CISCO SYSTEMS, INC.

September 28, 2001

DEAR CISCO SYSTEMS SHAREHOLDER:

You are cordially invited to attend the Annual Meeting of Shareholders (the “Annual Meeting”) of Cisco Systems, Inc., which will be held at Paramount’s Great America in the Paramount Theater, located at 1 Great America Parkway, Santa Clara, California 95054 on Tuesday, November 13, 2001, at 10:00 a.m. You will find a map with directions to the meeting on the outside back cover of the Proxy Statement.       Details of the business to be conducted at the Annual Meeting are given in the attached Notice of Annual Meeting of Shareholders and the attached Proxy Statement.       If you do not plan to attend the Annual Meeting, please complete, sign, date, and return the enclosed proxy promptly in the accompanying reply envelope. Shareholders who elected to access the 2001 Proxy Statement and Annual Report over the Internet and vote their proxy online will not be receiving a paper proxy card. If you decide to attend the Annual Meeting and wish to change your proxy vote, you may do so automatically by voting in person at the Annual Meeting.       We look forward to seeing you at the Annual Meeting.

	John T. Chambers
	President and Chief Executive Officer

San Jose, California

 

YOUR VOTE IS IMPORTANT           In order to assure your representation at the Annual Meeting, you are requested to complete, sign, and date the enclosed proxy as promptly as possible and return it in the enclosed envelope (to which no postage need be affixed if mailed in the United States). Please reference the “Voting Electronically via the Internet or by Telephone” section on page 1 of the Proxy Statement for alternative voting methods.

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CISCO SYSTEMS, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

1.	To elect eleven members of the Board of Directors of the Company to serve until the next Annual Meeting of Shareholders and until their successors have been elected and qualified;
2.	To ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent accountants for the fiscal year ending July 27, 2002; and
3.	To act upon such other matters as may properly come before the meeting or any adjournments or postponements thereof.

The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice. The record date for determining those shareholders who will be entitled to notice of, and to vote at, the Annual Meeting and at any adjournments thereof is September 13, 2001. The stock transfer books will not be closed between the record date and the date of the Annual Meeting. A list of shareholders entitled to vote at the Annual Meeting will be available for inspection at the principal executive offices of the Company.       Whether or not you plan to attend the Annual Meeting, please complete, sign, date and return the enclosed proxy promptly in the accompanying reply envelope. If you elected to receive the 2001 Proxy Statement and Annual Report electronically over the Internet you will not receive a paper proxy card and should vote online, unless you cancel your enrollment. If your shares are held in a bank or brokerage account and you did not elect to receive the materials through the Internet, you may be eligible to vote your proxy electronically or by telephone. Please refer to the enclosed proxy card for instructions. You may revoke your proxy vote at any time prior to the Annual Meeting. If you decide to attend the Annual Meeting and wish to change your proxy vote, you may do so automatically by voting in person at the Annual Meeting.

	BY ORDER OF THE BOARD OF DIRECTORS
	Larry R. Carter
	Secretary

San Jose, California

CISCO SYSTEMS, INC.

PROXY STATEMENT

 

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VOTING RIGHTS AND SOLICITATION

Voting Voting Electronically via the Internet or by Telephone	Proxies Solicitation of Proxies

Voting

Holders of the Company’s common stock (“Common Stock”) are the only securityholders of the Company entitled to vote at the Annual Meeting. On September 13, 2001, the record date for determination of shareholders entitled to vote at the Annual Meeting, there were 7,334,019,051 shares of Common Stock outstanding. Each shareholder of record on September 13, 2001 is entitled to one vote for each share of Common Stock held by such shareholder on that date. Holders of a majority of the outstanding shares of Common Stock must be present or represented at the Annual Meeting in order to have a quorum. Abstentions and broker non-votes will be treated as shares present for the purpose of determining the presence of a quorum for the transaction of business at the Annual Meeting. In the election of directors, the eleven nominees receiving the highest number of affirmative votes will be elected. Proposal No. 2 requires the approval of the affirmative vote of a majority of the shares of Common Stock present or represented and voting at the Annual Meeting, together with the affirmative vote of a majority of the required quorum. Abstentions and broker non-votes can have the effect of preventing approval of a proposal where the number of affirmative votes, though a majority of the votes cast, does not constitute a majority of the required quorum. If the persons present or represented by proxy at the Annual Meeting constitute the holders of less than a majority of the outstanding shares of Common Stock as of the record date, the Annual Meeting may be adjourned to a subsequent date for the purpose of obtaining a quorum. All votes will be tabulated by the inspector of election appointed for the Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes. Voting Electronically via the Internet or by Telephone       Shareholders whose shares are registered in their own names may vote either via the Internet or by telephone. Specific instructions to be followed by any registered shareholder interested in voting via Internet or by telephone are set forth on the enclosed proxy card. The Internet and telephone voting procedures are designed to authenticate the shareholder’s identity and to allow shareholders to vote their shares and confirm that their voting instructions have been properly recorded.       If your shares are registered in the name of a bank or brokerage firm and you have not elected to receive your Proxy Statement over the Internet, you may be eligible to vote your shares electronically over the Internet or by telephone. A large number of banks and brokerage firms are participating in the ADP Investor Communication Services online program. This program provides eligible shareholders who receive a paper copy of this Proxy Statement the opportunity to vote via the Internet or by telephone. If your bank or brokerage firm is participating in ADP’s program, your proxy card will provide instructions. If your proxy card does not reference Internet or telephone information, please complete and return the proxy card in the self-addressed, postage paid envelope provided. Shareholders who elected to receive the 2001 Proxy Statement and Annual Report over the Internet will be receiving an e-mail on or about September 28, 2001 with information on how to access shareholder information and instructions for voting. Proxies       Whether or not you are able to attend the Annual Meeting, you are urged to submit your proxy, which is solicited by the Company’s Board of Directors (the “Board of Directors” or the “Board”) and which when properly completed will be voted as you direct. In the event no directions are specified, such proxies will be voted FOR each of the nominees of the Board of Directors (Proposal No. 1), FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent accountants for the Company’s fiscal year ending July 27, 2002 (Proposal No. 2), and in the discretion of the proxy holders as to any other matters that may properly come before the Annual Meeting. You may revoke or change your proxy vote at any time before the Annual Meeting by sending a written notice of revocation or submitting another proxy with a later date to the Secretary of the Company at the Company’s principal executive offices before the beginning of the Annual Meeting. You may also revoke your proxy vote by attending the Annual Meeting and voting in person. Solicitation of Proxies       The Company will bear the entire cost of this solicitation of proxies, including the preparation, assembly, printing, and mailing of this Proxy Statement, the proxy, and any additional solicitation material furnished to shareholders by the Company. Copies of solicitation material will be furnished to brokerage houses, fiduciaries, and custodians holding shares in their names that are beneficially owned by others so that they may forward the solicitation material to such beneficial owners. In addition, the Company has retained Georgeson Shareholder Communications Inc. to act as a proxy solicitor in conjunction with the Annual Meeting. Under the terms of an agreement dated September 10, 2001, the Company has agreed to pay $10,000, plus reasonable out of pocket expenses, to Georgeson Shareholder Communications Inc. for proxy solicitation services. The original solicitation of proxies by mail may be supplemented by solicitation by telephone, telegram and other means by directors, officers, and/or employees of the Company. No additional compensation will be paid to these individuals for any such services. Except as described above, the Company does not presently intend to solicit proxies otherwise than by mail and via the Internet.

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PROPOSAL NO. 1
ELECTION OF DIRECTORS

General Business Experience of Nominees	Board Committees and Meetings Director Compensation Recommendation of the Board of Directors

General

      The names of persons who are nominees for director and their positions and offices with the Company are set forth in the table below. The proxy holders intend to vote all proxies received by them for the nominees listed below unless otherwise instructed. In the event any nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee who may be designated by the Board of Directors to fill the vacancy. As of the date of this Proxy Statement, the Board of Directors is not aware of any nominee who is unable or will decline to serve as a director. The eleven nominees receiving the highest number of affirmative votes of the shares entitled to vote at the Annual Meeting will be elected directors of the Company to serve until the next Annual Meeting of Shareholders and until their successors have been elected and qualified. Shareholders may not cumulate votes in the election of directors.

Business Experience of Nominees

Ms. Bartz, 53, has been a member of the Board of Directors since November 1996. From April 1992 to present she has served as Chairman of the Board and Chief Executive Officer of Autodesk, Inc. From April 1992 to September 1996 she was Chairman, Chief Executive Officer and President of Autodesk, Inc. Prior to that, she was with Sun Microsystems from August 1983 to April 1992 most recently as Vice President of Worldwide Field Operations. Ms. Bartz also currently serves on the Boards of Directors of BEA Systems, Inc., Network Appliance, Inc. and VA Linux Systems, Inc.       Mr. Carter, 58, was elected to the Board of Directors in July 2000. He joined the Company in January 1995 as Vice President, Finance and Administration, Chief Financial Officer and Secretary. In July 1997 he became the Senior Vice President, Finance and Administration, Chief Financial Officer and Secretary. Prior to his services at the Company he was with Advanced Micro Devices, Inc. as the Vice President and Corporate Controller. Mr. Carter currently serves on the Board of Directors of eSpeed, Inc., Network Appliance, Inc., QLogic Corporation and Transmeta Corporation.       Mr. Chambers, 52, has been a member of the Board of Directors since November 1993. He joined the Company as Senior Vice President in January 1991 and became Executive Vice President in June 1994. Mr. Chambers became President and Chief Executive Officer of the Company as of January 31, 1995. Prior to his services at the Company, he was with Wang Laboratories for eight years, most recently as Senior Vice President of U.S. Operations. Mr. Chambers currently serves on the Board of Directors of Wal-Mart Stores, Inc.       Ms. Fiorina, 46, has been a member of the Board of Directors since January 2001. From July 1999 to present she has been the President and Chief Executive Officer of Hewlett-Packard Company and a member of its Board of Directors. Since September 2000, she has also served as Chairman of the Board of Directors of Hewlett-Packard Company. From January 1996 to July 1999, she was with Lucent Technologies, Inc., most recently as Group President of the Global Service Provider Business.       Dr. Gibbons, 70, has been a member of the Board of Directors since May 1992. He is a Reid Weaver Dennis Professor of Electrical Engineering at Stanford University. He was Dean of the Stanford University School of Engineering from 1984 to 1996. Dr. Gibbons also currently serves on the Boards of Directors of Lockheed Martin Corporation and El Paso Natural Gas Company.       Mr. Morgan, 63, has been a member of the Board of Directors since February 1998. He has been Chief Executive Officer of Applied Materials, Inc. since 1977 and also Chairman of the Board since 1987. He was President of Applied Materials, Inc. from 1976 to 1987. He was previously a senior partner with West Ven Management, a private venture capital partnership affiliated with Bank of America Corporation.       Mr. Morgridge, 68, joined the Company as President and Chief Executive Officer and was elected to the Board of Directors in October 1988. Mr. Morgridge became Chairman of the Board on January 31, 1995, upon his retirement from the positions of President and Chief Executive Officer of the Company. From 1986 to 1988 he was President and Chief Operating Officer at GRiD Systems, a manufacturer of laptop computer systems.       Mr. Sarin, 46, has been a member of the Board of Directors since September 1998. From July 2001 to present he has been the 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 and Chief Operating Officer of AirTouch Communications, Inc., a wireless telecommunications services company. He served as President and Chief Executive Officer of AirTouch International from April 1994 to February 1997. Mr. Sarin joined AirTouch Communications, Inc. in 1984 and held a variety of positions, including Vice President and General Manager, Vice President, Chief Financial Officer and Controller, and Vice President of Corporate Strategy. Mr. Sarin currently serves on the Boards of Directors of GAP, Inc., Vodafone Plc and Charles Schwab Corporation.       Mr. Valentine, 69, has been a member of the Board of Directors of the Company since December 1987 and was elected Chairman of the Board of Directors in December 1988. He became Vice Chairman of the Board on January 31, 1995. He has been a general partner of Sequoia Capital since 1974. Mr. Valentine currently serves as Chairman of the Board of Directors of Network Appliance, Inc.       Mr. West, 46, has been a member of the Board of Directors since April 1996. He was the President and Chief Executive Officer of Entera, Inc. from September 1999 to January 2001. From January 1999 to August 1999 he was the President of the Services Business Unit at Electronic Data Systems Corporation. He was the President and Chief Executive Officer of Hitachi Data Systems, a joint venture computer hardware services company owned by Hitachi, Ltd. and Electronic Data Systems Corporation, from June 1996 to January 1999. Prior to that, Mr. West was at Electronic Data Systems Corporation from November 1984 to June of 1996, most recently as President of Electronic Data Systems Corporation Infotainment Business Unit.       Mr. Yang, 32, has been a member of the Board of Directors since July 2000. He is a founder of Yahoo! Inc., and since March 1995 has been an executive of Yahoo! Inc. and has served as a member of its Board of Directors.       Neither Ms. Mary Cirillo nor Mr. Edward Kozel, each of whom is currently a member of the Board of Directors, is standing for re-election at the Annual Meeting. Board Committees and Meetings       During the Company’s fiscal year that ended on July 28, 2001, the Board of Directors held six meetings. During this period, all of the directors attended or participated in more than 75% of the aggregate of (i) the total number of meetings of the Board of Directors and (ii) the total number of meetings held by all Committees of the Board on which each such director served except Edward Kozel who attended 62% of such meetings.       The Company has eight standing Committees: the Acquisition Committee; the Special Acquisition Committee; the Audit Committee; the Compensation/ Stock Option Committee; the Executive Committee; the Investment/ Finance Committee; the Nomination Committee; and the Special Stock Option Committee.       The Acquisition Committee reviews acquisition strategies and candidates with the Company’s management, approves acquisitions valued below a specified dollar threshold and also makes recommendations to the Board of Directors. This Committee met on two separate occasions during the last fiscal year. This Committee currently consists of Messrs. Valentine, Chambers, Morgridge and Sarin and Ms. Bartz.       The Special Acquisition Committee reviews acquisition strategies and candidates with the Company’s management, approves acquisitions valued below a specified dollar threshold and also makes recommendations to the Board of Directors. This committee held four meetings during the last fiscal year. The Committee currently consists of Messrs. Chambers and Kozel and Ms. Bartz.       The Audit Committee is responsible for reviewing the accounting principles, policies and practices followed by the Company in accounting for and reporting its financial results of operations and for selecting and meeting with the Company’s independent accountants. This Committee meets from time to time with members of the Company’s internal audit staff and also, among other things, reviews the financial, investment and risk management policies followed by the Company in conducting its business activities; the Company’s annual financial statements; the Company’s internal financial controls; and the performance of the Company’s independent accountants. The Audit Committee operates under a written Audit Committee Charter adopted by the Board, a copy of which is attached hereto as Appendix A. This Committee held seven meetings during the last fiscal year. This Committee currently consists of Ms. Cirillo and Messrs. Sarin and West. The Board has determined that each of the members of the Audit Committee is an “independent director” as defined in Rule 4200 of the listing standards of the National Association of Securities Dealers, Inc.       The Compensation/Stock Option Committee is responsible for reviewing the compensation arrangements in effect for the Company’s executive officers and for administering all of the Company’s employee benefit plans, including the 1996 Stock Incentive Plan. This Committee acted by unanimous written consent on fourteen separate occasions and met four times during the last fiscal year. This Committee currently consists of Messrs. Gibbons and Morgan and Ms. Bartz.       The Executive Committee is authorized to exercise all power and authority of the Board in the oversight of the management of the business and affairs of the Company, otherwise than in connection with matters specified by law to be reserved for the full Board. This Committee held no meetings during the last fiscal year. This Committee currently consists of Messrs. Morgridge, Chambers and Valentine.       The Investment/Finance Committee reviews and approves the Company’s investment policy, real estate acquisitions and leasing, and the Company’s currency, interest rate and equity risk management policies. This Committee also reviews the Company’s minority investments, fixed income assets and its insurance management policies and programs. This Committee held three meetings during the last fiscal year. This Committee currently consists of Messrs. Morgridge, Carter, Kozel and Valentine and Ms. Cirillo.       The Nomination Committee is responsible for nominating new members to be considered for the Board of Directors. This Committee held no meetings during the last fiscal year. This Committee currently consists of Messrs. Chambers and Gibbons and Ms. Bartz.       The Special Stock Option Committee has concurrent authorization with the Compensation/Stock Option Committee to make option grants under the 1996 Stock Incentive Plan to eligible individuals other than executive officers of the Company. This Committee held no meetings during the last fiscal year with respect to the approval of such option grants. This Committee currently consists of Messrs. Chambers and Morgridge and Ms. Bartz. Director Compensation       Non-employee directors were each paid a $32,000 annual retainer fee for serving on the Board during the 2001 fiscal year, except that the fee paid to Mr. Yang was increased to $40,000 to compensate him for his period of Board service in July 2000 prior to the start of the Company’s 2001 fiscal year and the fee paid to Ms. Fiorina was pro-rated to $26,667 because her period of Board service did not commence until January 2001. During such fiscal year, non-employee directors were also eligible to participate in the Discretionary Option Grant Program in effect under the 1996 Stock Incentive Plan and to receive periodic option grants under the Automatic Option Grant Program in effect under the 1996 Stock Incentive Plan. Directors who are also employees of the Company are eligible to receive options under the Company’s 1996 Stock Incentive Plan and to participate in the Company’s 1989 Employee Stock Purchase Plan, the Company’s 401(k) Plan, and the Company’s Management Incentive Plan.       At the Annual Meeting of Shareholders held on November 14, 2000, each of the following non-employee directors re-elected to the Board received an option grant under the Automatic Option Grant Program for 15,000 shares of Common Stock with an exercise price of $53.125 per share: Mses. Bartz and Cirillo and Messrs. Gibbons, Morgan, Sarin, Valentine and West. Ms. Fiorina received an initial automatic option grant under the Automatic Option Grant Program for 30,000 shares on January 9, 2001 when she was first elected to the Board, with an exercise price of $37.125 per share. The exercise price in effect for each option is equal to the fair market value per share of Common Stock on the grant date. Each option has a maximum term of nine years measured from the grant date, subject to earlier termination following the optionee’s cessation of Board service. The shares subject to each 15,000-share grant will vest in two equal annual installments upon the optionee’s completion of each year of Board service over the two year period beginning on the grant date. The shares subject to the 30,000-share grant made to Ms. Fiorina will vest in four successive equal annual installments upon the completion of each year of Board service over the four year period beginning on the grant date. Each option is immediately exercisable for all of the shares underlying the option; however, any shares purchased under the option will be subject to the Company’s right to repurchase any then unvested shares, at the option exercise price paid per share, upon the optionee’s cessation of Board service. Lastly, the vesting of the shares underlying the options immediately accelerate in full upon certain changes in control or ownership of the Company or upon the optionee’s death or disability while a Board member. Recommendation of the Board of Directors       The Board of Directors recommends that the shareholders vote FOR the election of each of the nominees listed herein.

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PROPOSAL NO. 2
RATIFICATION OF
INDEPENDENT ACCOUNTANTS

General Audit Fees Financial Information Systems Design and Implementation Fees	All Other Fees Recommendation of the Board of Directors

General

The Company is asking the shareholders to ratify the Board of Director’s appointment of PricewaterhouseCoopers LLP as the Company’s independent accountants for the fiscal year ending July 27, 2002. The affirmative vote of a majority of the shares of Common Stock present or represented and voting at the Annual Meeting, together with the affirmative vote of a majority of the required quorum, is required to ratify such appointment.       In the event the shareholders fail to ratify the appointment, the Board of Directors will reconsider its selection. Even if the appointment is ratified, the Board of Directors, in its discretion, may direct the appointment of a different independent accounting firm at any time during the year if the Board of Directors determines that such a change would be in the Company’s and its shareholders’ best interests.       PricewaterhouseCoopers LLP has audited the Company’s financial statements annually since the Company’s 1988 fiscal year. Representatives of PricewaterhouseCoopers LLP are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so. It is also expected that they will be available to respond to appropriate questions. Audit Fees       PricewaterhouseCoopers LLP has billed the Company $1,830,000, in the aggregate, for professional services rendered by PricewaterhouseCoopers LLP for the audit of the Company’s annual financial statements for the Company’s 2001 fiscal year and the reviews of the interim financial statements included in the Company’s Quarterly Reports on Form 10-Q for the Company’s 2001 fiscal year. Financial Information Systems Design and Implementation Fees       PricewaterhouseCoopers LLP has billed the Company $3,670,000, in the aggregate, for professional services related to financial information systems design and implementation as described in Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X. All Other Fees       PricewaterhouseCoopers LLP has billed the Company $13,126,000, in the aggregate, for professional services rendered by PricewaterhouseCoopers LLP for all services other than those services covered in the sections captioned “Audit Fees” and “Financial Information Systems Design and Implementation Fees” for the Company’s 2001 fiscal year. These other services include (i) tax planning and assistance with the preparation of returns, (ii) services rendered in connection with acquisitions made by the Company, (iii) assistance with regulatory filings, and (iv) consultations on the effects of various accounting issues and changes in professional standards.       In making its recommendation to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent accountants for the fiscal year ending July 27, 2002, the Audit Committee has considered whether the non-audit services provided by PricewaterhouseCoopers LLP are compatible with maintaining the independence of PricewaterhouseCoopers LLP. Recommendation of the Board of Directors       The Board of Directors recommends that the shareholders vote FOR the ratification of the appointment of PricewaterhouseCoopers LLP to serve as the Company’s independent accountants for the fiscal year ending July 27, 2002.

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OWNERSHIP OF SECURITIES

Compliance with SEC Reporting Requirements

The following table sets forth certain information known to the Company with respect to beneficial ownership of Common Stock as of July 28, 2001 for (i) all persons who are beneficial owners of five percent or more of the outstanding shares of Common Stock as of July 28, 2001, (ii) each director and nominee for director of the Company, (iii) the Company’s Chief Executive Officer and the other executive officers named in the Summary Compensation Table below, and (iv) all executive officers and directors as a group as of July 28, 2001:

	Number
	of Shares
	Beneficially	Percent
Name	Owned(1)	Owned(2)
Carol A. Bartz(3)	297,928	*
Larry R. Carter(4)	3,438,081	*
John T. Chambers(5)	21,385,667	*
Mary A. Cirillo(6)	220,717	*
Carleton Fiorina	30,450	*
James F. Gibbons	135,920	*
Richard J. Justice(7)	1,615,751	*
Edward R. Kozel(8)	1,148,889	*
James C. Morgan(9)	214,300	*
John P. Morgridge(10)	84,127,513	1.1
James Richardson	2,629,551	*
Arun Sarin	128,000	*
Donald T. Valentine(11)	4,014,983	*
Michelangelo Volpi(12)	1,801,768	*
Steven M. West(13)	140,400	*
Jerry Yang(14)	69,721	*
All executive officers and directors as a group (19 Persons)	133,230,159	1.8

(1)  Except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock. The number of shares beneficially owned by each person or group as of July 28, 2001 includes shares of Common Stock that such person or group had the right to acquire on or within 60 days after July 28, 2001, including, but not limited to, upon the exercise of options.     (2)  For each individual and group included in the table, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group as described above by the sum of the 7,324,134,100 shares of Common Stock outstanding on July 28, 2001 and the number of shares of Common Stock that such person or group had the right to acquire on or within 60 days of July 28, 2001, including, but not limited to, upon the exercise of options.     (3)  Includes 2,928 shares held by Carol Bartz’s spouse, Bill Marr.     (4)  Includes 27,596 shares held by the Carter Revocable Trust dated October 18, 1994.     (5)  Includes 35,928 shares held by the Sequoia Capital VII Partnership, in which John Chambers holds an economic interest. Mr.  Chambers disclaims beneficial ownership of shares of Common Stock held by the Sequoia Capital VII Partnership, except to the extent of his pecuniary interest therein.     (6)  Includes 13,500 shares held by Mary Cirillo’s spouse, Jay Goldberg.     (7)  Includes 21,836 shares held by the 1990 Justice Family Trust.     (8)  Includes 12,500 shares held by Edward R. and Sara T. Kozel, Trustees for the Kozel Revocable Trust dated December 27, 1994.     (9)  Includes 9,300 shares held by James Morgan’s spouse, Rebecca Q. Morgan.     (10)  Includes 78,020,191 shares held by John P. Morgridge and Tashia F. Morgridge as Trustees of the Morgridge Family Trust (UTA DTD 6/30/88), 96,238 shares held by John Morgridge’s spouse, Tashia F. Morgridge, and 4,652,222 shares held in the Morgridge Family Foundation.     (11)  Includes 1,963,214 shares held by the Donald T. Valentine Family Trust Under Agreement dated April 29, 1967. Also includes 1,426,769 shares held in total by the following partnerships in which Mr. Valentine holds a partnership or other economic interest: 506,782 shares held by Sequioa Capital IX, 93,541 shares held by Sequoia Capital IX Principles Fund, 78,008 shares held by Sequoia Capital Entrepreneurs Fund, 179,006 shares held by Sequoia Capital Seed Fund, 19,858 shares held by Sequoia Technology Partners VII, 454,232 shares held by Sequoia Capital VII, 7,924 shares held by Sequoia International Partners, 66,214 shares held by Sequoia Capital VIII, 4,384 shares held by Sequoia International Partners VIII Q, 840  shares held by Sequoia International Technology Partners VIII, 5,328 shares held by Sequoia 1997, 9,192 shares held by SQP 1997 and 1,460 shares held by CMS Partners (collectively the “Sequoia Entities”). Mr. Valentine disclaims beneficial ownership of shares of Common Stock held by the Sequoia Entities, except to the extent of his pecuniary interest therein.     (12)  Includes 74 shares held by Michelangelo Volpi’s son, Marco Volpi.     (13)  Includes 400 shares held by Steven West’s spouse, Donna Karam.     (14)  Includes 2,388 shares held in the Red Husley Foundation, 34,145 shares held in the Jerry Yang Charitable Trust and 3,188 shares held in the Jerry Yang Revocable Trust.

Compliance with SEC Reporting Requirements

Under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company’s directors, executive officers and any persons holding more than ten percent of the outstanding Common Stock are required to report their initial ownership of Common Stock and any subsequent changes in their ownership to the Securities and Exchange Commission (“SEC”). Specific due dates have been established by the SEC, and the Company is required to disclose in this Proxy Statement any failure to file by those dates. Based solely of its review of (i) copies of Section 16(a) reports that the Company received from such persons for their transactions during the Company’s 2001 fiscal year and (ii) written representations received from one or more of such persons that no annual Form 5 reports were required to be filed for them for the Company’s 2001 fiscal year, the Company believes that all reports required to be filed under Section 16(a) have been filed on a timely basis by the foregoing persons for the Company’s 2001 fiscal year, except as follows. Ms. Cirillo, a member of the Board of Directors, filed a late Form 5 report for the Company’s 2000 fiscal year and failed to timely file Form 4 reports with respect to (i) seven purchase transactions that occurred over a twenty-two month period beginning in December 1998 and covered a total of 1,920 shares of Common Stock and (ii) five sale transactions that occurred over a twelve month period beginning in January 2000 and covered a total of 205 shares of Common Stock. These transactions were subsequently reported by Ms. Cirillo in May 2001 as follows: a late Form 4 for October 2000 in which one of the late purchase transactions was reported; an amendment to a previously filed Form 4 for December 2000 in which one of the late sale transactions was reported; and an amendment to the Form 5 filed for the Company’s 2000 fiscal year in which the remaining six late purchase transactions and four late sale transactions were reported. Mr. Morgan, a member of the Board of Directors, filed an amended Form 3 in September 2001 in which he reported 300 shares of Common Stock owned by his spouse which he failed to report on his original Form 3. Mr. Morgridge, a member of the Board of Directors, filed a late Form 4 on March 8, 2001 with respect to 346 shares of Common Stock distributed to him in October 2000 from a partnership in which he held a limited partnership interest. In addition, Mr. Richardson, one of the Company’s Senior Vice Presidents, filed an amended Form 3 in September 2001 in which he reported an additional 445 shares of Common Stock purchased under the Company’s Employee Stock Purchase Plan which he failed to include in his Common Stock holdings reported on his original Form 3.

 

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EXECUTIVE COMPENSATION AND RELATED INFORMATION

 

Compensation/Stock Option Committee Report Compensation Committee Interlocks and Insider Participation Summary of Cash and Certain Other Compensation	Stock Options Employment Contracts, Termination of Employment, and Change in Control Agreements Certain Relationships and Related Transactions Option Exercises and Holdings

Stock Options

      The following table provides information with respect to the stock option grants made during the Company’s 2001 fiscal year under the Company’s 1996 Stock Incentive Plan to the Named Officers. No stock appreciation rights were granted to the Named Officers during the fiscal year.

 

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
									Number of Securities				Value of Unexercised
		Number of							Underlying Unexercised				In-the-Money Options
		Shares Acquired				Value Realized			Options at July 28, 2001				at July 28, 2001($)(2)
Name		on Exercise				($)(1)			Exercisable		Unexercisable		Exercisable		Unexercisable
John T. Chambers		0		$			0		18,791,667		12,608,333		185,775,479		8,585,071
Larry R. Carter		500,000		29,009,200					3,311,125		1,743,875		31,218,883		1,620,798
Richard J. Justice		0					0		1,516,959		1,729,291		10,575,554		1,124,164
James Richardson		0					0		1,391,979		1,632,083		10,053,470		1,461,388
Michelangelo Volpi		1,187,312		30,412,046					916,250		1,583,750		3,105,965		810,740

	7/26/96	7/25/97	7/24/98	7/30/99	7/28/00	7/27/01
Cisco Systems, Inc.	$100	$155	$285	$544	$1,100	$334
Standard and Poor 500 Stock Index	100	152	181	218	238	204
Hambrecht & Quist Technology Index	100	169	182	294	490	244

Notwithstanding anything to the contrary set forth in any of the Company’s previous filings under the Securities Act of 1933 or the Exchange Act that might incorporate future filings made by the Company under those statutes, the preceding Compensation/Stock Option Committee Report and the Stock Performance Graph will not be incorporated by reference into any of those prior filings, nor will such report or graph be incorporated by reference into any future filings made by the Company under those statutes. Notes

(1)	The graph covers the period from July 26, 1996, the last trading day before the Company’s 1997 fiscal year, to July 27, 2001, the last trading day before the Company’s 2002 fiscal year.
(2)	The graph assumes that $100 was invested in the Company on July 26, 1996, in Common Stock and in each index, and that all dividends were reinvested. No cash dividends have been declared on shares of Common Stock.
(3)	Shareholder returns over the indicated period should not be considered indicative of future shareholder returns.

Back to top SHAREHOLDER PROPOSALS FOR 2002 PROXY STATEMENT       Shareholders of the Company may submit proposals on matters appropriate for shareholder action at meetings of the Company’s shareholders in accordance with Rule 14a-8 promulgated under the Exchange Act (“Rule 14a-8”). For such proposals to be included in the Company’s proxy materials relating to its Annual Meeting of Shareholders to be held in 2002, all applicable requirements of Rule 14a-8 must be satisfied and such proposals must be received by the Company no later than May 31, 2002. Such proposals should be delivered to Cisco Systems, Inc., 170 W. Tasman Drive, San Jose, California 95134-1706, Attn: Secretary, with a copy to Cisco Systems, Inc., 170 W. Tasman Drive, San Jose, California 95134-1706, Attn: Senior Vice President, Corporate Affairs.

Except in the case of proposals made in accordance with Rule 14a-8, the Bylaws of the Company require that shareholders intending to bring any business before an annual meeting of shareholders deliver written notice thereof to the Secretary of the Company not less than sixty nor more than ninety days prior to the anniversary of the date on which the Company first mailed its proxy materials for its immediately preceding annual meeting of shareholders (as specified in the Company’s proxy materials for its immediately preceding annual meeting of shareholders). However, in the event that the annual meeting is called for a date which is not within thirty days of the anniversary of the date on which the immediately preceding annual meeting of shareholders was called, to be timely, notice by the shareholder must be so received not later than the close of business on the tenth day following the date on which public announcement of the date of the annual meeting is first made. In no event will the public announcement of an adjournment of an annual meeting of shareholders commence a new time period for the giving of a shareholder’s notice as provided above. The Bylaws of the Company further require, among other things, that the notice by the shareholder set forth a description of the business to be brought before the meeting and certain information concerning the shareholder proposing such business, including such shareholder’s name and address, the class and number of shares of the Company’s capital stock that are owned beneficially by such shareholder and any material interest of such shareholder in the business proposed to be brought before the meeting. The chairman of the meeting may refuse to permit to be brought before the meeting any shareholder proposal (other than a proposal made in accordance with Rule 14a-8) not made in compliance with these requirements. Similar procedures prescribed by the Bylaws of the Company are applicable to shareholders desiring to nominate candidates for election as directors.

In addition, the proxy solicited by the Board of Directors for the 2002 Annual Meeting of Shareholders will confer discretionary authority to vote on any shareholder proposal presented at that meeting, if the Company is not provided with notice of such proposal on or prior to July 30, 2002.

Back to top FORM 10-K       THE COMPANY WILL MAIL WITHOUT CHARGE, UPON WRITTEN REQUEST, A COPY OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JULY 28, 2001, INCLUDING THE FINANCIAL STATEMENTS, SCHEDULES AND LIST OF EXHIBITS. REQUESTS SHOULD BE SENT TO CISCO SYSTEMS, INC., 170 W. TASMAN DRIVE, SAN JOSE, CALIFORNIA 95134-1706, ATTN: INVESTOR RELATIONS. Back to top OTHER MATTERS       The Board knows of no other matters to be presented for shareholder action at the Annual Meeting. However, if other matters do properly come before the Annual Meeting or any adjournments or postponements thereof, the Board intends that the persons named in the proxies will vote upon such matters in accordance with their best judgment.

	BY ORDER OF THE BOARD OF DIRECTORS
	Larry R. Carter
	Secretary

Dated: September 28, 2001

APPENDIX A

CISCO SYSTEMS, INC.

CHARTER FOR THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

1. Purpose

The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities by reviewing the financial information which will be provided to the shareholders and others, the systems of internal controls which management and the Board of Directors have established, and the Company’s audit and financial reporting process.       The independent accountants’ ultimate responsibility is to the Board of Directors and the Audit Committee, as representatives of the shareholders. These representatives have the ultimate authority to select, evaluate, and, where appropriate, replace the independent accountants.       The Audit Committee will primarily fulfill these responsibilities by carrying out the activities enumerated in Section 3 of the Charter. The Committee shall be given full access to the Company’s Internal Control Services group, Board Chairman, Company executives and independent accountants as necessary to carry out these responsibilities. 2. Composition of the Audit Committee       The Audit Committee shall be comprised of three or more directors, each of whom will be independent as defined by the National Association of Securities Dealers, Inc. (NASD).       All members of the Committee shall be able to read and understand fundamental financial statements, including a balance sheet, income statement, and cash flow statement.       At least one member of the Committee shall have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities. 3. Responsibilities and Duties       To fulfill its responsibilities and duties, the Audit Committee shall:

	1. Review annually the Audit Committee Charter for adequacy and recommend any changes to the Board.
	2. Review the accounting principles, policies and practices followed by the Company in accounting for and reporting its financial results of operations.
	3. Review the financial, investment and risk management policies followed by the Company in operating its business activities.
	4. Review the Company’s annual financial statements.
	5. Review any management letter prepared by the independent accountants and review the Company’s internal financial controls, including the activities of the Company’s Internal Controls Services department.
	6. Recommend to the Board of Directors the selection of the independent accountants.
	7. Obtain on an annual basis a formal written statement from the independent accountants delineating all relationships between the accountants and the Company consistent with Independence Standards Board Standard No. 1, and review and discuss with the accountants all significant relationships the accountants have with the Company to determine the accountants’ independence.

	8. Review the effectiveness of the independent audit effort, including approval of the scope of, and fees charged in connection with, the annual audit, quarterly reviews and any non-audit services being provided.
	9. Review the performance of the independent accountants and approve any proposed changes in accountants when circumstances warrant.
	10. Following completion of the annual audit, review separately with the independent accountants, the Internal Control Services department, and management any significant difficulties encountered during the course of the audit.
	11. Report to the Board on the major items covered at each Audit Committee meeting and make recommendations to the Board and management concerning these matters.
	12. Perform any other activities consistent with this charter, the Corporation’s Bylaws and governing law as the Committee or the Board deems necessary or appropriate.

4. Audit Committee Meetings       The Committee will meet on a regular basis, approximately 3 to 4 times each year, and will hold special meetings as circumstances require. The timing of the meetings shall be determined by the Audit Committee.       At all Audit Committee meetings a majority of the total number of members shall constitute a quorum. 5. Communication Between Audit Committee Meetings       The Committee will meet at any time if the independent accountants believe that certain communication to the committee (e.g., significant events, transactions or changes to accounting principles affecting the quality of financial statements) is required in connection with their review of quarterly reporting. Back to top

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