EX-10.2






Exhibit 10.2




EMPLOYMENT AGREEMENT




     THIS EMPLOYMENT AGREEMENT (the “Agreement”), dated as of November 26, 2008, is by and between
ARRIS GROUP, INC., a Delaware corporation (the “Company”), and Bruce McClelland (“Executive”).



     WHEREAS, Executive and the Company want to enter into a written agreement providing for the
terms of Executive’s employment by the Company.



     NOW, THEREFORE, in consideration of the foregoing recital and of the mutual covenants set
forth herein, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:



     1. Employment. Executive agrees to enter into the continued employment of the
Company, and the Company agrees to employ Executive, on the terms and conditions set forth in this
Agreement. Executive agrees during the term of this Agreement to devote substantially all of his
business time, efforts, skills and abilities to the performance of his duties as stated in this
Agreement and to the furtherance of the Company’s business.



          Executive’s job title will be President, Broadband Communications Systems and his duties will
be those as are designated by the Chief Executive Officer of the Company. Executive further agrees
to serve, without additional compensation, as an officer or director, or both, of any subsidiary,
division or affiliate of the Company or any other entity in which the Company holds an equity
interest, provided, however, that (a) the Company shall indemnify Executive from liabilities in
connection with serving in any such position to the same extent as his indemnification rights
pursuant to the Company’s Certificate of Incorporation, By-laws and applicable Delaware law, and
(b) such other position shall not materially detract from the responsibilities of Executive
pursuant to this Section 1 or his ability to perform such responsibilities.




     2. Compensation.



          (a) Base Salary. During the term of Executive’s employment with the Company pursuant
to this Agreement, the Company shall pay to Executive as compensation for his services an annual
base salary of not less than $300,000 (“Base Salary”). 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.




          (b) Incentive Bonus. During the term of Executive’s employment with the Company
pursuant to this Agreement, Executive’s incentive compensation program shall be determined by the
Company in its discretion with a target bonus equal to 60% of Base Salary,



 









 






and allowing for payment of up to 200% of target thereafter. 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.




          (c) Executive Perquisites. During the term of Executive’s employment with the Company
pursuant to this Agreement, Executive shall be entitled to receive such executive perquisites and
fringe benefits as are provided to the executives in comparable positions and their families under
any of the Company’s plans and/or programs in effect from time to time and such other benefits as
are customarily available to executives of the Company and their families, including without
limitation vacations and life, medical and disability insurance.




          (d) Tax Withholding. The Company has the right to deduct from any compensation
payable to Executive under this Agreement social security (FICA) taxes and all federal, state,
municipal or other such taxes or charges as may now be in effect or that may hereafter be enacted
or required.




          (e) Expense Reimbursements. The Company shall pay or reimburse Executive for all
reasonable business expenses incurred or paid by Executive in the course of performing his duties
hereunder, including but not limited to reasonable travel expenses for Executive. As a condition
to such payment or reimbursement, however, Executive shall maintain and provide to the Company
reasonable documentation and receipts for such expenses. 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.




     3. Term. Unless sooner terminated pursuant to Section 4 of this Agreement, and
subject to the provisions of Section 5 hereof, the term of employment under this Agreement shall
commence as of the date hereof and shall continue for a period of one year. The term automatically
shall be extended by one day for each day of employment hereunder. Notwithstanding the foregoing
the term of employment under this agreement shall terminate, if it has not terminated earlier,
without further action on the part of the Company or Executive upon Executive’s 65th birthday.



     4. Termination. Notwithstanding the provisions of Section 3 hereof, but subject to
the provisions of Section 5 hereof, Executive’s employment under this Agreement shall terminate as
follows:



          (a) Death. 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.




          (b) Termination for Cause. The Company may terminate Executive’s employment at any
time for “Cause” (as hereinafter defined) by delivering a written termination



2









 






notice to Executive. For purposes of this Agreement, “Cause” shall mean any of: (i)
Executive’s conviction of a felony or a crime involving moral turpitude; (ii) Executive’s
commission of an act constituting fraud, deceit or material misrepresentation with respect to the
Company; (iii) Executive’s embezzlement of funds or assets from the Company; (iv) Executive’s
addiction to any alcoholic, controlled or illegal substance or drug; (v) Executive’s commission of
any act or omission which would give the Company the right to terminate Executive’s employment
under applicable law; or (vi) Executive’s failure to correct or cure any material breach of or
default under this Agreement within ten days after receiving written notice of such breach or
default from the Company.




          (c) Termination Without Cause. The Company may terminate Executive’s employment at
any time by delivering a written termination notice to Executive.




          (d) Termination by Executive. Executive may terminate his employment at any time by
delivering ninety days prior written notice to the Company; provided, however, that the terms,
conditions and benefits specified in Section 5 hereof shall apply or be payable to Executive only
if such termination occurs as a result of a material breach by the Company of any provision of this
Agreement.




          (e) Termination Following Disability. In the event Executive becomes mentally or
physically impaired or disabled and is unable to perform his material duties and responsibilities
hereunder for a period of at least ninety days in the aggregate during any one hundred twenty
consecutive day period, the Company may terminate Executive’s employment by delivering a written
termination notice to Executive. 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.




          (f) Payments. 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 8 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).




3









 








     5. Certain Termination Benefits. Subject to Section 6(a) hereof, in the event (i) the
Company terminates Executive’s employment without cause pursuant to Section 4(c) or (ii) Executive
terminates his employment pursuant to Section 4(d) after a material breach by the Company (which
the Company fails to cure within ten days after written notice of such reach from Executive):



          (a) Base Salary and Bonus. The Company shall continue to pay to Executive his Base
Salary (as in effect as of the date of such termination) and bonus based upon the assumption that
Executive would have fulfilled the requirements to earn his target bonus that would have been
payable hereunder to Executive from the date of such termination for a period of twelve (12) months
following the termination (and a prorate portion for any partial year). 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
twelve (12) 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 twelve (12) months immediately following Executive’s termination of employment in an
amount 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.




          (b) Stock. Subject to Section 10 hereof, on and as of the effective date of the
termination of employment, all of Executive’s outstanding stock options and restricted stock grants
under the Company’s stock option and other benefit plans shall immediately vest. 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).




          (c) Life Insurance. 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 twelve (12) months immediately following termination of employment.




          (d) Medical Insurance. 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 twelve (12) months immediately following termination of employment.




          (e) Group Disability. The Company shall continue to provide Executive coverage, no
less frequently than monthly, under the Company’s group disability plan for a period of twelve (12)
months immediately following termination of employment (subject in the



4









 






case of long-term disability to the availability of such coverage under Company’s insurance
policy).




          (f) Section 409A. 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 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.




5









 








          (g) Offset. Any fringe benefits received by Executive in connection with any other
employment that are reasonably comparable, but not necessarily as beneficial, to Executive as the
fringe benefits then being provided by the Company pursuant to this Section 5, shall be deemed to
be the equivalent of, and shall terminate the Company’s responsibility to continue providing, the
fringe benefits then being provided by the Company pursuant to this Section 5. The Company
acknowledges that if Executive’s employment with the Company is terminated, Executive shall have no
duty to mitigate damages.




          (h) General Release. Acceptance by Executive of any amounts pursuant to this Section
5 shall constitute a full and complete release by Executive of any and all claims Executive may
have against the Company, its officers, directors and affiliates, including, but not limited to,
claims he might have relating to Executive’s cessation of employment with the Company; provided,
however, that there may properly be excluded from the scope of such general release the following:





               (i) claims that Executive may have against the Company for reimbursement of
ordinary and necessary business expenses incurred by him during the course of his
employment;




               (ii) claims that may be made by the Executive for payment of Base Salary,
fringe benefits or stock options properly due to him; or




               (iii) claims respecting matters for which the Executive is entitled to be
indemnified under the Company’s Certificate of Incorporation or Bylaws, respecting
third party claims asserted or third party litigation pending or threatened against
the Executive.


Notwithstanding the foregoing, as a condition to the payment to Executive of any amounts pursuant
to this Section 5, Executive shall execute and deliver to the Company a release in the customary
form then being used by the Company, which may include non-disparagement and confidentiality
agreements. In exchange for such release, the Company shall, if Executive’s employment is
terminated without Cause, provide a release to Executive, but only with respect to claims against
Executive which are actually known to the Company as of the time of such termination. 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.




6









 








     6. Effect of Change in Control.



          (a) If within one year following a “Change of Control” (as hereinafter defined), Executive
terminates his employment with the Company for Good Reason (as hereinafter defined) or the Company
terminates Executive’s employment for any reason other than Cause, death or disability, the Company
shall pay to Executive: (1) an amount equal to one times the Executive’s Base Salary as of the date
of termination; (2) an amount equal to one times the average annual cash bonus paid to Executive
for the two fiscal years immediately preceding the date of termination (and a pro rata portion for
any partial year); (3) all benefits under the Company’s various benefit plans, including group
healthcare, dental and life, for the period equal to twelve months from the date of termination;
and (4) subject to Section 10 hereof, on and as of the effective date of the termination of
employment, all of Executive’s outstanding stock options and restricted stock grants under the
Company’s stock option and other benefit plans shall immediately vest. 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.




          (b) “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 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.




7









 








          (c) “Good Reason” shall mean any of the following actions taken by the Company without the
Executive’s written consent after a Change of Control:





               (i) the assignment to the Executive by the Company of duties inconsistent with,
or the reduction of the powers and functions associated with, the Executive’s
position, duties, responsibilities and status with the Company immediately prior to
a Change of Control or Potential Change of Control (as defined below), or an adverse
change in Executive’s titles or offices as in effect immediately prior to a Change
of Control or Potential Change of Control, or any removal of the Executive from or
any failure to re-elect Executive to any of such positions, except in connection
with the termination of his employment for Disability or Cause or as a result of
Executive’s death except to the extent that a change in duties relates to
the elimination of responsibilities attendant to the Company’s no longer being a
publicly traded company;




               (ii) A reduction by the Company in the Executive’s Base Salary as in effect on
the date of a Change of Control or Potential Change of Control, or as the same may
be increased from time to time during the term of his Agreement;




               (iii) The Company shall require the Executive to be based anywhere other than
at the Company’s principal executive offices or the location where the Executive is
based on the date of a Change of Control or Potential Change of Control, or if
Executive agrees to such relocation, the Company fails to reimburse the Executive
for moving and all other expenses reasonably incurred with such move;




               (iv) The Company shall fail to continue in effect any Company-sponsored plan or
benefit that is in effect on the date of a Change of Control or Potential Change of
Control, that provides (A) incentive or bonus compensation, (B) fringe benefits such
as vacation, medical benefits, life insurance and accident insurance, (C)
reimbursement for reasonable expenses incurred by the Executive in connection with
the performance of duties with the Company, or (D) pension benefits such as a Code
Section 401(k) plan and the Company’s nonqualified defined benefit plan,
except to the extent that such plans taken as a whole are replaced with
substantially comparable plans;




               (vi) Any material breach by the Company of any provision of this Agreement; and




               (vii) Any failure by the Company to obtain the assumption of this Agreement by
any successor or assign of the Company effected in accordance with the provisions of
Section 6.



8









 





          (d) “Potential Change of Control” shall mean the date as of which (1) the Company enters into
an agreement the consummation of which, or the approval by shareholders of which, would constitute
a Change of Control; (ii) proxies for the election of Directors of the Company are solicited by
anyone other than the Company; (iii) any person (including, but not limited to, any individual,
partnership, joint venture, corporation, association or trust) publicly announces an intention to
take or to consider taking actions which, if consummated, would constitute a Change of Control; or
(iv) any other event occurs which is deemed to be a Potential Change of Control by the Board and
the Board adopts a resolution to the effect that a Potential Change of Control has occurred.




          (e) 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.




7. Non-Competition.




          (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.




9









 








          (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.




     8. Nondisclosure of Trade Secrets. During the term of this Agreement, Executive will
have access to and become familiar with various trade secrets and proprietary and confidential
information of the Company, its subsidiaries and affiliates, including, but not limited to,
processes, designs, computer programs, compilations of information, records, sales procedures,
customer requirements, pricing techniques, product plans, marketing plans, strategic plans,
customer lists, methods of doing business and other confidential information (collectively,
referred to as “Trade Secrets”) which are owned by the Company, its subsidiaries and/or affiliates
and regularly used in the operation of its business, and as to which the Company, its subsidiaries
and/or affiliates take precautions to prevent dissemination to persons other than certain
directors, officers and employees. Executive acknowledges and agrees that the Trade Secrets (1)
are secret and not known in the industry; (2) give the Company or its subsidiaries or affiliates an
advantage over competitors who do not know or use the Trade Secrets; (3) are of such value and
nature as to make it reasonable and necessary to protect and preserve the confidentiality and
secrecy of the Trade Secrets; and (4) are valuable, special and unique assets



10









 







of the Company or its subsidiaries or affiliates, the disclosure of which could cause substantial injury and loss of profits and
goodwill to the Company or its subsidiaries or affiliates. Executive may not use in any way or
disclose any of the Trade Secrets, directly or indirectly, either during the term of this Agreement
or at any time thereafter, except as required in the course of his employment under this Agreement,
if required in connection with a judicial or administrative proceeding, or if the information
becomes public knowledge other than as a result of an unauthorized disclosure by the Executive.
All files, records, documents, information, data and similar items relating to the business of the
Company, whether prepared by Executive or otherwise coming into his possession, will remain the
exclusive property of the Company and may not be removed from the premises of the Company under any
circumstances without the prior written consent of the Board (except in the ordinary course of
business during Executive’s period of active employment under this Agreement), and in any event
must be promptly delivered to the Company upon termination of Executive’s employment with the
Company. Executive agrees that upon his receipt of any subpoena, process or other request to
produce or divulge, directly or indirectly, any Trade Secrets to any entity, agency, tribunal or
person, Executive shall timely notify and promptly hand deliver a copy of the subpoena, process or
other request to the Board. For this purpose, Executive irrevocably nominates and appoints the
Company (including any attorney retained by the Company), as his true and lawful attorney-in-fact,
to act in Executive’s name, place and stead to perform any act that Executive might perform to
defend and protect against any disclosure of any Trade Secrets.



     9. Return of Profits. In the event that Executive violates any of the provisions of
Sections 7 or 8 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.



     10. Severability. The parties hereto intend all provisions of Sections 7, 8 and 9
hereof to be enforced to the fullest extent permitted by law. Accordingly, should a court of
competent jurisdiction determine that the scope of any provision of Sections 7, 8 or 9 hereof is
too broad to be enforced as written, the parties intend that the court reform the provision to such
narrower scope as it determines to be reasonable and enforceable. In addition, however, Executive
agrees that the nonsolicitation and nondisclosure agreements set forth above each constitute
separate agreements independently supported by good and adequate consideration shall be severable
from the other provisions of, and shall survive, this Agreement. The existence of any claim or
cause of action of Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of the covenants of
Executive contained in the nonsolicitation and nondisclosure agreements. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable and this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision never constituted a
part of this Agreement; and the remaining provisions of this Agreement shall remain in full force
and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its



11









 







severance herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable provision,
there shall be added as part of this Agreement, a provision as similar in its terms to such
illegal, invalid or enforceable provision as may be possible and be legal, valid and enforceable.



     11. Arbitration — Exclusive Remedy.



          (a) The parties agree that the exclusive remedy or method of resolving all disputes or
questions arising out of or relating to this Agreement shall be arbitration. Arbitration shall be
held in Atlanta, Georgia by three arbitrators, one to be appointed by the Company, a second to be
appointed by Executive, and a third to be appointed by those two arbitrators. The third arbitrator
shall act as chairman. Any arbitration may be initiated by either party by written notice
(“Arbitration Notice”) to the other party specifying the subject of the requested arbitration and
appointing that party’s arbitrator.




          (b) If (i) the non-initiating party fails to appoint an arbitrator by written notice to the
initiating party within ten days after the Arbitration Notice, or (ii) the two arbitrators
appointed by the parties fail to appoint a third arbitrator within ten days after the date of the
appointment of the second arbitrator, then the American Arbitration Association, upon application
of the initiating party, shall appoint an arbitrator to fill that position.




          (c) The arbitration proceeding shall be conducted in accordance with the rules of the American
Arbitration Association. A determination or award made or approved by at least two of the
arbitrators shall be the valid and binding action of the arbitrators. The costs of arbitration
(exclusive of the expense of a party in obtaining and presenting evidence and attending the
arbitration and of the fees and expenses of legal counsel to a party, all of which shall be borne
by that party) shall be borne by the Company only if Executive receives substantially the relief
sought by him in the arbitration, whether by settlement, award or judgment; otherwise, the costs
shall be borne equally between the parties. The arbitration determination or award shall be final
and conclusive on the parties, and judgment upon such award may be entered and enforced in any
court of competent jurisdiction. 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.




     12. Miscellaneous.



          (a) Notices. Any notices, consents, demands, requests, approvals and other
communications to be given under this Agreement by either party to the other must be in writing and
must be either (i) personally delivered, (ii) mailed by registered or certified mail, postage
prepaid with return receipt requested, (iii) delivered by overnight express delivery service or
same-day local courier service, or (iv) delivered by telex or facsimile transmission, to the
address set forth below, or to such other address as may be designated by the parties from time to
time in accordance with this Section 12(a):




	 	 	 
	          If to the Company:
	 	Arris Group, Inc.






12









 






	 	 	 	 
	 
	 	3871 Lakefield Drive	 
	 
	 	Suwanee, Georgia  30024	 
	 
	 	Attention: Lawrence A. Margolis	 
	 
	 	 	 
	          If to Executive:
	 	 	 
	 	 
	 	 
	 
	 	 	 
	 	 
	 	 
	 
	 	 	 
	 	 
	 	 





          Notices delivered personally or by overnight express delivery service or by local courier
service are deemed given as of actual receipt. Mailed notices are deemed given three business days
after mailing. Notices delivered by telex or facsimile transmission are deemed given upon receipt
by the sender of the answer back (in the case of a telex) or transmission confirmation (in the case
of a facsimile transmission).




          (b) Entire Agreement. This Agreement supersedes any and all other agreements, either
oral or written, between the parties with respect to the subject matter of this Agreement and
contains all of the covenants and agreements between the parties with respect to the subject matter
of this Agreement.




          (c) Modification. No change or modification of this Agreement is valid or binding
upon the parties, nor will any waiver of any term or condition in the future be so binding, unless
the change or modification or waiver is in writing and signed by the parties to this Agreement.




          (d) Governing Law and Venue. The parties acknowledge and agree that this Agreement
and the obligations and undertakings of the parties under this Agreement will be performable in
Georgia. This Agreement is governed by, and construed in accordance with, the laws of the State of
Georgia. If any action is brought to enforce or interpret this Agreement, venue for the action
will be in Georgia.




          (e) Counterparts. This Agreement may be executed in counterparts, each of which
constitutes an original, but all of which constitutes one document.




          (f) Costs. If any action at law or in equity is necessary to enforce or interpret the
terms of this Agreement, each party shall bear its own costs and expenses.




          (g) Estate. If Executive dies prior to the expiration of the term of employment or
during a period when monies are owing to him, any monies that may be due him from the Company under
this Agreement as of the date of his death shall be paid to his estate and as when otherwise
payable.




          (h) Assignment. The Company shall have the right to assign this Agreement to its
successors or assigns. The terms “successors” and “assigns” shall include any person, corporation,
partnership or other entity that buys all or substantially all of the Company’s assets or all of
its stock, or with which the Company merges or consolidates. The rights, duties and



13









 






benefits to Executive hereunder are personal to him, and no such right or benefit may be
assigned by him.




          (i) Binding Effect. This Agreement is binding upon the parties hereto, together with
their respective executors, administrators, successors, personal representatives, heirs and
permitted assigns.




          (j) Waiver of Breach. The waiver by the Company or Executive of a breach of any
provision of this Agreement by Executive or the Company may not operate or be construed as a waiver
of any subsequent breach.




     13. 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.



14









 





     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.



	 	 	 	 	 	 	 
	 	 	“Company”	 	 
	 
	 	 	 	 	 	 
	 	 	ARRIS GROUP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence A. Margolis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Lawrence A. Margolis	 	 
	 

	 	Title:
	 	Executive Vice President of Strategic Planning,
	 	 
	 

	 	 	 	Administration and Chief Counsel, Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	“Executive”	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Bruce McClelland	 	 
	 	 	 	 	 
	 	 	Bruce McClelland	 	 







15