Company Name: Cisco Systems, Inc.
Public Availability Date: September 9, 2005

Document Sections:

INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER

[INQUIRY LETTER]

August 19, 2005

U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, DC 20549

Attention: Jonathan A. Ingram

Deputy Chief Counsel

Re: Omission of Shareholder Proposal Submitted by Donald A. Macri, Trustee of the Macri Family Trust 92882, and Trevor P. Macri

Dear Mr. Ingram:

We are writing on behalf of our client Cisco Systems, Inc., a California corporation ("Cisco"), about the shareholder proposal and integrated supporting statement (the "Proposal") that was the subject of Cisco's no-action letter request, dated July 6, 2005 (the "Request Letter"), and the subsequent revision to the Proposal, each of which was submitted to Cisco by Donald A. Macri, Trustee of the Macri Family Trust 92882, and Trevor P. Macri (the "Proponents"). Copies of the original Proposal and the Proposal, as revised, are enclosed for your reference.

On multiple occasions over the last few weeks, including most recently on August 16\th/, Cisco has attempted unsuccessfully to engage the Proponents in a conversation about their proposal. Therefore, in order to avoid any additional delay and continued expenditure of resources in resolving this matter, on behalf of Cisco, pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934, as amended, we respectfully request confirmation that the staff (the "Staff") of the Securities and Exchange Commission (the "Commission") will not recommend enforcement action if, for the reasons stated below, Cisco excludes the Proposal, and any revisions to it, from its proxy card and other proxy materials to be distributed to Cisco's shareholders in connection with its 2005 annual meeting of shareholders.

Background

The Proposal originally called for the Board of Directors to "ask the Shareholders to vote for substantial shareholder dividend payments to begin no later than May 2006."

The revision of the Proposal purports to be an amendment of the Proposal in accordance with the guidelines set forth in the Staff's response letter (the "Response Letter") dated July 29, 2005 to our original Request Letter. The Proposal, as revised, provides as follows:

"We REQUEST that the Board of Directors consider asking the Shareholders at large to vote "FOR" (or) "AGAINST" an Annual Dividend payment of $.60/share, paid quarterly, beginning no later than MAY 2006."

With reference to the full text of the Proposal, we draw your attention to the fact that the Proposal, as revised, differs substantively from the original version of the Proposal insofar as it, among other things:

refers to "an Annual Dividend payment of $.60/share, paid quarterly," rather than "substantial shareholder dividend payments;" and

attempts to rephrase the original terms of the Proposal as a recommendation or request to Cisco's Board of Directors.

Reasons for Excluding the Proposal

We believe that the revised Proposal may be excluded from Cisco's proxy card and other proxy materials, on each of the following independent grounds:

Rule 14a-8(i)(13)because the Proposal, as revised, calls for a specific amount of cash dividends; and

Rule 14a-8(i)(1)because the Proposal, as revised, is still not a proper subject for action by shareholders under the laws of Cisco's jurisdiction of organization.

In addition, we believe that the Proposal, as revised, goes beyond the guidelines set forth by the Staff in its Response Letter such that the revised Proposal constitutes a distinct and new proposal and, therefore, may be excluded from Cisco's proxy card and other proxy materials, on each of the following independent grounds:

Rule 14a-8(c)because the Proposal, as revised, constitutes a second proposal and, therefore, violates the rule that a shareholder may submit no more than one proposal for any particular shareholders' meeting; and

Rule 14a-8(e)(i)because the Proposal, as revised, constitutes a new and different proposal that was not submitted before Cisco's proposal deadline of May 31, 2005.

Discussion

1. As revised, the Proposal calls for a specific amount of dividends, and, therefore, is excludable under Rule 14a-8(i)(13).

Under Rule 14a-8(i)(13), a proposal may be excluded from an issuer's proxy materials "if the proposal relates to specific amounts of cash or stock dividends." Cisco believes the Proposal, as revised, is excludable under Rule 14a-8(i)(13) because, contrary to the Rule, it specifies the exact amount of the proposed dividend: "$.60/share."

The Staff has consistently taken the position that shareholder proposals that set specific dividend amounts are excludable under Rule 14a-8(i)(13), whether or not they are cast in mandatory or precatory form. See People's Ohio Financial Corporation (August 11, 2003) ("Resolved that the shareholders of Peoples Ohio Financial Corporation urge the Peoples Ohio Financial Corporation Board of Directors to payout 66% of net earnings to shareholders in the form of an annual cash dividend.") (emphasis added); Host Marriott Corporation (March 5, 2003) ("The shareholders strongly recommend to the Board of Directors to make all efforts to reinstate at least a $ 1.00 per share dividend....") (emphasis added); and Microsoft Corporation (July 19, 2002) ("Shareholders request the Board declare a dividend of 50% of Year 2002 and subsequent years' earnings, with the level of dividends to be maintained at least at Year 2002 level for subsequent years, that is, even if subsequent years' profits were the lower. (For Year 2002, EPS as estimated by S&P is $1.84/share, it suggested that the Board declare a dividend of $0.92/share)") (emphasis added). See also Safeway, Inc. (March 4, 1998) (permitting exclusion of a precatory proposal calling for a specific amount of dividends); and AirTouch Communications, Inc. (January 6, 1998) (same); St. Jude Medical, Inc. (March 23, 1992) (permitting exclusion of a mandatory proposal calling for a specific amount of dividends).

As revised, the Proposal is substantially similar, and in some cases nearly identical, to the proposals that were addressed in the no-action letters cited above and found by the Staff to be excludable as relating to specific amounts of cash dividends. Accordingly, Cisco believes it may properly omit the Proposal, as revised, from Cisco's proxy card and other proxy materials under Rule 14a-8(i)(13).

2. As revised, the Proposal is not a proper subject for action by shareholders under the laws of the State of California, and, therefore, is excludable under Rule 14a-8(i)(1).

Reference is made to the Request Letter wherein we provided Cisco's reasons why the Proposal was excludable under Rule 14a-8(i)(1) as "not a proper subject for action by shareholders under the laws of the jurisdiction of the company's organization." The same rationale applies to the Proposal, as revised, because it has not been sufficiently modified to address the defect identified in both the Request Letter and the Response Letter and, therefore, is not a proper subject for action under the General Corporation Law of the State of California, the jurisdiction in which Cisco is incorporated.

Like the original formulation of the Proposal, the Proposal, as revised, calls for a vote of shareholders on the payment of dividends which, if passed, still results in a mandate that Cisco's board of directors take a specified action. The relevant text of the proposal has changed from "the Board ask the Shareholders to vote for substantial shareholder dividend payments to begin no later than May 2006" to "the Board of Directors consider asking the Shareholders at large to vote "FOR" (or) "AGAINST" an Annual Dividend payment of $.60/share, paid quarterly, beginning no later than MAY 2006." However, the revisions have not changed the fact that the Proposal, with or without the Proponents' revisions, calls for the shareholders to vote on the payment of dividends. If passed, both versions of the Proposal are mandates that the Board of Directors take a specified action which is not a proper subject for shareholder action under California law. Accordingly, since the Proponents failed to revise the Proposal in accordance with the Response Letter, Cisco believes it may omit the Proposal, and any revisions to it, from Cisco's proxy card and other proxy materials pursuant to the Staff's advice in the Response Letter.

Based on the authority cited in the Request Letter we are of the opinion that insofar as the Proposal, as revised, is a mandate that Cisco's board of directors take a specified action, the Proposal, as revised, is not a proper subject for shareholder action under California law. Therefore, the Proposal, and any revisions to it, may be excluded pursuant to Rule 14a-8(i)(1). This paragraph of this letter shall serve as the supporting opinion of counsel pursuant to Rule 14a-8(j)(2)(iii). We note that we are admitted to practice law only in the State of California, and we therefore express no opinion as to any matter relating to the laws of any jurisdiction other than the laws of the State of California.

*****

Although the revisions to the Proposal are characterized by the Proponents as an amendment along the guidelines issued by the Staff in its Response Letter, Cisco believes these revisions go beyond the guidelines set forth by the Staff in the Response Letter such that the Proposal, as revised, constitutes a distinct and new proposal.

*****

3. As revised, the Proposal constitutes a second proposal excludable under Rule 14a-8(c)

The Proponents' submission is not simply a revision; it in fact constitutes a second proposal. The Proposal did not originally call for a specific dividend amount and did not originally specify the timing of dividend payments other than to require that they begin no later than May 2006, while the Proposal, as revised, calls for a specific dividend amount and specifies that the dividends be paid quarterly. These changes are not consistent with the guidelines set forth in the Staff's Response Letter. The substance of each proposal is clearly distinct. Thus, Cisco believes that it may exclude the Proposal, as revised, under Rule 14a-8(c), which provides that "[e]ach shareholder may submit no more than one proposal to a company for a particular shareholders' meeting."

4. As revised, the Proposal constitutes a new proposal that was not timely received in accordance with Rule 14a-8(e)

The Proposal, as revised, is an entirely new proposal and accordingly Cisco believes that it is entitled to exclude it because it was received by Cisco on August 10, 2005, after the May 31, 2005 deadline calculated in accordance with Rule 14a-8(e)(2) and as set forth in Cisco's proxy statement for its 2004 annual meeting. The Staff has previously granted no-action relief with respect to the exclusion of a proposal when it was not submitted by the properly determined deadline. See Allstate Insurance Company (January 14, 2000), Advanced Polymer Systems (March 18, 1999) and Guest Supply Inc. (October 20, 1999). Thus, Cisco believes that it may exclude the Proposal, as revised, under Rule 14a-8(e) as a new and different proposal submitted after the May 31, 2005 deadline.

Conclusion

For the foregoing reasons, we request your confirmation that the Staff will not recommend any enforcement action to the Commission if Cisco excludes the Proposal, and any revisions to it, from Cisco's proxy card and other proxy materials for its 2005 annual shareholders' meeting. Should the Staff disagree with our conclusions regarding the omission of the Proposal, and any revisions to it, or should the Staff have questions or desire any additional information in support of our position, we would appreciate an opportunity to confer with the Staff concerning these matters prior to the issuance of its Rule 14a-8(j) response. In this case, please contact me by telephone at (650) 335-7657 or by facsimile at (650) 938-5200.

Pursuant to Rule 14a-8(j)(2), six additional copies of this letter and the attachments are enclosed. Pursuant to Rule 14a-8(j)(1), on behalf of Cisco, we are simultaneously providing a copy of this letter and the attachments to each Proponent. In addition to the six copies of this letter required pursuant to Rule 14a-8(j), we have included an extra copy. If you would kindly acknowledge receipt of this letter and the enclosures by date-stamping the extra copy and returning it to me in the self-addressed, stamped envelope, I would appreciate it.

Sincerely,

/s/

Daniel J. Winnike, Esq.

Enclosures

cc: Mark Chandler, Cisco Systems, Inc.
Donald A. Macri, Trustee of the Macri Family Trust 92882
Trevor P. Macri
Robyn Manos, Special Counsel

[INQUIRY LETTER]

August 8, 2005

VIA U. S. CERTIFIED MAIL WITH RECEIPT

U. S. Securities & Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F. Street, N. E.
Washington, DC 20549

Attn: Robyn Manos, Special Counsel

Re: Our August 8, 2005 Receipt of your recommendations for our Request Proposal to Cisco Systems, Inc.

Dear Ms. Manos:

Attached, please find the revised letter we sent to Cisco Systems, Inc. today, observing the guidelines you proposed. Also, we responded within the seven calendar days you required.

Since we now have provided Cisco with the Revised Proposal, we ask that you recommend enforcement action to the Commission you represent.

Thank you for your prompt and considered action on our behalf and the many thousands of Cisco Shareholders who stand to benefit.

Sincerely,

/s/

Donald A. Macri, Trustee 92882
P.O. Box 3395
Santa Monica, CA 90408-3395

c. Cisco Board of Directors
Peter C. McMahon, Esquire
Rex H. Stevens, CPA

[INQUIRY LETTER]

August 8, 2005

VIA U. S. CERTIFIED MAIL WITH RECEIPT

To: Board of Directors
C/o Secretary CISCO SYSTEMS, Inc.
170 W. Tasman Drive
San Jose, CA 95134

Re: Amended Request of November 14, 2004 to the Cisco Board of Directors Along the Guidelines Issued by the SEC Special Council in a July 29, 2005 Letter which was received by us on August 8, 2005

In order to serve the best interests of CISCO and its Shareholders, the Macri Family Trust 92882, who are Beneficial Owners of 10,000 shares of CISCO common stock, joined by another filer*, make the following request in connection with the CISCO Annual Board Meeting of Shareholders scheduled to be held on November 25, 2005:

We REQUEST that the Board of Directors consider asking the Shareholders at large to vote "FOR" (or) "AGAINST" an Annual Dividend payment of $ 60/share, paid quarterly, Beginning no later than MAY 2006.

Further, we ask that proxy cards and other proxy materials to be distributed prior to the November 25, 2005 annual Board Meeting include the aforementioned request.

Sincerely,

/s/

Donald A. Macri, Trustee 92882

P. O. Box 3395

Santa Monica, CA 90408-3395

/s/

*Trevor P. Macri, Owner of 3,500 shares of CISCO Common Stock
P.O. Box 3395
Santa Monica, CA 90408-3395

EUCLOSED IS COPY OF LETTER SENT.

c. Robyn Manos, Special Counsel, Div. of Corporate Finance, U.S., Securities & Exchange Commission / Peter C. McMahon, Esquire / Rex II. Stevens, CPA

[INQUIRY LETTER]

August 26, 2005

VIA U. S. CERTIFIED MAIL WITH RECEIPT

U. S. Securities & Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, DC 20549

Attn: Robyn Manos, Special Counsel

Re: Proponent Statement for Inclusion in Cisco's 2005 Proxy Statement

Dear Ms. Manos:

Attached, please find our Proponent Statement and request for its inclusion in Cisco's 2005 Proxy Statement which we sent to Cisco Systems, Inc. today.

Although Cisco now contends that our Revised Proposal which followed the guidelines suggested, should also be excluded, we ask that you recommend enforcement action to the Commission you represent.

Thank you for your prompt and considered action on our behalf and the many thousands of Cisco Shareholders who stand to benefit.

Sincerely,

/s/

Donald A. Macri, Trustee 92882
P.O. Box 3395
Santa Monica, CA 90408-3395

c. Cisco Board of Directors
Peter C. McMahon, Esquire
Rex H. Stevens, CPA

Att. MFT Proponent Statement sent to Cisco Systems, Inc. 8-26-05

[INQUIRY LETTER]

August 26, 2005

VIA U. S. CERTIFIED MAIL

Board of Directors
C/O Secretary Cisco Systems, Inc.
170 W. Tasman Drive
San Jose, CA 95134

Re: Proponent Statement from Macri Family Trust (MFT) for Inclusion in Cisco's 2005 Proxy Statement

We submit on behalf of the MFT, and hereby deliver, our Proponent Statement and request its inclusion in Cisco's 2005 Proxy Statement for the 2005 Annual Share Holders meeting. If our Proponent Statement is revised, we will provide a copy of the revised proponent statement to you. We are simultaneously sending a copy of the Statement to the U. S. Securities & Exchange Commission.

Proponent Statement from Macri Family Trust for Inclusion in Cisco's 2005 Proxy Statement

Macri Family Trust's Statement in Support for our Proposal

The MFT believes our Proposal serves the best interest of Cisco and its shareholders and recommends a vote for it.

Cisco's strategy of "buybacks" has proven to be an abject failure; thus far (YTD 2005) Cisco's share price has fallen almost 9% in spite of its aggressive buyback strategy. We say, "enough with the buybacks" since they are not working, and begin dividend distribution to your loyal shareholders.

For the reasons set forth above, the MFT recommends a vote FOR Dividend Distribution to your loyal shareholders.

We ask that the entire August 17, 2005 Los Angeles Times article be included in the Proposal.

Sincerely,

/s/

Donald A. Macri, Trustee 92882
P.O. Box 3395
Santa Monica, CA 90408-3395

c. U. S. Securities & Exchange Com. / P. C. McMahon, Esq. / R. Stevens, CPA / enc. copy LA Times Bus. Sect. 8-17-05/Co. Financial Statement

[STAFF REPLY LETTER]

September 9, 2005

Response of the Office of Chief Counsel
Division of Corporation Finance

Re: Cisco Systems, Inc.

Incoming letter dated August 19, 2005

The proposal requests that the board consider asking the shareholders to vote regarding an annual dividend of $.60 per share, paid quarterly, beginning no later than May 2006.

There appears to be some basis for your view that Cisco may exclude the proposal under rule 14a-8(i)(13). Accordingly, we will not recommend enforcement action to the Commission if Cisco omits the proposal from its proxy materials in reliance on rule 14a-8(i)(13). In reaching this position, we have not found it necessary to address the alternative bases for omission upon which Cisco relies.

Sincerely,

/s/

Robyn Manos
Special Counsel