Document:

Cisco Systems, Inc. Amended and Restated 1996 Stock Incentive Plan

 Exhibit 10.2 

 
 CISCO SYSTEMS, INC. 

1996 STOCK INCENTIVE PLAN 
  

As Amended and Restated Effective March 18, 2003 

 
 ARTICLE ONE 

 
 GENERAL PROVISIONS 

 
 I. PURPOSE OF THE PLAN 

 
 This 1996 Stock Incentive Plan is intended to promote the
interests of Cisco Systems, Inc., a California corporation, by providing eligible persons with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Corporation as an incentive for them to remain
in the service of the Corporation. 
  
 Capitalized
terms shall have the meanings assigned to such terms in the attached Appendix. 
  

All share numbers in this March 18, 2003 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) spilt 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. 
  

II. STRUCTURE OF THE PLAN 
  

A. The Plan shall be divided into three separate equity programs: 

 
 (i) the Discretionary Option Grant Program
under which eligible persons may, at the discretion of the Plan Administrator, be granted options to purchase shares of Common Stock, 
  

(ii) the Automatic Option Grant Program under which eligible non-employee Board members shall automatically receive option
grants at periodic intervals to purchase shares of Common Stock, and 
  

(iii) the Stock Issuance Program under which eligible persons may, at the discretion of the Plan Administrator, be issued
shares of Common Stock directly, either through the immediate purchase of such shares or as a bonus for services rendered the Corporation (or any Parent or Subsidiary) or the attainment of designated performance goals. 

 B. The provisions of Articles One and Five shall apply to all equity programs under the Plan
and shall govern the interests of all persons under the Plan. 
  

III. ADMINISTRATION OF THE PLAN 
  

A. The Primary Committee shall have sole and exclusive authority to administer the Discretionary Option Grant Program with respect to
Section 16 Insiders. 
  
 B. Administration of the
Discretionary Option Grant Program with respect to all other persons eligible to participate in that program may, at the Board’s discretion, be vested in the Primary Committee or a Secondary Committee, or the Board may retain the power to
administer that program with respect to all such persons. The members of the Secondary Committee may be Board members who are Employees eligible to receive discretionary option grants under the Plan or any other stock option, stock appreciation,
stock bonus or other stock plan of the Corporation (or any Parent or Subsidiary). Administration of the Stock Issuance Program shall be vested in the Primary Committee, except to the extent the Board delegates administrative authority under the
Stock Issuance Program to a Secondary Committee or retains such authority for itself. 
  

C. Members of the Primary Committee or any Secondary Committee shall serve for such period of time as the Board may determine and may be
removed by the Board at any time. The Board may also at any time terminate the functions of any Secondary Committee and reassume all powers and authority previously delegated to such committee. 

 
 D. Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and authority (subject to the provisions of the Plan) to establish such rules and regulations as it may deem appropriate for proper administration of the Discretionary Option Grant and Stock
Issuance Programs and to make such determinations under, and issue such interpretations of, the provisions of such programs and any outstanding options or stock issuances thereunder as it may deem necessary or advisable. Decisions of the Plan
Administrator within the scope of its administrative functions under the Plan shall be final and binding on all parties who have an interest in the Discretionary Option Grant or Stock Issuance Program under its jurisdiction or any option or stock
issuance thereunder. 
  
 E. Service on the Primary
Committee or the Secondary Committee shall constitute service as a Board member, and members of each such committee shall accordingly be entitled to full indemnification and reimbursement as Board members for their service on such committee. No
member of the Primary Committee or the Secondary Committee shall be liable for any act or omission made in good faith with respect to the Plan or any option grants under the Plan. 

 
 F. Administration of the Automatic Option Grant Program shall
be self-executing in accordance with the terms of that program, and no Plan Administrator shall exercise any discretionary functions with respect to any option grants made under that program. 

 

 2. 

 IV. ELIGIBILITY 

 
 A. The persons eligible to participate in the Discretionary
Option Grant Program are as follows: 
  

(i) Employees, 
  

(ii) non-employee members of the Board or the board of directors of any Parent or Subsidiary, and 

 
 (iii) consultants and other independent
advisors who provide services to the Corporation (or any Parent or Subsidiary). 
  

B. The persons eligible to participate in the Stock Issuance Program shall be limited to those individuals who render services to the
Corporation (or any Parent or Subsidiary) in the capacity of independent, non-employee consultants and who are not otherwise Section 16 Insiders at the time of issuance. 
  

 C. Each Plan Administrator shall, within the scope of its administrative jurisdiction under the Plan, have full authority to
determine (i) with respect to the Discretionary Option Grant Program, which eligible persons are to receive option grants, the time or times when such option grants are to be made, the number of shares to be covered by each such grant, the status of
the granted option as either an Incentive Option or a Non-Statutory Option, the time or times when each option is to become exercisable, the vesting schedule (if any) applicable to the option shares and the maximum term for which the option is to
remain outstanding and (ii) with respect to stock issuances under the Stock Issuance Program, which eligible persons are to receive stock issuances, the time or times when such issuances are to be made, the number of shares to be issued to each
Participant, the vesting schedule (if any) applicable to the issued shares and the consideration for such shares. 
  

D. The individuals who shall be eligible to participate in the Automatic Option Grant Program shall be limited to (i) those individuals
serving as non-employee Board members on the Plan Effective Date, (ii) those individuals who first become non-employee Board members on or after the Plan Effective Date, whether through appointment by the Board or election by the Corporation’s
shareholders, and (iii) those individuals who continue to serve as non-employee Board members at one or more Annual Shareholders Meetings held after the Plan Effective Date. A non-employee Board member who has previously been in the employ of the
Corporation (or any Parent or Subsidiary) shall not be eligible to receive an option grant under the Automatic Option Grant Program at the time he or she first becomes a non-employee Board member, but shall be eligible to receive periodic option
grants under the Automatic Option Grant Program while he or she continues to serve as a non-employee Board member.  
  

 3. 

 V. STOCK SUBJECT TO THE PLAN 

 
 A. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares repurchased by the Corporation on the open market. The maximum number of shares of Common Stock reserved for issuance over the term of the Plan shall not exceed 2,504,006,600
shares, subject to the automatic share increases described in Paragraph V.B. below. Such share reserve consists of the number of shares of Common Stock transferred from the Predecessor Plan, as of the Plan Effective Date (619,524,900), plus the
number of shares added to the reserve pursuant to the automatic share increases effected in December 1996, December 1997, December 1998, December 1999, December 2000 and December 2001 (1,884,481,700 shares in the aggregate). 

 
 B. The number of shares of Common Stock available for
issuance under the Plan shall automatically increase on the first trading day of fiscal December each calendar year, beginning with fiscal December in calendar year 1996 and continuing through fiscal December in calendar year 2001, by a number of
shares equal to four and three-quarters percent (4.75%) of the total number of shares of Common Stock outstanding on the last trading day in the immediately preceding fiscal November, but in no event shall any such annual increase exceed 480,000,000
shares. 
  
 C. No one person participating in the
Plan may receive stock options, separately exercisable stock appreciation rights or direct stock issuances for more than 18,000,000 shares of Common Stock in the aggregate per calendar year. 

 
 D. Shares of Common Stock subject to outstanding options
(including options incorporated into this Plan from the Predecessor Plan) shall be available for subsequent issuance under the Plan to the extent those options expire or terminate for any reason prior to exercise in full. Unvested shares issued
under the Plan and subsequently cancelled or repurchased by the Corporation, at the original issue price paid per share, pursuant to the Corporation’s repurchase rights under the Plan shall be added back to the number of shares of Common Stock
reserved for issuance under the Plan and shall accordingly be available for reissuance through one or more subsequent option grants under the Plan. However, should the exercise price of an option under the Plan be paid with shares of Common Stock or
should shares of Common Stock otherwise issuable under the Plan be withheld by the Corporation in satisfaction of the withholding taxes incurred in connection with the exercise of an option or the vesting of a stock issuance under the Plan, then the
number of shares of Common Stock available for issuance under the Plan shall be reduced by the gross number of shares for which the option is exercised or which vest under the stock issuance, and not by the net number of shares of Common Stock
issued to the holder of such option or stock issuance. Shares of Common Stock underlying one or more stock appreciation rights exercised under Section IV of Article Two of the Plan shall not be available for subsequent issuance under the
Plan. 
  
 E. If any change is made to the Common
Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and/or class of 
  

 4. 

 
securities issuable under the Plan, (ii) the maximum number and/or class of securities for which any one person may be granted stock options, separately exercisable stock appreciation rights and
direct stock issuances in the aggregate under the Plan per calendar year, (iii) the maximum number and/or class of securities issuable under the Stock Issuance Program, (iv) the number and/or class of securities for which grants are subsequently to
be made under the Automatic Option Grant Program to new and continuing non-employee Board members, unless the Plan Administrator determines otherwise, (v) the number and/or class of securities and the exercise price per share in effect under each
outstanding option under the Plan and (vi) the number and/or class of securities and price per share in effect under each outstanding option incorporated into this Plan from the Predecessor Plan. Such adjustments to the outstanding options are to be
effected in a manner which shall preclude the enlargement or dilution of rights and benefits under such options. The adjustments determined by the Plan Administrator shall be final, binding and conclusive. 

 

 5. 

 ARTICLE TWO 

 
 DISCRETIONARY OPTION GRANT PROGRAM 

 
 I. OPTION TERMS 

 
 Each option shall be evidenced by one or more documents in
the form approved by the Plan Administrator; provided, however, that each such document shall comply with the terms specified below. Each document evidencing an Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options. 
  
 A. Exercise
Price. 
  
 1. The exercise price per share
shall be fixed by the Plan Administrator but shall not be less than one hundred percent (100%) of the Fair Market Value per share of Common Stock on the option grant date. 
  

 2. The exercise price shall become immediately due upon exercise of the option and shall, subject to the provisions of
Section I of Article Four and the documents evidencing the option, be payable in one or more of the forms specified below: 
  

(i) cash or check made payable to the Corporation, 

 
 (ii) shares of Common Stock held for the
requisite period necessary to avoid a charge to the Corporation’s earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date, or 
  

 (iii) to the extent the option is exercised for vested shares, through a special sale and remittance
procedure pursuant to which the Optionee shall concurrently provide irrevocable instructions to (a) a brokerage firm (reasonably acceptable to the Corporation for purposes of administering such procedure in compliance with the Corporation’s
pre-notification policy for sales of Common Stock) to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price
payable for the purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Corporation by reason of such exercise and (b) the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale. 
  

Except to the extent such sale and remittance procedure is utilized, payment of the exercise price for the purchased shares must be made
on the Exercise Date. 
  

 6. 

 B. Exercise and Term of Options. Each option shall be exercisable at such time
or times, during such period and for such number of shares as shall be determined by the Plan Administrator and set forth in the documents evidencing the option. However, no option shall have a term in excess of nine (9) years measured from the
option grant date. 
  
 C. Effect of Termination
of Service. 
  
 1. The following provisions
shall govern the exercise of any options held by the Optionee at the time of cessation of Service or death: 
  

(i) Any option outstanding at the time of the Optionee’s cessation of Service for any reason shall remain
exercisable for such period of time thereafter as shall be determined by the Plan Administrator and set forth in the documents evidencing the option, but no such option shall be exercisable after the expiration of the option term. 

 
 (ii) Any option exercisable in whole or in
part by the Optionee at the time of death may be subsequently exercised by the personal representative of the Optionee’s estate or by the person or persons to whom the option is transferred pursuant to the Optionee’s will or in accordance
with the laws of descent and distribution. 
  

(iii) Should the Optionee’s Service be terminated for Misconduct, then all outstanding options held by the Optionee
shall terminate immediately and cease to be outstanding. 
  

(iv) During the applicable post-Service exercise period, the option may not be exercised in the aggregate for more than
the number of vested shares for which the option is exercisable on the date of the Optionee’s cessation of Service. Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the option term, the option shall
terminate and cease to be outstanding for any vested shares for which the option has not been exercised. However, the option shall, immediately upon the Optionee’s cessation of Service, terminate and cease to be outstanding to the extent the
option is not otherwise at that time exercisable for vested shares. 
  

D. The Plan Administrator shall have complete discretion, exercisable either at the time an option is granted or at any time while the
option remains outstanding, to: 
  

(i) extend the period of time for which the option is to remain exercisable following the Optionee’s cessation of
Service from the limited exercise period otherwise in effect for that option to such greater period of time as the Plan Administrator shall deem appropriate, but in no event beyond the expiration of the option term, and/or 

 

 7. 

 (ii) permit the option to be exercised, during the applicable post-Service
exercise period, not only with respect to the number of vested shares of Common Stock for which such option is exercisable at the time of the Optionee’s cessation of Service but also with respect to one or more additional installments in which
the Optionee would have vested had the Optionee continued in Service. 
  

E. Shareholder Rights. The holder of an option shall have no shareholder rights with respect to the shares subject to the
option until such person shall have exercised the option, paid the exercise price and become a holder of record of the purchased shares. 
  

F. Repurchase Rights. The Plan Administrator shall have the discretion to grant options which are exercisable for unvested
shares of Common Stock. Should the Optionee cease Service while holding such unvested shares, the Corporation shall have the right to repurchase, at the exercise price paid per share, any or all of those unvested shares. The terms upon which such
repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Plan Administrator and set forth in the document evidencing such
repurchase right. 
  
 G. Limited
Transferability of Options. During the lifetime of the Optionee, Incentive Options shall be exercisable only by the Optionee and shall not be assignable or transferable other than by will or by the laws of inheritance following the
Optionee’s death. However, a Non-Statutory Option may be assigned in whole or in part during the Optionee’s lifetime to one or more members of the Optionee’s immediate family or to a trust established exclusively for one or more such
family members or to one or more individuals, to the extent such assignment is in connection with the Optionee’s estate plan or pursuant to a domestic relations order. The assigned portion may only be exercised by the person or persons who
acquire a proprietary interest in the option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents
issued to the assignee as the Plan Administrator may deem appropriate. 
  

II. INCENTIVE OPTIONS 
  

The terms specified below shall be applicable to all Incentive Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Four shall be applicable to Incentive Options. Options designated as Non-Statutory Options when issued under the Plan shall not be subject to the terms of this Section II. 

 
 A. Eligibility. Incentive Options may only be
granted to Employees. 
  

 8. 

 B. Dollar Limitation. The aggregate Fair Market Value of the shares of
Common Stock (determined as of the respective date or dates of grant) for which one or more options granted to any Employee under the Plan (or any other option plan of the Corporation or any Parent or Subsidiary) may for the first time become
exercisable as Incentive Options during any one calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee holds two (2) or more such options which become exercisable for the first time in the same
calendar year, the foregoing limitation on the exercisability of such options as Incentive Options shall be applied on the basis of the order in which such options are granted. 

 
 C. 10% Shareholder. If any Employee to whom an
Incentive Option is granted is a 10% Shareholder, then the exercise price per share shall not be less than one hundred ten percent (110%) of the Fair Market Value per share of Common Stock on the option grant date, and the option term shall not
exceed five (5) years measured from the option grant date. 
  

III. CORPORATE TRANSACTION/CHANGE IN CONTROL 

 
 A. In the event of any Corporate Transaction, each
outstanding option shall automatically accelerate so that each such option shall, immediately prior to the effective date of the Corporate Transaction, become exercisable for all of the shares of Common Stock at the time subject to such option and
may be exercised for any or all of those shares as fully-vested shares of Common Stock. However, an outstanding option shall not so accelerate if and to the extent: (i) such option is, in connection with the Corporate Transaction, either to be
assumed by the successor corporation (or parent thereof) or to be replaced with a comparable option to purchase shares of the capital stock of the successor corporation (or parent thereof), (ii) such option is to be replaced with a cash incentive
program of the successor corporation which preserves the spread existing on the unvested option shares at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule applicable to those
option shares or (iii) the acceleration of such option is subject to other limitations imposed by the Plan Administrator at the time of the option grant. The determination of option comparability under clause (i) above shall be made by the Plan
Administrator, and its determination shall be final, binding and conclusive. 
  

B. All outstanding repurchase rights shall also terminate automatically, and the shares of Common Stock subject to those terminated rights
shall immediately vest in full, in the event of any Corporate Transaction, except to the extent: (i) those repurchase rights are to be assigned to the successor corporation (or parent thereof) in connection with such Corporate Transaction or (ii)
such accelerated vesting is precluded by other limitations imposed by the Plan Administrator at the time the repurchase right is issued. 
  

C. Immediately following the consummation of the Corporate Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or parent thereof). 
  

 9. 

 D. Each option which is assumed in connection with a Corporate Transaction shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to the Optionee in consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction. Appropriate adjustments to reflect such Corporate Transaction shall also be made to (i) the exercise price payable per share under each outstanding option, provided the aggregate exercise price
payable for such securities shall remain the same, (ii) the maximum number and/or class of securities available for issuance over the remaining term of the Plan, (iii) the maximum number and/or class of securities for which any one person may be
granted stock options, separately exercisable stock appreciation rights and direct stock issuances under the Plan per calendar year and (iv) . the maximum number and/or class of securities available for issuance under the Stock Issuance Program.

  
 E. The Plan Administrator shall have full power
and authority to grant options under the Discretionary Option Grant Program which will automatically accelerate in the event the Optionee’s Service subsequently terminates by reason of an Involuntary Termination within a designated period (not
to exceed eighteen (18) months) following the effective date of any Corporate Transaction in which those options are assumed or replaced and do not otherwise accelerate. Any options so accelerated shall remain exercisable for fully-vested shares
until the expiration or sooner termination of the option term. In addition, the Plan Administrator may provide that one or more of the Corporation’s outstanding repurchase rights with respect to shares held by the Optionee at the time of such
Involuntary Termination shall immediately terminate, and the shares subject to those terminated repurchase rights shall accordingly vest in full. 
  

F. The Plan Administrator shall have full power and authority to grant options under the Discretionary Option Grant Program which will
automatically accelerate in the event the Optionee’s Service subsequently terminates by reason of an Involuntary Termination within a designated period (not to exceed eighteen (18) months) following the effective date of any Change in Control.
Each option so accelerated shall remain exercisable for fully-vested shares until the expiration or sooner termination of the option term. In addition, the Plan Administrator may provide that one or more of the Corporation’s outstanding
repurchase rights with respect to shares held by the Optionee at the time of such Involuntary Termination shall immediately terminate, and the shares subject to those terminated repurchase rights shall accordingly vest in full. 

 
 G. The portion of any Incentive Option accelerated in
connection with a Corporate Transaction or Change in Control shall remain exercisable as an Incentive Option only to the extent the applicable One Hundred Thousand Dollar limitation is not exceeded. To the extent such dollar limitation is exceeded,
the accelerated portion of such option shall be exercisable as a Non-Statutory Option under the Federal tax laws. 
  

 10. 

 H. The outstanding options shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 

 
 IV. STOCK APPRECIATION RIGHTS 

 
 A. The Plan Administrator shall have full power and
authority, exercisable in its sole discretion, to grant to selected Optionees or other individuals eligible to receive option grants under the Discretionary Option Grant Program stock appreciation rights. 

 
 B. Three types of stock appreciation rights shall be
authorized for issuance under the Plan: (i) tandem stock appreciation rights (“Tandem Rights”), (ii) stand-alone stock appreciation rights (“Stand-alone Rights”) and (iii) limited stock appreciation rights (“Limited
Rights”). 
  
 C. The following terms and
conditions shall govern the grant and exercise of Tandem Rights under this Article Two. 
  

1. One or more Optionees may be granted a Tandem Right, exercisable upon such terms and conditions as the Plan Administrator may
establish, to elect between the exercise of the underlying Article Two stock option for shares of Common Stock or the surrender of that option in exchange for a distribution from the Corporation in an amount equal to the excess of (i) the Fair
Market Value (on the option surrender date) of the number of shares in which the Optionee is at the time vested under the surrendered option (or surrendered portion thereof) over (ii) the aggregate exercise price payable for such vested shares.

  
 2. No such option surrender shall be effective
unless it is approved by the Plan Administrator, either at the time of the actual option surrender or at any earlier time. If the surrender is so approved, then the distribution to which the Optionee shall accordingly become entitled under this
Section V may be made in shares of Common Stock valued at Fair Market Value on the option surrender date, in cash, or partly in shares and partly in cash, as the Plan Administrator shall in its sole discretion deem appropriate. 

 
 3. If the surrender of an option is not approved by the Plan
Administrator, then the Optionee shall retain whatever rights the Optionee had under the surrendered option (or surrendered portion thereof) on the option surrender date and may exercise such rights at any time prior to the later of (i) five
(5) business days after the receipt of the rejection notice or (ii) the last day on which the option is otherwise exercisable in accordance with the terms of the instrument evidencing such option, but in no event may such rights be exercised more
than nine (9) years after the date of the option grant. 
  

D. The following terms and conditions shall govern the grant and exercise of Stand-alone Rights under this Article Two: 

 

 11. 

 1. One or more individuals eligible to participate in the Discretionary Option Grant
Program may be granted a Stand-alone Right not tied to any underlying option under this Discretionary Option Grant Program. The Stand-alone Right shall cover a specified number of underlying shares of Common Stock and shall be exercisable upon such
terms and conditions as the Plan Administrator may establish. Upon exercise of the Stand-alone Right, the holder shall be entitled to receive a distribution from the Corporation in an amount equal to the excess of (i) the aggregate Fair Market Value
(on the exercise date) of the shares of Common Stock underlying the exercised right over (ii) the aggregate base price in effect for those shares. 
  

2. The number of shares of Common Stock underlying each Stand-alone Right and the base price in effect for those shares shall be
determined by the Plan Administrator in its sole discretion at the time the Stand-alone Right is granted. In no event, however, may the base price per share be less than the Fair Market Value per underlying share of Common Stock on the grant date.

  
 3. The distribution with respect to an exercised
Stand-alone Right may be made in shares of Common Stock valued at Fair Market Value on the exercise date, in cash, or partly in shares and partly in cash, as the Plan Administrator shall in its sole discretion deem appropriate. 

 
 E. The following terms and conditions shall govern the grant
and exercise of Limited Rights under this Article Two: 
  

1. One or more Section 16 Insiders may, in the Plan Administrator’s sole discretion, be granted Limited Rights with respect to their
outstanding options under this Article Two. 
  
 2.
Upon the occurrence of a Hostile Take-Over, the Section 16 Insider shall have the unconditional right (exercisable for a thirty (30)-day period following such Hostile Take-Over) to surrender each option with such a Limited Right to the Corporation,
to the extent the option is at the time exercisable for fully vested shares of Common Stock. The Section 16 Insider shall in return be entitled to a cash distribution from the Corporation in an amount equal to the excess of (i) the Take-Over Price
of the vested shares of Common Stock at the time subject to each surrendered option (or surrendered portion of such option) over (ii) the aggregate exercise price payable for such vested shares. Such cash distribution shall be made within five (5)
days following the option surrender date. 
  
 3. The
Plan Administrator shall pre-approve, at the time such Limited Right is granted, the subsequent exercise of that right in accordance with the terms of the grant and the provisions of this Section IV. No additional approval of the Plan Administrator
or the Board shall be required at the time of the actual option surrender and cash distribution. Any unsurrendered portion of the option shall continue to remain outstanding and become exercisable in accordance with the terms of the instrument
evidencing such grant. 
  
 F. The shares of Common
Stock underlying any stock appreciation rights exercised under this Section IV shall not be available for subsequent issuance under the Plan. 
  

 12. 

 ARTICLE THREE 

 
 AUTOMATIC OPTION GRANT PROGRAM 

 
 The following terms and provisions reflect the amendment to
the Automatic Option Grant Program authorized by the Board on July 8, 1999 and approved by the shareholders at the 1999 Annual Shareholder Meeting on November 10, 1999. 
  

 I. OPTION TERMS 
  

A. Grant Dates. Option grants under this Article Three shall be made on the dates specified below: 

 
 1. Each individual who is first elected
or appointed as a non-employee Board member on or after November 10, 1999 shall automatically be granted, on the date of such initial election or appointment, a Non-Statutory Option to purchase 30,000 shares of Common
Stock,1
 provided that individual has not previously been in the employ of the Corporation or any Parent or Subsidiary. 

 
 2. On the date of each Annual
Shareholders Meeting, beginning with the 1999 Annual Shareholders Meeting, each individual who is re-elected to serve as an Eligible Director shall automatically be granted a Non-Statutory Option to purchase 15,000 shares of Common
Stock2, provided such individual has served as a
non-employee Board member for at least six (6) months. There shall be no limit on the number of such 15,000-share option grants any one Eligible Director may receive over his or her period of Board service, and non-employee Board members who have
previously been in the employ of the Corporation (or any Parent or Subsidiary) shall be eligible to receive one or more such annual option grants over their period of continued Board service. 

 
 B. Exercise Price. 

 
 1. The exercise price per share shall be equal to one
hundred percent (100%) of the Fair Market Value per share of Common Stock on the option grant date. 

	1
	 Prior to the July 8, 1999 restatement, the number of shares of Common Stock for which an initial option grant was to be made to each newly elected or
appointed non-employee Board member was set at 20,000 shares (before taking into account any splits of the Common Stock effected after that date). 

	2
	 Prior to the July 8, 1999 restatement, the number of shares of Common Stock for which a continuing non-employee Board member was to be granted an
option at each annual shareholders meeting at which he or she was re-elected to the Board was set at 10,000 shares (before taking into account any splits of the Common Stock effected after that date). 

 

 13. 

 2. The exercise price shall be payable in one or more of the alternative forms authorized
under the Discretionary Option Grant Program. Except to the extent the sale and remittance procedure specified thereunder is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date. 

 
 C. Option Term. Each option shall have a
maximum term equal to the lesser of (i) nine (9) years measured from the option grant date or (ii) twelve (12) months following termination of Board service. 

 
 D. Exercise and Vesting of Options. Each option
shall be immediately exercisable for any or all of the option shares. However, any shares purchased under the option shall be subject to repurchase by the Corporation, at the exercise price paid per share, upon the Optionee’s cessation of Board
service prior to vesting in those shares. Each initial 30,000-share grant shall vest, and the Corporation’s repurchase right with respect to those shares shall lapse, in four (4) successive equal annual installments over the Optionee’s
period of Board service, with the first such installment to vest upon the completion of one (1) year of Board service measured from the automatic grant date. Each annual 15,000-share grant shall vest, and the Corporation’s repurchase right with
respect to those shares shall lapse, in two (2) successive equal annual installments over the optionee’s period of Board service measured from the automatic grant date. 

 
 E. Termination of Board Service. The following
provisions shall govern the exercise of any options held by the Optionee upon his or her cessation of Board service: 
  

(i) The Optionee (or, in the event of Optionee’s death, the personal representative of the Optionee’s estate or
the person or persons to whom the option is transferred pursuant to the Optionee’s will or the laws of inheritance) shall have a twelve (12)-month period following the date of such cessation of Board service in which to exercise each such
option. 
  
 (ii) During the twelve
(12)-month exercise period, the option may not be exercised in the aggregate for more than the number of vested shares of Common Stock for which the option is exercisable at the time of the Optionee’s cessation of Board service. 

 
 (iii) Should the Optionee cease to serve as
a Board member by reason of death or Permanent Disability, then all shares at the time subject to the option shall immediately vest so that such option may, during the twelve (12)-month exercise period following such cessation of Board service, be
exercised for all or any portion of those shares as fully-vested shares of Common Stock. 
  

(iv) In no event shall the option remain exercisable after the expiration of the option term. Upon the expiration of the
twelve (12)-month exercise period or (if earlier) upon the expiration of the option term, the option shall terminate and cease to be outstanding for any vested shares for which the option has not been exercised. However, the option shall,
immediately upon the 
  

 14. 

 
Optionee’s cessation of Board service for any reason other than death or Permanent Disability, terminate and cease to be outstanding to the extent the option is not otherwise at that time
exercisable for vested shares. 
  
 II. CORPORATE
TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER 
  

A. In the event of any Corporate Transaction, the shares of Common Stock at the time subject to each outstanding option but not otherwise
vested shall automatically vest in full so that each such option shall, immediately prior to the effective date of the Corporate Transaction, become exercisable for all of the shares of Common Stock at the time subject to such option and may be
exercised for any or all of those shares as fully-vested shares of Common Stock. Immediately following the consummation of the Corporate Transaction, each automatic option grant shall terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or parent thereof). 
  

B. In connection with any Change in Control, the shares of Common Stock at the time subject to each outstanding option but not otherwise
vested shall automatically vest in full so that each such option shall, immediately prior to the effective date of the Change in Control, become exercisable for all of the shares of Common Stock at the time subject to such option and may be
exercised for any or all of those shares as fully-vested shares of Common Stock. Each such option shall remain exercisable for such fully-vested option shares until the expiration or sooner termination of the option term or the surrender of the
option in connection with a Hostile Take-Over. 
  
 C.
Upon the occurrence of a Hostile Take-Over, the Optionee shall have a thirty (30)-day period in which to surrender to the Corporation each of his or her outstanding automatic option grants. The Optionee shall in return be entitled to a cash
distribution from the Corporation in an amount equal to the excess of (i) the Take-Over Price of the shares of Common Stock at the time subject to each surrendered option (whether or not the Optionee is otherwise at the time vested in those shares)
over (ii) the aggregate exercise price payable for such shares. Such cash distribution shall be paid within five (5) days following the surrender of the option to the Corporation. At the 1999 Annual Meeting on November 10, 1999, shareholder approval
of a proposal amending the 1996 Stock Incentive Plan created an automatic pre-approval of each option grant with such a cash surrender right made under the Automatic Option Grant Program on or after this date and the subsequent exercise of that
right in accordance with the provisions of this Section II.C, and no additional approval of the Board or any Plan Administrator shall accordingly be required at the time of the actual option surrender and cash distribution. 

 
 D. Each option which is assumed in connection with a
Corporate Transaction shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to the Optionee in consummation

  

 15. 

 
of such Corporate Transaction had the option been exercised immediately prior to such Corporate Transaction. Appropriate adjustments shall also be made to the exercise price payable per share
under each outstanding option, provided the aggregate exercise price payable for such securities shall remain the same. 
  

E. The grant of options under the Automatic Option Grant Program shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 

 
 III. REMAINING TERMS 

 
 The remaining terms of each option granted under the
Automatic Option Grant Program shall be the same as the terms in effect for option grants made under the Discretionary Option Grant Program. 
  

 16. 

 ARTICLE FOUR 

 
 STOCK ISSUANCE PROGRAM 

 
 Shares of Common Stock reserved for issuance under the Plan
may be issued under the Stock Issuance Program through direct and immediate issuances without any intervening option grants. Only person who render services to the Corporation (or any Parent or Subsidiary) in the capacity of an independent,
non-employee consultant and who are not otherwise Section 16 Insiders at the time of issuance may receive a stock issuance under the Program. Each such stock issuance shall be evidenced by a Stock Issuance Agreement which complies with the terms
specified below. Shares of Common Stock may also be issued under the Stock Issuance Program pursuant to share right awards which entitle the recipients to receive those shares upon the attainment of designated performance goals. In no event may more
than One Million (1,000,000) shares of Common Stock reserved for issuance under the Plan be issued pursuant to the provisions of the Stock Issuance Program. 
  

A. Purchase Price. 
  

1. The purchase price per share of Common Stock subject to direct issuance shall be fixed by the Plan Administrator, but shall not be
less than one hundred percent (100%) of the Fair Market Value per share of Common Stock on the issuance date. 
  

2. Shares of Common Stock may be issued under the Stock Issuance Program for any of the following items of consideration which the Plan
Administrator may deem appropriate in each individual instance: 
  

(i) cash or check made payable to the Corporation, or 

 
 (ii) past services rendered to the
Corporation (or any Parent or Subsidiary). 
  
 B.
Vesting/Issuance Provisions. 
  
 1.
Shares of Common Stock issued under the Stock Issuance Program may, in the discretion of the Plan Administrator, be fully and immediately vested upon issuance or may vest in one or more installments over the Participant’s period of Service or
upon attainment of specified performance objectives. Alternatively, the Plan Administrator may issue share right awards under the Stock Issuance Program which shall entitle the recipient to receive a specified number of shares of Common Stock upon
the attainment of one or more performance goals established by the Plan Administrator or the completion of a specified period of Service designated by the Plan Administrator. Upon the attainment of such performance goals or the completion of such
Service requirement, fully-vested shares of Common Stock shall be issued in satisfaction of those share right awards. 
  

 17. 

 2. Any new, substituted or additional securities or other property (including money paid
other than as a regular cash dividend) which the Participant may have the right to receive with respect to his or her unvested shares of Common Stock by reason of any stock dividend, stock split, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration shall be issued subject to (i) the same vesting requirements applicable to the Participant’s unvested shares of
Common Stock and (ii) such escrow arrangements as the Plan Administrator shall deem appropriate. 
  

3. The Participant shall have full stockholder rights with respect to any shares of Common Stock issued to the Participant under the
Stock Issuance Program, whether or not the Participant’s interest in those shares is vested. Accordingly, the Participant shall have the right to vote such shares and to receive any regular cash dividends paid on such shares. 

 
 4. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the Stock Issuance Program or should the performance objectives not be attained with respect to one or more such unvested shares of Common Stock, then those shares shall be immediately
surrendered to the Corporation for cancellation, and the Participant shall have no further stockholder rights with respect to those shares. To the extent the surrendered shares were previously issued to the Participant for cash consideration, the
Corporation shall repay that consideration to the Participant at the time the shares are surrendered. 
  

5. The Plan Administrator may in its discretion waive the surrender and cancellation of one or more unvested shares of Common Stock (or
other assets attributable thereto) which would otherwise occur upon the cessation of the Participant’s Service or the non-attainment of the performance objectives applicable to those shares. Such waiver shall result in the immediate vesting of
the Participant’s interest in the shares of Common Stock as to which the waiver applies. Such waiver may be effected at any time, whether before or after the Participant’s cessation of Service or the attainment or non-attainment of the
applicable performance objectives. 
  
 6.
Outstanding share right awards under the Stock Issuance Program shall automatically terminate, and no shares of Common Stock shall actually be issued in satisfaction of those awards, if the performance goals or Service requirement established for
such awards are not attained. The Plan Administrator, however, shall have the discretionary authority to issue shares of Common Stock under one or more outstanding share right awards as to which the designated performance goals or Service
requirement have not been attained. 
  

 18. 

 II. CORPORATE TRANSACTION/CHANGE IN CONTROL 

 
 A. All of the Corporation’s outstanding repurchase
rights under the Stock Issuance Program shall terminate automatically, and all the shares of Common Stock subject to those terminated rights shall immediately vest in full, in the event of any Corporate Transaction, except to the extent those
repurchase rights are to be assigned to the successor corporation (or parent thereof) in connection with such Corporate Transaction. 
  

B. The Plan Administrator shall have the discretionary authority, exercisable either at the time the unvested shares are issued or any
time while the Corporation’s repurchase rights remain outstanding under the Stock Issuance Program, to provide that those rights shall automatically terminate in whole or in part, and the shares of Common Stock subject to those terminated
rights shall immediately vest, in the event the Participant’s Service should subsequently terminate by reason of an Involuntary Termination within a designated period (not to exceed eighteen (18) months) following the effective date of any
Corporate Transaction in which those repurchase rights are assigned to the successor corporation (or parent thereof). 
  

C. The Plan Administrator shall have the discretionary authority, exercisable either at the time the unvested shares are issued or any
time while the Corporation’s repurchase rights remain outstanding under the Stock Issuance Program, to provide that those rights shall automatically terminate in whole or in part, and the shares of Common Stock subject to those terminated
rights shall immediately vest, in the event the Participant’s Service should subsequently terminate by reason of an Involuntary Termination within a designated period (not to exceed eighteen (18) months) following the effective date of any
Change in Control. 
  
 III. SHARE ESCROW/LEGENDS

  
 Unvested shares may, in the Plan
Administrator’s discretion, be held in escrow by the Corporation until the Participant’s interest in such shares vests or may be issued directly to the Participant with restrictive legends on the certificates evidencing those unvested
shares. 
  
  

 19. 

 ARTICLE FIVE 

 
 MISCELLANEOUS 

 
 I. FINANCING 

 
 The Plan Administrator may permit any Optionee (other than a
Section 16 Insider) to pay the option exercise price under the Discretionary Option Grant Program by delivering a full-recourse, interest bearing promissory note payable in one or more installments. The terms of any such promissory note (including
the interest rate and the terms of repayment) shall be established by the Plan Administrator in its sole discretion. In no event may the maximum credit available to the Optionee exceed the sum of (i) the aggregate option exercise price payable for
the purchased shares plus (ii) any Federal, state and local income and employment tax liability incurred by the Optionee in connection with the option exercise or share purchase. 

 
 II. TAX WITHHOLDING 

 
 A. The Corporation’s obligation to deliver shares of
Common Stock upon the exercise of options under the Plan shall be subject to the satisfaction of all applicable Federal, state and local income and employment tax withholding requirements. 

 
 B. The Plan Administrator may, in its discretion, provide any
or all holders of Non-Statutory Options under the Discretionary Option Grant Program or unvested shares of Common Stock under the Stock Issuance Program with the right to use shares of Common Stock in satisfaction of all or part of the Withholding
Taxes to which such holders may become subject in connection with the exercise of their options or the vesting of their shares. Such right may be provided to any such holder in either or both of the following formats: 

 
 Stock Withholding: The election to
have the Corporation withhold, from the shares of Common Stock otherwise issuable upon the exercise of such Non-Statutory Option or the vesting of such shares, a portion of those shares with an aggregate Fair Market Value equal to the percentage of
the Withholding Taxes (not to exceed one hundred percent (100%)) designated by the holder. 
  

Stock Delivery: The election to deliver to the Corporation, at the time the Non-Statutory Option is exercised or
the issued shares vest, one or more shares of Common Stock previously acquired by such holder (other than in connection with the option exercise or stock vesting which triggers the Withholding Taxes) with an aggregate Fair Market Value equal to the
percentage of the Withholding Taxes (not to exceed one hundred percent (100%)) designated by the holder. 
  

 20. 

 III. EFFECTIVE DATE AND TERM OF THE PLAN 

 
 A. The Plan and each of the equity incentive programs
thereunder shall become effective immediately upon the approval of the Corporation’s shareholders at the 1996 Annual Meeting. Options may be granted under the Plan at any time on or after the date of such shareholder approval. If such
shareholder approval is not obtained, then this Plan shall not become effective, and no options shall be granted and no shares shall be issued under the Plan. 
  

B. The Plan shall serve as the successor to the Predecessor Plan, and no further option grants shall be made under the Predecessor Plan
after this Plan is approved by the shareholders at the 1996 Annual Meeting. All options outstanding under the Predecessor Plan at the time of such shareholder approval shall be incorporated into the Plan at that time and shall be treated as
outstanding options under the Plan. However, each outstanding option so incorporated shall continue to be governed solely by the terms of the documents evidencing such option, and no provision of the Plan shall be deemed to affect or otherwise
modify the rights or obligations of the holders of such incorporated options with respect to their acquisition of shares of Common Stock. 
  

C. One or more provisions of the Plan, including (without limitation) the option/vesting acceleration provisions of Article Two relating
to Corporate Transactions and Changes in Control, may, in the Plan Administrator’s discretion, be extended to one or more options incorporated from the Predecessor Plan which do not otherwise contain such provisions. 

 
 D. The Plan shall terminate upon the earliest of (i)
December 31, 2006, (ii) the date on which all shares available for issuance under the Plan shall have been issued as fully-vested shares or (iii) the termination of all outstanding options in connection with a Corporate Transaction. Upon such plan
termination, all outstanding option grants shall thereafter continue to have force and effect in accordance with the provisions of the documents evidencing such grants. 
  

 IV. AMENDMENT OF THE PLAN 
  

A. The Board shall have complete power and authority to amend or modify the Plan in any or all respects but may delegate such authority in
whole or in part to the Primary Committee, as the Board deems appropriate. However, no such amendment or modification shall adversely affect the rights and obligations with respect to stock options at the time outstanding under the Plan unless the
Optionee consents to such amendment or modification. In addition, certain amendments may require shareholder approval in accordance with applicable laws and regulations. 
  

 B. The Plan was amended by the Board on July 29, 1998 and approved by the Shareholders at the 1998 Annual Shareholders
Meeting, in order to extend the automatic share increase provisions of the Plan for an additional three (3)-year through fiscal December in calendar year 2001. The Automatic Option Grant Program in effect under the Plan was amended by the Board on
July 8, 1999 and approved by the shareholders at the 1999 Annual Shareholder Meeting, in order to increase the number of shares of Common Stock for which newly elected or 

 

 21. 

 
appointed non-employee Board members and continuing non-employee Board members may be granted stock options under such program. The Plan was amended on January 9, 2001 to allow the Board to
delegate, in whole or in part, its authority to amend the Plan to the Primary Committee as it deems appropriate. The Plan was amended on March 18, 2003 to implement the Stock Issuance Program pursuant to which up to One Million (1,000,000) shares of
Common Stock reserved for issuance under the Plan may be issued pursuant to direct stock issuances under the Stock Issuance Program. 
  

C. Options to purchase shares of Common Stock may be granted under the Discretionary Option Grant Program that are in excess of the number
of shares then available for issuance under the Plan, provided any excess shares actually issued under that program shall be held in escrow until there is obtained shareholder approval of an amendment sufficiently increasing the number of shares of
Common Stock available for issuance under the Plan. If such shareholder approval is not obtained within twelve (12) months after the date the first such excess issuances are made, then (i) any unexercised options granted on the basis of such excess
shares shall terminate and cease to be outstanding and (ii) the Corporation shall promptly refund to the Optionees the exercise or purchase price paid for any excess shares issued under the Plan and held in escrow, together with interest (at the
applicable Short Term Federal Rate) for the period the shares were held in escrow, and such shares shall thereupon be automatically cancelled and cease to be outstanding. 
  

 V. USE OF PROCEEDS 
  

Any cash proceeds received by the Corporation from the sale of shares of Common Stock under the Plan shall be used for general corporate
purposes. 
  
 VI. REGULATORY APPROVALS

  
 A. The implementation of the Plan, the
granting of any stock option under the Plan and the issuance of any shares of Common Stock under the Plan shall be subject to the Corporation’s procurement of all approvals and permits required by regulatory authorities having jurisdiction over
the Plan, the stock options granted under it and the shares of Common Stock issued pursuant to it. 
  

B. No shares of Common Stock or other assets shall be issued or delivered under the Plan unless and until there shall have been compliance
with all applicable requirements of Federal and state securities laws, including the filing and effectiveness of the Form S-8 registration statement for the shares of Common Stock issuable under the Plan, and all applicable listing requirements of
any stock exchange (or the Nasdaq National Market, if applicable) on which Common Stock is then listed for trading. 
  

 22. 

 VII. NO EMPLOYMENT/SERVICE RIGHTS 

 
 Nothing in the Plan shall confer upon the Optionee any right
to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of the Optionee, which rights are hereby
expressly reserved by each, to terminate such person’s Service at any time for any reason, with or without cause. 
  

 23. 

 APPENDIX 

 
 The following definitions shall be in effect under the Plan:

  
 A. Automatic Option Grant Program
shall mean the automatic option grant program in effect under Article Three of the Plan. 
  

B. Board shall mean the Corporation’s Board of Directors. 

 
 C. Change in Control shall mean a change in
ownership or control of the Corporation effected through either of the following transactions: 
  

(i) the acquisition, directly or indirectly by any person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than thirty-five percent (35%)
of the total combined voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer made directly to the Corporation’s shareholders which the Board does not recommend such shareholders to accept, or

  
 (ii) a change in the composition
of the Board over a period of thirty-six (36) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the
time the Board approved such election or nomination. 
  

D. Code shall mean the Internal Revenue Code of 1986, as amended. 

 
 E. Common Stock shall mean the
Corporation’s common stock. 
  
 F.
Corporate Transaction shall mean either of the following shareholder-approved transactions to which the Corporation is a party: 
  

(i) a merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting
power of the Corporation’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or 

 
 (ii) the sale, transfer or other disposition
of all or substantially all of the Corporation’s assets in complete liquidation or dissolution of the Corporation. 
  

 A-1. 

 G. Corporation shall mean Cisco Systems, Inc., a California corporation, and
its successors. 
  
 H. Discretionary Option
Grant Program shall mean the discretionary option grant program in effect under Article Two of the Plan. 
  

I. Eligible Director shall mean a non-employee Board member eligible to participate in the Automatic Option Grant Program in
accordance with the eligibility provisions of Article One. 
  

J. Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the
control and direction of the employer entity as to both the work to be performed and the manner and method of performance. 
  

K. Exercise Date shall mean the date on which the Corporation shall have received written notice of the option exercise.

  
 L. Fair Market Value per share of
Common Stock on any relevant date shall be determined in accordance with the following provisions: 
  

(i) If the Common Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be deemed
equal to the closing selling price per share of Common Stock on the date in question, as such price is reported on the Nasdaq National Market. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for which such quotation exists. 
  

(ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair Market Value shall be deemed equal to
the closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. 

 
 M. Hostile Take-Over shall mean the
acquisition, directly or indirectly, by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than thirty-five percent (35%) of the total combined voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation’s shareholders which the Board does not recommend such shareholders to accept. 
  

 A-2. 

 N. Incentive Option shall mean an option which satisfies the requirements of
Code Section 422. 
  
 O. Involuntary
Termination shall mean the termination of the Service of any individual which occurs by reason of: 
  

(i) such individual’s involuntary dismissal or discharge by the Corporation for reasons other than Misconduct, or

  
 (ii) such individual’s
voluntary resignation following (A) a change in his or her position with the Corporation which materially reduces his or her level of responsibility, (B) a reduction in his or her level of compensation (including base salary, fringe benefits and
target bonuses under any corporate-performance based bonus or incentive programs) by more than fifteen percent (15%) or (C) a relocation of such individual’s place of employment by more than fifty (50) miles, provided and only if such change,
reduction or relocation is effected without the individual’s consent. 
  

P. Misconduct shall mean the commission of any act of fraud, embezzlement or dishonesty by the Optionee, any unauthorized
use or disclosure by such person of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by such person adversely affecting the business or affairs of the Corporation (or any
Parent or Subsidiary) in a material manner. The foregoing definition shall not be deemed to be inclusive of all the acts or omissions which the Corporation (or any Parent or Subsidiary) may consider as grounds for the dismissal or discharge of any
Optionee or other person in the Service of the Corporation (or any Parent or Subsidiary). 
  

Q. 1934 Act shall mean the Securities Exchange Act of 1934, as amended. 

 
 R. Non-Statutory Option shall mean an option
not intended to satisfy the requirements of Code Section 422. 
  

S. Optionee shall mean any person to whom an option is granted under the Discretionary Option Grant or Automatic Option
Grant Program. 
  
 T. Parent shall mean
any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
  

U. Participant shall mean any person who is issued shares of Common Stock under the Stock Issuance Program. 

 

 A-3. 

 V. Permanent Disability or Permanently Disabled shall mean the inability of
the Optionee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more. However, solely for purposes
of the Automatic Option Grant Program, Permanent Disability or Permanently Disabled shall mean the inability of the non-employee Board member to perform his or her usual duties as a Board member by reason of any medically determinable physical or
mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more. 
  

W. Plan shall mean the Corporation’s 1996 Stock Incentive Plan, as set forth in this document. 

 
 X. Plan Administrator shall mean the particular
entity, whether the Primary Committee, the Board or the Secondary Committee, which is authorized to administer the Discretionary Option Grant Program with respect to one or more classes of eligible persons, to the extent such entity is carrying out
its administrative functions under those programs with respect to the persons under its jurisdiction. 
  

Y. Predecessor Plan shall mean the Corporation’s pre-existing 1987 Stock Option Plan in effect immediately prior to the
Plan Effective Date hereunder. 
  
 Z. Primary
Committee shall mean the committee of two (2) or more non-employee Board members appointed by the Board to administer the Discretionary Option Grant Program with respect to Section 16 Insiders. 

 
 AA. Secondary Committee shall mean a committee
of two (2) or more Board members appointed by the Board to administer the Discretionary Option Grant Program with respect to eligible persons other than Section 16 Insiders. 

 
 BB. Section 16 Insider shall mean an officer or
director of the Corporation subject to the short-swing profit liabilities of Section 16 of the 1934 Act. 
  

CC. Service shall mean the performance of services for the Corporation (or any Parent or Subsidiary) by a person in the
capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor, except to the extent otherwise specifically provided in the documents evidencing the option grant or stock issuance. 

 
 DD. Stock Exchange shall mean either the
American Stock Exchange or the New York Stock Exchange. 
  

EE. Stock Issuance Agreement shall mean the agreement entered into by the Corporation and the Participant at the time of
issuance of shares to such person under the Stock Issuance Program. 
  

FF. Stock Issuance Program shall mean the stock issuance program in effect under Article Four of the Plan. 

 

 A-4. 

 GG. Subsidiary shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations in such chain. 
  

HH. Take-Over Price shall mean the greater of (i) the Fair Market Value per share of Common Stock on the date the
option is surrendered to the Corporation in connection with a Hostile Take-Over or (ii) the highest reported price per share of Common Stock paid by the tender offeror in effecting such Hostile Take-Over. However, if the surrendered option is an
Incentive Option, the Take-Over Price shall not exceed the clause (i) price per share. 
  

II. 10% Shareholder shall mean the owner of stock (as determined under Code Section 424(d)) possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Corporation (or any Parent or Subsidiary). 
  

JJ. Withholding Taxes shall mean the Federal, state and local income and employment withholding taxes to which the holder of
Non-Statutory Options or unvested shares of Common Stock may become subject in connection with the exercise of those options or the vesting of those shares. 
  

 A-5. 

 CISCO SYSTEMS, INC. 

 
 NOTICE OF GRANT OF STOCK OPTION 

 
 Notice is hereby given of the following option grant (the
“Option”) made to purchase shares of Cisco Systems, Inc. (the “Company”) common stock (the “Common Stock”): 
  

Optionee:
                                         
                                         
             
 Grant Date:
                                         
                                         
           
 Type of
Option:                                      Incentive Stock
Option 

                       
                                         
   Non-Statutory Stock Option 
 Grant Number:
                                         
                                         
     
 Number of Option Shares:
                                         
       shares 
 Exercise Price:
$                                         
                            per share 

Vesting Commencement Date:
                                         
                        

Expiration Date:
                                         
                                         
       
  
 Exercise
Schedule 
  
 The Option shall become
exercisable with respect to (i) twenty percent (20%) of the Option Shares upon Optionee’s completion of one (1) year of Service measured from the Vesting Commencement Date and (ii) the balance of the Option Shares in a series of forty-eight
(48) successive equal monthly installments upon Optionee’s completion of each additional month of Service over the forty-eight (48)-month period measured from the first anniversary of the Vesting Commencement Date. In no event shall the Option
become exercisable for any additional Option Shares after Optionee’s cessation of Service. 
  

Should Optionee request a reduction to his or her work commitment to less than thirty (30) hours per week, then the Plan Administrator
shall have the right, exercisable in connection with the approval of that reduction, to extend the period over which the Option shall thereafter vest and become exercisable for the Option Shares during the remainder of the option term. The decision
whether or not to approve Optionee’s request for such reduced work commitment shall be at the sole discretion of the Plan Administrator. In no event shall any extension of the Exercise Schedule for the Option Shares result in the extension of
the Expiration Date of the Option. 
  
 Optionee
understands and agrees that the Option is offered subject to and in accordance with the terms of the Cisco Systems, Inc. 1996 Stock Incentive Plan (the “Plan”). Optionee further agrees to be bound by the terms of the Plan and the terms of
the Option as set forth in the Stock Option Agreement attached hereto. 
  

No Employment or Service Contract. Nothing in this Notice or in the attached Stock Option Agreement or in the Plan shall confer upon
Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining Optionee) or of Optionee, which rights
are hereby expressly reserved by each, to terminate Optionee’s Service at any time for any reason, with or without cause. 
  

Definitions. All capitalized terms in this Notice shall have the meaning assigned to them in this Notice or in the attached Stock Option
Agreement. 

 STOCK OPTION AGREEMENT 

 
 Recitals 

 
 A. The Board has adopted the Plan for the purpose of
retaining the services of selected Employees, non-employee members of the Board or of the board of directors of any Parent or Subsidiary and consultants and other independent advisors who provide services to the Corporation (or any Parent or
Subsidiary). 
  
 B. Optionee is to render valuable
services to the Corporation (or a Parent or Subsidiary), and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Corporation’s grant of an option to Optionee. 

 
 C. All capitalized terms in this Agreement shall have the
meaning assigned to them in the attached Appendix. 
  

NOW, THEREFORE, it is hereby agreed as follows: 

 
 1. Grant of Option. The Corporation hereby
grants to Optionee, as of the Grant Date, an option to purchase up to the number of Option Shares specified in the Grant Notice. The Option Shares shall be purchasable from time to time during the option term specified in Paragraph 2 at the Exercise
Price. 
  
 2. Option Term. This option
shall have a maximum term of nine (9) years measured from the Grant Date and shall accordingly expire at the close of business on the Expiration Date, unless sooner terminated in accordance with Paragraph 5 or 6. 

 
 3. Limited Transferability. This option may, in
connection with the Optionee’s estate plan, be assigned in whole or in part during Optionee’s lifetime to one or more members of the Optionee’s immediate family or to a trust established for the exclusive benefit of one or more such
family members. The assigned portion shall be exercisable only by the person or persons who acquire a proprietary interest in the option pursuant to such assignment. The terms applicable to the assigned portion shall be the same as those in effect
for this option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Corporation may deem appropriate. Should the Optionee die while holding this option, then this option shall be transferred in
accordance with Optionee’s will or the laws of descent and distribution. 
  

4. Dates of Exercise. This option shall become exercisable for the Option Shares in one or more installments as specified in
the Grant Notice. As the option becomes exercisable for such installments, those installments shall accumulate and the option shall remain exercisable for the accumulated installments until the Expiration Date or sooner termination of the option
term under Paragraph 5 or 6. As an administrative matter, the exercisable portion of this option may only be exercised until the close of the Nasdaq National Market on the last trading day before the Expiration Date or earlier date of termination of
the option term under 

 
Paragraph 5. Any later attempt to exercise this option will not be honored. For example, if Optionee ceases to remain in Service as provided in Paragraph 5(i) and the date three (3) months from
the date of cessation is Monday, July 4 (a holiday on which the Nasdaq National Market is closed), Optionee must exercise the exercisable portion of this option by 4 pm Eastern Daylight Time on Friday, July 1. 

 
 5. Cessation of Service. The option term
specified in Paragraph 2 shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date should any of the following provisions become applicable: 

 
 (i) Should Optionee cease to remain in
Service for any reason (other than death, Permanent Disability or Misconduct) while this option is outstanding, then Optionee shall have a period of three (3) months (commencing with the date of such cessation of Service) during which to exercise
this option, but in no event shall this option be exercisable at any time after the Expiration Date. 
  

(ii) If Optionee dies while this option is outstanding, then the personal representative of Optionee’s estate or the
person or persons to whom the option is transferred pursuant to Optionee’s will or in accordance with the laws of descent and distribution shall have the right to exercise this option. Such right shall lapse, and this option shall cease to be
outstanding, upon the earlier of (A) the expiration of the twelve (12)- month period measured from the date of Optionee’s death or (B) the Expiration Date. 

 
 (iii) Should Optionee cease Service by
reason of Permanent Disability while this option is outstanding, then Optionee shall have a period of twelve (12) months (commencing with the date of such cessation of Service) during which to exercise this option. In no event shall this option be
exercisable at any time after the Expiration Date. 
  

(iv) For purposes of this Agreement, Optionee’s period of Service shall not include any period of notice of
termination of employment, whether expressed or implied. Optionee’s date of cessation of Service shall mean the date upon which Optionee ceases active performance of services for the Corporation following the provision of such notification of
termination or resignation from Service and shall be determined solely by this Agreement and without reference to any other agreement, written or oral, including Optionee’s contract of employment. 

 
 (v) During the limited period of
post-Service exercisability, this option may not be exercised in the aggregate for more than the number of vested Option Shares for which the option is exercisable at the time of Optionee’s cessation of Service. Upon the expiration of such
limited exercise period or (if earlier) upon the Expiration Date, this option shall terminate and cease to be outstanding for any vested Option Shares for which the option has not 

 

 2 

 
been exercised. However, this option shall, immediately upon Optionee’s cessation of Service for any reason, terminate and cease to be outstanding with respect to any Option Shares in which
Optionee is not otherwise at that time vested or for which this option is not otherwise at that time exercisable. 
  

(vi) Should Optionee’s Service be terminated for Misconduct or should Optionee otherwise engage in Misconduct while
this option is outstanding, then this option shall terminate immediately and cease to remain outstanding. 
  

6. Special Acceleration of Option 
  

(a) This option, to the extent outstanding at the time of a Corporate Transaction but not otherwise fully exercisable, shall
automatically accelerate so that this option shall, immediately prior to the effective date of the Corporate Transaction, become exercisable for all of the Option Shares at the time subject to this option and may be exercised for any or all of those
Option Shares as fully-vested shares of Common Stock. No such acceleration of this option, however, shall occur if and to the extent: (i) this option is, in connection with the Corporate Transaction, either to be assumed by the successor corporation
(or parent thereof) or to be replaced with a comparable option to purchase shares of the capital stock of the successor corporation (or parent thereof) or (ii) this option is to be replaced with a cash incentive program of the successor corporation
which preserves the spread existing on the unvested Option Shares at the time of the Corporate Transaction (the excess of the Fair Market Value of those Option Shares over the aggregate Exercise Price payable for such shares) and provides for
subsequent pay-out in accordance with the same option exercise/vesting schedule set forth in the Grant Notice. The determination of option comparability under clause (i) shall be made by the Plan Administrator, and such determination shall be final,
binding and conclusive. 
  
 (b) Immediately
following the Corporate Transaction, this option shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) in connection with the Corporate Transaction. 

 
 (c) If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction, and appropriate adjustments shall also be made to the Exercise Price, provided the aggregate Exercise Price shall remain the same. 

 
 (d) This option, to the extent outstanding at the time of a
Change in Control but not otherwise fully exercisable, shall automatically accelerate so that this option shall, immediately prior to the effective date of the Change in Control, become exercisable for all of the Option Shares at the time subject to
this option and may be exercised for any or all of those Option Shares as fully-vested shares of Common Stock. This option shall remain so exercisable until the Expiration Date or sooner termination of the option term. 

 

 3 

 (e) This Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 

 
 7. Adjustment in Option Shares. Should any
change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of
consideration, appropriate adjustments shall be made to (i) the total number and/or class of securities subject to this option and (ii) the Exercise Price in order to reflect such change and thereby preclude a dilution or enlargement of benefits
hereunder. 
  
 8. Shareholder Rights.
The holder of this option shall not have any shareholder rights with respect to the Option Shares until such person shall have exercised the option, paid the Exercise Price and become a holder of record of the purchased shares. 

 
 9. Manner of Exercising Option. 

 
 (a) In order to exercise this option with respect to all or
any part of the Option Shares for which this option is at the time exercisable, Optionee (or any other person or persons exercising the option) must take the following actions: 

 
 (i) Pay the aggregate Exercise Price for
the purchased shares in one or more of the following forms: 
  

(A) cash or check made payable to the Corporation; 

 
 (B) to the extent the option is exercised
for vested Option Shares, through a special sale and remittance procedure pursuant to which Optionee (or any other person or persons exercising the option) shall concurrently provide irrevocable written instructions (I) to a Corporation-designated
brokerage firm (or in the case of an Executive Officer or Board member of the Corporation, an Optionee-designated brokerage firm) to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available
on the settlement date, sufficient funds to cover the aggregate Exercise Price payable for the purchased shares plus all applicable taxes required to be withheld by the Corporation by reason of such exercise and (II) to the Corporation to deliver
the certificates for the purchased shares directly to such brokerage firm in order to complete the sale transaction; 
  

(C) a promissory note payable to the Corporation, but only to the extent authorized by the Plan Administrator in
accordance with Paragraph 13; and 
  

 4 

 (D) shares of Common Stock held by Optionee (or any other person or persons
exercising the option) for the requisite period necessary to avoid a charge to the Corporation’s earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date. 

 
 (ii) Furnish to the Corporation appropriate
documentation that the person or persons exercising the option (if other than Optionee) have the right to exercise this option. 
  

(iii) Make appropriate arrangements with the Corporation (or Parent or Subsidiary employing or retaining Optionee) for
the satisfaction of all tax withholding requirements applicable to the option exercise. 
  

(b) As soon as practical after the Exercise Date, the Corporation shall issue to or on behalf of Optionee (or any other person or persons
exercising this option) a certificate for the purchased Option Shares, with the appropriate legends affixed thereto. 
  

(c) In no event may this option be exercised for any fractional shares. 

 
 (d) Notwithstanding any other provisions of the Plan, this
Agreement or any other agreement to the contrary, if at the time this option is exercised, Optionee is indebted to the Corporation (or any Parent or Subsidiary) for any reason, the following actions shall be taken, as deemed appropriate by the Plan
Administrator: 
  
 (i) any shares
of Common Stock to be issued upon such exercise shall automatically be pledged against Optionee’s outstanding indebtedness; and 
  

(ii) if this option is exercised in accordance with subparagraph 9(a)(i)(B) above, the after tax proceeds of the sale of
Optionee’s stock shall automatically be applied to the outstanding balance of Optionee’s indebtedness. 
  

10. Compliance with Laws and Regulations. 
  

 (a) The exercise of this option and the issuance of the Option Shares upon such exercise shall be subject to compliance by
the Corporation and Optionee with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange (or the Nasdaq National Market, if applicable) on which the Common Stock may be listed for trading at the
time of such exercise and issuance. 
  
 (b) The
inability of the Corporation to obtain approval from any regulatory body having authority deemed by the Corporation to be necessary to the lawful issuance and sale of any Common Stock pursuant to this option shall relieve the Corporation of any
liability with respect to the non-issuance or sale of the Common Stock as to which such 
  

 5 

 
approval shall not have been obtained. The Corporation, however, shall use its best efforts to obtain all such approvals. 

 
 11. Successors and Assigns. Except to the
extent otherwise provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and Optionee, Optionee’s assigns and the legal representatives,
heirs and legatees of Optionee’s estate. 
  
 12.
Notices. Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices. Any notice required to be given or
delivered to Optionee shall be in writing and addressed to Optionee at the address indicated below Optionee’s signature line on the Grant Notice. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail,
postage prepaid and properly addressed to the party to be notified. 
  

13. Financing. The Plan Administrator may, in its absolute discretion and without any obligation to do so, permit Optionee
to pay the Exercise Price for the purchased Option Shares by delivering a full-recourse promissory note payable to the Corporation. The terms of any such promissory note (including the interest rate, the requirements for collateral and the terms of
repayment) shall be established by the Plan Administrator in its sole discretion. 
  

14. Construction. This Agreement and the option evidenced hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the terms of the Plan. All decisions of the Plan Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in
this option. 
  
 15. Governing Law. The
interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of California without resort to that State’s conflict-of-laws rules. 

 
 16. Excess Shares. If the Option Shares covered
by this Agreement exceed, as of the Grant Date, the number of shares of Common Stock which may without shareholder approval be issued under the Plan, then this option shall be void with respect to those excess shares, unless shareholder approval of
an amendment sufficiently increasing the number of shares of Common Stock issuable under the Plan is obtained in accordance with the provisions of the Plan. 
  

17. Additional Terms Applicable to an Incentive Option. In the event this option is designated an Incentive Option in the
Grant Notice, the following terms and conditions shall also apply to the grant: 
  

(a) This option shall cease to qualify for favorable tax treatment as an Incentive Option if (and to the extent) this option is exercised
for one or more Option Shares: (A) more than three (3) months after the date Optionee ceases to be an Employee for any reason other than death or Permanent Disability or (B) more than twelve (12) months after the date Optionee ceases to be an
Employee by reason of Permanent Disability. 
  

 6 

 (b) No installment under this option shall qualify for favorable tax treatment as an
Incentive Option if (and to the extent) the aggregate Fair Market Value (determined at the Grant Date) of the Common Stock for which such installment first becomes exercisable hereunder would, when added to the aggregate value (determined as of the
respective date or dates of grant) of the Common Stock or other securities for which this option or any other Incentive Options granted to Optionee prior to the Grant Date (whether under the Plan or any other option plan of the Corporation or any
Parent or Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should such One Hundred Thousand Dollar ($100,000) limitation be exceeded in any calendar year, this
option shall nevertheless become exercisable for the excess shares in such calendar year as a Non-Statutory Option. 
  

(c) Should the exercisability of this option be accelerated upon a Corporate Transaction or Change in Control, then this option shall
qualify for favorable tax treatment as an Incentive Option only to the extent the aggregate Fair Market Value (determined at the Grant Date) of the Common Stock for which this option first becomes exercisable in the calendar year in which the
Corporate Transaction or Change in Control occurs does not, when added to the aggregate value (determined as of the respective date or dates of grant) of the Common Stock or other securities for which this option or one or more other Incentive
Options granted to Optionee prior to the Grant Date (whether under the Plan or any other option plan of the Corporation or any Parent or Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand Dollars
($100,000) in the aggregate. Should the applicable One Hundred Thousand Dollar ($100,000) limitation be exceeded in the calendar year of such Corporate Transaction or Change in Control, the option may nevertheless be exercised for the excess shares
in such calendar year as a Non-Statutory Option. 
  

(d) Should Optionee hold, in addition to this option, one or more other options to purchase Common Stock which become exercisable for the
first time in the same calendar year as this option, then the foregoing limitations on the exercisability of such options as Incentive Options shall be applied on the basis of the order in which such options are granted. 

 
 18. Leave of Absence. The following provisions
shall apply upon the Optionee’s commencement of an authorized leave of absence: 
  

(a) The exercise schedule in effect under the Grant Notice shall be frozen as of the first day of the authorized leave, and this option
shall not become exercisable for any additional installments of the Option Shares during the period Optionee remains on such leave. 
  

(b) If the option is designated as an Incentive Option in the Grant Notice, then the following additional provision shall apply:

  
 If the leave of absence
continues for more than ninety (90) days, then this option shall automatically convert to a Non-Statutory Option under the Federal tax laws at the end of the three (3)-month period measured from the ninety-first (91st) day of such leave, unless the
Optionee’s reemployment rights are guaranteed by statute or by written agreement. Following any such 
  

 7 

 
conversion of the option, all subsequent exercises of such option, whether effected before or after Optionee’s return to active Employee status, shall result in an immediate taxable event,
and the Corporation shall be required to collect from Optionee all withholding taxes applicable to such exercise. 
  

(c) In no event shall this option become exercisable for any additional Option Shares or otherwise remain outstanding if Optionee does
not resume Employee status prior to the Expiration Date of the option term. 
  

19. Further Instruments. The parties agree to execute such further instruments and to take such further action as may be
reasonably necessary to carry out the purposes and intent of this Agreement. 
  

20. Authorization to Release Necessary Personal Information. 

 
 (a) Optionee hereby authorizes and directs Optionee’s
employer to collect, use and transfer in electronic or other form, any personal information (the “Data”) regarding Optionee’s employment, the nature and amount of Optionee’s compensation and the fact and conditions of
Optionee’s participation in the Plan (including, but not limited to, Optionee’s name, home address, telephone number, date of birth, social security number (or any other social or national identification number), salary, nationality, job
title, number of shares of Common Stock held and the details of all options or any other entitlement to shares of Common Stock awarded, cancelled, exercised, vested, unvested or outstanding) for the purpose of implementing, administering and
managing Optionee’s participation in the Plan. Optionee understands that the Data may be transferred to the Corporation or any of its Subsidiaries, or to any third parties assisting in the implementation, administration and management of the
Plan, including any requisite transfer to a broker or other third party assisting with the exercise of Options under the Plan or with whom shares of Common Stock acquired upon exercise of this option or cash from the sale of such shares may be
deposited. Optionee acknowledges that recipients of the Data may be located in different countries, and those countries may have data privacy laws and protections different from those in the country of Optionee’s residence. Furthermore,
Optionee acknowledges and understands that the transfer of the Data to the Corporation or any of its Subsidiaries, or to any third parties is necessary for Optionee’s participation in the Plan. 

 
 (b) Optionee may at any time withdraw the consents herein,
by contacting Optionee’s local human resources representative in writing. Optionee further acknowledges that withdrawal of consent may affect Optionee’s ability to exercise or realize benefits from the option, and Optionee’s ability
to participate in the Plan. 
  
 21. No
Entitlement or Claims for Compensation. 
  

(a) The grant of options under the Plan is made at the discretion of the Plan Administrator, and the Plan may be suspended or terminated
by the Corporation at any time. The grant of an option in one year or at one time does not in any way entitle Optionee to an option grant in the future. The Plan is wholly discretionary in nature and is not to be considered part of Optionee’s
normal or expected compensation subject to severance, resignation, 
  

 8 

 
redundancy or similar compensation. The value of the option is an extraordinary item of compensation which is outside the scope of Optionee’s employment contract (if any). 

 
 (b) Optionee shall have no rights to compensation or damages
as a result of Optionee’s cessation of Service for any reason whatsoever, whether or not in breach of contract, insofar as those rights arise or may arise from Optionee’s ceasing to have rights under or be entitled to exercise this option
as a result of such cessation or from the loss or diminution in value of such rights. If Optionee did acquire any such rights, Optionee is deemed to have waived them irrevocably by accepting the option. 

 

 9 

 Appendix 

 
 The following definitions shall be in effect under the
Agreement: 
  
 A. Agreement shall mean
this Stock Option Agreement. 
  
 B.
Board shall mean the Corporation’s Board of Directors. 
  

C. Change in Control shall mean a change in ownership or control of the Corporation effected through either of the following
transactions: 
  
 (i) the acquisition, directly or
indirectly by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation), of beneficial ownership (within the meaning of
Rule 13d-3 of the 1934 Act) of securities possessing more than thirty-five percent (35%) of the total combined voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer made directly to the
Corporation’s shareholders which the Board does not recommend such shareholders to accept, or 
  

(ii) a change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination. 

 
 D. Code shall mean the Internal Revenue Code of
1986, as amended. 
  
 E. Common Stock
shall mean the Corporation’s common stock. 
  

F. Corporate Transaction shall mean either of the following shareholder-approved transactions to which the Corporation is a
party: 
  
 (i) a merger or
consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding securities are transferred to a person or persons different from the persons holding those securities
immediately prior to such transaction, or 
  

(ii) the sale, transfer or other disposition of all or substantially all of the Corporation’s assets in complete
liquidation or dissolution of the Corporation. 
  
 G.
Corporation shall mean Cisco Systems, Inc., a California corporation. 
  

 A-1 

 H. Employee shall mean an individual who is in the employ of the Corporation
(or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance. 
  

 I. Exercise Date shall mean the date on which the option shall have been exercised in accordance with Paragraph
9 of the Agreement. 
  
 J. Exercise
Price shall mean the exercise price per share as specified in the Grant Notice. 
  

K. Expiration Date shall mean the date on which the option expires as specified in the Grant Notice. 

 
 L. Fair Market Value per share of Common Stock
on any relevant date shall be determined in accordance with the following provisions: 
  

(i) If the Common Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the
closing selling price per share of Common Stock on the date in question, as the price is reported by the National Association of Securities Dealers on the Nasdaq National Market or any successor system. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. 
  

(ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on
such exchange. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. 

 
 M. Grant Date shall mean the date of grant of
the option as specified in the Grant Notice. 
  
 N.
Grant Notice shall mean the Notice of Grant of Stock Option accompanying the Agreement, pursuant to which Optionee has been informed of the basic terms of the option evidenced hereby. 

 
 O. Incentive Option shall mean an option which
satisfies the requirements of Code Section 422. 
  

P. Misconduct shall mean the commission of any act of fraud, embezzlement or dishonesty by Optionee, any unauthorized use or
disclosure by Optionee of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other 

 

 A-2 

 
intentional misconduct by Optionee adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not be deemed
to be inclusive of all the acts or omissions which the Corporation (or any Parent or Subsidiary) may consider as grounds for the dismissal or discharge of Optionee or any other individual in the Service of the Corporation (or any Parent or
Subsidiary). 
  
 Q. 1934 Act shall mean
the Securities Exchange Act of 1934, as amended. 
  

R. Non-Statutory Option shall mean an option not intended to satisfy the requirements of Code Section 422. 

 
 S. Option Shares shall mean the number of
shares of Common Stock subject to the option as specified in the Grant Notice. 
  

T. Optionee shall mean the person to whom the option is granted as specified in the Grant Notice. 

 
 U. Parent shall mean any corporation (other
than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
  

V. Permanent Disability shall mean the inability of Optionee to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which is expected to result in death or has lasted or can be expected to last for a continuous period of twelve (12) months or more. 

 
 W. Plan shall mean the Corporation’s 1996
Stock Incentive Plan. 
  
 X. Plan
Administrator shall mean either the Board or a committee of the Board acting in its administrative capacity under the Plan. 
  

Y. Service shall mean the Optionee’s performance of services for the Corporation (or any Parent or Subsidiary) in the
capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor. 
  

Z. Stock Exchange shall mean the American Stock Exchange or the New York Stock Exchange. 

 
 AA. Subsidiary shall mean any corporation
(other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
  

 A-3 

 INITIAL GRANT 

NON-EMPLOYEE DIRECTOR 
  

CISCO SYSTEMS, INC. 

NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR 

AUTOMATIC STOCK OPTION 
  

Notice is hereby given of the following option grant (the “Option”) to purchase shares of the Common Stock of Cisco Systems,
Inc. (the “Corporation”): 
  

Optionee:
                                         
                                         
                   
  

Grant Date:
                                         
                                         
                
  

Exercise Price:
$                     per share 
  

Number of Option Shares:
                     shares 
  

Expiration Date:
                                         
                                         
       
  
 Type
of Option: Non-Statutory Stock Option 
  

Date Exercisable: Immediately Exercisable 
  

Vesting Schedule: The Option Shares shall initially be unvested and subject to repurchase by the Corporation at the Exercise Price
paid per share. Optionee shall acquire a vested interest in, and the Corporation’s repurchase right shall accordingly lapse with respect to, the Option Shares in a series of four (4) successive equal annual installments upon the Optionee’s
completion of each year of service as a member of the Corporation’s Board of Directors (the “Board”) over the four (4)-year period measured from the Grant Date. In no event shall any additional Option Shares vest after Optionee’s
cessation of Board service. 
  
 Optionee understands
and agrees that the Option is granted subject to and in accordance with the terms of the automatic option grant program under the Cisco Systems, Inc. 1996 Stock Incentive Plan (the “Plan”). Optionee further agrees to be bound by the terms
of the Plan and the terms of the Option as set forth in the Automatic Stock Option Agreement attached hereto as Exhibit A. 
  

Optionee hereby acknowledges receipt of a copy of the official prospectus for the Plan in the form attached hereto as Exhibit B. A
copy of the Plan is available upon request made to the Corporate Secretary at the Corporation’s principal offices. 

 REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL UNVESTED OPTION SHARES ACQUIRED
UPON THE EXERCISE OF THE OPTION SHALL NOT BE TRANSFERABLE AND SHALL BE SUBJECT TO REPURCHASE BY THE CORPORATION, AT THE EXERCISE PRICE PAID PER SHARE, UPON OPTIONEE’S TERMINATION OF SERVICE AS A MEMBER OF THE CORPORATION’S BOARD OF
DIRECTORS PRIOR TO VESTING IN THOSE SHARES. THE TERMS AND CONDITIONS OF SUCH REPURCHASE RIGHT SHALL BE SPECIFIED IN A STOCK PURCHASE AGREEMENT, IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION, EXECUTED BY OPTIONEE AT THE TIME OF THE OPTION
EXERCISE. 
  
 No Impairment of Rights.
Nothing in this Notice or in the attached Automatic Stock Option Agreement or the Plan shall interfere with or otherwise restrict in any way the rights of the Corporation or the Corporation’s shareholders to remove Optionee from the Board at
any time in accordance with the provisions of applicable law. 
  

Definitions. All capitalized terms in this Notice shall have the meaning assigned to them in this Notice or in the attached
Automatic Stock Option Agreement. 
  
 DATED:
                    ,          

 

			
	CISCO SYSTEMS, INC.
		
	By:	 	
                        
                                         
                           

	Title:	 	  

                  
                                         
                                 

 

			
	
	                           
                                         
                                   
	
	OPTIONEE
		
	Address:	 	  

                  
                                         
                           

	  

                  
                                         
                                         
   

  
 ATTACHMENTS

 Exhibit A - Automatic Stock Option Agreement 

Exhibit B - Plan Summary and Prospectus 
  

 2 

 ANNUAL GRANT 

NON-EMPLOYEE DIRECTOR 
  

CISCO SYSTEMS, INC. 

NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR 

AUTOMATIC STOCK OPTION 
  

Notice is hereby given of the following option grant (the “Option”) to purchase shares of the Common Stock of Cisco Systems,
Inc. (the “Corporation”): 
  

Optionee:
                                         
                                         
               
  

Grant Date:
                                         
                                         
             
  

Exercise Price:
$                         per share 

 
 Number of Option Shares:
                     shares 
  

Expiration Date:
                                         
                                         
     
  
 Type of
Option: Non-Statutory Stock Option 
  
 Date
Exercisable: Immediately Exercisable 
  

Vesting Schedule: The Option Shares shall initially be unvested and subject to repurchase by the Corporation at the Exercise Price
paid per share. Optionee shall acquire a vested interest in, and the Corporation’s repurchase right shall accordingly lapse with respect to, the Option Shares in a series of two (2) successive equal annual installments upon Optionee’s
completion of each year of service as a member of the Corporation’s Board of Directors (the “Board”) over the two (2)-year period measured from the Grant Date. In no event shall any additional Option Shares vest after Optionee’s
cessation of Board service. 
  
 Optionee understands
and agrees that the Option is granted subject to and in accordance with the terms of the automatic option grant program under the Cisco Systems, Inc. 1996 Stock Incentive Plan (the “Plan”). Optionee further agrees to be bound by the terms
of the Plan and the terms of the Option as set forth in the Automatic Stock Option Agreement attached hereto as Exhibit A. 
  

Optionee hereby acknowledges receipt of a copy of the official prospectus for the Plan in the form attached hereto as Exhibit B. A
copy of the Plan is available upon request made to the Corporate Secretary at the Corporation’s principal offices. 
  

REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL UNVESTED OPTION SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL NOT BE
TRANSFERABLE AND SHALL BE SUBJECT TO REPURCHASE BY THE CORPORATION, AT THE EXERCISE PRICE PAID PER SHARE, UPON OPTIONEE’S TERMINATION OF SERVICE AS A MEMBER OF THE 

 
CORPORATION’S BOARD OF DIRECTORS PRIOR TO VESTING IN THOSE SHARES. THE TERMS AND CONDITIONS OF SUCH REPURCHASE RIGHT SHALL BE SPECIFIED IN A STOCK PURCHASE AGREEMENT, IN FORM AND SUBSTANCE
SATISFACTORY TO THE CORPORATION, EXECUTED BY OPTIONEE AT THE TIME OF THE OPTION EXERCISE. 
  

No Impairment of Rights. Nothing in this Notice or in the attached Automatic Stock Option Agreement or the Plan shall interfere
with or otherwise restrict in any way the rights of the Corporation or the Corporation’s shareholders to remove Optionee from the Board at any time in accordance with the provisions of applicable law. 

 
 Definitions. All capitalized terms in this Notice
shall have the meaning assigned to them in this Notice or in the attached Automatic Stock Option Agreement. 
  

DATED:                     ,
         
  

			
	CISCO SYSTEMS, INC.
		
	By:	 	
                  
                                         
                                 

	Title:	 	  

                  
                                         
                                 

 

			
	
	
                        
                                         
                                      

	
	OPTIONEE
		
	Address:	 	  

                  
                                         
                           

	  

                  
                                         
                                         
   

  
 ATTACHMENTS

 Exhibit A - Automatic Stock Option Agreement 

Exhibit B - Plan Summary and Prospectus 
  

 2 

 NON-EMPLOYEE DIRECTOR 

 
 CISCO SYSTEMS, INC. 

AUTOMATIC STOCK OPTION AGREEMENT 
  

RECITALS 
  

A. The Corporation has implemented an automatic option grant program under the Corporation’s 1996 Stock Incentive Plan pursuant to
which eligible non-employee members of the Board will automatically receive special option grants at designated intervals over their period of Board service in order to provide such individuals with a meaningful incentive to continue to serve as a
member of the Board. 
  
 B. Optionee is an eligible
non-employee Board member, and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the automatic grant of a stock option to purchase shares of the Corporation’s Common Stock under
the Plan. 
  
 C. The granted option is intended to be
a non-statutory option which does not meet the requirements of Section 422 of the Internal Revenue Code. 
  

D. All capitalized terms in this Agreement, to the extent not otherwise defined in the Agreement, shall have the meaning assigned to them
in the attached Appendix. 
  
 NOW, THEREFORE,
it is hereby agreed as follows: 
  
 1. Grant
of Option. The Corporation hereby grants to Optionee, as of the Grant Date, a Non-Statutory Option to purchase up to the number of Option Shares specified in the Grant Notice. The Option Shares shall be purchasable from time to time during
the option term specified in Paragraph 2 at the Exercise Price. 
  

2. Option Term. This option shall have a maximum term of nine (9) years measured from the Grant Date and shall accordingly
expire at the close of business on the Expiration Date, unless sooner terminated in accordance with Paragraph 5, 6 or 7. 
  

3. Limited Transferability. This option may, in connection with the Optionee’s estate plan, be assigned in whole or in
part during Optionee’s lifetime to one or more members of the Optionee’s immediate family or to a trust established for the exclusive benefit of one or more such family members. The assigned portion shall be exercisable only by the person
or persons who acquire a proprietary interest in the option pursuant to such assignment. The terms applicable to the assigned portion shall be the same as those in effect for this option immediately prior to such assignment and shall be set forth in
such documents issued to the assignee as the Corporation may deem appropriate. Should the Optionee die while holding this option, then this option shall be transferred in accordance with Optionee’s will or the laws of descent and distribution.

 4. Exercisability/Vesting. 

 
 (a) This option shall be immediately exercisable for any or
all of the Option Shares, whether or not the Option Shares are vested in accordance with the Vesting Schedule set forth in the Grant Notice, and shall remain so exercisable until the Expiration Date or the sooner termination of the option term under
Paragraph 5, 6 or 7. 
  
 (b) Optionee shall, in
accordance with the Vesting Schedule set forth in the Grant Notice, vest in the Option Shares in a series of installments over his or her period of Board service. Vesting in the Option Shares may be accelerated pursuant to the provisions of
Paragraph 5, 6 or 7. In no event, however, shall any additional Option Shares vest following Optionee’s cessation of service as a Board member. 
  

5. Cessation of Board Service. Should Optionee’s service as a Board member cease while this option remains outstanding,
then the option term specified in Paragraph 2 shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date in accordance with the following provisions: 

 
 (i) Should Optionee cease to serve as a
Board member for any reason (other than death or Permanent Disability) while this option is outstanding, then the period for exercising this option shall be reduced to a twelve (12)-month period commencing with the date of such cessation of Board
service, but in no event shall this option be exercisable at any time after the Expiration Date. During such limited period of exercisability, this option may not be exercised in the aggregate for more than the number of Option Shares (if any) in
which Optionee is vested on the date of his or her cessation of Board service. Upon the earlier of (i) the expiration of such twelve (12)-month period or (ii) the specified Expiration Date, the option shall terminate and cease to be
exercisable with respect to any vested Option Shares for which the option has not been exercised. 
  

(ii) Should Optionee die during the twelve (12)-month period following his or her cessation of Board service and hold
this option at the time of his or her death, then the personal representative of Optionee’s estate or the person or persons to whom the option is transferred pursuant to Optionee’s will or in accordance with the laws of descent and
distribution shall have the right to exercise this option for any or all of the Option Shares in which Optionee is vested at the time of Optionee’s cessation of Board service (less any Option Shares purchased by Optionee after such cessation of
Board service but prior to death). Such right of exercise shall terminate, and this option shall accordingly cease to be exercisable for such vested Option Shares, upon the earlier of (i) the expiration of the twelve (12)-month period
measured from the date of Optionee’s cessation of Board service or (ii) the specified Expiration Date of the option term. Should this option be transferred during Optionee’s lifetime in accordance with the provisions of Paragraph 3, then
the transferee(s) shall have the same limited time period in which to exercise this option for any or all of those vested Option Shares. 
  

 2 

 (iii) Should Optionee cease service as a Board member by reason of death or
Permanent Disability, then all Option Shares at the time subject to this option but not otherwise vested shall immediately vest in full so that Optionee (or the personal representative of Optionee’s estate or the person or persons to whom the
option is transferred upon Optionee’s death or to whom the option is transferred during Optionee’s lifetime in accordance with the provisions of Paragraph 3) shall have the right to exercise this option for any or all of the Option Shares
as fully-vested shares of Common Stock at any time prior to the earlier of (i) the expiration of the twelve (12)-month period measured from the date of Optionee’s cessation of Board service or (ii) the specified Expiration Date.

  
 (iv) Upon Optionee’s
cessation of Board service for any reason other than death or Permanent Disability, this option shall immediately terminate and cease to be outstanding with respect to any and all Option Shares in which Optionee is not otherwise at that time vested
in accordance with the normal Vesting Schedule set forth in the Grant Notice or the special vesting acceleration provisions of Paragraph 6 or 7 below. 
  

6. Corporate Transaction. 
  

(a) In the event of a Corporate Transaction, all Option Shares at the time subject to this option but not otherwise vested shall
automatically vest so that this option shall, immediately prior to the specified effective date for the Corporate Transaction, become fully exercisable for all of the Option Shares at the time subject to this option and may be exercised for all or
any portion of such shares as fully-vested shares of Common Stock. Immediately following the consummation of the Corporate Transaction, this option shall terminate and cease to be outstanding, except to the extent assumed by the successor
corporation or its parent company. 
  
 (b) If this
option is assumed in connection with a Corporate Transaction, then this option shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to Optionee
in consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate Transaction, and appropriate adjustments shall also be made to the Exercise Price, provided the aggregate Exercise Price shall
remain the same. 
  
 7. Change in
Control/Hostile Take-Over. 
  
 (a) All
Option Shares subject to this option at the time of a Change in Control but not otherwise vested shall automatically vest so that this option shall, immediately prior to the effective date of such Change in Control, become fully exercisable for all
of the Option Shares at the time subject to this option and may be exercised for all or any portion of such shares as fully-vested shares of Common Stock. This option shall remain exercisable for such fully-vested Option Shares until the
earliest to occur of (i) the specified Expiration Date, (ii) the sooner termination of this option in accordance with Paragraph 5 or 6 or (iii) the surrender of this option under Paragraph 7(b). 

 

 3 

 (b) Optionee shall have an unconditional right (exercisable during the thirty (30)-day
period immediately following the consummation of a Hostile Take-Over) to surrender this option to the Corporation in exchange for a cash distribution from the Corporation in an amount equal to the excess of (i) the Take-Over Price of the Option
Shares at the time subject to the surrendered option (whether or not those Option Shares are otherwise at the time vested) over (ii) the aggregate Exercise Price payable for such shares. This Paragraph 7(b) limited stock appreciation right shall in
all events terminate upon the expiration or sooner termination of the option term and may not be assigned or transferred by Optionee. 
  

(c) To exercise the Paragraph 7(b) limited stock appreciation right, Optionee must, during the applicable thirty (30)-day exercise
period, provide the Corporation with written notice of the option surrender in which there is specified the number of Option Shares as to which the option is being surrendered. Such notice must be accompanied by the return of Optionee’s copy of
this Agreement, together with any written amendments to such Agreement. The cash distribution shall be paid to Optionee within five (5) business days following such delivery date. Such option surrender and cash distribution has been pre-approved by
the Corporation’s shareholders in connection with their approval of the Plan, and no additional approval of the Plan Administrator or the Board shall be required at the time of the actual option surrender and cash distribution. Upon receipt of
such cash distribution, this option shall be cancelled with respect to the shares subject to the surrendered option (or the surrendered portion), and Optionee shall cease to have any further right to acquire those Option Shares under this Agreement.
The option shall, however, remain outstanding for the balance of the Option Shares (if any) in accordance with the terms and provisions of this Agreement, and the Corporation shall accordingly issue a new stock option agreement (substantially in the
same form as this Agreement) for those remaining Option Shares. 
  

8. Adjustment in Option Shares. Should any change be made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration, appropriate adjustments shall be made to (i) the number and/or
class of securities subject to this option and (ii) the Exercise Price in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder; provided, however, that the aggregate Exercise Price shall remain the same.

  
 9. Shareholder Rights. The holder
of this option shall not have any shareholder rights with respect to the Option Shares until such person shall have exercised the option, paid the Exercise Price and become a holder of record of the purchased shares. 

 
 10. Manner of Exercising Option. 

 
 (a) In order to exercise this option for all or any part of
the Option Shares for which the option is at the time exercisable, Optionee or, in the case of exercise after Optionee’s death, Optionee’s executor, administrator, heir or legatee, as the case may be, must take the following actions:

  

 4 

 (i) To the extent the option is exercised for vested Option Shares, the
Secretary of the Corporation shall be provided with written notice of the option exercise (the “Exercise Notice”) in substantially the form of Exhibit I attached hereto, in which there is specified the number of vested Option Shares to be
purchased under the exercised option. To the extent that the option is exercised for one or more unvested Option Shares, Optionee (or other person exercising the option) shall deliver to the Secretary of the Corporation a Purchase Agreement for
those unvested Option Shares. 
  

(ii) The Exercise Price for the purchased shares shall be paid in one or more of the following alternative forms:

  
 • cash or check made
payable to the Corporation’s order; or 
  

• shares of Common Stock held by Optionee (or any other person or persons exercising the option) for the requisite
period necessary to avoid a charge to the Corporation’s earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date; or 
  

• to the extent the option is exercised for vested Option Shares, through a special sale and remittance procedure
pursuant to which Optionee shall provide irrevocable written instructions (A) to a Optionee-designated brokerage firm to effect the immediate sale of the vested shares purchased under the option and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate Exercise Price payable for those shares plus the applicable Federal, state and local income taxes required to be withheld by the Corporation by reason of such exercise and (B)
to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale. 
  

(iii) Appropriate documentation evidencing the right to exercise this option shall be furnished the Corporation if the
person or persons exercising the option is other than Optionee. 
  

(iv) Appropriate arrangement must be made with the Corporation for the satisfaction of all Federal, state and local
income tax withholding requirements applicable to the option exercise. 
  

(b) Except to the extent the sale and remittance procedure specified above is utilized in connection with the exercise of the option for
vested Option Shares, payment of the Exercise Price for the purchased shares must accompany the Exercise Notice or Purchase Agreement delivered to the Corporation in connection with the option exercise. 

 

 5 

 (c) As soon as practical after the Exercise Date, the Corporation shall issue to or on
behalf of Optionee (or any other person or persons exercising this option) a certificate or certificates representing the purchased Option Shares. To the extent any such Option Shares are unvested, the certificates for those Option Shares shall be
endorsed with an appropriate legend evidencing the Corporation’s repurchase rights and may be held in escrow with the Corporation until such shares vest. 
  

(d) In no event may this option be exercised for fractional shares. 

 
 11. No Impairment of Rights. This Agreement
shall not in any way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise make changes in its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets. In addition, nothing in this Agreement shall in any way be construed or interpreted so as to affect adversely or otherwise impair the right of the Corporation or the shareholders to remove Optionee from the Board at any time in
accordance with the provisions of applicable law. 
  

12. Compliance with Laws and Regulations. 
  

 (a) The exercise of this option and the issuance of the Option Shares upon such exercise shall be subject to compliance by
the Corporation and Optionee with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange (or the Nasdaq National Market, if applicable) on which the Common Stock may be listed for trading at the
time of such exercise and issuance. 
  
 (b) The
inability of the Corporation to obtain approval from any regulatory body having authority deemed by the Corporation to be necessary to the lawful issuance and sale of any Common Stock pursuant to this option shall relieve the Corporation of any
liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained. However, the Corporation shall use its best efforts to obtain all such applicable approvals. 

 
 13. Successors and Assigns. Except to the
extent otherwise provided in Paragraph 3 or 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and Optionee, Optionee’s assigns and the legal representatives,
heirs and legatees of Optionee’s estate. 
  
 14.
Construction/Governing Law. This Agreement and the option evidenced hereby are made and granted pursuant to the automatic option grant program in effect under the Plan and are in all respects limited by and subject to the express terms
and provisions of that program. The interpretation, performance, and enforcement of this Agreement shall be governed by the laws of the State of California without resort to that State’s conflict-of-laws rules. 

 

 6 

 15. Notices. Any notice required to be given or delivered to the Corporation
under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices. Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the address
indicated below Optionee’s signature line on the Grant Notice. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified. 

 

 7 

 EXHIBIT I 

 
 NOTICE OF EXERCISE 

 
 I hereby notify Cisco Systems, Inc. (the
“Corporation”) that I elect to purchase              shares of the Corporation’s Common Stock (the “Purchased Shares”) at the option exercise price of
$             per share (the “Exercise Price”) pursuant to that certain option (the “Option”) granted to me pursuant to the automatic option grant program under
the Corporation’s 1996 Stock Incentive Plan on                     ,
            . 
  

Concurrently with the delivery of this Exercise Notice to the Secretary of the Corporation, I shall hereby pay to the Corporation the
Exercise Price for the Purchased Shares in accordance with the provisions of my agreement with the Corporation evidencing the Option and shall deliver whatever additional documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker/dealer sale and remittance procedure specified in my agreement to effect payment of the Exercise Price for any Purchased Shares in which I am vested at the time of exercise. 

 

                    ,
             
 Date 

 

					
	 	 	
                  
                                         
                                         
                 

	 	 	Optionee
		
	 	 	
                  
                                         
                                         
                 

			
	 	 	Address:	 	  

                  
                                         
                                         

	 	 	  

                  
                                         
                                         
                 

		
	 Print name in exact manner

it is to appear on the

stock certificate:
	 	  

                  
                                         
                                         
                 

		
	 Address to which certificate

is to be sent, if different

from address above:
	 	  

                  
                                         
                                         
                 

	 	 	  

                  
                                         
                                         
                 

		
	 Social Security Number:
	 	  

                  
                                         
                                         
                 

 APPENDIX 

 
 The following definitions shall be in effect under the
Agreement: 
  
 A. Agreement shall mean
this Automatic Stock Option Agreement. 
  
 B.
Board shall mean the Corporation’s Board of Directors. 
  

C. Change in Control shall mean a change in ownership or control of the Corporation effected through either of the following
transactions: 
  
 (i) the
acquisition, directly or indirectly, by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than thirty-five percent (35%) of the total combined voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation’s shareholders which the Board does not recommend such shareholders to accept, or 
  

(ii) a change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a
majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected
or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination. 

 
 D. Code shall mean the Internal Revenue Code of
1986, as amended. 
  
 E. Common Stock
shall mean the Corporation’s common stock. 
  

F. Corporate Transaction shall mean either of the following shareholder-approved transactions to which the Corporation is a
party: 
  
 (i) a merger or
consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding securities are transferred to a person or persons different from the persons holding those securities
immediately prior to such transaction, or 
  

(ii) the sale, transfer or other disposition of all or substantially all of the Corporation’s assets in complete
liquidation or dissolution of the Corporation. 
  

 A-1 

 G. Corporation shall mean Cisco Systems, Inc., a California corporation.

  
 H. Exercise Date shall mean the
date on which the option shall have been exercised in accordance with Paragraph 10 of the Agreement. 
  

I. Exercise Price shall mean the exercise price payable per share as specified in the Grant Notice. 

 
 J. Expiration Date shall mean the date on
which the option term expires as specified in the Grant Notice. 
  

K. Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with the following
provisions: 
  
 (i) If the Common
Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as the price is reported on the Nasdaq National Market. If there is no
closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. 

 
 (ii) If the Common Stock is at the time
listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock,
as such price is officially quoted in the composite tape of transactions on such exchange. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists. 
  

L. Grant Date shall mean the date of grant of the option as specified in the Grant Notice. 

 
 M. Grant Notice shall mean the Notice of Grant
of Automatic Stock Option accompanying this Agreement, pursuant to which Optionee has been informed of the basic terms of the option evidenced hereby. 
  

N. Hostile Take-Over shall mean the acquisition, directly or indirectly, by any person or related group of persons (other
than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than
thirty five percent (35%) of the total combined voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer made directly to the Corporation’s shareholders which the Board does not recommend such
shareholders to accept. 
  
 O. 1934 Act
shall mean the Securities Exchange Act of 1934, as amended. 
  

 A-2 

 P. Non-Statutory Option shall mean an option not intended to satisfy the
requirements of Code Section 422. 
  
 Q. Option
Shares shall mean the number of shares of Common Stock subject to the option. 
  

R. Optionee shall mean the person to whom the option is granted as specified in the Grant Notice. 

 
 S. Permanent Disability shall mean the
inability of Optionee to perform his or her usual duties as a Board member by reason of any medically determinable physical or mental impairment which is expected to result in death or has lasted or can be expected to last for a continuous period of
twelve (12) months or more. 
  
 T. Plan
shall mean the Corporation’s 1996 Stock Incentive Plan. 
  

U. Purchase Agreement shall mean the stock purchase agreement (in form and substance satisfactory to the Corporation) which
must be executed at the time the option is exercised for unvested Option Shares and which will accordingly (i) grant the Corporation the right to repurchase, at the Exercise Price, any and all of those Option Shares in which Optionee is not
otherwise vested at the time of his or her cessation of service as a Board member and (ii) preclude the sale, transfer or other disposition of any of the Option Shares purchased under such agreement while those Option Shares remain subject to the
repurchase right. 
  
 V. Stock Exchange
shall mean the American Stock Exchange or the New York Stock Exchange. 
  

W. Take-Over Price shall mean the greater of (i) the Fair Market Value per share of Common Stock on the date the
option is surrendered to the Corporation in connection with a Hostile Take-Over or (ii) the highest reported price per share of Common Stock paid by the tender offeror in effecting the Hostile Take-Over. 

 
 X. Vesting Schedule shall mean the vesting
schedule specified in the Grant Notice, pursuant to which Optionee will vest in the Option Shares in one or more installments over his or her period of Board service, subject to acceleration in accordance with the provisions of the Agreement.

  

 A-3 

 INITIAL GRANT 

NON-EMPLOYEE DIRECTOR 
  

CISCO SYSTEMS, INC. 

NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR 

DISCRETIONARY STOCK OPTION 
  

Notice is hereby given of the following option grant (the “Option”) to purchase shares of the Common Stock of Cisco Systems,
Inc. (the “Corporation”): 
  

Optionee:
                                         
                                         
                     
  

Grant Date:
                                         
                                         
                   
  

Exercise Price:
$                     per share 
  

Number of Option Shares:
                     shares 
  

Expiration Date:
                                         
                                         
           
  

Type of Option: Non-Statutory Stock Option 

 
 Date Exercisable: Immediately Exercisable 

 
 Vesting Schedule: The Option Shares shall initially
be unvested and subject to repurchase by the Corporation at the Exercise Price paid per share. Optionee shall acquire a vested interest in, and the Corporation’s repurchase right shall accordingly lapse with respect to, the Option Shares in a
series of four (4) successive equal annual installments upon the Optionee’s completion of each year of service as a member of the Corporation’s Board of Directors (the “Board”) over the four (4)-year period measured from the
Grant Date. In no event shall any additional Option Shares vest after Optionee’s cessation of Board service. 
  

Optionee understands and agrees that the Option is granted subject to and in accordance with the terms of the Cisco Systems, Inc. 1996
Stock Incentive Plan (the “Plan”). Optionee further agrees to be bound by the terms of the Plan and the terms of the Option as set forth in the Discretionary Stock Option Agreement attached hereto as Exhibit A. 

 
 Optionee hereby acknowledges receipt of a copy of the
official prospectus for the Plan in the form attached hereto as Exhibit B. A copy of the Plan is available upon request made to the Corporate Secretary at the Corporation’s principal offices. 

 REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL UNVESTED OPTION SHARES ACQUIRED
UPON THE EXERCISE OF THE OPTION SHALL NOT BE TRANSFERABLE AND SHALL BE SUBJECT TO REPURCHASE BY THE CORPORATION, AT THE EXERCISE PRICE PAID PER SHARE, UPON OPTIONEE’S TERMINATION OF SERVICE AS A MEMBER OF THE CORPORATION’S BOARD OF
DIRECTORS PRIOR TO VESTING IN THOSE SHARES. THE TERMS AND CONDITIONS OF SUCH REPURCHASE RIGHT SHALL BE SPECIFIED IN A STOCK PURCHASE AGREEMENT, IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION, EXECUTED BY OPTIONEE AT THE TIME OF THE OPTION
EXERCISE. 
  
 No Impairment of Rights.
Nothing in this Notice or in the attached Discretionary Stock Option Agreement or the Plan shall interfere with or otherwise restrict in any way the rights of the Corporation or the Corporation’s shareholders to remove Optionee from the Board
at any time in accordance with the provisions of applicable law. 
  

Definitions. All capitalized terms in this Notice shall have the meaning assigned to them in this Notice or in the attached
Discretionary Stock Option Agreement. 
  
 DATED:
                    ,          

 

			
	CISCO SYSTEMS, INC.
		
	By:	 	  

                  
                                         
                                    

	Title:	 	  

                  
                                         
                                    

	  

                  
                                         
                                         
   

	
	OPTIONEE
		
	Address:	 	  

                  
                                         
                                    

	  

                  
                                         
                                         
   

  
 ATTACHMENTS

 Exhibit A – Discretionary Stock Option Agreement 

Exhibit B- Plan Summary and Prospectus 
  

 2 

 ANNUAL GRANT 

NON-EMPLOYEE DIRECTOR 
  

CISCO SYSTEMS, INC. 

NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR 

DISCRETIONARY STOCK OPTION 
  

Notice is hereby given of the following option grant (the “Option”) to purchase shares of the Common Stock of Cisco Systems,
Inc. (the “Corporation”): 
  

Optionee:
                                         
                                         
               
  

Grant Date:
                                         
                                         
             
  

Exercise Price:
$                     per share 
  

Number of Option Shares:
                     shares 
  

Expiration Date:
                                         
                                         
     
  
 Type of
Option: Non-Statutory Stock Option 
  
 Date
Exercisable: Immediately Exercisable 
  

Vesting Schedule: The Option Shares shall initially be unvested and subject to repurchase by the Corporation at the Exercise Price
paid per share. Optionee shall acquire a vested interest in, and the Corporation’s repurchase right shall accordingly lapse with respect to, the Option Shares in a series of two (2) successive equal annual installments upon Optionee’s
completion of each year of service as a member of the Corporation’s Board of Directors (the “Board”) over the two (2)-year period measured from the Grant Date. In no event shall any additional Option Shares vest after Optionee’s
cessation of Board service. 
  
 Optionee understands
and agrees that the Option is granted subject to and in accordance with the terms of the Cisco Systems, Inc. 1996 Stock Incentive Plan (the “Plan”). Optionee further agrees to be bound by the terms of the Plan and the terms of the Option
as set forth in the Discretionary Stock Option Agreement attached hereto as Exhibit A. 
  

Optionee hereby acknowledges receipt of a copy of the official prospectus for the Plan in the form attached hereto as Exhibit B. A
copy of the Plan is available upon request made to the Corporate Secretary at the Corporation’s principal offices. 
  

REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL UNVESTED OPTION SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL NOT BE
TRANSFERABLE AND SHALL BE SUBJECT TO REPURCHASE BY THE CORPORATION, AT THE EXERCISE PRICE PAID PER SHARE, UPON OPTIONEE’S TERMINATION OF SERVICE AS A MEMBER OF THE CORPORATION’S BOARD OF DIRECTORS PRIOR TO VESTING IN THOSE

 
SHARES. THE TERMS AND CONDITIONS OF SUCH REPURCHASE RIGHT SHALL BE SPECIFIED IN A STOCK PURCHASE AGREEMENT, IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION, EXECUTED BY OPTIONEE AT THE TIME
OF THE OPTION EXERCISE. 
  
 No Impairment of
Rights. Nothing in this Notice or in the attached Discretionary Stock Option Agreement or the Plan shall interfere with or otherwise restrict in any way the rights of the Corporation or the Corporation’s shareholders to remove Optionee from
the Board at any time in accordance with the provisions of applicable law. 
  

Definitions. All capitalized terms in this Notice shall have the meaning assigned to them in this Notice or in the attached
Discretionary Stock Option Agreement. 
  
 DATED:
                    ,          

 

			
	CISCO SYSTEMS, INC.
		
	 By:
	 	
                  
                                         
                           

	 Title:
	 	  

                  
                                         
                           

	
	
                        
                                         
                                      

	
	OPTIONEE
		
	 Address:
	 	  

                  
                                         
                           

	  

                  
                                         
                                         
   

  
 ATTACHMENTS

 Exhibit A – Discretionary Stock Option Agreement 

Exhibit B - Plan Summary and Prospectus 
  

 2 

 NON-EMPLOYEE DIRECTOR 

 
 CISCO SYSTEMS, INC. 

DISCRETIONARY STOCK OPTION AGREEMENT 
  

RECITALS 
  

A. The Board has adopted the Plan for the purpose of retaining the services of selected employees, non-employee members of the Board or of
the board of directors of any Parent or Subsidiary and consultants and other independent advisors who provide services to the Corporation (or any Parent or Subsidiary). 
  

 B. Optionee is an eligible non-employee Board member, and this Agreement is executed pursuant to, and is intended to carry out
the purposes of, the Plan in connection with the Corporation’s grant of a stock option to purchase shares of the Corporation’s Common Stock under the Plan. 

 
 C. The granted option is intended to be a non-statutory
option which does not meet the requirements of Section 422 of the Internal Revenue Code. 
  

D. All capitalized terms in this Agreement, to the extent not otherwise defined in the Agreement, shall have the meaning assigned to them
in the attached Appendix. 
  
 NOW, THEREFORE,
it is hereby agreed as follows: 
  
 1. Grant
of Option. The Corporation hereby grants to Optionee, as of the Grant Date, a Non-Statutory Option to purchase up to the number of Option Shares specified in the Grant Notice. The Option Shares shall be purchasable from time to time during
the option term specified in Paragraph 2 at the Exercise Price. 
  

2. Option Term. This option shall have a maximum term of nine (9) years measured from the Grant Date and shall accordingly
expire at the close of business on the Expiration Date, unless sooner terminated in accordance with Paragraph 5, 6 or 7. 
  

3. Limited Transferability. This option may, in connection with the Optionee’s estate plan, be assigned in whole or in
part during Optionee’s lifetime to one or more members of the Optionee’s immediate family or to a trust established for the exclusive benefit of one or more such family members. The assigned portion shall be exercisable only by the person
or persons who acquire a proprietary interest in the option pursuant to such assignment. The terms applicable to the assigned portion shall be the same as those in effect for this option immediately prior to such assignment and shall be set forth in
such documents issued to the assignee as the Corporation may deem appropriate. Should the Optionee die while holding this option, then this option shall be transferred in accordance with Optionee’s will or the laws of descent and distribution.

  
 4. Exercisability/Vesting.

  

	 	(a)	 This option shall be immediately exercisable for any or all of the Option Shares, whether or not the Option Shares are vested in

	 	 
accordance with the Vesting Schedule set forth in the Grant Notice, and shall remain so exercisable until the Expiration Date or the sooner termination of the option term under Paragraph 5, 6 or
7. 

  

	 	(b)	Optionee shall, in accordance with the Vesting Schedule set forth in the Grant Notice, vest in the Option Shares in a series of installments over his or her period of
Board service. Vesting in the Option Shares may be accelerated pursuant to the provisions of Paragraph 5, 6 or 7. In no event, however, shall any additional Option Shares vest following Optionee’s cessation of service as a Board member.

  
 5. Cessation of Board
Service. Should Optionee’s service as a Board member cease while this option remains outstanding, then the option term specified in Paragraph 2 shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date
in accordance with the following provisions: 
  

(i) Should Optionee cease to serve as a Board member for any reason (other than death, Permanent Disability or Misconduct)
while this option is outstanding, then the period for exercising this option shall be reduced to a twelve (12)-month period commencing with the date of such cessation of Board service, but in no event shall this option be exercisable at any time
after the Expiration Date. During such limited period of exercisability, this option may not be exercised in the aggregate for more than the number of Option Shares (if any) in which Optionee is vested on the date of his or her cessation of Board
service. Upon the earlier of (i) the expiration of such twelve (12)-month period or (ii) the specified Expiration Date, the option shall terminate and cease to be exercisable with respect to any vested Option Shares for which the option has
not been exercised. 
  
 (ii) Should
Optionee die during the twelve (12)-month period following his or her cessation of Board service and hold this option at the time of his or her death, then the personal representative of Optionee’s estate or the person or persons to whom the
option is transferred pursuant to Optionee’s will or in accordance with the laws of descent and distribution shall have the right to exercise this option for any or all of the Option Shares in which Optionee is vested at the time of
Optionee’s cessation of Board service (less any Option Shares purchased by Optionee after such cessation of Board service but prior to death). Such right of exercise shall terminate, and this option shall accordingly cease to be exercisable for
such vested Option Shares, upon the earlier of (i) the expiration of the twelve (12)-month period measured from the date of Optionee’s cessation of Board service or (ii) the specified Expiration Date of the option term. Should this
option be transferred during Optionee’s lifetime in accordance with the provisions of Paragraph 3, then the transferee(s) shall have the same limited time period in which to exercise this option for any or all of those vested Option Shares.

  

 2 

 (iii) Should Optionee cease service as a Board member by reason of death or
Permanent Disability, then all Option Shares at the time subject to this option but not otherwise vested shall immediately vest in full so that Optionee (or the personal representative of Optionee’s estate or the person or persons to whom the
option is transferred upon Optionee’s death or to whom the option is transferred during Optionee’s lifetime in accordance with the provisions of Paragraph 3) shall have the right to exercise this option for any or all of the Option Shares
as fully-vested shares of Common Stock at any time prior to the earlier of (i) the expiration of the twelve (12)-month period measured from the date of Optionee’s cessation of Board service or (ii) the specified Expiration Date.

  
 (iv) Upon Optionee’s
cessation of Board service for any reason other than death or Permanent Disability, this option shall immediately terminate and cease to be outstanding with respect to any and all Option Shares in which Optionee is not otherwise at that time vested
in accordance with the normal Vesting Schedule set forth in the Grant Notice or the special vesting acceleration provisions of Paragraph 6 or 7 below. 
  

(v) Should Optionee cease service as a Board member by reason of Misconduct, then this option shall terminate immediately
and cease to remain outstanding. 
  
 6.
Corporate Transaction. 
  
 (a) In the
event of a Corporate Transaction, all Option Shares at the time subject to this option but not otherwise vested shall automatically vest so that this option shall, immediately prior to the specified effective date for the Corporate Transaction,
become fully-exercisable for all of the Option Shares at the time subject to this option and may be exercised for all or any portion of such shares as fully-vested shares of Common Stock. No such acceleration of this option, however, shall occur if
and to the extent: (i) this option is, in connection with the Corporate Transaction, either to be assumed by the successor corporation (or parent thereof) or to be replaced with a comparable option to purchase shares of the capital stock of the
successor corporation (or parent thereof) or (ii) this option is to be replaced with a cash incentive program of the successor corporation which preserves the spread existing on the unvested Option Shares at the time of the Corporate Transaction
(the excess of the Fair Market Value of those Option Shares over the aggregate Exercise Price payable for such shares) and provides for subsequent pay-out in accordance with the same option Vesting Schedule set forth in the Grant Notice. The
determination of option comparability under clause (i) shall be made by the Plan Administrator, and such determination shall be final, binding and conclusive. 
  

(b) Immediately following the Corporate Transaction, this option shall terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or parent thereof) in connection with the Corporate Transaction. 
  

(c) If this option is assumed in connection with a Corporate Transaction, then this option shall be appropriately adjusted, immediately
after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to 
  

 3 

 
Optionee in consummation of such Corporate Transaction had the option been exercised immediately prior to such Corporate Transaction, and appropriate adjustments shall also be made to the
Exercise Price, provided the aggregate Exercise Price shall remain the same. 
  

7. Change in Control/Hostile Take-Over. 

 
 (a) All Option Shares subject to this option at the time of
a Change in Control but not otherwise vested shall automatically vest so that this option shall, immediately prior to the effective date of such Change in Control, become fully exercisable for all of the Option Shares at the time subject to this
option and may be exercised for all or any portion of such shares as fully-vested shares of Common Stock. This option shall remain exercisable for such fully-vested Option Shares until the earliest to occur of (i) the specified Expiration
Date, (ii) the sooner termination of this option in accordance with Paragraph 5 or 6 or (iii) the surrender of this option under Paragraph 7(b). 
  

(b) Optionee shall have an unconditional right (exercisable during the thirty (30)-day period immediately following the consummation of a
Hostile Take-Over) to surrender this option to the Corporation in exchange for a cash distribution from the Corporation in an amount equal to the excess of (i) the Take-Over Price of the Option Shares at the time subject to the surrendered option
(whether or not those Option Shares are otherwise at the time vested) over (ii) the aggregate Exercise Price payable for such shares. This Paragraph 7(b) limited stock appreciation right shall in all events terminate upon the expiration or sooner
termination of the option term and may not be assigned or transferred by Optionee. 
  

(c) To exercise the Paragraph 7(b) limited stock appreciation right, Optionee must, during the applicable thirty (30)-day exercise
period, provide the Corporation with written notice of the option surrender in which there is specified the number of Option Shares as to which the option is being surrendered. Such notice must be accompanied by the return of Optionee’s copy of
this Agreement, together with any written amendments to such Agreement. The cash distribution shall be paid to Optionee within five (5) business days following such delivery date. Upon receipt of such cash distribution, this option shall be
cancelled with respect to the shares subject to the surrendered option (or the surrendered portion), and Optionee shall cease to have any further right to acquire those Option Shares under this Agreement. The option shall, however, remain
outstanding for the balance of the Option Shares (if any) in accordance with the terms and provisions of this Agreement, and the Corporation shall accordingly issue a new stock option agreement (substantially in the same form as this Agreement) for
those remaining Option Shares. 
  
 8.
Adjustment in Option Shares. Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock
as a class without the Corporation’s receipt of consideration, appropriate adjustments shall be made to (i) the number and/or class of securities subject to this option and (ii) the Exercise Price in order to reflect such change and thereby
preclude a dilution or enlargement of benefits hereunder; provided, however, that the aggregate Exercise Price shall remain the same. 
  

 4 

 9. Shareholder Rights. The holder of this option shall not have any
shareholder rights with respect to the Option Shares until such person shall have exercised the option, paid the Exercise Price and become a holder of record of the purchased shares. 

 
 10. Manner of Exercising Option. 

 
 (a) In order to exercise this option for all or any part of
the Option Shares for which the option is at the time exercisable, Optionee or, in the case of exercise after Optionee’s death, Optionee’s executor, administrator, heir or legatee, as the case may be, must take the following actions:

  
 (i) To the extent the option is
exercised for vested Option Shares, the Secretary of the Corporation shall be provided with written notice of the option exercise (the “Exercise Notice”) in substantially the form of Exhibit I attached hereto, in which there is specified
the number of vested Option Shares to be purchased under the exercised option. To the extent that the option is exercised for one or more unvested Option Shares, Optionee (or other person exercising the option) shall deliver to the Secretary of the
Corporation a Purchase Agreement for those unvested Option Shares. 
  

(ii) The Exercise Price for the purchased shares shall be paid in one or more of the following alternative forms:

  
 • cash or check made
payable to the Corporation’s order; or 
  

• shares of Common Stock held by Optionee (or any other person or persons exercising the option) for the requisite
period necessary to avoid a charge to the Corporation’s earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date; or 
  

• to the extent the option is exercised for vested Option Shares, through a special sale and remittance procedure
pursuant to which Optionee shall provide irrevocable written instructions (A) to a Optionee-designated brokerage firm to effect the immediate sale of the vested shares purchased under the option and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate Exercise Price payable for those shares plus the applicable Federal, state and local income taxes required to be withheld by the Corporation by reason of such exercise and (B)
to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale. 
  

(iii) Appropriate documentation evidencing the right to exercise this option shall be furnished to the Corporation if the
person or persons exercising the option is other than Optionee. 
  

 5 

 (iv) Appropriate arrangements must be made with the Corporation for the
satisfaction of all Federal, state and local income tax withholding requirements applicable to the option exercise. 
  

(b) Except to the extent the sale and remittance procedure specified above is utilized in connection with the exercise of the option for
vested Option Shares, payment of the Exercise Price for the purchased shares must accompany the Exercise Notice or Purchase Agreement delivered to the Corporation in connection with the option exercise. 

 
 (c) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or persons exercising this option) a certificate or certificates representing the purchased Option Shares. To the extent any such Option Shares are unvested, the certificates
for those Option Shares shall be endorsed with an appropriate legend evidencing the Corporation’s repurchase rights and may be held in escrow with the Corporation until such shares vest. 

 
 (d) In no event may this option be exercised for fractional
shares. 
  
 11. No Impairment of
Rights. This Agreement shall not in any way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise make changes in its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets. In addition, nothing in this Agreement shall in any way be construed or interpreted so as to affect adversely or otherwise impair the right of the Corporation or the shareholders to remove Optionee
from the Board at any time in accordance with the provisions of applicable law. 
  

12. Compliance with Laws and Regulations. 
  

 (a) The exercise of this option and the issuance of the Option Shares upon such exercise shall be subject to compliance by
the Corporation and Optionee with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange (or the Nasdaq National Market, if applicable) on which the Common Stock may be listed for trading at the
time of such exercise and issuance. 
  
 (b) The
inability of the Corporation to obtain approval from any regulatory body having authority deemed by the Corporation to be necessary to the lawful issuance and sale of any Common Stock pursuant to this option shall relieve the Corporation of any
liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained. However, the Corporation shall use its best efforts to obtain all such applicable approvals. 

 
 13. Successors and Assigns. Except to the
extent otherwise provided in Paragraph 3 or 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and Optionee, Optionee’s assigns and the legal representatives,
heirs and legatees of Optionee’s estate. 
  

 6 

 14. Construction/Governing Law. This Agreement and the option evidenced hereby
are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. The interpretation, performance, and enforcement of this Agreement shall be governed by the laws of the State of California without
resort to that State’s conflict-of-laws rules. 
  

15. Notices. Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in
writing and addressed to the Corporation at its principal corporate offices. Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the address indicated below Optionee’s signature line on the
Grant Notice. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified. 

 

 7 

 EXHIBIT I 

 
 NOTICE OF EXERCISE 

 
 I hereby notify Cisco Systems, Inc. (the
“Corporation”) that I elect to purchase              shares of the Corporation’s Common Stock (the “Purchased Shares”) at the option exercise price of
$              per share (the “Exercise Price”) pursuant to that certain option (the “Option”) granted to me under the Corporation’s 1996 Stock Incentive
Plan on              , 20    . 
  

Concurrently with the delivery of this Exercise Notice to the Secretary of the Corporation, I shall hereby pay to the Corporation the
Exercise Price for the Purchased Shares in accordance with the provisions of my agreement with the Corporation evidencing the Option and shall deliver whatever additional documents may be required by such agreement as a condition for exercise.
Alternatively, I may utilize the special broker/dealer sale and remittance procedure specified in my agreement to effect payment of the Exercise Price for any Purchased Shares in which I am vested at the time of exercise. 

 

                    ,
             
 Date 

 

					
	 	 	
                  
                                         
                                         
                 

	 	 	Optionee
	 	 	  

                  
                                         
                                         
                 

			
	 	 	Address:	 	  

                  
                                         
                                         

	 	 	  

                  
                                         
                                         
                 

	 Print name in exact manner
 it
is to appear on the
 stock certificate:
	 	
                  
                                         
                                         
                 

		
	 Address to which certificate

is to be sent, if different
 from address above:

	 	
                  
                                         
                                         
                 

	 	 	  

                  
                                         
                                         
                 

	Social Security Number:	 	  

                  
                                         
                                         
                 

 APPENDIX 
  

 The following definitions shall be in effect under the Agreement: 

 
 A. Agreement shall mean this Discretionary
Stock Option Agreement. 
  
 B. Board
shall mean the Corporation’s Board of Directors. 
  

C. Change in Control shall mean a change in ownership or control of the Corporation effected through either of the following
transactions: 
  
 (i) the
acquisition, directly or indirectly, by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than thirty-five percent (35%) of the total combined voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation’s shareholders which the Board does not recommend such shareholders to accept, or 
  

(ii) a change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a
majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected
or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination. 

 
 D. Code shall mean the Internal Revenue Code of
1986, as amended. 
  
 E. Common Stock
shall mean the Corporation’s common stock. 
  

F. Corporate Transaction shall mean either of the following shareholder-approved transactions to which the Corporation is a
party: 
  
 (i) a merger or
consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding securities are transferred to a person or persons different from the persons holding those securities
immediately prior to such transaction, or 
  

(ii) the sale, transfer or other disposition of all or substantially all of the Corporation’s assets in complete
liquidation or dissolution of the Corporation. 
  

 A-1 

 G. Corporation shall mean Cisco Systems, Inc., a California corporation.

  
 H. Exercise Date shall mean the
date on which the option shall have been exercised in accordance with Paragraph 10 of the Agreement. 
  

I. Exercise Price shall mean the exercise price payable per share as specified in the Grant Notice. 

 
 J. Expiration Date shall mean the date on which
the option term expires as specified in the Grant Notice. 
  

K. Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with the following
provisions: 
  
 (i) If the Common
Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as the price is reported on the Nasdaq National Market. If there is no
closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. 

 
 (ii) If the Common Stock is at the time
listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock,
as such price is officially quoted in the composite tape of transactions on such exchange. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists. 
  

L. Grant Date shall mean the date of grant of the option as specified in the Grant Notice. 

 
 M. Grant Notice shall mean the Notice of Grant
of Discretionary Stock Option accompanying this Agreement, pursuant to which Optionee has been informed of the basic terms of the option evidenced hereby. 
  

N. Hostile Take-Over shall mean the acquisition, directly or indirectly, by any person or related group of persons (other
than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than
thirty five percent (35%) of the total combined voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer made directly to the Corporation’s shareholders which the Board does not recommend such
shareholders to accept. 
  
 O.
Misconduct shall mean the commission of any act of fraud, embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by Optionee of confidential information or trade secrets of the Corporation (or any Parent or
Subsidiary), or any other intentional misconduct by Optionee adversely affecting the business or affairs of the Corporation 
  

 A-2 

 
(or any Parent or Subsidiary) in a material manner. The foregoing definition shall not be deemed to be inclusive of all the acts or omissions which the Corporation (or any Parent or Subsidiary)
may consider as grounds for the dismissal or discharge of Optionee or any other individual in the service of the Corporation (or any Parent or Subsidiary). 
  

P. 1934 Act shall mean the Securities Exchange Act of 1934, as amended. 

 
 Q. Non-Statutory Option shall mean an option
not intended to satisfy the requirements of Code Section 422. 
  

R. Option Shares shall mean the number of shares of Common Stock subject to the option. 

 
 S. Optionee shall mean the person to whom the
option is granted as specified in the Grant Notice. 
  

T. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the
Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. 
  
 U.
Permanent Disability shall mean the inability of Optionee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which is expected to result in death or has lasted or can be
expected to last for a continuous period of twelve (12) months or more. 
  

V. Plan shall mean the Corporation’s 1996 Stock Incentive Plan. 

 
 W. Purchase Agreement shall mean the stock
purchase agreement (in form and substance satisfactory to the Corporation) which must be executed at the time the option is exercised for unvested Option Shares and which will accordingly (i) grant the Corporation the right to repurchase, at the
Exercise Price, any and all of those Option Shares in which Optionee is not otherwise vested at the time of his or her cessation of service as a Board member and (ii) preclude the sale, transfer or other disposition of any of the Option Shares
purchased under such agreement while those Option Shares remain subject to the repurchase right. 
  

X. Stock Exchange shall mean the American Stock Exchange or the New York Stock Exchange. 

 
 Y. Subsidiary shall mean any corporation (other
than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
  

Z. Take-Over Price shall mean the greater of (i) the Fair Market Value per share of Common Stock on the date the
option is surrendered to the Corporation in connection with a 
  

 A-3 

 
Hostile Take-Over or (ii) the highest reported price per share of Common Stock paid by the tender offeror in effecting the Hostile Take-Over. 

 
 AA. Vesting Schedule shall mean the vesting
schedule specified in the Grant Notice, pursuant to which Optionee will vest in the Option Shares in one or more installments over his or her period of Board service, subject to acceleration in accordance with the provisions of the Agreement.

  

 A-4 

 CISCO SYSTEMS, INC. 

STOCK ISSUANCE AGREEMENT 
  

RECITALS 
  

This stock issuance agreement (this “Stock Issuance Agreement”) is made and entered into as of
                     by and between Cisco Systems, Inc., a California corporation having a principal place of business at 170 West Tasman
Drive, San Jose, California (the “Corporation”) and                     , an individual having a principal place of business at
                     (“Consultant”). 
  

A. Capitalized terms not defined in this Stock Issuance Agreement shall have the meanings assigned to such terms in the Corporation’s
1996 Stock Incentive Plan (the “Plan”). 
  

B. The Board has adopted the Plan for the purpose of retaining the services of selected employees, non-employee members of the Board or of
the board of directors of any Parent or Subsidiary and consultants and other independent advisors who provide services to the Corporation (or any Parent or Subsidiary). 
  

 C. Consultant is to render valuable services to the Corporation pursuant to the consulting agreement by and between the
Corporation and Consultant executed on                      (the “Consulting Agreement”), and this Stock Issuance Agreement is
executed pursuant to Article                      of, and is intended to carry out the purposes of, the Plan in connection with the
Corporation’s grant of a share right award to Consultant. 
  

NOW, THEREFORE, it is hereby agreed as follows: 

 
 1. GRANT OF SHARE RIGHT AWARD. In full satisfaction
of its obligation under Section              of the Consulting Agreement, the Corporation hereby grants to Consultant a share right award which entitles Consultant to receive
             shares of Common Stock as soon as practicable following each Issuance Date, in each case subject to Consultant having provided continuous service to the Corporation
pursuant to the Consulting Agreement through each such date. In no event will Consultant be issued any shares of Common Stock following Consultant’s termination of service pursuant to the Consulting Agreement. For purposes of this Stock
Issuance Agreement, “Issuance Date” shall mean                             . 

 
 2. NON-TRANSFERABILITY. This share right award shall
be neither transferable or assignable by Consultant. 
  

3. ADJUSTMENT IN SHARE RIGHT AWARD SHARES. If any change is made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s or its successor’s receipt of consideration, appropriate adjustments shall be made to
the number and/or class of securities in effect under the share right award made hereunder. Such adjustments are to be effected in a manner which shall preclude the enlargement or dilution of rights and benefits under such share right award.

 4. STOCKHOLDER RIGHTS. Consultant shall have full stockholder rights with respect to
any shares of Common Stock issued to Consultant hereunder. Accordingly, Consultant have the right to vote such shares and to receive any regular cash dividends paid on such shares. 

 
 5. CONSTRUCTION. This Stock Issuance Agreement and the
share right award evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All decisions of the Plan Administrator with respect to any question or issue arising under the
Plan or this Stock Issuance Agreement shall be conclusive and binding on all persons having an interest in this share right award. 
  

IN WITNESS WHEREOF, the parties have entered into this Stock Issuance Agreement as of the date first written above. 

 

					
	Corporation:	 	CISCO SYSTEMS, INC.
			
	 	 	By:	 	
                        
                                         
                                      

		
	Consultant:	 	
                        
                                         
                                         
        

  

 2 

  
 CISCO
SYSTEMS, INC. 
  
 VESTING ACCELERATION POLICY

 FOR 

DEATH AND TERMINAL ILLNESS 

AS 

AMENDED JULY 26, 2007 
  

Unless and until the Compensation & Management Development Committee of the Board of Directors of Cisco Systems, Inc. determines otherwise, the
following policy shall be applied to all equity awards issued under any equity plan maintained Cisco or any Cisco subsidiary, including equity awards and/or equity plans assumed by Cisco in connection with its acquisition of companies, and held by
any employee of Cisco or any Cisco subsidiary (each such award shall be referred to herein as an “equity award”), except to the extent that the application of such policy would be prohibited by the applicable equity plan, equity award
agreement or any applicable law, rule or regulation. 
  
 For purposes
of this policy: 
  

	 	•	 	 the value of stock options and stock appreciation rights is based on the difference between the exercise price of the equity awards and the closing
price of Cisco’s stock on the date of the employee’s death or terminal illness, as applicable, or if such day is not a trading day, the last trading day prior to the date of death or terminal illness, as applicable; and

  

	 	•	 	 the value of stock grants, stock units, and unvested shares previously acquired pursuant to equity awards (such shares are referred to herein as
“unvested equity award shares”) is based on the difference between the purchase price, if any, and the closing price of Cisco’s stock on the date of the employee’s death or terminal illness, as applicable, or if such day is not a
trading day, the last trading day prior to the date of death or terminal illness, as applicable. 

  

ACCELERATION UPON DEATH OF EMPLOYEE 
  

Upon the death of an employee, Cisco will accelerate the vesting of the employee’s outstanding equity awards and any unvested equity award shares up
to a specified limit based on the value of the equity awards and/or shares on the date of death. The limit on the amount of accelerated vesting is the greater of: (a) one-hundred percent (100%) of the unvested equity awards and/or unvested equity
award shares up to a total value of $10 million; or (b) up to one year of vesting from the date of death as to all unvested equity awards and/or unvested equity award shares. For example, if an employee held unvested options for 100,000 shares with
an exercise price of $1 which would vest in four annual installments of 25,000 shares, and the closing price of Cisco’s stock on the date of the employee’s death was $101, all 100,000 of the shares would become vested (100,000 shares x
$100 (the difference between $101 and $1) = $10,000,000). 
  

ACCELERATION UPON TERMINAL ILLNESS OF EMPLOYEE 
  

Upon the terminal illness of an employee, Cisco will accelerate the vesting of the employee’s outstanding equity awards and any unvested equity award
shares up to a specified limit based on the value of the equity awards and/or shares on the date of the terminal illness. An employee will be considered terminally ill upon the approval by Cisco’s employee life insurance provider of the
accelerated life insurance benefit which indicates 12 months or less to live. The date of terminal illness will be the date the determination is made by Cisco’s employee life insurance provider. The limit on the amount of accelerated vesting is
the greater of: (a) one-hundred percent (100%) of the unvested equity awards and/or unvested equity award shares up to a total value of $10 million; or (b) up to one year of vesting from the date of the terminal illness as to all unvested equity
awards and/or unvested equity award shares. For example, if an employee holds unvested options for 100,000 shares with an exercise price of $1 which would vest in four annual installments of 25,000 shares, and the closing price of Cisco’s stock
on the date that the employee is determined to be terminally ill was $101, all 100,000 of the shares would become vested (100,000 shares x $100 (the difference between $101 and $1) = $10,000,000). 

  
 CISCO
SYSTEMS, INC. 
  
 VESTING POLICY

 FOR 

LEAVES OF ABSENCE 
  

Unless and until the Compensation & Management Development Committee of the Board of Directors of Cisco Systems, Inc. determines otherwise, the
following policy shall be applied to all equity awards issued under any equity plan maintained Cisco or any Cisco subsidiary, including equity awards and/or equity plans assumed by Cisco in connection with its acquisition of companies, and held by
any employee of Cisco or any Cisco subsidiary (each such award shall be referred to herein as an “equity award”), except to the extent that the application of such policy would be prohibited by the applicable equity plan, equity award
agreement or any applicable law, rule or regulation. 
  
 90 DAYS
CONTINUED VESTING ON AUTHORIZED LEAVES OF ABSENCE 
  
 The
exercise or vesting schedule in effect for any outstanding equity award and any unvested shares previously acquired pursuant to any equity award (such shares referred to herein as “unvested equity award shares”) held by an employee at the
time of the employee’s commencement of an authorized leave of absence shall continue to vest and/or become exercisable in accordance with the vesting schedule set forth in the applicable equity award agreement during the period the employee
remains on such authorized leave of absence; provided that, in no event shall any employee be entitled to vest for more than 90 days of authorized leaves of absence during any rolling 12-month period (the “LOA Limit”). 

 
 If an employee exceeds the LOA Limit during any rolling 12-month period, the
unvested equity award shares held by such an employee shall be suspended immediately following the expiration of the LOA Limit and the equity award and any unvested equity shares shall not vest and/or become exercisable for any additional shares
during the remainder of the rolling 12-month period. 

 CISCO SYSTEMS, INC. 

 
 TRANSFER POLICY 

FOR 

DIVORCE 
  

Unless and until the Compensation & Management Development Committee of the Board of Directors of Cisco Systems, Inc. determines otherwise, the
following policy shall be applied to all equity awards issued under any equity plan maintained Cisco or any Cisco subsidiary, including equity awards and/or equity plans assumed by Cisco in connection with its acquisition of companies, and held by
any employee of Cisco or any Cisco subsidiary (each such award shall be referred to herein as an “equity award”), except to the extent that the application of such policy would be prohibited by the applicable equity plan, equity award
agreement or any applicable law, rule or regulation. 
  

PROHIBITION ON TRANSFER OF EQUITY AWARDS UPON DIVORCE 
  

Except as provided below, equity awards and any unvested shares acquired pursuant to equity awards shall not be anticipated, assigned, attached,
garnished, optioned, transferred or made subject to any creditor’s process in connection with the divorce of the holder of such equity award or shares. Equity awards and any unvested shares acquired pursuant to equity awards may be transferred
by an executive officer of Cisco only to the extent required by a domestic relations order, as defined by the Internal Revenue Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder, in settlement of marital property
rights by any court of competent jurisdiction.Fifth Supplemental Indenture

 Exhibit 4.1 

FIFTH SUPPLEMENTAL INDENTURE 

THIS FIFTH SUPPLEMENTAL INDENTURE, dated as of September 21, 2010 (this “Fifth Supplemental Indenture”), is by and between
NUCOR CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the “Company”), and THE BANK OF NEW YORK MELLON, a state banking corporation organized under the laws of the State of
New York, authorized to accept and execute trusts, as trustee (the “Trustee”). 
 WITNESSETH 

WHEREAS, pursuant to the Indenture dated as of January 12, 1999 between the Company and the Trustee (the “Original
Indenture”), the Company may from time to time issue and sell Debt Securities in one or more series, bearing such rates of interest, if any, maturing at such time or times and having such other provisions as shall be fixed as hereinafter
provided; 
 WHEREAS, the Company deems it advisable and in its best interests to issue and sell $600,000,000 aggregate
principal amount of its 4.125% Notes due 2022 (the “Notes”); 
 WHEREAS, the Company has duly authorized the execution
and delivery of an indenture in the form of this Fifth Supplemental Indenture in order to establish the form and terms of, and to provide for the creation and issuance of, the Notes, and all things necessary to make this Fifth Supplemental Indenture
a legal, binding and enforceable agreement, have been done and performed; 
 WHEREAS, all things necessary to make the Notes,
when executed by the Company and authenticated and delivered by the Trustee or any Authenticating Agent and issued upon the terms and subject to the conditions of the Indenture against payment therefore, the valid, binding and legal obligations of
the Company; 
 NOW, THEREFORE, THIS FIFTH SUPPLEMENTAL INDENTURE WITNESSETH that in consideration of the promises and of the
acceptance and purchase of the Notes by the Holders thereof, the Company covenants and agrees with the Trustee, for the benefit of all the present and future holders of the Notes, as follows: 

Section 1. Definitions. Terms used in this Fifth Supplemental Indenture and not defined herein shall have the respective meanings given
such terms in the Original Indenture. As used in this Fifth Supplemental Indenture, the following terms shall have the meanings indicated below: 

“Adjusted Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, plus 0.25%.

 “Business Day” means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions or trust companies in The City of New York (or other city in which the corporate trust office of the Trustee is located) are authorized by law, regulation or executive order to close.

 “Change of Control” means the occurrence of any of the following: (a) the consummation of any
transaction (including, without limitation, any merger or consolidation) resulting in any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) (other than the Company or one of its subsidiaries) becoming the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Voting Stock of the Company or other voting stock into which Voting Stock of the Company is reclassified, consolidated,
exchanged or changed, measured by voting power rather than the number of shares; (b) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in a transaction or a series of related
transactions, of all or substantially all of the assets of the Company and the assets of its subsidiaries, taken as a whole, to one or more “persons” (as that term is used in Section 13(d)(3) of the Exchange Act) (other than the
Company or one of its subsidiaries); or (c) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors. Notwithstanding the foregoing, a transaction shall not be considered a Change of
Control if (a) the Company becomes a direct or indirect wholly-owned subsidiary of a holding company and (b)(y) immediately following that transaction, the direct or indirect holders of the Voting Stock of the holding company are
substantially the same as the holders of Voting Stock of the Company immediately prior to that transaction or (z) immediately following that transaction no person is the beneficial owner, directly or indirectly, of more than 50% of the Voting
Stock of the holding company. 
 “Change of Control Triggering Event” means the occurrence of both a
Change of Control and a Rating Event. 
 “Comparable Treasury Issue” means, the United States Treasury
security selected by the Company’s choice of Banc of America Securities LLC, Citigroup Global Markets Inc. or J.P. Morgan Securities LLC, and its successors, or, if such firm is unwilling or unable to select the applicable Comparable Treasury
Issue, another Reference Treasury Dealer, as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues
of corporate debt securities of comparable maturity to the remaining term of the Notes to be redeemed. 

“Comparable Treasury Price” means, with respect to any redemption date, the average of the Reference Treasury
Dealer Quotations (as defined below) for that redemption date. 
  

 2 

 “Continuing Directors” means, as of any date of determination, any
member of our Board of Directors who (a) was a member of the Board of Directors on the date the Notes were issued or (b) was nominated for election, elected or appointed to the Board of Directors with the approval of a majority of the
continuing directors who were members of the Board of Directors at the time of such nomination, election or appointment (either by a specific vote or by approval of the proxy statement of the Company in which such member was named as a nominee for
election as a director, without objection to such nomination). 
 “Exchange Act” means the Securities
Exchange Act of 1934, as amended. 
 “Fifth Supplemental Indenture” means this Fifth Supplemental
Indenture between the Company and the Trustee, as amended and supplemented from time to time. 
 “Global
Note” means a Note issued in global form and deposited with or on behalf of the Depositary, substantially in the form of the Note attached hereto as Exhibit A. 

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and
BBB- (or the equivalent) by S&P, and the equivalent investment grade credit rating from any replacement rating agency or rating agencies selected by the Company. 

“Moody’s” means Moody’s Investors Service, Inc. 

“Rating Agencies” means (a) each of Moody’s and S&P; and (b) if either Moody’s or
S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the control of the Company, a “nationally recognized statistical rating organization” (within the meaning of Rule
15c3-1(c)(2)(vi)(F) under the Exchange Act) selected by the Company as a replacement rating agency for a former rating agency. 

“Rating Event” means the rating on the Notes is lowered by each of the Rating Agencies and the Notes are rated
below an Investment Grate Rating by each of the Rating Agencies on any day within the 60-day period (which 60-day period shall be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by any
of the Rating Agencies) after the earlier of (a) the occurrence of a Change of Control and (b) public notice of the particular Change of Control or the Company’s intention to effect a Change of Control. 

“Reference Treasury Dealer” means each of Banc of America Securities LLC, Citigroup Global Markets Inc. and J.P.
Morgan Securities LLC, and their respective successors, and two other primary U.S. government securities dealers in New York City selected by the Company (each, a “Primary Treasury Dealer”); provided however, that if any of the foregoing
shall cease to be a Primary 
  

 3 

 
Treasury Dealer or is no longer quoting prices for United States Treasury securities, the Company will substitute another Primary Treasury Dealer. 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption
date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by that Reference Treasury Dealer at
5:00 p.m. (New York City time) on the third Business Day preceding the redemption date. 
 “S&P”
means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. 

“SEC” means the United States Securities and Exchange Commission. 

“Securities Act” means the Securities Act of 1933, as amended. 

“Voting Stock” means, with respect to any specified person (as that term is used in Section 13(d)(3) of the
Exchange Act) as of any date, the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person. 

Section 2. Form, Denomination and Registration of the Notes. 

The Company will issue the Notes only in registered form, without interest coupons. The Notes initially will be issued in minimum
denominations of $2,000 and integral multiples of $1,000 in excess thereof. 
 The Notes and the Trustee’s certificate of
authentication thereon shall be in the form set forth in Exhibit A hereto. The Notes shall have such appropriate insertions, omissions, substitutions and other variations as are required or permitted hereby and by the Original Indenture and may have
such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange, The Depository Trust Company (“DTC”), any organizational
document or governing instrument or applicable law or as may, consistently herewith, be determined by the officers executing such Notes, as evidenced by their execution of the Notes. Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon. Any portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note. 
 The Notes will be in book-entry form represented by one or more Global
Notes in registered form without interest coupons, which will be deposited with the Trustee, as custodian for DTC, and registered in the name of DTC or its nominee. DTC shall be the Depositary with respect to the Notes. 

 

 4 

 The aggregate principal amount of the Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for the Depositary or its nominee, as hereinafter provided. 

Global Notes may be exchanged for definitive Notes in registered, certificated form without interest coupons only in accordance with the
provisions of the Original Indenture. All Notes in registered, certificated form shall bear and be subject to the applicable restrictive legend set forth on Exhibit A to this Fifth Supplemental Indenture unless the Company determines otherwise in
accordance with applicable law. 
 Section 3. Issue, Execution and Authentication. The aggregate principal amount of the Notes
to be issued by the Company and authenticated and delivered under this Fifth Supplemental Indenture is $600,000,000 (subject to increases or decreases from time to time by adjustments made on the records of the Trustee, as custodian for DTC or its
nominee, pursuant to instructions from the Company, in accordance with the Original Indenture). Notwithstanding the foregoing, the Company may reopen these series of Notes and issue additional notes by Board Resolution without the consent of or
notification to any Holder, and any such additional notes will have the same ranking, interest rate, maturity date, redemption rights and other terms as the applicable series of Notes. Any such additional notes, together with the applicable series
of Notes, will be consolidated with and constitute a single series of Debt Securities under the Indenture. 
 Section 4.
Principal and Interest Payments; Maturity Date. (a) The Notes shall bear interest at the rate of 4.125%, computed based on a 360-day year consisting of twelve 30-day months, from the date of issuance. Interest on the Notes will accrue from the
date of issuance and will be payable semi-annually in arrears on March 15 and September 15 of each year, commencing March 15, 2011, to the registered holders of the Notes on the preceding March 1 and September 1,
respectively. The principal amount of the Notes, together with all accrued, but unpaid interest shall be due and payable in full without further notice or demand on September 15, 2022 (the “Maturity Date”). 

(b) Principal of and premium, if any, and interest on the Notes initially will be payable, subject with respect to Global Notes to
compliance with DTC’s customary procedures, by wire transfer of immediately available funds to the accounts specified by the registered holder of the Notes or, if no account is specified, by mailing a check to each such holder’s registered
address. The Notes will be exchangeable and transfers of the Notes will be registrable, subject to the limitations provided in the Indenture, at the principal corporate trust office of the Trustee in New York, New York. 

(c) If any interest payment date, stated maturity date or earlier redemption date falls on a day other than a Business Day, then the
required payment of principal of and premium, if any, and interest may be made on the next succeeding Business Day, as if it were made on the date payment was due, and no interest will accrue on the amount so payable for the period from and after
that interest payment date, the stated maturity date or earlier redemption date, as the case may be. The Notes will not have the benefit of a sinking fund. 
  

 5 

 Section 5. Optional Redemption. (a) Before three months prior to the Maturity Date, the
Notes will be redeemable, in whole or in part at any time and from time to time, at the Company’s option, at a redemption price equal to the greater of: 
  

	 	•	 	 100% of the principal amount of the Notes to be redeemed; or 

 

	 	•	 	 the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed (not including the portion of
any payments of interest accrued to the redemption date) discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (determined on the third Business Day
preceding the redemption date), 

 plus accrued and unpaid interest thereon to the redemption date.

 (b) Within three months prior to the Maturity Date, the Notes will be redeemable, in whole at any time or in part from time
to time, at the Company’s option at par plus accrued interest thereon to but excluding the date of redemption. 
 (c)
Notwithstanding the foregoing, installments of interest on the Notes that are due and payable on Interest Payment Dates falling on or prior to a redemption date will be payable on the Interest Payment Date to the registered holders as of the close
of the Business Day on the relevant record date. 
 (d) Notice of any redemption will be mailed at least 30 days but no more
than 90 days before the redemption date to each holder of the Notes to be redeemed. The notice of redemption for the Notes will state, among other things, the amount of Notes to be redeemed, the redemption date, the redemption price and the place or
places that payment will be made upon presentation and surrender of Notes to be redeemed. If the Company redeems less than all of the Notes, the Trustee will select the particular Notes to be redeemed pro rata, by lot, or by another method the
Trustee deems fair and appropriate. Unless the Company defaults in payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on and after the redemption date. 

Section 6. Change of Control Offer to Purchase. (a) If a Change of Control Triggering Event occurs, holders of Notes may require the
Company to repurchase all of any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of their Notes at a purchase price of 101% of the principal amount, plus accrued and unpaid interest, if any, on such Notes to the date of
purchase (unless a notice of redemption has been mailed within 30 days after such Change of Control Triggering Event stating that all of the Notes will be redeemed as described above). The Company shall be required to mail to holders of the Notes a
notice describing the transaction or transactions constituting the Change of Control Triggering Event and offering to repurchase the Notes. The notice must be mailed within 30 days after any Change of Control Triggering Event, and the repurchase
must occur no earlier than 30 days and no later than 60 days after the date the notice is mailed. 
  

 6 

 (b) On the date specified for repurchase of the Notes, the Company shall, to the extent
lawful: 
 (i) accept for payment all properly tendered Notes or portions of Notes; 

(ii) deposit with the paying agent the required payment for all properly tendered Notes or portions of Notes; and 

(iii) deliver to the Trustee the repurchased Notes, accompanied by an Officers’ Certificate stating, among other things, the
aggregate principal amount of repurchased Notes. 
 (c) The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations applicable to the repurchase of the Notes. To the extent that these requirements conflict with the provisions requiring repurchases of the Notes, the Company shall comply with such
requirements instead of the repurchase provisions and shall not be considered to have breached its obligations with respect to repurchasing the Notes. Additionally, if an Event of Default exists under the Indenture (which is unrelated to the
repurchase provisions of the Notes), including events of default arising with respect to other issues of debt securities, the Company shall not be required to repurchase the Notes notwithstanding these repurchase provisions. 

(d) The Company shall not be required to comply with the obligations relating to repurchasing the Notes if a third party instead
satisfies all such obligations. 
 Section 7. Events of Default. With respect to the Notes only, 

(a) Section 7.01(a) of the Original Indenture is hereby amended by replacing “ten days” with “fifteen
days”; and 
 (b) Section 7.01(b) of the Original Indenture is hereby amended and restated as follows: “default
in the payment of the principal of or premium, if any, on any of the debt Securities of such series, as and when the same shall become due and payable (subject to subsection (c) below) either at maturity, upon redemption, by declaration or
otherwise; or” 
 Section 8. Applicability of Reports by Company. For purposes of this Fifth Supplemental Indenture, to the
extent information, documents or reports are required to be filed with the SEC and delivered to the Trustee or the holders of the Notes, the availability of such information, documents or reports on the SEC’s Electronic Data Gathering Analysis
and Retrieval (“EDGAR”) system or the Company’s website shall be deemed to have satisfied such delivery requirements to the Trustee or the holders of the Notes, as applicable. 

Section 9. Miscellaneous. The provisions of this Fifth Supplemental Indenture are intended to supplement those of the Original Indenture
as in effect immediately prior to the execution and delivery hereof. The Original Indenture shall remain in full force and effect except to the extent that the provisions of the Original Indenture are expressly modified by the terms of this Fifth
Supplemental Indenture. 
  

 7 

 Section 10. Governing Law. This Fifth Supplemental Indenture and the Notes shall be governed
by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. 

Section 11. Trustee Not Responsible for Recitals or Issuance of Notes. The recitals contained herein shall be taken as statements of the
Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Fifth Supplemental Indenture or of the Notes other than with respect to the Trustee’s
authentication and execution. The Trustee shall not be accountable for the use or application by the Company of the Notes or the proceeds thereof. 

Section 12. Counterparts. This Fifth Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed
to be an original for all purposes; and all such counterparts shall together constitute but one and the same instrument. 

[signatures on the following page] 
  

 8 

 IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental Indenture to be
duly executed and delivered, all as of the day and year above written. 
  

											
		 		 		 	NUCOR CORPORATION
					
		 		 		 	By:	 	 /s/ James D. Frias

		 		 		 		 	 James D. Frias

	Attest:	 		 		 	 Chief Financial Officer,

Executive Vice President and Treasurer

					
	By:	 	 /s/ A. Rae Eagle
	 		 		 	
		 	Secretary	 		 		 	
				
		 		 		 	 THE BANK OF NEW YORK MELLON,

as Trustee

					
		 		 		 	By:	 	 /s/ Scott I. Klein

		 		 		 		 	Name:	 	Scott I. Klein
		 		 		 		 	Title:	 	Vice President

 Exhibit A 

FORM OF GLOBAL NOTE DUE 2022 

[FACE OF THE NOTE] 
 THIS
SECURITY IS A GLOBAL DEBT SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY (AS DEFINED IN THE INDENTURE) OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN AS A WHOLE BY THE DEPOSITARY TO A NOMINEE
OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR ITS NOMINEE) MAY BE REGISTERED EXCEPT IN SUCH SPECIFIED CIRCUMSTANCES.

 UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
(“DTC”), TO NUCOR CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 

 Nucor Corporation 

4.125% Notes due 2022 
  

			
	N-	 	 CUSIP 670346AL9
  

$

Issue Date: September 21, 2010 

NUCOR CORPORATION, a Delaware corporation (the “Company”, which term includes any successor under the Indenture hereinafter
referred to), for value received, promises to pay to Cede & Co., or its registered assigns, the principal sum of
                                     Dollars
($                    ) on September 15, 2022. The 4.125% Notes due 2022 are herein referred to as the “Notes”. 

Interest Payment Dates: March 15 and September 15, commencing March 15, 2011. 

Record Dates: March 1 and September 1. 

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place. 

 IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile
by its duly authorized officers. 
  

			
	Date: September 21, 2010	  	NUCOR CORPORATION,
		  	as Issuer
		
		  	  

 Trustee’s Certificate of Authentication 

This 4.125% Notes due 2022 is one of the series of Debt Securities referred to in the within-mentioned Indenture. 

 

							
	Date: September 21, 2010	 		 	THE BANK OF NEW YORK MELLON
		 		 	as Trustee
				
		 		 	By:	 	  

		 		 		 	Authorized Signatory

 [REVERSE SIDE OF NOTE] 

NUCOR CORPORATION 

4.125% Notes due 2022 

Principal and Interest. The Company will pay the principal of this Note on September 15, 2022. 

The Company promises to pay interest on the principal amount of this Note on each Interest Payment Date indicated on the face of this
Note (each an “Interest Payment Date”), as set forth below, at the rate per annum shown above. 
 Interest will be
payable semiannually in arrears on each Interest Payment Date, commencing March 15, 2011. 
 Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no interest has been paid, from September 21, 2010; provided that, if there is no existing default in the payment of interest and if this Note is authenticated between a
regular Record Date as indicated on the face of this Note (each a “Record Date”) referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such Interest Payment Date. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. 
 The Company shall pay interest on overdue principal and premium and
interest on overdue installments of interest, to the extent lawful, at the rate borne by the Notes. 
 Method of Payment. The
Company will pay interest (except as provided pursuant to Article Seven of the Indenture with respect to defaulted interest and interest) on the principal amount of the Notes as provided above on each March 15 and September 15 to the
Persons who are Holders (as reflected in the Debt Security register at the close of business on the March 1 and September 1 next preceding the applicable Interest Payment Date), even if such Notes are cancelled after such Record Date and
on or before such Interest Payment Date. On and after the redemption or repurchase of any of the Notes by the Company, interest, if any, shall cease to accrue on the Notes, or portion thereof, subject to redemption or repurchase. With respect to the
payment of principal, the Company will make payment to the Holder that surrenders this Note to the paying agent with respect to the Notes (a “Paying Agent”) on or after September 15, 2022. 

Principal of and premium, if any, and interest on the Notes initially will be payable, subject with respect to Global Notes in compliance
with The Depository Trust Company’s (“DTC”) customary procedures, by wire transfer of immediately available funds to the accounts specified by the registered Holder of the Notes or, if no account is specified, by mailing a check to
each such Holder’s registered address. The Notes will be exchangeable and transfers of the Notes will be registrable, subject to the limitations provided in the Indenture (as defined below), at the principal corporate trust office of the
Trustee (as defined below) in New York, New York. 

 If any Interest Payment Date, stated maturity date or earlier redemption date falls on a
Saturday, a Sunday, or a day on which banking institutions are authorized by law to close, then the required payment of principal of and premium, if any, and interest may be made on the next succeeding day not a Saturday, a Sunday or a day on which
banking institutions are authorized by law to close, as if it were made on the date payment was due, and no interest will accrue on the amount so payable for the period from and after that interest payment date, the stated maturity date or earlier
redemption date, as the case may be. 
 All payments made in respect of the Notes are to be made in such coin or currency of the
United States of America as at the time of payment is legal tender for payment of public and private debts. 
 Paying Agent and
Registrar. Initially, the Trustee will act as authenticating agent, Paying Agent and Registrar with respect to the Notes (the “Registrar”). The Company may change any authenticating agent, Paying Agent or Registrar without notice. The
Company, any Subsidiary or any affiliate of any of them may act as Paying Agent, Registrar or co-Registrar. 
 Indenture;
Limitations. The Company issued the Notes under an Indenture dated as of January 12, 1999 (the “Original Indenture”), as supplemented by the Fifth Supplemental Indenture dated September 21, 2010 (the “Fifth Supplemental
Indenture” and together with the Original Indenture, the “Indenture”), between the Company and The Bank of New York Mellon, as trustee (the “Trustee”). Capitalized terms herein are used as defined in the Indenture unless
otherwise indicated. Reference is made to the Indenture and the Trust Indenture Act of 1939 (the “Trust Indenture Act”) for a full, complete and detailed statement of the purposes for which the Notes are issued, the terms on which the
Notes are issued and the terms, provisions and conditions governing payment of the Notes and the provisions, among others, with respect to the nature and extent of the rights, duties and obligations of the Trustee, the Paying Agent, the Registrar,
the authenticating agent, Holders and the Company. The Holder of this Note, by acceptance of this Note, is deemed to have agreed and consented to the terms and provisions of the Indenture. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. 

The Notes are general unsecured obligations of the Company. This Note is not secured by any collateral, including assets of the Company
or any of its Subsidiaries. The Fifth Supplemental Indenture establishes the original aggregate principal amount of the Notes at $600,000,000, all of which were issued by the Company on the Issue Date indicated on the face of this Note, and this
Note, together with the other Note issued by the Company on the Issue Date, shall represent the aggregate principal amount of such outstanding Notes from time to time endorsed thereon pursuant to the Indenture. The aggregate principal amount of
outstanding Notes represented hereby may from time to time by increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary or its nominee, as provided in the Fifth Supplemental Indenture. 

Optional Redemption. Before three months prior to the Maturity Date, the Notes will be redeemable, at the Company’s option, in whole
or in part, at any time and from time to 

 
time in accordance with the provisions set forth in the Indenture at a redemption price equal to the greater of (i) 100% of the principal amount of such Notes to be redeemed or (ii) the
sum of the present values of the remaining scheduled payments of principal and interest on such Notes to be redeemed (not including the portion of any such payments of interest accrued to the redemption date) discounted to the redemption date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (determined on the third Business Day preceding such redemption date), plus accrued and unpaid interest thereon to the redemption date.

 Within three months prior to the Maturity Date, the Notes will be redeemable, in whole at any time or in part from time to
time, at the Company’s option at par plus accrued interest thereon to but excluding the date of redemption. Notwithstanding the foregoing, installments of interest on the Notes that are due and payable on Interest Payment Dates falling on or
prior to a redemption date will be payable on the Interest Payment Date to the registered holders as of the close of the Business Day on the relevant record date. 

Change of Control Offer to Purchase. Upon a Change of Control Triggering Event, the Company shall be required to make an offer to
purchase the Notes on the terms set forth in the Fifth Supplemental Indenture. 
 Denominations; Transfer; Exchange. The Notes
are in registered form without coupons in minimum denominations of $2,000 of principal amount and integral multiples of $1,000 in excess thereof. The transfer or exchange of Notes may be registered and the Notes may be exchanged in accordance with
the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes, fees and/or other governmental charges required by law or permitted by the Indenture. The
Registrar need not register the transfer or exchange of any Notes selected for redemption. Also, it need not register the transfer or exchange of any Notes for a period of 15 days before the day of the mailing of a notice of redemption of Notes
selected for redemption. 
 As provided in the Indenture and subject to certain limitations therein set forth, Notes will be
issued only in registered form and initially will be represented by one or more Global Notes registered in the name of a nominee of DTC. Beneficial interests in the Notes will be shown on, and transfers thereof will be effected only through, the
records maintained by DTC participants. Except for the limited circumstances described in the Indenture, owners of beneficial interests in the Notes will not be entitled to receive definitive Notes in registered, certificated form and will not be
considered the Holders thereof. 
 The Company will provide for registration of transfers of the Notes through the Registrar,
subject to the operations and procedures of DTC in effect from time to time, upon receipt of the information regarding the form of transfer and the status of the transferee to be provided on the Assignment Form attached hereto, along with such other
opinions of counsel, certifications and/or other information satisfactory to the Company and the Trustee in connection with certain transfers. 

Persons Deemed Owners. A Holder shall be treated as the owner of a Note for all purposes. 

 Unclaimed Money. If money for the payment of principal and premium, if any, or interest
remains unclaimed for one year, the Trustee or the Paying Agent will pay the money back to the Company at its written request. After that, Holders entitled to the money must look to the Company for payment, unless applicable law designates another
Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease. 
 Defeasance and
Discharge Prior to Redemption or Maturity. If the Company deposits with the Trustee, in trust, money, U.S. Government Obligations and/or Eligible Obligations or any combination of the foregoing which through the payment of interest thereof and
principal thereof in accordance with their terms will provide money in an amount sufficient to pay the then outstanding principal of, interest, if any, and premium, if any, on the Notes (and any other Debt Securities of the same series) to
redemption or maturity, and complies with certain other provisions of the Indenture relating thereto, (i) the Company will be deemed to have paid and will be discharged from any and all obligations in respect of the Notes and (ii) certain
provisions set forth in the Indenture will no longer be in effect with respect to the Notes. In addition, the Company can obtain a Discharge (as defined in the Indenture) with respect to all the Debt Securities of a series by depositing with the
Trustee, in trust, funds sufficient to pay at maturity or upon redemption all of the Debt Securities of that series, provided that all of the Debt Securities of that series are by their terms to become due and payable within one year or are to be
called for redemption within one year. 
 Amendment; Supplement; Waiver. Subject to certain exceptions, the Indenture or the
Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding, and, subject to Section 13 hereof, any existing default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding; provided, however, that no supplemental indenture may, without the consent of the Holders of all Debt
Securities of that series then outstanding (i) change the fixed maturity (which term for these purposes does not include payments due pursuant to any sinking, purchase or analogous fund) of those Debt Securities, reduce the principal amount
thereof, reduce the rate or extend the time of payment of interest thereon, reduce any premium payable upon the redemption thereof or impair the right to institute suit for the enforcement of any such payment on or after the maturity thereof (or, in
the case of redemption, on or after the redemption date without the consent of the holder of each debt security so affected), or (ii) reduce the percentage of Debt Securities of a series required to approve any such supplemental indenture.
Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture or the Notes to, among other things, clarify or cure any ambiguity, defect or inconsistency and make any change that does not adversely affect
the rights of any Holder in any material respect. 
 Restrictive Covenants. The Indenture imposes certain limitations on the
ability of the Company and its Restricted Subsidiaries, among other things, to (a) create, assume, issue, guarantee, or incur any Secured Indebtedness, (b) enter into any Sale and Leaseback Transaction, (c) merge into or consolidate
with or convey or transfer its properties substantially as an entirety to any person. Within 120 days after the end of the last fiscal quarter of each year, the Company shall deliver to the Trustee an Officers’ Certificate stating whether or
not the signers know of any noncompliance with the terms, provisions, covenants and conditions under the Indenture. 

 Successor Persons. When a successor person or other entity assumes all the obligations of
its predecessor under the Notes and the Indenture, as permitted by the Indenture, the predecessor person will be released from those obligations. 

Defaults and Remedies. An Event of Default is: (a) default in the payment of any installment of interest upon the Notes (or other
Debt Securities of the same series), and continuance of such default for 15 days after receipt by the Company of written notice of such default from any Person; (b) default in the payment of the principal of or premium, if any, on the Notes (or
other Debt Securities of the same series), as the same shall become due and payable either at maturity, upon redemption, by declaration or otherwise; (c) failure by the Company to observe or perform any other covenants under the Indenture for
90 days after receipt by the Company of a written notice by the Trustee or receipt by the Company and the Trustee of written notice by Holders of at least 25% of the aggregate principal amount of the Notes (or other Debt Securities of the same
series) then outstanding; and (d) certain events of bankruptcy, insolvency and reorganization as described in the Indenture. 

If an Event of Default, as defined in the Indenture, occurs and is continuing, the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Notes then outstanding may, and the Trustee at the request of such Holders shall, declare all the Notes to be due and payable. Holders may not enforce the Indenture or the Notes, or take any action with respect to
any Event of Default under the Indenture, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations under the Indenture, Holders of at least a majority in principal amount of the Notes then outstanding may direct in accordance with the provisions of the Indenture the Trustee in its exercise of
any trust or power, including waiver of all past defaults, rescission and annulment of a declaration of acceleration and its consequences and exercise of any right, remedy or power available to the Trustee. 

Prior to any declaration accelerating the maturity of the Notes, the Holders of a majority in principal amount of the outstanding Notes
may, on behalf of the Holders of the Notes, waive any past default or Event of Default with respect to the Notes except a default (i) in the payment of principal of, premium, if any, or interest, if any, on the Notes or (ii) in regard to a
covenant or provision applicable to that series that cannot be modified or amended without the consent of the Holder of each outstanding Note. After the principal of all outstanding Notes has been declared due and payable but before any judgment or
decree for the payment of the money has been obtained or entered, the Holders of a majority in principal amount of the outstanding Notes may waive all defaults with respect to the Notes and rescind and annul that declaration if the Company has paid
or deposited with the Trustee a sum sufficient to pay all matured installments of principal, premium, if any, and interest which has become due other than by acceleration, and any and all other Events of Default with respect to the Notes have been
remedied, cured or waived. 
 Trustee Dealings with Company. Except as prohibited by the Indenture, the Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Company or its Affiliates and may otherwise deal with the Company or its Affiliates as if it were not the Trustee. 

 No Recourse Against Others. No recourse for the payment of the principal of, premium, if
any, or interest on the Notes issued under the Indenture or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any of the Company’s obligations, covenants or agreements in the Indenture, or in Notes or
because of the creation of any Indebtedness represented thereby, shall be had against any of the Company’s incorporators, stockholders, officers, directors or employees or of any successor Person thereof. Each Holder, by accepting Notes issued
under the Indenture, waives and releases all such liability. The waiver and release are a condition of, and part of the consideration for the issuance of the Notes. 

Authentication. This Note shall not be entitled to any right or benefit under the Indenture, or be valid, or become obligatory for any
purpose, until the Trustee or authenticating agent signs the certificate of authentication on the other side of this Note. 

Governing Law. The Notes shall be governed by and construed in accordance with the laws of the State of New York without regard to
principles of conflicts of laws. 
 The Company will furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to Nucor Corporation, 1915 Rexford Road, Charlotte, North Carolina 28211, Attention: A. Rae Eagle. 

 ASSIGNMENT FORM 

To assign this Note, fill in the form below: 

I or we assign and transfer this Note to 
  

 
 (Print or type
assignee’s name, address and zip code) 
  
  

(Insert assignee’s Soc. Sec. or Tax I.D. No.) 

and irrevocably appoint
                                        
agent to transfer this Note on the books of the Company. The agent may substitute another to act for him. 
  

			
	Date:                     	  	Your Signature:
                                         
               
		  	(sign exactly as your name appears on the other side of the Note)

  

	*	NOTICE: The Signature must be guaranteed by an Institution which is a member of one of the following recognized signature Guarantee Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) such other guarantee program acceptable to the Trustee.

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