S-4 1 g09643sv4.htm ARRIS GROUP, INC. ARRIS GROUP, INC.
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As filed with the Securities and Exchange Commission on October 12, 2007
Registration No. 333-[      ]
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 
ARRIS GROUP, INC.
(Exact name of Registrant as specified in its charter)
         
Delaware   3663   58-2588724
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification Number)
 
 
ARRIS Group, Inc.
3871 Lakefield Drive
Suwanee, Georgia 30024
(678) 473-2000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
 
Lawrence A. Margolis
ARRIS Group, Inc.
3871 Lakefield Drive
Suwanee, Georgia 30024
(678) 473-2000
(Address, including zip code, and telephone number, including area code, of agent for service)
 
 
 
 
Copies to:
 
     
W. Brinkley Dickerson, Jr.
Patrick W. Macken
Troutman Sanders LLP
600 Peachtree Street, NE, Suite 5200
Atlanta, Georgia 30308-2216
  Robert C. Gerlach
Brian D. Doerner
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania 19103
 
 
Approximate date of commencement of proposed sale to the public:  As soon as practicable after the effective date of this Registration Statement and upon consummation of the merger described herein.
 
If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  o
 
If this form is filed to register additional securities of an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o
 
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o
 
 
CALCULATION OF REGISTRATION FEE
 
                         
            Proposed Maximum
    Proposed Maximum
    Amount of
Title of Each Class of
    Amount to be
    Offering
    Aggregate
    Registration
Securities to be Registered(1)     Registered(2)     Price per Share     Offering Price(3)     Fee
Common Stock, par value $.01 per share
    30,535,998     N. A.     $266,057,606     $8,168
                         
 
(1) Includes rights under the ARRIS Group, Inc. Rights Agreement dated October 3, 2002 between ARRIS and The Bank of New York. The rights are initially attached to and trade with all of the shares of ARRIS’ common stock. Until the occurrence of certain events, the rights are not exercisable, are evidenced by the certificates for the common stock, and will be transferable only simultaneously and together with common stock. The value attributed to such rights, if any, is reflected in the market price of ARRIS’ common stock.
(2) The maximum number of shares of common stock of ARRIS to be issued pursuant to an agreement and plan of merger whereby the shareholders of C-COR Incorporated, a Pennsylvania corporation, will exchange their common stock of C-COR for cash and shares of ARRIS common stock.
(3) Estimated solely for purposes of calculating the registration fee required by Section 6(b) of the Securities Act and computed pursuant to Rules 457(c) and 457(f) under the Securities Act. The proposed maximum offering price is equal to (i) the product of (a) $11.64, the average of the high and low prices per share of the common stock of C-COR as reported on the NASDAQ Global Select Market on October 9, 2007, and (b) the maximum number of shares of C-COR common stock to be cancelled pursuant to the merger, minus (ii) the cash portion of the consideration to be paid by ARRIS to holders of C-COR common stock.
 
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said section 8(a), may determine.
 


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The information in this preliminary joint proxy statement/prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This document is not an offer to sell and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
 
 
PRELIMINARY COPY — SUBJECT TO COMPLETION, DATED OCTOBER 12, 2007
 
     
(ARRIS LOGO)
  (C-COR LOGO)
 
 • , 2007
 
Dear ARRIS shareholders and C-COR shareholders:
 
The Boards of Directors of ARRIS Group, Inc. and C-COR Incorporated have approved a merger of the two companies that they believe will create a leading pure play cable solutions company with highly scalable, revenue producing technologies for high speed data, telephony, optical and network access infrastructure and video management solutions.
 
Under the merger agreement, C-COR shareholders will have the right to elect to receive either $13.75 in cash or 0.9642 of a share of ARRIS common stock for each share of C-COR common stock they own. The stock portion of the merger consideration is subject to adjustment in the event the average closing price of ARRIS’ common stock over the ten trading-day period ending three trading days prior to the closing of the merger is less than $12.83 or more than $15.69 per share. ARRIS and C-COR have agreed that approximately 49% of the shares of C-COR common stock outstanding immediately before completion of the merger will be converted into the right to receive the stock consideration (although a small portion of that consideration may be paid in cash) and the remaining approximately 51% of the shares will be converted into the right to receive the cash consideration. Therefore, the cash and stock elections that C-COR shareholders make with respect to their shares will be subject to proration to achieve this allocation.
 
Based on the estimated number of shares of C-COR common stock outstanding and the current price of ARRIS common stock, ARRIS expects to pay approximately $ •  in cash and to issue approximately • shares of ARRIS common stock to C-COR shareholders in the merger. Former C-COR shareholders are expected to own approximately 19% of the outstanding ARRIS shares immediately after the merger. ARRIS common stock is listed on the NASDAQ Global Select Market under the symbol “ARRS.” C-COR common stock is listed on the NASDAQ Global Select Market under the symbol “CCBL.”
 
Each company is holding a special meeting of its shareholders in order to obtain the shareholder approval necessary to complete the merger. The accompanying joint proxy statement/prospectus provides a detailed description of the proposed merger and the merger consideration. In addition, it provides you with important information regarding the special meetings of shareholders. We urge you to read the enclosed materials (and any documents incorporated by reference into this joint proxy statement/prospectus) carefully. Please pay particular attention to the “Risk Factors” section beginning on page 15.
 
We cannot complete the merger without the approval of the shareholders of both of our companies. Your vote is very important, regardless of the number of shares you own. Whether or not you expect to attend your company’s special meeting, please vote all proxy cards that you receive as soon as possible to ensure that your shares are represented at the applicable special meeting. Shareholders holding registered shares or shares through a broker-managed account can vote their shares by using a toll-free telephone number or the Internet. Instructions for using these convenient services are provided on the accompanying proxy card. Of course, you may still vote your shares by marking your vote on the accompanying proxy card, signing and dating it and mailing it in the envelope provided. If you are a shareholder of both ARRIS and C-COR, you will receive two separate packages of proxy materials and should respond to both. If you have any questions or need assistance voting your shares, please call • , who is assisting ARRIS, toll free at • , if you are an ARRIS shareholder, or • , who is assisting C-COR, toll free at • , if you are a C-COR shareholder.
 
The ARRIS board of directors recommends that ARRIS shareholders vote FOR the proposal to approve the issuance of ARRIS common stock to be issued to C-COR shareholders pursuant to the merger agreement. The C-COR board of directors recommends that C-COR shareholders vote FOR the proposal to adopt the merger agreement.
 
Sincerely,
 
     
Chairman and Chief Executive Officer
  Chairman and Chief Executive Officer
ARRIS Group, Inc. 
  C-COR Incorporated
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in connection with the merger or passed upon the adequacy or accuracy of this joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.
 
This joint proxy statement/prospectus is dated • , 2007, and is first being sent to ARRIS shareholders and C-COR shareholders on or about • , 2007.


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(ARRIS LOGO)
 
ARRIS Group, Inc.
3871 Lakefield Drive
Suwanee, Georgia 30024
(678) 473-2000
 
 
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD • , 2007
 
 
To the Shareholders of ARRIS Group, Inc.:
 
A special meeting of shareholders of ARRIS Group, Inc., a Delaware corporation (“ARRIS”), will be held at • (local time) on • , • , 2007, at • , for the following purposes:
 
1. To consider and vote upon a proposal to approve the issuance of ARRIS common stock in the merger of C-COR Incorporated, a Pennsylvania corporation (“C-COR”), with and into Air Merger Subsidiary, Inc., a Delaware corporation and a wholly owned subsidiary of ARRIS (“Merger Sub”), as contemplated by the Agreement and Plan of Merger, dated as of September 23, 2007, by and among ARRIS, C-COR and Merger Sub, as that agreement may be amended;
 
2. To consider and vote on any adjournment or postponement of the special meeting, if necessary, to solicit additional proxies in favor of the proposal to approve the issuance of shares of ARRIS common stock pursuant to the merger agreement; and
 
3. To transact any other business as may properly come before the special meeting or any properly reconvened meeting following an adjournment or postponement of the special meeting.
 
Holders of record of ARRIS common stock at the close of business on • , 2007, are entitled to notice of and to vote at the special meeting and any adjournment or postponement of the special meeting. A list of these shareholders will be available for inspection by any shareholder for any purpose germane to the special meeting during ordinary business hours for ten days prior to the special meeting at the offices of ARRIS and will also be available at the special meeting.
 
Your vote is very important. Your proxy is being solicited by the ARRIS board of directors. The issuance of new shares of ARRIS common stock must be authorized by the shareholders of ARRIS in order for the merger to be completed.
 
By Order of the ARRIS board of directors,
 
Lawrence A. Margolis
Secretary
 
Suwanee, Georgia
 • , 2007
 
 
IMPORTANT NOTICE
 
If you do not plan to attend the special meeting to vote your shares, please complete, date, sign and promptly mail the enclosed proxy card in the return envelope provided. No postage is necessary if mailed in the United States. Shareholders of record and many shareholders holding shares in broker-managed accounts may also give their proxy by telephone or through the Internet in accordance with the instructions accompanying the proxy card. Any person giving a proxy has the power to revoke it at any time, and shareholders who are present at the special meeting may withdraw their proxies and vote in person.
 
 


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(C-COR LOGO)
 
C-COR Incorporated
60 Decibel Road
State College, Pennsylvania 16801
(814) 238-2461/(800) 233-2267
 
 
 
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD • , 2007
 
 
To the Shareholders of C-COR Incorporated:
 
A special meeting of shareholders of C-COR Incorporated, a Pennsylvania corporation (“C-COR”), will be held at • (local time) on • , • , 2007, at 1735 Market Street, 42nd floor, Philadelphia, Pennsylvania 19103, for the following purposes:
 
1. To consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of September 23, 2007, by and among C-COR, ARRIS Group, Inc., a Delaware corporation (“ARRIS”), and Air Merger Subsidiary, Inc., a Delaware corporation and wholly owned subsidiary of ARRIS (“Merger Sub”), as that agreement may be amended;
 
2. To consider and vote on any adjournment or postponement of the special meeting, if necessary, to solicit additional proxies in favor of the proposal to adopt the merger agreement; and
 
3. To transact other business that may properly come before the special meeting or any properly reconvened meeting following an adjournment or postponement of the special meeting.
 
Shareholders of record at the close of business on • , 2007, are entitled to notice of and to vote at the special meeting and any postponement or adjournment of the special meeting. Your vote is important. Please complete, date and sign the enclosed proxy and return it promptly, or if you prefer, you may cast your vote by Internet or telephone. If you attend the special meeting, you may vote in person.
 
By Order of the board of directors of C-COR,
 
William T. Hanelly
Chief Financial Officer, Secretary and Treasurer
 
State College, Pennsylvania
 • , 2007
 
 
IMPORTANT NOTICE
If you do not plan to attend the special meeting to vote your shares, please complete, date, sign and promptly mail the enclosed proxy card in the return envelope provided. No postage is necessary if mailed in the United States. Shareholders of record and many shareholders holding shares in broker-managed accounts may also give their proxy by telephone or through the Internet in accordance with the instructions accompanying the proxy card. Any person giving a proxy has the power to revoke it at any time, and shareholders who are present at the special meeting may withdraw their proxies and vote in person.
 
 


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REFERENCE TO ADDITIONAL INFORMATION
 
This joint proxy statement/prospectus incorporates by reference important business and financial information about ARRIS and C-COR from documents that are not included in or delivered with this joint proxy statement/prospectus. For a listing of the documents incorporated by reference into this joint proxy statement/prospectus, see “Where You Can Find Additional Information” beginning on page 94. This information is available to you without charge upon your written or oral request. You can obtain documents related to ARRIS and C-COR that are incorporated by reference into this joint proxy statement/prospectus, without charge, from the SEC’s website (www.sec.gov) or by requesting them in writing or by telephone from the appropriate company.
 
     
ARRIS Group, Inc.
3871 Lakefield Drive
Suwanee, Georgia 30024
(678) 473-2647
Attn: Investor Relations
www.arrisi.com
  C-COR Incorporated
60 Decibel Road
State College, Pennsylvania 16801
(800) 233-2267 ext. 4402
Attn: Investor Relations
www.c-cor.com
 
(All website addresses given in this joint proxy statement/prospectus are for information only and are not intended to be an active link or to incorporate any website information into this joint proxy statement/prospectus.)
 
Please note that copies of the documents provided to you will not include exhibits, unless the exhibits are specifically incorporated by reference into the documents or this joint proxy statement/prospectus.
 
In order to receive timely delivery of requested documents in advance of the special meetings, you should make your request no later than • , 2007.
 
ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS
 
This joint proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed with the SEC by ARRIS (File No. 333- • ), constitutes a prospectus of ARRIS under Section 5 of the Securities Act of 1933, as amended, which we refer to as the Securities Act, with respect to the ARRIS common stock to be issued to C-COR shareholders as required by the merger agreement. It also constitutes a notice of meeting and a joint proxy statement under Section 14(a) of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, with respect to the special meeting of ARRIS shareholders, at which ARRIS’ shareholders will be asked to consider and vote upon a proposal to approve the issuance of ARRIS common stock required to be issued to C-COR shareholders pursuant to the merger agreement, and, with respect to the special meeting of C-COR shareholders, at which C-COR’s shareholders will be asked to consider and vote upon a proposal to adopt the merger agreement.


 

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  P-1
ANNEX A — Agreement and Plan of Merger by and among ARRIS Group, Inc., C-COR Incorporated, and Air Merger Subsidiary, Inc. 
  A-1
ANNEX B — Opinion of UBS Securities LLC, dated September 23, 2007
  B-1
ANNEX C — Opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated, dated
September 23, 2007
  C-1
 EX-5.1 OPINION OF TROUTMAN SANDERS LLP
 EX-8.1 OPINION OF TROUTMAN SANDERS LLP
 EX-8.2 OPINION OF BALLARD SPAHR ANDREWS & INGERSOLL LLP
 EX-23.1 CONSENT OF ERNST & YOUNG LLP
 EX-23.2 CONSENT OF KPMG LLP
 EX-99.1 CONSENT OF UBS SECURITIES LLC
 EX-99.2 CONSENT OF MERRILL LYNCH, PIERCE, FENNER & SMITH INC.
 EX-99.3 FORM OF PROXY CARD FOR SPECIAL MEETING
 EX-99.4 FORM OF PROXY CARD FOR SPECIAL MEETING


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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE MEETINGS
 
General Questions and Answers
 
Q: What are ARRIS and C-COR proposing?
 
A: On September 23, 2007, ARRIS, C-COR and Merger Sub entered into a merger agreement providing for the acquisition of C-COR by means of a merger of C-COR into Merger Sub, a wholly owned subsidiary of ARRIS, and Merger Sub will change its name to “C-COR Incorporated.” We refer to this transaction as the merger. Following the merger, existing shareholders of ARRIS will own approximately 81% of ARRIS and former shareholders of C-COR will own approximately 19% of ARRIS. Also, following the merger, ARRIS will take all reasonable steps to insure that one designee of C-COR will be appointed to the board of directors of ARRIS.
 
Q: What will C-COR shareholders receive in the merger?
 
A: In the merger, shareholders of C-COR will receive either $13.75 in cash or 0.9642 of a share of ARRIS common stock for each share of C-COR common stock based on the shareholder’s election and subject to adjustment, which we refer to as the merger consideration, in exchange for each share of common stock of C-COR they own.
 
The implied value of the stock consideration to be received by C-COR shareholders as a result of the merger will fluctuate as the market price of ARRIS common stock fluctuates. As a result, ARRIS and C-COR have agreed that the number of shares of ARRIS common stock that each C-COR shareholder may elect to receive for each share of C-COR common stock will (i) increase in the event the closing price of ARRIS common stock decreases below a 10% threshold, or (ii) decrease in the event the closing price of ARRIS common stock increases above a 10% threshold. See “The Merger Agreement — Merger Consideration and Shareholder Elections” beginning on page 57 for more detailed information.
 
Q: Are C-COR shareholders guaranteed to receive their election of cash or ARRIS common stock?
 
A: No. Under the merger agreement, approximately 49% of the shares of C-COR common stock outstanding immediately before completion of the merger will be converted into the stock consideration and the remaining approximately 51% of the shares will be converted into the cash consideration, although a small portion of the consideration that would otherwise be payable in stock may be paid in cash as described under “The Merger Agreement — Merger Consideration and Shareholder Election — Stock Consideration Adjustment.” Therefore, the cash and stock elections that C-COR shareholders make with respect to their shares will be subject to proration to meet this requirement. See “The Merger Agreement — Merger Consideration and Shareholder Elections” beginning on page 57 for more detailed information.
 
Q. Do ARRIS shareholders make an election?
 
A. No. ARRIS shareholders will continue to own their existing shares of ARRIS common stock, which will not change or otherwise convert into other securities or cash.
 
Q: When and how must a C-COR shareholder elect the type of merger consideration?
 
A: The procedure for electing the type of merger consideration that a C-COR shareholder wants to receive is specified in an election form that accompanies this joint proxy statement/prospectus. You should carefully review and follow the instructions set forth in that election form. These instructions require that a properly completed and signed election form be received by the exchange agent by the election deadline, which is 5:00 p.m., New York City time, on • , 2007. Holders of record who do not submit a properly completed and signed election form to the exchange agent by the election deadline will have no control over the type of merger consideration they receive.

If your shares of C-COR common stock are held in a stock brokerage account or by a bank or other nominee, you must follow your broker’s, bank’s, or other nominee’s procedures for electing the type of merger


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consideration that you want to receive in the merger. If you do not properly follow these instructions for election, you will have no control over the type of merger consideration you receive.
 
In all events, the amount of cash and ARRIS common stock that you receive will reflect the election forms that are received from other shareholders, i.e. the more of one form of consideration that other shareholders elect, the less of that form you will receive.
 
Q: Can I change my election after I submit my election form?
 
A: Yes. A holder of record of C-COR common stock can revoke an election and submit new election materials before the election deadline by submitting a written notice to the exchange agent that is received prior to the election deadline at the following address:



The revocation must specify the account name and such other information as the exchange agent may request, and revocations may not be made in part. New elections must be submitted in accordance with the election procedures described in this joint proxy statement/prospectus.

If you instructed a broker, bank, or other nominee to submit an election for your shares, you must follow your broker’s, bank’s, or other nominee’s directions for changing those instructions.
 
Q. Do I need to send in my stock certificates now?
 
A. No. After the merger is completed, we will send C-COR shareholders written instructions for exchanging their stock certificates.
 
Q: How do the ARRIS and C-COR Boards of Directors recommend that I vote regarding the merger?
 
A: ARRIS’ board of directors recommends that ARRIS’ shareholders vote FOR the issuance of ARRIS common stock pursuant to the merger agreement.

C-COR’s board of directors unanimously recommends that C-COR’s shareholders vote FOR the adoption of the merger agreement.
 
Q: Why are ARRIS and C-COR proposing to merge?
 
A: The ARRIS board of directors has concluded that the merger offers significant benefits to its shareholders. The C-COR board of directors has concluded that the merger offers significant benefits to C-COR and its shareholders. See “The Merger — Factors Considered by the ARRIS Board of Directors” and “— Factors Considered by the C-COR Board of Directors,” beginning on page 33 for more information.
 
Q: Are there risks I should consider in deciding whether to vote for the merger?
 
A: Yes. The merger is subject to a number of risks and uncertainties. Before deciding whether to vote for or against the merger, you should carefully consider the risks set forth in “Risk Factors” and other information included or incorporated by reference in this joint proxy statement/prospectus.
 
Q: What will happen to C-COR stock options and warrants in the merger?
 
A: All C-COR stock options outstanding at the time of the merger will become fully vested and will be converted into options to acquire ARRIS common stock. The number of shares subject to such converted stock options will be adjusted by multiplying the number of shares subject to such C-COR stock option by 0.9642, subject to adjustment in certain circumstances, and the exercise price will be adjusted accordingly. The options to acquire ARRIS common stock will be subject to the same terms and conditions as were applicable under the C-COR plans pursuant to which they initially were issued (except that all options other than options awarded by C-COR to new employees after September 23, 2007 will vest on the date of the merger and except to the extent that such terms and conditions may be altered to reflect the merger).


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All C-COR warrants outstanding and unexercised immediately prior to the effective time of the merger will expire and no merger consideration will be paid with respect to any unexercised warrants. As a result, holders of outstanding C-COR warrants must exercise their warrants prior to the effective time of the merger or they will receive no merger consideration.
 
Q. If I want to exercise my C-COR options, what do I do?
 
A. You are under no obligation to exercise your C-COR options before the completion of the merger. However, if you hold exercisable C-COR options and wish to exercise them prior to the merger in order to be eligible to elect to receive cash consideration for such shares, then prior to 4:00 p.m. (local time) on the second trading day immediately prior to the date of closing of the merger you should exercise your options by submitting a completed and executed Stock Option Cash Exercise Letter of Authorization (included in materials accompanying this joint proxy statement/prospectus) along with payment for the shares and any applicable taxes to C-COR Incorporated, 60 Decibel Road, State College, Pennsylvania 16801, to the attention of Mark Savereno. Questions may be directed to Mr. Savereno at msavereno@c-cor.com or (800) 233-2267, ext. 4749. You may also execute a cashless exercise of outstanding exercisable options prior to the deadline set forth above.
 
Q. If I want to exercise my C-COR warrants, what do I do?
 
A. You are under no obligation to exercise your C-COR warrants before the completion of the merger. However, if you hold C-COR warrants and wish to exercise them to acquire C-COR common stock in order to receive the merger consideration, then prior to 4:00 p.m. (local time) on the second trading day immediately prior to the date of closing of the merger you should exercise your warrants by sending the warrant, with the completed and executed Notice of Exercise (included in materials accompanying this joint proxy statement/prospectus) and payment to C-COR Incorporated, 60 Decibel Road, State College, Pennsylvania 16801, to the attention of Mark Savereno. Questions may be directed to Mr. Savereno at msavereno@c-cor.com or (800) 233-2267, ext. 4749. You may also execute a cashless exercise of outstanding exercisable warrants as specified by the provisions of your warrants prior to the deadline set forth above.
 
Q: Am I entitled to dissenter or appraisal rights in connection with the merger?
 
A: No. Shareholders do not have dissenter or appraisal rights in connection with the merger.
 
Q: Where will the ARRIS common stock be listed?
 
A: ARRIS will remain listed on the NASDAQ Global Select Market following the merger. The stock symbol for ARRIS is “ARRS.”
 
Q: When do ARRIS and C-COR expect to complete the merger?
 
A: ARRIS and C-COR will complete the merger when all of the conditions to completion of the merger have been satisfied or waived. ARRIS and C-COR are working toward satisfying these conditions and completing the merger as quickly as possible. ARRIS and C-COR currently expect to complete the merger in the first quarter of 2008. Because the merger is subject to a number of conditions, some of which are beyond ARRIS’ and C-COR’s control, the exact timing cannot be predicted.
 
Q: Where can I find more information about the companies?
 
A: You can find more information about ARRIS and C-COR from various sources described under “Where You Can Find Additional Information.”


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ARRIS Shareholder Meeting Questions and Answers
 
Q: When and where is the Special Meeting of the ARRIS shareholders?
 
A: ARRIS will hold a special meeting of the shareholders on  • , 2007, at  •  (local time), at  • , which we refer to as the ARRIS meeting.
 
Q: On what am I being asked to vote?
 
A: ARRIS shareholders are being asked to approve the following proposals at the ARRIS meeting:
 
• to approve the issuance of ARRIS common stock to be issued pursuant to the Agreement and Plan of Merger, dated as of September 23, 2007, by and among ARRIS, C-COR and Merger Sub;
 
• to consider and vote on any adjournment or postponement of the ARRIS meeting, if necessary, to solicit additional proxies in favor of the proposal to approve the issuance of shares of ARRIS common stock pursuant to the merger agreement; and
 
• to transact any other business that may properly come before the ARRIS meeting or any properly reconvened meeting following an adjournment or postponement of the ARRIS meeting.
 
Q: What vote is required by the ARRIS shareholders to approve the issuance of the shares of ARRIS common stock in the merger?
 
A: Approval of the issuance of ARRIS common stock in the merger will require the affirmative vote of a majority of the votes cast by the holders of ARRIS common stock entitled to vote at the ARRIS meeting. Each share of ARRIS common stock is entitled to one vote on this proposal and on all other matters scheduled to come before the ARRIS meeting.

As of the record date, ARRIS directors and executive officers owned and were entitled to vote • ARRIS common stock, representing approximately  • % of the shares outstanding on the record date. The directors and officers of ARRIS have informed ARRIS that they intend to vote all of their shares of ARRIS common stock FOR the approval of the issuance of ARRIS common stock in the merger.
 
Q: How do I vote on the proposals to be presented at the ARRIS meeting?
 
A: First, please review the information contained in this joint proxy statement/prospectus, including the annexes. This joint proxy statement/prospectus contains important information about ARRIS, C-COR, Merger Sub and the merger. It also contains important information about what the boards of directors of ARRIS and C-COR considered in evaluating the merger.
 
Second:
 
• If you are a registered holder of ARRIS common stock, please submit your proxy card promptly by telephone, via the Internet or by signing, dating and returning the appropriate enclosed proxy card in the envelope provided so that your shares can be voted at the ARRIS meeting. The ARRIS proxy card applicable to ARRIS shareholders is printed on blue paper. You may also attend in person and vote at the ARRIS meeting, even if you have already submitted a proxy card.
 
• If you hold your ARRIS common stock in “street” name, you must contact your broker or other nominee to obtain a broker voting instruction form (if you did not receive one together with this joint proxy statement/prospectus) and for other instructions as to how to vote your shares.
 
• If you hold your ARRIS common stock in both registered and “street” name, you will receive both a proxy card and a broker voting instruction form. To ensure that all your shares are represented at the ARRIS meeting, please submit a vote by telephone, via the Internet or by mail for each proxy card or broker voting instruction form you receive.


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Q: What happens if I don’t indicate how to vote on my signed proxy card or broker voting instruction form?
 
A: If you sign and send in your proxy card but do not include instructions on how to vote your properly signed form, your shares will be voted FOR the issuance of ARRIS common stock in the merger and FOR any adjournment or postponement of the ARRIS meeting to solicit additional proxies.

If you are a non-registered holder and your shares of ARRIS common stock are held in “street name” and you do not provide voting instructions to your broker or other nominee, which we refer to as a “broker non-vote,” your shares will not be considered to have been voted for the issuance of ARRIS common stock in the merger or for any adjournment or postponement of the ARRIS meeting to solicit additional proxies. Given that only a majority of votes cast is required to approve the proposal, shares not voted for the issuance of ARRIS common stock in the merger will have no effect on that proposal. Broker non-votes will be deemed present for quorum purposes.

If you sign and send in your broker voting instruction form but do not include instructions on how to vote your properly signed form, your shares will not be voted with respect to the proposals that may properly come before the ARRIS meeting but you will be deemed present for quorum purposes.
 
Q: Can I change my vote after I have mailed my signed proxy card or broker voting instruction form?
 
A. Yes. You can change your vote before your proxy card or broker voting instruction form is voted at the ARRIS meeting.
 
Registered Holders.  If you are a registered holder, you can change your vote in one of three ways:
 
• First, before the ARRIS meeting, you can deliver a signed notice of revocation of proxy to the Secretary of ARRIS or to the offices of ARRIS’ proxy solicitor at the addresses specified below at any time up to and including the last business day before the ARRIS meeting.
 
• Second, you can complete and submit a later-dated proxy card no later than 5:00 p.m. (local time) on the last business day before the ARRIS meeting.
 
• Third, you can attend the ARRIS meeting and vote in person. Your attendance at the ARRIS meeting alone will not revoke your proxy; rather, you must vote at the ARRIS meeting in order to revoke your previously submitted proxy card.
 
If you are a registered holder and want to change your proxy directions by mail or by fax, you should send any notice of revocation or your completed new proxy card, as the case may be, to ARRIS at either of the following addresses:
 
     
ARRIS Group, Inc.
3871 Lakefield Drive
Suwanee, Georgia 30024
Attention: Secretary
Fax: (678) 473-8470
  [ARRIS PROXY SOLICITOR]
 
Non-Registered Holders.  If a broker, bank, trust company or other nominee holds your shares in “street name” and you have instructed such nominee to vote your shares and wish to change your vote, you must follow directions received from such nominee to change those instructions.

You may also revoke or change your proxy or broker voting instructions by telephone or via the Internet by following the instructions set forth below under “Can I vote by telephone or electronically?”
 
Q: Can I vote by telephone or electronically?
 
A: Yes, in most cases. To vote by telephone, please call the number shown on your proxy card or broker voting instruction form from a touch-tone phone and follow the instructions. To vote via the Internet, please go to the website shown on your proxy card or broker voting instruction form and follow the instructions


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on the screen. Please note that you will need to refer to the control number indicated on your proxy card or broker voting instruction form to identify yourself in the electronic voting system. Please also refer to the instructions on your proxy card or broker voting instruction form for information regarding the deadline for voting your shares electronically. If you hold your ARRIS common stock through a broker or other nominee, you should check your broker voting instruction form forwarded to you by such nominee to see which options are available.
 
Q: If my broker or other nominee holds my shares in “street name,” will my broker or other nominee vote my shares for me?
 
A: No. Your broker or other nominee will not vote your shares unless it receives your specific instructions in a completed broker voting instruction form. After carefully reading and considering the information contained in this joint proxy statement/prospectus, including the annexes, please follow the directions provided by your nominee with respect to voting procedures and complete a broker voting instruction form. Please ensure that your broker voting instruction form is submitted to your nominee in sufficient time to ensure that your vote is received by ARRIS on or before 5:00 p.m. (local time) on  • , 2007. If you have instructed a nominee to vote your shares and wish to change your vote, you must follow directions received from your nominee to change those instructions.
 
Q: Who can help answer my questions about the merger?
 
A:  •  is acting as the proxy solicitor for ARRIS. If you have any questions about the merger or about how to vote your shares, please call •  toll free at • .


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C-COR Shareholder Meeting Questions and Answers
 
Q: When and where is the Special Meeting of the C-COR shareholders?
 
A: We will hold the special meeting of the shareholders of C-COR on  • , 2007, at • (local time), at 1735 Market Street, 42nd Floor, Philadelphia, Pennsylvania 19103, which we refer to as the C-COR meeting.
 
Q: On what am I being asked to vote?
 
A: C-COR shareholders are being asked to approve the following proposals at the C-COR meeting:
 
• to adopt the Agreement and Plan of Merger, dated as of September 23, 2007, by and among ARRIS, C-COR and Merger Sub;
 
• to consider and vote on any adjournment or postponement of the C-COR meeting, if necessary, to solicit additional proxies in favor of the proposal to adopt the merger agreement; and
 
• to transact any other business that may properly come before the C-COR meeting or any properly reconvened meeting following an adjournment or postponement of the C-COR meeting.
 
Q: What vote is required to approve the merger agreement at the C-COR meeting?
 
A. Adoption of the merger agreement requires the affirmative vote of the majority of the votes cast by the holders of C-COR common stock entitled to vote at the C-COR meeting. Each share of C-COR common stock is entitled to one vote on this proposal and on all other matters scheduled to come before the C-COR meeting.
 
As of the record date, C-COR directors and executive officers owned and were entitled to vote • shares of C-COR common stock, representing approximately  • % of the C-COR common stock outstanding on that date. The directors and officers of C-COR have informed C-COR that they intend to vote all of their shares of C-COR common stock FOR the adoption of the merger agreement.
 
Q: How do I vote on the proposals to be presented at the C-COR meeting?
 
A: First, please review the information contained in this joint proxy statement/prospectus, including the annexes. This joint proxy statement/prospectus contains important information about ARRIS, C-COR, Merger Sub and the merger. It also contains important information about what the Boards of Directors of ARRIS and C-COR considered in evaluating the merger.
 
Second:
 
• If you are a registered holder of C-COR common stock, please submit your proxy card promptly by telephone, via the Internet or by signing, dating and returning the enclosed appropriate proxy card in the envelope provided so that your shares can be voted at the C-COR meeting. The C-COR proxy card applicable to C-COR shareholders is printed on pink paper. You may also attend in person and vote at the C-COR meeting, even if you have already submitted a proxy card.
 
• If you hold your C-COR common stock in “street” name, you must contact your broker or other nominee to obtain a broker voting instruction card or form (if you did not receive one together with this joint proxy statement/prospectus) and for other instructions as to how to vote your shares.
 
• If you hold your C-COR common stock in both registered and “street” name, you will receive both a proxy card and a broker voting instruction card or form.
 
• To ensure that all of your shares are represented at the C-COR meeting, please submit a vote by telephone, via the Internet or by mail for each proxy card or broker voting instruction card or form you receive.
 
Q: What happens if I don’t indicate how to vote on my signed proxy card or broker voting instruction card or form?
 
A: If you sign and send in your proxy card but do not include instructions on how to vote your properly signed form, your shares will be voted FOR the adoption of the merger agreement and FOR any adjournment or postponement of the C-COR meeting to solicit additional proxies.


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If your shares of C-COR are held in “street name” and you do not provide voting instructions to your broker or other nominee, which we refer to a broker non-vote, your shares will not be considered to have been voted for the adoption of the merger agreement or any adjournment or postponement of the C-COR meeting to solicit additional proxies. Because the required vote of C-COR shareholders is based upon the number of votes cast, rather than upon the number of shares of C-COR common stock outstanding, any shares for which a holder does not submit a proxy or vote in person at the C-COR meeting, including abstentions and broker non-votes, will not be counted in connection with the adoption of the merger agreement. Broker non-votes will be deemed present for quorum purposes.
 
If you sign and send in your broker voting instruction form but do not include instructions on how to vote your properly signed form, your shares will not be voted with respect to the proposals that may properly come before the C-COR meeting, however, you will be deemed present for quorum purposes.
 
Q: Can I change my vote after I have mailed my signed proxy card or broker voting instruction card or form?
 
A: Yes. You can change your vote before your proxy card or broker voting instruction card or form is voted at the C-COR meeting.
 
Registered Holders.  If you are a registered holder, you can change your vote in one of three ways:
 
• First, before the C-COR meeting, you can deliver a signed notice of revocation of proxy to the Secretary of C-COR at the address specified below at any time up to and including the last business day before the C-COR meeting.
 
• Second, you can complete and submit a later-dated proxy card at any time up to and including the last business day before the C-COR meeting.
 
• Third, you can attend the C-COR meeting and vote in person. Your attendance at the C-COR meeting alone will not revoke your proxy; rather, you must also vote at the C-COR meeting in order to revoke your previously submitted proxy card.
 
If you are a C-COR shareholder and want to change your proxy directions by mail or by fax, you should send any notice of revocation or your completed new proxy card, as the case may be, to C-COR at the following address:
 
C-COR Incorporated
60 Decibel Road
State College, Pennsylvania 16801
Attention: Secretary
Fax: (814) 237-5574
 
Non-Registered Holders. If a broker, bank, trust company or other nominee holds your shares in “street name” and you have instructed such nominee to vote your shares and wish to change your vote, you must follow directions received from such nominee to change those instructions.
 
You may also revoke or change your proxy or broker voting instructions by telephone or via the Internet by following the instructions set forth below under “Can I vote by telephone or electronically?”
 
Q: Can I vote by telephone or electronically?
 
A: Yes, in most cases. To vote by telephone, please call the number shown on your proxy card or broker voting instruction card or form from a touch-tone phone and follow the instructions. To vote via the Internet, please go to the website shown on your proxy card or broker voting instruction card or form and follow the instructions on the screen. Please note that you will need to refer to the control number indicated on your proxy card or broker voting instruction card or form to identify yourself in the electronic voting system. Please also refer to the instructions on your proxy card or broker voting instruction card or form for information regarding the deadline for voting your shares by telephone or electronically. If you hold your shares of C-COR common stock through a broker or other nominee, you should also check your broker voting instruction card or form forwarded to you by such nominee to see which options are available.


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Q: If my broker or other nominee holds my shares of C-COR common stock in “street name,” will my broker or other nominee vote my shares for me?
 
A: No. Your broker or other nominee will not vote your shares unless it receives your specific instructions in a completed broker voting instruction form. After carefully reading and considering the information contained in this joint proxy statement/prospectus, including the annexes, please follow the directions provided by your nominee with respect to voting procedures and complete a broker voting instruction form. Please ensure that your broker voting instruction form is submitted to your nominee in sufficient time to ensure that your vote is received by C-COR on or before 5:00 p.m. (local time) on  • , 2007. If you have instructed a nominee to vote your shares and wish to change your vote, you must follow directions received from your nominee to change those instructions.
 
Q. What are the U.S. federal income tax consequences of the merger to holders of C-COR common stock?
 
A. The transaction will generally be tax-free to C-COR shareholders who receive solely ARRIS common stock for their C-COR common stock. C-COR shareholders who receive solely cash for their C-COR common stock generally will recognize gain or loss equal to the difference between the amount of cash received and their tax basis in their shares of C-COR common stock. C-COR shareholders who receive both ARRIS common stock and cash for their C-COR common stock generally will recognize gain equal to the lesser of (i) the amount of cash received and (ii) the excess of the “amount realized” in the transaction (i.e., the fair market value of the ARRIS common stock at the effective time of the merger plus the amount of cash received) over their tax basis in their C-COR common stock. For more information, see “Material U.S. Federal Income Tax Consequences of the Merger — Tax Consequences of the Merger to C-COR Shareholders.”
 
Q: Who can help answer my questions about the merger?
 
A:  • is acting as the proxy solicitor for C-COR. If you have any questions about the merger or about how to vote your shares or options, please call •  toll free at the following number: • .


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SUMMARY
 
This summary highlights selected information from this joint proxy statement/prospectus and may not contain all the information that is important to you. To understand the merger fully and for a more complete description of the legal terms of the merger, you should read carefully this entire joint proxy statement/prospectus, including the annexes, and the other documents to which we have referred you. For information on how to obtain the documents that we have filed with the SEC, see “Where You Can Find Additional Information.”
 
The Companies
 
ARRIS Group, Inc.
3871 Lakefield Drive
Suwanee, Georgia 30024
(678) 473-2000
 
ARRIS provides broadband local access networks with best-in-class video, high-speed data, mobile and fixed-line telephony systems for the delivery of voice, video and data to their residential and small-to-medium sized business customers. ARRIS’ complete solutions enhance the reliability and value of converged services from the network to the end-user. Additionally, ARRIS provides a complete set of tools and cable system infrastructure products. Headquartered in Atlanta, Georgia, ARRIS has research and development centers in Atlanta, Chicago, Cork, Ireland and Shenzhen, China and operates support and sales offices throughout the world.
 
ARRIS’ common stock is listed on the NASDAQ Global Select Market and trades under the symbol “ARRS.” ARRIS was organized as a corporation under the laws of the State of Delaware.
 
For additional information about ARRIS and its business, see “Where You Can Find Additional Information.”
 
C-COR Incorporated
60 Decibel Road
State College, Pennsylvania 16801
(814) 238-2461
 
C-COR, headquartered in State College, Pennsylvania, is a global provider of integrated network solutions that include products, content and operations management systems, and professional services for broadband networks. Its core strategy is to lead network operators through the transition to Internet Protocol-based networks by leveraging its extensive global installed base of products and experienced workforce to deliver network solutions that meet the business needs of its customers. C-COR operates through two business segments: Broadband Systems Solutions and Network Services.
 
C-COR’s common stock is listed on the NASDAQ Global Select Market and trades under the symbol “CCBL.” C-COR was organized as a corporation under the laws of the Commonwealth of Pennsylvania.
 
For additional information about C-COR and its business, see “Where You Can Find Additional Information.”
 
Air Merger Subsidiary, Inc.
 
Merger Sub, a wholly owned subsidiary of ARRIS, is a Delaware corporation formed for the purpose of effecting the merger. Merger Sub has not conducted any activities other than those incidental to its formation and as contemplated by the merger agreement.


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The Merger (page 57)
 
The transaction will be implemented by means of a merger of C-COR with and into Merger Sub. Following completion of the merger, Merger Sub will change its name to “C-COR Incorporated” and will remain a wholly owned subsidiary of ARRIS.
 
Merger Consideration (page 57)
 
Under the merger agreement, C-COR shareholders will have the right to elect to receive either $13.75 in cash, without interest, or 0.9642 of a share of ARRIS common stock, for each share of C-COR common stock that they own. For example, if a C-COR shareholder owns 100 shares of C-COR common stock, he or she could elect to receive cash in exchange for 40 shares and shares of ARRIS common stock in exchange for the other 60 shares.
 
However, regardless of the elections made by individual C-COR shareholders, ARRIS and C-COR have agreed to fix the number of shares of C-COR common stock that will be converted into shares of ARRIS common stock and the number of shares that will be converted into cash. Under the merger agreement, approximately 49% of the shares of C-COR common stock outstanding immediately before completion of the merger will be converted into the right to receive the stock consideration and the remaining approximately 51% of the shares will be converted into the right to receive the cash consideration, although a small portion of the consideration that would otherwise be payable in stock may be paid in cash as described under “The Merger Agreement — Merger Consideration and Shareholder Elections — Stock Consideration Adjustments.” Therefore, the cash and stock elections that C-COR shareholders make with respect to their shares will be subject to proration to achieve this required ratio of cash and stock consideration.
 
Specifically, if C-COR shareholders elect to receive more stock consideration or cash consideration than is provided for under the merger agreement, elections for the over-subscribed form of merger consideration will be prorated so that the overall approximate 51/49 split of the merger consideration is achieved. For example, if C-COR shareholders elect, in the aggregate, to exchange more than 49% of the outstanding C-COR shares for shares of ARRIS common stock, then C-COR shareholder elections to receive ARRIS common stock for shares of C-COR common stock will be adjusted on a pro rata basis and, since it is unlikely that C-COR shareholders collectively will elect exactly the 51/49 split, a portion of the shares electing ARRIS common stock will receive the cash consideration instead. As a result, C-COR shareholders are likely to receive cash or shares of ARRIS stock for greater or fewer C-COR shares than they specify in their election. See the table on page 60 for examples of the potential effects of the proration on C-COR shareholder elections.
 
The implied value of the stock consideration will fluctuate as the market price of ARRIS common stock fluctuates. As a result of this fluctuation in the implied value, ARRIS and C-COR have agreed that, in the event the average closing price of ARRIS’ common stock on the NASDAQ Global Select Market for the ten-trading day period ending three trading days before the anticipated closing date, which we refer to as the average closing price, is less than $12.83, the exchange ratio for the conversion of C-COR common stock into ARRIS common stock will be increased so that the per share stock consideration will equal $12.38, based on the average closing price. The per share cash consideration will remain $13.75. The $12.83 threshold represents a 10% decrease from the $14.26 closing price of ARRIS’ common stock on the NASDAQ Global Select Market on the last trading day before the merger agreement was signed. The increase in the exchange ratio will result in an increase in the number of shares of ARRIS common stock issued as stock consideration. However, instead of issuing those additional shares, ARRIS may, at its option and subject to certain limitations, pay the incremental amount in cash to the C-COR shares receiving the stock consideration. No additional increase in the stock consideration will be made in the event the average closing price is less than $11.41. In such circumstances, ARRIS will use an average closing price of $11.41 and the exchange ratio will be fixed at 1.0848 shares of ARRIS common stock for each share of C-COR common stock receiving the stock consideration. In addition, if the average closing price is less than $11.41, both ARRIS and C-COR will have the right to terminate the merger agreement. See “The Merger Agreement — Termination” beginning on page 71 for more information.


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Similarly, in the event the average closing price is more than $15.69, the exchange ratio for the conversion of C-COR common stock into ARRIS common stock will be decreased so that the per share stock consideration will equal $15.13, based on the average closing price. The per share cash consideration will remain $13.75. The $15.69 threshold represents a 10% increase over the $14.26 closing price of ARRIS’ common stock on the NASDAQ Global Select Market on the last trading day before the merger agreement was signed. This decrease in the exchange ratio will result in a reduction in the number of shares of ARRIS common stock issued as stock consideration. No additional decrease in the exchange ratio will be made, however, in the event the average closing price is more than $17.11. In such circumstances, ARRIS will use an average closing price of $17.11 and the exchange ratio will be fixed at 0.8839 shares of ARRIS common stock for each share of C-COR common stock receiving the stock consideration.
 
The table below provides examples of the consideration that will be paid to each C-COR shareholder electing to receive cash consideration and stock consideration, assuming the average closing price of the ARRIS common stock is as indicated. The table assumes that in the event the average closing price is less than $12.83, ARRIS elects to pay the additional consideration in shares of ARRIS’ common stock.
 
                                                             
                  100% Cash
    Pro Rata Values Reflecting 51% Cash/49% Stock Consideration Mix  
ARRIS
    100% Stock Election     Election
          Implied Stock
    Cash
    Average
 
Average
          Value per
    Value per
          Consideration
    Consideration
    Implied Value
 
Closing
    Exchange
    C-COR
    C-COR
    Exchange
    Value per
    Value per
    per C-COR
 
Price
    Ratio     Share     Share     Ratio     C-COR Share     C-COR Share     Share  
 
$ 18.54       0.8839x     $ 16.39     $ 13.75       0.4339 x   $ 8.04     $ 7.00     $ 15.04  
$ 17.11 (1)     0.8839x     $ 15.13     $ 13.75       0.4339 x   $ 7.43     $ 7.00     $ 14.43  
$ 16.40       0.9223x     $ 15.13     $ 13.75       0.4528 x   $ 7.43     $ 7.00     $ 14.43  
$ 15.69       0.9642x     $ 15.13     $ 13.75       0.4734 x   $ 7.43     $ 7.00     $ 14.43  
$ 14.97       0.9642x     $ 14.43     $ 13.75       0.4734 x   $ 7.09     $ 7.00     $ 14.09  
$ 14.26       0.9642x     $ 13.75     $ 13.75       0.4734 x   $ 6.75     $ 7.00     $ 13.75  
$ 13.55       0.9642x     $ 13.07     $ 13.75       0.4734 x   $ 6.41     $ 7.00     $ 13.41  
$ 12.83       0.9642x     $ 12.38     $ 13.75       0.4734 x   $ 6.08     $ 7.00     $ 13.08  
$ 12.12       1.0210x     $ 12.38     $ 13.75       0.5012 x   $ 6.08     $ 7.00     $ 13.08  
$ 11.41 (2)     1.0848x     $ 12.38     $ 13.75       0.5325 x   $ 6.08     $ 7.00     $ 13.08  
$ 9.98       1.0848x     $ 10.83     $ 13.75       0.5325 x   $ 5.32     $ 7.00     $ 12.32  
 
 
(1) No further adjustment will be made to the exchange ratio above the $17.11 per share threshold.
 
(2) No further adjustment will be made to the exchange ratio below the $11.41 per share threshold.
 
ARRIS’ common stock trades on the NASDAQ Global Select Market under the ticker symbol “ARRS.” C-COR common stock trades on the NASDAQ Global Select Market under the ticker symbol “CCBL.” You may obtain current market price quotations for each company’s common stock from newspapers, over the Internet, or from other sources.
 
Holders of C-COR common stock who receive shares of ARRIS common stock in the merger will not receive any fractional shares of ARRIS common stock. Instead, the total number of shares of ARRIS common stock that a C-COR shareholder will receive in the merger will be rounded down to the nearest whole number and ARRIS will pay cash for any resulting fractional share of ARRIS common stock that a C-COR shareholder otherwise would be entitled to receive. The amount of cash payable for a fractional share of ARRIS common stock will be determined by multiplying the fraction by the average closing price.
 
Treatment of C-COR Stock Options and Warrants in the Merger (page 62)
 
All C-COR options outstanding at the time of the merger, except for any options awarded subsequent to September 23, 2007 (the date the merger agreement was signed) will become fully vested as a result of the merger. In addition, options granted to C-COR non-employee directors as part of C-COR’s customary annual grant, which is expected to be made in October, will become fully vested as a result of the merger. Any options that are not exercised prior to the effective time of the merger will be converted into options to acquire


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shares of ARRIS common stock and both the number of shares underlying the option and the exercise price will be adjusted to reflect the stock consideration (or exchange ratio).
 
As of the effective time of the merger, each outstanding warrant to purchase shares of C-COR common stock will be cancelled. As a result, holders of outstanding C-COR warrants must exercise such warrants prior to the effective time of the merger in order to be entitled to receive any merger consideration.
 
Reasons for the Merger
 
In reaching their respective conclusions to approve the merger and the merger agreement and recommend, with respect to ARRIS, that the ARRIS shareholders vote FOR approval of the issuance of ARRIS common stock issued pursuant to the merger agreement, and, with respect to C-COR, that the C-COR shareholders vote FOR adoption of the merger agreement, the ARRIS and C-COR boards of directors independently considered a number of factors. The strategic advantages of the merger and financial incentives of the merger in comparison to a stand-alone strategy for each company were carefully weighed against the potential risks of the merger to ARRIS, C-COR and their respective shareholders. For a detailed description of the factors considered by the ARRIS board of directors, see “The Merger — Factors Considered by the ARRIS Board of Directors” beginning on page 33. For a detailed description of the factors considered by the C-COR board of directors, see “The Merger — Factors Considered by the C-COR Board of Directors” beginning on page 41.
 
Recommendations of the Boards of Directors
 
ARRIS.  After careful consideration, the ARRIS board of directors determined that the merger agreement and the transactions it contemplates are fair to and in the best interests of ARRIS and its shareholders and approved and adopted the merger agreement and the issuance of ARRIS common stock in the merger. The ARRIS board of directors recommends that the ARRIS shareholders vote FOR the proposal to authorize the issuance of ARRIS common stock pursuant to the merger.
 
In evaluating the merger agreement, the ARRIS board of directors consulted with ARRIS’ senior management and ARRIS’ legal and financial advisors and considered a number of strategic, financial and other considerations referred to under “The Merger — Factors Considered by the ARRIS Board of Directors” beginning on page 33.
 
C-COR.  After careful consideration, the C-COR board of directors unanimously determined that the merger agreement and the transactions it contemplates are fair to and in the best interests of C-COR and its shareholders and approved the merger agreement. The C-COR board of directors recommends that C-COR’s shareholders vote FOR adoption of the merger agreement.
 
In reaching its decision to adopt the merger agreement and to recommend that C-COR shareholders vote to adopt the merger agreement, the C-COR board of directors consulted with C-COR’s management and C-COR’s financial and legal advisors and considered a number of strategic, financial and other considerations referred to under “The Merger — Factors Considered by the C-COR Board of Directors” beginning on page 41.
 
Opinions of Financial Advisors (page 34)
 
ARRIS.  In connection with the merger, ARRIS’ board of directors received an opinion, dated September 23, 2007, from ARRIS’ financial advisor, UBS Securities LLC, which we refer to as UBS, as to the fairness, from a financial point of view and as of the date of such opinion, to ARRIS of the per share merger consideration to be paid by ARRIS. The full text of UBS’ written opinion, dated September 23, 2007, is attached to this joint proxy statement/prospectus as Annex B. Holders of shares of ARRIS common stock are encouraged to read this opinion carefully in its entirety for a description of the assumptions made, procedures followed, matters considered and limitations on the review undertaken. UBS’ opinion was provided for the benefit of ARRIS’ board of directors in connection with, and for the purpose of, its evaluation of the merger consideration from a financial point of view, does not address any other aspect of the merger


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and does not constitute a recommendation to any shareholder as to how such shareholder should vote or act with respect to the merger. UBS’ opinion does not address the relative merits of the merger as compared to other business strategies or transactions that might be available to ARRIS or ARRIS’ underlying business decision to effect the merger. For purposes of UBS’ opinion, the term “per share merger consideration” refers to the per share value of the merger consideration of $13.75 based on the cash election consideration of $13.75 and the implied value, utilizing the closing price of ARRIS common stock on September 21, 2007, of the stock election consideration of 0.9642 of a share of ARRIS common stock.
 
C-COR.  On September 23, 2007, Merrill Lynch, Pierce, Fenner & Smith Incorporated, which we refer to as Merrill Lynch, delivered to C-COR’s board of directors its oral opinion, which opinion was subsequently confirmed in writing, to the effect that, as of that date and based upon the assumptions made, matters considered and limits of review set forth in its written opinion, the merger consideration to be received by holders of C-COR common stock pursuant to the merger was fair, from a financial point of view, to those holders. A copy of Merrill Lynch’s written opinion is attached to this joint proxy statement/prospectus as Annex C. C-COR encourages its shareholders to read Merrill Lynch’s opinion carefully and in its entirety for a description of the assumptions made, matters considered and limits on the scope of review undertaken by Merrill Lynch. Merrill Lynch’s opinion was intended for the use and benefit of C-COR’s board of directors, does not address the merits of the underlying decision by C-COR to engage in the merger, and does not constitute a recommendation to any C-COR shareholder as to how that shareholder should vote on the proposed merger or any related matter or as to what form of merger consideration such shareholder should elect.
 
Interests of Directors and Management in the Merger (page 52)
 
In considering the recommendation of the C-COR board of directors with respect to the adoption of the merger agreement, C-COR shareholders should be aware that some of the directors and officers of C-COR have interests in the merger that are different from, or are in addition to, the interests of C-COR shareholders generally. For example, Mr. David A. Woodle, Chairman and Chief Executive Officer of C-COR, has an employment agreement and each of the other executive officers of C-COR has a change of control agreement with C-COR that provide for severance payments and the acceleration of certain benefits if the executive is terminated involuntarily within 18 months after a change of control. In addition, under the C-COR Incentive Plan, pursuant to which stock options held by the executive officers and directors of C-COR were issued, all unvested stock options will vest upon consummation of the merger.
 
Under the merger agreement, ARRIS must take such steps as are reasonably necessary to insure that a nominee to the board of directors of ARRIS as selected by C-COR (and reasonably acceptable to ARRIS) is appointed to the board of directors of ARRIS. At the time the C-COR board of directors approved the merger agreement, the C-COR board of directors had not determined whom it would propose as a nominee to the ARRIS board of directors.
 
C-COR’s board of directors was aware of these interests and considered them, among other matters, in approving the merger agreement and the merger and making its recommendation that the C-COR shareholders adopt the merger agreement.
 
For a further discussion of interests of directors and executive officers of C-COR in the merger, see “The Merger — Interests of C-COR’s Directors and Management in the Merger.”
 
Material Income Tax Consequences of the Merger (page 74)
 
Neither ARRIS nor C-COR will be required to complete the merger unless it receives an opinion from its respective legal counsel to the effect that the merger will qualify as a “reorganization” for United States federal income tax purposes. Therefore, the transaction generally will be tax-free to holders of C-COR common stock for federal income tax purposes except to the extent that they receive cash, including consideration in the merger and any cash that they receive instead of fractional shares of ARRIS common stock.


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Those holders receiving solely cash for their C-COR common stock generally will recognize gain or loss equal to the difference between the amount of cash received and their tax basis in their shares of C-COR common stock. Those holders receiving both ARRIS common stock and cash for their C-COR common stock generally will recognize gain equal to the lesser of (i) the amount of cash received and (ii) the excess of the “amount realized” in the transaction (i.e., the fair market value of the ARRIS common stock at the effective time of the merger plus the amount of cash received) over their tax basis in their C-COR common stock. In certain circumstances, the gain or, in the case of recipients of cash only, the entire amount of cash received, could be taxable as ordinary dividend income rather than as a capital gain.
 
No Dissenters’ or Appraisal Rights (page 55)
 
Under Pennsylvania law, C-COR shareholders are not entitled to dissenters’ or appraisal rights in connection with the merger because shares of C-COR common stock are listed on the NASDAQ Global Select Market.
 
Conditions to Completion of the Merger (page 68)
 
The respective obligations of ARRIS and C-COR to effect the merger and the other transactions contemplated by the merger agreement are subject to the satisfaction and waiver of various conditions as more fully described under “The Merger Agreement — Conditions to Completion of the Merger.” These conditions include:
 
  •  adoption by C-COR shareholders of the merger agreement;
 
  •  approval by ARRIS shareholders of the issuance of ARRIS common stock pursuant to the merger;
 
  •  absence of legal prohibitions on consummating the merger and the transactions contemplated by the merger agreement or other legal issues that would have a material adverse effect on ARRIS or C-COR;
 
  •  termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, which we refer to as the HSR Act;
 
  •  receipt of consent and approval, by each of C-COR and ARRIS, of any person whose consent or approval is required under any agreement or instrument in order to permit the consummation of the merger and the transactions contemplated by the merger agreement;
 
  •  material accuracy of the representations and warranties of ARRIS and C-COR with specified exceptions;
 
  •  material performance of the other party to the merger agreement of all agreements and covenants required by the merger agreement; and
 
  •  receipt of tax opinions by Ballard Spahr Andrews & Ingersoll, LLP and Troutman Sanders LLP substantially to the effect that the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which we refer to as the Code.
 
Neither ARRIS nor C-COR can give any assurances when and if all of the conditions to the merger will either be satisfied or waived or that the merger will occur.


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Termination of the Merger Agreement (page 71)
 
Under the merger agreement, either party may terminate the agreement and abandon the merger prior to the effective time of the merger, whether before or after the approval by shareholders of C-COR and ARRIS, as authorized by the board of directors of the terminating party under certain circumstances as more fully described in “The Merger Agreement — Termination.” In the event of termination of the merger agreement and abandonment of the merger, ARRIS or C-COR may be required to pay to the other party a termination fee equal to $22.5 million. The circumstances under which either party may be required to pay a termination fee are more fully described in “The Merger Agreement — Termination Fee.”
 
Differences in Rights of C-COR Shareholders After the Merger (page 78)
 
C-COR shareholders who receive ARRIS common stock in the merger will become ARRIS shareholders as a result of the merger. Their rights as shareholders after the merger will be governed by Delaware law and by ARRIS’ certificate of incorporation and bylaws. The rights of ARRIS’ shareholders are different in certain respects from the rights of C-COR’s shareholders. Some of the principal differences are described in this joint proxy statement/prospectus under “Certain Differences in Rights of Shareholders.”


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SELECTED HISTORICAL FINANCIAL DATA
 
Selected Historical Consolidated Financial Data of ARRIS
 
The following selected financial data of ARRIS for each of the fiscal years in the five-year period ended December 31, 2006 have been derived from the audited consolidated financial statements of ARRIS and the following selected historical financial data of ARRIS for each of the six-month periods ended June 30, 2007 and 2006 have been derived from the unaudited consolidated financial statements of ARRIS. This information is only a summary and should be read in conjunction with the audited consolidated financial statements of ARRIS and the notes thereto and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in ARRIS’ Annual Report on Form 10-K filed with the SEC on March 1, 2007, and the unaudited consolidated financial statements of ARRIS and the notes thereto and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in ARRIS’ Quarterly Report on Form 10-Q filed with the SEC on August 3, 2007, which are incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find Additional Information.”
 
                                                         
    June 30,     December 31,  
    2007     2006     2006     2005     2004     2003     2002  
    (In thousands, except per share data)  
 
Consolidated Operating Data:
                                                       
Net sales
  $ 487,971     $ 428,334     $ 891,551     $ 680,417     $ 490,041     $ 433,986     $ 651,883  
Net income (loss) from continuing operations
    60,918       45,364       142,066       51,275       (30,510 )     (47,664 )     (114,413 )
Net income (loss) per common share from continuing operations Basic
  $ 0.56     $ 0.43     $ 1.32     $ 0.53     $ (0.36 )   $ (0.62 )   $ (1.40 )
Diluted
  $ 0.55     $ 0.42     $ 1.30     $ 0.52     $ (0.36 )   $ (0.62 )   $ (1.40 )
Weighted average common shares and common share equivalents
                                                       
Basic
    108,935       106,665       107,268       96,581       85,283       76,839       81,934  
Diluted
    111,340       109,294       109,490       98,264       85,283       76,839       81,934  
Selected Balance Sheet Data:
                                                       
Total assets
  $ 1,071,699     $ 590,185     $ 1,013,557     $ 529,403     $ 450,678     $ 451,859     $ 563,412  
Long-term debt and capital lease obligations, less current portion
  $ 276,000     $     $ 276,000     $     $ 75,000     $ 125,092     $ 158  


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Selected Historical Consolidated Financial Data of C-COR
 
The following selected financial data of C-COR for each of the fiscal years ended June 29, 2007, June 30, 2006, June 24, 2005, June 25, 2004 and June 27, 2003, have been derived from the audited consolidated financial statements of C-COR. This information is only a summary and should be read in conjunction with the audited consolidated financial statements of C-COR and the notes thereto and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in C-COR’s Annual Report on Form 10-K filed with the SEC on September 12, 2007, as amended on October 11, 2007, which is incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find Additional Information.”
 
                                         
    June 29,
    June 30,
    June 24,
    June 25,
    June 27,
 
    2007     2006     2005     2004     2003  
    (In thousands, except per share data)  
 
Consolidated Operating Data:
                                       
Net sales
  $ 277,329     $ 213,946     $ 199,237     $ 197,770     $ 179,105  
Income (loss) from continuing operations(1)
  $ 25,649     $ (30,072 )   $ (26,433 )   $ 36,803     $ (138,425 )
Income (loss) per share from continuing operations
                                       
Basic
  $ 0.53     $ (0.63 )   $ (0.58 )   $ 0.95     $ (3.81 )
Diluted
  $ 0.51     $ (0.63 )   $ (0.58 )   $ 0.92     $ (3.81 )
Weighted average common shares and common share equivalents Basic
    48,762       47,891       45,325       38,832       36,384  
Diluted
    52,565       47,891       45,325       40,223       36,384  
Selected Balance Sheet Data:
                                       
Total assets
  $ 376,720     $ 313,129     $ 337,755     $ 266,885     $ 143,017  
Long-term debt and capital lease obligations, less current portion
  $ 35,968     $ 35,966     $ 35,617     $ 772     $ 938  
                                         
 
 
(1) Income (loss) from continuing operations in fiscal years 2007, 2006, 2005, 2004 and 2003 includes a number of significant charges and recoveries, including charges associated with business combinations (see Notes 4, 5, 6, 8 and 22 to the consolidated financial statements of C-COR included in its Form 10-K for the fiscal year ended June 29, 2007, which is incorporated by reference into this joint proxy statement/prospectus).


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SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
 
The following selected unaudited pro forma combined financial data have been derived from and should be read together with the unaudited pro forma combined financial statements and related notes included elsewhere in this joint proxy statement/prospectus under the heading, “Unaudited Pro Forma Combined Financial Statements.” The unaudited pro forma statement of operations data for the six months ended June 30, 2007, and for the year ended December 31, 2006, give effect to the merger as if it occurred on January 1, 2006. The unaudited pro forma combined balance sheet data were computed as if the merger had been completed on June 30, 2007. This information is based on the historical consolidated balance sheets and related adjusted historical consolidated statements of income of ARRIS and C-COR and gives effect to the merger using the purchase method of accounting for business combinations.
 
The companies may have performed differently had they been combined at the date or for the periods presented. You should not rely on the selected unaudited pro forma combined financial data as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that ARRIS will experience after the merger.
 
                 
    Year Ended
    Six Months
 
    December 31,
    Ended June 30,
 
    2006     2007  
    (In millions, except
 
    per share data)  
 
Net sales
  $ 1,128.4     $ 635.4  
Cost of sales
    774.2       425.9  
                 
Gross margin
    354.2       209.5  
Gross margin %
    31.4 %     33.0 %
Operating expenses:
               
Selling, general, and administrative expenses
    149.6       84.4  
Research and development expenses
    100.1       53.4  
Restructuring and impairment charges
    9.3       0.8  
Gain on sale of product lines
    (1.7 )      
Amortization of intangibles
    59.6       29.6  
                 
Total operating expenses
    316.9       168.2  
                 
Operating income
    37.3       41.3  
Other expense (income):
               
Interest expense
    6.3       3.4  
Gain on investments
          (1.4 )
Loss (gain) on foreign currency
    (2.0 )     0.5  
Interest income
    (2.9 )     (6.2 )
Gain related to terminated acquisition, net of expenses
          (22.8 )
Gain on sale of bankruptcy trade claims
    (9.7 )      
Other expense (income), net
    (2.6 )     (0.2 )
                 
Income from continuing operations before income taxes
    48.2       68.0  
Income tax expense (benefit)
    (57.6 )     19.1  
                 
Net income from continuing operations
  $ 105.8     $ 48.9  
                 
Income from continuing operations per common share:
               
Basic
  $ 0.80     $ 0.36  
Diluted
  $ 0.78     $ 0.36  
Weighted average common shares:
               
Basic
    132.4       134.1  
Diluted
    135.5       137.7  
 


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    At
 
    June 30, 2007  
    (In millions)  
 
BALANCE SHEET DATA:
       
Cash, cash equivalents and short-term investments
  $ 257.5  
Marketable Securities
  $ 53.5  
Accounts Receivable, net
  $ 184.1  
Total current assets
  $ 695.5  
Goodwill
  $ 482.1  
Intangibles, net
  $ 309.2  
Total assets
  $ 1,607.4  
Current liabilities
  $ 155.0  
Long term debt, net of current portion
  $ 277.0  
Total stockholders’ equity
  $ 1,042.1  

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COMPARATIVE PER SHARE DATA
 
The following table summarizes unaudited per share information for ARRIS and C-COR on a historical basis, a pro forma combined basis for ARRIS, giving effect to the pro forma effects of the merger, and an equivalent pro forma combined basis for C-COR. It has been assumed for purposes of the pro forma financial information provided below that the merger was completed on January 1, 2006, for income statement purposes, and on June 30, 2007, for balance sheet purposes. The following information should be read in conjunction with the audited consolidated financial statements of ARRIS and C-COR as of and for the fiscal years ended December 31, 2006 and June 29, 2007, respectively, which are incorporated by reference into this joint proxy statement/prospectus, the unaudited consolidated financial statements of C-COR at and for the six-month period ended December 31, 2006, which are incorporated by reference into this joint proxy statement/prospectus, and the “Unaudited Pro Forma Combined Financial Statements” as of and for the year ended December 31, 2006 beginning on page P-1. The pro forma information below is presented for illustrative purposes only and is not necessarily indicative of the income per share and book value that would have occurred if the merger had been completed as of the beginning of the periods presented, nor is it necessarily indicative of the future operating results or financial position of the combined company.
 
The historical book value per share is computed by dividing total shareholders’ equity by the number of shares of common stock outstanding at the end of the period. The pro forma income per share from continuing operations of the combined company is computed by dividing the pro forma income from continuing operations available to holders of the combined company’s common stock by the pro forma weighted-average number of shares outstanding over the period. The pro forma combined book value per share is computed by dividing total pro forma shareholders’ equity by the pro forma number of shares of common stock outstanding at the end of the period. C-COR equivalent pro forma combined per share amounts are calculated by multiplying the pro forma combined per share amounts by the exchange ratio of 0.9642, the number of shares of ARRIS common stock that would be exchanged for each share of C-COR common stock in the merger. The C-COR equivalent per share amounts do not include the benefits of the cash component of the merger consideration and assume that no adjustments are made to the stock consideration as a result of the average closing price of ARRIS’ common stock being less than $12.83 or more than $15.69 or otherwise.
 
                 
    As of and for the
    As of and for the
 
    Twelve Months Ended
    Six Months Ended
 
    December 31, 2006     June 30, 2007  
 
ARRIS — Historical
               
Historical per common share:
               
Income per share from continuing operations (diluted)
  $ 1.30     $ 0.55  
Dividends declared per common share
           
Book value per share
  $ 5.52     $ 6.18  
C-COR — Historical
               
Historical per common share:
               
Income per share from continuing operations (diluted)
  $ 0.20     $ 0.31  
Dividends declared per common share
           
Book value per share
  $ 4.29     $ 4.83  
Unaudited Pro Forma Combined
               
Unaudited pro forma per common share:
               
Income per share from continuing operations (diluted)
  $ 0.78     $ 0.36  
Dividends declared per common share
           
Book value per share
    N.A. (1)   $ 7.75  
Unaudited Pro Forma C-COR Equivalents
               
Unaudited pro forma per equivalent C-COR share:
               
Income per share from continuing operations (diluted)
  $ 0.75     $ 0.34  
Dividends declared per common share
           
Book value per share
    N.A. (1)   $ 7.47  
 
 
(1) For the pro forma balance sheet presentation, it was assumed that the merger was completed on June 30, 2007, and, therefore, the pro forma book values for the twelve months ended December 31, 2006 are not presented.


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COMPARATIVE MARKET PRICE INFORMATION
 
ARRIS common stock is listed on the NASDAQ Global Select Market under the symbol “ARRS.” The C-COR common stock is listed on the NASDAQ Global Select Market under the symbol “CCBL.” The following table presents trading information for ARRIS and C-COR common stock on September 21, 2007, the last trading day before the public announcement of the execution of the merger agreement, and • , 2007, the latest practicable trading day before the date of this joint proxy statement/prospectus.
 
                                                 
    ARRIS Common Stock   C-COR Common Stock
    High   Low   Close   High   Low   Close
 
September 21, 2007
  $ 14.70     $ 14.25     $ 14.26     $ 9.97     $ 9.80     $ 9.88  
 • , 2007
  $  •      $  •      $  •      $  •      $  •      $  •   
 
For illustrative purposes, the following table provides C-COR equivalent per share information on each of the relevant dates. C-COR equivalent per share amounts assume that no adjustment is made to the stock consideration as a result of the average closing price of ARRIS’ common stock being less than $12.83 or more than $15.69 or otherwise, and are calculated:
 
  •  for a mixed election by adding (1) the product of approximately 49% (representing the stock portion of the merger consideration) of the ARRIS per share amounts by the exchange ratio under the merger agreement of 0.9642 and (2) $7.00 (representing the cash price per share multiplied by approximately 51% which is the approximate cash portion of the merger consideration); and
 
  •  for an all-stock election by multiplying the ARRIS per share amounts by the exchange ratio of 0.9642.
 
                                                 
    C-COR Common Stock
  C-COR Common Stock
    Mixed Equivalent   Stock Equivalent
    High   Low   Close   High   Low   Close
 
September 21, 2007
  $ 13.96     $ 13.74     $ 13.75     $ 14.17     $ 13.74     $ 13.75  
 • , 2007
  $  •      $  •      $  •      $  •      $  •      $  •   
 
The table below sets forth, for the calendar quarters indicated, the high and low sales prices per share reported on the NASDAQ Global Select Market for ARRIS and C-COR common stock. No dividends were declared on either the ARRIS common stock or the C-COR common stock during the periods presented below.
 
                                 
    ARRIS Common Stock   C-COR Common Stock
Calendar Year
  High   Low   High   Low
 
2005
                               
First Quarter
  $ 7.27     $ 5.45     $ 9.75     $ 5.88  
Second Quarter
    9.18       6.28       7.50       5.57  
Third Quarter
    12.17       8.50       8.82       6.27  
Fourth Quarter
    12.79       7.12       7.00       4.77  
2006
                               
First Quarter
  $ 14.30     $ 9.50     $ 8.97     $ 4.87  
Second Quarter
    14.22       10.66       8.88       6.13  
Third Quarter
    13.12       9.25       8.86       6.30  
Fourth Quarter
    13.80       10.84       11.46       8.55  
2007
                               
First Quarter
  $ 15.45     $ 12.32     $ 15.00     $ 11.19  
Second Quarter
    17.74       13.93       15.06       11.25  
Third Quarter
    17.89       11.21       16.00       9.40  
Fourth Quarter (through November  • , 2007)
     •         •         •         •   
 
We urge you to obtain current market quotations before you make your decision regarding the merger. Because the exchange ratio with respect to the stock consideration will be adjusted only in the event the average closing price of the ARRIS common stock is less than $12.83 or more than $15.69, and will not be adjusted further if the average closing price of the ARRIS common stock is less than $11.41 or more than $17.11, the market value of the shares of ARRIS common stock that holders of C-COR common stock will receive in the merger may vary significantly from the market value of such shares on the date of the merger agreement, this joint proxy statement/prospectus, or the special meetings of the shareholders of ARRIS and C-COR.


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FORWARD-LOOKING STATEMENTS
 
This joint proxy statement/prospectus, including information incorporated by reference in this joint proxy statement/prospectus (see “Where You Can Find Additional Information”), contains certain statements that are not historical facts and are forward-looking statements because they are based on our managements’ beliefs, certain assumptions and current expectations with respect to the financial condition, results of operations, plans, objectives, future performance and businesses of each of ARRIS and C-COR, as well as certain statements relating to the merger. These forward-looking statements include, without limitation:
 
  •  statements relating to the future and pro forma financial and operating results of ARRIS and statements relating to ARRIS after the merger;
 
  •  statements regarding the significant benefits from the merger, including strategic considerations and our ability to generate expected synergies and efficiencies, improve product quality and breadth, develop new products and better serve our customers;
 
  •  statements regarding our plans, objectives, expectations and intentions regarding ARRIS’ products and services and the future development of ARRIS’ business after the merger;
 
  •  statements regarding the expected timetable for completing the merger;
 
  •  statements relating to our ability to secure necessary regulatory and shareholder approvals for the merger; and
 
  •  other statements identified by the use of forward-looking terminology such as the words “expects,” “projects,” “intends,” “believes,” “anticipates” and other terms with similar meanings indicating possible future events or actions or potential impact on the businesses or shareholders of ARRIS and the shareholders of C-COR.
 
The management of each of ARRIS and C-COR believe that these forward-looking statements are reasonable; however, you should not place undue reliance on these statements, as they are based on our managements’ current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements:
 
  •  the risk factors described under “Risk Factors;”
 
  •  the cost savings and other expected synergies from the merger may not be fully realized or may take longer to realize than expected;
 
  •  the businesses may not be integrated successfully or the anticipated improved financial performance, product quality and development may not be achieved, the costs or difficulties related to the integration of the businesses of ARRIS and C-COR may be greater than expected or disruptions from the merger may make it more difficult to maintain relationships with customers, employees and suppliers;
 
  •  the failure of the ARRIS or C-COR shareholders to approve the merger;
 
  •  the failure to satisfy the other conditions required for closing the merger;
 
  •  the timing of the introduction and the performance of new products and manufacturing or product development problems;
 
  •  an inability to absorb or adjust costs in response to lower sales volumes than are anticipated; and
 
  •  decisions by our larger customers to cancel contracts or orders as they are entitled to do, or not enter into new contracts or orders with ARRIS because of dissatisfaction, technological or competitive changes, the merger, or other reasons.
 
Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the periodic reports filed by ARRIS and C-COR with the SEC. Except for their ongoing obligations to disclose material information under U.S. federal securities laws and regulations, both ARRIS and C-COR disclaim any obligation to release publicly any revisions to any forward-looking statements, to report events or circumstances after the date of this joint proxy statement/prospectus or to report the occurrence of unanticipated events.


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RISK FACTORS
 
We urge you to consider carefully all of the information we have included and incorporated by reference in this joint proxy statement/prospectus before you vote. See “Where You Can Find Additional Information” beginning on page 94. You should also read and consider the risks associated with each of the businesses of ARRIS and C-COR because these risks will affect the resulting company. These risks can be found, with respect to ARRIS, in the ARRIS Quarterly Report on Form 10-Q filed with the SEC on August 3, 2007, and, with respect to C-COR, in the C-COR Annual Report on Form 10-K filed with the SEC on September 12, 2007, and may be updated by ARRIS or C-COR in subsequent quarterly reports on Form 10-Q and current reports on Form 8-K, which are filed with the SEC and incorporated by reference into this joint proxy statement/prospectus. In addition, we urge you to consider carefully the following material risks relating to the merger and the business of the resulting company.
 
ARRIS may fail to realize the anticipated revenue and earnings growth and other benefits expected from the merger, which could adversely affect the value of shares of ARRIS common stock after the merger.
 
The merger involves the integration of two companies that previously operated independently. The integration of two previously independent companies is a challenging, time-consuming and costly process.
 
The value of shares of ARRIS common stock following completion of the merger will be affected by the ability of ARRIS to achieve the benefits expected to result from the merger. Achieving the benefits of the merger will depend in part upon meeting the challenges inherent in the successful combination of two business enterprises of the size and scope of ARRIS and C-COR, and the possible resulting diversion of management attention for an extended period of time. It is possible that the process of combining the companies could result in the loss of key employees, the disruption of each company’s ongoing businesses, or inconsistencies in standards, controls, procedures, and policies that adversely affect the ability of the companies to maintain relationships with customers, suppliers, and employees, or to achieve the anticipated benefits of the merger. In addition, the successful combination of the companies will require the dedication of significant management resources, which could temporarily divert attention from the day-to-day business of the combined company.
 
There can be no assurance that these challenges will be met and that the diversion of management attention will not negatively impact the operations of the combined company following the merger. Delays encountered in the transition process could have a material adverse effect on the revenues, expenses, operating results, and financial condition of the combined company following the merger. Although ARRIS and C-COR expect significant benefits, such as revenue and earnings growth, to result from the merger, there can be no assurance that the combined company will actually realize any of these anticipated benefits. See “The Merger — Factors Considered by the ARRIS Board of Directors” beginning on page 33 and “— Factors Considered by the C-COR Board of Directors” beginning on page 41.
 
Because the market price of ARRIS common stock will fluctuate, C-COR shareholders cannot be sure of the market value of the ARRIS common stock that they will receive in the merger.
 
Upon completion of the merger, approximately 49% of the outstanding shares of C-COR common stock will be converted into shares of ARRIS common stock. The ratio at which those shares will be converted will only be adjusted if the average closing price of ARRIS’ common stock is less than $12.83 or more than $15.69. However, even in such event, the adjustments to the exchange ratio are limited and, in the case of a decline in the price of ARRIS’ stock, will not provide C-COR shareholders receiving ARRIS common stock the same value for such shares as was contemplated when the merger agreement was signed. Accordingly, the market value of the ARRIS common stock that C-COR shareholders will be entitled to receive upon completion of the merger will depend on the market value of ARRIS common stock at the time of the completion of the merger and could vary significantly from the market value on the date of this joint proxy statement/prospectus or the dates of the ARRIS and C-COR special meetings.


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The market value of the ARRIS common stock that C-COR shareholders will be entitled to receive in the merger also will continue to fluctuate after the completion of the merger. For example, from January 1, 2007 through the date of this joint proxy statement/prospectus, the sale price of ARRIS common stock has ranged from a low of $ •  to a high of $ • , all as reported on the NASDAQ Global Select Market. See “Comparative Market Price Information” beginning on page 13.
 
Such variations could be the result of changes in the business, operations, or prospects of ARRIS or C-COR before the merger, or the combined company following the merger, market assessments of the likelihood that the merger will be completed or the timing of the completion of the merger, regulatory considerations, general market and economic conditions, and other factors both within and beyond the control of ARRIS and C-COR. Because the date that the merger is completed could be later than the date of the ARRIS and C-COR special meetings, at the time of the special meetings C-COR shareholders may not know with certainty the value of the shares of ARRIS common stock that they will receive upon completion of the merger.
 
ARRIS and C-COR may elect to proceed with the merger even if the average closing price of the ARRIS common stock is less than $11.41.
 
Under the merger agreement, either ARRIS or C-COR may terminate the merger agreement in the event that the average closing price of ARRIS’ common stock is less than $11.41. However, termination of the merger agreement in such circumstance is at the discretion of the boards of directors of ARRIS and C-COR and no assurance can be provided that either ARRIS or C-COR will terminate the merger agreement in such circumstance. If the average closing price of ARRIS’ common stock is less than $11.41, the boards of directors of ARRIS and C-COR may still determine that the merger remains in the best interests of their respective companies and shareholders and, therefore, elect to proceed with the merger. In that event, under the terms of the merger agreement, no further adjustment will be made to the exchange ratio for the stock consideration and, as a result, the value of the ARRIS shares a C-COR shareholder receives in the merger could be significantly lower than the value of those shares at the time the merger agreement was signed or at the time of either the ARRIS meeting or the C-COR meeting.
 
The pendency of the merger could materially adversely affect the future business and operations of ARRIS and C-COR.
 
In connection with the pending merger, some customers of ARRIS and C-COR may delay or defer decisions, which could negatively impact revenues, earnings, and cash flows of ARRIS and C-COR, as well as the market prices of ARRIS common stock and C-COR common stock, regardless of whether the merger is completed. Similarly, current and prospective employees of ARRIS and C-COR may experience uncertainty about their future roles with the combined company following the merger, which may materially adversely affect the ability of ARRIS and C-COR to attract and retain key management, sales, marketing, technical, and other personnel.
 
Directors and executive officers of C-COR may have potential conflicts of interest in recommending that C-COR shareholders vote in favor of the merger agreement.
 
Some of the directors and executive officers of C-COR have interests in the merger that are different from, and are in addition to, the interests of C-COR shareholders generally. These interests relate to the treatment of options held by directors and executive officers of C-COR in the merger, the payment of severance benefits to certain executive officers of C-COR under certain circumstances following completion of the merger, the appointment of a nominee of C-COR as a director of ARRIS after the merger, ARRIS’ commitment to assume the current employment agreements of C-COR’s executive officers, and ARRIS’ agreement to indemnify C-COR directors and officers from certain claims and to continue certain insurance coverage. You should consider these interests in connection with your vote, including whether these interests may have influenced these directors and executive officers to recommend or support the merger. See “The Merger — Interests of C-COR’s Directors and Management in the Merger” beginning on page 52.


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C-COR shareholders may receive a combination of consideration different from what they elect, and while such elections are being calculated, may not be able to transfer the shares of ARRIS common stock, if any, to which they may be entitled.
 
While each C-COR shareholder may elect to receive all cash, all ARRIS common stock, or a combination of cash and ARRIS common stock in the merger, the pools of cash and ARRIS common stock available for all C-COR shareholders will be fixed amounts. Accordingly, depending on the elections made by other C-COR shareholders, even if you elect to receive all cash in the merger, you may receive a portion of your consideration in ARRIS common stock and even if you elect to receive all ARRIS common stock in the merger, you may receive a portion of your consideration in cash. If you elect to receive a combination of cash and ARRIS common stock in the merger, you are likely to receive cash and ARRIS common stock in a proportion different from what you elected. The tax consequences to you from the transaction may be less favorable than you anticipated in the event you receive a greater portion of your consideration in cash than you elected. See “Material U.S. Federal Income Tax Consequences of the Merger” for more information. If you do not submit a properly completed and signed election form to the exchange agent by the election deadline, you will have no control over the type of merger consideration you may receive.
 
Within five business days of the closing of the merger, ARRIS and the exchange agent will calculate the number and amount of valid cash and stock elections made by C-COR shareholders. The validity of any election will be determined solely by ARRIS, in the exercise of its reasonable discretion. Until ARRIS and the exchange agent complete this calculation, a former holder of C-COR common stock may not be able to sell or otherwise dispose of the shares of ARRIS common stock, if any, to which such holder is entitled.
 
The merger agreement restricts both C-COR’s and ARRIS’ ability to pursue alternatives to the merger.
 
The merger agreement contains “no shop” provisions that, subject to limited fiduciary exceptions, restrict C-COR’s ability to directly or indirectly initiate, solicit, encourage, facilitate, discuss, or commit to competing third-party proposals to acquire all or a significant portion of C-COR. Further, there are only limited exceptions to C-COR’s agreement that the C-COR board of directors will not withdraw, modify, or qualify in any manner adverse to ARRIS its approval of the merger agreement or its recommendation to holders of C-COR common stock that they vote in favor of the adoption of the merger agreement, or recommend any other acquisition proposal. Although the C-COR board of directors is permitted to take these actions if it determines in good faith, after consultation with outside legal counsel, that failure to do so would be inconsistent with its fiduciary duties under applicable law in connection with a superior proposal, doing so in specified situations could entitle ARRIS to terminate the merger agreement and to be paid by C-COR a termination fee of $22.5 million in cash.
 
Similarly, in the event a third party makes a proposal to acquire all or a significant portion of ARRIS, and the merger agreement is terminated and ARRIS completes the third-party transaction within 12 months of the termination of the merger agreement, ARRIS could be required to pay C-COR a termination fee of $22.5 million in cash.
 
ARRIS and C-COR agreed to these restrictions to induce the other party to enter into the merger agreement. However, these provisions could discourage a potential third-party acquiror that might have an interest in acquiring all or a significant part of either C-COR or ARRIS from considering or proposing that acquisition, or might result in a potential acquiror proposing to pay a lower per share price to acquire either C-COR or ARRIS than it might otherwise have proposed to pay because of the added cost of the termination fee that may become payable to either ARRIS or C-COR in certain circumstances.
 
The market price of the shares of ARRIS common stock and the results of operations of ARRIS after the merger may be affected by factors different from those affecting C-COR or ARRIS currently.
 
The businesses of ARRIS and C-COR differ in some respects and, accordingly, the results of operations of the combined company and the market price of the combined company’s shares of common stock may be affected by factors different from those currently affecting the independent results of operations and market prices of each of ARRIS or C-COR. For example, as a result of the purchase accounting requirements under


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GAAP, ARRIS will not be able to recognize a significant amount of the deferred revenues currently recognized by C-COR, which will have a significant impact on the combined company’s financial results over approximately the first year of combined operations. For a discussion of the businesses of ARRIS and C-COR see the documents incorporated by reference in this joint proxy statement/prospectus and referred to under “Where You Can Find Additional Information” beginning on page 94.
 
Purchase accounting adjustments required under GAAP will have a significant impact on ARRIS’ GAAP earnings after the merger, which could impact the trading price of ARRIS’ common stock.
 
Under U.S. generally accepted accounting principles, or GAAP, ARRIS is required to account for the merger using a set of accounting rules known as “purchase accounting,” whereby assets and liabilities of an acquired entity are recorded at fair value as of the date of acquisition. ARRIS expects that certain adjustments made as a result of the purchase accounting requirements will have a significantly adverse effect on ARRIS’ GAAP earnings for at least the first year after the merger. These adjustments will include, but may not be limited to, fair market value adjustments to C-COR’s inventory, intangible assets, in-process research and development, and deferred revenue. For instance, deferred revenue currently reflected as a liability in C-COR’s financial statements and that, absent the merger, would be recognized over time as revenue will be substantially eliminated, thereby resulting in reduced revenue until the level of deferred revenue (or revenue that is instead recognized on a current basis) again builds to its current level. The initial purchase accounting adjustments, and their subsequent impact on financial results, do not necessarily reflect future expected cash flows of the combined company following the merger; however, the negative impact of such adjustments on ARRIS’ GAAP earnings after the merger could have a material adverse effect on the market price of ARRIS’ common stock.
 
ARRIS’ results of operations after the merger could be adversely affected as a result of goodwill impairment.
 
Under GAAP, when ARRIS acquires a business, purchase accounting principles require that it record an asset called “goodwill” in an amount equal to the excess amount it pays for the business, including liabilities assumed, over the fair value of the tangible and intangible assets of the business. ARRIS expects that the merger will result in the recognition of approximately $331.5 million in additional goodwill as of June 30, 2007. Statement of Financial Accounting Standards (SFAS) No. 142 “Goodwill and Other Intangible Assets” requires that goodwill and other intangible assets that have indefinite useful lives not be amortized, but instead be tested at least annually for impairment, and that intangible assets that have finite useful lives be amortized over their useful lives. In testing for impairment, SFAS No. 142 provides specific guidance for testing goodwill and other non-amortized intangible assets for impairment. SFAS No. 142 requires ARRIS’ management to make certain estimates and assumptions, including, among other things, an assessment of market conditions and projections of cash flows, investment rates and cost of capital and growth rates. These estimates and assumptions can significantly impact the reported value of goodwill and other intangible assets. Absent any impairment indicators, ARRIS performs its impairment tests annually during the fourth quarter. Any future impairments would negatively impact ARRIS’ results of operations for the period in which the impairment is recognized.
 
ARRIS’ and C-COR’s stockholders will be diluted by the merger.
 
The merger will dilute the ownership position of the current shareholders of ARRIS. ARRIS will issue approximately 25 million shares of ARRIS common stock (based on the number of outstanding shares of C-COR common stock on the date of this joint proxy statement/prospectus and assuming the exercise of all outstanding options to purchase shares of C-COR common stock) to C-COR shareholders in the merger. As a result, ARRIS’ shareholders and C-COR’s shareholders are expected to hold approximately 81% and 19%, respectively, of the combined company’s common stock outstanding on a fully diluted basis (including shares issuable pursuant to outstanding options and convertible securities) immediately following the completion of the merger.


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Any delay in completing the merger may reduce or eliminate the benefits expected.
 
In addition to the required shareholder approvals and regulatory clearances and approvals, the merger is subject to a number of other conditions beyond the control of ARRIS and C-COR that may prevent, delay, or otherwise materially adversely affect its completion. We cannot predict whether and when these other conditions will be satisfied. Further, the requirements for obtaining the required clearances and approvals could delay the completion of the merger for a period of time or prevent it from occurring. Any delay in completing the merger could cause ARRIS not to realize some of the benefits that ARRIS expects to achieve following the merger if it successfully completes the merger within its expected timeframe and integrates C-COR’s business.
 
The rights of C-COR shareholders will change when they become shareholders of ARRIS upon completion of the merger.
 
Upon completion of the merger, C-COR shareholders who receive ARRIS shares in the merger will become ARRIS shareholders. There are numerous differences between the rights of a shareholder of C-COR, a Pennsylvania corporation, and the rights of a shareholder of ARRIS, a Delaware corporation. For a detailed discussion of these differences, see “Certain Differences in Rights of Shareholders” beginning on page 78.
 
The costs and expenses incurred in connection with the integration of ARRIS’ and C-COR’s businesses may affect the combined company’s operating results.
 
The combined company will incur certain costs and expenses in connection with the integration of ARRIS’ and C-COR’s businesses. These costs and expenses will have a negative effect on the combined company’s results of operations.


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SPECIAL MEETING OF ARRIS SHAREHOLDERS
 
The accompanying ARRIS proxy card is solicited on behalf of ARRIS’ management for use at the ARRIS meeting.
 
Date, Time and Place of the ARRIS Meeting
 
The ARRIS meeting is scheduled to be held as follows:
Date: •, 2007
Time: • , local time
Place: • , • 
 
Purpose of the ARRIS Meeting
 
At the ARRIS meeting, ARRIS shareholders will be asked to:
 
1. consider and vote upon a proposal to approve the issuance of ARRIS common stock to be issued in the merger as further described under “The Merger” and “The Merger Agreement;”
 
2. consider and vote on any adjournment or postponement of the ARRIS meeting, if necessary, to solicit additional proxies in favor of the proposal to approve the issuance of shares of ARRIS common stock pursuant to the merger agreement; and
 
3. transact such other business that may properly come before the ARRIS meeting or any adjournment or postponement of the ARRIS meeting.
 
The agreement and plan of merger is attached to this joint proxy statement/prospectus as Annex A. ARRIS shareholders are encouraged to read the merger agreement in its entirety and the other information contained in this joint proxy statement/prospectus, including the other annexes, carefully before deciding how to vote.
 
Recommendation of the ARRIS Board of Directors
 
THE ARRIS BOARD OF DIRECTORS RECOMMENDS THAT ARRIS SHAREHOLDERS VOTE FOR THE PROPOSAL TO APPROVE THE ISSUANCE OF ARRIS COMMON STOCK TO BE ISSUED IN THE MERGER AND FOR ANY PROPOSAL TO ADJOURN OR POSTPONE THE ARRIS MEETING TO SOLICIT ADDITIONAL PROXIES. For further details regarding the reasons for this recommendation, see “The Merger — Factors Considered by the ARRIS Board of Directors.”
 
Record Date, Voting Securities and Entitlement to Vote
 
The ARRIS board of directors has fixed the close of business on • , 2007 as the record date for determining ARRIS shareholders entitled to notice of, and to vote at, the ARRIS meeting. As of the record date, there were • shares of ARRIS common stock outstanding and entitled to vote at the ARRIS meeting. Each share of ARRIS common stock carries the right to one vote on each proposal.
 
ARRIS will prepare, at least ten days prior to the ARRIS meeting, a list of the holders of ARRIS common stock entitled to vote at the ARRIS meeting. The list of ARRIS shareholders will be available for inspection for ten days prior to the ARRIS meeting at the offices of ARRIS during usual business hours and will also be available at the ARRIS meeting.
 
On the record date, directors and executive officers of ARRIS and their affiliates beneficially owned and had the right to vote • shares of common stock, representing approximately • of the shares outstanding on the record date. The directors and officers of ARRIS have informed ARRIS that they intend to vote all of their shares of ARRIS common stock FOR the approval of the issuance of ARRIS common stock to be issued in the merger.


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Quorum and Votes Required
 
Attendance in person or by proxy of holders of a majority of the issued and outstanding ARRIS common stock will constitute a quorum for the transaction of business at the ARRIS meeting. If a quorum is present, the affirmative vote of a majority of the votes cast is necessary to approve the issuance of ARRIS common stock in the merger and any proposal to adjourn the meeting to solicit additional proxies.
 
If a quorum is not present, the ARRIS meeting may be adjourned to allow additional time for obtaining additional proxies or votes. At any subsequent reconvening of the ARRIS meeting, all proxies will be voted in the same manner as the proxies would have been voted at the original convening of the ARRIS meeting, except for any proxies that have been effectively revoked or withdrawn prior to the subsequent meeting.
 
Withheld Votes and Abstentions
 
ARRIS common stock represented at the ARRIS meeting but not voting, including ARRIS common stock for which proxies have been received but for which holders of shares have abstained, will be treated as present at the ARRIS meeting for purposes of determining the presence or absence of a quorum for the transaction of all business.
 
Given that only a majority of votes cast is required to approve both the proposal to approve the issuance of ARRIS common stock in the merger and any proposal to adjourn or postpone the ARRIS meeting to solicit additional proxies, withheld votes and abstentions will have no effect on the proposals.
 
Proxies and Broker Voting Instruction Forms
 
Your vote is very important. Registered holders of ARRIS common stock can vote in person by completing the ballot at the ARRIS meeting, or you can vote before the ARRIS meeting by proxy. Even if you plan to attend the meeting, we encourage you to vote your shares as soon as possible by proxy. Registered holders of ARRIS common stock can vote by proxy by mail, using the Internet, or by telephone, as discussed below.
 
Vote by Mail:  Registered holders of ARRIS common stock may vote by mail by signing the enclosed proxy card and promptly returning it in the postage-paid envelope provided. For a proxy to be valid, you (or your attorney-in-fact, who must be authorized in writing) must sign it and must either return it in the envelope provided or deliver it to the offices of • not later than 5:00 p.m. (local time) on the business day prior to the ARRIS meeting or any adjournment or postponement thereof. An undated but executed proxy card will be deemed to be dated the date of this joint proxy statement/prospectus.
 
Vote by Internet or Telephone:  Registered holders of ARRIS common stock may also vote by proxy via the Internet at the website indicated on your proxy card or by telephone by calling the toll-free number shown on your proxy card and following the instructions. You must do so not later than 5:00 p.m. (local time) on the business day prior to the ARRIS meeting or any adjournment or postponement thereof. You will also need your control number located on the front of your proxy card to identify yourself to the system. If you vote via the Internet or by telephone, please do NOT return a signed proxy card. A signed and completed proxy card or properly submitted telephone or Internet proxies received by ARRIS prior to or at the ARRIS meeting will be voted as instructed.
 
A proxy card for ARRIS shareholders is enclosed with this joint proxy statement/prospectus and is blue. Signing the enclosed proxy card will not affect a shareholder’s right to attend the ARRIS meeting. ARRIS common stock represented by proxies on the accompanying blue form will be voted in accordance with the holder’s instructions. If you need an additional proxy card, please contact our proxy solicitor, •  toll free at • .
 
If you hold your ARRIS common stock in “street” name, you must contact your broker or other nominee to obtain a broker voting instruction form (if you did not receive one together with this joint proxy statement/prospectus) and for other instructions as to how to vote your shares. If you hold ARRIS common stock in both registered and “street” name, you will receive both a proxy card and a broker voting instruction form. To


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ensure that all your shares are represented at the ARRIS meeting, please submit a vote by telephone, via the Internet or by mail for each proxy card or broker voting instruction form you receive.
 
If the ARRIS meeting is adjourned to a different place, date or time, ARRIS need not give notice of the new place, date or time if the new place, date or time is announced at the ARRIS meeting before adjournment, unless the adjournment is for more than 30 days after the date fixed for the ARRIS meeting. If a new record date is or must be set for the adjourned meeting, notice of the adjourned meeting shall be given to persons who are shareholders as of the new record date.
 
Voting of Proxies and Broker Voting Instruction Forms
 
The individuals named in the enclosed proxy card will vote the ARRIS common stock represented by the proxy in accordance with the instructions of the ARRIS shareholder who appointed them. If you submit a validly executed proxy card without providing instructions, the ARRIS common stock represented by the proxy will be voted FOR the proposal to approve the issuance of the shares of ARRIS common stock in the merger and FOR any proposal to adjourn or postpone the ARRIS meeting to solicit additional proxies. The enclosed proxy card, when properly completed and signed, confers discretionary authority on the appointed individuals to vote as they see fit on any amendment or variation to any of the matters identified in the notice of ARRIS meeting and on any other matter that may properly be brought before the ARRIS meeting.
 
Your broker or other nominee will not vote your shares unless it receives specific instructions from you. If you sign and send in your broker instruction form but do not include instructions on how to vote your properly signed form, your shares will not be voted with respect to the proposals that may properly come before the ARRIS meeting, however, you will be deemed present for quorum purposes.
 
At the date of this joint proxy statement/prospectus, neither the ARRIS board of directors nor management of ARRIS is aware of any variation, amendment or other matter to be presented for a vote at the ARRIS meeting.
 
Revocation of Proxies and Broker Voting Instruction Forms
 
If you are a registered holder giving a proxy pursuant to this solicitation, you have the power to revoke and change it at any time before the ARRIS meeting. It may be revoked by filing a written notice with the Secretary of ARRIS or the offices of ARRIS’ proxy solicitor at the address below or by submitting in writing a proxy bearing a later date, in either case by 5:00 p.m. (local time) on the business day prior to the ARRIS meeting or any adjournment or postponement thereof, or by attending the ARRIS meeting and voting in person. Attendance at the ARRIS meeting will not, by itself, revoke a proxy.
 
If you are a registered holder and want to change your proxy directions by mail or by fax, you should send a notice of revocation or your completed new proxy card, as the case may be, to ARRIS at either of the following addresses:
 
         
ARRIS Group, Inc.
    [ARRIS Proxy Solicitor]  
3871 Lakefield Drive
       
Suwanee, Georgia 30024
       
Attention: Secretary
       
Fax: (678) 473-8470
       
 
You may also revoke a proxy via the Internet at the website indicated on your proxy card or by telephone by calling the toll-free number shown on your proxy card and following the instructions.
 
If a broker or other nominee holds your shares in “street name” and you have instructed a nominee to vote your shares and wish to change your vote, you must follow directions received from your nominee to change those instructions.


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Solicitation of Proxies
 
ARRIS will bear the expenses in connection with the solicitation of proxies from ARRIS shareholders, except that C-COR and ARRIS have agreed to share equally out-of-pocket expenses related to the printing and filing of this joint proxy statement/prospectus. ARRIS has retained • a proxy solicitation firm, for assistance in connection with the solicitation of proxies and anticipates paying a fee not exceeding $ •  plus additional charges related to telephone calls and other services. No solicitation fees will be payable if the merger is not completed. Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of ARRIS common stock held of record by these persons and ARRIS may reimburse them for their reasonable transaction and clerical expenses.
 
Solicitation of proxies may also be made by mail, in person, or by telephone, email, Internet, facsimile, telegram or other means of communication, by ARRIS’ directors, officers and employees, who will receive no additional compensation for these services, but will be reimbursed for any transaction expenses incurred by them in connection with these services.


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SPECIAL MEETING OF C-COR SHAREHOLDERS
 
The accompanying C-COR proxy card is solicited on behalf of C-COR’s management for use at the C-COR meeting.
 
Date, Time and Place of the C-COR Meeting
 
The C-COR meeting is scheduled to be held as follows:
 
Date: • , 2007
Time: • , local time
Place: 1735 Market Street, 42nd floor, Philadelphia, Pennsylvania 19103
 
Purpose of the C-COR Meeting
 
At the C-COR meeting, C-COR shareholders will be asked to:
 
1. consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of September 23, 2007, by and among C-COR, ARRIS and Merger Sub, as that agreement may be amended, as further described under “The Merger” and “The Merger Agreement;”
 
2. consider and vote on any adjournment or postponement of the special meeting, if necessary, to solicit additional proxies in favor of the proposal to adopt the merger agreement; and
 
3. transact such other business that may properly come before the C-COR meeting or any properly reconvened meeting following an adjournment or postponement of the C-COR meeting.
 
The agreement and plan of merger is attached to this joint proxy statement/prospectus as Annex A. C-COR shareholders are encouraged to read the merger agreement in its entirety and the other information contained in this joint proxy statement/prospectus, including the other annexes, carefully before deciding how to vote.
 
Recommendation of the C-COR Board of Directors
 
THE C-COR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT C-COR SHAREHOLDERS VOTE FOR THE PROPOSAL TO ADOPT THE AGREEMENT AND PLAN OF MERGER AND FOR ANY PROPOSAL TO ADJOURN OR POSTPONE THE C-COR MEETING TO SOLICIT ADDITIONAL PROXIES. For further details regarding the reasons for this recommendation, see “The Merger — Factors Considered by the C-COR Board of Directors.”
 
Record Date, Voting Securities and Entitlement to Vote
 
The C-COR board of directors has fixed the close of business on • , 2007 as the record date for determining C-COR shareholders entitled to notice of, and to vote at, the C-COR meeting. As of the record date, there were • shares of C-COR common stock outstanding and entitled to vote at the C-COR meeting. Each share of C-COR common stock carries the right to one vote on each proposal.
 
C-COR will prepare, at least 5 days prior to the C-COR meeting, a list of the holders of C-COR common stock entitled to vote at the C-COR meeting. The list of C-COR shareholders will be available for inspection at C-COR’s registered office during usual business hours.
 
On the record date, directors and executive officers of C-COR and their affiliates beneficially owned and had the right to vote • C-COR common stock, representing approximately • % of the C-COR shares outstanding on the record date. The directors and officers of C-COR have informed C-COR that they intend to vote all of their shares of C-COR common stock FOR the adoption of the merger agreement.


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Quorum and Votes Required
 
Attendance in person or by proxy of C-COR shareholders entitled to cast at least a majority of the votes that all holders of issued and outstanding C-COR common stock are entitled to cast on the merger will constitute a quorum for the transaction of business at the C-COR meeting. If a quorum is present, the affirmative vote of the majority of the votes cast by all shareholders entitled to vote at the C-COR meeting is necessary to adopt the merger agreement.
 
If a quorum is not present, the C-COR meeting may be adjourned to allow additional time for obtaining additional proxies or votes. At any subsequent reconvening of the C-COR meeting, all proxies will be voted in the same manner as the proxies would have been voted at the original convening of the C-COR meeting, except for any proxies that have been effectively revoked or withdrawn prior to the subsequent meeting.
 
Withheld Votes and Abstentions
 
C-COR common stock represented at the C-COR meeting but not voting, including C-COR common stock for which proxies have been received but for which holders of shares have abstained, will be treated as present at the C-COR meeting for purposes of determining the presence or absence of a quorum for the transaction of all business.
 
Only shares affirmatively voted for adoption of the merger agreement, and any proposal to adjourn or postpone the C-COR meeting to solicit additional proxies including properly executed proxies, will be counted as favorable votes for such proposals. An abstention or failure to vote, because they are not treated as votes cast, will have no effect on the vote for either the proposal to adopt the merger agreement or any proposal to adjourn or postpone the C-COR meeting.
 
Proxies and Broker Voting Instruction Forms
 
Your vote is very important. Registered holders of C-COR common stock can vote before the C-COR meeting by proxy, or you can vote in person by completing the ballot at the C-COR meeting. Even if you plan to attend the meeting, we encourage you to vote your shares as soon as possible by proxy. Registered holders of C-COR common stock can vote by proxy by mail, using the internet, or by telephone, as discussed below.
 
Vote by Mail:  Registered holders of C-COR common stock may vote by mail by signing the enclosed proxy card and promptly returning it in the postage-paid envelope provided. For a proxy to be valid, you (or your attorney-in-fact, who must be authorized in writing) must sign it and must either return it in the envelope provided or deposit it at the offices of American Stock Transfer and Trust Company not later than 5:00 p.m. (local time) on the business day prior to the C-COR meeting or any adjournment or postponement thereof. An undated but executed proxy card will be deemed to be dated the date of this joint proxy statement/prospectus.
 
Vote by Internet or Telephone:  Registered holders of C-COR common stock may also cast their vote by proxy via the Internet at the website indicated on your proxy card or by telephone by calling the toll-free number shown on your proxy card and following the instructions. You must do so not later than 5:00 p.m. (local time) on the business day prior to the C-COR meeting or any adjournment or postponement thereof. You will also need your control number located on the front of your proxy card to identify yourself to the system. If you vote via the Internet or by telephone, please do NOT return a signed proxy card. A signed and completed proxy card or properly submitted telephone or Internet proxies received by C-COR prior to or at the C-COR meeting will be voted as instructed.
 
A proxy card for C-COR shareholders is attached to this joint proxy statement/prospectus and is pink. Signing the enclosed proxy card will not affect a shareholder’s right to attend the C-COR meeting. C-COR common stock represented by proxies on the accompanying pink form will be voted in accordance with the holder’s instructions. If you need an additional proxy card, please contact our proxy solicitor, • or toll free at • . Banks and brokers may call collect at • .
 
If you hold your C-COR common stock in “street” name, you must contact your broker or other nominee to obtain a broker voting instruction form (if you did not receive one together with this joint proxy statement/


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prospectus) and for other instructions as to how to vote your shares. If you hold C-COR common stock in both registered and “street” name, you will receive both a proxy card and a broker voting instruction form. To ensure that all your shares are represented at the C-COR meeting, please submit a vote by telephone, via the Internet or by mail for each proxy card or broker voting instruction form you receive.
 
If the C-COR meeting is adjourned to a different place, date or time, C-COR need not give notice of the new place, date or time if the new place, date or time is announced at the C-COR meeting before adjournment. If a new record date is or must be set for the adjourned meeting, notice of the adjourned meeting shall be given to persons who are shareholders as of the new record date.
 
Voting of Proxies and Broker Voting Instruction Forms
 
The individuals named in the enclosed proxy card will vote the C-COR common stock represented by the proxy in accordance with the instructions of the C-COR shareholder who appointed them. If you submit a validly executed proxy card without providing instructions, the C-COR common stock represented by the proxy will be voted FOR the proposal to adopt the merger agreement and FOR any proposal to adjourn or postpone the C-COR meeting to solicit additional proxies. The enclosed proxy card, when properly completed and signed, confers discretionary authority on the appointed individuals to vote as they see fit on any amendment or variation to any of the matters identified in the notice of C-COR meeting and on any other matter that may properly be brought before the C-COR meeting.
 
Your broker or other nominee will not vote your shares unless it receives specific instructions from you. If you sign and send in your broker instruction form but do not include instructions on how to vote your properly signed form, your shares will not be voted with respect to the proposals that may properly come before the C-COR meeting, however, you will be deemed present for quorum purposes.
 
At the date of this joint proxy statement/prospectus, neither the C-COR board of directors nor management of C-COR is aware of any variation, amendment or other matter to be presented for a vote at the C-COR meeting.
 
Revocation of Proxies and Broker Voting Instruction Forms
 
If you are a registered holder giving a proxy pursuant to this solicitation you have the power to revoke and change it at any time before the C-COR meeting. It may be revoked by filing a written notice with the Secretary of C-COR at the address below or by submitting in writing a proxy bearing a later date, in either case, by 5:00 p.m. (local time) on the business day prior to the C-COR meeting or any adjournment or postponement thereof, or by attending the C-COR meeting and voting in person. Attendance at the C-COR meeting will not, by itself, revoke a proxy.
 
If you are a registered holder and want to change your proxy directions by mail or by fax, you should send a notice of revocation or your completed new proxy card, as the case may be, to C-COR at the following address:
C-COR Incorporated
60 Decibel Road
State College, Pennsylvania 16801
Attention: Secretary
Fax: (814) 237-5574
 
You may also revoke a proxy via the Internet at the website indicated on your proxy card or by telephone by calling the toll-free number shown on your proxy card and following the instructions.
 
If a broker or other nominee holds your shares in “street name” and you have instructed a nominee to vote your shares and wish to change your vote, you must follow directions received from your nominee to change those instructions.


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Solicitation of Proxies
 
C-COR will bear the expenses in connection with the solicitation of proxies from C-COR shareholders, except that ARRIS and C-COR have agreed to share equally out-of-pocket expenses related to the printing and filing of this joint proxy statement/prospectus. C-COR has retained • , a proxy solicitation firm, for assistance in connection with the solicitation of proxies and anticipates paying a fee not exceeding $ •  plus additional charges related to telephone calls and other services. No solicitation fees will be payable if the merger is not completed. Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of C-COR common stock held of record by these persons and C-COR may reimburse them for their reasonable transaction and clerical expenses.
 
Solicitation of proxies may also be made by mail, in person, or by telephone, email, Internet, facsimile, telegram or other means of communication, by C-COR’s directors, officers and employees, who will receive no additional compensation for these services, but will be reimbursed for any transaction expenses incurred by them in connection with these services.


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THE MERGER
 
Background of the Merger
 
The board of directors of C-COR has historically reviewed its strategic alternatives on a continual basis. During late 2005 and early 2006, the board of directors of C-COR began to reassess the strategic plan for C-COR in light of developments in the broadband communications industry. On the customer front, Verizon and AT&T announced plans to make major investments in their network infrastructures to enable them to offer video services that would compete directly with C-COR’s main customers, the cable operators. On the competitive front, C-COR’s largest competitor, Scientific Atlanta, agreed to be acquired by Cisco in order to more effectively compete in the future. The board considered risks facing C-COR, including competitive risks, market risks and execution risks, and the potential impact on C-COR of various scenarios regarding the increasing competition between telcos and cable operators. Several alternative courses of action were evaluated, including continuing on its present course with C-COR’s existing product portfolio, adding to the product portfolio by acquisition, divesting certain product lines and increasing investment in others, and seeking opportunities to become part of a larger entity.
 
After several months of strategic planning discussions, C-COR’s board of directors decided to seek the assistance of a financial advisor. On April 18, 2006, the board unanimously voted to form a selection committee, whose role was to select a financial advisor. Mr. Fink, Mr. Ibarguen, Mr. Royse, directors of C-COR, and Mr. Woodle, Chairman, President and Chief Executive Officer of C-COR, were appointed to the selection committee. After meeting with two other financial advisors, the selection committee invited Merrill Lynch to the next board meeting.
 
On May 2, 2006, the board of directors of C-COR met to discuss various trends, including consolidation in the broadband communications sector and the alternatives for increasing shareholder value. At the request of the board of directors, representatives of Merrill Lynch attended the meeting to provide a review of current trends in the broadband communications industry and a general review of potential strategic alternatives for C-COR. On May 12, 2006, C-COR engaged Merrill Lynch to act as the exclusive financial advisor to C-COR’s board of directors in connection with any proposed sale of C-COR.
 
On June 20, 2006, C-COR’s board of directors met, together with Merrill Lynch to review C-COR’s plan for its upcoming fiscal year 2007, which started in July. The board of directors discussed the strategic positioning of each business unit, the long-term strategic plan, by segment and for C-COR as a whole, and the changes in the industry. At the meeting, Merrill Lynch updated the board of directors on various strategic options potentially available to C-COR, including discussion as to anticipated interest with respect to potential bidders.
 
Acquisitions have been and continue to be an important part of ARRIS’ strategic growth plan. In that regard, ARRIS has actively sought out possible acquisition targets and has conducted extensive due diligence investigations and analyses of various target companies. On November 6, 2006, ARRIS issued $276 million of senior convertible notes to strengthen its position as a potential acquirer, and, in January 2007, initiated a tender offer for the shares of TANDBERG Television for cash and stock, which tender offer was subsequently terminated as the result of a higher competing bid made by a third party. ARRIS also briefly considered the acquisition of C-COR in 2005. However, the price ranges suggested by the parties were not mutually acceptable and the discussions were terminated in June 2005.
 
During the August 15, 2006 meeting, the C-COR board of directors authorized Merrill Lynch to undertake an auction process. Commencing in late August 2006, and continuing for several weeks, Merrill Lynch contacted, on behalf of C-COR, approximately 22 potential strategic buyers or merger of equals partners. Of the parties contacted, eight parties, including ARRIS, executed confidentiality agreements and began conducting preliminary due diligence, including participating in discussions with management and receiving limited non-public information concerning C-COR.
 
On October 16, 2006, C-COR’s board of directors met, together with Merrill Lynch, to discuss the solicitation process. At that meeting, the board of directors and Merrill Lynch also discussed the next steps in


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the process, including concluding management meetings and soliciting non-binding indications of value on November 10, 2006.
 
In early November 2006, Merrill Lynch provided the parties that had executed confidentiality agreements with C-COR’s financial results for the first quarter of fiscal year 2007 and an updated fiscal year 2007 budget. Based on this preliminary information and the initial discussions, ARRIS did not to submit an indication of interest.
 
On November 15, 2006, C-COR’s board of directors met, together with its legal counsel and Merrill Lynch, to discuss the submission of one non-binding indication of interest received and verbal updates from four other parties (none of whom submitted a non-binding indication of interest). The non-binding indication of interest suggested either an acquisition of the Access & Transport business line or the acquisition of C-COR in conjunction with a financial party. The non-binding indication of interest did not include a valuation for either the Access & Transport business line or C-COR. C-COR’s board of directors discussed potential alternatives, including a sale of the Access & Transport business line to the interested party if the interested party could arrange a transaction with a financial partner that would result in the sale of the entire company.
 
The board of directors discussed the reasons it believed C-COR did not receive any indications of value and what this meant to C-COR both in the near and long term. These reasons included lack of interest in all business segments by one party and lack of proven profitable performance to justify an acceptable valuation. The board of directors discussed alternative structures and the challenges of selling pieces of C-COR or entering into a transaction with a private equity firm. The board of directors also explored potential synergies that C-COR could bring to a deal.
 
Of the parties that indicated they were willing to continue discussions, one was interested in the video on demand business line, another indicated that it had reviewed a merger of equals transaction with its board of directors and may continue to consider a transaction of that nature outside of C-COR’s current process, and a third indicated that it may be interested in pursuing a transaction with C-COR in the future, but the closing and integration of other acquisitions prevented it from making any decisions at that time.
 
At the conclusion of the meeting, the board of directors of C-COR unanimously decided to terminate the process of identifying a strategic buyer, to inform the four parties that indicated a willingness to continue discussions that C-COR would consider future non-binding letters of interest that included a valuation of the company, to develop strategic alternatives other than a sale of C-COR for presentation at the January 2007 board meeting, and to focus on executing C-COR’s current business plan. Following the meeting, Merrill Lynch, on behalf of C-COR’s board of directors, suggested to the interested party that a sale of the entire company might be possible if the interested party could arrange a financial partner, and provided authorization for the interested party to conduct discussions with third parties which the interested party had identified to C-COR.
 
In December 2006, the interested party notified Merrill Lynch that, after further internal strategic discussions, it would not be submitting a non-binding indication of value for either the Access & Transport business segment or C-COR in conjunction with a third party. Later in December 2006, Merrill Lynch met with representatives of C-COR to review additional strategic alternatives, other than the sale of C-COR, potentially available to C-COR, including potential acquisition opportunities.
 
On January 23, 2007, C-COR’s board of directors convened to discuss the best ways to enhance shareholder value. The board considered whether C-COR should remain cable centric, and, if C-COR were to expand into different areas, what those markets should be. The board recognized that it had discussed these issues on a number of occasions over the past year and believed it should formalize its decision making process. The board developed a written “decision tree” which it would use to analyze all decisions regarding the strategic direction of C-COR. At the request of C-COR’s board, Mr. Woodle presented an analysis, which had been prepared with the assistance of Merrill Lynch and reviewed by members of C-COR’s management, of the competitive landscape and the product and service offerings of selected potential acquisition candidates


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and merger partners. The board also reviewed the proposed ARRIS/TANDBERG Television transaction and its likely impact on the industry landscape.
 
The board of directors discussed the challenges and rationales for growing C-COR either through a merger of equals or through the acquisition of smaller companies. The board identified five potential parties and discussed the financial position, strengths and potential synergies of each company. Subsequently, Mr. Woodle asked Merrill Lynch to provide more detailed information on three of the potential parties for the board to review at its upcoming meetings.
 
On April 24, 2007, the board of directors of C-COR met again to discuss strategic alternatives. The board had an extensive discussion on various alternatives, including growing the business organically by revising C-COR’s service model, by growing its video business through acquisitions or by expanding the operations support system (OSS) business through acquisitions. The directors agreed that C-COR should proceed with divesting its field services business. Also, the board requested that C-COR’s management team develop strategies and funding alternatives for growing the video business line. At the request of the board, Mr. Woodle made a presentation, which had been prepared with the assistance of Merrill Lynch and reviewed by members of C-COR’s management, of two companies the board was considering acquiring to grow the video business line.
 
Following the April 24, 2007, board meeting, Mr. Woodle spoke informally with the chief executive officer of one of the target companies considered at the meeting. After that discussion, Mr. Woodle determined that that company was not a viable target for C-COR’s strategic goals because it was likely to be a dilutive transaction.
 
On May 3, 2007, Merrill Lynch reviewed with Mr. Woodle and other members of C-COR’s management team information regarding a potential merger of equals. C-COR also revisited a potential video acquisition that was discussed at the previous board meeting. Mr. Woodle and the management team reviewed the pros and cons of each company and potential transaction, discussed potential financing alternatives and discussed various approaches to entering into a definitive agreement with either company. The management team determined that the best initial approach was for Mr. Woodle to speak to the chief executive officers of the two companies.
 
Thereafter, Mr. Woodle spoke to the chief executive officers of both companies. The chief executive officer of the video target indicated he was not interested in a transaction with C-COR at that time. The other expressed an interest in a potential merger of equals transaction. The potential merger of equals partner had been identified by C-COR’s board of directors and Merrill Lynch when the board of directors began the formal strategic alternatives review and had indicated in November 2006 that it was interested in continued discussions.
 
Throughout early May, Mr. Woodle and the chief executive officer of the potential merger partner engaged in preliminary discussions regarding deal terms, diligence, timeline and process. On May 14, 2007, C-COR’s board of directors authorized C-COR to enter into a confidentiality agreement with the potential merger partner. On May 23, 2007, the management of both C-COR and the potential merger partner, and their respective financial advisors, conducted initial reciprocal business, financial and synergy related due diligence.
 
On May 31, 2007, the boards of directors of both C-COR and the potential merger partner met separately to discuss the potential transaction and decide whether to enter into an exclusive dealing agreement. C-COR’s board of directors reviewed the preliminary structure, the proposed board composition, executive chairman and president positions, the transition process and time line. After discussing the strategic alternatives review process that the board had conducted over the past nine months and considering the fact that an exhaustive search had not revealed a potential buyer for C-COR, the board agreed that a merger of equals in light of the growing competition, larger competitors and converging technologies made sense from both a strategic and operational point of view. The board noted that a number of the companies’ products were complementary and a combination would give C-COR and the combined company access to new markets. After much discussion, C-COR’s board of directors authorized C-COR to enter into an exclusive dealing agreement for a transaction with the potential merger partner.


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Following its board meeting, the chief executive officer of the potential merger partner contacted Mr. Woodle to inform him that his board was not prepared to enter into exclusive negotiations at that time, but indicated it would reconsider the potential merger of equals transaction at its strategic planning meeting later that summer. Mr. Woodle and the chief executive officer of the potential merger partner continued to discuss a potential merger of equals transaction throughout the summer.
 
Throughout the summer of 2007, Merrill Lynch, on behalf of C-COR, continued to conduct informal discussions with selected interested parties. In July 2007, the chief executive officer of the potential merger partner informed Mr. Woodle that his board had reconsidered a merger of equals transaction with C-COR, but decided not to pursue a transaction at that time.
 
In a social telephone call made by Mr. Stanzione, Chairman and Chief Executive Officer of ARRIS, to Mr. Woodle in early August 2007, the prospect of combining the two companies was raised, and a prompt follow-up call was arranged for August 10, 2007. On the August 10, 2007 call, Mr. Woodle described C-COR’s long-term strategic plan and its 2008 financial plan to Mr. Stanzione and other members of ARRIS management.
 
On August 14, 2007, the ARRIS board of directors met in a regularly scheduled meeting. During that meeting, the status of various ARRIS strategic opportunities were discussed and the board reviewed the current status of the financing markets available to ARRIS. ARRIS’ management specifically reviewed with the board of directors the possible strategic benefits of an acquisition of C-COR and the board determined that management should proceed with discussions of possible transactions, including with C-COR. Over the next several days, ARRIS and C-COR continued their preliminary reviews. ARRIS also subsequently engaged UBS as its financial advisor in connection with a possible acquisition of C-COR.
 
On August 21, 2007, C-COR’s board of directors met to discuss the competitive landscape. The board recognized that the industry continued to be dominated by two large companies, an issue that was being compounded by consolidation at the customer level. The board again reviewed its strategic alternatives, including potential acquisition targets and merger of equal partners. At the conclusion of this meeting, the board determined that Mr. Woodle should continue discussions with ARRIS.
 
On August 28, 2007, Mr. Stanzione phoned Mr. Woodle to express ARRIS’ interest in a transaction with C-COR. On August 29, 2007, C-COR’s board of directors met telephonically to discuss a potential merger with ARRIS. At the conclusion of this meeting, the board of directors determined that Mr. Woodle should continue discussions with ARRIS.
 
Between August 28, 2007 and August 31, 2007 Messrs. Stanzione and Woodle had several brief conversations regarding the possibility of combining the companies. On August 31, 2007, ARRIS sent C-COR a letter of intent that proposed a merger pursuant to which ARRIS would acquire all of C-COR’s outstanding shares of common stock. The letter of intent proposed merger consideration of between $14.00 and $15.00 per share, which would be comprised of 50% cash and 50% shares of ARRIS common stock, subject to due diligence and market conditions. That day, the board of directors authorized C-COR to enter into an exclusivity agreement with ARRIS, pursuant to which C-COR agreed that it would not solicit or engage in discussions with a third party concerning a transaction involving the sale of C-COR by way of merger, spin off or sale of stock or assets through September 30, 2007.
 
On September 7, 2007, the management team of ARRIS met with the management team of C-COR in State College, Pennsylvania to discuss certain diligence matters related to C-COR. C-COR’s and ARRIS’ respective legal and financial advisors also attended. During the week of September 10, 2007, representatives of ARRIS visited several C-COR locations, including its manufacturing plant in Tijuana, Mexico. Throughout September, both ARRIS and C-COR conducted business, legal and accounting due diligence and negotiated a merger agreement.
 
On September 17, 2007, representatives of both ARRIS and C-COR met to discuss diligence matters relating to ARRIS. C-COR’s and ARRIS’ respective legal and financial advisors also attended. The board of directors of C-COR thought it was important to conduct a due diligence review of ARRIS given that C-COR shareholders would receive shares of ARRIS common stock in the merger. At this diligence meeting,


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Mr. Stanzione proposed a new per share merger consideration, which would still be comprised of 50% stock and 50% cash. Mr. Stanzione indicated that the proposed merger consideration was lower than the range stated in the letter of intent due to changes in the market prices of the common stock of both ARRIS and C-COR.
 
On September 18, 2007, on behalf of Mr. Woodle, Merrill Lynch contacted UBS, ARRIS’ financial advisor, to notify them that the consideration proposed by ARRIS the day before was considered too low and presented a counter-proposal, which included a collar mechanism to adjust the stock component of the consideration to protect C-COR shareholders from significant changes in the market price of ARRIS’ common stock. On September 20, 2007, Mr. Stanzione contacted Mr. Woodle to further discuss the amount of merger consideration.
 
Between August 28, 2007 and September 20, 2007, Mr. Stanzione remained in frequent contact with the members of the ARRIS board regarding the status of ARRIS’ review of C-COR’s operations and negotiations with C-COR. On September 19, 2007, ARRIS’ board of directors met to discuss the proposed transaction with C-COR. Members of ARRIS’ management and representatives of ARRIS’ legal and financial advisors also attended this meeting. At the meeting, ARRIS’ management reviewed with the board its due diligence review of C-COR and ARRIS’ financial advisor discussed with the board financial aspects of the proposed transaction. Following discussions, the board of directors authorized Mr. Stanzione to continue negotiations with C-COR.
 
On September 20, 2007, C-COR’s board of directors met to consider the transaction with ARRIS. The board reviewed its strategic alternatives process, the industry landscape and the strategic rationale of a combination with ARRIS. Merrill Lynch then reviewed with the board of directors a financial analysis of the proposed transaction. Representatives of KPMG LLP, C-COR’s independent accounting firm, presented their due diligence review of ARRIS’ financial statements and related matters. Representatives of Ballard Spahr Andrews & Ingersoll, LLP, C-COR’s legal counsel, reviewed with the board its fiduciary obligations, presented their legal due diligence review and summarized the terms and conditions of the merger agreement. The board reviewed and discussed various provisions of the merger agreement and discussed the risks and benefits of entering into the merger agreement. After extensive discussions, the board authorized Mr. Woodle to enter into a merger agreement at $13.75 per share, but requested that he try to negotiate a higher cash component and protect C-COR’s downside risk.
 
On September 21, 2007, after additional negotiations regarding the merger consideration, Mr. Stanzione and Mr. Woodle agreed that the merger consideration would be $13.75 per share, of which $7.00 would be paid in cash and the remainder would be paid in ARRIS’ common stock. The parties also agreed that C-COR’s shareholders may elect to take cash, stock or a combination of the two, subject to proration if the elections exceeded approximately 51% cash or approximately 49% stock. The parties also agreed to the previously proposed collar mechanism, whereby the stock component of the merger consideration would be subject to adjustment in the event that the average closing price of ARRIS’ common stock for the ten trading-day period ending three trading days prior to the anticipated closing date is less than $12.83 or more than $15.69. The parties also agreed that no further adjustments would be made in the event the average closing price of the ARRIS stock is less than $11.41 or more than $17.11.
 
From September 21 through September 23, the parties continued to negotiate various provisions of the merger agreement and complete their due diligence.
 
On the afternoon of September 23, 2007, the ARRIS board of directors met to consider the merger agreement and the merger. At this meeting, representatives of Troutman Sanders LLP summarized the terms of the merger agreement and reviewed with the board its fiduciary duties. UBS reviewed with ARRIS’ board of directors its financial analysis of the $13.75 per share merger consideration and delivered to ARRIS’ board of directors an oral opinion, which opinion was confirmed by delivery of a written opinion dated September 23, 2007, to the effect that, as of that date and based on and subject to various assumptions, matters considered and limitations described in its opinion, the $13.75 per share merger consideration to be paid by ARRIS was fair, from a financial point of view, to ARRIS. The ARRIS board of directors discussed the risks and benefits of entering into the merger agreement and how this transaction fit within the strategic plan for ARRIS. After much discussion, the ARRIS board of directors voted to enter into the merger agreement. All of the ARRIS


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directors, except for Mr. Best, voted in favor of the transaction. Mr. Best recused himself from the consideration of, and vote on, the transaction because Mr. Best also serves as a director of a company that competes directly with C-COR.
 
On the evening of September 23, 2007, C-COR’s board of directors met to consider approval of the merger agreement. Merrill Lynch made a financial presentation and delivered an oral opinion to the board of directors, subsequently confirmed in writing, to the effect that, as of September 23, 2007, and based on the assumptions made, matters considered and limits of review set forth in its written opinion, the merger consideration to be received by holders of C-COR common stock pursuant to the merger agreement was fair from a financial point of view to those holders. Representatives of Ballard Spahr Andrews & Ingersoll, LLP updated the board regarding its review of the legal due diligence and provided an updated summary of the merger agreement. The C-COR board of directors discussed the risks and benefits of entering into the merger agreement and how this transaction fit within the strategic plan for C-COR. After much discussion, the C-COR board of directors unanimously voted to enter into the merger agreement.
 
Subsequent to the board meetings, C-COR and ARRIS entered into the merger agreement and issued a joint press release announcing the transaction.
 
Factors Considered by the ARRIS Board of Directors
 
In reaching its conclusion to approve the merger and the merger agreement and recommend that ARRIS shareholders vote FOR approval of the issuance of ARRIS common stock pursuant to the merger agreement, the ARRIS board of directors considered a number of factors as set forth below.
 
Strategic Considerations.  The ARRIS board of directors considered a number of strategic advantages of the merger in comparison to a stand-alone strategy, including, but not limited to, the views of the ARRIS board of directors that:
 
  •  the merger will significantly expand ARRIS’ product line, giving ARRIS the ability to deploy and manage multiple technologies from the combined company to provide end-to-end solutions;
 
  •  the merger will strengthen ARRIS’ position as the leading pure play cable solutions provider;
 
  •  the merger will expand ARRIS’ addressable market and accelerate its video growth strategy;
 
  •  an expanded portfolio will differentiate ARRIS from smaller niche players;
 
  •  the expanded product offerings that ARRIS will be able to provide following the merger will strengthen ARRIS’ relationships with significant customers such as Comcast, TimeWarner, Charter and Liberty; and
 
  •  the expanded product line will improve ARRIS’ ability to compete with larger competitors and improve its positioning as an industry consolidator.
 
Financial Incentives.  The ARRIS board of directors also considered certain financial advantages to the merger including, but not limited to, the following factors:
 
  •  the merger is projected to result in a significant increase in sales and will make ARRIS the largest independent cable equipment player;
 
  •  C-COR’s Optical and Access businesses have higher gross margins than ARRIS’ existing gross margins, and revenues from these businesses are expected to improve ARRIS’ gross margin in the long term;
 
  •  the merger is anticipated to provide meaningful cost synergies by consolidating public company and administrative costs as well as sales force and research and development optimization costs; and
 
  •  the merger will diversify revenues received from ARRIS’ core multiple system operator relationships.


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Other Factors.  The ARRIS board of directors also considered the following factors, among others:
 
  •  ARRIS’ and C-COR’s respective historical businesses and financial results and prospects, including the results of ARRIS’ due diligence investigation of C-COR;
 
  •  the ability of the two companies to effectively integrate their businesses and cultures;
 
  •  the opinion of UBS, ARRIS’ financial advisor, dated September 23, 2007, to ARRIS’ board of directors as to the fairness, from a financial point of view and as of the date of the opinion, to ARRIS of the $13.75 per share merger consideration to be paid by ARRIS, as more fully described in “The Merger — Opinion of ARRIS’ Financial Advisor;” and
 
  •  the terms of the merger agreement that create a strong commitment on the part of C-COR to complete the merger.
 
Potential Risks.  The ARRIS board of directors considered a variety of risks and other potentially negative factors concerning the merger, including, without limitation, the following factors:
 
  •  the risks of integrating the operations of C-COR and ARRIS, including the risks that integration costs may be greater, and synergy benefits lower, than anticipated by ARRIS management;
 
  •  as a result of the merger and under purchase accounting, ARRIS will not be able to recognize most of C-COR’s deferred revenue balance, resulting in a significant negative impact on the combined company’s financial statements and near-term results of operations;
 
  •  a significant portion of C-COR’s business remains with radio frequency/optical infrastructure, which is a highly competitive market segment;
 
  •  C-COR’s in-house manufacturing in Tijuana, Mexico adds potential earnings volatility in the event of an industry down-cycle (relative to ARRIS’ outsourcing approach);
 
  •  the merger provides only limited customer expansion beyond ARRIS’ existing cable customers and only moderate opportunity international growth; and
 
  •  competition is expected to intensify in C-COR’s high margin businesses, which will put pressure on C-COR’s more favorable gross margins as prices decrease.
 
The foregoing discussion of the factors considered by ARRIS’ board of directors is not intended to be exhaustive, but, rather, includes the material factors considered by ARRIS’ board of directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, ARRIS’ board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. ARRIS’ board of directors considered all these factors as a whole, and overall considered the factors to be favorable to, and supportive of, its determination.
 
Opinion of ARRIS’ Financial Advisor
 
On September 23, 2007, at a meeting of ARRIS’ board of directors held to evaluate the proposed merger, UBS delivered to ARRIS’ board of directors an oral opinion, which opinion was confirmed by delivery of a written opinion dated September 23, 2007, to the effect that, as of that date and based on and subject to various assumptions, matters considered and limitations described in its opinion, the $13.75 per share merger consideration to be paid by ARRIS was fair, from a financial point of view, to ARRIS.
 
The full text of UBS’ opinion describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken by UBS. This opinion is attached as Annex B and is incorporated into this joint proxy statement/prospectus by reference. UBS’ opinion was provided for the benefit of ARRIS’ board of directors in connection with, and for the purpose of, its evaluation of the merger consideration from a financial point of view, does not address any other aspect of the merger and does not constitute a recommendation to any shareholder as to how such shareholder should vote or act with respect to the merger. The opinion does not address the relative merits of the merger as compared to


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other business strategies or transactions that might be available to ARRIS or ARRIS’ underlying business decision to effect the merger. Holders of shares of ARRIS common stock are encouraged to read this opinion carefully in its entirety. The summary of UBS’ opinion described below is qualified in its entirety by reference to the full text of its opinion.
 
In arriving at its opinion, among other things, UBS:
 
  •  reviewed certain publicly available business and financial information relating to C-COR and ARRIS;
 
  •  reviewed certain internal financial information and other data relating to C-COR’s business and financial prospects that were provided to UBS by C-COR’s management and not publicly available, including financial forecasts and estimates prepared by C-COR’s management as adjusted by ARRIS’ management;
 
  •  reviewed certain internal financial information and other data relating to ARRIS’ business and financial prospects that were provided to UBS by ARRIS’ management and not publicly available, including financial forecasts and estimates prepared by ARRIS’ management;
 
  •  conducted discussions with members of the senior managements of ARRIS and C-COR concerning the businesses and financial prospects of ARRIS and C-COR;
 
  •  reviewed publicly available financial and stock market data with respect to certain other companies UBS believed to be generally relevant;
 
  •  compared the financial terms of the merger with the publicly available financial terms of certain other transactions UBS believed to be generally relevant;
 
  •  reviewed current and historical market prices of C-COR common stock and ARRIS common stock;
 
  •  considered certain pro forma effects of the merger on ARRIS’ financial statements, both before and after giving effect to the accounting treatment under purchase accounting of certain deferred revenue of C-COR as estimated by ARRIS’ management;
 
  •  reviewed the merger agreement; and
 
  •  conducted such other financial studies, analyses and investigations, and considered such other information, as UBS deemed necessary or appropriate.
 
In connection with its review, with the consent of ARRIS’ board of directors, UBS did not assume any responsibility for independent verification of any of the information provided to or reviewed by UBS for the purpose of its opinion and, with the consent of ARRIS’ board of directors, UBS relied on such information being complete and accurate in all material respects. In addition, with the consent of ARRIS’ board of directors, UBS did not make any independent evaluation or appraisal of any of the assets or liabilities, contingent or otherwise, of ARRIS or C-COR, nor was UBS furnished with any such evaluation or appraisal. With respect to the financial forecasts, estimates and pro forma effects referred to above, UBS assumed, at the direction of ARRIS’ board of directors, that they had been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the managements of C-COR and ARRIS, as the case may be, as to the future performance of C-COR and ARRIS and such pro forma effects. In addition, UBS assumed, with the approval of ARRIS’ board of directors, that the financial forecasts and estimates referred to above would be achieved at the times and in the amounts projected. UBS assumed, with the consent of ARRIS’ board of directors, that the merger would qualify for U.S. federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code. UBS’ opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information available to UBS as of, the date of its opinion.
 
At the direction of ARRIS’ board of directors, UBS was not asked to, and it did not, offer any opinion as to the terms, other than the $13.75 per share merger consideration to the extent expressly specified in UBS’ opinion, of the merger agreement, the form of the merger or the form of the merger consideration. UBS expressed no opinion as to what the value of ARRIS common stock would be when issued pursuant to the


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merger or the prices at which ARRIS common stock or C-COR common stock would trade at any time. In rendering its opinion, UBS assumed, with the consent of ARRIS’ board of directors, that (i) ARRIS and C-COR would comply with all material terms of the merger agreement, and (ii) the merger would be consummated in accordance with the terms of the merger agreement without any adverse waiver or amendment of any material term or condition of the merger agreement. UBS also assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the merger would be obtained without any material adverse effect on ARRIS, C-COR or the merger. Except as described above, ARRIS imposed no other instructions or limitations on UBS with respect to the investigations made or the procedures followed by UBS in rendering its opinion.
 
In connection with rendering its opinion to ARRIS’ board of directors, UBS performed a variety of financial and comparative analyses that are summarized below. The following summary is not a complete description of all analyses performed and factors considered by UBS in connection with its opinion. The preparation of a financial opinion is a complex process involving subjective judgments and is not necessarily susceptible to partial analysis or summary description. With respect to the selected companies analysis and the selected precedent transactions analysis summarized below, no company or transaction used as a comparison was either identical or directly comparable to C-COR, ARRIS or the merger. These analyses necessarily involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading or acquisition values of the companies concerned.
 
UBS believes that its analyses and the summary below must be considered as a whole and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying UBS’ analyses and opinion. UBS did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion, but rather arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole.
 
The forecasts and estimates of the future performance of ARRIS and C-COR provided by the managements of ARRIS and C-COR in or underlying UBS’ analyses are not necessarily indicative of future results or values, which may be significantly more or less favorable than those estimates. In performing its analyses, UBS considered industry performance, general business and economic conditions and other matters, many of which were beyond the control of ARRIS and C-COR. Estimates of the financial value of companies do not purport to be appraisals or necessarily reflect the prices at which companies actually may be sold.
 
The merger consideration was determined through negotiation between ARRIS and C-COR and the decision to enter into the merger was solely that of ARRIS’ board of directors. UBS’ opinion, including its financial analyses, were only one of many factors considered by ARRIS’ board of directors in its evaluation of the merger and should not be viewed as determinative of the views of ARRIS’ board of directors or management with respect to the merger or the merger consideration.
 
The following is a brief summary of the material financial analyses performed by UBS and reviewed with ARRIS’ board of directors on September 23, 2007 in connection with UBS’ opinion. The financial analyses summarized below include information presented in tabular format. To fully understand UBS’ financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of UBS’ financial analyses. For purposes of the “C-COR Financial Analyses” summarized below, the “per share merger consideration” refers to the per share value of the merger consideration of $13.75 based on the cash election consideration of $13.75 and the implied value, utilizing the closing price of ARRIS common stock on September 21, 2007, of the stock election consideration of 0.9642 of a share of ARRIS common stock.


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C-COR Financial Analyses
 
Selected Companies Analysis.  UBS compared selected financial and stock market data of C-COR with corresponding data, to the extent publicly available, of the following 14 publicly traded communications equipment companies:
 
  •  ADC Telecommunications, Inc.
 
  •  ADTRAN, Inc.
 
  •  ARRIS
 
  •  BigBand Networks, Inc.
 
  •  Cisco Systems, Inc.
 
  •  CommScope, Inc.
 
  •  Concurrent Computer Corporation
 
  •  Harmonic Inc.
 
  •  Motorola, Inc.
 
  •  NDS Group plc
 
  •  OpenTV Corp.
 
  •  SeaChange International, Inc.
 
  •  Tellabs, Inc.
 
  •  Thomson SA
 
UBS reviewed, among other things, the enterprise value of each selected company (calculated as diluted equity value based on the closing stock price on September 21, 2007, plus book value of debt and minority interests, plus preferred stock at liquidation value, less cash and cash equivalents), as a multiple of the respective selected company’s revenue, earnings before interest, taxes, depreciation and amortization, referred to as EBITDA, and earnings before interest and taxes, referred to as EBIT, for the latest 12 months, and as estimated for calendar years 2007 and 2008. UBS also reviewed the closing stock price of each selected company on September 21, 2007 as a multiple of calendar years 2007 and 2008 estimated earnings per share, referred to as EPS. UBS then compared these multiples derived for the selected companies to corresponding multiples implied for C-COR based on the closing price of C-COR common stock on September 21, 2007 and on the $13.75 per share merger consideration, utilizing both publicly available research analyst’s forecasts, referred to as C-COR street forecasts, and internal estimates of C-COR’s management as adjusted by ARRIS’ management, referred to as C-COR adjusted management forecasts. Estimated financial data of the selected companies were based on publicly available research analysts’ estimates. This analysis indicated the following implied mean, median, high and low multiples for the selected companies, as compared to corresponding multiples implied for C-COR based on the closing price of C-COR common stock on September 21, 2007 and


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based on the $13.75 per share merger consideration, utilizing both C-COR adjusted management forecasts and C-COR street forecasts:
 
                                                                 
                            Implied Multiples for C-COR  
                            Based on Closing Stock
    Based on $13.75 per Share
 
                            Price on September 21, 2007     Merger Consideration  
                                  C-COR
          C-COR
 
    Implied Multiples for
    C-COR
    Adjusted
    C-COR
    Adjusted
 
    Selected Companies     Street
    Management
    Street
    Management
 
    Mean     Median     High     Low     Forecasts     Forecasts     Forecasts     Forecasts  
 
Enterprise Value as Multiple of:
                                                               
Revenue
                                                               
Latest 12 Months
    2.2 x     1.7 x     5.6 x     0.8 x     1.6 x     1.6 x     2.3 x     2.3 x
Estimated Calendar Year 2007
    2.1 x     1.7 x     5.2 x     0.8 x     1.5 x     1.5 x     2.2 x     2.2 x
Estimated Calendar Year 2008
    1.8 x     1.6 x     4.4 x     0.7 x     1.4 x     1.3 x     2.0 x     1.9 x
EBITDA
                                                               
Latest 12 Months
    13.5 x     13.7 x     24.9 x     5.2 x     11.0 x     11.0 x     16.3 x     16.3 x
Estimated Calendar Year 2007
    15.4 x     12.5 x     30.1 x     5.4 x     7.7 x     9.7 x     11.4 x     14.3 x
Estimated Calendar Year 2008
    10.4 x     10.6 x     15.4 x     5.2 x     6.3 x     7.3 x     9.4 x     10.9 x
EBIT
                                                               
Latest 12 Months
    17.4 x     15.5 x     31.5 x     10.0 x     12.7 x     12.7 x     18.9 x     18.9 x
Estimated Calendar Year 2007
    16.9 x     15.4 x     28.5 x     9.9 x     10.5 x     11.0 x     15.7 x     16.3 x
Estimated Calendar Year 2008
    14.6 x     14.7 x     25.1 x     8.2 x     8.3 x     8.3 x     12.4 x     12.3 x
Equity Value as Multiple of EPS:
                                                               
Estimated Calendar Year 2007
    21.4 x     21.2 x     29.0 x     15.1 x     12.8 x     12.6 x     17.9 x     18.1 x
Estimated Calendar Year 2008
    20.1 x     18.0 x     43.7 x     12.1 x     15.0 x     13.1 x     20.8 x     18.8 x
 
Selected Precedent Transactions Analysis.  UBS reviewed transaction values in the following 13 selected transactions involving communications equipment companies:
 
         
Announcement Date
 
Acquiror
 
Target
 
• 07/2007
 
•   The Swarth Group and Ashmore
Investment Management Limited
  •   ECI Telecom Ltd.
• 06/2007
 
•   CommScope, Inc. 
  •   Andrew Corporation
• 06/2007
 
•   TPG Partners V, L.P. and Silver Lake
Partners III, L.P.
  •   Avaya Inc.
• 04/2007
 
•   Mitel Networks Corporation
  •   Inter-Tel (Delaware), Incorporated
• 04/2007
 
•   Motorola, Inc. 
  •   Terayon Communication Systems, Inc.
• 02/2007
 
•   Telefonaktiebolaget LM Ericsson (publ)
  •   TANDBERG Television ASA
• 12/2007
 
•   Motorola, Inc. 
  •   Tut Systems, Inc.
• 12/2006
 
•   Telefonaktiebolaget LM Ericsson (publ)
  •   Redback Networks Inc.
• 09/2006
 
•   Motorola, Inc. 
  •   Symbol Technologies, Inc.
• 04/2006
 
•   Alcatel
  •   Lucent Technologies Inc.
• 11/2005
 
•   Cisco Systems, Inc. 
  •   Scientific-Atlanta, Inc.
• 10/2005
 
•   Telefonaktiebolaget LM Ericsson (publ)
  •   Marconi Corporation plc.
(Telecommunications business)
• 05/2004
 
•   Tellabs, Inc. 
  •   Advanced Fibre Communications, Inc.
 
For each of the selected transactions, UBS calculated and compared the resulting enterprise value as a multiple of latest 12 months’ and estimated next 12 months’ revenue and EBITDA as of the time of the respective transaction. UBS also reviewed the per share purchase price of each of the target companies as a


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multiple of latest 12 months’ and estimated next 12 months’ EPS as of the time of the respective transaction. UBS then compared these multiples derived from the selected transactions to corresponding multiples implied for C-COR based on the $13.75 per share merger consideration, utilizing both C-COR street forecasts and C-COR adjusted management forecasts. Multiples for the selected transactions were based on publicly available information at the time of announcement of the relevant transaction. This analysis indicated the following implied mean, median, high and low multiples for the selected transactions, as compared to corresponding multiples implied for C-COR based on the $13.75 per share merger consideration, utilizing both C-COR adjusted management forecasts and C-COR street forecasts:
 
                                                 
                            Implied Multiples for
 
                            C-COR Based on
 
                            $13.75 per Share
 
                            Merger Consideration  
                                  C-COR
 
    Implied Multiples for
    C-COR
    Adjusted
 
    Selected Transactions     Street
    Management
 
    Mean     Median     High     Low     Forecasts     Forecasts  
 
Transaction Value as Multiple of:
                                               
Latest 12 Months Revenue
    2.3 x     1.7 x     7.7 x     1.2 x     2.3 x     2.3 x
Estimated Next 12 Months Revenue
    2.0 x     1.5 x     5.6 x     1.1 x     2.1 x     2.0 x
Latest 12 Months EBITDA
    17.8 x     13.1 x     58.0 x     9.1 x     16.3 x     16.3 x
Estimated Next 12 Months EBITDA
    10.9 x     10.3 x     15.1 x     8.0 x     11.5 x     12.6 x
Equity Value as Multiple of:
                                               
Latest 12 Months EPS
    28.0 x     25.6 x     42.8 x     12.4 x     20.9 x     20.9 x
Estimated Next 12 Months EPS
    26.2 x     24.2 x     43.0 x     14.9 x     19.7 x     18.4 x
 
Discounted Cash Flow Analysis.  UBS performed a discounted cash flow analysis of C-COR to calculate the estimated present value as of September 30, 2007 of the standalone unlevered, after-tax free cash flows that C-COR was projected to generate from the second quarter of fiscal year 2008 through the full fiscal year 2012 based on C-COR adjusted management forecasts. UBS calculated a range of terminal values by applying a range of EBITDA terminal value multiples of 10.0x to 14.0x to C-COR’s fiscal year 2012 estimated EBITDA. The unlevered, after-tax free cash flows, adjusted to reflect the present value of C-COR’s net operating loss carryforwards anticipated by ARRIS’ management to be available, and terminal values were then discounted to present value using discount rates ranging from 14.5% to 18.5%. This analysis indicated an implied per share equity reference range for C-COR of approximately $12.45 to $17.60, as compared to the $13.75 per share merger consideration.
 
ARRIS Financial Analysis
 
Selected Companies Analysis.  UBS compared selected financial and stock market data of ARRIS with corresponding data, to the extent publicly available, of the following eight publicly traded communications equipment companies:
 
  •  BigBand Networks, Inc.
 
  •  C-COR
 
  •  Cisco Systems, Inc.
 
  •  D-Link Corporation
 
  •  Harmonic Inc.
 
  •  Motorola, Inc.
 
  •  NETGEAR, Inc.
 
  •  Thomson SA


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UBS reviewed, among other things, the enterprise value of each selected company as a multiple of the respective selected company’s revenue, EBITDA and EBIT for the latest 12 months and as estimated for calendar years 2007 and 2008. UBS also reviewed the closing stock price of each selected company on September 21, 2007 as a multiple of calendar years 2007 and 2008 estimated EPS. UBS then compared these multiples derived for the selected companies to corresponding multiples implied for ARRIS based on the closing price of ARRIS common stock on September 21, 2007, utilizing both publicly available research analyst’s forecasts, referred to as “ARRIS street forecasts,” and the high and low range of ARRIS management’s internal estimates, referred to as “ARRIS management forecasts.” Estimated financial data of the selected companies were based on publicly available research analysts’ estimates. This analysis indicated the following implied mean, median, high and low multiples for the selected companies, as compared to corresponding multiples implied for ARRIS based on the closing price of ARRIS common stock on September 21, 2007, utilizing both ARRIS management forecasts and ARRIS street forecasts:
 
                                                         
                    Implied Multiples for ARRIS
        Based on Closing Stock Price on
                    September 21, 2007
                    ARRIS
  ARRIS Management
    Implied Multiples for Selected Companies   Street
  Forecasts
    Mean   Median   High   Low   Forecasts   High   Low
Enterprise Value as Multiple of:
                                                       
Revenue
                                                       
Latest 12 Months
    2.1 x     1.5 x     5.6 x     0.8 x     1.3 x     1.3 x     1.3 x
Estimated Calendar Year 2007
    2.0 x     1.4 x     5.2 x     0.8 x     1.3 x     1.3 x     1.3 x
Estimated Calendar Year 2008
    1.7 x     1.3 x     4.4 x     0.7 x     1.1 x     1.1 x     1.2 x
EBITDA
                                                       
Latest 12 Months
    14.1 x     14.2 x     24.9 x     5.2 x     9.7 x     9.7 x     9.7 x
Estimated Calendar Year 2007
    14.5 x     13.9 x     26.3 x     5.4 x     9.2 x     9.6 x     10.4 x
Estimated Calendar Year 2008
    10.2 x     10.8 x     15.4 x     5.2 x     7.6 x     7.7 x     8.7 x
EBIT
                                                       
Latest 12 Months
    17.1 x     17.9 x     24.9 x     10.0 x     10.5 x     10.5 x     10.5 x
Estimated Calendar Year 2007
    17.3 x     15.9 x     28.5 x     10.5 x     9.9 x     10.5 x     11.4 x
Estimated Calendar Year 2008
    13.4 x     13.0 x     19.2 x     8.3 x     8.2 x     8.2 x     9.4 x
Equity Value as Multiple of EPS
                                                       
Estimated Calendar Year 2007
    19.4 x     17.3 x     28.6 x     12.8 x     16.2 x     17.0 x     18.3 x
Estimated Calendar Year 2008
    17.5 x     16.8 x     27.5 x     12.1 x     13.8 x     13.6 x     15.8 x
 
  Accretion/Dilution Analysis
 
UBS reviewed the potential pro forma financial impact of the merger on ARRIS’ fiscal year 2008 estimated non-GAAP earnings per share, referred to as non-GAAP EPS, both before and after giving effect to the accounting treatment under purchase accounting of certain deferred revenue of C-COR as estimated by ARRIS’ management. Estimated financial data of ARRIS and other information were provided by ARRIS’ management (which data, at the direction of ARRIS’ management, did not include potential future synergies that could result from the merger) and estimated financial data of C-COR were based on C-COR adjusted management forecasts. Based on the $13.75 per share merger consideration, this analysis indicated that (i) before giving effect to such accounting treatment, the merger would be accretive to ARRIS’ fiscal year 2008 estimated non-GAAP EPS based on the low range of ARRIS management forecasts and dilutive to ARRIS’ fiscal year 2008 estimated non-GAAP EPS based on the high range of ARRIS management forecasts and (ii) after giving effect to such accounting treatment, the merger would be dilutive to ARRIS’ fiscal year 2008 estimated non-GAAP EPS based on both the low and high range of ARRIS management forecasts. Actual results may vary from projected results and the variations may be material.


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  Miscellaneous
 
UBS has acted as financial advisor to ARRIS in connection with the merger and will receive a fee for its services, a portion of which was payable in connection with UBS’ opinion and a significant portion of which is contingent upon consummation of the merger. In addition, ARRIS has agreed to reimburse UBS for its reasonable expenses, including fees, disbursements and other charges of counsel, and to indemnify UBS and related parties against liabilities, including liabilities under federal securities laws, relating to, or arising out of, its engagement. In the past, UBS provided investment banking services to ARRIS unrelated to the proposed merger, for which UBS received compensation. In the ordinary course of business, UBS, its successors and affiliates may hold or trade, for their own accounts and the accounts of their customers, securities of ARRIS and C-COR and, accordingly, may at any time hold a long or short position in such securities.
 
ARRIS selected UBS as its financial advisor in connection with the merger because UBS is an internationally recognized investment banking firm with substantial experience in similar transactions. UBS is continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, leveraged buyouts, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities and private placements.
 
Factors Considered by the C-COR Board of Directors
 
In reaching its conclusion to approve the merger agreement and the merger and recommend that C-COR shareholders vote FOR adoption of the merger agreement, the C-COR board of directors, at its meeting held on September 23, 2007, considered the merger agreement and determined it to be fair to, advisable and in the best interests of C-COR and its shareholders. In evaluating the merger, C-COR’s board of directors consulted with management, as well as its legal and financial advisors, and considered a number of factors as set forth below.
 
Strategic Considerations.  The C-COR board of directors considered a number of strategic advantages of the merger in comparison to a stand-alone strategy, including, but not limited to, the following factors:
 
  •  the thorough, 12-month review conducted by C-COR’s board of directors of the strategic options available to the company, including remaining an independent public company, pursuing various recapitalization or acquisition strategies, that as part of the review, the company, with the assistance of its financial advisor, contacted 22 potential strategic buyers and that the merger agreement was the most favorable proposal received by C-COR, including as to price and certainty;
 
  •  the possible alternatives to the merger (including the possibility of continuing to operate C-COR as an independent entity and the desirability and perceived risks of that alternative), the range of potential benefits to C-COR’s shareholders of the possible alternatives and the timing and likelihood of accomplishing such alternatives, and C-COR’s board of directors’ assessment that none of such alternatives were reasonably likely to present superior opportunities for C-COR or to create greater value for its shareholders, taking into account risks of execution as well as business, competitive, industry and market risks, of the alternatives and the merger;
 
  •  the continued consolidation of the industry and the competitive effects of the increased consolidation on smaller companies such as C-COR;
 
  •  the strength of ARRIS’ financial position, in particular its significant cash position, which will enable it to make future acquisitions;
 
  •  ARRIS’ products are complementary to the products of C-COR and should enable the combined companies to better meet demands of its customers;
 
  •  the favorable long-term impact of the merger upon C-COR’s employees by joining a company that will be larger and better able to compete; and
 
  •  the positive impact upon C-COR’s customers by merging with ARRIS to produce a more stable company with more extensive product offerings.


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Financial Advantages.  The C-COR board of directors also considered certain financial advantages to the merger including, but not limited to, the following factors:
 
  •  the financial terms of the merger, including the fact that, based on the closing price of its common stock as reported on the NASDAQ Global Market on September 21, 2007 (the last business day prior to announcement of the merger agreement), the $13.75 per share merger consideration represented an approximate 19% premium to the 30-day trading average of C-COR’s common stock and a 39% premium as of that date; and
 
  •  both companies expect that ARRIS will be able to achieve significant operational savings after the completion of the merger as it integrates C-COR’s operations.
 
Other Factors.  The C-COR board of directors also considered the following factors, among others:
 
  •  the ability of C-COR’s shareholders to elect to receive the merger consideration in cash, ARRIS common stock or a combination of cash and ARRIS common stock, subject to pro-ration if the elections exceed approximately 51% cash or approximately 49% stock, and the fact that, to the extent shareholders receive ARRIS common stock, the transaction will be tax free;
 
  •  the financial presentation of Merrill Lynch, including the opinion of Merrill Lynch to C-COR’s board of directors to the effect that, as of September 23, 2007 and based on the assumptions made, matters considered and limits of review set forth in its written opinion, the merger consideration to be received by holders of C-COR common stock pursuant to the merger was fair, from a financial point of view, to those holders;
 
  •  its review of C-COR’s business, operations, financial condition and earnings on an historical and a prospective basis;
 
  •  the evaluation by C-COR’s board of directors of its business plan and the risks and uncertainties associated with the implementation of the plan compared to the risks and benefits from the proposed merger;
 
  •  the downside protection through the collar and the ability of C-COR to terminate the merger agreement if the ARRIS stock price drops below $11.41;
 
  •  the ability of C-COR to receive a termination fee in the amount of $22.5 million if a third party makes a proposal to acquire ARRIS, the shareholders of ARRIS do not approve the issuance of shares by ARRIS in the merger and within twelve months of the termination date, ARRIS enters into a transaction to be acquired;
 
  •  the C-COR board of directors has the right under the merger agreement to consider unsolicited superior proposals and to change its recommendation, and terminate the merger agreement, provided C-COR pays to ARRIS a termination fee in the amount of $22.5 million;
 
  •  the regulatory and other approvals required in connection with the merger and the likelihood that such approvals would be received without unacceptable conditions; and
 
  •  the fact that some of C-COR’s directors and executive officers have other financial interests in the merger that are in addition to their interests as shareholders, including as a result of employment and compensation arrangements with C-COR and the manner in which they would be affected by the merger.
 
Potential Risks.  The C-COR board of directors considered a variety of risks and other potentially negative factors concerning the merger, including, without limitation, the following factors:
 
  •  the risk that potential benefits of the merger, including possible synergies, might not be realized;
 
  •  the possibility that the consummation of the merger may be delayed, or not occur;
 
  •  the incurrence of substantial expenses related to the merger, including transaction expenses and integration costs; and


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  •  the other potential risks about the merger and the business of ARRIS following a merger as described under the heading “Risk Factors” in this joint proxy statement/prospectus.
 
The foregoing discussion of the factors considered by C-COR’s board of directors is not intended to be exhaustive, but, rather, includes the material factors considered by C-COR’s board of directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, C-COR’s board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. C-COR’s board of directors considered all these factors as a whole, and overall considered the factors to be favorable to, and supportive of, its determination.
 
Opinion of C-COR’s Financial Advisor
 
On September 23, 2007, Merrill Lynch delivered to C-COR’s board of directors its oral opinion, which opinion was subsequently confirmed in writing, to the effect that, as of that date and based upon the assumptions made, matters considered and limits of review set forth in its written opinion, the merger consideration to be received by holders of C-COR common stock pursuant to the merger was fair, from a financial point of view, to those holders. A copy of Merrill Lynch’s written opinion is attached to this joint proxy statement/prospectus as Annex C.
 
Merrill Lynch’s written opinion sets forth the assumptions made, matters considered and limits on the scope of review undertaken by Merrill Lynch. C-COR encourages its shareholders to read Merrill Lynch’s opinion carefully and in its entirety. Merrill Lynch’s opinion was intended for the use and benefit of C-COR board of directors, does not address the merits of the underlying decision by C-COR to engage in the merger, and does not constitute a recommendation to any C-COR shareholder as to how that shareholder should vote on the proposed merger or any related matter or as to what form of merger consideration such shareholder should elect. Merrill Lynch was not asked to address, and its opinion does not address, the fairness to, or any other consideration of, the holders of any class of securities, creditors or other constituencies of C-COR, other than the holders of C-COR common stock. Merrill Lynch’s opinion does not express any opinion as to the prices at which C-COR common stock or ARRIS common stock will trade following the announcement or consummation of the merger. This summary of Merrill Lynch’s opinion is qualified in its entirety by reference to the full text of the opinion attached to this joint proxy statement/prospectus as Annex C.
 
In arriving at its opinion, Merrill Lynch, among other things:
 
  •  reviewed certain publicly available business and financial information relating to C-COR and ARRIS that it deemed to be relevant;
 
  •  reviewed certain information, including financial forecasts, relating to the business, earnings, cash flow, assets, liabilities and prospects of C-COR, as well as the amount and timing of the cost savings and related expenses and synergies expected to result from the merger furnished to Merrill Lynch by C-COR, which are referred to below as the “Expected Synergies,” and certain information relating to the business, earnings, cash flow, assets, liabilities and prospects of ARRIS, furnished to Merrill Lynch by ARRIS, including financial forecasts for fiscal years 2007 and 2008 only, Merrill Lynch having been informed by ARRIS that ARRIS has not prepared financial forecasts beyond that period;
 
  •  conducted discussions with members of senior management and representatives of C-COR and ARRIS concerning the matters described in the preceding two bullet points, as well as their respective businesses and prospects before and after giving effect to the merger and the Expected Synergies;
 
  •  reviewed the market prices and valuation multiples for C-COR common stock and ARRIS common stock and compared them with those of certain publicly-traded companies that it deemed to be relevant;
 
  •  reviewed the results of operations of C-COR and ARRIS and compared them with those of certain publicly-traded companies that it deemed to be relevant;


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  •  compared the proposed financial terms of the merger with the financial terms of certain other transactions that it deemed to be relevant;
 
  •  participated in certain discussions and negotiations among representatives of C-COR and ARRIS and their financial and legal advisors;
 
  •  reviewed the potential pro forma impact of the merger;
 
  •  reviewed the merger agreement; and
 
  •  reviewed such other financial studies and analyses and took into account such other matters as were deemed necessary, including its assessment of general economic, market and monetary conditions.
 
In preparing its opinion, Merrill Lynch assumed and relied on the accuracy and completeness of all information supplied or otherwise made available to it, discussed with or reviewed by or for it, or publicly available, and Merrill Lynch did not assume any responsibility for independently verifying such information or undertake an independent evaluation or appraisal of any of the assets or liabilities of C-COR or ARRIS and was not furnished with any such evaluation or appraisal, nor did it evaluate the solvency or fair value of C-COR or ARRIS under any state or federal laws relating to bankruptcy, insolvency or similar matters. In addition, Merrill Lynch did not assume any obligation to conduct any physical inspection of the properties or facilities of C-COR or ARRIS. With respect to the financial forecast information and the Expected Synergies furnished to or discussed with Merrill Lynch by C-COR or ARRIS, Merrill Lynch assumed that such financial forecast information and the Expected Synergies were reasonably prepared and reflected the best currently available estimates and judgment of C-COR’s or ARRIS’ management as to the expected future financial performance of C-COR or ARRIS, as the case may be, and the Expected Synergies. Merrill Lynch further assumed that the merger would qualify as a “tax-free reorganization” for U.S. federal income tax purposes.
 
Merrill Lynch’s opinion was necessarily based upon market, economic and other conditions as they existed and could be evaluated on, and on the information made available to it as of, the date thereof. Merrill Lynch assumed that in the course of obtaining the necessary regulatory or other consents or approvals (contractual or otherwise) for the merger, no restrictions, including any divestiture requirements or amendments or modifications, would be imposed that would have a material adverse effect on the contemplated benefits of the merger.
 
At the September 23, 2007 meeting of the C-COR board of directors and in connection with preparing its opinion, Merrill Lynch made a presentation of certain financial analyses of the merger. The following is a summary of the material analyses contained in the presentation that was delivered to the C-COR board of directors. Some of the summaries of financial analyses include information presented in tabular format. In order to understand fully the financial analyses performed by Merrill Lynch, the tables must be read together with the accompanying text of each summary. The tables alone do not constitute a complete description of the financial analyses, including the methodologies and assumptions underlying the analyses, and if viewed in isolation could create a misleading or incomplete view of the financial analyses performed by Merrill Lynch.
 
The fact that any specific analysis has been referred to in the summary below is not meant to indicate that such analysis was given more weight than any other analysis; in reaching its conclusion, Merrill Lynch arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole and believes the totality of the factors considered and performed by Merrill Lynch in connection with its opinion operated collectively to support its determinations as to the fairness from a financial point of view of the merger consideration to the holders of C-COR common stock pursuant to the merger. Merrill Lynch did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis.
 
In arriving at its opinion, Merrill Lynch made its determination as to the fairness, from a financial point of view, as of the date of the opinion, of the consideration to be received by holders of C-COR common stock on the basis of the financial analyses described below. The following summary is not a complete description of all of the analyses performed and factors considered by Merrill Lynch in connection with its opinion, but rather is a summary of the material financial analyses performed and factors considered by Merrill Lynch. The


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preparation of a fairness opinion is a complex process involving subjective judgments and is not necessarily susceptible to partial analysis.
 
With respect to the comparable company and comparable transactions analyses summarized below, such analyses reflect selected companies and transactions, and not necessarily all companies or transactions, that may be considered relevant in evaluating the merger. In addition, no company or transaction used as a comparison is either identical or directly comparable to C-COR, ARRIS or the merger. These analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading or acquisition values of the companies concerned.
 
The estimates of future performance of C-COR provided by C-COR’s management and of ARRIS provided by ARRIS’ management in or underlying Merrill Lynch’s analyses are not necessarily indicative of future results or values, which may be significantly more or less favorable than those estimates. In performing its analyses, Merrill Lynch considered industry performance, general business and economic conditions and other matters, many of which are beyond C-COR’S and ARRIS’ control. Estimates of the financial value of companies do not purport to be appraisals or reflect the prices at which such companies actually may be sold.
 
The consideration payable in the merger was determined through negotiation between C-COR and ARRIS and the decision to enter into the merger agreement was solely that of C-COR and ARRIS. The opinion and financial analyses of Merrill Lynch were only one of many factors considered by C-COR in its evaluation of the merger and should not be viewed as determinative of the views of C-COR with respect to the merger or the consideration offered.
 
Transaction Overview
 
Based upon the $14.26 closing price of ARRIS common stock on September 21, 2007, the exchange ratio pursuant to the merger of 0.9642 shares of ARRIS common stock per share of C-COR common stock (in the case of a C-COR shareholder receiving the merger consideration in the form of shares of ARRIS common stock and assuming no proration), or $13.75 in cash per share of C-COR common stock (in the case of a C-COR shareholder receiving the merger consideration in the form of cash and assuming no proration), Merrill Lynch noted that the implied value of the merger consideration to be received, whether in shares of ARRIS common stock or in cash, per share of C-COR common stock as of that date was $13.75, which is referred to below as the “implied consideration value.” Based upon the implied consideration value, approximately 54.3 million diluted shares of C-COR common stock outstanding (calculated using the treasury stock method) and assuming that stock options are exercised and convertible debt is converted prior to closing, and approximately $107.0 million of net cash based on $108.4 million in cash and $1.4 million in debt (which excludes convertible debt currently outstanding), Merrill Lynch also noted that the merger implied a net offer value of approximately $747.3 million, and a transaction value of approximately $640.3 million, which is referred to below as the “implied transaction value.”
 
Merrill Lynch compared the implied consideration value to the closing price of C-COR common stock on September 21, 2007 and to the average daily closing price of C-COR common stock for the one month period ending on that date and noted the following implied offer premia:
 
                 
    C-COR
   
    Common
  Implied
Time Period
  Stock Price   Premium*
 
Current (September 21, 2007)
  $ 9.88       39.2 %
1-month average
  $ 10.91       26.1 %
 
 
* Based upon the implied consideration value of $13.75
 
Analysis of C-COR
 
Historical Trading Performance.  Merrill Lynch reviewed the historical closing prices for C-COR common stock on a yearly basis since January 1, 2005 as reported by FactSet to provide background information on the prices at which C-COR common stock has historically traded. FactSet is an online


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investment research and database service used by many financial institutions. This review indicated the following:
 
C-COR Stock Price by Calendar Year
 
                         
Year
  High     Low     Mean  
 
2005
  $ 9.56     $ 4.83     $ 6.79  
2006
  $ 11.33     $ 5.04     $ 7.97  
2007*
  $ 15.76     $ 9.59     $ 13.25  
 
 
* Through September 21, 2007
 
These trading prices compared to the closing price of C-COR common stock on September 21, 2007 of $9.88 and the implied consideration value of $13.75.
 
Comparable Public Companies Analysis.  Merrill Lynch performed a comparable public companies analysis to estimate the implied equity value ranges per share of C-COR common stock on both an enterprise value basis and on a sum-of-the-parts basis. Using publicly available information, Merrill Lynch compared certain financial and operating information, ratios and valuation multiples for C-COR with corresponding financial and operating information, ratios and valuation multiples for the following five cable equipment companies that Merrill Lynch deemed relevant to its analysis, which are referred to below as the “Comparable Cable Equipment Companies,” and to the six non-cable telecommunications companies that Merrill Lynch deemed relevant to its analysis, which are referred to below as the “Comparable Non-Cable Telecommunications Companies”:
 
The Comparable Cable Equipment Companies were comprised of:
 
     
•   ARRIS
  •   Harmonic Inc.
     
•   BigBand Networks Inc. 
  •   SeaChange International Inc.
     
•   Concurrent Computer Corp.
   
 
The Comparable Non-Cable Telecommunications Companies were comprised of:
 
     
•   ADC Telecommunications Inc. 
  •   CIENA Corp.
     
•   ADTRAN Inc. 
  •   Harris Corp.
     
•   Adva AG Optical Networking
  •   Tellabs Inc.
 
Using publicly available information and research estimates, Merrill Lynch reviewed for each of these companies, the ratio of enterprise value, defined as the market capitalization plus total debt, minority interests, preferred stock, and any one-time costs, less cash and marketable securities, to estimated earnings before interest, taxes, depreciation and amortization, or “EBITDA,” for calendar year 2008, which is referred to below as “Enterprise Value/2008E EBITDA.”


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This analysis showed the following:
 
Comparable Cable Equipment Companies
 
                                 
Multiple
  High   Low   Mean   Median
 
Enterprise Value/2008E EBITDA
    13.5 x     6.4 x     9.6 x     8.4x  
 
Comparable Non-Cable Telecommunications Companies
 
                                 
Multiple
  High   Low   Mean   Median
 
Enterprise Value/2008E EBITDA
    20.5 x     7.3 x     11.8 x     10.7x  
 
Merrill Lynch estimated implied equity value ranges per share of C-COR common stock based upon estimated 2008 EBITDA for C-COR provided by C-COR management. Using a reference range of 8.0x to 10.0x C-COR’s estimated EBITDA for calendar year 2008, after adding net cash and dividing by the fully diluted shares of C-COR common stock outstanding (calculated using the treasury stock method), this analysis indicated implied values per share of C-COR common stock, rounded to the nearest $0.25, of approximately $10.75 to $13.00, compared to the closing price of C-COR common stock on September 21, 2007 of $9.88 and the implied consideration value of $13.75.
 
Using publicly available information, Merrill Lynch also compared certain financial and operating information for C-COR’s three principal businesses, Access & Transport, On Demand and OSS, on a sum-of-the-parts basis with the financial and operating information, ratios and valuation multiples from companies in similar lines of business which Merrill Lynch deemed relevant to its analysis, which are referred to as the “Access & Transport Comparable Companies,” the “On Demand Comparable Companies” and the “OSS Comparable Companies.”
 
The Access & Transport Comparable Companies were comprised of:
 
     
•   ADC Telecommunications Inc. 
  •   ARRIS
     
•   ADTRAN, Inc. 
  •   Harmonic Inc.
     
•   Adva AG Optical Networking
   
 
The On Demand Comparable Companies were comprised of:
 
     
•   BigBand Networks Inc. 
  •   SeaChange International Inc.
     
•   Concurrent Computer Corp.
   
 
The OSS Comparable Companies were comprised of:
 
     
•   Amdocs Ltd. 
  •   Convergys Corp.
     
•   Comverse Technology Inc. 
  •   CSG Systems International Inc.
 
Using publicly available information and research estimates, Merrill Lynch separately calculated for each of these companies the ratio of enterprise value to estimated revenues for calendar year 2008. For C-COR’s Access & Transport business, this ratio is referred to below as “Enterprise Value/2008E Revenue (Access & Transport Comparable Companies),” for C-COR’s On Demand business, this ratio is referred to below as “Enterprise Value/2008E Revenue (On Demand Comparable Companies),” and for C-COR’s OSS business, this ratio is referred to as “Enterprise Value/2008E Revenue (OSS Comparable Companies).”


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This analysis showed the following:
 
C-COR Sum-of-the-parts Analysis
 
                                 
Multiple
  High     Low     Mean     Median  
 
Enterprise Value/2008E Revenue (Access & Transport Comparable Companies)
    2.84 x     0.91 x     1.75 x     1.53 x
Enterprise Value/2008E Revenue (On Demand Comparable Companies)
    1.72 x     0.86 x     1.20 x     1.02 x
Enterprise Value/2008E Revenue (OSS Comparable Companies)
    2.08 x     0.80 x     1.63 x     1.82x  
 
Merrill Lynch estimated implied equity value ranges per share of C-COR common stock, based upon financial forecasts provided by C-COR management on a sum-of-the-parts basis for C-COR’s three businesses referred to above. Using a reference range of 1.25x to 1.75x C-COR’s estimated calendar year 2008 revenues for Access & Transport, 1.50x to 2.00x C-COR’s estimated calendar year 2008 revenues for On Demand, and 1.50x to 2.00x C-COR’s estimated calendar year 2008 revenues for OSS, after adding net cash and dividing by the fully diluted shares of C-COR common stock outstanding (calculated using the treasury stock method), this analysis indicated implied values per share of C-COR common stock, rounded to the nearest $0.25, of approximately $10.00 to $13.25, compared to the closing price of C-COR common stock on September 21, 2007 of $9.88 and the implied consideration value of $13.75.
 
No company used in the above analysis is identical to C-COR. In evaluating companies identified by Merrill Lynch as comparable to C-COR or C-COR’s businesses or otherwise relevant to its analysis of C-COR, Merrill Lynch made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which matters are beyond C-COR’s control. A complete analysis involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies identified above and other factors that could affect the public trading values of such companies.


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Selected Acquisition Comparables Analysis.  Using publicly available information, Merrill Lynch examined the following transactions involving communications equipment companies announced since January 1, 2002. The transactions considered and the month and year each transaction was announced were as follows:
 
         
        Month and Year of
Acquiror
 
Target
 
Announcement
 
Commscope Inc. 
  Andrew Corporation   June 2007
Silver Lake Partners and TPG Capital
  Avaya Inc.   June 2007
Motorola Inc. 
  Terayon Communication Systems, Inc.   April 2007
LM Ericsson Telefon AB
  TANDBERG Television Ltd   February 2007
LM Ericsson Telefon AB
  Redback Networks, Inc.   December 2006
Harmonic Inc. 
  Entone Technologies, Inc.   August 2006
Cisco Systems, Inc. 
  Arroyo Video Solutions, Inc.   August 2006
Motorola Inc. 
  Broadbus Technologies, Inc.   July 2006
Powerwave Technologies Inc. 
  Filtronic PLC (Wireless Infrastructure Division)   June 2006
ADC Telecommunications Inc.
  Andrew Corporation   May 2006
Alcatel
  Lucent Technologies Inc.   April 2006
Cisco Systems, Inc. 
  Scientific-Atlanta, Inc.   November 2005
Ericsson
  Marconi Corp. plc (Certain Assets)   October 2005
Harris Corp. 
  Leitch Technology Corporation   August 2005
ADC Telecommunications Inc. 
  Fiber Optic Network Solutions (FONS) Corp.   July 2005
JDS Uniphase Corporation
  Acterna Inc.   May 2005
C-COR
  nCUBE Corporation   October 2004
Avaya Inc. 
  Tenovis GmbH   October 2004
Tektronix Inc. 
  Inet Technologies, Inc.   July 2004
Tellabs Inc. 
  Advanced Fibre Communications, Inc.   May 2004
Advanced Fibre Communications, Inc. 
  Marconi Communications, Inc. (North American Access Group)   January 2004
Powerwave Technologies Inc. 
  LGP Allgon Holding AB   December 2003
Juniper Networks, Inc. 
  Unisphere Networks, Inc.   May 2003
Cisco Systems, Inc. 
  The Linksys Group, Inc.   March 2003
Andrew Corporation
  Allen Telecom Inc.   February 2003
LGP Telecom Holding AB
  Allgon AB   January 2003
CIENA Corp. 
  ONI Systems Corp.   February 2002
Proxim Corporation
  Western Multiplex Corporation   January 2002
 
In its analysis, Merrill Lynch derived and compared multiples for C-COR and the selected transactions, calculated as follows:
 
  •  the ratio of transaction value to estimated revenues for the next-twelve-months following announcement of the transaction, which is referred to below as “Transaction Value/Next-Twelve-Month Revenues,” and
 
  •  the ratio of transaction value to estimated EBITDA for the next-twelve-months following announcement of the transaction, which is referred to below as “Transaction Value/Next-Twelve-Month EBITDA.”


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This analysis indicated the following:
 
Selected Comparable Acquisition Multiples
 
                                 
Multiple
  High     Low     Mean     Median  
 
Transaction Value/Next-Twelve-Month
                               
Revenues
    5.2 x     0.7 x     2.0 x     1.6 x
Transaction Value/Next-Twelve-Month
                               
EBITDA
    21.1 x     7.5 x     12.6 x     12.1 x
 
Using a reference range of 1.50x to 2.00x C-COR’s estimated revenues for fiscal year 2008, after adding net cash and dividing by the fully diluted shares of C-COR common stock outstanding (calculated using the treasury stock method), this analysis indicated implied values per share of C-COR common stock, rounded to the nearest $0.25, of approximately $10.75 to $13.75. Using a reference range of 10.0x to 13.0x, C-COR’s estimated EBITDA for fiscal year 2008, after adding net cash and dividing by the fully diluted shares of C-COR common stock outstanding (calculated using the treasury stock method), this analysis indicated implied values per share of C-COR common stock, rounded to the nearest $0.25, of approximately $11.50 to $14.25. These ranges of implied values per share of C-COR common stock compared, in each case, to the closing price of C-COR common stock on September 21, 2007 of $9.88 and the implied consideration value of $13.75.
 
No selected comparable company or transaction is identical to C-COR or the merger. Accordingly, an analysis of the resulting multiples of the selected transactions necessarily involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and the selected transactions and other factors that may have affected the selected transactions and/or affect the merger.
 
Discounted Cash Flow Analysis.  Merrill Lynch performed a discounted cash flow, or DCF, analysis for C-COR, using financial forecasts provided by C-COR management, on a sum-of-the-parts basis for C-COR’s three principal businesses. Merrill Lynch estimated the present value of the standalone, unlevered, after-tax free cash flows that each of the businesses of C-COR could produce over the fiscal years 2008 through 2012 before giving effect to the Expected Synergies. The range of terminal values was derived by applying perpetuity growth rates ranging from 4.0% to 6.0% for Access & Transport, 6.0% to 8.0% for On Demand and 5.0% to 7.0% for OSS to fiscal year 2012 estimated free cash flow for each of the businesses. In order to derive implied equity value per share ranges for C-COR, Merrill Lynch discounted the free cash flows and terminal values of each of the businesses to present value using discount rates ranging from 13.0% to 15.0% for Access & Transport, 13.0% to 15.0% for On Demand and 12.0% to 14.0% for OSS. After adding net cash and the estimated net present value of C-COR’s net operating losses and dividing by the fully diluted shares of C-COR common stock outstanding (calculated using the treasury stock method), this analysis indicated a range of implied equity value per share of C-COR common stock, rounded to the nearest $0.25, of approximately $9.50 to $14.00, compared to the closing price of C-COR common stock on September 21, 2007 of $9.88 and the implied consideration value of $13.75.
 
Analysis of ARRIS
 
Comparable Public Companies Analysis.  Using financial forecasts provided by ARRIS management and publicly available information, Merrill Lynch compared certain financial and operating information, ratios and valuation multiples for ARRIS with corresponding financial and operating information, ratios and valuation multiples for the following eight companies, which are referred to as the ARRIS comparable companies:
 
     
•   BigBand Networks Inc. 
  •   Harmonic Inc.
     
•   C-COR
  •   Motorola Inc.
     
•   Cisco Systems Inc. 
  •   NETGEAR Inc.
     
•   Concurrent Computer Corp. 
  •   SeaChange International Inc.


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Using publicly available information and research estimates, Merrill Lynch reviewed for each of these companies, including a subset of these companies which excluded both Cisco Systems Inc. and Motorola Inc.:
 
  •  the ratio of enterprise value to estimated EBITDA for calendar year 2007, which is referred to below as “Enterprise Value/2007E EBITDA;”
 
  •  the ratio of enterprise value to estimated EBITDA for calendar year 2008, which is referred to below as “Enterprise Value/2008E EBITDA;”
 
  •  the ratio of enterprise value to estimated revenue for calendar year 2007, which is referred to below as “Enterprise Value/2007E Revenue;”
 
  •  the ratio of enterprise value to estimated revenue for calendar year 2008, which is referred to below as “Enterprise Value/2008E Revenue;”
 
  •  the ratio of the share price to the estimated earnings per share for calendar year 2007, which is referred to below as the “2007E P/E;” and
 
  •  the ratio share price to the estimated earnings per share for calendar year 2008, which is referred to below as the “2008E P/E.”
 
This analysis showed the following:
 
ARRIS Comparable Public Companies Analysis
 
                                         
Multiple
  High     Low     Mean     Median     ARRIS  
 
Enterprise Value/2007E EBITDA
    24.9 x     9.4 x     16.5 x     15.5 x     9.9 x
Enterprise Value/2008E EBITDA
    13.6 x     6.4 x     10.1 x     10.0 x     8.1 x
Enterprise Value/2007E Revenue
    5.21 x     0.96 x     1.99 x     1.37 x     1.28 x
Enterprise Value/2008E Revenue
    4.54 x     0.86 x     1.73 x     1.22 x     1.15 x
2007E P/E
    29.5 x     13.0 x     21.7 x     22.4 x     17.6 x
2008E P/E
    32.8 x     14.7 x     21.6 x     19.1 x     14.6 x
 
ARRIS Comparable Public Companies Analysis (Excluding Cisco and Motorola)
 
                                         
Multiple
  High     Low     Mean     Median     ARRIS  
 
Enterprise Value/2007E EBITDA
    20.8 x     9.4 x     15.0 x     15.2 x     9.9 x
Enterprise Value/2008E EBITDA
    13.5 x     6.4 x     9.4 x     8.7 x     8.1 x
Enterprise Value/2007E Revenue
    2.62 x     0.96 x     1.61 x     1.37 x     1.28 x
Enterprise Value/2008E Revenue
    2.31 x     0.86 x     1.39 x     1.22 x     1.15 x
2007E P/E
    29.5 x     13.0 x     21.5 x     21.7 x     17.6 x
2008E P/E
    32.8 x     14.7 x     21.8 x     18.9 x     14.6 x
 
Research Analyst Price Targets.  Merrill Lynch reviewed the most recent Wall Street research equity analyst per share target prices for ARRIS common stock, which ranged from $19.00 to $21.00, compared to the closing price of ARRIS common stock on September 21, 2007 of $14.26.
 
Pro Forma Analysis.  Merrill Lynch analyzed the potential pro forma effect of the merger on C-COR shareholders for the years 2007 through 2010 using financial forecasts provided by C-COR management, both including and excluding the Expected Synergies. The financial forecasts that included the Expected Synergies assumed, among other factors, that the combined company would achieve the Expected Synergies in the amounts and at the times indicated. The financial forecasts did not make any adjustment for the combined company as related to projected tax rates or to deferred revenue resulting from purchase accounting. This analysis indicated that the merger would be accretive to earnings to ARRIS shareholders throughout the period both including and excluding the Expected Synergies.


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Miscellaneous.  C-COR’s board of directors selected Merrill Lynch to act as its financial advisor with respect to the possible sale of C-COR because Merrill Lynch is an internationally recognized investment banking firm with substantial experience in transactions similar to the merger. As part of its investment banking business, Merrill Lynch is continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, leveraged buyouts, negotiated underwritings, secondary distributions of listed and unlisted securities and private placements.
 
Merrill Lynch is acting as financial advisor to C-COR in connection with the merger and will receive a fee from C-COR for its services pursuant to a letter agreement dated May 12, 2006, as amended. Pursuant to this letter agreement, C-COR agreed to pay Merrill Lynch a fee for its services, a portion of which was payable upon delivery of its opinion and a significant portion of which is payable contingent upon consummation of the merger. In addition, C-COR has agreed to indemnify Merrill Lynch for certain liabilities arising out of its engagement. C-COR has also agreed to reimburse Merrill Lynch for its reasonable expenses, including attorney’s fees and disbursements.
 
In the ordinary course of its business, Merrill Lynch may actively trade C-COR common stock and other securities of C-COR, as well as the ARRIS common stock and other securities of ARRIS, for its own account and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities.
 
Interests of C-COR’s Directors and Management in the Merger
 
In considering the recommendation of the C-COR board of directors with respect of the adoption of the merger agreement, C-COR shareholders should be aware that the merger agreement includes an agreement that ARRIS shall take such steps as are reasonably necessary to ensure that a nominee to the board of directors of ARRIS as selected by C-COR (and reasonably acceptable to ARRIS) is appointed to the board of directors of ARRIS. At the time the C-COR board of directors approved the merger agreement, the C-COR board of directors had not yet determined who it would propose as a nominee for the ARRIS board of directors. The members of the board of directors of Merger Sub, none of whom are members of the C-COR board of directors, will serve as the directors of the surviving corporation after the closing of the merger. The terms of the C-COR Amended and Restated Incentive Plan, under which stock options held by the non-employee directors are granted, provide that the vesting of all unvested stock options held by non-employee directors will accelerate upon any change of control transaction. The merger will constitute a change of control transaction. The C-COR non-employee directors currently hold 70,000 unvested stock options. If the merger had occurred on October 9, 2007, the aggregate in-the-money value of such accelerated stock options would have been $152,900. In addition, C-COR is also permitted to make its customary annual option grant to its non-employee directors, which grants are expected to be made in October 2007. Unlike any other option grants made to C-COR employees after September 23, 2007, the vesting of the options granted to the non-employee directors will accelerate as a result of the merger.
 
C-COR’s Chairman and Chief Executive Officer, Mr. David A. Woodle, has an Amended and Restated Employment Agreement dated March 5, 2007, which we refer to as the Woodle Employment Agreement, that provides certain benefits be paid to Mr. Woodle in the event he is terminated in connection with a change of control. If Mr. Woodle’s employment is terminated, other than for cause (as defined in the Woodle Employment Agreement), within 18 months after a change of control occurs (the merger will constitute a change of control transaction under the Woodle Employment Agreement), Mr. Woodle is entitled to receive the following severance payments: (i) three times his annual salary at the rate on the date of the termination of his employment (but not less than three times his annual salary prior to the change of control); (ii) three times the C-COR’s matching and discretionary contributions to its 401(k) Plan and the Supplemental Executive Retirement Plan, which we refer to as the SERP (if the termination occurs during a plan year for which C-COR makes a discretionary contribution to the 401(k) Plan, an amount equal to the contribution he would have received); (iii) 100% vesting on all 401(k) Plan and SERP contributions to the extent not already vested; (iv) three times the average Profit Incentive Plan payment made to Mr. Woodle over the past three years; and (v) three years of health, dental, accident, life and disability insurance coverage. If payments by C-COR pursuant to the Woodle Employment Agreement are deemed compensation for Mr. Woodle and, as a result, he


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becomes subject to “excise tax” under Section 4999 of the Code, C-COR must pay Mr. Woodle an additional amount required to “gross up” such amount paid by Mr. Woodle in excise taxes. Pursuant to the C-COR Incentive Plan, all outstanding but unvested options held by Mr. Woodle become fully vested upon the occurrence of a change of control. In addition, Mr. Woodle is entitled to a supplemental retirement benefit with an annual benefit of $50,000, commencing on Mr. Woodle’s retirement and continuing until his death in accordance with, and subject to, definitions of retirement as outlined in the C-COR Incentive Plan. Under the Woodle Employment Agreement, if Mr. Woodle’s employment is terminated by C-COR within three months prior to a change of control, but such termination was in connection with a change of control, Mr. Woodle is entitled to receive all payments and benefits to which he would otherwise be entitled if such termination had actually occurred within 18 months after such change of control. If Mr. Woodle resigns within 18 months after a change of control, he is entitled to the same benefits as from an involuntary termination if: (a) he determines there has been a significant change in his responsibilities or duties; (b) his base salary is reduced by more than 10%; or (c) he is required to relocate more than 40 miles from his former place of work.
 
All of C-COR’s executive officers, other than Mr. Woodle, have change of control agreements, which we refer to as the Change of Control Agreements. Pursuant to the Change of Control Agreements, in the event an executive is terminated involuntarily within 18 months after a change of control, the executive is entitled to receive: (i) two times his or her annual salary (Mr. Hanelly, the Chief Financial Officer, Treasurer and Secretary of C-COR, would receive three times his annual salary) payable in a lump sum; (ii) two times C-COR’s annual matching contribution to the Retirement Savings and Profit Sharing Plan, the 401(k) Plan and discretionary and matching contributions to the SERP (Mr. Hanelly would receive three times C-COR’s contributions) payable in a lump sum; (iii) the sum of the prior two years’ awards from the Profit Incentive Plan then in effect (Mr. Hanelly would receive three years’ awards) payable in a lump sum; (iv) 24 months of coverage under C-COR’s various health, dental, life and disability insurance plans (Mr. Hanelly would receive 36 months of coverage) or, at the executive’s discretion, a lump sum payment in an amount equal to C-COR’s cost of providing such coverages during such period; and (v) unreduced benefits payable under C-COR’s Supplemental Retirement Plan, which we refer to as CSRP, even if the executive has not yet attained age 55, payable in monthly installments over 15 years. Pursuant to the C-COR Amended and Restated Incentive Plan, all outstanding but unvested options held by executive officers become fully vested upon the occurrence of a change of control. If the executive resigns within 18 months after a change of control, the executive is entitled to the same benefits as from an involuntary termination if: (a) the executive determines there has been a significant change in his/her responsibilities or duties; (b) the executive’s base salary is reduced by more than 10%; or (c) the executive is required to relocate more than 40 miles from his/her former place of work.
 
If payments by C-COR pursuant to a Change of Control Agreement are deemed compensation for the executive and, as a result, the executive becomes subject to “excise tax” under Section 4999 of the Code, C-COR will pay such executive an additional amount required to “gross up” such amount paid by the executive in excise taxes. Additionally, C-COR is responsible for the fees and expenses of counsel (up to a maximum of $500,000) and any additional amount required to “gross up” the amount paid to cover federal and state income taxes payable by such executive relating to such payments that the executive incurs in the enforcement of his or her rights under the agreement by litigation or other legal action.
 
C-COR committed in its initial offer letter to Mr. Pohl, dated December 22, 2004, that should his employment change significantly within 36 months of his date of hire (January 1, 2005), that he would be entitled to enhanced severance benefits. The enhanced severance benefits in the event of such significant change in employment status include: twelve months severance based upon base salary at time of termination, payment of Profit Incentive Plan should a payment be authorized by the board of directors at the conclusion of the fiscal year during which employment is terminated, and immediate vesting of CSRP payments constituting normal retirement age/service requirements ($18,000 annually for fifteen years, payable in equal monthly installments).


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Based on a hypothetical termination date of October 1, 2007, the value of salary, bonus and accelerated stock which would be paid to C-COR’s executive officers in the event of a change of control have been set forth in the following table:
 
   Change of Control Payments
 
                                                                         
                                              Estimated
       
                                              280G Tax
       
                Incentive
    C-COR
    Insurance
          Equity
    Gross-Up
       
    Multiple     Salary(1)     Compensation(2)     Contributions(3)     Benefits(4)     CSRP(5)     Acceleration(6)     Payment(7)     Total  
 
David A. Woodle
    3     $ 1,500,000     $ 504,087     $ 421,717     $ 44,302     $ 1,350,000     $ 872,125     $ 901,281     $ 5,593,512  
William T. Hanelly
    3     $ 849,000     $ 194,423     $ 200,518     $ 43,675     $ 270,000     $ 267,775     $ 620,725     $ 2,446,116  
Michael J. Pohl
    2     $ 680,000     $ 224,054     $ 157,935     $ 26,108     $ 270,000     $ 516,625     $ 610,226     $ 2,484,948  
John O. Caezza
    2     $ 600,000     $ 204,519     $ 141,265     $ 30,644     $ 270,000     $ 268,000     $ 654,354     $ 2,168,782  
Steven T. Gropp
    2     $ 460,000     $ 9,200     $ 127,925     $ 28,000     $ 270,000     $ 337,188     $ 510,960     $ 1,743,273  
Mary Beahm
    2     $ 332,000     $ 90,123     $ 71,714     $ 28,214     $ 270,000     $ 144,375     $ 334,034     $ 1,270,460  
Ken Wright
    2     $ 510,000     $ 170,692     $ 119,194     $ 33,625     $ 270,000     $ 192,500     $ 501,097     $ 1,797,108  
Joseph Zavacky
    2     $ 321,000     $ 89,409     $ 69,975     $ 28,155     $ 270,000     $ 58,850     $ 275,577     $ 1,112,966  
 
 
(1) Amounts shown in the Salary column are calculated as current annual salary multiplied by the multiple shown in first column.
 
(2) Amounts shown in the Incentive Compensation column for Mr. Woodle and Mr. Hanelly are the actual incentive payments for the last 3 years; amounts shown for the other executives are the actual incentive payments for the last 2 years. No amounts are included for payments that may be made under the fiscal year 2008 PIP plan.
 
(3) Amounts shown in the C-COR Contributions columns are calculated based upon the current deferral rates for the executive officers for the 401(k) and SERP plans and the relevant C-COR matches and contributions for those plans times the sum of the current annual salary and incentive compensation award times the multiple in Column 1. For Mr. Gropp, the C-COR contributions also includes discretionary contributions in the amount of $60,949, the vesting of which would accelerate on a change of control. The discretionary contributions require five years of service for 100% vesting with no partial vesting prior to that time. Mr. Gropp did not meet the five-year vesting requirement as of October 1, 2007.
 
(4) Amounts shown in the Insurance Payment column represent C-COR’s payments for continuing the health, dental, disability and life insurance coverage for the named executives for the number of years shown in the Multiple column.
 
(5) The amount shown in the CSRP column for Mr. Woodle is the estimated amount payable under his plan benefit calculated based upon a $50,000 annual payment beginning June 29, 2007 and continuing for a life expectancy of 78. These payments are due to Mr. Woodle in the event that he terminates employment for any reason, whether his employment was terminated voluntarily or involuntarily, not only in the case of change of control. The amounts shown for the other named executives are the sum of full payments due under the plan if the named executive retired at age 65. In the event of termination after a change in control, these payments become due as if the named executive had retired at age 65. As Mr. Woodle is eligible for retirement under the CSRP, such amounts are not included for purposes of calculating his estimated tax gross-up payment.
 
(6) The amounts in the Equity Acceleration column represent the value of all unvested stock options at the closing price on October 1, 2007, minus any applicable strike price. In the event of a change of control, such as the merger, these options vest immediately. Each of Mr. Woodle, Mr. Hanelly, Mr. Pohl and Mr. Zavacky are eligible for retirement under the Incentive Plan, so the value of their respective options was not included for purposes of their respective estimated tax gross-up payments.
 
(7) Consists of payments of an amount equal to Section 4999 excise tax and an additional amount to cover taxes on such excise tax payment.
 
C-COR’s officers will serve as the officers of the surviving company after the closing.


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C-COR, prior to the effective time of the merger, and each of ARRIS and Merger Sub, following the effective time of the merger, have agreed to indemnify and hold harmless the present and former directors and officers of C-COR and its subsidiaries for costs, expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages, or liabilities, arising out of matters existing at or prior to the merger to the same extent those individuals are indemnified or have the right to advancement or expenses, as of the date of the merger agreement, by C-COR pursuant to its articles of incorporation and bylaws, to the fullest extent permitted by law. Prior to the closing, Merger Sub, as the surviving company, or in lieu thereof, C-COR, will obtain directors’ and officers’ “tail” insurance policies with a claims period of at least six years from the effective time of the merger, subject to certain limitations.
 
C-COR’s board of directors was aware of these interests and considered them, among other matters, in approving the merger and making its recommendation that the C-COR shareholders adopt the merger agreement.
 
No Dissenters’ or Appraisal Rights
 
Under Pennsylvania law, the holders of C-COR common stock are not entitled to dissenters’ or appraisal rights with respect to the merger. Therefore, although holders of C-COR common stock may vote against the merger, they will not have the right under Pennsylvania law to demand from C-COR an appraisal proceeding to determine the “fair value” of their shares. A holder of C-COR common stock who receives shares of ARRIS common stock in the merger and who does not wish to be an ARRIS shareholder may elect to sell his or her shares at any time in the public market at the value set by the market.
 
Regulatory Matters
 
The merger is subject to the requirements of the HSR Act and the rules promulgated under the HSR Act by the U.S. Federal Trade Commission, or the FTC, which prevent transactions such as the merger from being completed until required information and materials are furnished to the U.S. Department of Justice, or DOJ, and the FTC and the applicable waiting period is terminated or expires. On October 11, 2007, ARRIS and C-COR filed the requisite Pre-Merger Notification and Report Forms under the HSR Act with the DOJ and the FTC. The applicable waiting period began on October 11, 2007 and will expire on November 12, 2007 unless early termination is granted or unless extended by a request for additional information.
 
The DOJ, the FTC and others may challenge the merger on antitrust grounds either before or after expiration or termination of the waiting period. Accordingly, at any time before or after the completion of the merger, any of the DOJ, the FTC or others could take action under the antitrust laws as it deems necessary or desirable in the public interest, including without limitation seeking to enjoin the completion of the merger or permitting completion subject to regulatory concessions or conditions. We cannot assure you that a challenge to the merger will not be made or that, if a challenge is made, it will not succeed.
 
Accounting Treatment
 
ARRIS is required to account for the merger as a purchase transaction under GAAP. Under the purchase method of accounting, the assets (including identifiable intangible assets) and liabilities (including executory contracts and other commitments) of C-COR will be recorded, as of completion of the merger, at their respective fair values and added to those of ARRIS. Any excess of purchase price over the net fair value of C-COR’s assets and liabilities is recorded as goodwill (excess purchase price). Financial statements and reported results of operations of ARRIS issued after completion of the merger will reflect these values, but will not be restated retroactively to reflect the historical financial position or results of operations of C-COR. The results of operations of C-COR will be included in the results of operations of ARRIS following the effective time of the merger.


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Stock Exchange Listing
 
ARRIS has agreed to use its reasonable efforts to cause the shares of ARRIS common stock to be issued pursuant to the merger to be approved for listing on the NASDAQ Global Select Market before the completion of the merger, subject to official notice of issuance and regulatory approval.
 
It is a condition to the merger that the ARRIS common stock issuable in the merger be approved for listing on the NASDAQ Global Select Market. Upon completion of the merger, ARRIS common stock will continue to trade under the symbol “ARRS” and C-COR common stock will cease to be listed on the NASDAQ Global Select Market and its shares will be deregistered under the Exchange Act.
 
Issue and Resale of Shares of ARRIS Common Stock Received In the Merger
 
In general, ARRIS common stock issued to C-COR shareholders pursuant to the merger agreement will be freely transferable, except for any shares received by persons who may be deemed to be “affiliates” of the parties under the Securities Act. Affiliates generally include individuals or entities that control, are controlled by, or are under common control with a person. Affiliates may sell their ARRIS common stock only pursuant to an effective registration statement under the Securities Act covering the resale of those shares, an exemption under Rule 145(d) of the Securities Act or any other applicable exemption under the Securities Act. ARRIS’ registration statement on Form S-4, of which this joint proxy statement/prospectus constitutes a part, does not cover the resale of ARRIS common stock held by affiliates after the merger.


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THE MERGER AGREEMENT
 
The following is a summary of the material provisions of the merger agreement and certain other related matters. This summary is qualified in its entirety by reference to the merger agreement which is incorporated by reference in its entirety and attached to this joint proxy statement/prospectus as Annex A. We encourage you to read the merger agreement in its entirety.
 
Form of the Merger
 
The ARRIS board of directors and the C-COR board of directors each approved the merger agreement, the merger, and the other transactions contemplated by the merger agreement. The merger agreement contemplates the merger of C-COR with and into Merger Sub. At the effective time of the merger, the separate corporate existence of C-COR will cease, and Merger Sub will continue as the surviving entity and a wholly owned subsidiary of ARRIS. Each share of ARRIS common stock issued and outstanding at the effective time of the merger will remain issued and outstanding as one share of common stock of ARRIS, and each share of C-COR common stock issued and outstanding at the effective time of the merger will be converted into the right to receive either cash or ARRIS common stock, subject to the election, proration and adjustment procedures described below. See “ — Merger Consideration and Shareholder Elections” below.
 
Merger Sub’s articles of incorporation and bylaws will be the articles of incorporation and bylaws of the surviving corporation after the effective time of the merger. After the merger is complete, Merger Sub will file an amendment to its articles of incorporation to change its name to “C-COR Incorporated.” In addition, at the effective time of the merger, a designee of C-COR (reasonably acceptable to ARRIS), who has not yet been determined, will be appointed to the ARRIS board of directors. The directors of Merger Sub will continue as the directors of the surviving corporation after the merger and the officers of C-COR immediately prior to the merger will become the officers of the surviving corporation.
 
Merger Consideration and Shareholder Elections
 
Under the merger agreement, C-COR shareholders will have the right to elect to receive either $13.75 in cash, without interest, or 0.9642 of a share of ARRIS common stock, for each share of C-COR common stock that you own. For example, if a C-COR shareholder owns 100 shares of C-COR common stock, he or she could elect to receive cash in exchange for 40 shares and shares of ARRIS common stock in exchange for the other 60 shares.
 
However, regardless of the elections made by individual C-COR shareholders, ARRIS and C-COR have agreed to fix the number of shares of C-COR common stock that will be converted into shares of ARRIS common stock, and the number of shares that will be converted into cash. Under the merger agreement, approximately 49% of the shares of C-COR common stock outstanding immediately before completion of the merger will be converted into the right to receive stock consideration, and the remaining approximately 51% of the shares will be converted into the right to receive the cash consideration, although a small portion of the consideration that would otherwise be payable in stock may be paid in cash as described below under “ — Stock Consideration Adjustments.” Therefore, the cash and stock elections that C-COR shareholders make with respect to their shares will be subject to proration to achieve this required ratio of cash and stock consideration.
 
Specifically, as described in more detail below under “— Election Limitations,” if C-COR shareholders elect to receive more stock or cash consideration than is provided for under the merger agreement, elections for the over-subscribed form of merger consideration will be prorated so that the overall approximate 51/49 split of the merger consideration is achieved. For example, if C-COR shareholders elect in the aggregate to exchange more than 49% of the outstanding C-COR shares for shares of ARRIS common stock, then the C-COR shareholders’ elections to receive ARRIS common stock for shares of C-COR common stock will be adjusted on a pro rata basis and, since it is unlikely that C-COR shareholders collectively will elect exactly the 51/49 split, a portion of those shares electing ARRIS common stock will receive the cash consideration instead. As a result, C-COR shareholders are likely to receive cash or shares of ARRIS stock for greater or fewer C-COR shares than they specify in their election.


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Stock Consideration Adjustments
 
The implied value of the stock consideration will fluctuate as the market price of ARRIS common stock fluctuates and, because elections are subject to proration as described below under “— Election Limitations,” there can be no assurance that a C-COR shareholder will receive ARRIS common stock, rather than cash, for each share of C-COR common stock for which he or she makes a stock election. As a result of this fluctuation in the implied value, ARRIS and C-COR have agreed that, in the event the average closing price is less than $12.83, the exchange ratio for the conversion of C-COR common stock into ARRIS common stock will be increased so that the per share stock consideration will equal $12.38, based on the average closing price. The per share cash consideration will remain $13.75. The $12.83 threshold represents a 10% decrease from the $14.26 closing price of ARRIS’ common stock on the NASDAQ Global Select Market on the last trading day before the merger agreement was signed. The increase in the exchange ratio will result in an increase in the number of shares of ARRIS common stock issued as stock consideration. However, instead of issuing those additional shares, ARRIS may, at its option and subject to certain limitations, pay the incremental amount in cash to the C-COR shares receiving the stock consideration. No additional increase in the stock consideration will be made in the event the average closing price is less than $11.41. In such circumstances, ARRIS will use an average closing price of $11.41 and the exchange ratio will be fixed at 1.0848 shares of ARRIS common stock for each share of C-COR common stock receiving the stock consideration. In addition, if the average closing price is less than $11.41, both ARRIS and C-COR will have the right to terminate the merger agreement. See “— Termination.”
 
Similarly, in the event the average closing price is more than $15.69, the exchange ratio for the conversion of C-COR common stock into ARRIS common stock will be decreased so that the per share stock consideration will equal $15.13, based on the average closing price. The per share cash consideration will remain $13.75. The $15.69 threshold represents a 10% increase over the $14.26 closing price of ARRIS’ common stock on the NASDAQ Global Select Market on the last trading day before the merger agreement was signed. This decrease in the exchange ratio will result in a reduction in the number of shares of ARRIS common stock issued as stock consideration. No additional decrease in the exchange ratio will be made, however, in the event the average closing price is more than $17.11. In such circumstances, ARRIS will use an average closing price of $17.11 and the exchange ratio will be fixed at 0.8839 shares of ARRIS common stock for each share of C-COR common stock receiving the stock consideration.
 
The table below provides examples of the consideration that will be paid to each C-COR shareholder electing to receive cash consideration and stock consideration, assuming the average closing price of the ARRIS common stock is as indicated. The table assumes that, in the event the average closing price is less than $12.83, ARRIS elects to pay the additional consideration in shares of ARRIS’ common stock.
 
                                                             
      100% Stock Election           Pro Rata Values Reflecting 51% Cash/49% Stock Consideration Mix  
                  100% Cash
          Implied Stock
             
ARRIS
          Value
    Election
          Consideration
    Cash
    Average Implied
 
Average
          per
    Value
          Value per
    Consideration
    Value
 
Closing
    Exchange
    C-COR
    per C-COR
    Exchange
    C-COR
    Value per C-COR
    per C-COR
 
Price
    Ratio     Share     Share     Ratio     Share     Share     Share  
 
$ 18.54       0.8839x     $ 16.39     $ 13.75       0.4339 x   $ 8.04     $ 7.00     $ 15.04  
$ 17.11 (1)     0.8839x     $ 15.13     $ 13.75       0.4339 x   $ 7.43     $ 7.00     $ 14.43  
$ 16.40       0.9223x     $ 15.13     $ 13.75       0.4528 x   $ 7.43     $ 7.00     $ 14.43  
$ 15.69       0.9642x     $ 15.13     $ 13.75       0.4734 x   $ 7.43     $ 7.00     $ 14.43  
$ 14.97       0.9642x     $ 14.43     $ 13.75       0.4734 x   $ 7.09     $ 7.00     $ 14.09  
$ 14.26       0.9642x     $ 13.75     $ 13.75       0.4734 x   $ 6.75     $ 7.00     $ 13.75  
$ 13.55       0.9642x     $ 13.07     $ 13.75       0.4734 x   $ 6.41     $ 7.00     $ 13.41  
$ 12.83       0.9642x     $ 12.38     $ 13.75       0.4734 x   $ 6.08     $ 7.00     $ 13.08  
$ 12.12       1.0210x     $ 12.38     $ 13.75       0.5012 x   $ 6.08     $ 7.00     $ 13.08  
$ 11.41 (2)     1.0848x     $ 12.38     $ 13.75       0.5325 x   $ 6.08     $ 7.00     $ 13.08  
$ 9.98       1.0848x     $ 10.83     $ 13.75       0.5325 x   $ 5.32     $ 7.00     $ 12.32  
 
 
(1) No further adjustment will be made to the exchange ratio above the $17.11 per share threshold.
 
(2) No further adjustment will be made to the exchange ratio below the $11.41 per share threshold.


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In deciding to make any increase in the stock consideration in cash, shares of ARRIS common stock or both, ARRIS may not make such increase in cash if it would result in counsel for either ARRIS or C-COR being unable to issue its opinion that the merger will qualify as a “reorganization” under the Internal Revenue Code of 1986 (referred to herein as the Code). See “Material U.S. Federal Income Tax Consequences of the Merger.”
 
ARRIS’ common stock trades on the NASDAQ Global Select Market under the ticker symbol “ARRS.” C-COR common stock trades on the NASDAQ Global Select Market under the ticker symbol “CCBL.” You may obtain current market price quotations for each company’s common stock from newspapers, over the Internet, or from other sources.
 
Non-Electing Shares
 
C-COR shareholders who make no election, or who do not make a valid election, with respect to any or all of their shares of C-COR common stock will be deemed not to have made an election as to those shares. C-COR shareholders holding shares of C-COR common stock as to which no election has been made may receive, in respect of those shares, cash, ARRIS common stock, or a mix of cash and shares of ARRIS common stock depending on, and after giving effect to, the number of valid cash elections and stock elections that have been made by other C-COR shareholders using the proration adjustment described below.
 
In addition, under the terms of the merger agreement, all of the C-COR shares held in C-COR’s retirement plans, including both its plans qualified under Section 401(a) of the Code and its non-qualified plans, will be deemed “non-electing” C-COR shares and participants under such plans will not have the right to make an election with respect to the shares of C-COR common stock held by them under the retirement plans.
 
Election Limitations
 
The number of shares of C-COR common stock that will be converted into the stock consideration in the merger is fixed at approximately 49% of the total number of shares of C-COR common stock outstanding immediately before completion of the merger, although a small portion of the consideration that would otherwise be payable in stock may be paid in cash as described above under “ — Stock Consideration Adjustments.” The remainder of the shares will be converted into $13.75 per share in cash, without interest. Therefore, the cash and stock elections made by C-COR shareholders are subject to proration to achieve this ratio of the total number of shares of ARRIS common stock to be issued and the aggregate amount of cash to be paid in the merger. As a result, depending on the overall elections made by C-COR shareholders, they could receive cash or ARRIS common stock for more or fewer C-COR shares than specified in their elections. However, except with respect to C-COR treasury shares or C-COR shares owned by ARRIS, each share of C-COR common stock held by a C-COR shareholder will be converted into either the stock or cash consideration described herein upon completion of the merger.
 
Proration if Too Much Stock is Elected.  If C-COR shareholders elect to receive more shares of ARRIS common stock than ARRIS is required to issue in the merger, then:
 
  •  C-COR shareholders who elect to receive cash or who have made no election for shares of C-COR common stock will receive cash for their shares of C-COR common stock; and
 
  •  C-COR shareholders who elect to receive ARRIS common stock for shares of C-COR common stock will receive ARRIS common stock for a prorated portion of their shares and cash for those shares of C-COR common stock not converted into ARRIS common stock.
 
Proration if Too Much Cash is Elected.  If C-COR shareholders elect to receive fewer shares of ARRIS common stock than ARRIS is required to issue in the merger, then C-COR shareholders who elected to receive ARRIS common stock for shares of C-COR common stock will receive ARRIS common stock for their shares


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of C-COR common stock, and those C-COR shareholders who have elected cash or have made no election for shares of C-COR common stock will be treated in the following manner:
 
  •  If the number of shares held by C-COR shareholders as to which no election has been made is sufficient to make up the shortfall in the number of shares of ARRIS common stock that ARRIS is required to issue in the merger under the merger agreement, then all C-COR shareholders who elected cash for their shares of C-COR common stock will receive cash for those shares of C-COR common stock, and those shareholders who made no election for their shares of C-COR common stock will receive, pro rata, a combination of cash and ARRIS common stock for those shares of C-COR common stock in whatever proportion is necessary to make up the shortfall.
 
  •  If the number of shares held by C-COR shareholders as to which no election has been made is insufficient to make up the shortfall, then all of those shares will be converted into ARRIS common stock and those C-COR shareholders who elected to receive cash for their shares of C-COR common stock will receive, pro rata, a combination of cash and ARRIS common stock.
 
The table below illustrates some, but not all of the potential outcomes for the amount of stock consideration and/or cash consideration a C-COR shareholder could receive depending on the percentage of C-COR shares as to which an election has been made to receive the stock consideration or the cash consideration. The calculations in the table below assume that no adjustment is made to the stock consideration as a result of the average trading price of ARRIS’ common stock, that valid elections have been made in respect of all of the outstanding C-COR shares and do not give effect to the payment of cash for fractional shares. The table below is for illustrative purposes only. Because the proration will be done on a share by share basis, unless ARRIS elects to pay a portion of the stock consideration in cash in the event the average closing price is less than $12.83, no single share of C-COR common stock will actually receive both shares of ARRIS common stock and cash (other than cash in lieu of fractional shares).
 
                     
Percentage of C-COR
  Percentage of C-COR
  Aggregate Consideration
  Aggregate Consideration
Shares Requesting
  Shares Requesting
  Received for Each C-COR
  Received for Each C-COR
Cash Consideration
  Stock Consideration   Cash Election Share   Stock Election Share
 
  100 %     0 %   $7.00 in cash and 0.4733 shares of ARRIS common stock   $7.00 in cash and 0.4733 shares of ARRIS common stock
  90 %     10 %   $7.78 in cash and 0.4188 shares of ARRIS common stock   0.9642 shares of ARRIS common stock
  80 %     20 %   $8.75 in cash and 0.3506 shares of ARRIS common stock   0.9642 shares of ARRIS common stock
  70 %     30 %   $10.00 in cash and 0.2630 shares of ARRIS common stock   0.9642 shares of ARRIS common stock
  60 %     40 %   $11.67 in cash and 0.1461 shares of ARRIS common stock   0.9642 shares of ARRIS common stock
  51 %(1)     49 %(1)   $13.75 in cash   0.9642 shares of ARRIS common stock
  40 %     60 %   $13.75 in cash   $2.50 in cash and 0.7889 shares of ARRIS common stock
  30 %     70 %   $13.75 in cash   $4.11 in cash and 0.6762 shares of ARRIS common stock
  20 %     80 %   $13.75 in cash   $5.31 in cash and 0.5917 shares of ARRIS common stock
  10 %     90 %   $13.75 in cash   $6.25 in cash and 0.5259 shares of ARRIS common stock
  0 %     100 %   $7.00 in cash and 0.4733 shares of ARRIS common stock   $7.00 in cash and 0.4733 shares of ARRIS common stock
 
 
(1) Represents agreed upon ratio of cash consideration and merger consideration.


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Treasury Shares and Shares Held by ARRIS or C-COR
 
Any shares of C-COR common stock owned immediately prior to the completion of the merger by C-COR or ARRIS (other than shares held by C-COR pursuant to the Supplemental Executive Retirement Plan) will be cancelled and retired and will cease to exist, and there will be no payment or consideration for those shares.
 
Conversion of Shares; Exchange of Certificates; Elections as to Form of Consideration
 
Conversion of C-COR common stock into the right to receive the merger consideration will occur automatically upon completion of the merger. Prior to the closing of the merger, ARRIS will deposit in trust with the exchange agent certificates representing the shares of ARRIS common stock issuable in the merger and cash sufficient to pay the cash consideration and the cash to be paid instead of fractional shares of ARRIS common stock.
 
As soon as reasonably practicable after the effective time of the merger, and promptly following its calculation of the number and amount of valid stock and cash elections and its receipt of properly completed transmittal materials, The Bank of New York, as exchange agent, will exchange certificates representing shares of C-COR common stock for the merger consideration pursuant to the terms of the merger agreement.
 
Election Form
 
Accompanying this joint proxy statement/prospectus is an election form. The election form will allow a C-COR shareholder to elect to receive cash or ARRIS common stock for each share of C-COR common stock held by the holder, subject to proration. The exchange agent will also make available election forms to holders of C-COR common stock who request such forms before the election deadline described below.
 
Shareholders of C-COR who wish to elect the type of merger consideration they will receive if the merger is completed should carefully review and follow the instructions set forth in the election form. Shareholders who hold their shares in “street name” should follow the instructions of their broker, bank, or other nominee to make an election with respect to those shares. The election deadline is 5:00 p.m., New York City time, on • , 2007, which is the day prior to the date of the special meeting of the C-COR shareholders. Shares of C-COR common stock as to which the holder has not made a valid election before the election deadline will be treated as though no election has been made. Since the election deadline will occur before the date the merger is completed, a C-COR shareholder will not know what the market price of a share of ARRIS common stock will be, and accordingly may not know what the indicated value of the merger consideration for each share of C-COR common stock that is converted in the merger into a share of ARRIS common stock will be as of completion of the merger. We expect that the market price of ARRIS common stock will fluctuate both before and after the election deadline and the completion of the merger.
 
To make an election, a holder of C-COR common stock must submit a properly completed election form and return it, so that the form is actually received by the exchange agent at or before the election deadline in accordance with the instructions on the election form.
 
Generally, an election may be revoked or changed, but only by written notice received by the exchange agent before the election deadline (accompanied by a new properly completed and signed election form in the event of a changed election).
 
Shareholders will not be entitled to revoke or change their elections following the election deadline. Shares of C-COR common stock as to which a holder has not made a valid election prior to the election deadline, including as a result of revocation, will be deemed non-electing shares. If it is determined that any purported election was not properly made, the purported election will be deemed to be of no force or effect and the holder making the purported election will be deemed not to have made an election for these purposes, unless a proper election is subsequently made on a timely basis.
 
Within five business days of the closing of the merger, ARRIS and the exchange agent will calculate the number and amount of valid cash and stock elections made by C-COR shareholders. The validity of any


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election will be determined solely by ARRIS, in the exercise of its reasonable discretion. Until ARRIS and the exchange agent complete this calculation, a former holder of C-COR common stock may not be able to sell or otherwise dispose of the shares of ARRIS common stock, if any, to which such holder is entitled.
 
Letter of Transmittal
 
Prior to or promptly following the effectiveness of the merger, the exchange agent will send a letter of transmittal to those persons who were C-COR shareholders immediately prior to completion of the merger. This mailing will contain instructions on how to surrender shares of C-COR common stock in exchange for the merger consideration the holder is entitled to receive. If a certificate for C-COR common stock has been lost, stolen, or destroyed, the exchange agent will issue the merger consideration properly payable following its receipt of an affidavit of that fact by the person claiming that such certificate is lost, stolen or destroyed and, if required by ARRIS, the posting of a bond as indemnity against any claim made against ARRIS with respect to the certificate.
 
Dividends and Distributions
 
Until C-COR common stock certificates (or other appropriate evidence of share ownership) are surrendered for exchange, any dividends or other distributions declared after the effectiveness of the merger with respect to ARRIS common stock into which shares of C-COR common stock may have been converted will accrue but will not be paid. When duly surrendered, ARRIS will pay any unpaid dividends or other distributions, without interest. After the effective time, there will be no transfers on the stock transfer books of C-COR of any shares of C-COR common stock.
 
Withholding
 
The exchange agent will be entitled to deduct and withhold from the merger consideration payable to any C-COR shareholder the amounts it is required to deduct and withhold under any federal, state, local, or foreign tax laws.
 
No Fractional Shares
 
ARRIS will not issue fractional shares to shareholders in connection with the merger. Rather, shareholders will receive cash, without interest, equal to such fractional part of a share of ARRIS common stock multiplied by the average closing price.
 
Treatment of C-COR Stock Options and Warrants
 
As of the effective time of the merger, each outstanding option to purchase shares of C-COR common stock granted under C-COR’s stock-based compensation and benefit plans will become fully vested (except for options granted by C-COR to new employees hired after September 23, 2007, the date of the merger agreement) and will be converted into an option to acquire a number of shares of ARRIS common stock (rounded down to the nearest whole number of shares) obtained by multiplying the number of shares of C-COR common stock subject to the C-COR stock option immediately prior to the effective time of the merger by 0.9642, which we refer to as the option exchange ratio. However, in the event the average closing price is less than $12.83, the option exchange ratio will be calculated by dividing $13.08 by the average trading price of the ARRIS common stock and in the event the average closing price is more than $15.69, the option exchange ratio will be calculated by dividing $14.43 by the average trading price of the ARRIS common stock. In no event, however, is ARRIS required to use an average trading price of less than $11.41 or more than $17.11.
 
The exercise price per share for the converted options will be obtained by dividing the exercise price per share of C-COR common stock of such C-COR stock option immediately prior to the effective time of the merger by the applicable option exchange ratio (rounded up to the nearest cent).


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Following the merger, each option will continue to be governed by the same terms and conditions as were applicable to the option immediately prior to the merger; provided, that each C-COR option will be converted into an option to acquire ARRIS common stock.
 
As of the effective time of the merger, each outstanding warrant to purchase shares of C-COR common stock will expire. As a result, holders of outstanding C-COR warrants must exercise such warrants prior to the effective time of the merger in order to be entitled to receive any cash or stock merger consideration.
 
Closing and Effective Time
 
Closing
 
The closing of the merger will take place as soon as practicable after all closing conditions have been satisfied or waived (other than any conditions which by their terms cannot be satisfied until the closing date, but subject to the satisfaction or, where permitted, waiver of those conditions as of the closing date) or another time as agreed to in writing by the parties. See “The Merger Agreement — Conditions to Completion of the Merger.”
 
Effective Time
 
Shortly after the closing, ARRIS and Merger Sub will file a certificate of merger with the Secretary of State of the State of Delaware in accordance with the Delaware General Corporation Law and C-COR will file articles of merger with the Department of State of the Commonwealth of Pennsylvania in accordance with the Pennsylvania Business Corporation Law. The merger will become effective upon the effective time as set forth in the certificate of merger and the articles of merger.
 
Representations and Warranties
 
The merger agreement contains various representations and warranties of ARRIS and C-COR. The assertions embodied in those representations and warranties were made for purposes of the merger agreement and are subject to qualifications and limitations agreed to by ARRIS and C-COR in connection with negotiating the terms of the merger agreement. In addition, certain representations and warranties were made as of a specified date or may be subject to a contractual standard of materiality different from what might be viewed as material to shareholders, or may have been used for the purpose of allocating risk between the respective parties rather than establishing matters as facts. For the foregoing reasons, you should not rely on the representations and warranties as statements of factual information.
 
Mutual Representations of ARRIS and C-COR.  Representations and warranties made by and to ARRIS and C-COR in the merger agreement relate generally to:
 
  •  organization, existence, good standing and corporate or similar power of each party and its subsidiaries and the ownership by each party of its subsidiaries;
 
  •  incorporation documents and bylaws;
 
  •  capitalization;
 
  •  the corporate authorization of the merger agreement and the transactions contemplated by the merger agreement, the due execution and enforceability of the merger agreement and actions of such party’s board of directors with respect to the merger agreement and the transactions contemplated by the merger agreement;
 
  •  material contracts;
 
  •  the absence of conflicts with applicable law in connection with the parties’ performance under the merger agreement and related agreements;
 
  •  required consents and required government approvals;
 
  •  compliance with laws and possession of permits;


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  •  proper filings of documents with the SEC, the accuracy of information contained in those documents, the accuracy of financial statements included in those documents, compliance with the Sarbanes-Oxley Act and matters relating to disclosure and internal controls;
 
  •  the absence of any material adverse effect and certain other changes or events since, for C-COR, the end of C-COR’s last fiscal year (June 29, 2007) and, for ARRIS, the end of ARRIS’ second quarter (June 30, 2007);
 
  •  absence of undisclosed liabilities and litigation;
 
  •  the accuracy of information supplied for inclusion in securities filings in connection with the merger, including in this joint proxy statement/prospectus;
 
  •  pension and employee benefits compliance matters;
 
  •  employees and employment agreements;
 
  •  tax matters;
 
  •  customer matters;
 
  •  environmental matters;
 
  •  intellectual property matters;
 
  •  the Foreign Corrupt Practices Act;
 
  •  financial advisor opinions;
 
  •  absence of obligations to pay certain brokers’ or similar fees;
 
  •  approval of the merger by the board of directors;
 
  •  shareholder votes required in connection with the merger; and
 
  •  the inapplicability of each party’s shareholder rights plan in connection with the merger.
 
Additional Representations of C-COR.  In addition to the representations and warranties described above, C-COR also provided representations and warranties that relate generally to:
 
  •  labor matters;
 
  •  restrictions on business activities;
 
  •  title to properties;
 
  •  supplier relations;
 
  •  inventory;
 
  •  product warranties and product liabilities;
 
  •  insurance matters;
 
  •  the inapplicability of Pennsylvania anti-takeover statutes; and
 
  •  import and export control laws.
 
Additional Representations of ARRIS.  In addition to the representations and warranties described above, ARRIS also provided representations and warranties that relate generally to financial capacity to consummate the merger.
 
Although both ARRIS and C-COR provide a representation and warranty with respect to several of the same categories, the C-COR’s representations and warranties with respect to intellectual property are generally more comprehensive than those provided by ARRIS, and C-COR provided certain representations and warranties that were not also provided by ARRIS. Certain representations and warranties of ARRIS and C-COR are qualified as to “materiality” or “material adverse effect.” For purposes of the merger agreement,


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material adverse effect means, with respect to ARRIS or C-COR or any of their respective subsidiaries, any change or effect which individually, or in the aggregate is or will be materially adverse to the business, operations, prospects, properties (including intangible properties), condition (financial or otherwise), assets, liabilities or regulatory status of such party and its subsidiaries taken as a whole, but does not include the effects of changes that are generally applicable in:
 
  •  the United States economy;
 
  •  the United States securities markets;
 
  •  the announcement of the merger agreement and the transactions contemplated thereby;
 
  •  the taking of any action required under the merger agreement or the transactions contemplated thereby;
 
  •  changes in GAAP;
 
  •  changes in laws of general applicability or interpretations thereof by courts or governmental entities;
 
  •  changes in C-COR’s and ARRIS’ industry; or
 
  •  any acts of terrorism or any outbreak of war.
 
Most references to material adverse effect on ARRIS or its subsidiaries refers solely to ARRIS and its subsidiaries without including its ownership of C-COR and its subsidiaries after the merger. Generally, the representations and warranties of each of the parties to the merger agreement will expire upon the effective time.
 
Covenants
 
Conduct of C-COR Pending the Merger.  The merger agreement contains certain covenants of C-COR and its subsidiaries concerning the operation of their business between the date of the merger agreement and continuing until the earlier of the termination of the merger agreement or the effective time of the merger. C-COR has agreed that, unless ARRIS otherwise consents in writing (which consent may not be unreasonably withheld), during such period, C-COR will carry on its business in the ordinary course consistent with past practice and, to the extent consistent with the conduct of its business in the ordinary course, use commercially reasonable efforts to preserve intact its current business organizations, keep available the services of its current officers, employees and consultants and preserve its relationships with customers, suppliers and other persons with which C-COR or any of its subsidiaries has significant business relations. In addition to and without limiting the generality of the foregoing, C-COR will not during the period from the date of the merger agreement and continuing until the earlier of the termination of the merger agreement or the effective time of the merger (except as specifically contemplated in the merger agreement), directly or indirectly, without the consent of ARRIS, which shall not be unreasonably withheld, do any of the following:
 
  •  amend its articles of incorporation or bylaws;
 
  •  issue, sell, pledge, dispose or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including without limitation, any phantom interest), except as provided in the merger agreement;
 
  •  sell, pledge, dispose of or encumber any assets of C-COR, or any of its subsidiaries, except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) disposition of obsolete or worthless assets, and (iii) sales of immaterial assets not in excess of $500,000;
 
  •  declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, except that a wholly owned subsidiary of C-COR may declare and pay a dividend or make advances to C-COR;
 
  •  split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, other than options for new hires and directors;


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  •  amend the terms of change the period of exerciseability of purchase, repurchase, redeem, or otherwise acquire, or permit any subsidiary to purchase repurchase redeem or otherwise acquire, any of its securities or any securities of its subsidiaries;
 
  •  acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof;
 
  •  incur any indebtedness for borrowed money, except as provided in the merger agreement, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person or, except in the ordinary course of business consistent with past practices or in connection with purchase of equipment or capital improvements, make any loans or advances (other than loans or advances to or from direct or indirect wholly owned subsidiaries);
 
  •  enter into or amend any material contract or agreement other than in the ordinary course of business;
 
  •  authorize any capital expenditures or purchase fixed assets, which are, in the aggregate, in excess of $8.1 million;
 
  •  increase the compensation payable or to become payable to its officers or employees, except for increases in salary or wages of employees of C-COR in accordance with past practice or, except in the ordinary course of business, grant any severance or termination pay to, or enter into any employment or severance agreement with any director, officer or other employee of C-COR, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees, except, in each case, as may be required by law, to establish the rate of contributions under certain benefit plans, and to amend the terms of employment agreements, change in control agreements, and stock option and nonqualified deferred compensation plans and arrangements to the extent necessary or desirable to conform to the requirements of section 409A of the Internal Revenue Code or to satisfy an exception to section 409A of the Code;
 
  •  take any action to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable) or any action that would prevent or impede the merger from qualifying as a tax-free reorganization under Section 368 of the Code;
 
  •  make any material tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations, except to the extent the amount of any such settlement has been reserved for in the financial statements contained in C-COR’s reports filed with the SEC prior to the date of the merger agreement;
 
  •  pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements contained in C-COR’s reports filed with the SEC prior to the date of the merger agreement or incurred in the ordinary course of business and consistent with past practice;
 
  •  make any significant change in any tax or accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in tax laws or regulatory accounting requirements or GAAP; or
 
  •  take, or agree in writing to take, any of the actions described above, or any action which would make any of the representations or warranties of C-COR contained in the merger agreement untrue or incorrect or prevent C-COR from performing or cause C-COR not to perform its covenants under the merger agreement.
 
No Solicitation.  The merger agreement includes provisions prohibiting C-COR from seeking a competing transaction, subject to certain exceptions described below. Under these “no shop” provisions, C-COR has


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agreed that it will not, directly or indirectly, and will not authorize or permit any of its officers, directors, employees, advisors or other representatives to take any of the following actions:
 
  •  solicit, initiate, facilitate, respond to or encourage, including by way of furnishing non-public information, any inquiries regarding or relating to, or the submission of, any takeover proposal (as defined below);
 
  •  participate in any discussions or negotiations, furnish to any person any information or data relating to C-COR or its subsidiaries, provide access to any of the properties, books, records or employees of C-COR or its subsidiaries or take any other action, in each such case regarding or to facilitate the making of any proposal that constitutes, or may reasonably be expected to lead to, any takeover proposal;
 
  •  enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement or other similar agreement or commitment with respect to any takeover proposal or agree to, approve, endorse or resolve to recommend or approve any takeover proposal, except in the circumstances described below;
 
  •  grant any waiver or release under any standstill or similar agreement by any third party who has made a takeover proposal; or
 
  •  take any action to exempt any third party from the restrictions on “business combinations” contained in Subchapters “C” through “J” of Chapter 25 of Pennsylvania law.
 
However, prior to the adoption of the merger agreement and approval of the transactions contemplated by the C-COR shareholders at the C-COR meeting, C-COR may, so long as such information is contemporaneously provided to ARRIS, furnish information to and enter into discussions and negotiations with any person that makes an unsolicited bona fide acquisition proposal that the C-COR board of directors in good faith, after consultation with its outside counsel and financial advisors, concludes is likely to result in a superior proposal (as defined below) if the C-COR board of directors determines that such action is required to discharge the C-COR board of directors’ fiduciary duties to C-COR’s shareholders.
 
C-COR has agreed to promptly notify ARRIS telephonically and in writing of any proposal, discussion, negotiation or inquiry received by C-COR that is or could reasonably be expected to constitute or lead to a takeover proposal. C-COR must notify ARRIS of any superior proposal, specifying the terms and conditions of such proposal, the name of the party making such proposal and provide a copy of the superior proposal, to the extent permitted. If ARRIS does not make an offer that is at least as favorable as the superior proposal to C-COR shareholders within three business days of receiving such notification, and the adoption of the merger agreement at the C-COR meeting has not yet occurred, the C-COR board of directors may withdraw or change its recommendation and/or approve or recommend the superior proposal if the board of directors has determined in good faith, after receiving advice from its outside counsel and financial advisors, that such action is required to discharge the C-COR board of directors’ fiduciary duties to C-COR shareholders.
 
A takeover proposal is any inquiry, proposal, offer or indication of interest (including any inquiry, proposal, offer or indication of interest to its shareholders), whether in writing or otherwise, from a third party that constitutes, or could reasonably be expected to lead to any transaction, other than the transactions contemplated by the merger agreement, to acquire beneficial ownership of:
 
  •  assets that constitute 20% or more of the consolidated revenues, net income or assets of C-COR and its subsidiaries; or
 
  •  20% or more (in number or voting power) of any class of equity securities or other capital stock of C-COR pursuant to any transaction or series of transactions, including:
 
  —  a merger, consolidation, share exchange, or other business combination involving C-COR or any of its subsidiaries;
 
  —  a sale, issuance, exchange, transfer or other disposition of shares of capital stock of C-COR or any of its subsidiaries;


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  —  a sale, lease, license, exchange, transfer or other disposition of assets of C-COR or any of its subsidiaries; or
 
  —  a tender offer, exchange offer or similar transaction with respect to either C-COR or any of its subsidiaries, including any single or multi-step transaction or series of related transactions, which is structured to permit such third party or another third party to acquire beneficial ownership of assets that constitute 20% or more of the consolidated revenues, net income or assets of C-COR and its subsidiaries, or 20% or more of the equity interest in either C-COR or any of its subsidiaries.
 
A superior proposal is an unsolicited written proposal or offer (whether a takeover proposal or otherwise) by a third party to acquire (whether by way of merger, acquisition or otherwise), directly or indirectly, greater than 50% of the shares of C-COR common stock then outstanding (or the effect of which would be that the shareholders of C-COR beneficially own less than 50% of the voting power of the combined or ongoing entity), or to acquire all or substantially all of the assets of C-COR and (i) otherwise on terms which the board of directors of C-COR determines in good faith, after consultation with its financial advisors, and taking into account all terms and conditions of the proposal or offer that it deems relevant (including all legal, financial, regulatory and other aspects, including any financing condition and time to consummation), to be more favorable to C-COR’s shareholders from a financial point of view than the merger, and (ii) that, in the good faith reasonable judgment of the board of directors of C-COR, is reasonably likely to be consummated.
 
Conduct of ARRIS Pending the Merger.  The merger agreement contains certain covenants of ARRIS and its subsidiaries concerning the operation of their business between the date of the merger agreement and continuing until the earlier of the termination of the merger agreement or the effective time of the merger. ARRIS has agreed that, unless C-COR otherwise consents in writing (which consent may not be unreasonably withheld), during such period, ARRIS will carry on its business in the ordinary course consistent with past practice and, to the extent consistent with the conduct of its business in the ordinary course, use commercially reasonable efforts to preserve intact its current business organizations, keep available the services of its current officers, employees and consultants and preserve its relationships with customers, suppliers and other persons with which ARRIS or any of its subsidiaries has significant business relations. In addition, ARRIS will not, during the period from the date of the merger agreement and continuing until the earlier of the termination of the merger agreement or the effective time of the merger, directly or indirectly, do any of the following:
 
  •  amend its certificate of incorporation or bylaws;
 
  •  declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, except that a wholly owned subsidiary of ARRIS may declare and pay a dividend or make advances to ARRIS;
 
  •  split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
 
  •  take, or agree in writing to take, any of the actions described above, or any action which would make any of the representations or warranties of ARRIS contained in the merger agreement untrue or incorrect or prevent ARRIS from performing or cause ARRIS not to perform its covenants under the merger agreement; or
 
  •  take any other action that would reasonably be expected to interfere with, or delay the consummation of, the merger or otherwise breach the merger agreement.
 
Conditions to Completion of the Merger
 
Conditions to Each Party’s Obligations to Effect the Merger.  The respective obligations of ARRIS and C-COR to effect the merger and the other transactions contemplated by the merger agreement are subject to the satisfaction and waiver of various conditions that include, in addition to other customary closing conditions, the following:
 
  •  adoption by C-COR shareholders of the merger agreement;


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  •  approval by ARRIS shareholders of the issuance of ARRIS common stock pursuant to the merger;
 
  •  absence of legal prohibitions on consummating the merger and the transactions contemplated by the merger agreement or other legal issues that would have a material adverse effect on ARRIS or C-COR;
 
  •  expiration or termination of the waiting period under the HSR Act;
 
  •  receipt of all consents, approvals and authorizations of any governmental authority required of ARRIS, C-COR or any of their respective subsidiaries to consummate the transactions contemplated by the merger agreement, other than matters described in the two preceding bullet points, the failure of which to be obtained or taken, individually or in the aggregate, would have a material adverse effect on ARRIS or C-COR or prevent the parties from realizing in all material respects the economic benefit of the transactions contemplated by the merger agreement;
 
  •  effectiveness under the Securities Act of the registration statement on Form S-4 in which this joint proxy statement/prospectus is included, the absence of any stop order suspending such effectiveness, and the absence of any proceedings by the SEC for such purpose;
 
  •  obtainment of consent and approval, by each of C-COR and ARRIS, of any person whose consent or approval is required under any agreement or instrument in order to permit the consummation of the merger and the transactions contemplated by the merger agreement;
 
  •  approval for listing on the NASDAQ Global Select Market of the shares of ARRIS common stock into which the C-COR shares will be converted;
 
  •  receipt of a tax opinion by C-COR from Ballard Spahr Andrews & Ingersoll, LLP substantially to the effect that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code; and
 
  •  receipt of a tax opinion by ARRIS from Troutman Sanders LLP substantially to the effect that the merger will qualify as reorganization within the meaning of Section 368(a) of the Code.
 
Additional Conditions to Obligations of ARRIS.  The obligations of ARRIS to effect the merger and the other transactions contemplated by the merger agreement are subject to the satisfaction or waiver of the following:
 
  •  the representations and warranties made by C-COR in the merger agreement being true and correct in all material respects as of the date of the merger agreement and as of the effective time of the merger (except to the extent the representation and warranty speaks as of an earlier date) except where the failure of such representations and warranties to be true and correct would not have a material adverse effect on C-COR or ARRIS; and
 
  •  C-COR having performed or complied in all material respects with all agreements and covenants required by the merger agreement.
 
Additional Conditions to Obligations of C-COR.  The obligations of C-COR to effect the merger and the other transactions contemplated by the merger agreement are subject to the satisfaction or waiver of the following:
 
  •  the representations and warranties made by ARRIS in the merger agreement being true and correct in all material respects as of the date of the merger agreement and as of the effective time (except to the extent the representation and warranty speaks as of an earlier date) except where the failure of such representations and warranties to be true and correct would not have a material adverse effect on ARRIS; and
 
  •  ARRIS having performed or complied in all material respects with all agreements and covenants required by the merger agreement.


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Other Agreements
 
The merger agreement contains other mutual agreements, in addition to the covenants related to the conduct of business described above, including the following mutual agreements of ARRIS and C-COR:
 
  •  to promptly prepare and file all necessary documentation to effect all applications, notices and filings, including this joint proxy statement/prospectus and the registration statement to which this joint proxy statement/prospectus is a part, to hold special shareholder meetings;
 
  •  to agree to be bound by the confidentiality agreement entered into between the two parties prior to execution of the merger agreement, including following termination of the merger agreement;
 
  •  to provide each other with reasonable access to properties, books, contracts, commitments and records;
 
  •  to use all commercially reasonable efforts to obtain all approvals, including any consents, waivers and approvals from any governmental entity or under any agreements, contracts licenses or leases with third parties, required to be obtained in connection with or satisfied under the merger agreement;
 
  •  to take all commercially reasonable actions to consummate the merger and make effective the transactions contemplated by the merger agreement; and
 
  •  not to issue or cause to issue the publication of an press release or other public announcement with respect to the merger, the merger agreement or the other transactions contemplated thereby without the prior approval of the other party, except such disclosures as may be required by law or by NASDAQ regulations or listing requirements.
 
Registration Statement on Form S-8.  C-COR options that have not been exercised prior to the effective time of the merger will be converted into options to acquire shares of ARRIS common stock. Within ten business days following the effective time of the merger, ARRIS must file a registration statement on Form S-8 under the Securities Act with respect to the ARRIS common stock underlying such exchanged options.
 
Indemnification, Directors, and Officer’s Insurance.  C-COR, prior to the effective time of the merger, and each of ARRIS and Merger Sub, following the effective time of the merger, have agreed to indemnify and hold harmless the present and former directors and officers of C-COR and its subsidiaries for costs, expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages, or liabilities, arising out of matters existing or occurring at or prior to the effective time of the merger to the same extent these individuals are indemnified or have the right to advancement of expenses, as of the date of the merger agreement, by C-COR pursuant to its articles of incorporation and bylaws and any indemnification agreements between C-COR and its officers, to the fullest extent permitted by law. Prior to the closing, Merger Sub, as the surviving corporation, or in lieu thereof, C-COR, shall obtain directors’ and officers’ “tail” insurance policies with a claims period of at least six years from the effective time of the merger, in amount and scope at least as favorable as C-COR’s existing policies for claims arising from facts on or before the effective time, subject to certain limitations.
 
Employee Benefit Plans.  ARRIS has agreed that it will initially provide, or cause Merger Sub to provide, each employee of C-COR with at least the same level of base salary and, taken as a whole, cash incentive compensation and other variable cash compensation as was provided to each employee immediately prior to the effective time of the merger. ARRIS has also agreed initially to provide the C-COR employees with benefits that are no less favorable in the aggregate than those provided to similarly situated employees of ARRIS.
 
Change of Control, Severance and Employment Agreements.  ARRIS shall cause Merger Sub to honor, in accordance with their terms, all of C-COR’s employment agreements and change of control agreements, except in the event the individuals covered under such agreements enter into new agreements with ARRIS, and, for a period of 18 months following the effective time of the merger, C-COR’s severance plans.
 
ARRIS has agreed to honor existing participant elections as to timing and forms of benefits under C-COR’s Supplemental Executive Retirement Plan. C-COR has agreed to cooperate reasonably with ARRIS and Merger Sub in accelerating to the earlier of the effective time of the merger or December 31, 2007, benefits


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under any existing change of control agreements, benefits to be paid in the event of a change of control under any existing employment agreements, bonuses or other incentive compensation reasonably likely to be earned and benefits under any nonqualified deferred compensation arrangements.
 
Tax-free Reorganization.  Each of ARRIS and C-COR has agreed to use its commercially reasonably efforts to cause the merger agreement to qualify as a “reorganization” within the meaning of Section 368(a) of the Code.
 
Amendment
 
Subject to applicable law, at any time prior to the effective time, ARRIS and C-COR may amend the merger agreement by written agreement authorized by their respective boards of directors. However, after ARRIS shareholder approval or C-COR shareholder approval is obtained, no amendment requiring further approval by the ARRIS shareholders or the C-COR shareholders, as the case may be, may be effected without that further approval.
 
Termination
 
The merger agreement may be terminated and the merger may be abandoned at any time prior to the effective time of the merger, whether before or after the approval by shareholders of C-COR and ARRIS, as authorized by the board of directors of the terminating party, if any of the following occurs:
 
  •  by mutual agreement of ARRIS and C-COR;
 
  •  by either ARRIS or C-COR if:
 
  —  the merger is not completed by March 31, 2008;
 
  —  the adoption of the merger agreement by C-COR shareholders or the approval of the issuance of ARRIS common stock pursuant to the merger by ARRIS shareholders is not obtained at a duly held shareholders meeting;
 
  —  any order permanently restraining, enjoining or otherwise prohibiting consummation of the merger becomes final and non-appealable, whether before or after the shareholders meeting of either party; or
 
  —  the average closing price of ARRIS common stock on the NASDAQ Global Select Market for the ten trading-day period ending the third trading day prior to the anticipated closing date is less than $11.41;
 
however, the right to terminate the merger agreement by either ARRIS or C-COR under the first two circumstances will not be available to any party that has breached or failed to perform in any material respect its obligations under the merger agreement in any manner that has been the principal cause of or primarily resulted in the failure of the merger to be consummated.
 
The merger agreement may be terminated and the merger may be abandoned at any time prior to the effective time of the merger by ARRIS, as authorized by its board of directors, if:
 
  •  one of the following events, which we refer to as a C-COR triggering event, has occurred:
 
  —  the board of directors of C-COR fails to recommend approval of the merger agreement and the merger in this joint proxy statement/prospectus, a change in recommendation occurs or the board of directors of C-COR resolves to make a change in its recommendation;
 
  —  the board of directors of C-COR recommends to the shareholders of C-COR a competing transaction or publicly announces that it intends to do so or enters into any alternative acquisition agreement accepting any acquisition proposal;
 
  —  a tender offer or exchange offer for the outstanding shares of capital stock of C-COR is commenced (other than pursuant to the transactions contemplated by the merger agreement), and the board of directors of C-COR fails to recommend against (or maintain such recommendation against) acceptance of such tender offer or exchange offer by its shareholders;


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  —  the board of directors of C-COR, upon request of ARRIS following receipt of a proposal or offer for a competing transaction, fails to reaffirm to ARRIS the approval or recommendation of the merger and the merger agreement within five business days after such request; or
 
  —  C-COR or any of its officers, directors, representatives, or agents knowingly and materially breaches its non-solicitation obligations; or
 
  •  there has been a breach of any representation, warranty, covenant or agreement made by C-COR in the merger agreement, or any such representation or warranty becomes untrue after the date of the merger agreement (unless the failure of such representation or warranty to be true would not have a material adverse effect on ARRIS or C-COR) and such breach is not cured within 20 days after written notice thereof; provided however, that the right to terminate under this condition will not be available if ARRIS or Merger Sub is at that time in material breach of the merger agreement.
 
The merger agreement may be terminated and the merger may be abandoned at any time prior to the effective time of the merger by C-COR as authorized by its board of directors if:
 
  •  prior to, but not after, the time the vote is taken with respect to the adoption of the merger agreement at the shareholders meeting of either party (i) C-COR’s board of directors has approved or recommended to the shareholders of C-COR any superior proposal and (ii) prior to or upon termination, C-COR paid the termination fee; provided, however, that (A) C-COR notified ARRIS in writing promptly of its intention to terminate the merger agreement and to enter into a binding alternative acquisition agreement concerning a superior proposal promptly following the waiting period (as defined below), and (B) ARRIS did not make, within three business days after its receipt of such written notification (the waiting period), an offer that the board of directors of C-COR determined is at least as favorable to the shareholders of C-COR from a financial point of view as such superior proposal; or
 
  •  there has been a breach of any representation, warranty, covenant or agreement made by ARRIS in the merger agreement, or any such representation or warranty becomes untrue after the date of the merger agreement (unless the failure of such representation or warranty to be true would not have a material adverse effect on ARRIS) and such breach is not cured within 20 days after written notice thereof; provided however, that the right to terminate under this condition will not be available if C-COR is at that time in material breach of the merger agreement.
 
In the event of termination of the merger agreement and the abandonment of the merger, the merger agreement becomes void and of no effect with no liability or obligation on the part of any party (or any of its directors, officers, employees, agents, legal and financial advisors or other representatives); provided, however, except as otherwise provided in the merger agreement, no termination relieves any party of any liability or damages resulting from any fraud or willful or intentional breach of the merger agreement. Termination of the merger agreement will not affect the obligations under the separate confidentiality agreement between ARRIS and C-COR.
 
Termination Fee
 
C-COR must pay a termination fee of $22.5 million to ARRIS no later than:
 
  •  the date of the first to occur of the execution of an alternative acquisition agreement, approval or recommendation to the C-COR shareholders of a competing transaction, failure to oppose a competing transaction or the consummation of a competing transaction, if the merger agreement is terminated by ARRIS or C-COR due to failure to obtain the approval of C-COR shareholders and if:
 
  —  prior to the shareholder meeting of either party, any third party makes a takeover proposal to C-COR or publicly discloses or announces an intention to make a takeover proposal (as defined in “The Merger Agreement — Covenants,” substituting 35% for the 20% threshold in the definition); and


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  —  within 12 months of termination, C-COR enters into an alternative acquisition agreement to consummate, or consummates, or approves or recommends to the shareholders of C-COR or otherwise does not oppose, a competing transaction with such third party;
 
  •  the date of termination of the merger agreement if the merger agreement is terminated by C-COR, in the event that a C-COR triggering event has occurred prior to the date of the shareholders meeting of either party or board of directors has approved or recommended to the shareholders of C-COR any superior proposal; or
 
  •  two business days after termination of the merger agreement if the merger agreement is terminated by ARRIS, in the event that a C-COR triggering event has occurred.
 
ARRIS must pay a termination fee of $22.5 million no later the date of the first to occur of the execution of an alternative acquisition agreement, approval or recommendation to the ARRIS shareholders of a competing transaction, failure to oppose a competing transaction or the consummation of a competing transaction, if the merger agreement is terminated by ARRIS or C-COR due to failure to obtain the approval of ARRIS shareholders and if:
 
  •  prior to the shareholder meeting of either party, any third party makes a takeover proposal to ARRIS or publicly discloses or announces an intention to make a takeover proposal; and
 
  •  within 12 months of termination, ARRIS enters into an alternative acquisition agreement to consummate, or consummates, or approves or recommends to the shareholders of C-COR or otherwise does not oppose, a competing transaction with such third party.
 
Fees and Expenses
 
All expenses incurred in connection with the merger agreement and the transactions contemplated by the merger agreement will be paid by the party incurring those expenses, except that expenses incurred in connection with the printing of the joint proxy statement/prospectus and the registration statement, of which it is a part, as well as the filing fees related thereto and any filing fee required in connection with the filing of Pre-Merger Notifications under the HSR Act, will be shared equally by ARRIS and C-COR.


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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
 
The following is a summary of material U.S. federal income tax consequences applicable to C-COR shareholders that receive ARRIS common stock or cash in the merger (or both ARRIS common stock and cash). This summary is based upon the provisions of the Code, applicable Treasury regulations thereunder, judicial decisions, and current administrative rulings, all as in effect on the date of this joint proxy statement/prospectus and all of which are subject to change, possibly with retroactive effect.
 
This discussion addresses only those C-COR shareholders that hold their shares as capital assets (generally, property held for investment). In addition, this discussion does not address all the U.S. federal income tax consequences that may be relevant to these shareholders in light of their particular circumstances, or the U.S. federal income tax consequences to those shareholders that are subject to special rules, such as, without limitation:
 
  •  partnerships, subchapter S corporations and other pass-through entities (and the holders of interests therein);
 
  •  foreign persons and entities;
 
  •  banks, thrifts, mutual funds and other financial institutions;
 
  •  tax-exempt organizations and pension funds;
 
  •  insurance companies;
 
  •  dealers or traders in securities;
 
  •  shareholders who received their shares of common stock through a benefit plan or a tax-qualified retirement plan or through the exercise of employee stock options or similar derivative securities or otherwise as compensation;
 
  •  shareholders whose shares are qualified small business stock for purposes of section 1202 of the Code;
 
  •  shareholders who may be subject to the alternative minimum tax provisions of the Code;
 
  •  shareholders whose functional currency is not the U.S. dollar; and
 
  •  shareholders who hold their shares other than as a capital asset or who hold their shares as part of a hedge, appreciated financial position, straddle, synthetic security, conversion transaction or other integrated investment.
 
Furthermore, this discussion does not address any tax consequences arising under the laws of any state, locality or foreign jurisdiction. This discussion does not purport to be a comprehensive analysis or description of all potential U.S. federal income tax consequences of the proposed transaction.
 
ARRIS and C-COR anticipate that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. It is a condition to the completion of the merger that ARRIS receive a written opinion of Troutman Sanders LLP and that C-COR receive a written opinion of Ballard Spahr Andrews & Ingersoll, LLP, dated as of the effective date of the merger, to the effect that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Neither ARRIS nor C-COR currently intends to waive this condition. The opinions of Troutman Sanders LLP and Ballard Spahr Andrews & Ingersoll, LLP will be based upon representation letters of ARRIS, Merger Sub and C-COR, and upon customary assumptions. Any inaccuracy in the representations or assumptions, or any actions by ARRIS, Merger Sub or C-COR contrary to the representations or assumptions, could adversely affect the conclusions reached in the opinions and the tax discussion set forth below.
 
The opinions represent the best judgment of Troutman Sanders LLP and Ballard Spahr Andrews & Ingersoll, LLP, respectively, as to the U.S. federal income tax treatment of the merger and as to the U.S. federal


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income tax consequences of the merger to the C-COR shareholders, but will not be binding on the IRS or the courts. No rulings have been or will be requested from the IRS with respect to any of the matters discussed herein. There can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this summary. The following discussion assumes that the foregoing factual conditions are met, and therefore, the merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code.
 
Tax Consequences of the Merger to C-COR Shareholders
 
Exchange of C-COR Common Stock for Cash
 
A C-COR shareholder that exchanges shares of C-COR common stock solely for cash will recognize capital gain or loss on the difference between the cash received and the adjusted basis of the C-COR common stock, and such gain or loss will be long-term capital gain or loss if the C-COR shareholder’s holding period is more than one year as of the date of the merger. A C-COR shareholder must recognize gain or loss separately for each identifiable block of shares that is surrendered in the exchange, and the C-COR shareholder may not offset a loss recognized on one block of the shares against a gain recognized on another block of the shares.
 
In determining whether a C-COR shareholder has exchanged his or her shares solely for cash, a shareholder will, under constructive ownership rules, be deemed to own stock that is owned by certain related persons or entities or with respect to which the shareholder owns options, in addition to stock actually owned by that shareholder. Thus, for any C-COR shareholder that received solely cash in exchange for C-COR shares he or she actually owns, but that also constructively owns C-COR common stock that is exchanged for common stock of ARRIS in the merger, or otherwise owns common stock of ARRIS actually or constructively after the merger, the consequences to such C-COR shareholder may be similar to the consequences described below under the headings “— Exchange of C-COR Common Stock for a Combination of ARRIS Common Stock and Cash” and “— Possible Treatment of Cash to the Extent of Gain as a Dividend.” Because the application of the constructive ownership rules is complex, a C-COR shareholder should consult its own tax advisor as to the applicability of the rules and the resulting tax consequences.
 
Exchanges of C-COR Common Stock for ARRIS Common Stock
 
A C-COR shareholder that exchanges shares of C-COR common stock solely for shares of ARRIS common stock in the merger will not recognize gain or loss, except with respect to any cash received instead of fractional share interests in ARRIS common stock. The aggregate tax basis of the ARRIS common stock received by a C-COR shareholder in the merger will be the same as the aggregate tax basis of the C-COR common stock for which it is exchanged, less any tax basis attributable to fractional share interests in ARRIS common stock for which cash is received. The holding period of ARRIS common stock received in exchange for shares of C-COR common stock will include the holding period of the C-COR common stock surrendered in exchange therefor. For the consequences of receipt of cash instead of a fractional share interest in ARRIS common stock, see “— Cash Received Instead of a Fractional Share” below.
 
Exchange of C-COR Common Stock for a Combination of ARRIS Common Stock and Cash
 
A C-COR shareholder that exchanges shares of C-COR common stock for a combination of cash and shares of ARRIS common stock in the merger will not recognize loss on the exchange. However, such a C-COR shareholder will recognize gain equal to the lesser of the amount of cash received and the gain realized. The gain realized will be the excess of the sum of the fair market value of the shares of ARRIS common stock (determined as of the effective time of the merger) and the amount of cash received by a C-COR shareholder over the shareholder’s adjusted tax basis in the shares of C-COR common stock that were surrendered in the merger. For this purpose, a C-COR shareholder must calculate gain or loss separately for each identifiable block of shares of C-COR common stock that is surrendered in the exchange, and the C-COR shareholder may not offset a loss recognized on one block of the shares against gain recognized on


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another block of the shares. For the consequences of receipt of cash instead of a fractional share interest in ARRIS common stock, see “— Cash Received Instead of a Fractional Share” below.
 
Any gain recognized generally will be treated as capital gain. However, as discussed below under the section captioned “— Possible Treatment of Cash to the Extent of Gain as a Dividend,” if the receipt of the cash has “the effect of the distribution of a dividend” for U.S. federal income tax purposes, any gain recognized by the C-COR shareholder will be treated as ordinary dividend income to the extent of the shareholder’s ratable share of the earnings and profits of C-COR accumulated through the date of the exchange. Any gain that is treated as capital gain will be long-term capital gain if the C-COR shareholder held the C-COR common stock that is surrendered in the exchange for more than one year as of the date of the merger.
 
The aggregate tax basis of the shares of ARRIS common stock received by a C-COR shareholder (including, for this purpose, any fractional share of ARRIS common stock for which cash is received pursuant to the Merger Agreement) in exchange for shares of C-COR common stock in the merger will be equal to the aggregate tax basis of the surrendered C-COR common stock, decreased by the amount of cash received (excluding any cash received instead of a fractional share), and increased by the amount of gain recognized, (including any portion of the gain that is treated as a dividend and excluding any gain recognized as a result of the receipt of cash instead of a fractional share). The holding period of the ARRIS common stock received will include the holding period of the shares of C-COR common stock surrendered in exchange therefor.
 
Possible Treatment of Cash to the Extent of Gain as a Dividend
 
In general, the determination of whether gain recognized by a C-COR shareholder will be treated as capital gain or a dividend distribution will depend upon whether, and to what extent, the receipt of cash rather than stock in the transaction reduces the C-COR shareholder’s deemed percentage stock ownership interest in ARRIS. For purposes of this determination, a C-COR shareholder will be treated as if it first exchanged all of its C-COR common stock solely for ARRIS common stock (instead of the combination of ARRIS common stock and cash actually received), and then ARRIS immediately redeemed a portion of that ARRIS common stock in exchange for the cash the C-COR shareholder received in the merger transaction. The gain recognized in the exchange followed by the deemed redemption will be treated as capital gain if, with respect to the C-COR shareholder, the deemed redemption is “substantially disproportionate” or “not essentially equivalent to a dividend.”
 
In general, the deemed redemption will be “substantially disproportionate” with respect to a C-COR shareholder if the C-COR shareholder experiences more than a 20% reduction in its percentage ownership of ARRIS common stock as a result of the deemed redemption. In order for the deemed redemption to be “not essentially equivalent to a dividend,” the deemed redemption must result in a “meaningful reduction” in the C-COR shareholder’s deemed percentage stock ownership of ARRIS common stock. The IRS has indicated that a minority shareholder in a publicly traded corporation whose relative stock interest is minimal and who exercise no control with respect to corporate affairs will experience a “meaningful reduction” if that shareholder experiences any reduction in its percentage ownership. In applying the foregoing tests, a shareholder will, under constructive ownership rules, be deemed to own stock that is owned by certain related persons or entities or with respect to which the shareholder owns options, in addition to the stock actually owned by that shareholder. Moreover, the tests are applied after taking into account any related transactions undertaken by a C-COR shareholder under a single, integrated plan. Thus, dispositions or acquisitions by a holder of common stock of ARRIS before or after the merger that are part of such C-COR shareholder’s plan may be taken into account. Because the application of these tests may be complex in many cases, each C-COR shareholder should consult its own tax advisor as to the applicability of these rules.
 
Cash Received Instead of a Fractional Share
 
No fractional shares of ARRIS common stock will be issued in connection with the merger. Instead, ARRIS will make a cash payment without interest to each C-COR shareholder who would otherwise receive a


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fractional share. A C-COR shareholder who receives cash instead of a fractional share of ARRIS common stock will be treated as having received the fractional share pursuant to the merger, and then as having exchanged the fractional share for cash in a redemption by ARRIS. Any gain or loss attributable to this deemed redemption will be capital gain or loss. The amount of this gain or loss will be equal to the difference between the portion of the tax basis of the C-COR common stock surrendered in the merger transaction that is allocated to the fractional share and the cash received therefor. Any capital gain or loss of this type will constitute long-term capital gain or loss if the holding period for the C-COR common stock surrendered is greater than one year as of the date of the merger.
 
Information Reporting and Backup Withholding
 
Cash payments received by a C-COR shareholder in the merger may, under certain circumstances, be subject to information reporting and backup withholding (currently at the rate of 28%) of the cash payable to such shareholder, unless such shareholder provides proof of an applicable exemption or furnishes its taxpayer identification number, and otherwise complies with all applicable requirements of the backup withholding rules. Any amounts withheld from payments to C-COR shareholders under the backup withholding rules are not an additional tax and will be allowed as a refund or credit against such shareholder’s federal income tax liability provided that the required information is timely furnished to the IRS.
 
This U.S. federal income tax discussion is for general information only and may not apply to all C-COR shareholders. C-COR shareholders are strongly urged to consult their own tax advisors as to the specific tax consequences of the proposed transaction to them, including state, local and foreign tax consequences.


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CERTAIN DIFFERENCES IN RIGHTS OF SHAREHOLDERS
 
C-COR is a Pennsylvania corporation subject to the provisions of the Pennsylvania Business Corporation Law, which we refer to in this joint proxy statement/prospectus as Pennsylvania law. ARRIS is a Delaware corporation subject to the provisions of the Delaware General Corporation Law, which we refer to in this joint proxy statement/prospectus as Delaware law. If the merger is completed, C-COR shareholders, whose rights are currently governed by the C-COR articles of incorporation, the C-COR bylaws and Pennsylvania law, will, if they receive ARRIS common stock as merger consideration, become shareholders of ARRIS and their rights will be governed by the ARRIS certificate of incorporation, the ARRIS bylaws and Delaware law.
 
The following description summarizes material differences that may affect the rights of ARRIS shareholders and C-COR shareholders but does not purport to be a complete statement of all those differences, or a complete description of the specific provisions referred to in this summary. The identification of specific differences is not intended to indicate that other equally or more significant differences do not exist. Shareholders should read carefully the relevant provisions of Delaware law, Pennsylvania law, the ARRIS certificate of incorporation, the ARRIS bylaws, the C-COR articles of incorporation and the C-COR bylaws.
 
C-COR is a “registered corporation” under Pennsylvania law because C-COR common stock is registered under the Exchange Act.
 
Capitalization
 
ARRIS
 
The authorized capital stock of ARRIS consists of (i) 320,000,000 shares of ARRIS common stock and (ii) 5,000,000 shares of preferred stock, $1.00 par value per share, none of which is issued and outstanding and none of which is reserved for issuance. As of • , 2007, • shares of ARRIS common stock were issued and outstanding. ARRIS also has $276.0 million in senior unsecured convertible notes outstanding. The notes bear interest at 2% per year, which is payable in arrears twice a year. The notes are senior unsecured obligations and rank equally with all existing and future senior unsecured indebtedness. The Notes will be effectively subordinated to all future secured indebtedness.
 
C-COR
 
The authorized capital stock of C-COR consists of (i) 100,000,000 shares of C-COR common stock and (ii) 2,000,000 shares of preferred stock, no par value per share, none of which is issued and outstanding and none of which is reserved for issuance. C-COR also has $35.0 million of 3.5% senior unsecured convertible notes due on December 31, 2009. As of •  , 2007, •  shares of C-COR common stock were issued and outstanding.
 
Number, Election, Vacancy and Removal of Directors
 
ARRIS
 
The ARRIS bylaws provide that the total number of ARRIS directors will be fixed from time to time by action of the shareholders or directors or, if not so fixed, the number shall be three. ARRIS currently has seven directors, all of whom serve one year terms. Under Delaware law, directors are elected by a plurality of the votes of the shares present at the meeting.
 
The ARRIS bylaws provide that vacancies on the ARRIS board of directors may be filled by the vote of a majority of the remaining directors then in office, although less than a quorum, or by the sole remaining director. Delaware law provides that any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.


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C-COR
 
The C-COR bylaws provide that the total number of C-COR directors will not be less than six nor more than 15, as determined by the C-COR board of directors from time to time. C-COR currently has nine directors. The board is divided into three classes, with the directors of each class elected for three-year terms and the term of one class expiring each year. A class of directors is elected at each annual meeting of shareholders to serve until the end of the term to which they are elected and until their successors are elected and qualified. Under Pennsylvania law, candidates for director who receive the highest number of affirmative votes are elected.
 
The C-COR bylaws provide that vacancies on the C-COR board of directors may be filled by a majority vote of the directors then in office.
 
C-COR’s bylaws provide that directors may not be removed without cause. C-COR shareholders may remove any director, class of directors or may remove the entire board of directors for cause, by the vote of shareholders entitled to cast at least two-thirds of the votes entitled to be cast at any annual election of directors. In the event any directors are so removed, new directors may be elected at the same time.
 
Amendments to Charter Documents
 
ARRIS
 
Under Delaware law, all proposed amendments to a corporation’s certificate of incorporation require (i) approval by its board of directors and (ii) adoption by an affirmative vote of a majority of the outstanding stock entitled to vote on the amendment (subject to any class voting rights required by the corporation’s certificate of incorporation, the terms of any preferred stock, or Delaware law).
 
The certificate of incorporation of ARRIS provides that ARRIS may amend, alter or repeal the certificate of incorporation as permitted by Delaware law.
 
C-COR
 
Under Pennsylvania law, every amendment to a registered corporation’s articles of incorporation must be (i) proposed or approved by the corporation’s board of directors and (ii) with certain exceptions, adopted by an affirmative vote of a majority of the votes cast by shareholders entitled to vote on the amendment (subject to any class voting rights required by the corporation’s articles of incorporation, the terms of any preferred stock, or Pennsylvania law), unless the corporation’s articles of incorporation or a specific provision of Pennsylvania law requires a greater vote. The C-COR articles of incorporation provide that two-thirds of shares entitled to vote generally in the election of directors is required to approve any amendment relating to the approval requirements for certain business combinations.
 
Under Pennsylvania law, unless the corporation’s articles of incorporation restrict the power, a corporation’s board of directors, without shareholder approval, may amend the corporation’s articles of incorporation to:
 
  •  change the corporation’s name;
 
  •  provide for perpetual existence of the corporation;
 
  •  in certain circumstances, reflect a reduction in authorized shares effected in connection with an acquisition by the corporation of its own shares;
 
  •  add or delete a provision authorizing that shares of the corporation not be represented by certificates;
 
  •  add, change or eliminate the par value of any class or series of shares, if the par value does not have any substantive effect on the terms of any shares of the corporation; and/or
 
  •  under certain circumstances, split the corporation’s voting shares and/or, subject to certain limitations, increase the number of authorized voting shares of the corporation in connection with a stock split or stock dividend of the corporation’s voting shares.


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The C-COR articles of incorporation do not restrict this power of the C-COR board of directors.
 
Amendments to Bylaws
 
ARRIS
 
The ARRIS certificate of incorporation and bylaws provide that the power to amend, alter, or repeal the bylaws and to adopt new bylaws may be exercised by the board of directors or by the shareholders. The ARRIS bylaws do not require a supermajority vote to approve any amendment to the bylaws.
 
C-COR
 
The C-COR bylaws provide that, except for those provisions discussed below, the bylaws may be changed at any meeting of shareholders a majority of the votes which all shareholders are entitled to cast thereon, or by the board of directors by a majority vote of the directors present at any regular or special meeting. This authority of the board of directors is subject to the authority of the shareholders of C-COR to further alter, amend or repeal the bylaws.
 
A vote of shareholders holding two-thirds of shares entitled to vote thereon is required to approve an amendment to the bylaws relating to (i) the number and term of directors; (ii) removal of directors; and (iii) liability of directors.
 
Action by Written Consent
 
ARRIS
 
Under Delaware law, unless otherwise provided in the certificate of incorporation, any action required or permitted to be taken at a meeting of shareholders may be taken without a meeting, without prior notice and without a vote, upon the written consent of shareholders who would have been entitled to cast the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. The ARRIS bylaws specifically provide for shareholder action by written consent.
 
C-COR
 
Under Pennsylvania law, any action required or permitted to be taken at a meeting of shareholders may be taken without a meeting by consent by all the shareholders entitled to vote on the action and delivered to the corporation, unless otherwise provided in the articles of incorporation or bylaws. Pennsylvania law allows shareholder action without a meeting for registered corporations such as C-COR by less than unanimous consent of the shareholders only if provided for in the corporation’s articles of incorporation. The C-COR articles of incorporation do not contain provisions with respect to shareholder action by written consent.
 
Notice of Shareholder Meetings and Actions
 
ARRIS
 
Delaware law and the ARRIS bylaws provide that written notice of the time, place and purpose or purposes of any annual or special meeting of shareholders must be given not less than 10 days and not more than 60 days before the date of the meeting to each shareholder entitled to vote at the meeting.
 
C-COR
 
Pennsylvania law provides that written notice of the time, place and date of a meeting of shareholders must be given or sent to each shareholder of record entitled to vote at the meeting at least 10 days prior to the day named for a meeting that will consider a “fundamental change” or five days prior to the day named for the meeting in any other case. The C-COR bylaws require that notice of a meeting of shareholders be sent to


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each shareholder entitled to vote at the meeting at least five days before the meeting. A notice of a special meeting must state the purpose or purposes of the meeting.
 
The C-COR bylaws require a shareholder who intends to nominate a person to the board of directors bring any matter before an annual meeting to provide advance notice of such intended action not less than 50 nor more than 75 days prior to the date of the meeting.
 
Special Shareholder Meetings
 
ARRIS
 
Under Delaware law, a special meeting of shareholders may be called by the board of directors or by any other person authorized to do so in the certificate of incorporation or the bylaws. A notice must be sent to shareholders of the meeting stating the purpose or purposes for which the meeting is called.
 
Under the ARRIS bylaws, a special meeting of the shareholders may be called by the directors or by any officer upon the direction of the directors.
 
C-COR
 
Under the C-COR bylaws, a special meeting of shareholders may be called at any time by the president of the corporation, a majority of the board of directors, or by shareholders entitled to cast a majority of the votes which all shareholders are entitled to cast at the meeting.
 
Under Pennsylvania law, shareholders of registered companies do not have a statutory right to call special meetings, except that an “interested shareholder” (generally, a beneficial owner of shares entitling the shareholder to cast 20% of the votes that all shareholders are entitled to cast in an election of directors, or certain affiliates or associates of the corporation) may call a special meeting for the purpose of approving certain business combinations.
 
Limitation of Personal Liability and Indemnification of Directors and Officers
 
ARRIS
 
Under Delaware law, a corporation may indemnify any directors, officers, employees and agents of the corporation against expenses and, except in the case of an action by or in the right of the corporation, liabilities actually and reasonably incurred by such person in connection with any action, suit or proceeding involving such person by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, provided that (i) such person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal proceeding, such person had no reasonable cause to believe his conduct was unlawful and (ii) in the case of an action by or in the right of the corporation, no indemnification of expenses may be made in respect of any matter as to which such person is adjudged liable to the corporation unless and only to the extent such indemnification is approved by a court. Delaware law mandates such indemnification of expenses to the extent that a present or former director or officer of the corporation has been successful in defense of any proceeding described above, and permits advancement of expenses to a director or officer if the corporation receives an undertaking that the amount advanced will be repaid if it is determined that such person is not entitled to indemnification. Delaware law also provides that the permitted indemnifications described above are not exclusive.
 
Delaware law permits a corporation to include in its certificate of incorporation a provision eliminating or limiting the personal liability of a director of a corporation to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the directors’ duty of loyalty to the corporation or its shareholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for acts relating to unlawful payment of a dividend or an unlawful stock purchase or redemption or (iv) for any transaction from which the director derived an improper personal benefit.


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The ARRIS bylaws provide for indemnification of officers and directors of the corporation in the following circumstances: If any person is made a party to any suit or proceeding because of such person’s status as a director or officer of the corporation, where such director or officer acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to criminal matters, had no reasonable cause to believe his or her conduct was unlawful.
 
If a director or officer is made a party to any suit by the corporation arising from the fact that he or she was an officer or director of the corporation, where such director or officer acted in good faith and reasonably believed to be in, or not opposed to, the best interests of the company; except that no indemnification shall be made for any matter where a person is found liable to the corporation, unless a court determines that despite such liability, such person is fairly and reasonably entitled to indemnification.
 
ARRIS may also, at its discretion, provide the same benefits of indemnification to any employee or agent of the corporation, including a director or officer of the corporation who is serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.
 
C-COR
 
Under Pennsylvania law, unless otherwise restricted in its articles of incorporation or bylaws, a corporation may indemnify any directors, officers, employees and agents of the corporation against expenses and, except in the case of an action by or in the right of the corporation, liabilities actually and reasonably incurred by such person in connection with any action or proceeding by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, provided that (i) such person acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal proceeding, such person had no reasonable cause to believe his conduct was unlawful and (ii) in the case of an action by or in the right of the corporation, no indemnification of expenses may be made in respect of any matter as to which such person is adjudged liable to the corporation unless and only to the extent such indemnification is approved by a court. Pennsylvania law mandates such indemnification of expenses to the extent the present or former director, officer, employee or agent has been successful in defense of any action or proceeding described above, and permits advancement of expenses to a director or officer if the corporation receives an undertaking that the amount advanced will be repaid if it is determined that such person is not entitled to indemnification. Pennsylvania law also provides that the permitted indemnifications described above are not exclusive.
 
The C-COR bylaws provide that C-COR shall indemnify any director or officer of the corporation against expenses, judgments, fines and amounts paid in settlement to the fullest extent permitted under Pennsylvania law by reason of the fact that the person is or was a director or officer of the corporation or is or was serving on behalf of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.
 
The board of directors may similarly indemnify any person who is not a director or officer for liabilities incurred in connection with services rendered for or at the request of the corporation.
 
Dividends
 
ARRIS
 
Under Delaware law, subject to any restrictions contained in the corporation’s certificate of corporation, the board of directors of a corporation may declare and pay dividends and other distributions to the corporation’s shareholders either out of surplus (generally net assets in excess of capital) or, if there is no surplus, out of its net profits for the current or preceding fiscal year in which the dividend is declared. However, a distribution out of net profits is not permitted if a corporation’s capital is less than the amount of capital represented by the issued and outstanding shares of all classes having a preference upon the distribution of assets, until the deficiency has been repaid.


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C-COR
 
Under Pennsylvania law, a board of directors of a corporation may not authorize and pay dividends to its shareholders if after giving it effect:
 
  •  the corporation would not be able to pay its debts as they become due in the usual course of business; or
 
  •  the corporation’s total assets would be less than the sum of its total liabilities plus (unless otherwise provided in the articles of incorporation) the amount that would be needed to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the dividend if the corporation were to be dissolved at the time this valuation is measured.
 
Rights Plan
 
ARRIS
 
Under the ARRIS shareholder rights plan dated October 3, 2002, each outstanding share of ARRIS’ common stock has an associated preferred stock purchase right. Each right represents the right to purchase one one-thousandth of a share of Series A Participating Preferred Stock and becomes exercisable only if a person or group acquires beneficial ownership of 15% or more of ARRIS common stock or announces a tender or exchange offer for 15% or more of ARRIS common stock or under other similar circumstances. See “