ARRIS GROUP, INC.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities
Exchange Act of 1934 (Amendment No.
)
Filed by the Registrant
x
Filed by a Party other than the Registrant
o
Check the appropriate box:
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o Preliminary
Proxy Statement |
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o Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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x Definitive
Proxy Statement
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o Definitive
Additional Materials
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o Soliciting
Material Pursuant to §240.14a-12
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Arris Group, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if
other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11.
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(1) |
Title of each class of securities to which
transaction applies:
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(2) |
Aggregate number of securities to which
transaction applies:
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(3) |
Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is calculated and
state how it was determined):
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(4) |
Proposed maximum aggregate value of transaction:
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o |
Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and identify the
filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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(1) |
Amount Previously Paid:
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(2) |
Form, Schedule or Registration Statement No.:
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ARRIS GROUP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 25, 2005
To the Stockholders of ARRIS Group, Inc.:
The Annual Meeting of Stockholders of ARRIS Group, Inc. will be
held at the Companys corporate headquarters, located at
3871 Lakefield Drive, Suwanee, Georgia, on Wednesday,
May 25, 2005 at 9:00 a.m. local time, for the purposes
of (a) electing seven directors, (b) approving the
appointment of Ernst & Young LLP as the independent
registered public accounting firm for ARRIS Group, Inc. for 2005
and (c) transacting such other business as may be brought
before the meeting or any adjournment(s) thereof.
It is important that your shares be represented at the meeting.
Whether or not you plan to attend in person, you are requested
to vote, sign, date, and promptly return the enclosed proxy in
the envelope provided.
The Board of Directors has fixed the close of business on
April 8, 2005, as the record date for the determination of
stockholders entitled to notice of, and to vote at, the meeting
or any adjournment(s) thereof. A complete list of the
stockholders entitled to vote at the meeting will be open for
examination by any stockholder for any purpose germane to the
meeting during ordinary business hours for ten days prior to the
meeting. The list of stockholders as of the date of record will
be made available at the offices of the Company at the above
address and will be available at the meeting.
A copy of ARRIS Group, Inc.s Annual Report to Stockholders
for the fiscal year ended December 31, 2004, is enclosed.
Additional copies of this report may be obtained without charge
by writing the Secretary of ARRIS Group, Inc.,
3871 Lakefield Drive, Suwanee, Georgia 30024.
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BY ORDER OF THE BOARD OF DIRECTORS |
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![-s- Lawrence A. Margolis](g94467g9446702.gif) |
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Lawrence A. Margolis, |
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Secretary |
Suwanee, Georgia
April 13, 2005
TABLE OF CONTENTS
PROXY STATEMENT
For
ANNUAL MEETING OF STOCKHOLDERS
OF ARRIS GROUP, INC.
To Be Held May 25, 2005
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of ARRIS
Group, Inc., a Delaware corporation. The Companys
corporate headquarters is located at 3871 Lakefield Drive,
Suwanee, Georgia 30024 (telephone 770-622-8400). This proxy
statement and form of proxy are first being mailed to
stockholders on or about April 18, 2005. Proxies solicited
by the Board of Directors of the Company are to be voted at the
Annual Meeting of Stockholders of the Company to be held on
May 25, 2005 at 9:00 a.m. local time at the
Companys corporate headquarters, 3871 Lakefield Drive,
Suwanee, Georgia or any adjournment(s) thereof.
This solicitation is being made by mail, although directors,
officers and regular employees of the Company may solicit
proxies from stockholders personally or by telephone, or letter.
The costs of this solicitation will be borne by the Company. The
Company may request brokerage houses, nominees or fiduciaries
and other custodians to forward proxy materials to their
customers and will reimburse them for their reasonable expenses
in so doing. In addition, the Company has retained
Morrow & Co., Inc. to assist in the solicitation for a
fee of $6,000 plus expenses.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be present at the 2006
Annual Meeting of Stockholders must be received by the Company
at its principal offices by December 15, 2005, in order to
be considered for inclusion in the Companys proxy
statement and proxy relating to the 2006 Annual Meeting of
Stockholders.
VOTING
Shares of Common Stock of the Company represented by proxies in
the accompanying form, which are properly executed and returned
to the Company (and which are not effectively revoked) will be
voted at the meeting in accordance with the stockholders
instructions contained therein. In the absence of contrary
instructions, shares represented by such proxies will be voted
IN FAVOR OF the election as directors of the nominees
listed herein, IN FAVOR OF approving the appointment of
Ernst & Young LLP as the independent registered public
accounting firm for the Company for 2005, and in the discretion
of the appointed proxies, upon such other business as may
properly be brought before the meeting.
Each stockholder has the power to revoke his or her proxy at any
time before it is voted by (1) delivering to the Company,
prior to or at the meeting, written notice of revocation or a
later dated proxy or (2) attending the meeting and voting
his or her shares in person.
The Board of Directors has fixed the close of business on
April 8, 2005, as the record date for the determination of
stockholders entitled to notice of, and to vote at, the meeting
or any adjournment(s) thereof.
As of April 8, 2005, 87,770,698 shares of Common Stock
were outstanding. Each holder of Common Stock is entitled to one
vote per share.
A quorum, which is a majority of the outstanding shares of
Common Stock as of the record date, must be present in order to
hold the meeting. Your shares will be counted as being present
at the meeting if you appear in person at the meeting or if you
submit a properly executed proxy.
In the absence of controlling precedent to the contrary, the
Company intends to treat broker non-votes in the following
manner. A broker non-vote occurs when a nominee
holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have the
discretionary voting power with respect to that item and has not
received instructions from the beneficial owner. Broker
non-votes are not
1
deemed to be entitled to vote for purposes of determining
whether stockholder approval of that matter has been obtained.
As a result, broker non-votes are not included in
the tabulation of the voting results on the election of
directors or issues requiring the approval of a majority of the
shares of Common Stock present or represented by proxy and
entitled to vote. Proxies which contain a broker non-vote are
counted towards a quorum and voted on the matters indicated.
If a quorum is present, the votes required to approve the
various matters presented to stockholders at the meeting shall
be as follows:
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Election of Directors Election requires a
plurality of the votes of the shares represented at the meeting.
Abstentions and broker non-votes will not be counted as votes
cast and will have no effect on the result of the vote, although
they will count toward the presence of a quorum. |
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Approval of Appointment of Ernst & Young LLP as the
Independent Registered Public Accounting Firm
Approval of the appointment of Ernst & Young LLP as the
independent registered public accounting firm for the Company
for 2005 requires the affirmative vote of holders of a majority
of the shares present or represented by proxy and entitled to
vote at the meeting. Abstentions and broker non-votes will have
no effect on the outcome of this proposal, although they will
count toward the presence of a quorum. |
ELECTION OF DIRECTORS
In the absence of contrary instructions, the proxies received
will be voted for the election as directors of the nominees
listed below, all of whom presently serve on the Board of
Directors, to hold office until the next annual meeting of
stockholders or until their successors are elected and
qualified. Although the Board of Directors does not contemplate
that any nominee will decline or be unable to serve as director,
in either such event the proxies will be voted for another
person selected by the Board of Directors, unless the Board acts
to reduce the size of the Board of Directors in accordance with
the provisions of ARRIS by-laws. The current number of
Directors has been set by the Board at seven. Upon his
re-election at this years Annual Meeting,
Mr. Stanzione will serve as Chairman of the Board.
NOMINEES TO SERVE FOR A ONE-YEAR TERM EXPIRING IN 2006
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Name: |
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Alex B. Best |
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Age: |
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63 |
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Director Since: |
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2003 |
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ARRIS Board Committee: |
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Compensation Committee and Nominating and Corporate Governance
Committee |
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Principal occupation and recent business experience: |
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Prior to his retirement in 2000, Mr. Best was the Executive
Vice President of Cox Communications, Inc. From 1986 through
1999, he served as the Vice President of Engineering of Cox.
Since 2000, Mr. Best has continued to consult for Cox on a
part- time basis. From 1966 through 1986, Mr. Best worked
for Scientific Atlanta, and was involved in nearly every aspect
of its cable television product development and business
applications. Mr. Best served as Chairman of the National
Cable Television Associations Engineering Advisory
Committee from 1995 until 2000. |
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Other directorships: |
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Concurrent Computer, Inc. |
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2
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Name: |
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Harry L. Bosco |
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Age: |
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59 |
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Director Since: |
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2002 |
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ARRIS Board Committee: |
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Audit Committee and Nominating and Corporate Governance
Committee (Chair) |
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Principal occupation and recent business experience: |
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Since 2000, Mr. Bosco has served as the Chief Executive
Officer, President and a Director of OpNext, Inc., an optical
component company privately owned by Hitachi Ltd. and Clarity
Partners. From 1965 to 2000, Mr. Bosco held numerous senior
management positions within Lucent Technologies, formerly Bell
Labs. |
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Name: |
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John Anderson Craig |
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Age: |
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62 |
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Director since: |
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1998 |
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ARRIS Board Committee: |
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Audit Committee and Compensation Committee |
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Principal occupation and recent business experience: |
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Mr. Craig is a business consultant. From September 1999 through
March 2000, Mr. Craig was Chief Marketing Officer of Nortel
Networks, Inc. From 1981 to March 2000, he held numerous senior
management positions within Northern Telecom Inc., now known as
Nortel Networks Inc. |
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Other directorships: |
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Bell Canada International and CAE, Inc. |
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Name: |
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Matthew B. Kearney |
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Age: |
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65 |
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Director Since: |
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2003 |
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ARRIS Board Committee: |
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Audit Committee |
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Principal occupation and recent business experience: |
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Prior to his retirement in 1997, Mr. Kearney was the Chief
Financial Officer of Griffin Gaming & Entertainment,
Inc. (formerly Resorts International, Inc.). Mr. Kearney
also served as President of Griffin Gaming &
Entertainment, Inc. from November 1993 through May 1995. Prior
to joining Resorts International, Inc., Mr. Kearney worked
in public accounting for Price Waterhouse & Co.
Mr. Kearney is a CPA (inactive) in New York and Florida. |
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Name: |
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William H. Lambert |
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Age: |
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67 |
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Director since: |
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1997 |
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ARRIS Board Committee: |
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Compensation Committee (Chair) and Nominating and Corporate
Governance Committee |
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Principal occupation and recent business experience: |
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Mr. Lambert is retired. From 1988 to 1997, Mr. Lambert
served as the Chairman, President and Chief Executive Officer of
TSX Corporation, which was acquired by ARRIS in 1997.
Mr. Lambert has been a private investor since 1998. |
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3
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Name: |
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John R. Petty |
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Age: |
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74 |
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Director since: |
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1993 |
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ARRIS Board Committee: |
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Audit Committee (Chair) and Nominating and Corporate Governance
Committee. Mr. Petty is also the lead independent director. |
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Principal occupation and recent business experience: |
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Mr. Petty is the Chairman and CEO of TECSEC Incorporated, a data
security company. Mr. Petty also serves as the Chairman of
Federal National Payables, Inc., Federal National Commercial,
Inc., and Federal National Services, Inc., since 1992.
Mr. Petty has been a private investor since 1988. |
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Name: |
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Robert J. Stanzione |
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Age: |
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57 |
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Director since: |
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1998 |
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ARRIS Board Committee |
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None |
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Principal occupation and recent business experience: |
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Mr. Stanzione has been Chief Executive Officer of the Company
since January 1, 2000. From 1998 through 1999,
Mr. Stanzione was President and Chief Operating Officer of
the Company. Mr. Stanzione has been Chairman of the Board
of Directors since May 2003. From 1995 to 1997, he was President
and Chief Executive Officer of Arris Interactive L.L.C. From
1969 to 1995, he held various positions with AT&T
Corporation. Mr. Stanzione is a board member of the
National Cable & Telecommunications Association (NCTA). |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
ITS
NOMINEES LISTED AS DIRECTORS.
APPROVAL OF THE APPOINTMENT OF ERNST & YOUNG LLP
AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed the
firm of Ernst & Young LLP to serve as the independent
registered public accounting firm of Arris Group, Inc. for the
fiscal year ending December 31, 2005, subject to
stockholder approval. This firm has audited the accounts of the
Company since 1993. If stockholders do not approve this
appointment the Committee will consider other independent
registered public accounting firms. One or more members of
Ernst & Young LLP are expected to be present at the
Annual Meeting, will be able to make a statement if they so
desire, and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
APPROVAL
OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
4
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 31, 2005,
certain information with respect to the Common Stock of the
Company that may be deemed beneficially owned by each director
or nominee for director of the Company, the officers named in
the Summary Compensation Table and by all directors, officers
and nominees as a group.
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Shares | |
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Shares That May | |
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Total Shares | |
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Beneficially | |
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Be Acquired | |
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Percentage of | |
Name of Beneficial Owner(1) |
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Owned(2) | |
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Within 60 days | |
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Class if> 1%(3) | |
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Alex B. Best
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14,800 |
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14,800 |
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* |
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Harry L. Bosco
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21,100 |
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21,100 |
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* |
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J. A. Ian Craig
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34,800 |
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7,500 |
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42,300 |
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* |
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Matthew B. Kearney
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14,800 |
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14,800 |
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* |
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William H. Lambert
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33,750 |
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7,500 |
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41,250 |
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* |
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John R. Petty
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34,400 |
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15,000 |
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49,400 |
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* |
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Robert J. Stanzione
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86,609 |
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1,678,898 |
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1,765,507 |
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2.0 |
% |
Lawrence A. Margolis
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67,042 |
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454,090 |
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521,132 |
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* |
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James D. Lakin
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64,738 |
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252,890 |
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317,628 |
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* |
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David B. Potts
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29,118 |
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212,790 |
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241,908 |
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* |
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Ron Coppock
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8,779 |
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204,591 |
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213,370 |
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* |
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All directors, nominees and executive officers as a group
including the above named persons
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473,488 |
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3,347,149 |
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3,784,637 |
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4.3 |
% |
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* |
Percentage of shares beneficially owned does not exceed one
percent of the class. |
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(1) |
Unless otherwise indicated, each person has sole investment
power and sole voting power with respect to the securities
beneficially owned by such person. |
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(2) |
Includes 113,750 stock units awarded to directors that
convert on a one-for-one basis into shares of Common Stock at a
time predetermined at the time of issuance. |
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(3) |
The shares underlying all currently exercisable options and
options that may be exercised within 60 days as deemed to
be beneficially owned by the person or persons for whom the
calculation is being made and are deemed to have been exercised
for the purpose of calculating this percentage. |
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS
The following table sets forth information as of March 31,
2005, with respect to each person who is known by the management
of the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock. Unless otherwise indicated,
the beneficial owner has sole voting and investment power and
the information below is based upon SEC filings by the person.
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Amount and Nature of | |
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Percent | |
Title of Class |
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Name and Address of Beneficial Owner |
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Beneficial Ownership | |
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of Class | |
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Common
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Cramer Rosenthan McGlynn, LLC |
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4,810,173 |
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5.5% |
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520 Madison Avenue |
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New York, NY 10022 |
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Common
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Dimensional Fund Advisors, Inc. |
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5,575,962 |
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6.4% |
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1299 Ocean Avenue, 11th Floor |
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Santa Monica, CA 90401 |
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5
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information concerning Common
Stock that may be issued upon exercise of options, warrants and
rights under all equity compensation plans as of
December 31, 2004:
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Number of Securities | |
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Remaining Available for | |
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Future Issuance Under | |
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Number of Securities to be | |
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Weighted-Average | |
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Equity Compensation | |
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Issued Upon Exercise of | |
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Exercise Price of | |
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Plans (Excluding | |
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Outstanding Options, | |
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Outstanding Options, | |
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Securities Reflected in | |
Plan Category |
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Warrants and Rights | |
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Warrants and Rights(1) | |
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1st Column)(2) | |
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Equity compensation plans approved by security holders
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11,039,166 |
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$ |
8.48 |
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7,200,570 |
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Equity compensation plans not approved by security holders(3)
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17,000 |
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Total
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11,056,166 |
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$ |
8.48 |
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7,200,570 |
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(1) |
The weighted-average exercise price is calculated on the
outstanding options and does not include restricted stock or
rights with no exercise price. |
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(2) |
Includes securities available for future issuance under
ARRIS 2004 Stock Incentive Plan (5,968,500), 2002 Stock
Incentive Plan (40,556), 2001 Stock Incentive Plan (325,520),
and 2001 Employee Stock Purchase Plan (865,994). |
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(3) |
In March 2003, the Company granted shares of restricted stock to
27 former employees of Atoga Systems, Inc. (the assets of which
the Company had acquired) in order to induce them to become
employees of the Companys subsidiary Arris International,
Inc. These employees have never been officers or directors of
the Company or its subsidiaries. The employees received, in the
aggregate, 500,000 restricted shares of Common Stock, vesting in
fourths each successive six months from the award date and in
thirds in the case of one employee, so long as, in each case,
the employee remains in the employ of the Company on such
anniversary dates. None of the employees received an award of
more than 50,000 shares. |
BOARD AND COMMITTEE MATTERS
Compensation of Directors
During 2004, the Company paid its non-employee directors annual
retainers of $46,000. Fifty percent of this retainer was paid in
the form of stock units which convert to Common Stock on a
one-for-one basis and the remaining fifty percent was paid in
cash. In addition, the Company paid each director a cash fee of
$2,000 for each Board meeting attended in person and $500 for
each Board meeting attended by phone. The Company paid the
Chairman of the Audit Committee an annual retainer of $10,000
and each other member of the Audit Committee an annual retainer
of $2,500. Further, the Company paid the Chairman of the
Compensation Committee and the Chairman of the Nominating
Committee an annual retainer of $2,500. The Company paid a
meeting fee of $1,000 to each member of a committee who attended
a committee meeting in person and a meeting fee of $500 to each
member who attended a committee meeting by phone.
Committees of the Board of Directors and Meeting
Attendance
The Board of Directors has Compensation, Audit, and Nominating
and Corporate Governance Committees. Each member of the
Compensation, Audit, and Nominating and Corporate Governance
Committees is independent as defined by
Rule 4200(a)(15) of the National Association of Securities
Dealers listing standards.
The Board of Directors held seven meetings in 2004. During 2004,
each of the directors attended 75 percent or more of the
total of all meetings held by the Board and the committees on
which the director served.
6
The Company has not adopted a formal policy on Board
members attendance at annual meetings of stockholders.
This year, there is a regularly scheduled Board meeting on the
same day as the annual meeting of stockholders and all directors
are encouraged to attend the 2005 annual meeting of
stockholders. Of the Companys seven directors at the time,
two directors attended the 2004 annual meeting of stockholders
on May 26, 2004.
The Audit Committee in 2004 consisted of Messrs. Petty
(Chairperson), Bosco, Craig, and Kearney. Information regarding
the functions performed by the Committee is set forth in the
Report of the Audit Committee, included in this
proxy statement. The Audit Committee is governed by a written
charter approved by the Board of Directors on December 12,
2003, which is available on the Companys website at
http://www.arrisi.com. Mr. Petty, the Chairperson of
the Audit Committee, is also the lead independent director. The
Audit Committee held thirteen meetings in 2004.
The Compensation Committee in 2004 consisted of
Messrs. Lambert (Chairperson), Craig and Best. No member of
the Compensation Committee is currently or has served as an
executive officer or employee of the Company. The Compensation
Committee is governed by a written charter, which is available
on the Companys website at http://www.arrisi.com.
The Compensation Committee generally exercises all powers of the
Board of Directors in connection with compensation matters,
including incentive compensation, benefit plans and stock
grants. The Compensation Committee held six meetings in 2004.
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Nominating and Corporate Governance Committee |
The Board of Directors has a Nominating and Corporate Governance
Committee. The Committees operations are governed by a
written charter that, among other things, provides that:
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the Committee consist of members who are independent
in accordance with the definitions of independence
adopted by the NASD; and |
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the Committee identifies individuals qualified to become
directors and recommends candidates to the Board of Directors. |
A copy of the current charter is available on the Companys
website at http://www.arrisi.com.
The Nominating and Corporate Governance Committee in 2004
consisted of Messrs. Bosco (Chairperson), Craig, Lambert,
and Petty. Each of these members satisfies the independence
requirements contained in the Committees charter. The
Nominating and Corporate Governance Committee held two meetings
in 2004.
With respect to the Committees evaluation of director
nominee candidates, the Committee has no formal requirements or
minimum standards for the individuals that it nominates. Rather,
the Committee considers each candidate on his or her own merits.
However, in evaluating candidates, there are a number of
criteria that the Committee generally views as relevant and is
likely to consider. Some of these factors include the
candidates:
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career experience, particularly experience that is germane to
the Companys business, such as telecommunications products
and services, legal, human resources, finance, marketing, and
regulatory experience; |
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whether the candidate is an audit committee financial
expert (as defined by the SEC); |
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experience in serving on other boards of directors or in the
senior management of companies that have faced issues generally
of the level of sophistication that the Company faces; |
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contribution to diversity of the Board of Directors; |
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integrity and reputation; |
7
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ability to work collegially with others; |
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whether the candidate is independent; |
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other obligations and time commitments and the ability to attend
meetings in person; and |
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current membership on the Board the Board values
continuity (but not entrenchment). |
The Committee does not assign a particular weight to the
individual factors. Similarly, the Committee does not expect to
see all (or even more than a few) of these factors in any
individual candidate. Rather, the Committee looks for a mix of
factors that, when considered along with the experience and
credentials of the other candidates and existing Board members,
will provide stockholders with a diverse and experienced Board
of Directors.
With respect to the identification of nominee candidates, the
Committee has not developed a formalized process. Instead, its
members and the Companys senior management generally
recommend candidates whom they are aware of personally or by
reputation. The Company historically has not utilized a
recruiting firm to assist in the process but could do so in the
future.
The Committee welcomes recommendations from stockholders. The
Committee evaluates a candidate for director who was recommended
by a stockholder in the same manner that the Committee evaluates
a candidate recommended by other means. In order to make a
recommendation, the Committee asks that a stockholder send the
Committee:
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a resume for the candidate detailing the candidates work
experience and credentials; |
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written confirmation from the candidate that he or she
(1) would like to be considered as a candidate and would
serve if nominated and elected, (2) consents to the
disclosure of his or her name, (3) has read the
Companys Policy on Business Ethics and Conduct and that
during the prior three years has not engaged in any conduct
that, had he or she been a director, would have violated the
Policy or required a waiver, (4) is, or is not,
independent as that term is defined in the
Committees charter, and (5) has no plans to change or
influence the control of the Company; |
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the name of the recommending stockholder as it appears in the
Companys books, the number of shares of Common Stock that
are owned by the stockholder and written confirmation that the
stockholder consents to the disclosure of his or her name. (If
the recommending person is not a stockholder of record, he or
she should provide proof of share ownership); |
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personal and professional references, including contact
information; and |
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any other information relating to the candidate required to be
disclosed in a proxy statement for election of directors under
Regulation 14A of the Securities Exchange Act of 1934 (the
Exchange Act). |
This information should be sent to the Nominating and Corporate
Governance Committee, c/o Lawrence Margolis, Corporate
Secretary, Arris Group, Inc., 3871 Lakefield Drive, Suwanee, GA
30024, who will forward it to the chairperson of the Committee.
The Committee does not necessarily respond to recommendations.
The nomination must be accompanied by the name and address of
the nominating stockholder and must state the number and class
of shares held. It must include information regarding each
nominee that would be required to be included in a proxy
statement. For potential nominees to be considered at the 2006
annual stockholders meeting, the Corporate Secretary must
receive this information by December 15, 2005.
In addition to the procedures described above for recommending
prospective nominees for consideration by the Committee,
stockholders may directly nominate directors for consideration
at any annual meeting of stockholders.
Each of the nominees for election as a director at the Annual
Meeting was nominated by the Board of Directors. Each of the
nominees currently is a director.
8
Communication with the Board
Stockholders may communicate with the Board of Directors by
sending a letter to the ARRIS Group, Inc. Board of Directors,
c/o Corporate Secretary, ARRIS Group, Inc.,
3871 Lakefield Drive, Suwanee, GA 30024. The Corporate
Secretary will submit the correspondence to the Chairman of the
Board or to any specific director to whom the correspondence is
directed.
Audit Committee Financial Experts
The Board of Directors believes that each of its Audit Committee
members is financially literate as defined by the current
listing standards of the NASD. Additionally, the Board has
identified John Petty and Matthew Kearney as audit committee
financial experts, as defined by the SEC rules adopted pursuant
to the Sarbanes-Oxley Act of 2002.
REPORT OF AUDIT COMMITTEE
Pursuant to its written charter, the Audit Committee oversees
the Companys financial reporting process on behalf of the
Board of Directors. Our responsibility is to monitor and review
these processes. It is not our duty or our responsibility to
conduct auditing or accounting reviews or procedures. We are not
employees of the Company and we do not represent ourselves to
be, or to serve as, accountants or auditors by profession.
Therefore, we have relied, without independent verification, on
managements representation that the consolidated financial
statements have been prepared with integrity and objectivity and
in conformity with U.S. generally accepted accounting principles
and on the representations of the independent registered public
accounting firm included in their report on the Companys
consolidated financial statements. Our oversight does not
provide us with an independent basis to determine that
management has maintained appropriate accounting and financial
reporting principles or policies, or appropriate internal
controls and procedures designed to assure compliance with
accounting standards and applicable laws and regulations.
Furthermore, our considerations and discussions with management
and the independent registered public accounting firm do not
assure that the Companys consolidated financial statements
are presented in accordance with U.S. generally accepted
accounting principles, that the audit of our Companys
consolidated financial statements has been carried out in
accordance with the standards of the Public Company Accounting
Oversight Board (United States) or that our Companys
independent registered public accounting firm is in fact
independent.
Management has the primary responsibility for the financial
statements and the reporting process, including the systems of
internal controls. In fulfilling our oversight responsibilities,
we reviewed the audited financial statements in the Annual
Report with management, including a discussion of the quality,
not just the acceptability, of the accounting principles, the
reasonableness of significant judgments, and the disclosures in
the financial statements.
We reviewed with the independent registered public accounting
firm, who is responsible for expressing an opinion on the
conformity of those audited financial statements with U.S.
generally accepted accounting principles, its judgments as to
the quality, not just the acceptability of the Companys
accounting principles required by Statement on Auditing
Standards No. 61, and such other matters as are required to
be discussed with the Committee under the standards of the
Public Company Accounting Oversight Board (United States). In
addition, we discussed with the independent registered public
accounting firm their independence from management and the
Company, including the matters in the written disclosures
required by the Independence Standards Board, and considered the
compatibility of nonaudit services provided by the independent
registered public accounting firm to the Company with their
independence.
We discussed with the Companys internal auditors and the
independent registered public accounting firm the overall scope
and plans for their respective audits. We met with the internal
auditors and the independent registered public accounting firm,
with and, as deemed advisable, without management present, to
discuss the results of their examinations, their evaluations of
the Companys internal controls and the overall quality of
the Companys financial reporting. We reviewed proposed
interim financial statements with
9
management and the independent registered public accounting
firm. We oversaw the implementation of and the Companys
compliance with Section 404 of the Sarbanes-Oxley Act of
2002.
In 2004, we had thirteen meetings. In reliance on the reviews
and discussions referred to above, we recommended to the Board
of Directors (and the Board of Directors has accepted that
recommendation) that the audited financial statements be
included in the Annual Report on Form 10-K for the fiscal
year ended December 31, 2004 for filing with the Securities
and Exchange Commission. In addition, we have selected the
Companys independent registered public accounting firm.
John R. Petty, Audit Committee Chairman
Harry L. Bosco, Audit Committee Member
John A. Craig, Audit Committee Member
Matthew B. Kearney, Audit Committee Member
EXECUTIVE COMPENSATION
The following tables set forth information about the
compensation paid to the Companys Chief Executive Officer,
and the four most highly compensated Company executive officers
for the last fiscal year.
Summary Compensation Table
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Long Term | |
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Compensation Awards | |
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Annual Compensation | |
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Restricted | |
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Securities | |
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Name and |
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Stock | |
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Underlying | |
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LTIP | |
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All Other | |
Principal Position |
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Year | |
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Salary($) | |
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Bonus($) | |
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Other($) | |
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Awards($) | |
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Awards(#) | |
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Payouts($) | |
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Compensation($)(1) | |
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Robert J. Stanzione
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2004 |
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585,000 |
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600,000 |
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220,000 |
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4,898 |
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Chief Executive Officer
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2003 |
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585,000 |
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375,000 |
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45,488 |
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2002 |
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600,000 |
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376,500 |
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455,000 |
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51,596 |
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Lawrence A. Margolis
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2004 |
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331,500 |
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204,000 |
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13,870 |
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100,000 |
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1,200 |
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Executive Vice President
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2003 |
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331,500 |
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58,102 |
(2) |
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170,000 |
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19,081 |
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of Strategic Planning,
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2002 |
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340,000 |
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128,010 |
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58,585 |
(2) |
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205,000 |
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25,689 |
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Administration, and Chief
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Counsel
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James D. Lakin
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2004 |
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273,675 |
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150,000 |
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100,000 |
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1,961 |
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President, Broadband
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2003 |
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273,675 |
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160,000 |
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15,800 |
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2002 |
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280,692 |
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88,067 |
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90,000 |
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21,693 |
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David B. Potts
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2004 |
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260,071 |
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150,000 |
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24,500 |
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100,000 |
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1,706 |
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Executive Vice President,
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2003 |
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246,461 |
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150,000 |
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78,200 |
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13,829 |
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Chief Financial Officer,
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2002 |
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252,780 |
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79,310 |
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75,000 |
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236,300 |
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13,428 |
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Chief Information Officer
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Ronald M. Coppock
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2004 |
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231,300 |
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130,000 |
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24,500 |
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90,000 |
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1,200 |
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President, Worldwide Sales
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2003 |
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210,600 |
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120,000 |
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13,162 |
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2002 |
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204,079 |
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67,770 |
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71,042 |
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13,200 |
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(1) |
Represents contributions by the Company to a supplemental
savings plan and a life insurance plan. |
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(2) |
Includes $45,000 for forgiveness of relocation advance. |
10
Option Grants in Last Fiscal Year
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Individual Grants | |
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Potential Realizable | |
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Value at Assumed | |
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Number of | |
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% of Total | |
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Annual Rates of | |
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Securities | |
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Options | |
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Stock Price Appreciation | |
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Underlying | |
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Granted to | |
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for Option Term(2) | |
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Options | |
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Employees in | |
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Exercise or Base | |
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Date of | |
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Name |
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Granted(#) | |
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Fiscal Year | |
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Price ($/sh) | |
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Expiration | |
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5%($) | |
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10%($) | |
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Robert J. Stanzione
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220,000 |
(1) |
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9.3 |
% |
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$ |
4.90 |
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5/25/2014 |
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$ |
647,488 |
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$ |
1,669,551 |
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Lawrence A. Margolis
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100,000 |
(1) |
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4.2 |
% |
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$ |
4.90 |
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5/25/2014 |
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294,313 |
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758,887 |
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James D. Lakin
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100,000 |
(1) |
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4.2 |
% |
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$ |
4.90 |
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5/25/2014 |
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294,313 |
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758,887 |
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David B. Potts
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100,000 |
(1) |
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4.2 |
% |
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$ |
4.90 |
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5/25/2014 |
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294,313 |
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758,887 |
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Ronald M. Coppock
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90,000 |
(1) |
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3.8 |
% |
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$ |
4.90 |
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5/25/2014 |
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264,881 |
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682,998 |
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(1) |
The options vest in thirds beginning on the anniversary of the
date of grant. |
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(2) |
The potential realizable value is calculated based on the term
of the option at its time of grant, which is ten years, assuming
the fair market price of the Common Stock on the date of grant
(the average of the high and low on the date of grant)
appreciates at the indicated annual rate compounded annually for
the entire term of the option and that the option is exercised
and sold on the last day of its term for the appreciated stock
price. These numbers are for presentation purposes only and are
not predictions of future stock prices. |
Aggregated Option Exercises in Last Fiscal Year
And Fiscal Year-End Option Value
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Number of Securities | |
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Value of Unexercised | |
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Underlying Unexercised | |
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In-the-Money | |
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Shares Acquired | |
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Value | |
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Options at FY-End(#) | |
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Options at FY-End($) | |
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on Exercise(#) | |
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Realized($) | |
|
Exercisable/Unexercisable | |
|
Exercisable/Unexercisable(1) | |
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| |
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| |
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Robert J. Stanzione
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1,564,300/645,700 |
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$ |
1,191,038/$1,482,162 |
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Lawrence A. Margolis
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112,200 |
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133,817 |
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403,250/291,750 |
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$ |
550,969/$677,931 |
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James D. Lakin
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208,300/276,700 |
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|
$ |
262,355/$524,745 |
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David B. Potts
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|
169,450/255,550 |
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|
$ |
223,517/$494,583 |
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Ronald M. Coppock
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27,847 |
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108,606 |
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164,585/199,444 |
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$ |
140,094/$422,245 |
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(1) |
The value of the unexercised options was calculated using the
difference between the option exercise price and the fiscal
year-end fair market value (the average of the high and the low
stock price on December 31, 2004) of $7.09 per share,
multiplied by the number of shares underlying the option. |
11
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
To assure the continued services of its key officers, the
Company has entered into employment agreements with certain
executive officers, including Messrs. Stanzione, Margolis,
Lakin, Potts, and Coppock. The salaries and bonus opportunities
specified in these agreements (see Employment Contracts
and Termination of Employment and Change-In-Control
Arrangements,) were initially determined after reviewing
publicly available information on the compensation practices of
cable companies and distributors and manufacturers of
sophisticated electronic products. (No attempt was made to limit
these companies to the companies in the published industry index
used in the Performance Graph.) However, because of
the differences in size and business between these companies and
ARRIS, the salaries and bonus opportunities specified in the
employment agreements were subjectively determined by the
Committee to be within the Committees goal of salaries
within the median of the range paid by others for comparable
positions and bonus opportunities within the high end of the
range provided by others for comparable positions. Prior to
July 1, 2004, salaries for all executive officers had been
frozen since their last salary adjustment in mid-2001, and in
July 2003, all executive officers took a 5% reduction in their
salaries. As of July 1, 2004, salaries for all executive
officers were reinstated at the levels following the mid-2001
salary adjustment; however, two executive officers received
additional salary increases as a result of changes in their
respective job titles and their related increased
responsibilities.
Annual bonus targets are set as a percentage of base salary
compensation. In 2004, this percentage was approximately 100%
for Mr. Stanzione, and 50% to 60% for the other named
officers. Actual bonuses can range from zero to 150% (200% for
Messrs. Stanzione and Margolis) of target, dependent upon
the achievement of goals set at the beginning of the year. No
bonuses were paid with respect to the calendar year 2003.
Bonuses were paid, as shown in the compensation table, with
respect to the calendar year 2004. These bonuses were paid
pursuant to the provisions of bonus plans in effect for 2004
that were based upon achieving earnings per share targets,
excluding certain items (a non-GAAP measure), in 2004. Earnings
per share, excluding certain items, increased from a loss of
$(0.28) per share in 2003 to earnings of $0.14 per share in
2004, which was in excess of the bonus target. In calculating
bonus targets, the Company considers performance after making
adjustments for certain items (a non-GAAP measure) because of
their nature. A reconciliation of our GAAP to our non-GAAP
earnings per share can be found on our website. In addition to
the improvement in earnings per share, revenues were up
approximately 13% year over year, the Companys cash, cash
equivalents, and short term investments position at the end of
the year was $103 million (up $18 million), and the
year ended with substantial backlog and a book-to-bill ratio of
1.05 for 2004. In light of these substantial financial
improvements and performance achieved under the bonus plans, the
Committee believed the bonuses were earned and properly paid.
The Compensation Committee has the authority to and does
regularly retain outside consultants to assist in its analysis
of the Companys compensation policies and actions.
The components of executive officer compensation related to the
performance of the Company are the portions of the annual bonus
awards based on financial performance and the ultimate value of
long-term incentive awards as determined by the stock market.
The executive officers, particularly the Chief Executive
Officer, have suffered substantial losses (not reflected in
accompanying tables) in the positions in the Companys
stock that they are required to maintain by the Companys
stock ownership guidelines and vesting restrictions in grants
they have earned.
It is the policy of the Company to structure its compensation in
a manner which will avoid the limitations imposed by the Omnibus
Budget Reconciliation Act of 1993 on the deductibility of
executive compensation under Section 162 (m) of the
Internal Revenue Code to the extent it can reasonably do so
consistent with its goal of retaining and motivating its
executives in a cost effective manner.
William H. Lambert, Compensation Committee Chairman
John A. Craig, Compensation Committee Member
Alex B. Best, Compensation Committee Member
12
Pension Plan
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Years of Service | |
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Remuneration |
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10 | |
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15 | |
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20 | |
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25 | |
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30 | |
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35 | |
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$150,000
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$ |
16,492 |
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$ |
24,737 |
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$ |
32,983 |
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$ |
41,229 |
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$ |
49,475 |
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$ |
49,475 |
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200,000
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22,992 |
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34,487 |
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45,983 |
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57,479 |
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68,975 |
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68,975 |
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250,000
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29,492 |
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44,237 |
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58,983 |
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73,729 |
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88,475 |
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88,475 |
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300,000
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35,992 |
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53,987 |
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71,983 |
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89,979 |
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107,975 |
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107,975 |
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350,000
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42,492 |
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63,737 |
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84,983 |
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106,229 |
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127,475 |
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127,475 |
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400,000
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48,992 |
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73,487 |
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97,983 |
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122,479 |
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146,975 |
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146,975 |
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450,000
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55,492 |
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83,237 |
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110,983 |
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138,729 |
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166,475 |
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166,475 |
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500,000
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61,992 |
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93,987 |
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123,983 |
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154,979 |
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185,975 |
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185,975 |
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550,000
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68,492 |
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102,737 |
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136,983 |
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171,229 |
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205,475 |
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205,475 |
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600,000
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74,992 |
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112,487 |
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149,983 |
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187,479 |
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224,975 |
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224,975 |
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650,000
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81,492 |
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122,237 |
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162,983 |
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203,729 |
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244,475 |
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244,475 |
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700,000
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87,992 |
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131,987 |
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175,983 |
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219,979 |
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263,975 |
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263,975 |
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The amounts in the table above are annual straight-line annuity
amounts (which are not reduced for Social Security benefits)
payable upon retirement at age 65 under the Companys
funded defined benefit pension plan and an unfunded
supplementary defined benefit pension plan. The benefits are
determined by the average of the five highest consecutive years
of salary and bonus during an employees last ten years of
service. Bonus is attributable to the year in which it is paid
not the year for which it is accrued. Thus, the covered
remuneration for 2004 was the salary for 2004 and the bonus
accrued for 2003 in the Summary Compensation Table.
In 1999, the Company adopted changes in its retirement plans
that enabled plan participants to elect to freeze their benefits
in the funded pension plan as of December 31, 1999, in
exchange for better matching contributions in the future by the
Company under its 401(k) savings plan and supplemental savings
plan; however, the Company suspended 401(k) and deferred
compensation matching contributions in 2003. In 2004, the
Company reinstated a partial matching contribution to the 401(k)
savings plan. Messrs. Stanzione and Margolis elected to
freeze their benefits in the funded pension plan and, for
purposes of the plan, are credited with approximately 12
(actual service tripled pursuant to employment agreement) and
15 years of service, respectively, and their then annual
remuneration was $649,499 and $451,200, respectively. As of
December 31, 2004, Messrs. Stanzione, Margolis, Lakin,
Potts and Coppock have approximately 27 (actual service tripled
pursuant to employment agreement), 22, 8, 9 and
14 years of service, respectively. Messrs. Stanzione
and Margolis, as well as Messrs. Latin, Potts, and Coppock,
continue to participate in the unfunded supplementary pension
plan that provides benefits based on the remuneration that is in
excess of the remuneration that the federal tax rules permit to
be considered in determining benefits under the funded pension
plan, which was $205,000 in 2004. For a discussion of additional
retirement agreements with Mr. Stanzione, see
Employment Contracts and Termination of Employment and
Change in Control Arrangements.
EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
Employment contracts. The Company has entered into
employment agreements with Messrs. Stanzione, Margolis,
Lakin, Potts and Coppock. The employment agreements obligate
these officers to continue to serve the Company and for the
Company to continue to employ these officers until the
employment agreements are terminated by the required prior
notice or for cause or good reason as defined in the employment
agreements or until the employment agreements expire in the case
of Messrs. Stanzione and Margolis when they reach the ages
of 62 and 65 respectively, in the case of Mr. Coppock in
2005, and in the case of Messrs. Lakin and Potts in 2006.
The employment agreements provide for minimum salaries equal to
current salaries (and for minimum annual increases for
Messrs. Stanzione and Margolis, which, in the case of
13
both individuals, were waived in 2002, 2003, and 2004) and for
the Company to determine annual bonus opportunities targeted at
100% of salary for Mr. Stanzione, and 50% or 60% of salary
for the other officers.
Termination of employment. If the employment agreements
are terminated without cause by the Company or with good reason
by the executive, the employment agreements provide for the
vesting of options to purchase shares of Common Stock and for
the continuation of employment benefits (including salaries and
bonuses) for three years in the case of Mr. Stanzione, two
years in the case of Mr. Margolis, and one year in the case
of Messrs. Lakin, Potts and Coppock. The employment
agreements prohibit each officer from working for a competitor
while receiving these benefits from the Company.
Mr. Stanzione has agreed to serve as a consultant to the
Company during the period he is receiving these benefits.
Change of control. Good reason for termination of the
employment agreement includes in the case of
Messrs. Margolis, Lakin, Potts and Coppock, a change of
control, and in addition in the case of Mr. Stanzione no
longer being a chief executive of a significant public company
or otherwise having his position materially diminished after a
change of control. A change of control occurs, subject to
certain exceptions, if any person becomes, directly or
indirectly, the beneficial owner of securities representing more
than 25% to 30% of the combined voting power of the
Companys then outstanding voting securities, or if
substantially all the Companys assets are sold or a
comparable transaction occurs, or if certain changes in
composition of the Companys Board of Directors occurs.
Special retirement provisions. The Company has agreed to
establish a supplemental retirement plan for Mr. Stanzione
that, together with the Companys other pension plans will
provide Mr. Stanzione at age 62 a monthly single life
annuity of approximately 50% of his final average compensation.
His final average compensation is defined as one-twelfth of his
then annual salary plus one-twelfth of his then typical annual
bonus. His then typical annual bonus shall be the annual average
of the three highest full year bonuses for the five full years
(or such lesser number of years) after 2001. If
Mr. Stanzione terminates his employment prior to
age 62 because of a change of control, he is guaranteed
that his total pension benefits from the Company will not be
less than $33,333 a month.
14
STOCK PERFORMANCE GRAPH
Below is a graph comparing total stockholder return on the
Companys stock from December 31, 1999 through
December 31, 2004, with the Standard & Poors
500 and the Index of NASDAQ U.S. Stocks of entities in the
industry of electronics and electrical equipment and components,
exclusive of computer equipment, (SIC 3600-3699), prepared by
the Research Data Group, Inc.. The stock performance graph
assumes the investment of $100 on December 31, 1999 and
reinvestment of all dividends.
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Cumulative Total Return | |
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12/99 |
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12/00 |
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12/01 |
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12/02 |
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12/03 |
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12/04 |
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ARRIS GROUP, INC
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100.00 |
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21.66 |
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26.74 |
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9.78 |
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19.84 |
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19.29 |
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S&P 500
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100.00 |
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90.89 |
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80.09 |
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62.39 |
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80.29 |
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89.02 |
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Peer Group
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100.00 |
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86.66 |
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66.62 |
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34.10 |
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61.29 |
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56.34 |
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15
Notwithstanding anything to the contrary set forth in any
other of the Companys filings under the Securities Act of
1933, or the Exchange Act that might incorporate future filings,
including this Proxy Statement, in whole or in part, the
Compensation Committee Report on Executive Compensation, the
Audit Committee Report and the Performance Graph presented above
shall not be incorporated by reference into any such filings.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has selected Ernst & Young LLP as
the independent registered public accounting firm of the Company
for the fiscal year ended December 31, 2005.
Ernst & Young LLP also acted in such capacity during
the fiscal year ended December 31, 2004. Representatives of
Ernst & Young LLP, who are expected to be present at
the meeting, will be given an opportunity to make a statement if
they so desire and to respond to appropriate questions asked by
stockholders. The fees billed by Ernst & Young LLP for
the last two Company fiscal years were as follows:
Audit Fees
Fees for audit services totaled $2,627,978 and $1,340,737 in
2004 and 2003, respectively, and include fees associated with
the annual audits, the Sarbanes Oxley Section 404
attestation, the reviews of the Companys quarterly reports
on Form 10-Q, other SEC filings, and audit consultations.
Audit-Related Fees
Fees for audit-related services totaled $58,000 and $528,084 in
2004 and 2003, respectively. Audit-related services include due
diligence in connection with acquisitions, consultation on
accounting and internal control matters, audits in connection
with benefit plans, and audits in connection with consummated
acquisitions.
Tax Fees
Fees for tax services including tax compliance, tax advice and
tax planning totaled $134,354 and $255,005 in 2004 and 2003,
respectively.
All Other Fees
Fees for all other services not included above totaled $0 and
$67,636 for 2004 and 2003, respectively, primarily related to
actuarial services requested by the Company. The Audit Committee
believes that such non-audit services in 2003 were compatible
with maintaining the independence of Ernst & Young LLP
as the Companys independent registered public accounting
firm.
Audit Committee Pre-Approval Policy
The Audit Committee has adopted a policy that requires advance
approval of all audit, audit-related, tax services, and other
permissible non-audit services performed by the independent
registered public accounting firm. Prior to engagement, the
Audit Committee pre-approves independent registered public
accounting firm services and fee amounts or ranges within each
category. Either the independent registered public accounting
firm or the Companys Chief Financial Officer (or his
designee) must submit to the Audit Committee requests for
services to be provided by the independent registered public
accounting firm. The Audit Committee may delegate pre-approval
authority to one of its members. The member to whom such
authority is delegated must report, for informational purposes
only, any pre-approval decisions to the Audit Committee at its
next meeting.
The Audit Committee requires the Companys Internal Audit
Director to report to the Audit Committee on a periodic basis
the results of the Internal Audit Directors monitoring of
the independent registered public accounting firms
performance of all services to the Company and whether the
performance of those services was in compliance with the Audit
Committees pre-approval policy. Both the Internal Audit
Director and management are required to report immediately to
the Audit Committee any breaches by the independent registered
public accounting firm of the policy.
16
CONCLUSION
The Board of Directors knows of no other matters to be presented
for stockholder action at the meeting. However, if other matters
do properly come before the meeting, it is intended that the
persons named in the proxies will vote upon them in accordance
with their best judgment.
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BY ORDER OF THE BOARD OF DIRECTORS |
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![-s- Lawrence A. Margolis](g94467g9446702.gif) |
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Lawrence A. Margolis, Secretary |
April 13, 2005
17
DETACH PROXY CARD HERE
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Mark, Sign, Date and Return
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x |
the Proxy Card Promptly |
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Using the Enclosed Envelope.
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Votes must be indicated
(x) in Black or Blue ink. |
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1. |
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Election of the following nominees as directors: |
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FOR
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AGAINST
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ABSTAIN |
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FOR ALL NOMINEES o |
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WITHHOLD AUTHORITY o |
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*EXCEPTIONS o |
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2. |
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Approval of the appointment of
Ernst & Young LLP as independent
registered public accountants. |
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o |
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Nominees: |
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Alex B. Best, Harry L.
Bosco, John Anderson Craig, Matthew B. Kearney,
William H. Lambert, John R. Petty, and Robert J. Stanzione. |
3. |
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In their discretion, such other matters as properly may
come before the meeting or at any adjournment(s) thereof. |
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(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the
Exceptions box and write that nominees name in the space provided below). |
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PLEASE CHECK BOX IF YOU INTEND
TO BE PRESENT AT MEETING. |
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o |
*Exceptions
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COMMENT / ADDRESS
CHANGE
Please mark this box if you have written
comment / address change on the reverse side. |
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o |
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![CORNER MARKS](g94467g9446705.gif) |
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SCAN LINE
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IMPORTANT: Please date this proxy and sign exactly as your name appears
hereon. Executors, administrators, trustees, guardians and officers
signing in a representative capacity should give full title.
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Date Share Owner sign here
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Co-Owner sign here |
4901
ARRIS GROUP, INC.
PROXY SOLICITED BY AND ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Stanzione, Lawrence A. Margolis and David B. Potts
and each of them (with full power of substitution in each) proxies of the undersigned to vote at the
annual meeting of ARRIS Group, Inc. to be held at 9:00 a.m., eastern time, May 25, 2005, at the Companys
corporate headquarters, 3871 Lakefield Drive, Suwanee, Georgia, and at any adjournments thereof, all of the
shares of Common Stock of ARRIS Group, Inc. in the name of the undersigned on the record date.
This proxy when properly executed will be voted in the manner directed by the undersigned
stockholder. THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES AND IN FAVOR
OF THE APPROVAL OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS, as set forth in the proxy statement accompanying this proxy.
(Continued, and to be dated and signed on the reverse side.)
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COMMENTS / ADDRESS CHANGE: PLEASE MARK |
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COMMENT / ADDRESS BOX ON REVERSE SIDE
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ARRIS GROUP, INC. P.O. BOX 11340 |
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NEW YORK, N.Y. 10203-0340 |
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