Cisco Systems, Inc. Employee Stock Purchase Plan



 Exhibit 10.4 
  
 CISCO SYSTEMS, INC. 
  
 EMPLOYEE STOCK PURCHASE PLAN 
  
 (As Amended and Restated January 9, 2001 
 and 
 As Amended March 15, 2001 and December 13, 2001) 
  
 I. PURPOSE 
  
 The Cisco Systems, Inc. Employee Stock Purchase Plan (the “Plan”) is intended to provide eligible employees of the Company and one or more of
its Corporate Affiliates with the opportunity to acquire a proprietary interest in the Company through participation in a plan designed to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code (the
“Code”). 
  
 All share numbers in this December 2001
restatement reflect all splits of the Common Stock effected through March 22, 2000, including (i) the three (3)-for-two (2) split of Common Stock effected on December 16, 1997, (ii) the three (3)-for-two (2) split of Common Stock effected on
September 15, 1998, (iii) the two (2)-for-one (1) split of Common Stock effected on June 21, 1999, and (iv) the two (2)-for-one (1) split of Common Stock effected on March 22, 2000. 
  
 The Plan became effective on the designated Effective Date and was approved by the Company’s shareholders in January
1990. The shareholders approved a 15,000,000-share increase to the Plan on November 13, 1997. When adjusted for all forward splits of the Common Stock effected through March 22, 2000, such approved share increase now represents 135,000,000 shares of
Common Stock. Forward splits of the Common Stock have also resulted in an increase in the remaining number of shares of Common Stock purchasable under the Plan (as per Section VI(b)). When combined with the 135,000,000-share addition to the Plan
(adjusted on a forward stock split basis), the total number of shares of Common Stock which may be issued over the term of the Plan has been increased to 221,400,000 shares. 
  
 II. DEFINITIONS 
  
 For purposes of administration of the Plan, the following terms shall have the meanings indicated: 
  
 Board means the Board of Directors of the Company. 







 Company means Cisco Systems, Inc., a California corporation, and any corporate successor to
all or substantially all of the assets or voting stock of Cisco Systems, Inc. which shall by appropriate action adopt the Plan. 
  
 Corporate Affiliate means any company which is either the parent corporation or a subsidiary corporation of the Company (as determined in
accordance with Section 424 of the Code), including any parent or subsidiary corporation which becomes such after the Effective Date. 
  
 Effective Date means January 1, 1990; provided, however, that any Corporate Affiliate which becomes a Participating Company in the
Plan after January 1, 1990 shall designate a subsequent Effective Date with respect to its employee-Participants. 
  
 Eligible Earnings means (i) the regular basic earnings paid to a Participant by one or more Participating Companies, (ii) any salary
deferral contributions made on behalf of the Participant to the Company’s Code Section 401(k) Plan or Code Section 125 Plan plus (iii) overtime payments, bonuses and commissions. There shall be excluded from the calculation of Eligible
Earnings: (I) all profit-sharing distributions and other incentive-type payments and (II) all contributions (other than Code Section 401(k) and Code Section 125 contributions) made by the Company or its Corporate Affiliates for the
Participant’s benefit under any employee benefit or welfare plan now or hereafter established. 
  
 Employee means any person who is regularly scheduled to work more than 20 hours per week for more than 5 months per calendar year in the
employ of the Company or any other Participating Company for earnings considered wages under Section 3401(a) of the Code. 
  
 International Plan means the Company’s International Employee Stock Purchase Plan. 
  
 Participant means any Employee of a Participating Company who
is actively participating in the Plan. 
  
 Participating
Company means the Company and such Corporate Affiliate or Affiliates as may be designated from time to time by the Board. 
  
 Stock means shares of the common stock of the Company. 
  
 III. ADMINISTRATION 
  

The Plan shall be administered by the Board or by a committee (the “Committee”) comprised of at least two or more Board members appointed
from time to time by the Board. The Plan Administrator (whether the Board or the Committee) shall have full authority to administer the Plan, including authority to interpret and construe any provision of the Plan and to adopt such rules and
regulations for administering the Plan as it may deem necessary in order to comply with the requirements of Section 423 of the Code. Decisions of the Plan Administrator shall be final and binding on all parties who have an interest in the Plan.

  

 2 








 IV. PURCHASE PERIODS 
  
 (a) Stock shall be offered for purchase under the Plan through a series of successive purchase periods until such time as
(i) the maximum number of shares of Stock available for issuance under the Plan shall have been purchased or (ii) the Plan shall have been sooner terminated in accordance with Article IX. 
  
 (b) Under no circumstances shall any purchase rights granted under the Plan be exercised, nor shall any shares of Stock be
issued hereunder, until such time as (i) the Plan shall have been approved by the Company’s shareholders and (ii) the Company shall have complied with all applicable requirements of the Securities Act of 1933 (as amended), all applicable
listing requirements of any securities exchange on which the Stock is listed and all other applicable requirements established by law or regulation. 
  
 (c) The Plan shall be implemented in a series of consecutive purchase periods, each to be of such duration (not to exceed twenty-four (24) months per
purchase period) as determined by the Plan Administrator prior to the commencement date of the purchase period. Purchase periods may commence at quarterly or semi-annual intervals over the term of the Plan. Accordingly, up to four (4) separate
purchase periods may commence in each calendar year the Plan remains in existence. The Plan Administrator will announce the date each purchase period will commence and the duration of that purchase period in advance of the last day of the
immediately preceding purchase period. 
  
 (d) The Participant
shall be granted a separate purchase right for each purchase period in which he/she participates. The purchase right shall be granted on the first day of the purchase period and shall be automatically exercised on the last business day of that
purchase period or any earlier day the purchase right is to be exercised hereunder. 
  
 (e) An Employee may participate in only one purchase period at a time. Accordingly, an Employee who wishes to join a new purchase period must withdraw from the current purchase period in which he/she is participating
no later than fifteen (15) days prior to the last day of the current purchase period in which the Employee participates and must also enroll in the new purchase period no later than fifteen (15) days prior to the start date of that new purchase
period.1 The Plan Administrator, in its discretion, may require an Employee who withdraws from one purchase period
to wait one full purchase period before re-enrolling in a new purchase period under the Plan. 
  
 V. ELIGIBILITY AND PARTICIPATION 
  
 (a) Each individual who is an Employee of a Participating Company on the commencement date of any purchase period under the Plan shall be eligible to participate in the Plan for that purchase period. 
  


	1	 	The fifteen (15)-day advance enrollment requirement shall be in effect for all purchase periods beginning on or after April 1, 2001. 

  

 3 








 (b) In order to participate in the Plan for a particular purchase period, the Employee must complete the
enrollment forms prescribed by the Plan Administrator (including a purchase agreement and a payroll deduction authorization) and file such forms with the Plan Administrator (or its designate) no later than fifteen (15) days prior to the commencement
date of the purchase period.2 
  
 (c) The payroll deduction authorized by a Participant for purposes of acquiring Stock under the Plan may be any multiple of
1% of the Eligible Earnings paid to the Participant during the period the purchase right remains outstanding, up to a maximum of 10% per purchase right. The deduction rate so authorized shall continue in effect for the entire period the purchase
right remains outstanding, unless the Participant shall, prior to the end of the purchase period for which the purchase right will remain in effect, reduce such rate by filing the appropriate form with the Plan Administrator (or its designate). The
reduced rate shall become effective as soon as practicable following the filing of such form. Payroll deductions, however, will automatically cease upon the termination of the Participant’s purchase right in accordance with Section VII(d) or
(e) below. 
  
 VI. STOCK SUBJECT TO PLAN 

 
 (a) The Stock purchasable by Participants under the Plan shall, solely in
the Board’s discretion, be made available from either authorized but unissued Stock or from reacquired Stock, including shares of Stock purchased on the open market. The total number of shares which may be issued under the Plan and the
International Plan in the aggregate shall not exceed 221,400,000 shares (subject to adjustment under subparagraph (b) below). Such share reserve has been adjusted for the various forward splits of the Stock which have been effected since the
Effective Date and includes the 135,000,000-share increase3 approved by the shareholders at the 1997 Annual Meeting.

  
 (b) In the event any change is made to the Stock purchasable
under the Plan by reason of (I) any merger, consolidation or reorganization or (II) any stock dividend, stock split, combination of shares or other change affecting the outstanding Stock as a class without the Company’s receipt of
consideration, then unless such change occurs in connection with a Section VII(j) transaction, appropriate adjustments shall be made by the Plan Administrator to (i) the class and maximum number of shares issuable over the term of the Plan, (ii) the
class and maximum number of shares purchasable per Participant on any one purchase date, (iii) the class and maximum number of shares purchasable by any one executive officer over the term of the Plan and (iv) the class and number of shares and the
price per share of the Stock subject to each purchase right at the time outstanding under the Plan. 
  


	2	 	The fifteen (15)-day advance enrollment requirement shall be in effect for all purchase periods beginning on or after April 1, 2001. 


	3	 	The shareholders originally approved a share increase of 15,000,000 shares, but when recalculated for all forward splits of the Common Stock effected by March 22, 2000 (i.e.,
the three (3)-for-two (2) split of Common Stock effected on December 16, 1997, the three (3)-for-two (2) split of Common Stock effected on September 15, 1998, the two (2)-for-one (1) spilt of Common Stock effected on June 21, 1999, and the two
(2)-for-one (1) split of Common Stock effected on March 22, 2000), that share increase represents 135,000,000 shares. 

  

 4 








 VII. PURCHASE RIGHTS 
  
 An Employee who participates in the Plan for a particular purchase period shall have the right to purchase Stock upon the
terms and conditions set forth below and shall execute a purchase agreement embodying such terms and conditions and such other provisions (not inconsistent with the Plan) as the Plan Administrator may deem advisable. 
  
 (a) Purchase Price. The purchase price per share shall be the
lesser of (i) 85% of the fair market value per share of Stock on the date on which the purchase right is granted or (ii) 85% of the fair market value per share of Stock on the date the purchase right is exercised. For purposes of determining
such fair market value (and for all other valuation purposes under the Plan), the fair market value per share of Stock on any relevant date shall be the closing selling price per share on such date, as officially quoted on the principal exchange on
which the Stock is at the time traded or, if not traded on any such exchange, the closing selling price per share of the Stock on such date, as reported on the Nasdaq National Market. If there are no sales of Stock on such day, then the closing
selling price for the Stock on the next preceding day for which there does exist such quotation shall be determinative of fair market value. 
  
 (b) Number of Purchasable Shares. The number of shares purchasable by a Participant upon the exercise of an outstanding purchase right shall be the
number of whole shares obtained by dividing the amount collected from the Participant through payroll deductions during each purchase period the purchase right remains outstanding by the purchase price in effect for that purchase period. Any
remaining amount in the Participant’s account shall be automatically refunded to the Participant. However, the maximum number of shares purchasable by any Participant on any one purchase date shall not exceed 22,500 shares (subject to
adjustment under Section VI(b)), and any amount not applied to the purchase of Stock on behalf of a Participant by reason of such limitation shall be refunded to that Participant. In addition, should the Employee be an executive officer of the
Company subject to the short-swing profit restrictions of the Federal securities laws, then the maximum number of shares which such Employee may purchase over the term of the Plan shall not exceed 4,320,000 shares (as adjusted for the various
forward splits of the Stock effected since the Effective Date and subject to further adjustment under Section VI(b)). Accordingly, no such officer shall be eligible to receive purchase rights for any purchase period if the number of shares which
would otherwise be purchasable by such individual for that purchase period would result in the issuance to such individual of shares of Stock in excess of the maximum number of shares purchasable in the aggregate by such individual over the term of
the Plan. 
  
 Under no circumstances shall purchase rights be
granted under the Plan to any Employee if such Employee would, immediately after the grant, own (within the meaning of Code Section 425(d)), or hold outstanding options or other rights to purchase, stock possessing 5% or more of the total combined
voting power or value of all classes of stock of the Company or any of its Corporate Affiliates. 
  
 (c) Payment. Payment for Stock purchased under the Plan shall be effected by means of the Participant’s authorized payroll deductions. Such
deductions shall begin on the first pay day coincident with or immediately following the commencement date of the relevant 

  

 5 








 
purchase period and shall terminate with the pay day ending with or immediately prior to the last day of the purchase period. The amounts so collected shall
be credited to the book account maintained by the Company on the Participant’s behalf under the Plan, but no interest shall be paid on the balance from time to time outstanding in such book account. The amounts collected from a Participant may
be commingled with the general assets of the Company and may be used for general corporate purposes. 
  
 (d) Withdrawal from Purchase Period. 
  
 (i) A Participant may, not later than fifteen (15) days prior to the last day of the purchase period in which the Participant is enrolled,4 withdraw from that purchase period by filing the prescribed notification form with the Plan Administrator (or its designate).
No further payroll deductions shall be collected from the Participant with respect to that purchase period, and the Participant shall have the following election with respect to any payroll deductions for the purchase period collected prior to the
withdrawal date: (A) have the Company refund the payroll deductions which the Participant made under the Plan during that purchase period or (B) have such payroll deductions held for the purchase of shares at the end of such purchase period. If no
such election is made, then such payroll deductions shall automatically be refunded at the end of such purchase period. 
  
 (ii) The Participant’s withdrawal from a particular purchase period shall be irrevocable and shall also require the Participant to re-enroll in the
Plan (by making a timely filing of a new purchase agreement and payroll deduction authorization) if the Participant wishes to resume participation in a subsequent purchase period. 
  
 (e) Termination of Employment/Leave of Absence. If a Participant ceases to remain an Employee while his/her purchase
right remains outstanding, then such purchase right shall immediately terminate and all sums previously collected from the Participant during the purchase period in which such termination occurs shall be promptly refunded to the Participant.
However, should the Participant die or become permanently disabled while in Employee status or should the Participant cease active service by reason of a leave of absence, then the Participant (or the person or persons to whom the rights of the
deceased Participant under the Plan are transferred by will or by the laws of descent and distribution) shall have the election, exercisable up until the end of the purchase period in which the Participant dies or becomes permanently disabled or in
which the leave of absence commences, to (i) withdraw all the funds in the Participant’s payroll account at the time of his/her cessation of Employee status or the commencement of such leave or (ii) have such funds held for the purchase of
shares at the end of such purchase period. If no such election is made, then such funds shall automatically be held for the purchase of shares at the end of such purchase period. In no event, however, shall any further payroll deductions be added to
the Participant’s account following his/her cessation of Employee status or the commencement of such leave. Should the Participant return to active service (x) within ninety (90) days following the commencement of his/her leave of absence or


  


	4	 	The fifteen (15)-day advance notice requirement for withdrawal from a purchase period shall be in effect for all purchase periods beginning on or after April 1, 2001.


  

 6 








 
(y) prior to the expiration of any longer period for which such Participant’s right to reemployment with the Corporation is guaranteed by statute or
contract, then his/her payroll deductions under the Plan shall automatically resume upon his/her return at the rate in effect at the time the leave began, and if a new purchase period begins during the period of the leave, then the Participant will
automatically be enrolled in that purchase period at the rate of payroll deduction in effect for him/her at the time the leave commenced, but payroll deductions for that purchase period shall not actually begin until the Participant returns to
active service. However, an individual who returns to active employment following a leave of absence that exceeds in duration the applicable (x) or (y) time period will be treated as a new Employee for purposes of subsequent participation in the
Plan and must accordingly re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before the start date of any subsequent purchase period in which he or she wishes to participate. 
  
 For purposes of the Plan: (a) a Participant shall be considered to be an
Employee for so long as such Participant remains in the active employ of the Company or any other Participating Company under the Plan, and (b) a Participant shall be deemed to be permanently disabled if he/she is unable, by reason of any medically
determinable physical or mental impairment expected to result in death or to be of continuous duration of at least twelve (12) months, to engage in any substantial gainful employment. 
  
 (f) Stock Purchase. The Stock subject to the purchase right of each Participant (other than Participants whose
purchase rights have previously terminated in accordance with Section VII(d) or (e) above) shall be automatically purchased on the Participant’s behalf on the last business day of the purchase period for which such purchase right remains
outstanding. The purchase shall be effected by applying the amount credited to each Participant’s book account on the last business date of the purchase period to the purchase of whole shares of Stock (subject to the limitations on the maximum
number of purchasable shares set forth in Section VII(b)) at the purchase price in effect for such purchase period. 
  
 (g) Proration of Purchase Rights. Should the total number of shares of Stock to be purchased pursuant to outstanding purchase rights on any
particular date exceed the number of shares then available for issuance under the Plan, the Plan Administrator shall make a pro-rata allocation of the available shares on a uniform and nondiscriminatory basis, and any amounts credited to the
accounts of Participants shall, to the extent not applied to the purchase of Stock, be refunded to the Participants. 
  
 (h) Shareholder Rights. A Participant shall have no rights as a shareholder with respect to shares covered by the purchase rights granted to the
Participant under the Plan until the shares are actually purchased on the Participant’s behalf in accordance with Section VII(f). No adjustments shall be made for dividends, distributions or other rights for which the record date is prior to
the purchase date. 
  
 (i) ESPP Broker Account. The shares
purchased on behalf of each Participant shall be deposited directly into a brokerage account which the Company shall establish for the Participant at a Company-designated brokerage firm. The account will be known as the ESPP Broker Account. The
following policies and procedures shall be in place for 
  

 7 








 
any shares the Participant wishes to transfer from his or her ESPP Broker Account before those shares have been held for the requisite period necessary to
avoid a disqualifying disposition of such shares under the federal tax laws — the shares are held for at least two years after the start of the Purchase Period in which the shares were purchased and for at least one year after the actual
purchase date of those shares. 
  
 Shares Purchased Before
January 1, 2001: The Participant may transfer those shares out of his or her ESPP Broker Account to another brokerage firm under either of the following conditions: 
  
 The shares have been held for the required holding period: The Participant may freely transfer such
shares electronically between brokers. 
  
 The
shares have not been held for the required holding period: The Participant may not electronically transfer such shares, but the Participant may request stock certificates to be issued for any shares purchased under the Plan before January 1,
2001. However, each such certificate shall bear a legend requiring the Participant to notify the Company if he or she disposes of the shares before the required holding period is satisfied. 
  
 Shares Purchased After December 31, 2000: These shares shall
not be transferable (either electronically or in certificate form) from the ESPP Broker Account until the required holding period for those shares is satisfied. Such limitation shall apply to transfers to a different account with the same ESPP
broker or to other brokers. Any shares for the required holding period is satisfied may be transferred electronically to other accounts. 
  
 The foregoing procedures shall not in any way limit when the Participant may sell his or her shares. It is the intent of such procedures to
assure that any sale of shares before the required holding period for those shares is satisfied must be made through the ESPP Broker Account. In addition, the Participant may request a stock certificate to be issued from the ESPP Broker Account
before the required holding period is met should the Participant wish to make a gift of those shares or (for shares purchased before January 1, 2002) should the Participant need those pre-January 1, 2002 shares as collateral for a loan. Any stock
certificate issued in a pre-January 1, 2002 loan situation shall, at the Company’s discretion, bear a legend requiring the Participant to notify the Company of any subsequent disposition of the shares, whether by the lender upon a default in
the loan or by the Participant following repayment of the loan, made before the required holding period for the shares is met. 
  
 Shares purchased after December 31, 2001 may not be released from the ESPP Broker Account to serve as collateral for a loan unless the required holding
period for those shares has been satisfied. 
  
 The foregoing
policies and procedures shall apply to all shares purchased by the Participant under the Plan, whether or not the Participant continues in Employee status. 
  

 8 








 (j) Assignability. No purchase rights granted under the Plan shall be assignable or transferable
by a Participant other than by will or by the laws of descent and distribution, and during the Participant’s lifetime the purchase rights shall be exercisable only by the Participant. 
  
 (k) Merger or Liquidation of Company. In the event the Company or its
shareholders enter into an agreement to dispose of all or substantially all of the assets or outstanding capital stock of the Company by means of a sale, merger or reorganization in which the Company will not be the surviving corporation (other than
a reorganization effected primarily to change the State in which the Company is incorporated) or in the event the Company is liquidated, then all outstanding purchase rights under the Plan shall automatically be exercised immediately prior to the
consummation of such sale, merger, reorganization or liquidation by applying all sums previously collected from Participants during the purchase period of such transaction to the purchase of whole shares of Stock, subject, however, to the applicable
limitations of Section VII(b). 
  
 VIII. ACCRUAL
LIMITATIONS 
  
 (a) No Participant shall be entitled to
accrue rights to acquire Stock pursuant to any purchase right outstanding under this Plan if and to the extent such accrual, when aggregated with (I) Stock rights accrued under other purchase rights outstanding under this Plan and (II) similar
rights accrued under other employee stock purchase plans (within the meaning of Section 423 of the Code) of the Company or its Corporate Affiliates, would otherwise permit such Participant to purchase more than $25,000 worth of stock of the Company
or any Corporate Affiliate (determined on the basis of the fair market value of such stock on the date or dates such rights are granted to the Participant) for each calendar year such rights are at any time outstanding. 
  
 (b) For purposes of applying the accrual limitations of Section VIII(a), the
right to acquire Stock pursuant to each purchase right outstanding under the Plan shall accrue as follows: 
  
 (i) The right to acquire Stock under each such purchase right shall accrue as and when the purchase right first becomes exercisable on the last business
day of each purchase period the right remains outstanding. 
  
 (ii) No right to acquire Stock under any outstanding purchase right shall accrue to the extent the Participant has already accrued in the same calendar year the right to acquire $25,000 worth of Stock (determined on the basis of the fair
market value on the date or dates of grant) pursuant to one or more purchase rights held by the Participant during such calendar year. 
  
 (iii) If by reason of the Section VIII(a) limitations, one or more purchase rights of a Participant do not accrue for a particular purchase period, then
the payroll deductions which the Participant made during that purchase period with respect to such purchase rights shall be promptly refunded. 
  

 9 








 (c) In the event there is any conflict between the provisions of this Article VIII and one or more
provisions of the Plan or any instrument issued thereunder, the provisions of this Article VIII shall be controlling. 
  
 IX. AMENDMENT AND TERMINATION 
  
 The Board or the Compensation Committee of the Board may from time to time alter, amend, suspend or discontinue the Plan; provided, however, that
no such action shall adversely affect purchase rights at the time outstanding under the Plan; and provided, further, that no such action of the Board or the Compensation Committee may, without the approval of the shareholders of the
Company, increase the number of shares issuable under the Plan (other than adjustments pursuant to Sections VI(b) and VII(b)), alter the purchase price formula so as to reduce the purchase price specified in the Plan, or materially modify the
requirements for eligibility to participate in the Plan. 
  
 X.
GENERAL PROVISIONS 
  
 (a) On March 15, 2001 the
Compensation Committee amended the Plan to effect the following changes: (i) impose the requirement that an Employee file enrollment forms with the Plan Administrator (or its designate) no later than fifteen (15) days prior to the commencement date
of a particular purchase period in order to participate in the Plan for that purchase period and (ii) impose the requirement that a Participant file the prescribed notification form with the Plan Administrator (or its designate) not later than
fifteen (15) days prior to the last day of the purchase period in which a Participant is enrolled in order to terminate his/her participation in that purchase period. On December 13, 2001, the Compensation Committee amended the Plan to effect the
following changes: (i) preclude the transfer of shares from the ESPP Broker Account to serve as collateral for loans obtained from lenders other than the Company-designated brokerage firm(s) during the requisite holding period necessary to avoid a
disqualifying disposition and to further preclude the transfer of shares from the ESPP Broker Account until sale of such shares where required for compliance with local law; and (ii) provide for the automatic enrollment of participants on a leave of
absence in a new purchase period. 
  
 (b) The Plan shall terminate
upon the earlier of (i) January 3, 2005 or (ii) the date on which all shares available for issuance under the Plan shall have been sold pursuant to purchase rights exercised under the Plan. The extension of the term of the Plan from January
3, 2000 to January 3, 2005 was approved by the shareholders at the 1997 Annual Meeting. 
  
 (c) All costs and expenses incurred in the administration of the Plan shall be paid by the Company. 
  
 (d) Neither the action of the Company in establishing the Plan, nor any action taken under the Plan by the Board or the Plan Administrator, nor any
provision of the Plan itself shall be construed so as to grant any person the right to remain in the employ of the Company or any of its Corporate Affiliates for any period of specific duration, and such person’s employment may be terminated at
any time, with or without cause. 
  

 10 








 (e) The provisions of the Plan shall be governed by the laws of the State of California. 
  

 11