UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Dated of Report (Date of Earliest Event Reported): December 11, 2014

of

 

 

ARRIS GROUP, INC.

 

 

A Delaware Corporation

IRS Employer Identification No. 46-1965727

Commission File Number 000-31254

3871 Lakefield Drive

Suwanee, Georgia 30024

(678) 473-2000

Not Applicable

Former name or former address, if changed since last report

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 8.01 Other Matters

On December 11, 2014, the Delaware Court of Chancery (the “Court”) issued an order granting preliminary approval of the agreement of the parties (the “Proposed Dismissal”) to dismiss as moot all claims in the derivative action styled The Fire and Police Pension Fund, San Antonio v. Robert J. Stanzione et. al., C.A. No. 10078-VCG (the “Derivative Action”). The Derivative Action alleges breaches of fiduciary duty by members of the Board of Directors of ARRIS Group, Inc. (the “Company”) in connection with the approval of certain provisions in the Company’s credit facility. The credit facility was subsequently amended by the Company to delete the provisions that were the subject of the Derivative Action. Under the terms of the Proposed Dismissal, no damages will be awarded. Plaintiff’s counsel intends to make an application to the Court for an award of fees and expenses in an amount not to exceed $750,000. The Company reserves the right to oppose this fee application. Any fees and expenses awarded by the Court will be paid by the Company. A hearing to determine whether the Court should issue an order granting final approval of the Proposed Dismissal or award fees and expenses to plaintiff’s counsel has been scheduled for February 11, 2015, at 1:00 p.m. at the Delaware Court of Chancery in Georgetown, Delaware. Pursuant to the Court’s order, any objections to any aspects of the Settlement must be filed with the Court no later than January 26, 2015. There can be no assurance that the Proposed Dismissal ultimately will be approved by the Court.

Additional information concerning the terms of the proposed Settlement, the February 11, 2015 hearing, and the requirements for objections can be found in the Notice of Proposed Dismissal of Class Action and Plaintiff’s Fee Application (the “Notice”), which is attached hereto as Exhibit 99.1 and is available for viewing on the Company’s website at www.arrisi.com. The information on the Company’s website is not a part of this Current Report and is not incorporated herein by reference.

 

Item 9.01 Exhibits

 

(d) Exhibits

 

Exhibit
No.

  

Description

99.1    Notice of Proposed Dismissal of Class Action and Plaintiff’s Fee Application


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

ARRIS Group, Inc.
By:  

/s/ David B. Potts

  David B. Potts
  Executive Vice President and Chief Financial Officer

Dated: December 12, 2014



EXHIBIT 99.1

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

 

THE FIRE AND POLICE PENSION    )   
FUND, SAN ANTONIO,    )   
   )   

Plaintiff,

   )   
   )    C.A. No. 10078–VCG

v.

   )   
   )   
ROBERT J. STANZIONE, ALEX B. BEST,    )   
HARRY L. BOSCO, JAMES A. CHIDDIX,    )   
ANDREW T. HELLER, MATTHEW B.    )   
KEARNEY, DEBORA J. WILSON,    )   
DAVID A. WOODLE, AND WILLIAM H.    )   
LAMBERT, and BANK OF AMERICA, N.A.,    )   
   )   

Defendants,

   )   
   )   

and

   )   
   )   
ARRIS GROUP INC.,    )   
   )   

Nominal Defendant.

   )   
   )   

NOTICE OF PROPOSED DISMISSAL OF CLASS

ACTION AND PLAINTIFF’S FEE APPLICATION

 

TO: All persons who held shares of Arris Group Inc. common stock at any time during the period from and including March 27, 2013 through October 27, 2014.

The purpose of this Notice is to inform you about developments with respect to the above-captioned action (the “Action”), including the proposed dismissal of the Action, the intention of counsel for The Fire and Police Pension Fund, San Antonio (“Plaintiff”) to make an application for an award of fees and expenses in connection with the Action, and your right to object to the proposed dismissal of the Action and the application for an award to Plaintiff’s counsel of fees and expenses in connection with the Action.


By way of background, on September 3, 2014, Plaintiff filed a putative Verified Class Action and Derivative Complaint (the “Complaint”) in the Delaware Court of Chancery (the “Court”) alleging that (1) nine members of the board of directors of Arris Group Inc. (“Arris” or the “Company”)—Robert J. Stanzione, Alex B. Best, Harry L. Bosco, James A. Chiddix, Andrew T. Heller, Matthew B. Kearney, Debora J. Wilson, David A. Woodle, and William H. Lambert (collectively, the “Individual Defendants” and, together with defendants Bank of America, N.A. (“BANA”) and nominal defendant Arris, the “Defendants”) violated their fiduciary duties by approving and/or maintaining a continuing director provision in a credit agreement between Arris and BANA dated March 27, 2013 (the “Continuing Director Provision” and the “Credit Agreement”); (2) BANA aided and abetted that alleged breach; and (3) the Continuing Director Provision is invalid and unenforceable.

Section 1.01(b) of the Credit Agreement included as a “Change of Control” the circumstance where:

during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Company cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that


board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors)[.]

Section 8.01(k) of the Credit Agreement treats a Change of Control as an “Event of Default.” If an Event of Default occurs, the Credit Agreement gives BANA the option to accelerate the repayment of the Company’s debt, which currently exceeds $1.5 billion. The Complaint alleges that Sections 1.01(b) and 8.01(k) of the Credit Agreement undermines the Arris stockholder franchise by decreasing the likelihood of proxy challenges to the incumbent Arris board of directors.

On October 27, 2014, the Credit Agreement was amended and the Continuing Director Provision was deleted. Following the deletion of the Continuing Director Provision, counsel for the parties determined that Plaintiff’s claims in the Complaint were moot and agreed to pursue the dismissal of the Action as to all Defendants with prejudice as to Plaintiff and without prejudice as to all other Arris stockholders (the “Proposed Dismissal”). No compensation of any form has passed directly or indirectly from any of the Defendants to the Plaintiff or Plaintiff’s counsel and no promise to give any such compensation has been made in connection with the deletion of the Continuing Director Provision from the Credit Agreement.

On December 11, 2014, the Court entered an Order Establishing the Procedure for Considering the Dismissal of the Litigation and Plaintiff’s Fee Application (the “Procedure Order”). The Procedure Order establishes procedures regarding the Proposed Dismissal and a motion to be filed by Plaintiff’s counsel that seeks an award of attorneys’ fees and expenses to be


paid solely by Arris in an amount not to exceed $750,000 based on the October 27, 2014 deletion of the Continuing Director Provision from the Credit Agreement (the “Fee Application”). The parties intend to seek an Order dismissing the Action and resolving the Fee Application in the form attached hereto (the “Final Order”) after the expiration of the objection period, as detailed below.

RIGHT TO OBJECT

If you were a record holder or beneficial owner of Arris common stock at any time during the period from and including March 27, 2013 through October 27, 2014 (the “Relevant Period”), you may object to the Proposed Dismissal or Fee Application, or both. Every objection must be in writing and contain: (i) your name, address, email address, and telephone number; (ii) the number of shares of Arris stock you held during the Relevant Period, together with third-party documentary evidence, such as the most recent account statement, showing such share ownership; and (iii) a detailed statement of your objections and all grounds therefore, including any supporting documents to be considered by the Court. Written objections must be received within forty-five days of the date of this Notice or NO LATER THAN January 26, 2015. All such objections must identify the case number (C.A. No. 10078–VCG) and must be filed with the Court at:

Register in Chancery

34 The Circle

Georgetown, DE 19947

Copies of all such papers also must be sent to the following counsel in the Action:

 

Joel Friedlander

FRIEDLANDER & GORRIS, P.A.

222 Delaware Avenue, Suite 1400

Wilmington, DE 19801

  

Kevin G. Abrams

ABRAMS & BAYLISS LLP

20 Montchanin Road, Suite 200

Wilmington, DE 19807


A hearing will be held before the Court, in the Court of Chancery Courthouse, 34 The Circle, Georgetown, DE 19947, on February 11, 2015, at 1:00 p.m. to consider the Fee Application and any stockholder objection(s) filed in accordance with the procedure outline above. If you do not take the steps described above (or if you make objections and those objections are rejected by the Court), you will be bound by the Final Order, which the Court may enter without further action by the parties or other Arris stockholders following the expiration of the objection period.

 

BY ORDER OF THE COURT

/s/ Karla Johnson

Register in Chancery

Dated: December 12, 2014

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