News Release

Cisco Systems to Join with StrataCom

SAN JOSE, Calif. -- April 22, 1996 -- Cisco Systems, Inc.
Apr 22, 1996

SAN JOSE, Calif. -- April 22, 1996 -- Cisco Systems, Inc. today announced anagreement to acquire StrataCom, Inc. (NASDAQ: STRM), a leading supplierof Asynchronous Transfer Mode (ATM) and Frame Relay high-speed wide areanetwork (WAN) switching equipment that integrates and transports a widevariety of information, including voice, data and video.

The combination with StrataCom will enable Cisco to provide end-to-endsolutions across public, private or hybrid networks. Cisco and StrataComwill define the future of networking by merging high-performance ATMswitching and local area network (LAN) switching with the intelligence andcontrol of routing to develop the next-generation networkinginfrastructure. The combined entity will be positioned to deliverintegrated, scalable multiservice network solutions to public carriers,Internet service providers and enterprises.

Under the terms of the agreement, shares of Cisco common stock will beexchanged for all outstanding shares and options of StrataCom. Each shareof StrataCom stock will be exchanged for the higher of one Cisco share or$50 of Cisco stock, depending on the price of Cisco's shares averagedduring a specified period preceding the merger. If the average price ofCisco shares falls below $41 during this period, then the exchange ratewill be 1.22 shares of Cisco stock to one share of StrataCom stock. Thetransaction will be accounted for as a pooling of interests and willqualify as a tax-free reorganization. Following the transaction, Dick Moley,president and CEO of StrataCom, will join Cisco's board of directors.

The closing price of Cisco common stock on April 19, 1996, was $47.75 pershare, giving the transaction an approximate value of $4 billion. Thetransaction is expected to be completed by the end of June 1996 and issubject to various conditions, including clearance under theHart-Scott-Rodino Antitrust Act and approval by StrataCom stockholders.

"By combining our networking technologies with those ofStrataCom, Cisco will become the first vendor to provide advancednetwork infrastructure for the intranet and Internet environments andthe only vendor to offer end-to-end connectivity across public,private or hybrid networks," said John Chambers, president and CEO of Cisco Systems.

"In addition to having complementary technologies and a sharedvision of future networking architectures, Cisco and StrataCom areboth entrepreneurial, fast-growing Silicon Valley companies thatthrive on the dynamic networking market," said StrataCom'sMoley. "There's an excellent fit of cultures, values and personalchemistry."

The transaction is expected to have a slightlydilutive-to-neutral impact on Cisco's earnings in fiscal 1997.However, any dilution is expected to be offset by the gain fromcertain appreciated securities from prior investments.

Concurrent with this agreement, the companies have enteredinto licensing and OEM agreements under standard terms. StrataComwill license Cisco IOS(TM)software for integration into itsline of wide area switching products, and Cisco will distribute and resellStrataCom's entire product line worldwide.

This press release contains forward-looking statements thatinvolve risks and uncertainties. The company's actual results,including the level of earnings of both Cisco and StrataCom, maydiffer from the results discussed in the forward-lookingstatements. Factors that might cause such a difference include, butare not limited to, risks associated with acquisitions, such asdifficulties in the assimilation of operations, technologies andproducts of the acquired companies, diversion of management'sattention from other business concerns and risks of entering newmarkets.

StrataCom, Inc., based in San Jose, Calif., develops, deliversand supports FastPacket networking systems for ATM applications inprivate wide area networks and public carrier service offerings, suchas Frame Relay, ATM and Internet. StrataCom's family of products,including IPX(R), IGX, BPX, AXIS, FastPAD, and EdgeConnect, is usedto integrate and transport a wide variety of corporate information,including voice, data, video, image and multimedia traffic innarrowband to broadband ATM network applications. Company news andproduct/service information are available at World Wide Web site

Cisco Systems (NASDAQ: CSCO) is the leading globalsupplier of internetworkingsolutions for corporate intranets and the globalInternet. Cisco's products, including routers, LAN and ATM switches,dial-up access servers and network management software, are integratedby the Cisco IOS software to linkgeographically dispersed LANs,WANs and IBM networks. Company news and product/service information areavailable at World Wide Web site Cisco isheadquartered in San Jose, Calif.