Cisco 2007 Annual Report Download - page 65

68 Cisco Systems, Inc.
Notes to Consolidated Financial Statements
Preferred Stock
Under the terms of the Company’s Articles of Incorporation, the Board of Directors may determine the rights, preferences, and terms of the
Company’s authorized but unissued shares of preferred stock.
Comprehensive Income
The components of comprehensive income are as follows (in millions):
Years Ended July 28, 2007 July 29, 2006 July 30, 2005
Net income $ 7,333 $ 5,580 $ 5,741
Other comprehensive income:
Change in unrealized gains and losses on investments, net of tax benefit (expense)
of $43, $57, and $(61) in fiscal 2007, 2006, and 2005, respectively 128 (64) (25)
Other(1) 166 61 10
Comprehensive income before minority interest 7,627 5,577 5,726
Change in minority interest(2) (4) 1 77
Total $ 7,623 $ 5,578 $ 5,803
(1) Includes primarily changes in currency translation.
(2) The Company consolidates its investment in a venture fund managed by SOFTBANK as it is the primary beneficiary as defined under FIN 46(R). As a result,
SOFTBANK’s interest in the change in the unrealized gains and losses on the investments in the venture fund is recorded as a component of accumulated other
comprehensive income, and is reflected as a change in minority interest.
10. Employee Benefit Plans
Employee Stock Purchase Plan
The Company has an Employee Stock Purchase Plan, which includes its sub-plan, the International Employee Stock Purchase Plan (together,
the “Purchase Plan”), under which 321.4 million shares of the Company’s stock have been reserved for issuance. Eligible employees may
purchase a limited number of shares of the Company’s stock at a discount of up to 15% of the lesser of the market value on the subscription
date or the purchase date, which is approximately six months after the subscription date. The Purchase Plan terminates on January 3, 2010.
The Company issued 17 million, 21 million, and 19 million shares under the Purchase Plan in fiscal 2007, 2006 and 2005, respectively. As
of July 28, 2007, 82 million shares were available for issuance under the Purchase Plan.
Employee Stock Incentive Plans
Stock Incentive Plan Program Description As of July 28, 2007, the Company had five stock incentive plans: the 2005 Stock Incentive Plan
(the “2005 Plan”), the 1996 Stock Incentive Plan (the “1996 Plan”), the 1997 Supplemental Stock Incentive Plan (the “Supplemental Plan”),
the Cisco Systems, Inc. SA Acquisition Long-Term Incentive Plan (the “SA Acquisition Plan”), and the Cisco Systems, Inc. WebEx Acquisition
Long-Term Incentive Plan (the “WebEx Acquisition Plan”). In addition, the Company has, in connection with the acquisitions of various
companies, assumed the stock incentive plans of the acquired companies or issued replacement share-based awards. Share-based
awards are designed to reward employees for their long-term contributions to the Company and provide incentives for them to remain with
the Company. The number and frequency of share-based awards are based on competitive practices, operating results of the Company,
and government regulations. Since the inception of the stock incentive plans, the Company has granted stock options to virtually all
employees, and the majority has been granted to employees below the vice president level.