Cisco 2011 Annual Report Download - page 124

intends to defend the claims vigorously. While the Company believes there is no legal basis for its alleged
liability, due to the complexities and uncertainty surrounding the judicial process in Brazil and the nature of the
claims asserting joint liability with the importer, the Company is unable to determine the likelihood of an
unfavorable outcome against it and is unable to reasonably estimate a range of loss, if any. The Company does
not expect a final judicial determination for several years.
On March 31, 2011, a purported shareholder class action lawsuit was filed in the United States District Court for
the Northern District of California against the Company and certain of its officers and directors. A second lawsuit
with substantially similar allegations was filed with the same court on April 12, 2011 against the Company and
certain of its officers and directors. The lawsuits are purportedly brought on behalf of those who purchased the
Company’s publicly traded securities between May 12, 2010 and February 9, 2011, and between February 3,
2010 and February 9, 2011, respectively. Plaintiffs allege that defendants made false and misleading statements
during quarterly earnings calls, purport to assert claims for violations of the federal securities laws, and seek
unspecified compensatory damages and other relief. The Company believes the claims are without merit and
intends to defend the actions vigorously. While the Company believes there is no legal basis for liability, due to
the uncertainty surrounding the litigation process, the Company is unable to reasonably estimate a range of loss,
if any, at this time.
Beginning in April 2011, purported shareholder derivative lawsuits were filed in both the United States District
Court for the Northern District of California and the California Superior Court for the County of Santa Clara
against the Company’s Board of Directors and several of its officers for allowing management to make allegedly
false statements during earnings calls. The Company’s management of its stock repurchase program is also
alleged to have breached a fiduciary duty. The complaints include claims for violation of the federal securities
laws, breach of fiduciary duty, aiding and abetting breaches of fiduciary duty, waste of corporate assets, unjust
enrichment, and violations of the California Corporations Code. The complaint seeks compensatory damages,
disgorgement, and other relief.
In addition, the Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of
business, including intellectual property litigation. While the outcome of these matters is currently not
determinable, the Company does not expect that the ultimate costs to resolve these matters will have a material
adverse effect on its consolidated financial position, results of operations, or cash flows.
13. Shareholders’ Equity
(a) Stock Repurchase Program
In September 2001, the Company’s Board of Directors authorized a stock repurchase program. As of July 30,
2011, the Company’s Board of Directors had authorized an aggregate repurchase of up to $82 billion of common
stock under this program and the remaining authorized repurchase amount was $10.2 billion with no termination
date. A summary of the stock repurchase activity under the stock repurchase program, reported based on the trade
date, is summarized as follows (in millions, except per-share amounts):
Shares
Repurchased
Weighted-
Average Price
per Share
Amount
Repurchased
Cumulative balance at July 25, 2009 ............................. 2,802 $20.41 $57,179
Repurchase of common stock under the stock repurchase program ..... 325 24.02 7,803
Cumulative balance at July 31, 2010 3,127 $20.78 $64,982
Repurchase of common stock under the stock repurchase program .. 351 19.36 6,791
Cumulative balance at July 30, 2011 3,478 $20.64 $71,773
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