, can range from 0 to 2.0. The customer satisfaction factor uses a narrower range (from 1.0 to 1.12) compared to the company performance and individual factors because it is viewed as correlated with Cisco’s broader company performance factor. For fiscal 2012, the worldwide revenue target for purposes of the EIP was $45.0 billion and the actual result was $46.1 billion and the operating income target was $12.0 billion and the actual result was $12.7 billion. As a point of reference, actual fiscal 2011 revenue was $43.2 billion and actual fiscal 2011 operating income was $11.3 billion, each as calculated for purposes of the EIP. This resulted in a total fiscal 2012 company performance factor of 1.06, reflecting above target achievement of the company performance factor.

  37. Fiscal 2012 Compensation

    Worldwide revenue and operating income each were calculated for purposes of the EIP in accordance with pre-established rules. Worldwide revenue was Cisco’s GAAP worldwide revenue excluding the effects of business combinations subject to a pre-established threshold. Operating income was Cisco’s GAAP operating income excluding the following: share-based compensation expense; compensation expense related to acquisitions and investments; changes in estimates of contingent consideration related to acquisitions and investments; amortization or impairment of acquired intangible assets including in-process research and development; all external acquisition-related costs such as finder’s fees, advisory, legal, accounting, valuation, hedging or other professional or consulting fees directly associated with acquisitions and investments; and each of the following subject to pre-established thresholds; the impact of any cumulative effect of changing to newly adopted accounting principles; operating income of the acquired entity and its subsidiaries as reflected on the financial records thereof; losses due to impairments or loss contingencies; direct losses on Cisco’s tangible assets from natural catastrophe, war, insurrection, riot, terrorism, confiscation, expropriation, nationalization, deprivation, or seizure; and restructuring charges. For fiscal 2012, Cisco’s composite customer satisfaction score, which was derived from the results of an annual customer satisfaction survey in which Cisco met or exceeded its goal in each of the survey categories, was the maximum of 1.12 and above the target of 1.0 set at the beginning of the performance period. For fiscal 2012, the individual performance factors for each of the named executive officers, other than the CEO, were set by the Compensation Committee pursuant to the recommendation of the CEO based on the relative contributions of each of the named executive officers to Cisco’s success in fiscal 2012. The Compensation Committee established the individual performance factor for the CEO. Mr. Moore and Mr. Lloyd received the highest individual performance factors based on their exceptional leadership in helping Cisco implement its plan to simplify and focus its operational model. The CEO and Mr. Calderoni received the next highest individual performance factors based on the CEO’s leadership on strategic planning and Mr. Calderoni’s contribution in reducing expenses and helping Cisco achieve record financial results. Mr. Elfrink received an above target individual performance factor for continued excellence in expanding Cisco’s global solutions. Based on the foregoing, the cash incentive awards for fiscal 2012 for each named executive officer were as follows.

  38. Fiscal 2012 Compensation

    | * The CEO’s cash incentive award is calculated using the median CEO base salary of the Initial Peer Group. |

  39. Fiscal 2012 Compensation

    | ** Mr. Elfrink’s annual base salary and cash incentive award are paid in euros. His cash incentive award of €1,099,592 was converted from euros to U.S. dollars based on the exchange rate referenced by the Compensation Committee when the award was made. |

  40. Fiscal 2012 Compensation

    Based on Cisco’s improved performance during fiscal 2012, the incentive cash awards paid for fiscal 2012 to Mr. Moore and Mr. Lloyd are approximately at the 85th percentile of the Updated Peer Group, and approximately the 70th percentile for the CEO, Mr. Calderoni and Mr. Elfrink. Long-Term, Equity-Based Incentive Awards. The objective of Cisco’s long-term, equity-based incentive awards is to align the interests of named executive officers with shareholders and to provide each named executive officer with an incentive to manage Cisco from the perspective of an owner with an equity stake in the business. The Compensation Committee determines the size of the long-term, equity-based incentives according to each named executive officer’s position within Cisco and sets a level it considers appropriate to create a meaningful opportunity for reward predicated on increasing shareholder value. In addition to the desired benchmarking percentiles and consideration of the competitive market data described above, the Compensation Committee takes into account an individual’s performance history, his or her potential for future advancement, the CEO’s recommendations for awards other than his own, and the value of existing vested and unvested outstanding equity awards. The relative weight given to each of these factors varies among individuals at the Compensation Committee’s discretion. For fiscal 2012, the Compensation Committee determined for the named executive officers (other than the CEO) that a split of 25% of their target value of long-term, equity-based incentive awards as time-based restricted stock units and 75% of that target value as PRSUs represented a total long-term equity incentive opportunity aligned with shareholder interests with the appropriate balance for long-term incentives of risk, performance and retention. The CEO received 100% PRSUs. The time-based restricted stock units vest in four equal annual installments on each annual anniversary of the award date. The PRSUs vest following the conclusion of the three-year performance period as further described below. In September 2011, the Compensation Committee approved an equity award to Mr. Chambers of 100% PRSUs and equity awards of a 75/25 combination (based on value) of PRSUs and time-based restricted stock units to the other named executive officers as set forth in the table below. The target value set forth below of the 100% PRSUs for Mr. Chambers and the 75/25 combination of PRSUs and time-based restricted stock units awarded to the other named executive officers are determined with reference to the median of the Updated Peer Group with an opportunity to earn awards at the 75th percentile for superior total shareholder return and operational performance.

  41. Fiscal 2012 Compensation

    | Named Executive Officer | Target PRSUs | Max. PRSUs | Target Value of PRSUs | Time-Based RSUs | Grant Value of Time Based RSUs | Total Target Value of Fiscal 2012 Equity Awards | | John T. Chambers | 495,500 | 743,250 | $9,919,910 | — | — | $9,919,910 | | Frank A. Calderoni | 143,775 | 215,662 | $2,878,376 | 50,600 | $793,914 | $3,672,290 | | Gary B. Moore | 206,740 | 310,110 | $4,138,935 | 72,800 | $1,142,232 | $5,281,167 | | Robert W. Lloyd | 190,975 | 286,462 | $3,823,320 | 67,250 | $1,055,153 | $4,878,472 | | Wim Elfrink | 162,800 | 244,200 | $3,259,256 | 57,300 | $899,037 | $4,158,293 |

  42. ((50% x Average Operating Goal Multiplier) + (50% x Total Shareholder Return Multiplier))

    ((50% x Average Operating Goal Multiplier) + (50% x Total Shareholder Return Multiplier)) Depending upon performance and the sum of the respective Multipliers, each named executive officer may receive total PRSU shares ranging from 0% to 150% of the target for superior performance. For fiscal 2012, the worldwide operating cash flow target for purposes of the PRSUs was $10.3 billion and the actual result was $11.5 billion and the earnings per share target was $1.74 and the actual result was $1.85 resulting in an Operating Goal Multiplier for fiscal 2012 of 1.07. At the end of the three-year performance period, the Total Shareholder Return Multiplier will be determined and 50% of the Average Operating Goal Multiplier (the average of the Operating Goal Multipliers for fiscal 2012, 2013 and 2014) will be added to 50% of the Total Shareholder Return Multiplier to determine an award of shares for each named executive officer. As fiscal 2012 was the first year of the three-year performance period, no shares were earned. The vesting and settlement of any of the PRSUs granted for fiscal 2012 will depend on Cisco’s performance for fiscal 2013 and fiscal 2014 (in addition to fiscal 2012) and total shareholder return during the three-year performance period, and whether the Compensation Committee exercises any negative discretion to reduce the award when approving the settlement of the PRSUs. Because the PRSUs include a three-year Total Shareholder Return Multiplier and annual Operating Goal Multipliers, the Summary Compensation Table reports a reduced value relative to the target value set forth in the table above and in the Executive Summary. FASB ASC Topic 718 requires that the value of the fiscal 2012 PRSUs reported in the Summary Compensation Table include the full value for the PRSUs based on the probable outcome of the Total Shareholder Return Multiplier, but only that portion of the value of the PRSUs based on the Operating Goal Multipliers for which annual financial performance metrics were established during fiscal 2012 based on probable achievement of such metrics. As a result, for the fiscal 2012 PRSUs, the Summary Compensation Table does not include the value of the PRSUs based on the annual financial metrics for fiscal 2013 or fiscal 2014. Such amounts will be included as equity compensation in the Summary Compensation Table for fiscal 2013 and fiscal 2014, respectively, when the financial metrics are established. Worldwide operating cash flow is Cisco’s GAAP operating cash flow. Earnings per share was calculated from Cisco’s GAAP diluted earnings per share excluding all of the items excluded from the calculation of operating income for purposes of the EIP, other than operating income of the acquired entity and its subsidiaries as reflected on the financial records thereof, including the income tax effects thereof; and each of the following subject to pre-established thresholds: net income or loss of the acquired entity and its subsidiaries as reflected on the financial records thereof, including any income tax effects; and the effects of certain tax matters. Subject to continued employment, any earned PRSUs will be settled at the end of the three-year performance period. All outstanding unvested equity awards under Cisco’s 2005 Stock Incentive Plan (and 1996 Stock Incentive Plan) will vest in full (at target levels for PRSUs), and, if applicable, become immediately exercisable in the event of the named executive officer’s death, terminal illness or if Cisco is acquired by merger or asset sale, unless the award or related agreement is assumed or replaced by the acquiring entity, or in the event there is a hostile change in control or ownership of Cisco, whether through a tender or exchange offer for more than 35% of Cisco’s outstanding voting securities which the Board of Directors does not recommend the shareholders to accept, or a change in the majority of the members of the Board of Directors as a result of one or more contested elections for board membership. Cisco believes that this accelerated equity vesting is appropriate under the circumstances described above to ensure that employees are not deprived of their equity when Cisco may not be able to arrange for appropriate vesting continuation terms and conditions. Cisco does not provide for any golden parachute excise tax gross-up arrangements for its named executive officers, nor does it provide employment agreements with cash severance provisions, unless under certain circumstances an executive officer is on international assignment. Please refer to the “Potential Payments upon Termination or Change in Control” section on page 56 for additional information regarding potential accelerated vesting of outstanding awards granted to the named executive officers. In the event of the retirement of a named executive officer, and to the extent the named executive officer meets certain retirement eligibility criteria described in the award agreement and complies with certain post-retirement covenants, all PRSUs will continue to vest and any earned PRSUs, based on the satisfaction of the performance metrics, will be settled in Cisco shares at the end of the three-year performance period. In all cases, the settlement of PRSUs must comply with Code Section 409A. Cisco believes that the retirement vesting feature of all PRSUs is an appropriate and necessary retention tool because it provides protection to the named executive officers in light of the three-year PRSU performance period and is a prevalent practice among the companies within the Updated Peer Group that grant similar equity awards with multi-year performance periods. Further, PRSUs will be forfeited and provide no value to its holder to the extent a named executive officer violates specific post-retirement covenants. Please refer to the table entitled “Grants of Plan-Based Awards—Fiscal 2012” on page 50 for additional information regarding these equity grants to the named executive officers, and to the “Potential Payments upon Termination or Change in Control” section on page 56 for additional information regarding these grants to the named executive officers and all other outstanding equity awards previously granted to the named executive officers. Group Benefits/Perquisites. Cisco’s named executive officers generally do not receive any special benefits such as payment of club memberships, financial planning or executive dining rooms. Other than executive physicals and their right to participate along with other enumerated employees in the nonqualified deferred compensation plan described below and other than the Netherlands Capital Plan described below in which Mr. Elfrink participates, there are no special employee benefit plans for the named executive officers and Cisco’s named executive officers are eligible to participate in the same employee benefit plans and on the same basis as all other Cisco employees. During fiscal 2012, Cisco provided certain named executive officers payment for personal expenses, including spousal travel and personal expenses, in connection with a business trip to recognize sales personnel achievements and a business trip to the 2012 Summer Olympics for Cisco promotional purposes. Pursuant to a policy adopted by the Compensation Committee during fiscal 2009, Cisco is not providing to its named executive officers tax restoration payments with respect to this taxable income.

  43. ((50% x Average Operating Goal Multiplier) + (50% x Total Shareholder Return Multiplier))

    Under an International Assignment Agreement, additional benefits were provided during fiscal 2012 to Wim Elfrink, whose home country is the Netherlands, for certain living, travel, tax and other expenses in connection with his international assignment in the U.S. Mr. Elfrink was reassigned to the U.S. from India as of August 2011. During fiscal 2012, Mr. Elfrink’s international assignment benefits, including tax equalization benefits, were substantially reduced and capped at approximately $508,000. During fiscal 2013, his benefits will be capped at approximately $536,000. Some of these benefits are specific to Mr. Elfrink, while others are provided under Cisco’s international assignment policy, which applies to all employees serving on international assignment and is designed to minimize any financial detriment to the employee from the assignment. Mr. Elfrink’s international assignment benefits and his other compensation and benefits are generally set forth in his International Assignment Agreement. Mr. Elfrink is also entitled to potential severance benefits under his International Assignment Agreement, as further detailed in the “Potential Payments upon Termination or Change in Control” section below. Mr. Elfrink also participates in a defined contribution plan that Cisco maintains for eligible employees in the Netherlands (the “Netherlands Capital Plan”). For more information about these compensation components, including a description of the Netherlands Capital Plan, see the sections below entitled “Summary Compensation Table,” “Nonqualified Deferred Compensation—Fiscal 2012,” and “Potential Payments upon Termination or Change in Control.” Deferred Compensation Plan. The adoption of the Deferred Compensation Plan by the Board of Directors in 2007 resulted from a review of the prevalence of similar deferred compensation plans operated by Cisco’s Initial Peer Group and a recommendation from the Compensation Committee that the Deferred Compensation Plan should be adopted. The Deferred Compensation Plan is available to all U.S. employees with the title of director or above, including the named executive officers other than Mr. Elfrink. Mr. Elfrink participates in the Netherlands Capital Plan. A primary rationale for adopting the plan was to provide an opportunity for individual retirement savings on a tax- and cost-effective basis on compensation above the Code limits under the Cisco 401(k) Plan, recognizing that Cisco does not sponsor a supplemental executive retirement plan or a pension plan on behalf of the named executive officers covered by the Deferred Compensation Plan. It was also decided, based on this same rationale and because the Cisco 401(k) Plan has a matching contribution, that Cisco would begin making matching contributions starting with calendar year 2007 at the same percentage as made under the Cisco 401(k) Plan. Those matching contributions are described in the footnote to the “Nonqualified Deferred Compensation—Fiscal 2012” table below. The Deferred Compensation Plan administrator is Cisco’s 401(k) Plan Administration Committee.

  44. Fiscal 2013 Compensation Approach

    | • | Base Salaries—On September 12, 2012, the Compensation Committee approved the increases in base salary set forth below for Mr. Chambers, Mr. Calderoni, Mr. Moore and Mr. Lloyd. The Compensation Committee decided to discontinue setting Mr. Chambers’ base salary at a relatively nominal amount and increased his historically low base salary closer to the median base salary of the other CEOs in the Updated Peer Group so that the total of his base salary and target bonus is more consistent with the Updated Peer Group’s approach to total cash compensation. Given their performance, tenure and anticipated future contributions, Mr. Moore’s and Mr. Lloyd’s base salaries were increased to slightly over the median of the Updated Peer Group and Mr. Calderoni’s base salary was increased closer to the median of the Updated Peer Group. |

  45. Fiscal 2013 Compensation Approach

    | • | Variable Cash Incentive Awards—Awards under the EIP for fiscal 2013 are based on the same one-year performance metrics as were used in fiscal 2012. In connection with the increase of his base salary closer to the median base salary of the other CEOs in the Updated Peer Group, the target award percentage for the CEO was also increased from 185% of base salary to 200% of base salary resulting in a target bonus equal to the median target bonus for the other CEOs in the Updated Peer Group. The target award percentages for the other named executive officers remain unchanged. |

  46. Fiscal 2013 Compensation Approach

    | • | Long-Term, Equity-Based Incentive Awards—On September 12, 2012, the Compensation Committee granted the following equity awards to the named executive officers and the PRSUs were granted using a three-year performance period and the same performance metrics (but not goals) that were used in fiscal 2012. With the exception of the awards to Mr. Calderoni, Mr. Moore and Mr. Lloyd, which were approved with reference to the 75th percentile of the Updated Peer Group in recognition of the critical nature of their leadership roles at Cisco and to encourage them to continue to provide a high level of performance essential to Cisco’s future success, the grants to the other named executive officers were made with reference to the median of the Updated Peer Group with an opportunity to earn awards at the 75th percentile for superior relative total shareholder return and operational performance. |

  47. Fiscal 2013 Compensation Approach

    | Named Executive Officer | Performance-Based Restricted Stock Units | Time-Based Restricted Stock Units | | John T. Chambers | 583,500 | — | | Frank A. Calderoni | 250,700 | 89,900 | | Gary B. Moore | 263,500 | 94,500 | | Robert W. Lloyd | 218,800 | 78,500 | | Wim Elfrink | 141,600 | 50,800 |

  48. Summary Compensation Table

    Summary Compensation Table

  49. Summary Compensation Table

    | Name and Principal Position | Fiscal Year | Salary ($) (2) | Bonus ($) | Stock Awards ($) (4) | Option Awards ($) (7) | Non-Equity Incentive Plan Compensation ($) (8) | All Other Compensation ($) (10) | Total ($) | | John T. Chambers | 2012 | $375,000 | — | $7,348,265(5) | — | $3,953,376 | $11,025 | $11,687,666 | | Chairman and Chief Executive Officer | 2011 | $375,000 | — | $12,500,100(6) | — | — | $11,025 | $12,886,125 | | | 2010 | $382,212 | — | $8,190,000 | $5,688,638 | $4,600,000 | $11,025 | $18,871,875 | | Frank A. Calderoni | 2012 | $630,000 | — | $2,926,097(5) | — | $1,402,380 | $74,585 | $5,033,062 | | Executive Vice President, Chief Financial Officer | 2011 | $630,000 | — | $7,236,900(6) | — | — | $21,483 | $7,888,383 | | | 2010 | $611,538 | — | $4,680,000 | $3,250,650 | $1,530,000 | $78,681 | $10,150,869 | | Gary B. Moore | 2012 | $800,000 | — | $4,208,186(5) | — | $2,220,064 | $21,897 | $7,250,147 | | Executive Vice President, Chief Operating Officer (1) | 2011 | $699,808 | — | $10,518,900(6) | — | — | $33,962 | $11,252,670 | | Robert W. Lloyd | 2012 | $685,000 | — | $3,887,312(5) | — | $1,677,291 | $56,250 | $6,305,853 | | Executive Vice President, Worldwide Operations | 2011 | $685,000 | — | $7,236,900(6) | — | — | — | $7,921,900 | | | 2010 | $652,308 | — | $4,680,000 | $3,250,650 | $1,640,000 | $68,106 | $10,291,064 | | Wim Elfrink | 2012 | $729,169(3) | — | $3,313,361(5) | — | $1,352,608(9) | $661,011(11) | $6,056,149 | | Executive Vice President, Emerging Solutions and Chief Globalisation Officer | 2011 | $849,383(3) | — | $7,236,900(6) | — | — | $3,857,765(11) | $11,944,048 | | | 2010 | $773,762(3) | — | $5,850,000 | $4,063,313 | $1,600,000(9) | $3,456,642(11) | $15,743,717 |

  50. Summary Compensation Table

    | (1) Mr. Moore was promoted to Executive Vice President, Chief Operating Officer on February 21, 2011 and was not a named executive officer in fiscal 2010. |

  51. Summary Compensation Table

    | (2) Fiscal 2010 was a 53-week fiscal year, and the salary amounts for fiscal 2010 reflect the extra week’s salary earned during that fiscal year. |

  52. Summary Compensation Table

    | (3) Mr. Elfrink’s salary was paid in euros. The conversion rate from euros to U.S. dollars is based on the exchange rate in effect on the last day of Cisco’s applicable fiscal year: 1.2301, 1.4329, and 1.3044 dollars per euro for fiscal 2012, 2011 and 2010, respectively. |

  53. Summary Compensation Table

    | (4) The amounts in the Stock Awards column represent the aggregate grant date fair values, computed in accordance with FASB ASC Topic 718, of restricted stock unit awards, PRSU rights and/or PRSUs awarded during the applicable fiscal year under the 2005 Stock Incentive Plan. For time-based restricted stock unit awards and PRSU rights awarded prior to March 17, 2011, the grant date fair values were determined based on the closing share price of Cisco common stock on the date of grant. For time-based awards granted in fiscal 2012 and in fiscal 2011 on or subsequent to March 17, 2011, the grant date fair value was determined using the closing share price of Cisco common stock on the date of grant, adjusted for the present value of expected dividends. For a discussion of the valuation methodology used to value the PRSUs awarded during fiscal 2012, see footnote 5 to the Summary Compensation Table below. |

  54. Summary Compensation Table

    | (5) The PRSUs awarded in fiscal 2012 are based on a three-year performance cycle. The performance metrics for 50% of the PRSUs are based on operating goal performance, and the performance metric for the remaining 50% of the PRSUs is Cisco’s TSR. |

  55. Summary Compensation Table

    The operating goal performance metrics are operating cash flow and earnings per share based on annual goals, pre-established at the beginning of each of fiscal 2012, fiscal 2013 and fiscal 2014 in accordance with Code Section 162(m), over such three-year period. These operating goal performance metrics will be reviewed at the end of each fiscal year and any PRSUs will be earned based on the average performance over the three fiscal years, subject to the Compensation Committee’s approval. Because the performance-related component is based on separate measurements of our financial performance for each year in the three-year performance cycle, FASB ASC Topic 718 requires the grant date fair value to be calculated at the commencement of each separate year of the performance cycle when the respective performance measures are approved. The TSR metric is Cisco’s TSR relative to the S&P 500 Information Technology Index over a three-year period covering fiscal 2012, fiscal 2013 and fiscal 2014. Consistent with FASB ASC Topic 718, the full grant date fair value for the market-related TSR component for the entire three-year performance cycle is included in the amounts shown for fiscal 2012 (the year of grant) and was determined using a Monte Carlo simulation model. The table below sets forth the grant date fair value determined in accordance with FASB ASC Topic 718 for fiscal 2012 for the operating goal performance-related component of these awards (i) based upon the probable outcome of the fiscal 2012 operating goal performance-related component as of the grant date, and (ii) based upon achieving the maximum level of performance under the fiscal 2012 operating goal performance-related component as of the grant date. Also set forth below is the grant date fair value for the market-related TSR component, which is not subject to probable or maximum outcome assumptions. See “Compensation Discussion and Analysis—Fiscal 2012 Compensation” for a more complete description of the PRSUs.

  56. Summary Compensation Table

    | Name | Fiscal Year | Probable Outcome of Performance Conditions Grant Date Fair Value ($)* | Maximum Outcome of Performance Conditions Grant Date Fair Value ($) | Market-Related Component Grant Date Fair Value ($)** | | John T. Chambers | 2012 | $1,285,823 | $1,928,734 | $6,062,442 | | Frank A. Calderoni | 2012 | $373,096 | $559,644 | $1,759,087 | | Gary B. Moore | 2012 | $536,490 | $804,735 | $2,529,464 | | Robert W. Lloyd | 2012 | $495,580 | $743,370 | $2,336,579 | | Wim Elfrink | 2012 | $422,466 | $633,699 | $1,991,858 |

  57. Summary Compensation Table

    | * The grant date fair value of the fiscal 2012 operating goal performance-related component of the PRSUs awarded on September 8, 2011 was $15.57 per unit, which was based on the closing share price of Cisco common stock on the date of grant adjusted for the annualized dividend yield of 1.5%. |

  58. Summary Compensation Table

    | ** The grant date fair value of the market-related TSR components of the PRSUs awarded on September 8, 2011 was $24.47 per unit, which was determined using a Monte-Carlo simulation. The significant inputs and assumptions used in this simulation were a volatility of 31.7%, a risk free interest rate of 0.3%, and an annualized dividend yield of 1.3%. A measurement date of December 7, 2011 was used because these PRSUs were awarded subject to shareholder approval of the amendment and restatement of the 2005 Stock Incentive Plan at the 2011 annual meeting of shareholders. |

  59. Summary Compensation Table

    | (6) For the PRSU rights awarded in fiscal 2011, 84% of the target number of restricted stock units would have been granted pursuant to these awards; however, in light of the erosion of shareholder value in fiscal 2011, the Compensation Committee exercised its negative discretion and decided no named executive officer would receive a performance-based equity award for fiscal 2011. The maximum that could have been earned under the PRSU rights was 133% of target for fiscal 2011. Those maximum values for fiscal 2011 that could have been earned were: for Mr. Chambers, $8,312,567; for Mr. Calderoni, $4,812,539; for Mr. Moore, $4,812,539; for Mr. Lloyd, $4,812,539; and for Mr. Elfrink, $4,812,539. |

  60. Summary Compensation Table

    | (7) The amounts in the Option Awards column represent the aggregate grant date fair values, computed in accordance with FASB ASC Topic 718, of stock option awards granted during fiscal year 2010 pursuant to the 2005 Stock Incentive Plan. For information on the valuation assumptions with respect to stock option grants, refer to the note on Employee Benefit Plans in the notes to consolidated financial statements contained in Cisco’s Annual Report on Form 10-K for the fiscal year ended July 31, 2010. There can be no assurance that these grant date fair values will ever be realized by the named executive officers. |

  61. Summary Compensation Table

    | (8) The amounts listed in the Non-Equity Incentive Plan Compensation column for fiscal 2012 and fiscal 2010 reflect the cash awards paid under the EIP for performance in the applicable fiscal year. |

  62. Summary Compensation Table

    | (9) For Mr. Elfrink, the non-equity incentive plan compensation for fiscal 2012 and fiscal 2010 were payable in euros. The conversion rates from euros to U.S. dollars for fiscal 2012 and fiscal 2010 were 1.2301 and 1.2230 dollars per euro, respectively, each being the rate referenced by the Compensation Committee when the respective award was made. |

  63. Summary Compensation Table

    | (10) The amounts listed in the All Other Compensation column for fiscal 2012 include actual and estimated matching contributions by Cisco under the Cisco Systems, Inc. Deferred Compensation Plan on behalf of |

  64. Summary Compensation Table

    | certain participating named executive officers. This includes $63,560, $10,207 and $56,250 in matching contributions on behalf of Mr. Calderoni, Mr. Moore, and Mr. Lloyd, respectively, related to fiscal 2012 salary deferred during calendar year 2011 as well as fiscal 2012 salary deferred during calendar year 2012 that is expected to be credited at the end of calendar year 2012. See “Nonqualified Deferred Compensation—Fiscal 2012” for more information. In addition, the amounts listed in the All Other Compensation column for fiscal 2012 include matching contributions that Cisco made under its 401(k) plan on behalf of certain participating named executive officers, including $11,025, $11,025 and $11,690 on behalf of Mr. Chambers, Mr. Calderoni, and Mr. Moore, respectively. |

  65. Summary Compensation Table

    | (11) The amounts listed in the All Other Compensation column for Mr. Elfrink are, for each fiscal year, comprised primarily of certain tax, living and travel expenses in connection with Mr. Elfrink’s International Assignment Agreement, and contributions to the Netherlands Capital Plan by Cisco on behalf of Mr. Elfrink. Certain of these items paid to Mr. Elfrink were paid in euros during fiscal 2012, 2011 and 2010 and others in Indian rupees during fiscal 2011 and 2010. The conversion rates from euros to U.S. dollars and from Indian rupees to U.S. dollars are based on the exchange rate in effect on the last day of Cisco’s applicable fiscal year: 1.2301 per euro for fiscal 2012, 1.4329 per euro and 0.0226 per rupee for fiscal 2011, and 1.3044 dollars per euro and 0.02154 dollars per rupee for fiscal 2010. The amount listed for fiscal 2011 includes an additional $18,266 over the amount previously reported because the amount previously reported included estimated expenses relating to Mr. Elfrink’s reassignment to the U.S. from India and the amount above has been adjusted to include actual expenses. |

  66. Summary Compensation Table

    Mr. Elfrink was reassigned to the U.S. from India as of August 2011 and during fiscal 2012, Mr. Elfrink’s international assignment benefits, including tax equalization benefits, were substantially reduced from fiscal 2011 and capped at approximately $508,000. The perquisites and personal benefits received by Mr. Elfrink pursuant to the International Assignment Agreement for fiscal 2012 include: $192,195 for housing assistance in the United States, which includes utilities and property taxes; $75,000 for fees for tax services; $60,000 for home leave travel and dependent visits; and $48,968 for an allowance for child education. Other similar perquisites and personal benefits included in the amounts shown for fiscal 2012 consist of the following: a relocation miscellaneous expense allowance, an allowance for automobiles, goods and services differential, property management expenses related to his home country residence, reimbursement for personal expenses related to a trip he attended to recognize sales personnel achievements, and payment of medical expenses. Cisco’s contributions on behalf of Mr. Elfrink under the Netherlands Capital Plan paid during fiscal 2012 were $198,859 (comprised of $141,168, $46,721, $1,964 and $9,006 for a defined contribution premium, a survivor’s death benefit, an orphan’s death benefit and a disability benefit, respectively). For more information on the Netherlands Capital Plan, see “Nonqualified Deferred Compensation—Fiscal 2012.” The following table provides information on cash-based performance awards, restricted stock unit awards and stock option awards in fiscal 2012 to each of Cisco’s named executive officers. There can be no assurance that the Grant Date Fair Value, as listed in this table, of the Stock Unit and Stock Option Awards will ever be realized. These Grant Date Fair Value amounts also are included in the “Stock Awards” and “Option Awards” columns of the Summary Compensation Table.

  67. Grants of Plan-Based Awards—Fiscal 2012

    Grants of Plan-Based Awards—Fiscal 2012

  68. Grants of Plan-Based Awards—Fiscal 2012

    | | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) (3)(4) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | | Name | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) (3) | Maximum (#) | | | | | | John T. Chambers | (1) | — | $2,220,000 | $6,660,000 | | | | | | | | | | 9/8/11(2) | | | | — | 495,500 | 743,250 | | | | $7,348,265 | | Frank A. Calderoni | (1) | — | $787,500 | $2,362,500 | | | | | | | | | | 9/8/11(2) | | | | — | 143,775 | 215,662 | | | | $2,132,183 | | | 9/8/11 | | | | | | | 50,600 | | | $793,914 | | Gary B. Moore | (1) | — | $1,000,000 | $3,000,000 | | | | | | | | | | 9/8/11(2) | | | | — | 206,740 | 310,110 | | | | $3,065,954 | | | 9/8/11 | | | | | | | 72,800 | | | $1,142,232 | | Robert W. Lloyd | (1) | — | $856,250 | $2,568,750 | | | | | | | | | | 9/8/11(2) | | | | — | 190,975 | 286,462 | | | | $2,832,159 | | | 9/8/11 | | | | | | | 67,250 | | | $1,055,153 | | Wim Elfrink | (1) | — | $911,461 | $2,734,383 | | | | | | | | | | 9/8/11(2) | | | | — | 162,800 | 244,200 | | | | $2,414,324 | | | 9/8/11 | | | | | | | 57,300 | | | $899,037 |

  69. Grants of Plan-Based Awards—Fiscal 2012

    | (1) These rows represent possible payouts pursuant to the annual cash incentive awards under the EIP for fiscal 2012. More information about these payments appears above in the “Compensation Discussion and Analysis” section of this Proxy Statement. For each named executive officer other than Mr. Chambers, the target and maximum values are calculated by multiplying 125% (target) and 375% (maximum), respectively, by the executive’s annual base salary in effect at the beginning of fiscal 2012. For Mr. Chambers, the target and maximum values are calculated by multiplying 185% and 555%, respectively, by $1,200,000, the median CEO base salary of the Initial Peer Group. For Mr. Elfrink, the target and maximum values are denominated in euros. The conversion rate from euros to U.S. dollars for fiscal 2012 is 1.2301 dollars per euro, the exchange rate in effect on the last day of fiscal 2012. The EIP did not contain any threshold value for fiscal 2012. |

  70. Grants of Plan-Based Awards—Fiscal 2012

    | (2) The amounts shown in these rows reflect, in share amounts, the target and maximum potential awards of restricted stock units for the fiscal 2012 performance period, as further described in the “Compensation Discussion and Analysis” section of this Proxy Statement. In September 2011, each named executive officer was awarded a PRSU under the 2005 Stock Incentive Plan, subject to the satisfaction of pre-determined worldwide revenue and earnings per share performance conditions during fiscal 2012, with a maximum award equal to 150% of the target grant. There was no threshold number of restricted stock units available for fiscal 2012. The potential awards were performance-based and were completely at risk. For additional detail on the grant date fair value of the PRSUs, see footnote 5 to the Summary Compensation Table above. |

  71. Grants of Plan-Based Awards—Fiscal 2012

    | (3) Each of the awards will vest in full (at target levels for PRSUs) and, if applicable, become immediately exercisable in the event that Cisco is acquired by merger or asset sale, unless the award or related agreement is assumed or replaced by the acquiring entity, or in the event there is a hostile change in control or ownership of Cisco, whether through a tender or exchange offer for more than 35% of Cisco’s outstanding voting securities which the Board of Directors does not recommend the shareholders to accept, or a change in the majority of the members of the Board of Directors as a result of one or more contested elections for board membership. In addition, pursuant to a Compensation Committee policy which can be revoked or changed at any time, if the holder of an award dies or becomes terminally ill, his or her award will generally vest in an amount equal to the greater of 100% of the unvested shares subject to the award (at target levels |

  72. Grants of Plan-Based Awards—Fiscal 2012

    | for PRSUs) up to a total value of $10 million, net of aggregate exercise or purchase price, or up to one year of vesting from the date of death or determination of terminal illness. For purposes of this policy, shares subject to the award are valued based on the closing share price of Cisco common stock on the date of death or determination of terminal illness. |

  73. Grants of Plan-Based Awards—Fiscal 2012

    In the event of the retirement of a named executive officer, and to the extent the named executive officer meets certain retirement eligibility criteria described in the award agreement and complies with certain post-retirement covenants, all PRSUs will continue to vest and any earned PRSUs, based on the satisfaction of the performance metrics, will be settled in Cisco shares at the end of the three-year performance period. Further, PRSUs will be forfeited and provide no value to its holder to the extent the holder violates specific post-retirement covenants.

  74. Grants of Plan-Based Awards—Fiscal 2012

    | (4) Each restricted stock unit award listed in this column was granted under the 2005 Stock Incentive Plan. Each award vests in 25% increments on September 11, 2012, and annually for the next 3 years. Each award is settled in shares on each vesting date. |

  75. Grants of Plan-Based Awards—Fiscal 2012

    The following table shows the number of Cisco common shares covered by exercisable and unexercisable stock options, and the number of Cisco unvested restricted stock units, held by Cisco’s named executive officers as of July 28, 2012.

  76. Outstanding Equity Awards At 2012 Fiscal Year-End

    Outstanding Equity Awards At 2012 Fiscal Year-End

  77. Outstanding Equity Awards At 2012 Fiscal Year-End

    | | Option Awards | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) * | Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) * | | John T. Chambers | 1,500,000 | — | $19.18 | 8/23/2013 | | | | | | | 1,300,000 | — | $17.86 | 9/29/2014 | | | | | | | 1,300,000 | — | $23.01 | 9/21/2015 | | | | | | | 870,000 | 30,000 | $32.21 | 9/20/2016(1) | | | | | | | 619,791 | 255,209 | $23.40 | 11/12/2016(8) | | | | | | | | | | | 23,200(3) | $364,008 | | | | | | | | | 33,750(4) | $529,538 | | | | | | | | | 175,000(9) | $2,745,750 | | | | | | | | | 213,750(11) | $3,353,738 | | | | | | | | | | | 743,250(14) | $11,661,593 | | Frank A. Calderoni | 173,333 | — | $21.24 | 5/14/2013 | | | | | | | 78,000 | — | $19.18 | 8/23/2013 | | | | | | | 58,750 | — | $17.80 | 8/12/2014 | | | | | | | 120,000 | — | $17.86 | 9/29/2014 | | | | | | | 200,000 | — | $23.01 | 9/21/2015 | | | | | | | 100,000 | — | $25.85 | 6/7/2016 | | | | | | | 232,000 | 8,000 | $32.21 | 9/20/2016(1) | | | | | | | 354,166 | 145,834 | $23.40 | 11/12/2016(8) | | | | | | | | | | | 15,000(2) | $235,350 | | | | | | | | | 6,187(3) | $97,074 | | | | | | | | | 15,000(4) | $235,350 | | | | | | | | | 100,000(9) | $1,569,000 | | | | | | | | | 123,750(11) | $1,941,638 | | | | | | | | | 50,600(13) | $793,914 | | | | | | | | | | | 215,662(14) | $3,383,737 | | Gary B. Moore | 100,000 | — | $19.59 | 9/2/2012 | | | | | | | 325,000 | — | $19.18 | 8/23/2013 | | | | | | | 275,000 | — | $17.86 | 9/29/2014 | | | | | | | 200,000 | — | $23.01 | 9/21/2015 | | | | | | | 232,000 | 8,000 | $32.21 | 9/20/2016(1) | | | | | | | 115,623 | 34,377 | $20.10 | 6/11/2016(7) | | | | | | | | | | | 6,187(3) | $97,074 | | | | | | | | | 18,750(4) | $294,188 | | | | | | | | | 25,000(5) | $392,250 | | | | | | | | | 100,000(6) | $1,569,000 | | | | | | | | | 100,000(9) | $1,569,000 | | | | | | | | | 50,000(10) | $784,500 | | | | | | | | | 123,750(11) | $1,941,638 | | | | | | | | | 150,000(12) | $2,353,500 | | | | | | | | | 72,800(13) | $1,142,232 | | | | | | | | | | | 310,110(14) | $4,865,626 | | Robert W. Lloyd | 30,000 | — | $19.18 | 8/23/2013 | | | | | | | 700,000 | — | $19.24 | 6/10/2014 | | | | | | | 179,117 | — | $17.86 | 9/29/2014 | | | | | | | 200,000 | — | $23.01 | 9/21/2015 | | | | | | | 232,000 | 8,000 | $32.21 | 9/20/2016(1) | | | | | | | 115,623 | 34,377 | $20.10 | 6/11/2016(7) | | | | | | | 354,166 | 145,834 | $23.40 | 11/12/2016(8) | | | | | | | | | | | 6,187(3) | $97,074 | | | | | | | | | 18,750(4) | $294,188 | | | | | | | | | 43,750(5) | $686,438 | | | | | | | | | 100,000(6) | $1,569,000 | | | | | | | | | 100,000(9) | $1,569,000 | | | | | | | | | 123,750(11) | $1,941,638 | | | | | | | | | 67,250(13) | $1,055,153 | | | | | | | | | | | 286,462(14) | $4,494,589 | | Wim Elfrink | 243,800 | — | $19.59 | 9/2/2012 | | | | | | | 395,000 | — | $19.18 | 8/23/2013 | | | | | | | 115,000 | — | $17.86 | 9/29/2014 | | | | | | | 400,000 | — | $23.01 | 9/21/2015 | | | | | | | 551,000 | 19,000 | $32.21 | 9/20/2016(1) | | | | | | | 442,708 | 182,292 | $23.40 | 11/12/2016(8) | | | | | | | | | | | 14,694(3) | $230,549 | | | | | | | | | 22,500(4) | $353,025 | | | | | | | | | 125,000(9) | $1,961,250 | | | | | | | | | 123,750(11) | $1,941,638 | | | | | | | | | 57,300(13) | $899,037 | | | | | | | | | | | 244,200(14) | $3,831,498 |

  78. Outstanding Equity Awards At 2012 Fiscal Year-End

    | * The market values of the restricted stock units that have not vested and the unearned PRSUs are calculated by multiplying the number of units shown in the table by the closing share price of Cisco common stock on July 27, 2012, which was $15.69. |

  79. Outstanding Equity Awards At 2012 Fiscal Year-End

    Vesting Schedule for Outstanding Stock Options and Unvested Restricted Stock Units

  80. Outstanding Equity Awards At 2012 Fiscal Year-End

    | Note | Grant Dates | Incremental Vesting Dates | | (1) | 9/20/07 | 20% on 9/20/08; pro-rata monthly for next 48 months | | (2) | 2/19/08 | 20% on 2/19/09; 20% annually for next 4 years | | (3) | 9/11/08 | 20% on 9/11/08; 20% annually for next 4 years | | (4) | 9/11/08 | 25% on 9/11/09; 25% annually for next 3 years | | (5) | 3/12/09 | 25% on 3/12/10; 25% annually for next 3 years | | (6) | 3/12/09 | Full vesting on 3/12/13 | | (7) | 6/11/09 | 25% on 6/11/10; pro-rata monthly for next 36 months | | (8) | 11/12/09 | 25% on 9/11/10; pro-rata monthly for next 36 months | | (9) | 11/12/09 | 25% on 9/11/10; 25% annually for next 3 years | | (10) | 6/10/10 | 25% on 6/11/11; 25% annually for next 3 years | | (11) | 9/16/10 | 25% on 9/11/11; 25% annually for next 3 years | | (12) | 3/17/11 | 25% on 3/12/12; 25% annually for next 3 years | | (13) | 9/8/11 | 25% on 9/11/12; 25% annually for next 3 years | | (14) | 9/8/11 | Vests on 9/11/14 based on (i) the achievement of two operating goal performance metrics, operating cash flow and earnings per share, based on annual goals that are pre-established at the beginning of each of fiscal 2012, fiscal 2013 and fiscal 2014 and (ii) Cisco’s TSR relative to the S&P 500 Information Technology Index over a three-year period covering fiscal 2012, fiscal 2013 and fiscal 2014. The number of shares and the payout value for the fiscal 2012 PRSUs set forth above reflect the maximum potential payout since Cisco’s performance during the first year of the three-year performance period has exceeded the target levels. The maximum potential payout represents 150% of the target number of PRSUs. Each PRSU is subject to the Compensation Committee’s negative discretion when approving the settlement thereof. |

  81. Outstanding Equity Awards At 2012 Fiscal Year-End

    Except as described below, each stock option granted prior to 2009 has a maximum term of nine years measured from the applicable grant date, subject to earlier termination in the event of the optionee’s cessation of service with Cisco. Each option that was granted to the named executive officers on November 12, 2009 has a maximum term of seven years measured from the applicable grant date, subject to earlier termination in the event of the optionee’s cessation of service with Cisco. The exercise price for each of these options is equal to the closing share price of Cisco common stock on the date of grant. The option to purchase 1,500,000 shares that was granted to Mr. Chambers on August 23, 2004 has a maximum term of nine years measured from the grant date and, if vested, will remain exercisable for the full term even after his cessation of service except in limited circumstances. For purposes of Mr. Chambers’ stock option agreement, “service” includes providing services directly to Cisco or employment by educational or governmental institutions if those institutions’ policies preclude continued service to Cisco. The exercise price is equal to the closing share price of Cisco common stock on the date of grant. The following table shows the number of shares acquired by each of the named executive officers during fiscal 2012 through stock option exercises and vesting of restricted stock units (including restricted stock units granted upon the satisfaction of a performance condition). The table also presents the value realized upon such exercises and vesting, as calculated, in the case of stock options, based on the difference between the market price of Cisco’s common stock at exercise and the option exercise price, and as calculated, in the case of restricted stock units, based on the closing share price of Cisco’s common stock on the NASDAQ Global Select Market on the vesting date.

  82. Option Exercises and Stock Vested—Fiscal 2012

    Option Exercises and Stock Vested—Fiscal 2012

  83. Option Exercises and Stock Vested—Fiscal 2012

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | John T. Chambers | 2,000,000 | $12,388,372 | 215,700 | $3,412,374 | | Frank A. Calderoni | — | — | 134,437 | $2,193,983 | | Gary B. Moore | 100,000 | $116,000 | 256,187(1) | $4,370,928(1) | | Robert W. Lloyd | — | — | 199,937 | $3,339,241 | | Wim Elfrink | 50,000 | $109,500 | 160,943 | $2,546,518 |

  84. Option Exercises and Stock Vested—Fiscal 2012

    | (1) Includes 10,313 shares subject to fully vested deferred stock units, which will not settle until after Mr. Moore’s separation from service with Cisco within the meaning of Code Section 409A. |

  85. Option Exercises and Stock Vested—Fiscal 2012

    The following table shows the contributions and earnings during fiscal 2012, and account balance as of July 28, 2012, for named executive officers under the Cisco Systems, Inc. Deferred Compensation Plan, the Netherlands Capital Plan or the 2005 Stock Incentive Plan, as the case may be.

  86. Nonqualified Deferred Compensation—Fiscal 2012

    Nonqualified Deferred Compensation—Fiscal 2012

  87. Nonqualified Deferred Compensation—Fiscal 2012

    | Name | Plan | Executive Contributions in Last Fiscal Year ($) (1) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($) (2) | Aggregate Withdrawal/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($) (3) | | John T. Chambers | — | — | — | — | — | — | | Frank A. Calderoni | Deferred Compensation Plan | $953,191 | $63,560(4) | $(1,043) | — | $4,116,272 | | Gary B. Moore | Deferred Compensation Plan | $67,692 | $10,207(4) | $243 | — | $1,296,816 | | | 2005 Stock Incentive Plan | $163,152 | — | $(1,341) | — | $161,811 | | Robert W. Lloyd | Deferred Compensation Plan | $838,646 | $56,250(4) | $24,954 | — | $3,904,932 | | Wim Elfrink (5) | Netherlands Capital Plan | $21,282 | $141,168(6) | $60,115(7) | — | $2,484,157(8) |

  88. Nonqualified Deferred Compensation—Fiscal 2012

    | (1) The executive contribution amounts under the Deferred Compensation Plan and the Netherlands Capital Plan were included in fiscal 2012 compensation in the “Salary” and “Non-Equity Incentive Plan Compensation” columns of the Summary Compensation Table, as applicable. The executive contribution amount under the 2005 Stock Incentive Plan represents the value of fully vested deferred stock units and is included in the “Value Realized on Vesting” column of the Option Exercises and Stock Vested—Fiscal 2012 table. |

  89. Nonqualified Deferred Compensation—Fiscal 2012

    | (2) None of the amounts in this column is included in the Summary Compensation Table because plan earnings were not preferential or above-market. |

  90. Nonqualified Deferred Compensation—Fiscal 2012

    | (3) The following amounts included in this column for the Deferred Compensation Plan and the Netherlands Capital Plan also have been reported in the Summary Compensation Table as compensation for fiscal 2012 or a prior fiscal year: Mr. Calderoni, $3,649,162; Mr. Moore, $238,923; Mr. Lloyd, $2,543,602; and Mr. Elfrink, $1,255,182. The grant date fair value of Mr. Moore’s fully vested deferred stock units under the 2005 Stock Incentive Plan of $226,164 has been reported in the Summary Compensation Table as compensation for fiscal 2011. |

  91. Nonqualified Deferred Compensation—Fiscal 2012

    | (4) These amounts were included in the “All Other Compensation” column of the Summary Compensation Table. Matching contributions under the Deferred Compensation Plan are made to eligible participants following the end of each calendar year. Generally, the matching contribution rate for calendar year 2011 was, and the matching contribution rate for calendar year 2012 will be, 4.5% of eligible compensation over the Code Section 401(a)(17) limit for each calendar year ($245,000 for 2011 and $250,000 for 2012), with a $1,500,000 cap on eligible compensation for each calendar year. The matching contribution rate for calendar years 2011 and 2012 is the same as in the 401(k) Plan for both years. Participants must be actively employed by Cisco on the last day of a calendar year to receive a matching contribution under the Deferred Compensation Plan. The amounts in this column reflect the sum of (i) actual calendar year 2011 matching contributions, excluding the portion of those contributions related to deferrals of fiscal 2011 salary and non-equity incentive plan compensation, and (ii) estimated calendar year 2012 matching contributions related to deferrals of fiscal 2012 salary and non-equity incentive plan compensation during calendar year 2012 that are expected to be credited to the accounts of the named executive officers at the end of calendar year 2012. |

  92. Nonqualified Deferred Compensation—Fiscal 2012

    | (5) The dollar amounts in the table shown for Mr. Elfrink were converted from euros. The conversion rate from euros to U.S. dollars is based on the exchange rate of 1.2301 dollars per euro in effect on the last day of fiscal 2012. |

  93. Nonqualified Deferred Compensation—Fiscal 2012

    | (6) This amount was included in fiscal 2012 compensation in the “All Other Compensation” column of the Summary Compensation Table. Cisco makes contributions to the Netherlands Capital Plan on the first day of each calendar year equal to a percentage of Mr. Elfrink’s base salary and his bonus paid during the prior calendar year. Except as provided in the last sentence of this footnote, Cisco’s contribution to the Netherlands Capital Plan is determined as discussed below. These contribution percentages for Mr. Elfrink for fiscal 2012 were approximately 20% of eligible earnings. The amount in this column reflects the sum of Cisco’s contributions for Mr. Elfrink during fiscal 2012. The amount in the column does not include contributions under the Netherlands Capital Plan listed in footnote 10 to the Summary Compensation Table relating to a survivor’s death benefit, an orphan’s death benefit and a disability benefit, which benefits are described under the “Potential Payments upon Termination or Change in Control” below. |

  94. Nonqualified Deferred Compensation—Fiscal 2012

    | (7) The return listed in this column represents the dollar value by which the amount available under the Netherlands Capital Plan as of the last day of fiscal 2012, as described below in footnote 8, exceeds or falls short of the sum of (i) the amount available at fiscal 2011 year-end and (ii) the aggregate contributions during fiscal 2012 by Mr. Elfrink and Cisco. The dollar amounts in the table shown for Mr. Elfrink were converted from euros. The conversion rate from euros to U.S. dollars is based on the exchange rate of 1.2301 dollars per euro in effect on the last day of fiscal 2012, including the amount available at fiscal 2011 year-end. |

  95. Nonqualified Deferred Compensation—Fiscal 2012

    | (8) The amount in this column represents the funds available under the Netherlands Capital Plan as of July 28, 2012 that would have been available to Mr. Elfrink to purchase a retirement annuity (covering his life and that of his spouse) had he elected to retire as of that date. |

  96. Nonqualified Deferred Compensation—Fiscal 2012

    The Deferred Compensation Plan, which became effective on June 25, 2007, is an unfunded and unsecured deferred compensation arrangement that is designed to allow the participants to defer a specified percentage of their base salary (up to 75%), commissions and/or eligible bonuses (up to 100%) in a manner similar to the way in which Cisco’s 401(k) plan operates, but without regard to the maximum deferral limitations imposed on 401(k) plans by the Code. The Deferred Compensation Plan is designed to comply with Code Section 409A. As required by applicable law, participation in the Deferred Compensation Plan is limited to a group of Cisco’s management employees, which group includes each of Cisco’s named executive officers. Amounts deferred by each participant pursuant to the Deferred Compensation Plan are credited to a bookkeeping account maintained on behalf of that participant. Amounts credited to each participant under the Deferred Compensation Plan are periodically adjusted for earnings and/or losses at a rate that is equal to one or more of the measurement funds selected by the 401(k) Plan Committee and elected by a participant. Currently, the measurement funds consist of the following: Fidelity Money Market Fund; iShares Barclays Aggregate Bond Fund; SPDR S&P 500 ETF Trust; SPDR S&P MidCap 400 ETF Trust; iShares Russell 2000 Index Fund; iShares MCSI EAFE Index Fund; Fidelity Freedom 2010 Fund; Fidelity Freedom 2020 Fund; Fidelity Freedom 2030 Fund; and Fidelity Freedom 2040 Fund. In addition, Cisco may credit additional matching amounts to a participant’s account for any plan year as determined by the Compensation Committee. For calendar years 2012 and 2011, there are matching contributions on deferrals over the IRS limitation on compensation that may be taken into account under the 401(k) Plan ($250,000 for 2012 and $245,000 for 2011). Generally, the matching contribution rate for calendar year 2011 was, and the matching contribution rate for calendar year 2012 will be, 4.5% of eligible compensation over the Code Section 401(a)(17) limit, with a $1,500,000 cap on eligible compensation for each calendar year. The matching contribution rate for calendar years 2012 and 2011 is the same as in the 401(k) Plan for both years. Participants must be actively employed by Cisco on the last day of a calendar year to receive a matching contribution under the Deferred Compensation Plan. Distributions are made in accordance with elections filed by participants at the time of their deferral elections and distributions generally are expected to occur after a participant’s separation of service, or in some cases at specified future distribution dates. The Netherlands Capital Plan is a funded defined contribution plan for eligible employees in the Netherlands that is tax-qualified in the Netherlands in the sense that contributions and earnings are not subject to income taxes until distributed. The Netherlands Capital Plan requires participants to defer 3% of their eligible earnings, while Cisco makes contributions on behalf of eligible participants equal to a percentage of their eligible earnings, based on the participant’s age, to fund a defined contribution premium. Eligible earnings are generally comprised of salary and bonus subject to certain caps. These contributions are deposited in an account for each participant and held by an insurance company and are credited with an investment return with a minimum rate guaranteed by the insurance company until each participant retires. In-service withdrawals or distributions are not allowed. Upon retirement, distributions must be used to purchase an annuity providing an annual income to the participant for his life and a survivor’s annuity (at 70% of his annual benefit) for the life of his surviving spouse, if any. Pursuant to the Netherlands Capital Plan, Cisco also contributes specified amounts to the participant’s separate accounts for pre-retirement death (a survivor benefit and an orphan’s benefit) and a disability benefit, as described under “Potential Payments upon Termination or Change in Control” below. Under the 2005 Stock Incentive Plan, at the election of an eligible employee, the settlement of vested shares underlying restricted stock unit awards may be deferred until either (i) the employee’s separation from service with Cisco or (ii) the earlier of an elected future settlement date or the employee’s separation from service with Cisco, in each case in accordance with Code Section 409A.

  97. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control Except for Mr. Elfrink, none of our named executive officers have employment or severance agreements with Cisco, and their employment may be terminated at any time at the discretion of the Board of Directors. For information regarding potential payments upon termination under the Deferred Compensation Plan, in which certain named executive officers participate, the Netherlands Capital Plan, in which Mr. Elfrink participates, and the deferred equity awards of Mr. Moore under the 2005 Stock Incentive Plan, see “Nonqualified Deferred Compensation—Fiscal 2012” above. Mr. Elfrink—Non-Equity Severance Payments. Set forth below is a description of the benefits to which Mr. Elfrink or his family would be entitled, assuming a qualifying termination, illness or death on the last business day of fiscal 2012. These benefits would have been payable in euros and unless otherwise noted, the conversion rate from euros to U.S. dollars is based on the exchange rate of 1.2301 dollars per euro in effect on the last day of fiscal 2012. Severance Payments upon Termination Following Completion of International Assignment. Pursuant to Mr. Elfrink’s International Assignment Agreement, upon the successful completion of his international assignment, Cisco has agreed to relocate Mr. Elfrink to the Netherlands and attempt to employ Mr. Elfrink in a comparable position. If Cisco is unable to offer a position to Mr. Elfrink, his employment would terminate and he would be entitled to receive severance compensation equal to 2.25 times his then current annual salary. Using Mr. Elfrink’s salary in effect on the last day of fiscal 2012, this amount is estimated at €1,333,737, or $1,640,630 (based on the exchange rate listed above). Mr. Elfrink is employed on an at-will basis, but the termination of Mr. Elfrink’s Netherlands employment agreement, as recorded in his International Assignment Agreement, is subject to a notice period of two months plus any fractional month between the date notice is given and the start of the next calendar month. Payments Due to Mr. Elfrink upon Being Unable to Perform His Duties as a Result of Illness. If Mr. Elfrink is unable to perform his duties as a result of illness, he shall remain entitled to 100% of his annual base salary for one year, or $729,169, and 70% of his annual base salary for a second year, or $510,418 (each estimated based on Mr. Elfrink’s salary in effect at the end of fiscal 2012). Any such payments would be reduced by the amount of any financial benefit Mr. Elfrink received through various insurance proceeds, and any other income earned by Mr. Elfrink for services provided to Cisco. Further, if Mr. Elfrink’s incapacity to work is caused by a third party, Cisco’s obligation to pay Mr. Elfrink’s salary may be limited. After the second year of illness, Mr. Elfrink would then be entitled to a disability benefit under the Netherlands Capital Plan in an amount equal to $214,423 per year until Mr. Elfrink reaches the age of 65. Payments Due Mr. Elfrink’s Family upon Death. In the event of Mr. Elfrink’s death, his family would be entitled to a survivor death benefit and an orphan’s death benefit pursuant to the Netherlands Capital Plan. The survivor death benefit would be payable to his spouse in the amount of $265,463 per year until her death. The orphan’s death benefit would be payable to his children in an aggregate amount of $53,093 per year generally until his children reach the age of 18 or in certain circumstances the age of 27. Acceleration of Equity Awards. As described above in the “Compensation Discussion and Analysis” section, each outstanding award to all employees under the 2005 Stock Incentive Plan and the 1996 Stock Incentive Plan that is subject to vesting provisions, and each PRSU or PRSU right awarded from time to time, will vest in full (at target levels for PRSUs and PRSU rights) and, if applicable, become immediately exercisable in the event that Cisco is acquired by merger or asset sale, unless the award or related agreement is assumed or replaced by the acquiring entity, or in the event there is a hostile change in control or ownership of Cisco, whether through a tender or exchange offer for more than 35% of Cisco’s outstanding voting securities which the Board of Directors does not recommend the shareholders to accept, or a change in the majority of the members of the Board of Directors as a result of one or more contested elections for board membership. In addition, the Compensation Committee has adopted a policy (the “Death and Terminal Illness Policy”) that applies to each outstanding award to all employees (other than as described in this paragraph) and that can be revoked or changed at any time. Pursuant to this policy, if the holder of such an award dies or becomes terminally ill, his or her aggregate awards will generally vest in an amount equal to the greater of (a) 100% of the unvested shares subject to the awards (at target levels for PRSUs) up to a total value of $10 million, net of aggregate exercise or purchase price, or (b) up to one year of vesting from the date of death or determination of terminal illness. For purposes of this policy, shares subject to each award are valued based on the closing share price of Cisco common stock on the date of death or determination of terminal illness. The dollar limit under the Death and Terminal Illness Policy does not apply to an option grant made to Mr. Chambers on August 23, 2004 to purchase up to 1,500,000 shares of Cisco common stock at an exercise price of $19.18 that would vest in full upon Mr. Chambers’ death or permanent disability. In addition, for purposes of the stock option agreement relating to the August 23, 2004 grant, “service” includes providing services directly to Cisco or employment by educational or governmental institutions if those institutions’ policies preclude continued service to Cisco. The table below sets forth the intrinsic values that the named executive officers would derive in the event of (a) a hostile change in control of Cisco or change in control in which the awards are not assumed or replaced by the acquiror, or (b) the death or terminal illness of the named executive officer (or permanent disability in the case of the August 23, 2004 option grant to Mr. Chambers), that in either case hypothetically occurred on the last business day of fiscal 2012. For restricted stock unit awards, the intrinsic value is based upon the fiscal 2012 year-end closing share price of Cisco common share of $15.69, and for stock options, the value is based on such $15.69 minus the exercise price of the applicable stock option.

  98. Potential Payments—Accelerated Equity Awards

    Potential Payments—Accelerated Equity Awards

  99. Potential Payments—Accelerated Equity Awards

    | | Hostile Change in Control or Change in Control in Which Awards Are Not Assumed or Replaced by Acquiror | | | Death or Terminal Illness | | | | Name | Intrinsic Value of Accelerated Stock Options ($) | Intrinsic Value of Accelerated Restricted Stock Units and PRSUs ($) | Total Intrinsic Value of Accelerated Equity Awards ($) | Intrinsic Value of Accelerated Stock Options ($) | Intrinsic Value of Accelerated Restricted Stock Units and PRSUs ($) | Total Intrinsic Value of Accelerated Equity Awards ($) | | John T. Chambers | — | $14,767,428 | $14,767,428 | — | $10,000,000(1) | $10,000,000(1) | | Frank A. Calderoni | — | $7,128,155 | $7,128,155 | — | $7,128,155 | $7,128,155 | | Gary B. Moore | — | $13,387,132 | $13,387,132 | — | $10,000,000(2) | $10,000,000(2) | | Robert W. Lloyd | — | $10,208,887 | $10,208,887 | — | $10,000,000(2) | $10,000,000(2) | | Wim Elfrink | — | $7,939,830 | $7,939,830 | — | $7,939,830 | $7,939,830 |

  100. Potential Payments—Accelerated Equity Awards

    | (1) Represents the intrinsic value of full acceleration, up to the limit of $10 million, of Mr. Chambers’ stock options (other than his August 23, 2004 option grant) and restricted stock unit awards and PRSUs assuming those awards were to be accelerated under the Death and Terminal Illness Policy. Mr. Chambers’ August 23, 2004 stock option is not subject to the Death and Terminal Illness Policy and will also accelerate in full in the event of a permanent disability. However, the full acceleration of such stock option would have no intrinsic value based upon the fiscal 2012 year-end closing share price of Cisco common stock. These values have not been, and may never be, realized. |

  101. Potential Payments—Accelerated Equity Awards

    | (2) In order to give effect to the aggregate limit of $10 million applicable under the Death and Terminal Illness Policy described above, the full intrinsic value of accelerated stock options is first applied against the dollar limit, and then the intrinsic value of accelerated restricted stock units that would cause the total intrinsic value to exceed the aggregate dollar limit is reduced accordingly. |

  102. Potential Payments—Accelerated Equity Awards

    Potential Continued Vesting of PRSUs upon Retirement. In the event of the retirement of a named executive officer, and to the extent the named executive officer meets certain retirement eligibility criteria described in the award agreement and complies with certain post-retirement covenants, all PRSUs will continue to vest and any earned PRSUs, based on the satisfaction of the performance metrics, will be settled in Cisco shares at the end of the three-year performance period. Further, PRSUs will be forfeited and provide no value to its holder to the extent the holder violates specific post-retirement covenants. None of the named executive officers would have met the eligibility criteria if their retirement hypothetically occurred on the last business day of fiscal 2012 because one of the eligibility requirements is that the retirement must have occurred on or after the anniversary of the award date of the PRSUs.