425, 2000-05-05
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<PAGE>   1
                                                    Filed by Cisco Systems, Inc.
                       Pursuant to Rule 425 under the Securities Act of 1933 and
                                            deemed filed pursuant to Rule 14a-12
                                          of the Securities Exchange Act of 1934

                                            Subject Company: Cisco Systems, Inc.
                                                  Commission File No.: 000-18225

                                 CONFERENCE CALL
                            ARROWPOINT COMMUNICATIONS
                               FRIDAY, MAY 5, 2000
                                   6:00AM PDT


- -   Good morning everyone, and thank you for joining us this morning.

- -   This is Larry Carter in San Jose with Kevin Kennedy, Senior Vice President
    of our Service Provider Line of Business and Ammar Hanafi, Vice President,
    Business Development. I would also like to introduce Cheng-Wu, the CEO of
    ArrowPoint, who is joining us from Boston. Cheng-Wu will be participating in
    the Q&A session.

- -   This morning Cisco announced a definitive agreement to acquire publicly
    traded ArrowPoint Communications of Acton, Massachusetts (NASDAQ: ARPT) for
    approximately $5.7 billion in stock.

- -   The purpose of the call this morning is to review the strategy and specifics
    of the acquisition and to answer any questions in regards to the

- -   The press release went out at 5:00 a.m. Pacific Time this morning and is
    available on First Call, National Business Wire and the European Business
    and Technical Wire.

- -   You can also find the press release on our Web page at

- -   The matters we will be discussing today may include forward-looking
    statements, and as such are subject to the risks and uncertainties that we
    discuss in detail in our documents filed with the SEC, specifically the most
    recent reports on Form 10-K and 10-Q, which identify important risk factors
    that could cause actual results to differ from those contained in the
    forward-looking statements.

- -   Unauthorized recording of this conference call is not permitted.

<PAGE>   2
- -   The terms of the transaction are as follows:

    -   Under the terms of the ArrowPoint agreement, approximately 89.7 million
        shares of Cisco common stock will be exchanged for all outstanding
        shares and options of ArrowPoint.

    -   Based on Cisco's May 4, 2000 closing price of $63 5/8, the stock
        exchanged would have a value of approximately $5.7 billion.

    -   2.1218 Cisco shares will be exchanged for each ArrowPoint share or

    -   The ArrowPoint acquisition will be accounted for as a pooling of
        interests and is expected to close in the fourth quarter of Cisco's
        fiscal year 2000 (Q4 FY00).

    -   The acquisition has been approved by the board of directors of both
        companies and is subject to various closing conditions including
        approval under the Hart-Scott-Rodino Antitrust Improvements Act and by
        ArrowPoint's shareholders.

- -   The acquisition will have a neutral impact on FY00 and we believe will
    become slightly accretive in calendar year 2001.

- -   I will now turn the call over to Ammar Hanafi, who will further discuss the
    terms of the deal and the market. Kevin Kennedy will then outline the
    technology and organization. We will then open the call for Q&A.

- -   Ammar.

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Cisco Positioning

- -   Thanks Larry.

- -   The acquisition of ArrowPoint, a provider of content switching products that
    optimize the delivery of Web content, gives Cisco a broad portfolio of
    content networking solutions, providing even more choices for Cisco

- -   As you know from past calls, when we do acquisitions, we look for several
    key criteria - such as a corporate culture and management chemistry that can
    produce win-win results, a shared vision, a strong engineering team and the
    potential for future market share and exciting next-generation products.

- -   The ArrowPoint acquisition fits these criteria extremely well, with Cisco
    and ArrowPoint sharing the vision of providing end-to-end, next generation
    solutions for content networking.


- -   I'd like to spend a few minutes on valuation.

- -   The networking industry and the Web switching market in particular are
    subject to rapidly changing conditions including dynamic technological
    innovation, shorter product cycles, increasing levels of competition and
    evolving customer requirements.

- -   Content switching has become increasingly important to Cisco as customer
    demands for QoS, differentiated service, scalability, Web hosting and
    e-commerce capabilities increase.

- -   To date, Cisco has relied on internal development, partnerships, investments
    and acquisitions in order to deliver a complete Content Networking solution.
    The acquisition of ArrowPoint adds content switching, a key content
    networking technology for our customers.

- -   ArrowPoint completed its initial public offering on March 31, 2000. It was
    not until after ArrowPoint completed their public offering that we were able
    to seriously engage the company to discuss the possibility of a strategic
    relationship between Cisco and ArrowPoint.

- -   ArrowPoint provides a strong product platform and represents an explosive
    market opportunity for content-based infrastructure solutions. Based on the
    valuations of comparable companies, we believe that the valuation for
    ArrowPoint is in-line with that of other companies in this sector.

<PAGE>   4

- -   In addition, we believe that the premium paid for ArrowPoint's stock is
    in-line with acquisition premiums being attained in the Internet
    infrastructure sector and the technology sector in general.

More details on the deal:

                                            ARROWPOINT COMMUNICATIONS
<S>                      <C>
EMPLOYEES                337 (Sales = 176, engineering = 71, training/support =
(AS OF APRIL 27, 2000)   marketing = 19, manufacturing = 13, Finance/HR/IS = 31)

LOCATION                 Acton, MA (neighboring Boxborough, MA)

CEO                      Chin-Cheng Wu (Lou Volpe, President)

REVENUES                 $12.4 million for year ended 12/31/99; $9.5 million for
                         quarter ended 3/31/00.

CUSTOMERS                225+ customers, incl. EMC, Exodus, Navisite, Road Runner
                         80 new customers in Q1'00

FORMED                   Public, founded in April 1997

RELOCATION               ArrowPoint will remain in Acton, Massachusetts. Over
                         time, Cisco may integrate ArrowPoint with our other
                         Massachusetts site. Cisco will evaluate the appropriate
                         time frame for this relocation based on ArrowPoint's
                         and Cisco's needs going forward.

- -   I'll now turn the call over to Kevin to discuss the technology and
    organizational aspects of the deal.

~   Kevin.

<PAGE>   5

- -   Thanks, Ammar

Product/Technology Positioning

- -   Content switching has become a critical element of the Internet business and
    is increasingly important to our customers as they deploy content networking

- -   Whereas traditional switching relies on Layer 2 and Layer 3 information,
    such as Ethernet and IP addresses, in order to route traffic, Content
    switching focuses on delivering a new level of content networking services
    by switching traffic based on higher layer information, namely Layer 4/
    Layer 7.

- -   Today's announcement is evidence that Cisco recognizes this trend and is
    responding with an acquisition that gives us greater customer intimacy via a
    team of people that have approached URL switching with a higher layer
    implementation (a layer 7 software focus).

- -   The acquisition of ArrowPoint gives Cisco a broad portfolio of content
    networking solutions in the market today.

- -   In addition, ArrowPoint's solutions strengthen Cisco's presence in emerging
    markets that include ASPs (Application Service Provider), AIPs (Application
    Infrastructure Provider) and "dot com" companies

- -   ArrowPoint's advanced higher layer capabilities allow it to look deeper into
    a data flow to switch traffic based on the content being requested, the
    location of the content or the identity of the requestor. This signature
    (layer 7) software functionality will be used as an ingredient element
    across Cisco's product lines over time

- -   The ArrowPoint platforms can provide both the functionality and flexibility
    customers demand because of their unique combination of a software and
    hardware-based architecture.

- -   ArrowPoint's products include both large scale, chassis-based solutions
    (CS-800) that meet the needs of the most demanding customers as well as
    smaller, space-efficient solutions (CS-50 and CS-150) that meet the needs of
    smaller customers, such as hosted or co-location customers.

- -   ArrowPoint's products share the WebNS software platform which provides an
    easy method of adding functionality and features through future software
    upgrades. In addition, ArrowPoint's advanced software capabilities can be
    leveraged across

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    different Cisco product lines to meet the evolving needs of our diverse

- -   ArrowPoint's products also complement the Cisco Catalyst family of high
    performance multilayer switching products that are deployed in the
    enterprise and service provider environments.

- -   ArrowPoint has over 225 customers ranging from large service providers to
    Web portals and e-commerce sites. ArrowPoint added 81 new customers during
    its last quarter. Its current customer base includes EMC, Excite@Home,
    Exodus, Global Crossing, Lycos, NaviSite and Road Runner. Approximately
    two-third's of ArrowPoint's revenue is attributable to ISPs, hosting
    companies and other service provider customers, with the remaining share
    split between portals, e-commerce companies and other customers.

- -   ArrowPoint has partnered with leading service providers, resellers,
    technology partners and OEMs to help deliver its content switching
    solutions. Current service provider partners include Exodus, GlobalCenter
    and Navisite. Exodus has selected ArrowPoint as the preferred platform for
    its co-location customers. In addition, ArrowPoint has 37 resellers licensed
    to sell its products.

Organizational Details

- -   In typical Cisco fashion, we do these transactions for the people, and in
    the case of ArrowPoint, we are getting some very senior talent.

- -   Prior to founding ArrowPoint, Cheng Wu, Chairman of the Board and Chief
    Executive Officer, co-founded Arris Networks. When Cascade Communications
    acquired Arris in May 1996, Wu served as Cascade's vice president for remote
    access engineering. Wu has over 20 years of high-tech engineering and
    management experience holding executive management positions at Xyplex,
    Prime Computer/ Computervision.

- -   From an organizational standpoint, the ArrowPoint organization will become
    part of Cisco's Public Carrier IP Group within our Service Provider Line of

- -   Cheng Wu will continue to lead his team and will report directly to me.

- -   ArrowPoint has a global reach, with over 60 sales teams in more than 20
    countries. Its sales and support infrastructure along with its focus on
    meeting the international requirements for its products, have given
    ArrowPoint a global footprint to deliver content switching solutions.

- -   ArrowPoint's sales force will continue to focus on selling its content
    switching products and will be integrated in a similar fashion as we handled
    the Cerent team.

<PAGE>   7

Q & A

~   We will now open the call for questions from sell side analysts and

~   We request that you ask only one question.

~   Operator, please begin the Q & A.

Closing remarks

~   Thank you for your participation in today's call. If you have further
    questions, please call a Cisco IR representative.

~   This concludes our call.

<PAGE>   8
Cisco Systems, Inc. ("Cisco") plans to file a Registration Statement on SEC Form
S-4 in connection with the merger and ArrowPoint Communications, Inc.
("ArrowPoint") expects to mail a Proxy Statement/Prospectus to its stockholders
containing information about the merger. Investors and security holders are
urged to read the Registration Statement and the Proxy Statement/Prospectus
carefully when they are available. The Registration Statement and the Proxy
Statement/Prospectus will contain important information about Cisco, ArrowPoint,
the merger and related matters. Investors and security holders will be able to
obtain free copies of these documents through the web site maintained by the
U.S. Securities and Exchange Commission at http//
In addition to the Registration Statement and the Proxy Statement/Prospectus,
Cisco and ArrowPoint file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any reports, statements and other information filed by
Cisco and ArrowPoint at the SEC public reference rooms at 450 Fifth Street,
N.W., Washington, D.C. 20549 or at the Commission's other public reference rooms
in New York, New York and Chicago, Illinois. Please call the Commission at
1-800-SEC-0330 for further information on public reference rooms. Cisco's and
ArrowPoint's filings with the Commission also are available to the public from
commercial document-retrieval services and at the web site maintained by the
Commission at http//

ArrowPoint, its directors, executive officers and certain members of management
and employees may be soliciting proxies from ArrowPoint's stockholders in favor
of the adoption of the merger agreement. A description of any interests that
ArrowPoint's directors and executive officers have in the merger will be
available in the Proxy Statement/Prospectus.

This report may contain projections or other forward-looking statements
regarding future events or the future financial performance of Cisco and
ArrowPoint. These projections or statements are only predictions. Actual events
or results may differ materially from those in the projections or other
forward-looking statements set forth herein. Among the important factors that
could cause actual events to differ materially from those in the projections or
other forward-looking statements are potential fluctuations in quarterly
results, dependence on new product development, rapid technological and market
change, acquisition strategy, manufacturing and sourcing risks, risks associated
with the Internet infrastructure and regulation, volatility of stock price,
international operations, financial risk management, and future growth subject
to risks. Readers are referred to Cisco's Annual Report to Shareholders and
Cisco's and ArrowPoint's filings with the Securities and Exchange Commission,
including their most recent filings on Form 10-K and 10-Q, for a discussion of
these and other important risk factors concerning Cisco and ArrowPoint and their
respective operations.

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