Current Report Filing (8-k)
July 05 2016 - 8:00AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 29, 2016
ARRIS INTERNATIONAL PLC
(Exact name of registrant as specified in its charter)
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England and Wales
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001-37672
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98-1241619
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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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3871 Lakefield Drive
Suwanee, Georgia
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30024
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrants telephone number, including area code: (678) 473-2000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01.
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Entry into a Material Definitive Agreement.
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On June 29, 2016, ARRIS International
plc (ARRIS or the Company) entered into a Warrant and Registration Rights Agreement (the Warrant) with Comcast Cable Communications Management, LLC (Comcast) pursuant to which Comcast may purchase up
to 8.0 million of ARRIS ordinary shares, nominal value £0.01 per share (subject to adjustment in accordance with the terms of the Warrant, the Shares).
The Warrant will vest in two tranches based on the amount of products and services Comcast purchases from the Company. Between
1.0 million and 3.0 million Shares are issuable under the Warrant based on Comcasts purchases in 2016 and between 1.0 million and 5.0 million are issuable based on purchases made in 2017. In order for the Warrant to vest
above the 1.0 million Share threshold in both 2016 and 2017, specified increased purchases are required and a set percentage of the purchases must be for products and services included in ARRIS Network & Cloud segment for 2016
and 2017, respectively. The exercise price per Share is $22.19, which represents the average volume-weighted price of ARRIS ordinary shares on NASDAQ for the 10-day trading period preceding the date of the Warrant.
The Warrant provides for net Share settlement that, if elected by Comcast, will reduce the number of Shares issued upon exercise to reflect
net settlement of the exercise price. Comcast may also request cash settlement of the Warrant upon exercise in lieu of issuing Shares, however, such cash election is at the discretion of ARRIS. The warrants will expire on June 30, 2023.
The Warrant provides for certain adjustments that may be made to the exercise price and the number of Shares issuable upon exercise due to
customary anti-dilution provisions based on future corporate events. In addition, in connection with any consolidation, merger or similar extraordinary event involving the Company, the Warrant will be deemed to represent the right to receive, upon
exercise, the same consideration received by the holders of the Companys ordinary shares in connection with such transaction. Upon a change of control of ARRIS or if ARRIS materially breaches its separate Master Supply Agreement with Comcast
(and such breach is not cured pursuant to the terms of the Master Supply Agreement), the Warrant will immediately vest for the minimum threshold of Shares that would otherwise be issuable.
ARRIS has also agreed, if requested by Comcast, to register the Shares issuable upon exercise of the Warrant under the Securities Act of 1933,
as amended (the Securities Act) and has also granted piggyback registration rights in the event ARRIS files a registration statement with the U.S. Securities and Exchange Commission under the Securities Act covering its
equity securities, subject to the terms and conditions included in the Warrant.
The foregoing description of the terms and conditions of
the Warrant and Registration Rights Agreement is only a summary and is qualified in its entirety by the full text of the Warrant and Registration Rights Agreement, which is filed as Exhibit 4.1 to this Current Report and incorporated by reference in
this Item 1.01 and Item 3.02.
Item 3.02.
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Unregistered Sales of Equity Securities.
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The information set forth in Item 1.01
regarding the issuance of the Shares pursuant to the Warrant is incorporated into this Item 3.02 by reference. The offer and sale of such securities were made only to accredited investors (as defined by Rule 501 under the Securities
Act) in reliance upon exemptions from registration under the Securities Act afforded by Section 4(a)(2) of the Securities Act and corresponding provisions of state securities laws. Reliance on Section 4(2) is based on the nature of the
offering and sale and certain representations made by Comcast in the Warrant with respect to its investment intent and status as an accredited investor.
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Item 7.01.
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Regulation FD.
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Beginning with the second quarter ended June 30, 2016,
the fair value of the Warrant described above in Item 1.01 will be treated as a reduction of revenues under U.S. GAAP when achievement of purchase commitments by Comcast under each tranche are deemed probable. Upon a purchase
commitment being deemed probable, ARRIS will be required to mark-to-market the fair value of each tranche of the Warrant through the final vesting dates of December 31, 2016 and 2017. The Company expects to exclude the impact of the fair value
revenue adjustment in its adjusted (Non GAAP) net income.
Item 9.01.
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Financial Statements and Exhibits.
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Exhibit
No.
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Description
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4.1*
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Warrant and Registration Rights Agreement dated June 29, 2016
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99.1
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Press Release dated July 5, 2016
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*
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Portions of this document were omitted and filed separately with the SEC pursuant to a request for
confidential treatment in accordance with Rule 24b-2 of the Exchange Act.
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3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
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ARRIS INTERNATIONAL PLC
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By:
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/s/ Patrick W. Macken
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Patrick W. Macken
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Senior Vice President, General Counsel, and Secretary
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Date: July 5, 2016
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