Cisco Systems, Inc. 170 Tasman Drive San Jose, CA 95134-1706 Phone: 408 526-4000 Fax: 408 526-4100 http://www.cisco.com

With the announcement of Cisco's Q4FY14 financial results, the bonus payout information and a limited restructuring, each of you will play a critical role in translating this information for your teams.

The pace of change today, in every industry, continues to accelerate. The network and Cisco are driving much of that change and the opportunities that come from market disruptions. Three years ago, we started our transformation to move from selling products to selling architectures, solutions and outcomes. We are making good progress, as our solid results in Q4 and for FY14 demonstrate. We are executing well on controlling OpEx, especially when compared with our peers. We will continue to take actions to accelerate our transformation in every possible aspect — from how we are organized, to how we develop products, to how our customers buy from us. Internally the speed of change has to exceed the pace of change we see externally.

Limited Restructuring

On our quarterly earnings call, we announced a limited restructuring across several areas of our business. This action will impact up to 6,000 employees or approximately 8% of our workforce, and will be conducted in compliance with local laws and regulations. We are taking these actions to continue to invest in growth, innovation and talent, while managing costs and improving efficiencies across our business.

John Chambers, Gary Moore, Rob Lloyd and Fran Katsoudas will host an Insight Series for all employees from 8-9 a.m. PDT Thursday, August 14, on Cisco TV. Please encourage your teams to attend so they can ask questions and better understand the company's direction. An invitation will be sent from John.

Listen to internal Cisco "Insight Series" Q4-FY14

Listen to internal Chambers' Message to Employees Q4-FY14

Every function leader will communicate with their employees to share more details about impacts and plans for their function. While several functions will be impacted by the limited restructurings, others will not. Please encourage your teams to participate in all communication activities so they are informed and understand the changes we are making.

P&LI Funding and Resources

To recognize your efforts this past fiscal year, we are pleased to confirm that Cisco will be funding the Professional and Leadership Incentive (P&LI) bonus pool at 89% of our target year-end bonus. This exceeds the 50-75% range we indicated at the beginning of Q3, which was primarily driven by our Q4 performance.