{"id":38501,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/amended-and-restated-international-assignment-agreement-cisco.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"amended-and-restated-international-assignment-agreement-cisco","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/amended-and-restated-international-assignment-agreement-cisco.html","title":{"rendered":"Amended and Restated International Assignment Agreement – Cisco"},"content":{"rendered":"

Cisco Systems, Inc <\/strong><\/p>\n

170 West Tasman Drive<\/p>\n

San Jose, CA 95134-1706<\/p>\n

Phone: 408 526 4000<\/p>\n

Fax: 408 526 1400<\/p>\n

http:\/\/www.cisco.com<\/p>\n

September 16, 2011<\/p>\n<\/p>\n

Wim Elfrink<\/p>\n

[ADDRESS]<\/p>\n<\/p>\n\n\n\n
Re:<\/strong><\/td>\nAmended and Restated International Assignment Agreement<\/u>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Dear Wim:<\/p>\n

I am pleased to confirm the amendment and restatement of your international
\nassignment to San Jose, California, United States. This letter of agreement
\noutlines the terms and conditions of the amendment and restatement of your
\ninternational assignment. Your international assignment is also subject to the
\nterms of Cisco153s Long Term International Assignment Policy <\/em>(the
\n“International Assignment Policy”) and the Tax Equalization Policy<\/em> as
\nthey apply to international assignees generally. However, where an express term
\nof this Agreement and the International Assignment Policy conflict, this
\nAgreement will govern.<\/p>\n

Your point of origin is the Netherlands (the “home country”) and your country
\nof reference during your assignment is the United States (the “host country”).
\nWe understand you are a resident of the United States for tax purposes.<\/p>\n

This Agreement supersedes and replaces, in its entirety, your previous
\nAmended and Restated International Assignment Agreement dated February 15, 2010
\nand your previous Agreement of International Assignment from the Netherlands to
\nthe United States dated November 9, 2001 and any prior employment agreement
\nexcept to the extent set forth in Exhibit A or as otherwise required by the laws
\nof the Netherlands.<\/p>\n

Assignment <\/strong><\/p>\n

Your international assignment began on July 31, 2011.<\/p>\n

Your job title is Executive Vice President, Emerging Solutions and Chief
\nGlobalization Officer. In this capacity, you report to John Chambers, or his
\nsuccessor(s) and\/or designee(s). As the Executive Vice President, Emerging
\nSolutions and Chief Globalization Officer, you are<\/p>\n

\n

responsible for such duties and responsibilities as Mr. Chambers or his
\nsuccessor or designee assign. You are required to travel internationally during
\nyour international assignment.<\/p>\n

Term <\/strong><\/p>\n

Although neither this assignment nor this letter alters your status as an
\nat-will employee, it is anticipated that your international assignment will last
\nfor up to two years from July 31, 2011. Your international assignment may be
\nextended if expressly agreed upon in writing by you and Cisco.<\/p>\n

Salary and Bonus <\/strong><\/p>\n

You will remain an employee of the home country and be paid on its payroll.
\nYour annual base salary will continue to be EUR 592,772 (USD 853,651 as of July
\n31, 2011) as approved by the Compensation and Management Development Committee
\neffective as of August 1, 2010. You will also continue to be eligible to
\nparticipate in Cisco153s Executive Incentive Plan (“EIP”). Your continued
\nparticipation in the EIP will be subject to the terms and conditions of the EIP.
\nYour target bonus percentage under the EIP for fiscal year 2012 will continue to
\nbe 125 percent (125%) of your annual base salary.<\/p>\n

Your salary and bonuses will be paid to you in Euro from your home country
\nless applicable deductions and withholdings; however, pursuant to the Tax
\nEqualization Policy, you will receive a Host Country Tax Payment to off-set any
\nadditional amounts you are required to pay in taxes due to your international
\nassignment on the same basis as other international assignees.<\/p>\n

Benefits <\/strong><\/p>\n

Life insurance, business travel accident insurance, retirement plans, and
\ndisability coverage will be provided from the home country while on assignment.
\nYour health benefits will be provided by Cigna International while on
\nassignment. For additional information about benefits coverage, please refer to
\nthe Benefits section on Cisco153s intranet and access the link to Worldwide Plans.
\nYour vacation entitlements will continue to be governed by the policies in
\neffect for the home country and your PTO accrual will remain unchanged. However,
\nworking hours, public holidays and sick leave will follow policies in effect for
\nthe host country, the United States.<\/p>\n

Please be aware that in the case of a medical or security emergency, Cisco
\nhas contracted with International SOS (“ISOS”) to provide employees working
\nabroad with access to a full range of medical information and emergency
\nservices, including medical assistance, international healthcare, security
\nservices and outsourced customer care. Additional information about ISOS, is
\navailable on Cisco153s intranet at wwwin.cisco.com\/employee\/benefits\/isos.shtml.\n<\/p>\n

On-Going Allowances and Reimbursements <\/strong><\/p>\n

Cisco has adopted a “Balance Sheet Approach” in compensating employees on
\ninternational assignments, to ensure that assignees can maintain purchasing
\npower similar to that which they would have enjoyed in their home country,
\nassuming the same salary, grade level and family size. Therefore, during your
\ninternational assignment, you will continue to be entitled to the following
\nallowances or reimbursements to cover additional costs incurred as a result of
\nyour<\/p>\n

\n

international assignment. In addition, any amount of allowance\/reimbursement
\nthat is not used by you in any given month shall be carried over to the next
\nmonth(s) and made available to you (in addition to the maximum allowance
\nspecified) in the subsequent month(s). Notwithstanding the foregoing, with
\nrespect to any allowance\/reimbursement that would otherwise be treated as a
\ndeferred compensation arrangement under Section 409A of the Internal Revenue
\nCode of 1986, as amended (“Section 409A”) if the amount were carried over into a
\nsubsequent taxable year, any portion of such allowance\/reimbursement that is
\nunused as of each December 31 (including amounts carried over from a prior month
\nin the same calendar year) shall not be carried-over into the next calendar year
\nand made available to you. Cisco will reimburse you for business expenses in
\naccordance with Cisco153s applicable reimbursement policies; however, if you incur
\nany business related travel expenses that are not reimbursed by Cisco under such
\npolicies, any of the allowances below may be used to cover such expenses.<\/p>\n

Housing Assistance: <\/em><\/strong><\/p>\n

Cisco will provide housing and utilities assistance in the United States.
\nThis housing and utilities assistance will be paid from the Netherlands payroll
\nin the monthly amount not to exceed EUR 13,020 (USD 18,750 as of July 31, 2011)
\nbeginning July 31, 2011 (or whenever you occupy your long term housing).<\/p>\n

Goods and Services: <\/em><\/strong><\/p>\n

Cisco will pay you a goods and services differential of USD 1,035 per month
\nbeginning in August 2011. The goods and services differential will be increased
\nto USD 3,333 per month beginning in August 2012 and throughout your
\ninternational assignment.<\/p>\n

Property Management: <\/em><\/strong><\/p>\n

If you elect not to sell or rent your home country residence, Cisco will
\nreimburse you for the costs for property management of that residence in
\naccordance with the International Assignment Policy.<\/p>\n

Dependent Education Reimbursement: <\/em><\/strong><\/p>\n

Cisco will pay direct bill costs of annual tuition for each of your dependent
\nchildren attending elementary or secondary school at the host location with a
\ncost not to exceed USD 50,000 in the aggregate per school year.<\/p>\n

Annual Dependent Visit: <\/em><\/strong><\/p>\n

Cisco will pay you a USD 10,000 annual allowance for your dependents to visit
\nyou and the family in the United States.<\/p>\n

Home Leave Travel Allowance: <\/em><\/strong><\/p>\n

Cisco will pay you a USD 50,000 annual allowance for you, your spouse, and
\nyour children to return to your home in the Netherlands. As a guideline, this
\nallowance typically covers three trips per year.<\/p>\n

\n

Automobile Assistance: <\/em><\/strong><\/p>\n

The costs for the rent or purchase of two family-style automobiles, for you
\nand your spouse will be paid on your behalf by Cisco. The annual cost is not to
\nexceed USD 36,000.<\/p>\n

Relocation Misc Expense Allowance: <\/em><\/strong><\/p>\n

Cisco will provide you a lump sum relocation allowance equal to EUR 34,720
\n(USD 50,000 as of July 31, 2011) beginning July 31, 2012 per year paid through
\npayroll in the Netherlands for relocation, adjustment and transition assistance.
\nPayment shall continue to be made on or about each anniversary of the
\ncommencement of your international assignment. This payment shall be in lieu of
\nthe Miscellaneous Relocation Payment set forth in the International Assignment
\nPolicy.<\/p>\n

Maximum Benefits <\/strong><\/p>\n

The maximum value of benefits pursuant to the On-Going Allowances and
\nReimbursements section of this Agreement and including the value of any payments
\nfor fees associated with tax services provided by EY and other tax consulting
\nservices and the value of any benefits pursuant to Cisco153s Tax Equalization
\nPolicy, but excluding the value of any benefits under the Repatriation section
\nof this Agreement upon completion of your international assignment, is not to
\nexceed USD 508,420 with respect to benefits for fiscal year 2012 and USD 536,000
\nwith respect to benefits for fiscal year 2013, based on the currency exchange
\nrate of 1 EUR to 1.4401 USD in effect as of July 31, 2011.<\/p>\n

Repatriation <\/strong><\/p>\n

Upon completion of your international assignment, Cisco will provide you with
\nrelocation assistance related to your move back to the Netherlands. This will
\ninclude one-way business class travel for you and your qualifying dependents;
\nshipment of household goods and personal effects and temporary living in your
\nhome country.<\/p>\n

Assuming your international assignment is successful, upon its termination
\nCisco will attempt to employ you in a position comparable to your then current
\nposition and which utilizes the skills and experience you gained during your
\ninternational assignment. If Cisco is unable to provide you with a position
\ncomparable to your then current position, Cisco will attempt to provide you with
\na position comparable to your position immediately prior to the commencement of
\nyour international assignment. Your base salary and target bonuses, in either
\ncase, will be at a level commensurate with the position offered. If Cisco is
\nunable to offer you a position, your employment will terminate and Cisco will
\npay you an amount equal to 225 percent (225%) of your then current annual salary
\n(the “Severance”). Cisco153s obligation to pay the Severance will be contingent
\nupon your execution and the effectiveness of a release agreement in a form
\nprovided by Cisco within 30 days of your “separation from service” from Cisco as
\nthat term is defined in Section 409A. This Severance would be in lieu of any
\nentitlement you may have to notice of termination, to pay in lieu of notice of
\ntermination, or to any other severance payment from any source. This section
\nsupersedes any termination of employment provision of the International
\nAssignment Policy.<\/p>\n

\n

Taxes <\/strong><\/p>\n

Your international assignment will be covered by Cisco153s Tax Equalization
\nPolicy and you hereby acknowledge that you have accepted all the terms and
\nconditions set forth in Exhibit B. Your pay will be subject to annual
\nhypothetical tax deductions in amounts determined by Ernst & Young (“EY”).
\nCisco153s philosophy regarding tax equalization is that as an international
\nassignee, you will neither materially gain nor lose from the differences in
\nincome and social tax costs between your home and host country, within certain
\nparameters. Tax equalization applies to Cisco equity awards as described in the
\nTax Equalization Policy. Cisco has retained EY, an independent tax accounting
\nfirm, to provide assistance with the preparation of both your home and local
\ncountry tax filing obligations and to prepare annual tax equalization
\ncalculations. Please contact [ ] in EY153s Tax Department [ ] for any questions.\n<\/p>\n

Fees associated with tax services provided by EY and other tax consulting
\nservices, including any services provided by your tax advisor in the
\nNetherlands, shall be paid on your behalf by Cisco not to exceed USD 75,000 per
\nyear.<\/p>\n

Notwithstanding the foregoing, if this Agreement or any benefit payable to
\nyou hereunder is subject to Section 409A and you are a “specified employee”
\n(within the meaning of Section 409A) as of the date you separate from service
\nfrom Cisco, then any payments scheduled to be made to you pursuant to this
\nAgreement during the first six months following your separation from service
\nshall be delayed and shall accrue interest at the applicable federal rate for
\nsuch six month period. The delayed payments (and including any accrued interest)
\nshall be paid immediately following the end of the six month delay. In no event
\nshall Cisco be liable for any taxes or penalties imposed under Section 409A with
\nrespect to any benefit(s) paid to you pursuant to this Agreement. All
\nreimbursements under this Agreement that are subject to Section 409A shall be
\nmade no later than the end of the calendar year next following the calendar year
\nin which the applicable expenses are incurred and the Severance, if any, shall
\nbe paid no later than the 15th day of the third month following the year in
\nwhich your international assignment terminates. Any tax equalization payments
\nshall be paid within the time periods described in Section 1.409A-1(b)(8)(iii)
\nof the Treasury Regulations under Section 409A.<\/p>\n

Dispute Resolution <\/strong><\/p>\n

You and Cisco acknowledge and agree that any and all disputes or claims
\narising from or relating to your recruitment to or employment with Cisco
\n(including but not limited to disputes or claims arising from or relating to
\nthis Agreement), or the termination of your employment, will be resolved solely
\nand exclusively pursuant to final and binding arbitration in lieu of any
\nevidentiary hearing before a government agency and\/or a court trial before a
\njudge or jury, pursuant to the terms of Cisco153s Arbitration Agreement and
\nPolicy, a copy of which can be found at
\nhttp:\/\/wwwin.cisco.com\/HR\/employee\/proprietary_info\/agreement2arbitrate.shtm<\/u>l.
\nThe agreement to arbitrate means that both you and Cisco have expressly waived
\nany and all rights to a trial before a court or a jury.<\/p>\n

\n

General <\/strong><\/p>\n

Cisco153s personnel policies and standards of business apply to your
\nassignment, unless a written exception is provided by a company representative
\nauthorized to make that exception or is otherwise set forth in this Agreement.\n<\/p>\n

This Agreement sets forth the entire agreement between you and Cisco
\nregarding your international assignment except that existing agreements with
\nCisco such as your agreement to arbitrate, your proprietary information and
\ninventions agreement and agreement(s) establishing at-will employment are not
\nsuperseded by this agreement, unless expressly provided to the contrary herein.\n<\/p>\n

This Agreement can only be modified by a written document signed in writing
\nby Randy Pond or his successor(s) or designee(s) and approved by the
\nCompensation and Management Development Committee of the Board of Directors.
\nPlease note that Cisco reserves the right to unilaterally modify the provisions
\nof this Agreement and\/or the documents incorporated herein as legal requirements
\nmay dictate, new practices may require or for other reasons at the discretion of
\nCisco. In the event such modifications are made, notification will be provided
\nto you.<\/p>\n

This Agreement shall be governed by, and construed in accordance with, the
\nlaws of the State of California (except its choice-of-law provisions).<\/p>\n

We are excited to have you join our operations in the United States. If you
\nare in agreement with the terms and conditions of your assignment as outlined in
\nthis letter and in the attached policies, please sign the two originals and
\nreturn one to the person listed below.<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

BY CISCO SYSTEMS, INC.<\/p>\n<\/td>\n

<\/td>\n\n

APPROVED & ACCEPTED<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

\/s\/ Randy Pond<\/p>\n<\/td>\n

<\/td>\n\n

9\/16\/11<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

\/s\/ Wim Elfrink<\/p>\n<\/td>\n

<\/td>\n\n

9\/16\/11<\/p>\n<\/td>\n<\/tr>\n

\n

Randy Pond<\/p>\n<\/td>\n

<\/td>\n\n

Date<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

Wim Elfrink<\/p>\n<\/td>\n

<\/td>\n\n

Date<\/p>\n<\/td>\n<\/tr>\n

\n

Executive Vice President, Operations,<\/p>\n

Processes and Systems<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n\n

Executive Vice President, Emerging Solutions<\/p>\n

and Chief Globalization Officer<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

EXHIBIT A <\/strong><\/p>\n\n\n\n
\n

1.<\/p>\n<\/td>\n

\n

Termination of the Employee153s home country employment agreement will be
\nsubject to a notice period of two (2) months. Notice must be given before the
\nend of a calendar month, in which case the formal notice period will start on
\nthe first day of the month following the month during which notice was served.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

2.<\/p>\n<\/td>\n

\n

The Employee shall be entitled to an annual holiday allowance of 8% of the
\ngross annual base salary, payable in the month of May of the current year. If
\nthe Employee performed work during only a part of the year, the holiday
\nallowance shall be calculated and paid proportionately.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

3.<\/p>\n<\/td>\n

\n

The Employee shall be entitled to 25 days153 holiday a year, which the Employee
\nshall take in consultation with and after approval by the Employer.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

In principle, accrued holidays must be taken in the calendar year in which
\nthey accrue. Excess holidays (i.e., holidays accrued during a certain year which
\nhave not been taken during the calendar year in which they accrued) must be
\ntaken between 1 January and 1 April of the subsequent calendar year in
\nconsultation with the Employer. If, after consultation, the holidays are not
\ntaken during the said period, the Employer shall designate the period during
\nwhich the holidays must be taken. If, in spite of this, the designated holiday
\nperiod is not taken, the claim to the excess holidays shall lapse.<\/p>\n

Upon termination of the employment relationship, the Employee shall not be
\nentitled to any salary over holidays and\/or hours which have been taken but
\nwhich have not yet accrued. The Employee shall be obliged to repay the Employer
\nany salary already received over such holidays and\/or hours at the end of the
\nemployment relationship.<\/p>\n\n\n\n
\n

4.<\/p>\n<\/td>\n

\n

If the Employee is ill or unable to perform work for any other reason, he
\nshall be obliged to inform the Employer thereof on the first day of absence.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

If the Employee is unable to perform his work as a result of illness, he
\nshall remain entitled to 100% of his last earned salary for a period of 52
\nweeks, unless the illness was caused intentionally by him or ensued from an
\ninfirmity in respect of which he intentionally gave the Employer false
\ninformation when he entered into the employment agreement, in the event he
\ncauses an obstruction of or delay in the recovery process, or if the
\nEmployee:despite being able to do so:refuses to perform other suitable work for
\nhis own Employer or:with the prior approval of the Industrial Insurance
\nBoard:for another employer.<\/p>\n

The wages will be reduced by:<\/p>\n

– the amount of any financial benefit which the Employee receives under any
\nstatutorily prescribed insurance or under any insurance or from many fund which
\nwas agreed upon in or results from the employment agreement;<\/p>\n

– the amount of income earned by the Employee, whether in or outside the
\nemployer-employee relationship, from work which he has performed in the period
\nduring which the<\/p>\n

\n

contractually agreed work could have been performed if he had not been
\nprevented from doing so.<\/p>\n

If the Employee153s incapacity for work was caused by a third party, the
\nEmployer shall not be obliged to pay the Employee153s salary or a supplement to
\nhis social security benefits. If, in that case, the Employee can hold a third
\nparty liable for loss of income in connection with his incapacity for work, he
\nshall assign his claim against the third party to the Employer, for which he
\nwill receive an amount equal to the amount which he would have received if the
\nthird party had not been involved in the incapacity for work. The Employer will
\npay the amount to which the Employee is in that case entitled in monthly
\ninstallments, the amount of which shall be determined by the Employer.<\/p>\n

The Employer will not invoke the provisions contained above, if and insofar
\nas the Employee cannot hold the third party liable.<\/p>\n\n\n\n
\n

5.<\/p>\n<\/td>\n

\n

The Employer shall compensate 50% of the Employee153s premium payable for the
\nstandard insurance class of the Company153s health insurance plan. The Company
\ndoes not contribute to the costs of participating in insurance plans other than
\nthe Company plan.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Employer has taken out accident insurance, i.e. “Cisco153s Worldwide
\nBusiness Travel Accident Insurance (BTA)”, for the benefit of the Employee.<\/p>\n\n\n\n
\n

6.<\/p>\n<\/td>\n

\n

As required, the Employee has joined the employer153s pension scheme in the
\nNetherlands. Both employee and employer participate in the costs of this scheme.
\nUnder the scheme there is an employer contribution for the following pensions:
\nold age pension, survivors pension, orphans pension and occupational disability
\nbenefit. The contribution percentage increases with age and the contribution
\namount is generally determined as a percentage of certain cash compensation of
\nthe employee. Contributions are used to purchase insurance which has a specified
\nminimum guaranteed annual rate of return.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

7.<\/p>\n<\/td>\n

\n

Neither during the employment term nor upon termination of the employment
\nshall the Employee inform any third party in any form, directly or indirectly,
\nof any particulars concerning or related to the business conducted by the
\nEmployer or its affiliated companies which he could reasonably have known were
\nnot intended for third parties, regardless of the manner in which he learned of
\nthe particulars.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Any violation of the obligation to maintain confidentiality as set forth in
\nthe preceding paragraph shall carry a penalty of NLG 10,000, immediately payable
\nby the Employee to the Employer and without prejudice to any other claims which
\nthe Employer may have, including the right to full damages.<\/p>\n\n\n\n
\n

8.<\/p>\n<\/td>\n

\n

Insofar as the rights specified hereinafter are not vested in the Employer by
\noperation of law on the grounds of the employment relation between the parties,
\nthe Employee covenants that he shall transfer and, insofar as possible, hereby
\ntransfers to the Employer any rights of whatever nature in or arising from
\ninventions made by the Employee in the discharge of his duties, both in the
\nNetherlands and abroad.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
\n

9.<\/p>\n<\/td>\n

\n

The foregoing provisions on this Exhibit A shall be governed by the laws of
\nthe Netherlands.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

EXHIBIT B <\/strong><\/p>\n

CISCO SYSTEMS, INC. <\/strong><\/p>\n

INTERNATIONAL ASSIGNMENT TAX EQUALIZATION POLICY
\nAGREEMENT <\/strong><\/p>\n

I acknowledge having read the Tax Equalization Policy of Cisco Systems, Inc.
\n(“Cisco”), located at
\nhttp:\/\/wwwin.cisco.com\/FinAdm\/Tax\/StockOptions\/stock_faq.shtml<\/u>, and
\nunderstand the personal impact of the Policy. Any questions concerning this
\nPolicy with Cisco have been fully explained to my satisfaction. I accept that
\nall interpretations under this agreement shall be controlled by the Policy of
\nCisco, which is included as part of this agreement. Cisco shall have the right
\nand privilege at any time it deems necessary and proper to amend, add, or delete
\nprovisions to and from this Policy without prior notice.<\/p>\n

I understand and agree that all tax positions affecting income, deductions
\nand credits outside the scope of the Policy (i.e., amounts not covered by the
\nPolicy) are the responsibility of the employee. Cisco is not liable for any
\ntaxes, penalties, or interest resulting from a successful challenge by any tax
\nauthority of any item not covered by the Policy.<\/p>\n

In addition, I understand the employee is fully responsible for all penalties
\nand interest charges assessed by any tax authority due to the employee153s failure
\nto (1) provide information to Ernst & Young on a timely basis, (2) notify
\nErnst & Young of any significant personal income or investment transactions,
\nor (3) cooperate with Cisco with respect to the tax equalization process.<\/p>\n

I understand and agree that Cisco will reduce my compensation by an estimated
\nhypothetical tax. The estimated hypothetical tax is an amount which approximates
\nmy periodic estimated tax deductions calculated with reference to compensation,
\nbenefits, deductions and credits otherwise available to me had I remained in my
\nhome country, except as otherwise provided in this Policy. In return, Cisco will
\nadvance wages that I have not yet earned to assist with the payment of my actual
\nhome and host country tax liabilities within the limits prescribed by the
\nPolicy.<\/p>\n

I understand that these wage advances provided by Cisco for payment of taxes
\nconstitutes an obligation by me to Cisco, which will be reconciled with the
\nfinal liabilities that are Cisco153s responsibility through the annual tax
\nequalization settlement calculation. After completion of the tax equalization
\nsettlement statement for each taxable year, I agree to repay any obligation for
\neach taxable year within thirty (30) days. If I fail to repay any obligation to
\nCisco within thirty (30) days after completion of the tax equalization
\nsettlement statement, then, unless Cisco and I have agreed otherwise in writing,
\nCisco shall have the right to:<\/p>\n\n\n\n
<\/td>\n\n

a)<\/p>\n<\/td>\n

\n

reduce any foreign assignment allowances or reimbursements due to me, and\/or\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n

b)<\/p>\n<\/td>\n

\n

reduce future amounts paid to me whether as wages, salary or other
\ncompensation for services performed in light of my having received wage advances
\nthat I have not yet earned.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The total obligation will become immediately due and payable if my employment
\nwith Cisco or any of its affiliate corporations is terminated, whether
\nvoluntarily or involuntarily.<\/p>\n

\n

If I fail to furnish tax records in response to a request by Cisco pursuant
\nto the Policy, or cease employment with Cisco or any of its subsidiaries for any
\nreason before the tax records needed to complete the year-end tax equalization
\nsettlement statement under the Policy are available, then Cisco shall have the
\nright to calculate such amounts by making reasonable assumptions of probable
\ntaxes. If an amount is owed to Cisco, Cisco shall also have the right to require
\nimmediate payment of such amount, including the right to reduce future amounts
\npaid to me whether as wages, salary or other compensation for services performed
\nin light of my having received wage advances that I have not yet earned, unless
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