EX-4.1 2004 STOCK INCENTIVE PLAN



 







Exhibit 4.1




ARRIS
GROUP, INC.



2004 STOCK INCENTIVE PLAN



1. PURPOSE AND EFFECTIVE DATE. ARRIS Group, Inc. (the “Company”) has established this 2004 Stock
Incentive Plan (the “Plan”) to facilitate the retention and continued motivation of key employees,
consultants and directors and to align more closely their interests with those of the Company and
its stockholders. The effective date of the 2004 Incentive Plan shall be the date it is approved
by the stockholders of the Company. This plan shall expire in its entirety ten (10) years from the
date the plan is approved by stockholders (the “Effective Date”). This Plan will serve as the
successor to the Company’s existing Stock Incentive Plans, (the “Predecessor Plans”). All shares
available for grant under the Predecessor Plans shall be cancelled on the Effective Date. Only
those shares subject to outstanding stock awards under the Predecessor Plans that are forfeited,
cancelled, or expire unexercised; shares tendered (either actually or through attestation) to pay
the option exercise price of such outstanding awards; and shares withheld for the payment of
withholding taxes associated with such outstanding awards return to the share reserve of the
Predecessor Plan and shall be available again for issuance under the Predecessor Plan. All
outstanding awards under the Predecessor Plans as of the Effective Date will remain outstanding
awards under the applicable Predecessor Plan. Each such outstanding award will continue to be
governed by the express terms and conditions of the agreements evidencing such award. No provision
of this Plan shall be deemed to affect or otherwise modify the rights or obligations of the holders
of such awards under Predecessor Plans with respect to their acquisition of shares of the Company’s
common stock (“Common Stock”) thereunder.



2. ADMINISTRATION. The Plan shall be administered by the Board of Directors, or the Compensation
Committee of the Company’s Board of Directors or such other Board committee as the Board may
designate (the “Committee”). The Committee has the authority and responsibility for the
interpretation, administration and application of the provisions of the 2004 Incentive Plan, and
the Committee’s interpretations of the 2004 Incentive Plan, and all actions taken by it and
determinations made by it shall be binding on all persons. No Board or Committee member shall be
liable for any determination, decision or action made in good faith with respect to the 2004
Incentive Plan.



3. SHARES SUBJECT TO PLAN. A total of 6,000,000 shares of Common Stock of the Company (“Shares”)
may be issued pursuant to the 2004 Incentive Plan. The Shares may be authorized but unissued
Shares or Shares reacquired by the Company and held in its treasury. Grants of incentive awards
under the 2004 Incentive Plan will reduce the number of Shares available thereunder by the maximum
number of Shares obtainable under such grants. If all or any portion of the Shares otherwise
subject to any grant under the 2004 Incentive Plan are not delivered for any reason including, but
not limited to, the cancellation, expiration or termination of any option right or unit, the
settlement of any award in cash, the forfeiture of any restricted stock, or the repurchase of any
Shares by the Company from a participant for the cost of the participant’s investment in the
Shares, such number of Shares shall be available again for issuance under the 2004 Incentive Plan.
Shares tendered (either actually or through attestation) to pay the option exercise price and
shares withheld for the payment of withholding taxes return to the share reserve and shares issued
in connection with awards that are assumed, converted or substituted pursuant to a merger or an
acquisition do not reduce the share reserve. Shares subject to outstanding option grants under the
Predecessor Plans that are forfeited, cancelled, or expire unexercised; shares tendered (either
actually or through attestation) to pay the option exercise price of such outstanding awards; and
shares withheld for the payment of withholding taxes associated with such outstanding awards return
to the share reserve of the Predecessor Plan and shall be available again for issuance under the
Predecessor Plan. The number of Shares covered by or specified in the 2004 Incentive Plan and the
number of Shares and the purchase price for Shares under any outstanding awards, may be adjusted
proportionately by the Committee for any increase or decrease in the number of issued Shares or any
change in the value of the Shares resulting from a subdivision or consolidation of Shares,
reorganization, recapitalization, spin-off, payment of stock dividends on the Shares, any other
increase or decrease in the number of issued Shares made without receipt of consideration by the
Company, or the payment of an extraordinary cash dividend.




 









 







4. ELIGIBILITY. All key employees, active consultants and directors of the Company and its
subsidiaries are eligible to be selected to receive a grant under the 2004 Incentive Plan by the
Committee. The Committee may condition eligibility under the 2004 Incentive Plan or participation
under the 2004 Incentive Plan, and any grant or exercise of an incentive award under the 2004
Incentive Plan on such conditions, limitations or restrictions as the Committee determines to be
appropriate for any reason. No person may be granted in any period of two consecutive calendar
years, awards covering more than 1,500,000 Shares. The maximum amount to be paid to any one person
pursuant to performance units, in any calendar year, shall not exceed $2,000,000.



5. AWARDS. The Committee may grant awards under the 2004 Incentive Plan to eligible persons in the
form of stock options (including incentive stock options within the meaning of section 422 of the
Code), stock grants, stock units, restricted stock, stock appreciation rights, performance shares
and units and dividend equivalent rights, and shall establish the number of Shares subject to each
such grant and the terms thereof, including any adjustments for reorganizations and dividends,
subject to the following:





(a) All awards granted under the 2004 Incentive Plan shall be
evidenced by agreements in such form and containing such terms and
conditions not inconsistent with the 2004 Incentive Plan as the
Committee shall prescribe.




(b) The exercise price of any option or stock appreciation right
shall not be less than the fair market value of a corresponding
number of Shares as of the date of grant, except (i) options or
stock appreciation rights being granted to replace options or rights
not initially granted by the Company or its predecessors may be
granted with exercise prices that in the judgment of the Committee
result in options or rights having comparable value to the options
or rights being replaced. The maximum term on options and stock
appreciation rights shall not exceed ten (10) years.




(c) No more than 2,000,000 of the Shares may be awarded in a form
other than options or stock appreciation rights. The aggregate
number of Shares with respect to which incentive stock options may
be issued under the Plan shall not exceed 4,000,000.




(d) No option may be repriced by amendment, substitution or
cancellation and regrant, unless authorized by the stockholders.
Adjustments pursuant to Section 3 above shall not be considered
repricing.




(e) When issuing performance shares or units, performance measures
may include: revenue; earnings before interest, taxes, depreciation
and amortization (EBITDA); cash earnings (earnings before
amortization of intangibles); operating income; pre- or after-tax
income; earnings per share, net cash flow; net cash flow per share;
return on equity; return on total capital; return on sales, return
on net assets employed, return on assets; economic value added (or
an equivalent metric); share price performance; total shareholder
return; improvement in or attainment of expense levels; improvement
in or attainment of working capital levels. Performance criteria
may be related to a specific customer or group of customers or
geographic region. Performance goals may be measured solely on a
corporate, subsidiary or division basis, or a combination thereof.
Performance criteria may reflect absolute entity performance or a
relative comparison of entity performance to the performance of a
peer group of entities or other external measure of the selected
performance criteria. Profit,



 









 







earnings and revenues used for any
performance goal measurement may exclude any extraordinary
nonrecurring items.




(f) All awards may be settled in cash, shares or deferred delivery.




(g) Shares granted from the plan may be used as a form of payment
for compensation, grants or rights earned or due under other Company
plans or arrangements.


6. AMENDMENT OF THE PLAN. The Board of Directors or the Committee may from time to time suspend,
terminate, revise or amend the 2004 Incentive Plan or the terms of any grant in any respect
whatsoever, provided that, without the approval of the stockholders of the Company, no such
revision or amendment may increase the number of Shares subject to the 2004 Incentive Plan, change
the provisions of Section 5 above, or expand those eligible for grants under the 2004 Incentive
Plan.