11 Nov 2003

Presentation of Proposal to nnual Meeting of Cisco Stockholders an Jose, California
by Ann Lau hair of Visual Artists Guild

“Cisco Systems' vision is to change the way we work, live, play and learn. Our mission is to shape the future of the Internet in ways that empower individuals to participate fully in our vision.”

“The Internet economy is creating a level playing field for diverse companies, countries, and individuals around the world. It is characterized as inclusive and as having low barriers to entry. We value the Internet as an open ecosystem that encourages new and diverse members to fully participate and collaborate.”

“Although we all tend to individually judge ourselves by our intentions, the rest of the world will always measure each of us by the impact of our behavior. Each of us must own our behavior, and the impact it has on others.”

“Cisco takes the responsibility as a global citizen seriously. It's the right thing to do and our success depends on it.”

Mr. Chambers (Cisco Systems President and CEO), the statements I just read are the statements you made and what you believe in regarding Cisco Systems. I cannot agree with you more and I applaud you for your leadership and clear vision for Cisco Systems.

Ladies and gentlemen, members of the Board, fellow stockowners, I am here to ask you all to help Mr. John Chambers in fulfilling those mission statements by voting for proposal #4.

“The stockowners recommend that the board prepare a report to the stockowners on Cisco hardware and software products that can (a) allow monitoring, interception, keyword searches, and/pr recording of the Internet, or (b) act as a ‘firewall’ by which selected Internet traffic can be prevented from raching its addressee outside the country of origin or by which downloading of information from selected sites outside the country of origin is prevented. This report would be limited to hardware and software provided to government agencies and state-owned communications/information technology entities in any country.”

One country that has used technology effectively to monitor its citizens is the Peoples Republic of China. China has increasing cracked down on internet dissent and has imprisoned many internet writers on subversion charges. Allow me to introduce you to two people. The first person is Huang Qi. Huang Qi could be anyone of us. In May this year, Huang Qi, who has been detained since June, 2000 was sentenced to five years in prison. Huang Qi is a computer engineer who started a missing person web site and reported on official corruptions. Another person is Liu Di. Liu Di could be your daughter, your sister or the girl next door. Liu Di was a 22 year old Beijing University student when she was reported missing in November last year. Using the pseudonym "Stainless Steel Mouse", she has written several online essays criticizing the Chinese government. In one essay, Liu wrote that "my ideals are the ideals of an open society... In my view, freedom does not just include external freedom, but freedom within our hearts and minds."

In rejecting my proposal, Cisco claims that it sells through resellers and thus is ignorant of its end users. Yet, Mr. Greg Dixon, Chief Information Officer at Cisco China specifically said, “We, also work with local, provincial and national government organization at various levels and this year, we, were named ‘Recommended E-government Solutions Providers’ by the Chinese Ministry of Information.” In fact, Cisco, in its press statements, announced in October, 2002, a key contract to supply China Telecom with routers for its northern ChinaNet IP backbone network expansion covering 10 major provinces. In December, 2002, Cisco announced that it will provide networking equipment for China Unicom upgrade for 15 cities and provinces. In September, 2003, Cisco won a contract with China Telecom to cover 2 southern provinces and 10 northern provinces.

Cisco is concerned about what effect this proposal would have in terms of customer relations. However, the broadness of the proposal’s language allows Cisco leeway to interpret it more narrowly and to omit proprietary information. Regular financial reporting for publicly traded companies has long been accepted as a way to hold companies accountable to their shareholders. Similarly, reporting on human rights, while not required by law, could provide the same sort of accountability.

On August 31, 2002, after 89 years in business, Arthur Andersen LLP announced that it ends its role as auditor of public companies. When he established his company in 1913, Arthur Andersen had the vision that members of his firm possess "the knowledge to probe deeply into corporate operations and the courage to tell management what changes must be made." Arthur Andersen, the man, died in 1947. Arthur Andersen, the company, continued his vision. It flourished, it grew, remaining the leading accountancy firm through the decades. But somehow, omething went wrong. The vision and the mission of the company fell on the wayside.

Ladies and gentlemen, we do not want Cisco to follow the same fate. In voting for this proposal, you are in fact asking Cisco to take a serious look on who Cisco is selling its products to and how its products are being used for repressive purposes. You, as stockowners, have the right to know. You, as stockowners have the responsibility to motivate management to be more vigilant about the end result of Cisco’s business practices. You, as stockowners will be the catalyst in making into a reality Mr. Chamber’s stated mission that Cisco takes the responsibility as a global citizen seriously. As Mr. Chambers had said, it is indeed the right thing to do and Cisco’s success does depend on it.

In voting for this proposal you are helping to fulfill the vision of this corporation to allow people like the young lady, Liu Di, to fully participate and collaborate in the internet. As Mr. Chambers has articulated so well: we must each own our behavior, and the impact it has on others. The long term success of Cisco Systems depends on everyone associated with this company to live up to the its vision.

Ladies and Gentlemen, Cisco will achieve its vision and a long term profitability when you vote yes on Proposal #4.

Thank you.

Submitted by Ann Lau - November 2003

Resolution

The stockowners recommend that the board prepare a report to the stockowners on Cisco hardware and software products that can (a) allow monitoring, interception, keyword searches, and/or recording of the Internet, or (b) act as a "firewall" by which selected Internet traffic can be prevented from reaching its addressee outside the country of origin or by which downloading of information from selected sites outside the country of origin is prevented.

This report would be limited to hardware and software provided to government agencies and state-owned communications/information technology entities in any country. The countries shall be identified, but only a total of each such product in each country shall be reported. The report shall cover each fiscal year of Cisco, starting with fiscal 2004. The first report shall include a cumulative provision of such products from 1995 to the date of the report.

If Cisco has entered into any contracts by which it has pledged to keep secret from its stockowners the existence or content of such contracts for the above hardware or software products to the above customers, then the required reports shall not need to include those products for those countries, but shall need to note that secrecy-against-stockowners contracts exist and list the products which they cover.

Supporting Statement

Anything that stifles the Internet can discourage its use. Cisco should be promoting the use of the Internet to the maximum, so that its hardware and software sales can reach the largest market possible. Government monitoring, control, or censorship of the Internet can chill public enthusiasm toward Internet and computer use. Freedom of speech is threatened by such practices, not only in the country involved but for the rest of the world.

Based on published reports, I believe that one country that has used technology effectively to monitor its people is the Peoples Republic of China. The objectives of the PRC apparently are:

1. To prevent people of the PRC from accessing certain political and/or religious sites.
2. To monitor the discussion of certain political and/or religious topics by people of the PRC, especially in their e-mails.
3. To block or delay the transmission of information or e-mail that the government disapproves of.
4. To inhibit the growth of Internet discussion groups.

We stockowners deserve to be informed if Cisco's sales policies are promoting or inhibiting Internet use and its potential for growth.

Opposition by Cisco 2003

The Board of Directors believes this proposal does not serve the best interests of Cisco or its shareholders and recommends a vote AGAINST it.

Cisco and its Board of Directors are committed to freedom of speech. Furthermore, we are a proponent of the vast potential of the Internet to advance and propel the dissemination of information among people throughout the world. Nonetheless, we believe that the proposal will not further these social principles, will unnecessarily expend Cisco resources and could interfere with our customer relations.

The product capabilities described in this shareholder proposal meet fundamental and legitimate needs to protect the integrity of Internet communications networks. Cisco products, whether used by a private business, a telecommunications service provider or a government agency, have these capabilities, as do the products of our competitors. These capabilities are legitimately used by network operators and by governmental customers for those purposes and are also used by the United States and other countries for law enforcement, national security purposes and to protect their citizens against the threat of terrorism. In the United States and other countries whose governmental systems are based upon the rule of law, the exercise of these powers is subject to constitutional and legal protections and respect for individual rights.

This shareholder proposal would require the proposed report to cover all hardware and software sold to any government agencies and state-owned communications or information technology entities which allows monitoring, interception, keyword searches, and/or recording of the Internet, or which acts as a "firewall." Because the capabilities listed are inherent in a wide range of products that we sell to anyone, and because we sell our products to government agencies and state-owned communications or information technology entities in most of the countries of the world, this proposal is seeking a report that would list most of the countries of the world and would require us to list a substantial portion of our products. The report sought would result in substantial expenditure of company resources, in both funds and staffing, without furthering the freedoms that Ms. Lau addresses in her supporting statement.

Outside of the United States, we sell our products almost exclusively through resellers, with direct sales to some telecommunications service providers (both government owned and otherwise) but rarely if ever directly to governmental agencies or entities. In some cases, we do not have visibility into the names of, and products purchased by, particular end-users. We believe that this shareholder proposal would require us to set up inquiry procedures with our distributors and resellers to determine those countries in which sales are made to government agencies and state-owned communication or information technology entities and which products are so sold. The board is concerned that the mere gathering of this information could have an impact on our relations with reseller customers.

In the supporting statement to this shareholder proposal, Ms. Lau discusses the actions of the Government of the People's Republic of China. In the past few years, we addressed our activities in the People's Republic of China as they relate to freedom of speech and association over the Internet with the U.S. China Security Review Commission. As we informed the Commission, the products that we sell to any customer in the People's Republic of China, government or otherwise, do not contain any detection or monitoring capabilities which are different from the products we sell to anyone anywhere else in the world.

While we understand the cause Ms. Lau espouses, and vigorously support freedom of speech and association and the role of the Internet in providing opportunities to all the peoples of the world, the Board of Directors believes that this proxy statement and the meeting are not proper forums for this debate.

Recommendation of the CISCO Board of Directors

For all the reasons set forth above, the Board of Directors recommends
a vote AGAINST Proposal No. 4.

Related articles about the Great Firewall in China

• Wired.com
• NewsMax.com
• BusinessWeek Online