Exhibit 10.6
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
          THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this “First Amendment”)
is made and entered into effective as of the 26th day of November, 2008, by and
between Arris Group, Inc., a Delaware corporation (“Company”), and David B.
Potts (“Executive”).
          WHEREAS, the parties hereto entered into that certain Employment
Agreement dated as of December 7, 2006 (the “Agreement”); and
          WHEREAS, the parties hereto now desire to amend the Agreement as
provided herein to make certain changes and bring the Agreement into compliance
with Section 409A of the Code.
          NOW, THEREFORE, for and in consideration of Executive’s continued
employment with Company and the premises and the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Company and Executive hereby agree
as follows:

1.   Capitalized terms that are used but not defined in this Amendment shall
have the meaning specified in the Agreement.

2.   The second sentence of Section 2(a) of the Agreement is amended in its
entirety to read as follows:

    Executive’s Base Salary will be payable in arrears (no less frequently than
monthly) in accordance with the Company’s normal payroll procedures and will be
reviewed annually and subject to upward adjustment at the discretion of the
Chief Executive Officer and Compensation Committee, but will not be lowered
except in connection with reductions applied to all executive officers.   3.  
Section 2(b) is amended by adding the following at the end thereof:      
Executive’s bonus, if any, shall be payable as soon after the end of each
calendar year to which it relates as it can be determined, but in any event
within two and one-half (2-1/2) months thereafter.

4.   Section 2(e) of the Agreement is amended by adding the following at the end
thereof:

    Such payments and reimbursements shall be made as soon as administratively
practicable following submission of reasonable documentation and receipts for
such expenses but all such payments and reimbursements shall be made no later
than the last day of the calendar year following the calendar year in which
Executive incurs the reimbursable expense.

 

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5.   Section 4(a) of the Agreement is amended in its entirety to read as
follows:       Executive’s employment shall terminate upon the death of
Executive, provided, however, that the Company shall continue to pay no less
frequently than monthly (in accordance with its normal payroll procedures) the
Base Salary to Executive’s estate for a period of three months after the date of
Executive’s death.   6.   The last sentence of Section 4(e) of the Agreement is
amended in its entirety to read as follows:       Notwithstanding the foregoing,
Executive shall continue to receive his full salary and benefits under this
Agreement for a period of six months after the effective date of such
termination with his base salary payable in arrears no less frequently than
monthly in accordance with the Company’s normal payroll procedures and continued
benefits on a monthly basis through such time.   7.   Section 4(f) of the
Agreement is amended in its entirety to read as follows:       Following any
expiration or termination of this Agreement and Executive’s employment
hereunder, in addition any amounts owed pursuant to Section 5 hereof, the
Company shall pay to Executive all amounts earned by Executive hereunder prior
to the date of such expiration and termination, as soon as administratively
practicable following the date of termination of Executive’s employment, in the
normal course consistent with the provisions of this Agreement. Additionally,
subject to Executive’s continued compliance with Sections 7 and 9 of this
Agreement, if Executive terminates his employment with the Company without Good
Reason on or after Executive attains age 62 (provided Executive has no less than
10 years of continuous service with Company as of such termination), all of
Executive’s stock options and equity awards outstanding at termination of
Executive’s employment shall continue to vest for four (4) years after the
termination as if Executive remained employed through such time, and such stock
options shall remain outstanding through the original expiration date of the
stock options (disregarding any earlier expiration date based on Executive’s
termination of employment).   8.   Section 5(a) of the Agreement is amended by
adding to the end thereof the following:       The Company shall continue to pay
to Executive his Base Salary (as in effect as of the date of such termination)
no less frequently than monthly in accordance with the Company’s normal payroll
procedures, beginning with the first payroll date after the date of termination
of Executive’s employment and continuing for twenty-four (24) months immediately
following the termination. The Company also shall pay to Executive a bonus for
each Company fiscal year (and a pro rata amount for each partial Company fiscal
year) during the twenty-four (24) months immediately following Executive’s
termination of employment in an amount

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    equal to the bonus Executive would have received had he fulfilled the
requirements to earn his target bonus that would have been payable during such
time (or pro rata amount of such bonus for any partial Company fiscal year) with
the bonus for any fiscal year or partial year to be paid after the end of such
fiscal or partial year and within two and one-half (2-1/2) months thereafter.
Notwithstanding the foregoing, all payments to be made or benefits to be
provided under this Section are subject to the provisions of Section 5(f) below.
  9.   Section 5(b) of the Agreement is amended by adding the following to the
end thereof:       Additionally, all of Executive’s outstanding stock options
shall remain outstanding until the original expiration date of the stock options
(disregarding any earlier expiration date based on Executive’s termination of
employment).   10.   Section 5(c) of the Agreement is amended in its entirety to
read as follows::       The Company shall continue to provide Executive on a
monthly basis with group and additional life insurance coverage, no less
frequently than monthly, for a period of twenty-four (24) months immediately
following termination of employment.   11.   Section 5(d) of the Agreement is
amended in its entirety to read as follows:       The Company shall continue to
provide Executive and his family with group medical insurance coverage, no less
frequently than monthly, under the Company’s medical plans (as the same may
change from time to time) or other substantially similar health insurance for a
period of twenty-four (24)months immediately following termination of
employment.   12.   Section 5(e) of the Agreement is amended in its entirety to
read as follows:       The Company shall continue to provide Executive coverage,
no less frequently than monthly, under the Company’s group disability plan for a
period of twenty-four (24) months immediately following termination of
employment (subject in the case of long-term disability to the availability of
such coverage under Company’s insurance policy).   13.   Section 5(f) of the
Agreement is amended in its entirety to read as follows:

(f) Notwithstanding any other provisions of this Agreement, it is intended that
any payment or benefit which is provided pursuant to or in connection with this
Agreement and which is considered to be nonqualified deferred compensation
subject to Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), will be provided and paid in a manner, and at such time, as complies
with Section 409A of the Code. For purposes of this Agreement, all rights to
payments and benefits hereunder shall be treated as rights to receive a series
of

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separate payments and benefits to the fullest extent allowed by Section 409A of
the Code. If Executive is a key employee (as defined in Section 416(i) of the
Code without regard to paragraph (5) thereof) and any of Company’s stock is
publicly traded on an established securities market or otherwise, then the
payment of any amount or provision of any benefit under this Agreement which is
considered to be nonqualified deferred compensation subject to Section 409A of
the Code shall be deferred for six (6) months after the Termination Date or, if
earlier, Executive’s death (the “409A Deferral Period”), as required by
Section 409A(a)(2)(B)(i) of the Code. In the event payments are otherwise due to
be made in installments or periodically during such 409A Deferral Period, the
payments which would otherwise have been made in the 409A Deferral Period shall
be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends,
and the balance of the payments shall be made as otherwise scheduled. In the
event, benefits are otherwise to be provided hereunder during such 409A Deferral
Period, any such benefits may be provided during the 409A Deferral Period at
Executive’s expense, with Executive having a right to reimbursement for such
expense from the Company as soon as the 409A Deferral Period ends, and the
balance of the benefits shall be provided as otherwise scheduled. For purposes
of this Agreement, Executive’s termination of employment shall be construed to
mean a “separation from service” within the meaning of Section 409A of the Code
where it is reasonably anticipated that no further services will be performed
after such date or that the level of bona fide services Executive would perform
after that date (whether as an employee or independent contractor) would
permanently decrease to less than fifty percent (50%) of the average level of
bona fide services performed over the immediately preceding thirty-six
(36)-month period. Without limitation, if any payment or benefit which is
provided pursuant to or in connection with this Agreement and which is
considered to be nonqualified deferred compensation subject to Section 409A of
the Code fails to comply with Section 409A of the Code, and Executive incurs any
additional tax, interest and penalties under Section 409A of the Code, Company
will pay Executive an additional amount so that, after paying all taxes,
interest and penalties on such additional amount, Executive has an amount
remaining equal to such additional tax, interest and penalties. All payments to
be made to Executive pursuant to the immediately preceding sentence shall be
payable no later than when the related taxes, interest and penalties are to be
remitted. Any right to reimbursement incurred due to a tax audit or litigation
addressing the existence or amount of any tax liability addressed in the
immediately preceding sentence must be made no later than when the related
taxes, interest and penalties that are the subject of the audit or litigation
are to be remitted to the taxing authorities or, where no such taxes, interest
and penalties are remitted, within thirty (30) days of when the audit is
completed or there is a final non-appealable settlement or resolution of the
litigation.

14.   Section 5(h) of the Agreement is amended by adding at the end thereof the
following:

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    Executive will be required to execute and not revoke the Company’s standard
written release of any and all claims against the Company and all related
parties with respect to all matters arising out of Executive’s employment by the
Company (other than as described above) no later than thirty (30) days following
Executive’s termination of employment (or such later time as the Company may
permit). If the Executive does not provide such release, with the period for
revoking same having already expired, then Company shall not be required to pay
any further amounts pursuant to this Section 5 and Executive will be required to
return to the Company any amounts previously paid pursuant to this Section 5.  
15.   Section 6(a) of the Agreement is amended by adding to the end thereof the
following:       The Company shall pay the amounts set forth in (1) and
(2) above in one lump sum payment as soon as administratively practicable (and
within thirty (30) days) following Executive’s termination of employment. The
benefits provided under (3) above shall be provided no less frequently than
monthly following the date of termination of employment. Additionally,
Executive’s outstanding stock options shall remain outstanding until the
original expiration date of the stock options (disregarding any earlier
expiration date based on Executive’s termination of employment). Notwithstanding
the foregoing, all payments to be made and benefits to be provided under this
Section are subject to the provisions of Section 5(f) above.   16.  
Section 6(b) of the Agreement is amended in its entirety to read as follows:    
  “Change of Control” shall mean the date as of which: (i) there shall be
consummated (1) any consolidation or merger of the Company to which the Company
is not the continuing or surviving corporation or pursuant to which shares of
the Company’s common stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of the
Company’s common stock immediately prior to the merger own more than 50% of the
total fair market value or total voting power of the continuing or surviving
entity, or (2) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, of the assets
of the Company or (ii) the stockholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company; or (iii) otherwise
(any person) as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended. (the “Exchange Act”)), shall become
the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
of 30% or more of the Company’s outstanding common stock (in a single
transaction or within twelve (12) months from the date of the final acquisition)
or (iv) during any one year, individuals who at the beginning of such period
constitute the entire Board of Directors of the Company shall cease for any
reason to constitute a majority thereof unless the election, or the nomination
for election by the Company’s stockholders, of each new director was approved by
a vote of at least two-thirds of the directors still then in office who were
directors at the beginning of the

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    period. This definition of “Change in Control” is intended to comply with
the definition of a change in the ownership or effective control of the Company
or in the ownership of a substantial portion of the assets of the Company within
the meaning of Section 409A(a)(2)(A)(v) of the Code and shall be construed
consistent with that intent.

17.    Sections 6(e), (f) and (g) are deleted amended in their entirety and
replaced with new Section (e) as follows:

    Company will pay to Executive the amount of any excise taxes, penalties and
interest imposed on Executive under Section 4999 of the Code by reason of
payments or benefits under the provisions of this Agreement, including this
provision, and the amount of any federal and state income taxes, penalties and
interest imposed on Executive by reason of payments to Executive under this
Section. All payments to be made to Executive under this Section shall be
payable no later than when the related taxes are to be remitted. Any right to
reimbursement incurred due to a tax audit or litigation addressing the existence
or amount of a tax liability under this Section must be made no later than when
the related taxes that are the subject of the audit or litigation are to be
remitted to the taxing authorities or, where no such taxes are remitted, within
thirty (30) days of when the audit is completed or there is a final and
non-appealable settlement or resolution of the litigation.

18.    Section 7 and 8 of the Agreement are deleted in their entirety and
replaced with new Section 7 to read as follows:
(a) As used in this Section:
“Business of Company” means providing products and services to broadband
internet service providers which support a full range of integrated voice, video
and high-speed data services to the subscribers of such providers.
“Restricted Period” means the period beginning on the Termination Date and
ending twelve (12) months after the Termination Date.
“Restricted Territory” means, and is limited to, the following Metropolitan
Statistical Areas: (1) Atlanta — Sandy Springs — Marietta, (2) Denver — Aurora,
(3) Portland — Vancouver — Beaverton, (4) Philadelphia — Camden — Wilmington,
(5) New York — Northern New Jersey — Long Island, (6) San Francisco — Oakland —
Fremont, (7) Los Angeles — Long Beach — Santa Ana, and (8) St. Louis. Executive
acknowledges and agrees that this is the area in which the Company does business
at the time of execution of this Agreement, and in which Executive will have
responsibility, at a minimum, on behalf of the Company.
“Material Contact” means contact in person, by telephone or by paper or
electronic correspondence, in furtherance of the business interests of Company.

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(b) Executive agrees that during Executive’s employment hereunder and during the
Restricted Period, Executive shall not, within the Restricted Territory, perform
services on his own behalf or on behalf of any other person or entity, which are
the same as or similar to those he provided to Company and which support any
business activities which compete with the Business of Company.
(c) Executive agrees that during Executive’s employment hereunder and during the
Restricted Period, Executive shall not, directly or indirectly, solicit any
actual or prospective customers of Company with whom Executive had Material
Contact, for the purpose of selling any products or services which compete with
the Business of Company.
(d) Executive agrees that during Executive’s employment hereunder and during the
Restricted Period, Executive shall not, directly or indirectly, solicit any
actual or prospective vendor of Company with whom Executive had Material
Contact, for the purpose of providing products or services in support of any
business activities which compete with the Business of Company.
(e) Executive agrees that during Executive’s employment hereunder and during the
Restricted Period, Executive shall not, directly or indirectly, solicit or
induce any employee or independent contractor of Company with whom Executive had
Material Contact to terminate such employment or contract with Company.
Notwithstanding the foregoing, it is understood and agreed that, without
limitation on other available remedies, the restrictions on Executive set forth
in this Section 7(b), (c), (d) and (e) hereof shall not be applicable at any
time that Company is in breach of its contractual obligations to Executive under
this Agreement or the ARRIS Group, Inc. Supplemental Retirement Benefits Plan
(the “Excess Benefit Plan”) following the thirty (30) days after being notified
in writing by Executive of such breach and failure of Company to cure same. In
the event Company cures such breach, the restrictions set forth in
Sections 7(b), (c), (d) and (e) hereof shall continue pursuant to their terms as
if such breach never occurred.

19.   Section 10 of the Agreement is amended in its entirety to read as follows:
      In the event that Executive violates any of the provisions of Sections 7
or 9 hereof or fails to provide the notice required by Section 4(d) hereof, the
Company shall be entitled to receive from Executive the profits, if any,
received by Executive upon exercise of any Company granted stock options or
stock appreciation rights or upon lapse of the restrictions on any grant or
restricted stock to the extent such options or rights were exercised, or such
restrictions lapsed, subsequent to six months prior to the termination of
Executive’s employment.   20.   New Section 14 of the Agreement is added to read
as follows:

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14. Rabbi Trust. The Company will establish an irrevocable grantor trust (as
described in Section 671 of the Internal Revenue Code) for the purpose of
accumulating assets to provide for any retirement obligations owed to Executive
under the Excess Benefit Plan. The assets and income of such trust shall be
subject only to the claims of the creditors of the Company in the event of the
Company’s insolvency as defined in Rev. Proc. 92-64, 1992-2 C.B. 422. The
establishment of such trust shall not affect the Company’s liability to pay
benefits except that any liability under the Excess Benefit Plan shall be offset
by any payments actually made to Executive from such trust. The Company will
reasonably determine the amount to contribute to such trust pursuant to the
requirements of the Excess Benefit Plan, and the investment of the assets of the
trust shall be made in accordance with the terms of the trust document. Without
limitation, but only to the extent not prohibited by Section 409A(b) of the
Code, the Company agrees to contribute to the trust pursuant to the requirements
of the Excess Benefit Plan sufficient amounts to provide for the Company’s
liability to pay the benefits under such Excess Benefit Plan no later than when
a “Change of Control” occurs. The terms of the trust shall contain such
provisions as may be necessary to qualify the trust as a “rabbi trust” under
applicable rules so that the supplemental retirement benefits may be considered
“unfunded” for purposes of the Employee Retirement Income Security Act of 1974,
as amended.

21.   Section 11 of the Agreement is amended by replacing the references to
Sections 7, 8, 9 and 10 to Sections 7, 9 and 10.   22.   Section 12(c) of the
Agreement is hereby amended by adding the following to the end of Section 12(c)
to read as follows:

To the extent the Company is required to reimburse Executive for any such cost,
fees and expenses, the Company shall reimburse such costs, fees and expenses
within 90 days following the final determination, award, judgment or settlement.

23.   Except as amended hereby, the Agreement shall remain in full force and
effect.   24.   The provisions of Section 13 of the Agreement shall apply to
this First Amendment as if set forth in its entirety herein.

          IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the day first above written.

              COMPANY
 
            Arris Group, Inc.
 
       
 
  By:   /s/ Lawrence A. Margolis
 
       
 
  Name:   Lawrence A. Margolis

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  Title:   Executive Vice President of Strategic
Planning, Administration and Chief Counsel, Secretary
 
            EXECUTIVE
 
            /s/ David B. Potts           David B. Potts

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