Cisco Shareholder Class Action Lawsuit Resolved

Business Wire, August 18, 2006

SAN JOSE, Calif. -- Cisco Systems, Inc., (NASDAQ:CSCO) today announced an agreement to resolve the consolidated shareholder class action lawsuit filed in 2001 against the company and certain current and former directors and officers in the United States District Court for the Northern District of California.

Under the terms of the settlement, liability insurers for Cisco and its directors and officers will pay $91.75 million to the plaintiffs. The payment will have no impact on Cisco's financial position or results of operations, as the settlement amount is within applicable insurance limits.

"Cisco continues to firmly believe that the suit's claims are without merit, and we have been eager to achieve a victory in this case. Given the expense and disruption associated with prolonged litigation, and the fact that this resolution is achieved with no additional cost to Cisco and with the consent of our insurance carriers, we believe this settlement is in the best interest of Cisco and its shareholders," said Mark Chandler, Senior Vice President and General Counsel, Cisco Systems.

Spencer Burkholz, lead lawyer for Lerach, Coughlin, Stoia, Gellar, Rudman and Robbins LLP, counsel for the class, stated, "We provided a service to Cisco's shareholders by bringing this action and conducting exhaustive discovery into the company's performance in 2000-2001. Clearly, industry and macroeconomic conditions had a dramatic impact on Cisco's stock price, which reduced potential damages. Though not required to prove securities fraud, there was a lack of insider trading, and Cisco was not required to make a financial restatement. In light of these litigation risks, we are satisfied that this is a fair settlement that returns value to the class members."

The original suit, filed April 20, 2001, claimed that the company made misleading statements, or omitted statements of material fact, that were relied on by purchasers of Cisco stock. It also alleged that the individual defendants sold Cisco stock while in possession of material, non-public information. Cisco denied all allegations in the suit.

The agreement is subject to final documentation and court approval. The recovery, less fees and expenses, will be distributed to purchasers of Cisco common stock between November 10, 1999 and February 6, 2001 who timely file valid proofs of claim under procedures to be implemented by the United States District Court for the Northern District of California, which is overseeing the litigation.

About Cisco Systems

Cisco Systems, Inc. (NASDAQ:CSCO) is the worldwide leader in networking for the Internet. Information on Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.

Cisco, Cisco Systems and the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. and/or its affiliates in the U.S. and certain other countries. All other trademarks mentioned in this document are the property of their respective owners.