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Cisco Systems to Acquire Token Ring Switch Innovator Nashoba Networks

SAN JOSE, Calif. - August 6, 1996 - Cisco Systems,Inc. today announced it has signed a definitive agreement to acquireprivately held Nashoba Networks, Inc.and its Token Ring switching technologies in a stock swap.

Under the terms of the agreement, shares of Cisco common stock worthapproximately $100 million will be exchanged for all outstanding shares andoptions of Nashoba. The number of Cisco shares issued will be calculated atclosing based on the average price for Cisco's shares during a specifiedperiod. However, the number of Cisco shares issued at the time of themerger will not be less than 1,549,139 or more than 2,323,708. Thetransaction will be accounted for as a pooling of interests. Thetransaction is expected to be completed by mid-September 1996 and is subjectto various closing conditions, including shareholder votes.

Token Ring switching is one of the fastest-growing segments of the local areanetworking (LAN) market. Cisco customers will now have access to productsand technology comprising a complete set of solutions forToken Ringenvironments. Cisco's intent in acquiring Nashoba Networks is to giveusersa wide choice of Token Ring LAN switching products targeted at the workgroupand backbone environments. By joining forces, Cisco and Nashoba can helpcustomers employ high-performance switched workgroup and backbone Token RingLAN connectivity. Nashoba's approximately 40 employees will become part ofthe InterWorks Business Unit and be located primarily at Cisco's Chelmsford,Mass. facilities.

This acquisition will enhance Cisco's product offerings in the fast-growingToken Ring switching arena by adding a highly functional workgroup/backboneswitch that integrates with existing switch and router products. Withinthe CiscoFusion(tm)architecture, Token Ring switching allows customers tocombine router and switch products to provide scalable campus and wide-areaToken Ring solutions. Today's bridged networks can be upgraded with abackbone switch such as the NashobaConcord product, which will become theCatalyst 1800, and provide access to high speed servers. In addition, thebackbone switch can be a concentrator of desktop/workgroup switches such asthe Catalyst 2600. Finally, the switches can front-end Ciscorouters to exploit the rich feature set of the Cisco IOS(tm) software.

A joint development agreementbetween Cisco and Olicom A/S, announced in March 1996, providesworld-class Token Ring interface technology that will be included in futureCisco Token Ring switching products. By including the Nashoba products andengineering team, Cisco adds a rich set of software switching features thatwill be leveraged within both the current and future product line. Combinedwith Cisco IOS software and wide-area network switching, Cisco now providesusers with a scalable enterprise switched network for legacy SNA networks.

Nashoba Networks Inc. was founded in 1993 and is based in Littleton, Mass.Company and product information can be accessed via the World Wide Web athttp://www.cisco.com.

Cisco Systems (NASDAQ: CSCO) is the leading globalsupplier ofinternetworkingsolutions for corporate intranets and the global Internet.Cisco's products, including routers, LAN and ATM switches, dial-up accessservers and network management software, are integrated by the Cisco IOSsoftware to link geographically dispersed LANs, WANs and IBM networks.Company news and product/service information are available at World WideWeb site http://www.cisco.com.Cisco is headquartered in San Jose, California.

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This release may consist of forward-looking statements thatinvolve risks and uncertainties. These statements may differ materiallyfrom actual future events or results. Readers are referred to the documentsfiled by Cisco with the S.E.C., specifically the most recent reports on Form10-K and 10-Q, which identify important risk factors that could cause actualresults to differ from those contained in the forward-looking statements.

CiscoFusion, Cisco IOS and Cisco Systems are trademarks, and Cisco and theCisco Systems logo are registered trademarks of Cisco Systems, Inc. Allother trademarks, service marks, registered trademarks or registered servicemarks mentioned in this document are the property of their respectiveowners.

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