ARRS Arris International Plc - Ordinary Shares

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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ARRIS International plc

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ARRIS INTERNATIONAL PLC

(a public limited company having its registered office at Victoria Road, Saltaire, West Yorkshire,
England BD18 3LF and incorporated in England and Wales with company number 9551763)

Board of Directors or any committee thereof to take any action. However, our Board of Directors values the opinions of our shareholders as expressed through their advisory votes on such non-binding resolutions and other communications. Accordingly, the Board of Directors will carefully consider the outcome of the advisory votes on Proposals 2, 6, 7 and 9.

These matters are more fully described (and the full text of each Proposal is set out) in the Proxy Statement accompanying this notice, which shall be deemed to form part of this notice. Our Board of Directors considers that all the Proposals being put to the meeting are in the best interests of the Company and its shareholders as a whole. Our Board of Directors unanimously recommends that you vote “ FOR ” each Proposal.

As a shareholder of the Company, your vote is important. Whether or not you plan to attend the Annual Meeting in person, it is important that you vote as soon as possible to ensure that your shares are represented. A broker or other nominee generally will NOT be able to vote your shares with respect to Proposals 1 and 6 through 10 if you have not provided directions to your broker or other nominee. We strongly encourage you to submit your voting instruction card and exercise your right to vote as a shareholder. Therefore, we urge you to promptly vote and submit your proxy by Internet, by telephone or by signing, dating, and returning the enclosed proxy card in the accompanying reply envelope. If you decide to attend the Annual Meeting, you will be able to vote in person, even if you previously have submitted your proxy.

The Board of Directors fixed the close of business on March 30, 2017, as the record date for the determination of beneficial owners entitled to notice of, and to vote at, the meeting and any adjournment(s) thereof. A complete list of the shareholders entitled to vote at the meeting will be open for examination at the Company’s corporate headquarters by any shareholder for any purpose germane to the meeting during ordinary business hours for ten days prior to the meeting and at the meeting.

A copy of our 2016 Annual Report is enclosed. Additional copies of these materials may be obtained without charge by writing the Secretary of ARRIS International plc, 3871 Lakefield Drive, Suwanee, Georgia 30024.

BY ORDER OF THE BOARD OF DIRECTORS

Patrick Macken, Senior Vice President, General Counsel and Secretary

Suwanee, Georgia
March 30, 2017

TABLE OF CONTENTS

i

SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. Since this summary does not contain all of that information, you are encouraged to read the entire Proxy Statement before voting. As used in this Proxy Statement, the terms “we,” “us,” “our,” “ARRIS” and the “Company” refer to ARRIS International plc.

Annual General Meeting of Shareholders (the “Annual Meeting”)

​	Time and Date:	​	​	9:00 a.m., local time, on Wednesday, May 10, 2017	​
​	Place:	​	​	ARRIS International plc, Board Room, 101 Tournament Drive, Building Three, Horsham, PA 19044	​
​	Record Date:	​	​	March 30, 2017	​
​	Voting:	​	​	Each holder of ordinary shares is entitled to one vote per share.	​

Voting Recommendations

There are ten Proposals for which we are soliciting shareholder votes in connection with the Annual Meeting. Those Proposals and the Board of Directors’ voting recommendation with respect to each is set forth below:

​	​	Proposal	​	​	​	Board Vote Recommendation	​	​
​	​	Election of Eleven Directors	​	​	​	FOR (Each Nominee)	​	​
​	​	Advisory Vote to Approve the U.K. Statutory Accounts and Reports	​	​	​	FOR	​	​
​	​	Ratify Ernst & Young LLP as Independent Registered Public Accounting Firm	​	​	​	FOR	​	​
​	​	Re-appoint Ernst & Young LLP as U.K. Statutory Auditor	​	​	​	FOR	​	​
​	​	Authorize the U.K. Statutory Auditors’ Remuneration	​	​	​	FOR	​	​
​	​	Advisory Vote to Approve Named Executive Officer Compensation (Say on Pay)	​	​	​	FOR	​	​
​	​	Advisory Vote to Approve the Frequency of Future Advisory Votes to Approve Executive Compensation	​	​	​	FOR EVERY YEAR	​	​
​	​	Binding Vote to Approve the Directors’ Remuneration Policy	​	​	​	FOR	​	​
​	​	Advisory Vote to Approve the Directors’ Remuneration Report (other than the part containing the Directors’ Remuneration Policy)	​	​	​	FOR	​	​
​	​	Vote to Approve the Amendment to the ESPP to Increase the Number of Available Shares	​	​	​	FOR	​	​

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Corporate Governance Practices

We strive to conduct our business in accordance with the highest principles of business ethics and conduct. Highlights of our corporate governance practice include:

​	☑	​	​	Annual Election of Directors	​	​	☑	​	​	Annual Board and Committee Self-Evaluations	​
​	☑	​	​	Majority Voting for Directors	​	​	☑	​	​	Regular Shareholder Engagement	​
​	☑	​	​	9 of 11 Directors are Independent	​	​	☑	​	​	Annual Say on Pay Votes for Both Directors and Named Executive Officers	​
​	☑	​	​	Appointment of Independent Lead Director	​	​	☑	​	​	Anti-Pledging and Hedging Policies	​
​	☑	​	​	Regular Executive Sessions of Independent Directors	​	​	☑	​	​	Share Ownership Requirements for Directors and Executive Officers	​
​	☑	​	​	Fully Independent Audit, Compensation and Nominating and Corporate Governance Committees Comprised of All Independent Directors	​	​	☑	​	​	Strong Board Oversight	​

Director Nominees

The following table provides summary information about each nominee. Directors are elected annually by an ordinary resolution. Each ARRIS director shall hold office until his or her successor is elected or until he or she resigns or is removed.

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Name

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Age

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Director Since

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Brief Biography

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Independent

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Committee Membership

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AC

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CC

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GC

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Andrew M. Barron

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52

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2016

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Chairman, Com Hem Holding AB

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X

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X

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Alex B. Best

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76

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2003

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Former Executive Vice President, Cox Communications, Inc.

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X

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X

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X

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J. Timothy Bryan

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56

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2015

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CEO, National Rural Telecommunications Cooperative

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X

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X

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James A. Chiddix

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71

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2009

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Former Chairman and CEO, OpenTV Corporation

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X

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C

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Andrew T. Heller

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61

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2011

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Former Vice Chairman, Turner Broadcasting System, Inc.

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X

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X

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X

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Dr. Jeong Kim

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56

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2014

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Former President, Bell Labs

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X

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X

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X

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Bruce McClelland

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50

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2016

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Chief Executive Officer, ARRIS International plc

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Robert J. Stanzione

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69

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1998

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Executive Chairman, ARRIS International plc

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Doreen A. Toben

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67

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2013

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Former Executive Vice President, Verizon Communications, Inc.

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X

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C

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Debora J. Wilson

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59

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2011

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Former President & CEO, The Weather Channel Inc.

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X

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C

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David A. Woodle

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61

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2007

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Chairman & CEO, Nano Horizons, Inc.

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X

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X

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AC   Audit Committee

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GC   Nominating and Corporate Governance Committee

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CC   Compensation Committee

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C     Chair

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PROXY STATEMENT
FOR
ANNUAL GENERAL MEETING OF SHAREHOLDERS
OF ARRIS INTERNATIONAL PLC

To Be Held May 10, 2017

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of ARRIS International plc, a company organized under the laws of England and Wales, in connection with the Annual General Meeting of Shareholders of the Company to be held on May 10, 2017 at 9:00 a.m. local time at the Company’s offices and any adjournment(s) thereof. The Company’s offices are located at 101 Tournament Drive, Horsham, PA 19044 (telephone 678-473-2000). This Proxy Statement and form of proxy are first being mailed to shareholders on or about April 5, 2017.

This solicitation is being made by mail, although directors, officers and regular employees of the Company may solicit proxies from shareholders personally or by telephone, e-mail or letter. No additional compensation will be paid to those individuals for any such services. The costs of this solicitation will be borne by the Company. The Company will request brokerage houses, nominees and other custodians to forward this Proxy Statement to their customers and will reimburse them for their reasonable expenses in so doing. In addition, the Company has retained Morrow Sodali LLC to assist in the solicitation for a fee of approximately $8,000 plus expenses.

ABOUT THE MEETING

In accordance with our Articles of Association, all Proposals will be taken on a poll. Voting on a poll means that each share represented in person or by proxy will be counted in the vote. Ordinary shares of the Company represented by proxies, 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 shareholders’ instructions contained therein. In the absence of contrary instructions, except as discussed below, shares represented by such proxies will be voted FOR each Proposal.

Each shareholder 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.

In accordance with the provisions of the U.K. Companies Act 2006 (the “Companies Act”) and in accordance with our Articles of Association, a shareholder of record who is entitled to attend and vote at the Annual Meeting may appoint another person(s) (who need not be a shareholder of the Company) to exercise all or any of his rights to attend, speak and vote at the Annual Meeting. A member can appoint more than one proxy in relation to the meeting, provided that each proxy is appointed to exercise the rights attaching to different shares.

A proxy form that may be used to make this appointment and give proxy instructions accompanies this Proxy Statement. Details of how to appoint a proxy are set out in the notes to the proxy form.

If you are a shareholder of record, you may appoint a proxy to vote on your behalf using any of the following methods:

(i)

by telephone, using the toll-free telephone number shown on the proxy card;

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(ii)

via the internet, as instructed on the proxy card; or

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(iii)

by completing and signing the proxy card, and returning it in the prepaid envelope provided,

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and in each case the appointment of proxy must be received by the Company by not less than 24 hours before the time of the Annual Meeting.

If you are a beneficial owner ( i.e. you hold your shares in “street name”), you should follow the voting directions provided by your broker, bank or other nominee.

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The Board of Directors fixed the close of business on March 30, 2017, as the record date for the determination of beneficial owners entitled to notice of, and to vote at, the meeting or any adjournment(s) thereof. As of that date, 191,048,296 ordinary shares were outstanding. Each holder of ordinary shares is entitled to one vote per share.

A quorum, which is the presence of persons entitled to vote upon the business to be transacted in respect of a majority in nominal value of the issued shares of the class in question (excluding any shares of that class held as treasury shares), present in person or by proxy for a member or a duly authorized representative of a corporation that is a member, 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. Abstentions and broker non-votes will be counted for the purpose of determining whether a quorum is present for the transaction of business.

An “abstention” is the voluntary act of not voting by a shareholder who is present at a meeting in person or by proxy and entitled to vote. “Broker non-votes” occur when shares held by a brokerage firm or other nominee (for the benefit of its client) are represented at the meeting, but with respect to which such broker or nominee is not instructed to vote on a particular Proposal and does not have discretionary authority to vote on that Proposal. If you are a beneficial owner whose shares are held in street name and you do not submit voting instructions to your broker or other nominee, your broker or other nominee may generally vote your shares in its discretion only on routine matters. We believe that Proposals 2 (approval of reports of auditors and directors and U.K. statutory accounts), 3 (ratification of Ernst & Young LLP (“Ernst and Young”) as our independent auditor), 4 (re-appointment of Ernst & Young as U.K. statutory auditor) and 5 (authorization to determine U.K. statutory auditors’ compensation) are routine and may be voted on by your broker if you do not submit voting instructions. However, pursuant to applicable stock exchange rules, brokers and nominees do not have the discretion to vote their clients’ shares on non-routine matters, unless the broker receives voting instructions from the beneficial owner. Proposals 1 (election of directors), 6 (advisory vote on executive compensation (Say on Pay)), 7 (advisory vote on the frequency of future advisory votes on executive compensation), 8 (binding vote to approve the Directors’ Remuneration Policy), 9 (advisory vote to approve the Directors’ Remuneration Report (other than the part containing the Directors’ Remuneration Policy)) and 10 (amendment to ESPP to increase the number of shares available thereunder) are considered non-routine matters. Consequently, if your shares are held in street name, you must generally provide your broker with instructions on how to vote your shares in order for your shares to be voted on Proposals 1, 6, 7, 8, 9 and 10. Broker non-votes will not be counted as votes cast for or against any Proposal and, accordingly, will not affect the outcome with respect to any matter to be voted on at the Annual Meeting.

If a quorum is present, each of the matters presented to shareholders at the meeting shall be proposed as ordinary resolutions, which means, assuming a quorum is present, each of Proposals 1 through 10 will be approved if a simple majority of the voting rights represented in person or by proxy at the meeting is cast in favor thereof.

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(2)

According to the most recent Schedule 13G filed with the SEC on January 30, 2017, BlackRock, Inc. has sole voting power with respect to 13,766,082 shares. The address for BlackRock, Inc. is 55 East 52 nd Street, New York, NY 10055.

​

(3)

The address for Google, Inc. is 1600 Amphitheatre Parkway, Mountain View, California 94043.

​

(1)

The total number of securities to be issued upon exercise of outstanding options, warrants and rights consists of, upon vesting, 8,297,209 restricted shares.

​

(2)

The ARRIS 2016 Stock Incentive Plan (the “2016 Plan”) has been designed to allow for flexibility in the form of awards; awards denominated in ordinary shares other than stock options and stock appreciation rights will be counted against the plan limit as 1.87 shares for every one share covered by such an award. As a result, 23,878,061 stock options or 12,769,016 restricted shares are available for issuance under the 2016 Plan.

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Each of the nominees brings a wealth of relevant business experience that qualifies the nominee for service on the Board. The Board of Directors believes that these nominees provide a good cross-section of skills and experience to the Board of Directors and that the shareholders of the Company would be well-served by these nominees.

BOARD AND COMMITTEE MATTERS

Director Independence

For purposes of determining the independence of its directors, the Board of Directors has adopted the definition of independence used in the listing standards of The NASDAQ Stock Market. It also considers the definitions of independence used in the Internal Revenue Code and the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and standards set forth by NASDAQ for purposes of determining whether members of the Audit Committee and Compensation Committee are independent. In making determinations, the Board of Directors considers that, in the ordinary course of business, transactions may occur between the Company and companies at which some of the directors are or have been outside directors. The Board of Directors determines whether such transactions carry any implications to the director’s independence. A copy of the director independence standards is available on the Company’s website at www.arris.com under the caption Company — Investors — Corporate Governance . Based upon these standards, the Board of Directors has determined that all of the directors, other than Bob Stanzione and Bruce McClelland, meet the independence requirements for the committees on which they serve and for the Board. Mr. Stanzione, as the Executive Chairman, and Mr. McClelland, as the Company’s Chief Executive Officer, are not considered independent for any purpose.

Compensation of Directors

Cash Fees.    For 2016, the non-employee directors received an annual cash retainer of $80,000, paid in equal quarterly installments. The Lead Independent Director was paid an additional annual cash retainer of  $20,000. The respective Chairpersons and members of our Board committees were paid the following additional annual cash retainers:

•

Audit Committee:

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Chairperson — $25,000
Members — $15,000

•

Compensation Committee:

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Chairperson — $15,000
Members — $7,500

•

Nominating and Corporate Governance Committee:

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Chairperson — $10,000
Members — $5,000.

Share Awards and Minimum Holding Requirement.    For 2016, each non-employee director also received restricted share units. The restricted share units vest in full one year from the date of grant. The number of shares subject to the restricted share units was determined by dividing the dollar amount of the award, $160,000, by the closing price of the Company’s ordinary shares on the trading day preceding the date of grant rounded to the nearest one hundred units.

The Company’s Share Ownership Guidelines require directors to own three times their annual cash retainer ($80,000 for 2016) in our stock. Prior to 2015, directors were permitted to defer delivery of shares upon vesting. For purposes of determining compliance with our Share Ownership Guidelines, restricted share units that have vested but for which delivery has been deferred are treated as owned; however, one-half of the shares subject to the vested share units are required to be held until the director retires from the Board. Directors are given five years to obtain this ownership level initially or if they become non-compliant, for example because of a change in share value. The Compensation Committee reviews compliance with the guidelines annually. As of March 30, 2017, all of the current Board members had already met this guideline or were on track to obtain compliance within the five-year time period.

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Reimbursements.    Directors are reimbursed for reasonable expenses (including costs of travel, food and lodging) incurred in attending Board, committee, shareholder and other Company meetings. Directors also are reimbursed for reasonable expenses associated with other business activities related to their Board of Directors service, including participation in director education programs, attendance of industry functions and memberships in director organizations. In addition, beginning in 2016, U.S.-based directors were also provided tax preparation assistance with respect to the income tax returns they are required to file in England as a result of their service on our Board.

Liability Insurance.    The Company maintains customary directors’ and officers’ liability insurance. The Company is permitted under its Articles of Association to indemnify its directors under certain circumstances and has entered into a Deed of Indemnity in favor of the directors.

Director Compensation Table.    The following table sets forth information about the compensation paid to the non-employee members of the Board of Directors for the last fiscal year.

(1)

Mr. Stanzione and Mr. McClelland, as employees of the Company, receive no additional compensation for their services as members of the Board.

​

(2)

In 2015, a cash award of  $120,000 was granted in lieu of the annual restricted share unit award. The cash award vested in four equal installments and the amounts shown for each non-employee director, except for Mr. Barron (who was not a director at the time of the award), include $90,000 reflecting the portions of the cash award grant that vested in 2016.

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(3)

Each director other than Mr. Barron, who joined the Board in August 2016, was granted 7,000 restricted stock units on July 7, 2016, having a grant date fair value of  $159,600, calculated based on the fair market value of our ordinary shares on the grant date. These awards will vest in full on July 7, 2017 and, as a result, remained outstanding at December 31, 2016.

​

(4)

The value of perquisites and other personal benefits was less than $10,000 in the aggregate for each non-employee director.

​

(5)

Mr. Barron joined the Board in August 2016.

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Committee Composition and Meeting Attendance

The following table shows the current membership of each standing committee and the number of meetings held by each committee during 2016.

During 2016, the Board held 7 meetings and each director attended at least 75% of the aggregate number of meetings of the Board and respective committees on which he or she served while a member thereof.

The Company has not adopted a formal policy on Board members’ attendance at Annual General Meetings of Shareholders. However, all directors are encouraged to attend the meetings. All of the Company’s current directors attended the 2016 Annual General Meeting of Shareholders.

Identification and Evaluation of Director Nominees

With respect to the Nominating and Corporate Governance Committee’s evaluation of director nominee candidates, the Committee considers each candidate on his or her own merits. 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 candidate’s:

•

career experience, particularly experience that is germane to the Company’s business, such as telecommunications products and services, legal, human resources, finance, marketing, and regulatory experience;

​

•

whether the candidate is an “audit committee financial expert” (as defined by the SEC);

​

•

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;

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•

integrity and reputation;

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•

ability to work collegially with others;

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•

whether the candidate is independent;

​

•

other obligations and time commitments and the ability to attend meetings in person; and

​

•

current membership on the Board — the Board values continuity (but not entrenchment).

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19

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 shareholders with a diverse and experienced Board.

With respect to the identification of nominee candidates, the Board recommends candidates whom they are aware of personally or by reputation. The Committee from time to time also utilizes a recruiting firm to assist in the process.

The Committee welcomes recommendations from shareholders. The Committee evaluates a candidate for director who was recommended by a shareholder 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 shareholder send the Committee:

•

a resume for the candidate detailing the candidate’s work experience and credentials;

​

•

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 Company’s 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 NASDAQ listing standards (a copy of which is available on our website), and (5) has no plans to change or influence the control of the Company;

​

•

the name of the recommending shareholder as it appears in the Company’s books, the number of ordinary shares of the Company that are owned by the shareholder and written confirmation that the shareholder consents to the disclosure of his or her name. If the recommending person is not a shareholder of record, he or she should provide proof of share ownership;

​

•

personal and professional references, including contact information; and

​

•

any other information relating to the candidate required to be disclosed in a Proxy Statement for election of directors under Regulation 14A of the Exchange Act.

​

This information should be sent to the Nominating and Corporate Governance Committee, c/o Corporate Secretary, ARRIS International plc, 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 shareholder and must state the number of shares held. For potential nominees to be considered at the 2018 Annual General Meeting of Shareholders, the Corporate Secretary must receive this information by November 24, 2017.

In addition to the procedures described above for recommending prospective nominees for consideration by the Committee, shareholders may directly nominate directors for consideration at any Annual General Meeting of Shareholders.

Lead Independent Director

The Company’s Governance Guidelines provide that at any time the Board of Directors does not have an independent Chairman, the Board of Directors must have a Lead Independent Director. The Lead Independent Director presides over Executive Sessions of the Board of Directors and other meetings where the Chairman is not present. The Lead Independent Director also approves the agenda for Board meetings. He also is the liaison between the Chairman and the independent directors and may call meetings of the independent directors. Lastly, he is available for consultation and direct communications, if so requested by a major shareholder and has various other communications and administrative responsibilities. Mr. Heller has served as Lead Independent Director since 2016. With the appointment of Mr. McClelland as Chief Executive Officer effective September 1, 2016, the Company split the roles of Chairman of the Board and Chief Executive Officer. In splitting the roles, it permits Mr. Stanzione, as Executive Chairman, to focus more time on strategy matters and customer engagement, while as Chief Executive Officer, Mr. McClelland

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functions as the Company’s overall leader. The Company believes that retaining a Lead Independent Director is important as it continues to provide independent leadership to the directors and as he serves as an intermediary between the independent directors and the Executive Chairman. The resulting structure sends a message to our employees, customers and shareholders that we believe in having strong leadership at the highest levels of management, but that we also value the perspective of our independent directors and their many contributions to our Company.

Consideration of Risks Facing the Company

On a periodic basis, the Company’s management reviews the primary risks that the Company faces and assesses the adequacy of the means through which the Company manages those risks. Some risks, such as the focus of the Company’s business on the broadband and satellite communications industry and its significant sales to the dominant service providers are intrinsic to its business and are largely unavoidable without a significant change in strategic focus. Others, such as the risk of property damage or business interruption from weather or other causes are managed through maintaining insurance of types and at levels that the Company believes are reasonable given the nature of its assets and business and through the maintenance of backup storage and processing capability offsite. Still others, such as credit risk, currency risk, cybersecurity risk and country risk, are actively managed through policies and oversight designed to minimize the Company’s ultimate exposure to loss. On an annual basis, the Company’s management reviews with the Board of Directors the risks that it considers the most significant as well as the approaches used to manage or mitigate those risks. In addition, the Board of Directors informally considers risk-related matters on a more frequent basis and also in connection with its consideration of specific transactions and issues. Further, Company management also separately reviews financial risks and related policies with the Audit Committee and information security risks and related policies with the Nominating and Corporate Governance Committee. On at least an annual basis, the Company’s management, as part of the annual budget process, reviews with the Board of Directors technological developments affecting the industry and the research and development programs that respond to those developments and risks.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee is currently or has served as an executive officer or employee of the Company and none of the members of the Compensation Committee had any “interlocks” within the meaning of Item 407(e)(4) of the SEC Regulation S-K during the year ended December 31, 2016.

Communication with the Board

Shareholders may communicate with the Board of Directors, including the Lead Independent Director, by sending a letter to the ARRIS International plc Board of Directors, c/o Corporate Secretary, ARRIS International plc, 3871 Lakefield Drive, Suwanee, GA 30024. The Corporate Secretary will submit the correspondence to the Lead Independent Director or to any specific director to whom the correspondence is directed.

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PROPOSALS 3, 4 AND 5

AN ORDINARY RESOLUTION TO RATIFY THE AUDIT COMMITTEE’S APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2017

AN ORDINARY RESOLUTION TO APPOINT ERNST & YOUNG LLP AS OUR U.K. STATUTORY AUDITORS UNDER THE COMPANIES ACT 2006 (TO HOLD OFFICE FROM THE CONCLUSION OF THE MEETING UNTIL THE CONCLUSION OF THE NEXT ANNUAL GENERAL MEETING OF SHAREHOLDERS AT WHICH ACCOUNTS ARE LAID BEFORE THE COMPANY)

AN ORDINARY RESOLUTION TO AUTHORIZE THE AUDIT COMMITTEE TO DETERMINE OUR U.K. STATUTORY AUDITORS’ REMUNERATION

Our Audit Committee has re-appointed the accounting firm of Ernst & Young to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2017. Ernst & Young has served as our independent registered public accounting firm since 1993, having been duly appointed by the Board or by the Audit Committee in conformity with then-applicable rules. If, under Proposal 3, shareholders do not ratify this appointment, the appointment will be reconsidered by the Audit Committee and the Audit Committee may consider other independent registered public accounting firms. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in our and our shareholders’ best interests.

Our Audit Committee has re-appointed Ernst & Young to serve as our statutory auditors under the Companies Act. Ernst & Young has served as our statutory auditors since December 2015. The U.K. statutory auditor is responsible for conducting the statutory audit of the Company’s U.K. statutory accounts in accordance with the requirements of the Companies Act. On the Audit Committee’s recommendation, Ernst & Young has been selected to be re-appointed as our statutory auditors from the conclusion of the Annual Meeting until the conclusion of the next Annual General Meeting of Shareholders at which accounts are laid before the Company. In Proposal 4, we are asking you to approve their re-appointment.

In Proposal 5 we are asking our shareholders to authorize the Audit Committee to determine Ernst & Young’s remuneration as statutory auditors in accordance with the Audit Committee’s procedures and applicable law.

One or more representatives of Ernst & Young are expected to be present at the Annual Meeting, will have the opportunity to make a statement if they so desire, and will be available to respond to appropriate questions from the shareholders.

Fees

The fees billed by Ernst & Young and its affiliates for the last two fiscal years were as follows, all of which were approved by the Audit Committee:

Audit Fees .   Fees for audit services totaled $10,212,422 and $7,315,702 in 2016 and 2015, respectively, and include fees associated with the annual audits, the Sarbanes-Oxley Section 404 attestation, the reviews of the Company’s quarterly reports on Form 10-Q and other SEC filings, audit consultations, the audit of our U.K. statutory accounts, audits of certain subsidiary statutory accounts, and attestation services and procedures conducted in connection with consents to incorporate Ernst & Young’s reports into registration statements filed with the SEC for each respective year.

Audit-Related Fees .   Fees for audit-related services totaled $216,842 and $1,010,165 in 2016 and 2015, respectively. Audit-related services include due diligence in connection with acquisitions, consultation on accounting and internal control matters, and audits in connection with employee benefit plans.

Tax Fees .   Fees for tax services, including tax compliance, tax advice and tax planning, totaled $1,324,426 and $1,526,150 in 2016 and 2015, respectively.

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All Other Fees .   Fees for all other services not included above were $0 for 2016 and 2015.

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 Company’s 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 Company’s Internal Audit Director to report to the Audit Committee on a periodic basis the results of the Internal Audit Director’s monitoring of the independent registered public accounting firm’s performance of all services to the Company and whether the performance of those services was in compliance with the Audit Committee’s 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.

The Board recommends that shareholders vote FOR the ordinary resolution to ratify the Audit Committee’s re-appointment of Ernst & Young as our independent registered public accounting firm for the year ending December 31, 2017, FOR the ordinary resolution to re-appoint Ernst & Young as our U.K. statutory auditors under the Companies Act (to hold office until the conclusion of the next Annual General Meeting of Shareholders at which accounts are laid before the Company), and FOR the ordinary resolution to authorize the Audit Committee to determine our U.K. statutory auditors’ remuneration. If no indication is given as to how you want your shares to be voted, the persons designated as proxies will vote the proxies received FOR Proposals 3, 4 and 5.

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COMPENSATION DISCUSSION AND ANALYSIS (“CD&A”)

   Overview

This CD&A describes the major elements of our compensation program for the executive officers (the “named executive officers” or “NEOs”) included in the Summary Compensation Table included elsewhere in this Proxy Statement. This CD&A also discusses the objectives and philosophy decisions underlying the compensation of the NEOs. The CD&A should be read together with the executive compensation tables, including the summary compensation table, and related footnotes found later in this Proxy Statement.

Authority over compensation of the Company’s senior executives is within the province of the Compensation Committee. The Compensation Committee is comprised entirely of independent directors, as determined under the applicable NASDAQ listing standards, SEC requirements and Section 162(m) of the Internal Revenue Code. The Compensation Committee reviews and approves executive compensation programs and specific compensation arrangements for the executive officers. The Compensation Committee reports to the Board, and all compensation decisions with respect to the Executive Chairman and Chief Executive Officer are reviewed and approved by the whole Board, without participation by the Executive Chairman or Chief Executive Officer.

   Programs and Objectives and Reward Philosophy

Our Compensation Committee is guided by the key objectives and reward philosophies in the design and implementation of our executive compensation program described below. We target to be competitive with the compensation provided to executives of companies within our peer group for the cash-based and equity compensation components. While we consider where elements of cash and equity compensation fall with respect to officers with similar responsibilities within the peer group, no formal benchmarking is used, as the Compensation Committee determines the amounts of the elements of compensation depending on, among other things, the responsibilities of the officer, his or her skillset and experience, how difficult it would be to replace and the relative importance of that particular skillset to the accomplishment of our business objectives, the officer’s ability to assume additional responsibility and his or her service time with the Company.

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Competitive pay. Competitive compensation programs are required to attract and retain a high-performing executive team, particularly for a technology-focused company.

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Pay for performance. Our compensation program must motivate our executive officers to drive ARRIS’ business and financial results and is designed to reward both near-term performance as well as sustainable performance over a longer period through equity compensation. The “at risk” portion of total compensation ( i.e. the incentive programs under which the amount of compensation realized by the executive is not guaranteed, and increases with higher levels of performance) should be a significant component of an executive’s compensation.

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Alignment with shareholders. Our executives’ interests must be aligned with the interests of our shareholders. Our compensation program should motivate and reward our executives to drive performance which leads to the enhancement of long-term shareholder value.

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The principal elements of our executive compensation program are:

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base salary;

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annual, performance-based cash incentives (“Bonus”);

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annual long-term equity incentives and the use of performance metrics in one-half of our long- term equity incentives to align executive compensation with growing long-term shareholder value;

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benefits and perquisites; and

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change in control severance pay and other severance pay arrangements and practices.

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The charts below reflect the targeted amount of each primary element of compensation for 2017 for Mr. McClelland and the other NEOs, collectively, as a percentage of total targeted compensation. As reflected below, approximately 83% of Mr. McClelland’s targeted compensation for 2017, and approximately 77% of the targeted compensation for all other NEOs, is performance-based, share-linked, or both. For information on the amounts actually paid, see the discussion below and the Summary Compensation Table.

(1)

Based on grant date fair value. 50% of award is subject to performance-based vesting and the remaining 50% is time-based vesting and the charts reflect 100% payout for performance based awards.

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(2)

Assumes 100% payout.

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   Key Considerations

In applying these program objectives and reward philosophies, the Compensation Committee takes into account the key considerations discussed below.

Competitive Market Assessment.    We regularly, but not necessarily annually, conduct a competitive market assessment with an independent compensation consultant for each of the three primary elements of our executive compensation program. Given the growth in the Company’s size as a result of the Combination with Pace plc and the added complexities associated with each officer’s responsibilities associated with the Company’s reincorporation into the U.K., the Compensation Committee engaged Longnecker & Associates, Inc. to provide a competitive market assessment in 2016 in connection with the annual compensation decisions for senior executives, as well as the appointment of Mr. McClelland as Chief Executive Officer in September 2016 and the corresponding move of Mr. Stanzione into the role of Executive Chairman. Given that no significant changes have been made in the compensation program for 2017, the Compensation Committee does not expect to engage an independent compensation consultant to conduct a market assessment in 2017.

In setting executive compensation levels, the Compensation Committee has historically reviewed market data from the following sources:

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Peer Group Information.    The Compensation Committee considers information from the proxy statements of  “peer group” public companies, which is comprised primarily of communications infrastructure companies. The peer group for 2016 was selected by the Compensation Committee based on prior input from Longnecker & Associates, Inc. For 2016, the peer group consisted of:

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For 2016, as a result of the Pace plc Combination, which increased the Company’s size significantly, and consolidations and similar activities amongst the companies included in the 2015 peer group, Brocade Communications Systems, Ciena Corporation, F5 Networks, TW Telecom and JDS Uniphase were removed from the peer group and were replaced by CommScope Holding Company, Motorola Solutions Inc., SanDisk Corporation, Seagate Technology PLC and Western Digital Corporation. The change in the peer group did not have any impact on previously issued performance share awards as those awards use the total shareholder return of the NASDAQ composite index, and not our peer group, for determining the applicable vesting level of the awards.

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Survey Data.    Survey data from various sources may also be utilized, including the following:

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Economic Research Institute Executive Compensation Assessor

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Towers Watson Top Management Compensation

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Mercer, Inc. US General Benchmark Survey

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Kenexa CompAnalyst

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World at Work Total Salary Increase Budget Survey

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IPAS Global Technology Survey

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Information from an Independent Compensation Consultant.    Our Compensation Committee also considers the recommendations and market data provided by Longnecker & Associates, the independent compensation consultant retained by the Compensation Committee. As noted above, Longnecker & Associates was engaged for a market assessment in 2016.

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The primary use of this data is to inform and confirm that the compensation and benefit level decisions of the Compensation Committee are consistent with industry levels generally and the Compensation Committee goals described in this Proxy Statement.

Our Financial and Strategic Objectives.    Each year our management team develops an annual operating target plan or budget for the next fiscal year for review and approval by our Board of Directors. The Compensation Committee utilizes the financial plan in the development of compensation plans and performance goals for our NEOs for the next target year.

Considerations for Mr. Stanzione and Mr. McClelland ( on his appointment as Chief Executive Officer effective September 1, 2016 ).   In setting the compensation arrangements for Messrs. Stanzione and McClelland, the primary factors considered by the Compensation Committee included:

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An assessment of their respective skills sets, experience and recent performance, as well as performance over a sustained period of time (based on evaluations from the entire Board);

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The financial and strategic results achieved by ARRIS for the last year relative to the pre-established objectives in our annual operating plan;

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Strategic and operational factors critical to the long-term success of our business, including merger and acquisition activities and the integration of any acquired business;

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The competitive market survey information described above;

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With respect to Mr. McClelland, Mr. Stanzione’s assessment of Mr. McClelland’s performance and contributions for the most recent year as well as performance and contributions made over a sustained period of time (through both positive and negative business cycles); and

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Guidance from the Compensation Committee’s independent compensation consultant, where applicable.

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Considerations for Other Named Executive Officers.    The Compensation Committee considers the same factors in setting the compensation arrangements for each of the other NEOs as well as:

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The Chief Executive Officer’s recommendation with respect to each NEO and his assessment of the NEO’s individual performance and contributions to our performance for the most recent year as well as the performance and contributions made over a sustained period of time (through both positive and negative business cycles); and

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An evaluation of the skill set and experience of each NEO, including an assessment of how effective or unique the skill set is, how difficult it would be to replace and the relative importance of that particular skill set to the accomplishment of our business objectives and each named executive’s ability to assume additional responsibility.

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   Additional Information and Considerations

Shareholder Input through Prior “Say-on-Pay” Votes.    We submit to shareholders, on an annual basis, both a “say-on-pay” Proposal and a Proposal to approve the annual report on directors’ remuneration (which forms part of the Directors’ Remuneration Report), that enable our shareholders to cast an advisory vote to approve the compensation of the NEOs as disclosed in this Compensation Discussion and Analysis and accompanying compensation tables in the Proxy Statement and the Annual Report on Directors’ Remuneration, which is set out in Annex A to this Proxy Statement. While the results of both votes are not binding, the Compensation Committee will consider the voting results on such proposals in making its determinations with respect to our compensation program. At the 2016 Annual General Meeting of Shareholders, the say-on-pay Proposal received significant shareholder support with approximately 95% of votes cast in favor of the Proposal.

The Role of the Compensation Committee and Its Use of Advisors.    A summary of the role of the Compensation Committee is found under Board and Committee Matters in this Proxy Statement. For more information on the role and responsibilities of the Compensation Committee, we encourage you to review the Compensation Committee charter, which is available on our website at www.arris.com under the caption “Investors.” Annually, the Compensation Committee reviews the independence of each of its advisors and confirms that any executive compensation consultant used by the Committee is independent, including Longnecker & Associates.

The Compensation Committee charter permits the Compensation Committee to engage independent outside advisors to assist the Compensation Committee in the fulfillment of its responsibilities. The Compensation Committee engages an independent executive compensation consultant for information, advice and counsel. Typically, the consultant assists the Compensation Committee by providing an independent review of:

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Our executive compensation policies, practices and designs;

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The mix of compensation established for our NEOs as compared to external benchmarks;

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Identification of an appropriate peer group of companies to use for comparison;

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Market trends, survey data and competitive and best practices in executive compensation; and

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The specific compensation package for Messrs. Stanzione and McClelland and other NEOs.

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In connection with the compensation decisions for senior executives made in 2016, as described above, Longnecker & Associates was retained to review base salaries, annual incentives and long-term equity incentives, as well as general compensation consultation.

The Role of Executive Management in the Process of Determining Executive Compensation.    The Executive Chairman and Chief Executive Officer make recommendations to the Compensation Committee regarding executive compensation decisions for the Chief Executive Officer and the other NEOs, respectively. Vicki Brewster, our Senior Vice President, Human Resources, is responsible for administering our executive compensation program. Dave Potts, our Executive Vice President and Chief Financial Officer, provides information and analysis on various aspects of our executive compensation plans, including financial analysis relevant to the process of establishing performance targets for our annual cash incentive

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plan and the cost of long-term equity incentive plans. Although members of our management team participate in the process of determining executive compensation, the Compensation Committee also meets in executive session without any members of the management team present and may also meet independently with the independent compensation consultant. The Compensation Committee makes the final determination of the executive compensation package provided to each of our NEOs subject, in the case of Messrs. Stanzione and McClelland, to full Board approval.

Equity awards are granted annually, generally in March or April depending on Board meeting schedule, shareholder approval of new equity plans and other factors. The Compensation Committee believes that grant dates should occur as early as practicable after final budgets for the new year have been approved by the Board and after year-end results have been announced to the public. Equity grants, annual compensation adjustments, and incentive plan performance criteria generally will be decided simultaneously, although they may be implemented at various times. (For example, base salary increases historically were effective April 1, while bonuses generally were paid earlier.) The fair value for restricted stock is the closing price of the stock on the date of grant. For 2016, in connection with the completion of the Pace plc Combination, base salary changes and the grant dates for the restricted stock units issued to the NEOs were made in July.

Primary Compensation Elements

   Base Salaries

The annual base salary component of our compensation program provides each executive officer with a fixed level of annual cash compensation. We believe that providing annual cash compensation through a base salary is an established market practice and is a necessary component of a competitive compensation program. A minimum base salary is included in the employment agreement with each of our executive officers and adjustments to that contractual minimum are typically considered annually. Changes in base salaries are made taking into consideration factors such as the relative levels of individual experience, performance, responsibility and contribution to the results of the company’s operations.

The 2016 base salary for each NEO is reported in the “Base Salary” column of the Summary Compensation Table appearing later in this Proxy Statement. For 2016, Mr. Stanzione received an initial increase in his base salary of  $100,000 over 2015. In determining the increase, the Compensation Committee and Board considered, among other factors, Mr. Stanzione’s role in steering the Company through a volatile year in 2015, his role in the Pace plc Combination and related corporate reorganization, which was completed in 2016, the progress he made in achieving certain of the Company’s goals in 2015 including diversification of both the Company’s product portfolio and customer base, as well as the fact that no base salary increase was made in 2015. In connection with Mr. Stanzione’s move solely into the role of Executive Chairman upon the appointment of Mr. McClelland as CEO in September 2016, Mr. Stanzione’s base salary for the remainder of 2016 was subsequently reduced to $750,000. Mr. McClelland’s base salary was increased to $750,000 in connection with his appointment as CEO. With respect to the changes to the base salaries for Messrs. Stanzione and McClelland in September 2016, the Compensation Committee, in making its recommendation to the full Board, considered compensation information provided by Longnecker & Associates for similarly situated executives with comparable levels of experience in the respective roles, as well as the changes in responsibilities for both Messrs. Stanzione and McClelland.

In approving the base salary increases for the other NEOs, the Compensation Committee considered, among other factors, the updated market analysis information provided by Longnecker & Associates for similar positions within the Company’s peer group, each officer’s contributions to the Company during 2015, as well as his role in the Pace plc Combination and other strategic initiatives, as well as the fact that no increase in base salary was made during 2015.

   Annual Cash Incentives

Annual cash bonuses are tied to Company performance. Annual bonus targets for senior executives have been established as a percentage of base pay including the annual raise, if any, in the relevant years. For 2016, Mr. Stanzione’s bonus target was 125% of base salary and the remaining NEO’s annual bonus

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targets were 80% of base salary, the same as the targets used in 2015. Following his appointment as CEO, Mr. McClelland’s bonus target was increased to 100% of his then base salary. The increase in his bonus target applied only to the portion of 2016 for which he served as CEO (September through December 2016). The maximum bonus payout for each of the NEOs is 200% of the annual bonus target.

The Compensation Committee seeks to establish variable pay in the form of an annual cash bonus opportunity within the market levels of our peer group based on the analysis described above. The Compensation Committee believes that the variable pay target should be set at a level and permit a payout ranging from 0% to 200% in order to strongly align executive pay with the performance of the Company.

For 2016, 100% of the annual incentives for the NEOs continue to be based on targeted financial performance objectives developed by management and approved by the Board of Directors with any adjustments the Committee considers appropriate in setting the target metrics. In reviewing the budget, the Compensation Committee considers, in addition to the detailed budget as presented, expected capital expenditure trends within the Company’s industry and the Company’s market share and market share growth. For 2016, the bonus was based 50% on adjusted direct operating income and 50% on adjusted revenue, the same metrics used for 2015. The direct operating income and revenue targets set by the Compensation Committee may vary from the amounts in the annual budget for the Company approved by the Board of Directors, if the Compensation Committee determines that such adjustments are appropriate to better reflect how such measures are used internally to track the performance of the Company (e.g., non-GAAP measures). No individually assigned objectives (“MBOs”) were considered in determining the amount of any bonus awarded to an NEO. Actual payouts depend on results relative to the established objectives as detailed in the table below with straight-line interpolation between levels.

The 2016 target for consolidated adjusted direct operating income (50% of the bonus) that would yield a 100% payout of this component of the targeted bonus was $682 million. Actual adjusted direct operating income performance for 2016 was approximately $731.0 million, which was 107% of the target performance, and, accordingly, yielded a 136% payout for this component of the bonus. The target revenue component (50% of the bonus) for 2016 was based on an adjusted revenue target of   $6.7 billion. Actual 2016 performance was approximately $6.86 billion, which was approximately 102% of target and yielded a 124% payout for the revenue component. As a result, the combined financial performance yielded a total bonus payout of 129.9% of target. The dollar amount of the annual cash incentive bonus paid in 2016 to each of our NEOs is reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table appearing later in this Proxy Statement.

In alignment with the Company’s strategy to strongly link pay to performance, historical bonus payouts have ranged from 0% to the maximum based on the Company’s performance against the criteria then in effect. In 2012 and 2013, payouts versus target for the financial components of the bonus (which represented 80% of the bonus target prior to the elimination of the MBO portion in 2014) were approximately 92% and 83% of target, respectively. In 2014, the Company achieved outstanding financial results, which resulted in the payment of the maximum bonus amounts. However, in 2015, bonus payouts were only approximately 18% of the target amount. The volatile and challenging industry and market conditions in which we operate contribute to significant variations in annual performance against goals and incentive payout amounts against the target level of payout.

For 2017, the Compensation Committee has determined that annual bonus payouts for NEOs should again be based on the financial metrics described above, namely 50% on adjusted revenues and 50% on adjusted direct operating income.

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The Compensation Committee has the authority to adjust bonuses, including additions to the bonuses earned (or to pay bonuses when no bonus has been earned) under the bonus plan. The Committee may consider any of a number of elements such as individual performance, business unit performance, relative performance to competitors, strategic accomplishments, the level of work or sacrifice required in the relevant year, years of service with the Company and other factors. The Company does not have a formal policy for payments above the amounts established under the bonus plan. The Compensation Committee also may adjust the performance criteria if circumstances dictate (e.g., acquisitions, financings or other items that may not have been incorporated in the budget and therefore might require adjustment). No adjustments were made to the bonus payouts to the NEOs in 2016 and no NEO received any additional cash bonus.

   Long-Term Equity Incentives

Annual Grants.    We make long-term equity incentive awards to our executive officers each year. The primary objectives of our equity incentive program are to:

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Align the interests of our executive officers with the interests of our shareholders through stock awards which have multi-year vesting requirements and which provide a significant incentive for executives to focus on increasing long-term shareholder value;

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Provide a total compensation package that is competitive based upon our assessment of the market data described earlier in this CD&A; and

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Provide a financial incentive to retain our executives over a multi-year period.

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The long-term incentive compensation for NEOs in recent years has consisted of grants of restricted stock units with both time-based and performance-based vesting. The Company has used restricted stock units to reduce the share dilution associated with awards since restricted stock unit awards use fewer shares than comparably valued stock option awards. Moreover, recent changes in accounting standards require that stock options, as well as restricted stock, be expensed. Prior to these changes, the Company, like most companies, utilized primarily stock options to take advantage of the then-available favorable accounting treatment for stock options. The Company also has used restricted stock units instead of stock options to maintain retention incentive even in challenging periods when our stock price may have been depressed. Under the terms of our restricted stock unit awards, the recipient is not entitled to vote the shares underlying the award, or to receive dividends, if any are declared, until the restricted stock unit vests and shares are issued in settlement of the award.

The Compensation Committee establishes an aggregate value for equity grants for Company-wide distribution focusing on cost to be reflected in the Company’s financial statements, the annual grant level as a percent of shares outstanding and using the dollar value of the aggregate grants as a percentage of the company’s total market capitalization, and factors in the advice of its executive compensation consultant. A value expressed in dollars was allocated to the NEOs based, in part on the review of the updated peer company data provided by Longneck & Associates in 2016 with respect to senior executives in comparable positions and the level of expense and dilution the Compensation Committee deemed appropriate. The value was awarded in the restricted stock unit awards.

One-half of the restricted stock units awarded to the NEOs since 2008 have utilized performance vesting. The remaining restricted stock unit awards vest equally over a four-year period.

The performance criteria used for performance-based vesting awards compares the Company’s total shareholder return (“TSR”) to the shareholder return of the NASDAQ composite over a three-year period (the “TSR measurement”) beginning with the calendar year of grant. The TSR measurement allows for payment from 0% and 200% based on underperforming, meeting or exceeding the NASDAQ composite three-year return as set forth in the following table, with straight-line interpolation between levels.

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The Company’s TSR was 0.11 points below the NASDAQ Composite for the period from 2013 to 2016, resulting in 99.8% vesting in January 2017 of the performance-based awards granted in 2013. The restricted stock units subject to performance vesting that were issued to the NEOs in 2016 will vest in January 2019.

Additional 2016 Grants.    The Company completed the Combination with Pace plc in January 2016. The Combination, among other things, brought the Company a broader product portfolio, including a meaningful entry into the satellite market, diversified its customer base both in terms of the number of customers and the geographic location of the customers, and resulted in a lower effective corporate tax rate. In recognition of the work done by the NEOs in completing the Combination and its impact on the Company, an additional grant of equity awards was made to the NEOs in July 2016. Mr. McClelland was also provided an additional restricted stock unit grant of  $1,562,500 in September 2016 in connection with his appointment as CEO. Consistent with annual grants, one-half of the additional restricted stock units awarded to the NEOs utilized the same performance vesting described above, other than with respect to the grant made to Mr. McClelland in September 2016, which will use the three-year performance period commencing September 1, 2016. The remaining restricted stock unit awarded to the NEOs vest equally over a four-year period.

The specific numbers of restricted stock that were granted to each of our NEOs in 2016 are set forth on the table entitled Grants of Plan-Based Awards in the executive compensation tables found later in this Proxy Statement.

   Risk Considerations

The Compensation Committee reviews whether the Company’s compensation program taken as a whole creates more incentive for officers and employees to take more risks than are appropriate from a sound business judgment perspective and that are reasonably likely to have a material adverse effect on the Company. The Compensation Committee concluded it does not. This analysis applies generally to the compensation program for all employees since all management employees (both executive officers and non-officers) above a certain level are provided with substantially the same mix of compensation as the NEOs. The compensation package provided to employees below this level is not applicable to this analysis as such compensation package does not provide sufficient incentive to take risks that could materially affect the Company.

There is no objective way to measure risk resulting from a corporation’s compensation program; therefore, this analysis is subjective in nature. We believe that the only elements of our compensation program that could incentivize risk-taking by employees, and therefore have a reasonable likelihood of materially adversely affecting the Company, are the annual cash incentive compensation and, for senior officers, including the NEOs, the portion of the long-term equity incentives where the payout is dependent on the achievement of certain performance levels by the Company. Based upon the value of each of these elements to the overall compensation mix and the relative value each has to the other, we believe the Company’s compensation program is appropriately balanced. We believe that the mix of short-term cash awards and long-term equity awards minimizes risks that may be taken, as any risks taken for short-term gains could ultimately jeopardize the Company’s ability to meet the long-term performance objectives. Given the current balance of compensation elements, we do not believe our compensation program incentivizes unreasonable risk-taking by management. Additional factors that help mitigate inappropriate risk-taking also include the clawback policy and stock ownership guidelines described below. The Compensation Committee’s stock ownership guidelines require officers who participate in the long-term incentive compensation program to hold an amount of Company ordinary shares and other equity-related

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Company securities that varies depending upon such officers’ level. The guidelines require the Company’s executive officers to hold ordinary shares and other equity-related securities of the Company having a minimum fair market value ranging from 200% to 600% of base salary. The Compensation Committee believes these stock ownership guidelines further discourage unreasonable risk-taking by Company officers.

   Executive Stock Ownership Guidelines; Prohibition on Hedging and Pledging

The Company’s Share Ownership Guidelines require each senior executive to own shares having a value equal to a multiple of the senior executive’s annual base salary. The multiple is six times base salary for Messrs. Stanzione and McClelland; four times base salary for Mr. Potts; and three times base salary for Messrs. Robinson, Coppock and O’Loughlin. Each officer has five years to meet the guidelines, and generally must retain one-half of the shares, after tax, issuable upon vesting of restricted stock units. The five-year period to meet the guidelines also applies to changes in the required number of shares due to changes in the share price or applicable base salary. The Compensation Committee reviews compliance with the guidelines annually. As of December 31, 2016, all senior executives met the guidelines or were on track to reach compliance within the five-year period.

Under the terms of the Company’s insider trading policy, all officers, including the NEOs, and directors are prohibited from (1) hedging any of the Company’s equity securities (which include the Company’s ordinary shares and options or other securities exercisable for, convertible into, settled in or measured by reference to, any other equity security) or (2) pledging a significant number of the Company’s equity securities. For purposes of the policy, “hedging” includes any instrument or transaction, including put options, swaps and forward-sales contracts, through which the officer or director offsets or reduces exposure to the risk of price fluctuations in the corresponding equity security. With respect to the pledging prohibition, the amount of equity securities that is considered “significant” is the lesser of 1% of the Company’s outstanding shares and 50% of the equity securities held by the applicable officer or director.

   Accounting, Tax and Financial Considerations

The Compensation Committee carefully considers the accounting, tax and financial consequences of the executive compensation and benefit programs implemented by us. These were important considerations in connection with the design of the following compensation programs:

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Our 2016 Plan was designed to generally allow for tax-deductibility of performance-based stock awards, stock options, and annual cash incentive awards, under Section 162(m) of the Code. The issuance of grants and awards under the SIP are topics discussed in greater detail elsewhere in this CD&A.

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•

We have taken steps to ensure that our supplemental retirement plans and executive employment agreements, including change in control provisions, comply with the regulations on non-qualified deferred compensation under Section 409A of the Code.

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•

Since 2008, all equity awards have been made in the form of restricted stock units with one-half of the awards granted to senior executives in the form of performance-based restricted share units. Given the continuing trend in favor of using restricted stock and restricted stock units instead of stock options, it is anticipated that future long-term equity awards will continue to be in the form of restricted shares (including performance share units for senior executives) and not stock options. The timing and amount of expense recorded for each of these various forms of equity awards will vary depending on the requirement of stock-based compensation accounting. The use of these various forms of long-term equity compensation awards for each of our NEOs is discussed in greater detail elsewhere in this CD&A.

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•

The Company has a long-standing “clawback policy” that enables the Company to recoup compensation paid to certain executives if that compensation was based on (1) financial results or operating metrics satisfied as a result of fraudulent or illegal conduct of the executive, or (2) intentional misconduct that materially contributes to improper or incorrect financial data. The policy is discussed more fully below.

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   Clawback Policy

In February 2009, the Board of Directors adopted the Executive Compensation Adjustment and Recovery Policy. This policy is a so-called “clawback policy” that enables the Company to recoup compensation paid to any president, vice president, secretary, treasurer or principal financial officer, comptroller or principal accounting officer, or any other officer routinely performing corresponding functions with respect to the Company when such compensation was based on financial results or operating metrics that were satisfied as the result of fraudulent or illegal conduct of any of the officers. The Board of Directors is entitled to recover compensation when it concludes that it is attributable to such officers’ conduct and would not have been awarded had such financial results or operating metrics not been satisfied. In addition, if an officer engaged in intentional misconduct that contributed in any material respect to the improper accounting or incorrect financial data, the Board of Directors may seek to recoup any profits realized from the officer’s sale of securities of the Company during or subsequent to the impacted accounting period. A copy of the Policy is available at www.arris.com under the caption Investors.

   Employment Contracts and Termination of Employment and Change in Control Arrangements

The employment agreements with the NEOs generally are one-year agreements and automatically renew until normal retirement at age 65, define initial salary and target bonus percent, general employment benefits and business expense reimbursements. The agreements contain one year non-competition, non-solicitation and non-disclosures of trade secret provisions. Under the agreements, the outstanding equity awards of executives terminating their employment who are 62 years old or older with ten or more years of experience will continue to vest and remain outstanding for their original term (notwithstanding such termination) provided they continue to comply with the non-competition and trade secret protection provisions of the agreements. The agreements also reflect the Rabbi Trust and funding elements described below under Pension Benefits with respect to the Company’s non-qualified defined benefit plan and the SERP of Mr. Stanzione. Pursuant to amendments made to his agreement in 2016, except for “good cause” or “good reason,” Mr. Stanzione’s agreement is terminable on 120 days’ notice. Also, Mr. Stanzione’s agreement contains various terms related to his SERP that are described under Pension Benefits below.

The table below sets forth the approximate value of salary, bonus and accelerated equity payable to each NEO assuming a change in control or termination event had occurred on December 31, 2016. The outstanding equity awards are reflected under the Outstanding Equity Awards at 2016 Fiscal Year-End table.

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(1)

Represents the termination period during which payments are made.

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(2)

Three months of salary continuation paid to NEO’s estate.

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(3)

Six months of salary and benefits continuation paid.

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(4)

Continuation of salary, bonus and benefits for the duration period, plus accelerated equity vesting.

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(5)

Most recent salary and average of prior 2 year bonuses times the severance duration period.

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(6)

Average of highest three bonuses earned in previous five years.

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(7)

Target bonus equal to 100% of annual base salary.

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(8)

Target bonus equal to 80% of annual base salary.

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(9)

Does not include bonus earned in 2016 but not paid until 2017.

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SUMMARY COMPENSATION TABLE

The summary compensation table below presents the “total compensation” earned by our NEOs during the years indicated. This amount is not the actual compensation received by our NEOs. In addition to cash and other forms of compensation actually received, total compensation includes the amount of the annual change in actuarial present value of accumulated pension benefits that will not be paid, or begin to be paid, until retirement, and the calculated dollar amounts set forth in the “Stock Awards” column. The compensation expense included in the “Stock Awards” column likely will vary from the actual amounts ultimately realized by any NEO based on a number of factors, including the number of shares that ultimately vest, the timing of any sale of shares, and the market price of our shares. The actual value realized by our NEOs from share awards during 2016 is presented in the Option Exercises and Stock Vested table below. Details about the equity awards granted to our NEOs during 2016 can be found in the Grants of Plan-Based Awards table below.

(1)

No base salary increases were made in 2015. Base salary increases in 2016 were made on July 1, 2016 and were not retroactive. In addition, the base salaries of Messrs. Stanzione and McClelland were further adjusted effective September 1, 2016, without retroactive effect, in connection with Mr. McClelland’s appointment as CEO and Mr. Stanzione being appointed as Executive Chairman. Increases in 2015 compared to 2014 reflect full year of base salary in 2015 compared to 2014 when base salary was increased April 1 without retroactive effect.

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(2)

The amounts shown in this column would relate to any discretionary bonus for each NEO that was outside of the amount listed under the “Non-Equity Incentive Plan Compensation” column.

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(3)

The amounts represent the aggregate grant date fair value of awards, computed based on the number of awards granted and the fair value of the awards on the date of grant. The table reflects an estimated payout of 100% for performance share awards; if the maximum achievement of 200% is attained, additional awards of $2,249,976, $2,250,065 and $3,449,982 will be granted to Mr. Stanzione, $600,003, $600,066 and $1,500,520 to Mr. McClelland, $699,980, $699,956 and $876,888 to Mr. Potts, and

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$600,003, $600,066 and $718,770 to Mr. Robinson, with respect to the 2014, 2015 and 2016 grants, respectively, and additional awards of  $684,228 to Mr. Coppock and $449,958 for Mr. O’Loughlin for 2016. The 2014 performance share grant was paid out at 99.8% of the target amount. The values for awards from prior years were restated to reflect fair value on the grant date. Assumptions used in the fair value calculation of these awards are included in Note 19 of Notes to Consolidated Financial Statements in our 2016 Form 10-K.

(4)

For 2016, the amount reflects annual bonus earned for 2016 performance paid at 129.9%. For 2014 and 2015, the amount reflects annual bonus earned for performance paid at 200% and 18%, respectively.

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(5)

Changes in pension value reflect the aggregate annual change in the actuarial present value of accumulated pension benefits under the qualified and non-qualified defined benefit pension plans, which were frozen in 1999 and 2013, respectively. The increases for 2014 reflect a decrease in the discount rate assumption used from 4.50% to 3.75%, which resulted in a larger present value of the accumulated pension benefits. 2014 increases were also impacted by the adoption of actuarial studies that reflected longer life expectancies, which resulted in an increase in the total expected benefit payments to the applicable participants. The change in pension value does not include changes under any of the Company’s defined contribution plans because there are no above-market or preferential earnings provided under such plans. The change in pension value also does not include changes in Mr. Stanzione’s supplemental employee retirement plan, which was frozen at age 62. Increases or decreases in value since then have been based upon the investment results of independently managed investment vehicles selected by Mr. Stanzione from a menu of vehicles made available by the Company without any above-market or preferential earnings being provided by the Company.

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(6)

Included in all other compensation are matching contributions to the 401(k) savings plan and the non-qualified 401(k) wrap plan, and the incremental cost for supplemental life insurance coverage. The matching contribution to the 401(k) savings plan was $10,600 for each NEO in 2016, and the non-qualified 401(k) wrap plan reflects $29,822, $15,137, $13,186, $9,382 and $19,175 for Messrs. Stanzione, McClelland, Potts, Coppock and O’Loughlin respectively. The value of perquisites and other personal benefits was less than $10,000 in the aggregate for each NEO.

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(7)

Prior to September 1, 2016, Mr. Stanzione served as Chairman and CEO and Mr. McClelland served as President, Network and Cloud.

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(8)

Mr. Coppock and Mr. O’Loughlin became NEOs in 2016. As a result, prior compensation information is not provided.

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