Audit Committee

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Effective December 8, 2022

I. Purpose

The purpose of the Committee is to assist the Board in discharging its responsibilities relating to oversight of the Company by reviewing the Company’s financial information, which will be provided to stockholders and others; reviewing the Company’s systems of internal controls, which management and the Board have established; reviewing the Company’s financial and risk management policies; reviewing the Company’s cybersecurity and data protection program and policies; appointing, retaining and overseeing the performance of independent accountants; and overseeing the Company’s accounting and financial reporting processes and the audits of the Company’s financial statements, as more fully set forth in Section III of this Charter.

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II. Composition

The Committee shall consist of not less than three members of the Board, each of whom shall be independent as required by Section 10A(m) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), any rules and regulations promulgated thereunder by the Securities and Exchange Commission (the “SEC”), and the rules of The Nasdaq Stock Market (“Nasdaq”). No member of the Committee shall have participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the preceding three years.

All members of the Committee shall be able to read and understand fundamental financial statements, including a balance sheet, income statement, and cash flow statement. At least one member of the Committee shall have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities.

The members of the Committee shall be appointed by the Board and are subject to annual reconfirmation. The Board shall designate one member of the Committee as the Committee’s chairperson. The members of the Committee may be removed by the Board.

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III. Responsibilities and Duties

In carrying out the purpose set forth in Section I above, the Committee shall:

  1. Review the significant accounting principles, policies and practices followed by the Company in accounting for and reporting its financial results of operations in accordance with generally accepted accounting principles (“GAAP”). 
  2. Review the financial and risk management policies (including the Company’s cybersecurity and data protection (as described in Section III.3), insurance, currency, interest rate and equity risk management policies and programs) followed by the Company in operating its business activities.
  3. Review the Company’s policies and programs for addressing cybersecurity and data protection, including with respect to (a) the Company’s products and services, (b) the servers, data centers, and cloud-based solutions on which the Company’s and third-party data is stored or processed (including servers, data centers and cloud-based solutions operated by third parties on which the Company relies), and (c) the cloud-based services provided to, by, or enabled by the Company. The Committee shall provide an update to the Board, at least annually, on such review. 
  4. Review and discuss with management and the independent accountants the Company’s annual audited financial statements, related disclosures, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” portion of the Company’s periodic SEC filings, and discuss with the independent accountants the matters required to be discussed by the auditing standards of the Public Company Accounting Oversight Board (“PCAOB”), including the qualitative aspects of significant accounting policies and practices, the assessment of critical accounting policies and practices, conclusions regarding critical accounting estimates, significant unusual transactions, any critical audit matters, financial statement presentation, new accounting pronouncements, and alternative accounting treatments.
  5. Review any management letters or internal control reports prepared by the independent accountants or the Company’s internal auditors in the Company’s Governance, Risk, and Controls Department (“GRC”) and responses to prior management letters, and review with the independent accountants the Company’s internal financial controls, including the budget, staffing and responsibilities of GRC.
  6. Review the effectiveness of the independent audit effort, including approval of the scope of, and fees charged in connection with, the annual audit, quarterly reviews and any non-audit services being provided.
  7. Be directly responsible for the appointment, determination of the compensation for, retention and oversight of the work of the independent accountant employed to conduct the audit (including resolution of disagreements between the independent accountants and management regarding financial reporting) or other audit, review or attest services. The independent accountants shall report directly to the Committee.
  8. Pre-approve all audit services and permissible non-audit services by the independent accountants, as set forth in Section 10A of the Exchange Act and the rules and regulations promulgated thereunder by the SEC. The Committee may establish pre-approval policies and procedures, as permitted by Section 10A of the Exchange Act and the rules and regulations promulgated thereunder by the SEC, for the engagement of independent accountants to render services to the Company, including but not limited to policies that would allow the delegation of pre-approval authority to one or more members of the Committee, provided that any pre-approvals delegated to one or more members of the Committee are reported to the Committee at its next scheduled meeting.
  9. Review the hiring policies for any employees or former employees of the independent accountants.
  10. Obtain, on an annual basis, from the independent accountants the written disclosures and the letter required by the applicable requirements of the PCAOB regarding the independent accountants’ communications with the audit committee concerning independence, and review and discuss with the accountants any disclosed relationships or services the accountants have with the Company which may affect the accountants’ independence and objectivity. The Committee is responsible for taking, or recommending that the full Board take, appropriate action to oversee the independence of the independent accountants.
  11. For each of the first three fiscal quarters and at fiscal year-end, at a Committee meeting, review with management the financial results, the proposed earnings press release and formal guidance which the Company may plan to offer, and review with the independent accountants the results of their review of the interim financial information and audit of the annual financial statements.
  12. Review management’s analysis of any significant accounting issues, changes, estimates, judgments or unusual items relating to the financial statements and the selection, application and effects of critical accounting policies applied by the Company (including an analysis of the effect of alternative GAAP methods) and review with the independent accountants the reports on such subjects delivered pursuant to Section 10A(k) of the Exchange Act and the rules and regulations promulgated thereunder by the SEC.
  13. Following completion of the annual audit, review separately with the independent accountants, GRC, and management any significant difficulties encountered during the course of such audit.
  14. Review and approve decisions made by the Company and its subsidiaries to enter into swaps (as defined under the Commodity Exchange Act and any associated rules and regulations), including decisions to enter into swaps that are exempt from the clearing and exchange trading requirements under the Commodities Exchange Act and any associated rules or regulations.
  15. Review with management the Company’s capital structure and capital allocation strategy, including management’s recommendations regarding dividends and the implementation by management of the repurchase of Company securities under any repurchase program, in each case, as adopted by the Board.
  16. Review the Company’s signature and payment authority and approval policies, the Company’s credit approval authorities, and approve modifications to any signature and payment authority that may be granted to the Company’s Chief Executive Officer and Chief Financial Officer.
  17. Review and approve the Company’s investment policy, and review the Company’s public and private equity investments and fixed income assets, including the Company’s debt portfolio.
  18. Review the business and activities of Cisco Systems Capital Corporation.
  19. Review annually: (a) with GRC, its responsibilities and activities for the prior and upcoming fiscal years, the organizational independence of the internal audit activity, and the functional reporting to the Committee (including approval of the internal audit charter, review of the risk-based internal audit plan, and recommendation of any changes to the planned scope of the internal audit plan or resources), and (b) with the Company’s Compliance Office, its responsibilities and activities for the prior and upcoming fiscal years.
  20. Conduct appropriate review and oversight of related party transactions, as defined by applicable rules of Nasdaq, to which the Company is a party.
  21. Establish procedures for: (a) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and (b) the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
  22. Review, annually, this Charter for adequacy and recommend any changes to the Board.
  23. Perform any other activities consistent with this Charter, the Company's Amended and Restated Bylaws, and governing law, as the Committee or the Board deems necessary or appropriate.

Notwithstanding the foregoing, the Committee’s function is one of oversight only and shall not relieve the Company’s management of its responsibilities for preparing financial statements which accurately and fairly present the Company’s financial results and condition, or the responsibilities of the independent accountants relating to the audit or review of financial statements.

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IV. Meetings

The Committee shall meet as often as it determines is appropriate to carry out its responsibilities under this Charter. The Committee shall periodically meet separately with each of the independent accountants, management, GRC, and the Company’s Compliance Office to discuss any matters that the Committee or each of these persons or groups believes would be appropriate to discuss privately. In addition, the Committee should meet with the independent accountants and management quarterly to review the Company’s financial statements in a manner consistent with that outlined in Section III of this Charter. Furthermore, the Committee will meet at any time that the independent accountants believe communication to the Committee is required. A majority of the total number of members of the Committee shall constitute a quorum at all Committee meetings. Minutes shall be kept of each meeting of the Committee. The Committee shall report on significant activities of the Committee to the Board.

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V. Resources and Authority

The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to select, retain, terminate, and approve the fees and other retention terms of independent special counsel or other experts or consultants, as it deems appropriate, without seeking approval of the Board or management. The Company shall provide appropriate funding to the Committee, as determined by the Committee, for payment of (a) compensation to the independent accountants for services approved by the Committee, (b) compensation to any independent outside advisers, including any special counsel, other experts or consultants, retained by the Committee, and (c) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties. The Committee shall have full access to the Company’s executives and other personnel, and the independent accountants, as necessary to carry out its responsibilities. In fulfilling its responsibilities, the Committee shall have the authority to delegate its authority to subcommittees or to one or more members of the Committee, in each case, to the extent permitted by applicable law.

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Committee Members

Mark Garrett, Chair

John Harris

Sarah Rae Murphy

Ekta Singh-Bushell