News Release

Cisco to Acquire Kalpana, Leading Ethernet Switching Company

SAN JOSE, Calif., Oct. 24, 1994 -- Cisco Systems Inc. and
Oct 24, 1994

SAN JOSE, Calif., Oct. 24, 1994 -- Cisco Systems Inc. and Kalpana, jointly announced the signing of an agreement whereby Cisco willacquire Kalpana, a privately held company that is the leading provider ofEthernet switches worldwide.

Under the terms of the agreement, Cisco has agreed to acquire all ofthe outstanding stock and assume all the outstanding employee stock optionsand warrants of Kalpana in exchange for 7,480,114 shares of Cisco commonstock. The closing sale price for Cisco's common stock on NASDAQ onOctober 21, 1994 was $27.25 per share. The transaction, approved by theboard of directors of both Cisco and Kalpana, is subject to severalconditions including approval of Kalpana shareholders and receipt of anopinion that the transaction will be accounted for as a pooling ofinterests.

"The complementary nature of our products and distribution channels,coupled with cultural compatibility, make this an extraordinarypartnership. Combining Kalpana's switches and Cisco's internetworkingproducts provides a comprehensive, first-class offering to our customers,"said Jim Jordan, president of Kalpana.

"Kalpana provides great value because their products are bothcost-effective and high-in-performance. Additionally, because Kalpanamarkets and supports products worldwide through distributors, value-addedresellers and systems integrators, their well-established, indirectchannels of distribution complement Cisco's existing sales channels," saidJohn Chambers, Cisco's executive vice president.

Kalpana presently has approximately 150 employees and is based inSunnyvale, California with regional offices in the U.S. and distributors inEurope and Asia. Kalpana is considered to be the inventor of Ethernetswitching, and designs and manufactures internetworking products thatincrease the throughput of Ethernet networks. This technology enablesKalpana's Ethernet switching products to significantly extend the usabilityand data-carrying capacity of existing Ethernet local area networks. Thecompany's product line consists of modular and stackable platforms whichare managed through SwitchVison, an SNMP managementsolution.

Kalpana pioneered the Ethernet switching industry with innovativetechnology such as low-latency, cut-through switching and full-duplexEthernet.

Cisco Systems,Inc., headquartered in San Jose, Calif., is the leading global supplier of internetworkingproducts, including routers, bridges,workgroup systems, ATM and Ethernet switches, dial-up access servers,software routers and router management software. These products are usedto build enterprise-wide internetworks linking an unlimited number ofgeographically dispersed LANs, WANs and IBM SNA networks. Cisco'sInternetwork Operating System (IOS) technology, found in more than 250,000installed Cisco units and in the products of over 20 partners, is the defacto industry standard for data transmission. In the U.S., Cisco istraded over the counter under the NASDAQ symbol CSCO. A member of the S&P500 and Fortune 500, Cisco in fiscal 1994 logged sales of $1.2 billion.