EXHIBIT 10.1
SCIENTIFIC-ATLANTA, INC.
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
As Amended, Effective November 12, 1997
1. PURPOSES
The purposes of this Plan are to aid the Company in attracting and retaining
highly qualified Non-employee Directors, to provide additional compensation as
an incentive for Non-employee Directors to contribute their best efforts to the
Company's success, and to emphasize and enhance the Company's policy of seeking
to have Non-employee Directors maintain a significant investment in the stock of
the Company and thus a strong commonality of interests with the shareholders.
2. DEFINITIONS
As used in this Plan:
(a) The term "Annual Meeting" means the annual meeting of shareholders
of the Company.
(b) The term "Award" means an Elective Grant, a Stock Award, a
Retirement Award, or a Lump Sum Distribution awarded under this Plan.
(c) The term "Board" means the Board of Directors of the Company.
(d) The term "Board Approval" means approval by a majority of the
directors present at a Board meeting at which a quorum is present.
(e) The term "Company" means Scientific-Atlanta, Inc., a Georgia
corporation.
(f) The term "Committee" shall mean the Governance and Nominations
Committee of the Board or any another committee comprised of directors of the
Board which is vested by the Board with responsibility to administer this Plan.
(g) The term "Elective Grant" shall mean the election by a Non-Employee
Director pursuant to Section 3(a) hereof to receive a portion of his or her
Quarterly Compensation in the form of Shares.
(h) For the purposes of a Stock Award, the term "Eligible Directors"
shall mean those Non-employee Directors who served on the Board for the six
months immediately preceding the Annual Meeting at which a Stock Award is
granted. For the purposes of an Elective Grant, the term "Eligible Directors"
shall mean all Non-employee Directors of the Board. For the purposes
of a Retirement Award and for purposes of the Lump Sum Distribution, the term
"Eligible Directors" shall mean all Non-employee Directors who were not members
of the Board prior to January 1, 1997, and all Non-employee Directors who were
members of the Board and Participants in the Retirement Plan for Non-employee
Directors prior to January 1, 1997, and who elected on or before September 21,
1997, pursuant to the terms of paragraph 3 of the Retirement Plan for Non-
employee Directors, as amended on June 17, 1997, to receive a Lump Sum
Distribution.
(i) The term "Fair Market Value Per Share" means the closing sale price
of a Share on the New York Stock Exchange on the date such value is determined
or, if there is no trade on such Exchange on that date, then the closing sale
price on the next preceding date on which there is trade of the Company's Common
Stock on such Exchange. In the event that the Company's Common Stock is not
listed on the New York Stock Exchange on the determination date, the Fair Market
Value shall be determined as stated above but with reference to trades on the
largest stock exchange or other public market on which the Company's Common
Stock is then traded.
(j) The term "Lump Sum Distribution" means an award to an Eligible
Director consisting of a number of Shares having an aggregate fair market
value, as of January 1, 1997, determined as provided in Section 2(i) above,
equal to the greater of either (i) the present value, actuarially determined, as
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of January 1, 1997, of the retirement benefits of such Eligible Director under
the Retirement Plan for Non-employee Directors, as amended on June 17, 1997 (the
"Retirement Plan"), reduced by the present value, actuarially determined by the
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Company, as of January 1, 1997, of the stream of annual Retirement Awards
(granted under Section 5(a) hereof) through the electing participant's sixty-
fifth birthday, or (ii) an amount equal to the value of 750 shares of the
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Company's Common Stock (at the closing price on January 1, 1997) multiplied by
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the Eligible Director's total years of service as a director, as of January 1,
1997, all as determined in accordance with paragraph 3 of the Retirement Plan.
(k) The term "Non-employee Director" means any person who is elected to
the Board and who has not been an employee of the Company or any of its
subsidiaries at any time during the twelve (12) months preceding (i) any
election by such person under Section 3 hereof, (ii) the receipt of a Stock
Award by such person under Section 4 hereof, or (iii) the receipt of a
Retirement Award by such person under Section 5 hereof.
(l) The term "Plan" means this Scientific-Atlanta, Inc. Stock Plan for
Non-employee Directors, as amended from time to time.
(m) The term "Quarterly Compensation" means the sum of all meeting fees,
annual retainer fees, and Committee and Board Chairmanship fees for service as a
director earned by a Non-employee Director during a fiscal quarter. Compensation
paid to Non-employee Directors for their service to the Company in any other
capacity, shall be excluded from the calculation of Quarterly Compensation.
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(n) The term "Retirement Award" means an award consisting of 1,500
Shares (subject to adjustment as herein provided) granted to an Eligible
Director pursuant to Section 5 hereof, which Shares shall be either deferred or
restricted for a period of at least two (2) years from the date of the grant, in
accordance with the terms of Section 5 hereof. Depending on the election made by
each Eligible Director under Section 5(a) hereof, each Retirement Award will be
either a Deferred Retirement Award or a Restricted Retirement Award (as such
terms are defined in Section 5(a) hereof).
(o) The term "Share" means a share of the Company's Common Stock, $.50
par value. Shares delivered to the Eligible Directors under this Plan may be
either authorized but previously unissued shares or previously issued shares
reacquired by the Company.
(p) The term "Shareholder Approval" means the affirmative vote of a
majority of the shares of Common Stock present or represented and entitled to
vote at a meeting of the shareholders of the Company at which a quorum is
present.
(q) The term "Stock Award" means an award consisting of 500 Shares
(subject to adjustment as herein provided) granted to an Eligible Director
pursuant to Section 4(a) hereof.
3. ELECTIVE GRANTS
(a) Each Non-employee Director may make an election to receive up to 100
percent (100%) of his or her Quarterly Compensation (in increments of 5%) in the
form of Shares pursuant to an Elective Grant made in accordance with this
Section 3(a). The election by the Non-employee Director to receive an Elective
Grant of Shares must be in writing and must be delivered to the Secretary of the
Company before the start of the fiscal quarter during which services are to be
rendered by the Non-employee Director giving rise to the Quarterly Compensation.
The election made by a Non-employee Director pursuant to this Section 3(a) shall
be in effect as to Quarterly Compensation payable for services rendered during
the fiscal quarter of the Company covered by the election. The Committee shall,
prior to the receipt by a Non-employee Director of shares under an Elective
Grant, approve the issuance of such shares by resolution; however, if the
Committee fails to adopt such an approving resolution, such shares may be issued
to the electing Non-employee Director, but such shares cannot be sold or
otherwise transferred by such Non-employee Director prior to the date which is
six (6) months after the date of such issuance of shares.
(b) The number of Shares to be granted to a Non-employee Director who
makes an Elective Grant shall equal (i) the amount of the Quarterly Compensation
earned during the Company's fiscal quarter subject to the Elective Grant,
divided by (ii) the Fair Market Value Per Share on the last day of such fiscal
quarter. In no event shall the Company be required to issue fractional Shares.
Any fractional Share will be rounded to the nearest whole Share.
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(c) As soon as practicable after each Non-employee Director's Elective
Grant of Shares is determined, the Company shall cause to be issued and
delivered to such Non-employee Director a stock certificate registered in the
name of the Non-employee Director evidencing his or her Elective Grant, less any
Shares withheld by the Company pursuant to Section 8 below.
(d) No right to an Elective Grant and no interest therein may be
assigned, pledged, hypothecated, or otherwise transferred by a Non-employee
Director except that, in the event of the death of a Non-employee Director prior
to the issuance of a stock certificate evidencing an Elective Grant, such right
to such Elective Grant may be transferred to the Non-employee Director's
designated beneficiary or, in the absence of such designation, by will or the
laws of descent and distribution.
4. STOCK AWARDS
(a) Beginning with the 1995 Annual Meeting and at the Annual Meeting
every year thereafter through and including the Annual Meeting held in 2009,
every Eligible Director shall be granted a Stock Award.
(b) Subject to the provisions of Section 8 hereof, as soon as
practicable after the applicable Annual Meeting, the Company shall cause to be
issued and delivered to each Eligible Director receiving a Stock Award a stock
certificate registered in the name of such Eligible Director evidencing the
Stock Award, less any Shares withheld by the Company pursuant to Section 8
below.
(c) Eligible Directors shall not be deemed for any purpose to be, or
have any rights as, shareholders of the Company with respect to any Stock Award
until the stock certificates are issued and then only from the date of the
issuance of such stock certificates. Appropriate adjustments shall be made for
dividends or distributions or other rights for which the record date is after an
Annual Meeting and prior to the issuance of such stock certificates.
(d) No right to a Stock Award and no interests therein may be assigned,
pledged, hypothecated, or otherwise transferred by an Eligible Director except
that, in the event of the death of a Non-employee Director prior to the issuance
of a stock certificate evidencing a Stock Award, such right to such Stock Award
may be transferred to the Non-employee Director's designated beneficiary or, in
the absence of such designation, by will or the laws of descent and
distribution.
5. RETIREMENT AWARDS
(a) Beginning with the 1997 Annual Meeting and at the Annual Meeting
every year thereafter through and including the Annual Meeting held 2009, every
Eligible Director shall be granted a Retirement Award. Each Eligible Director
shall elect annually either (i) to defer his or her right to receive such
Retirement Award, under the Deferred Compensation Plan for Non-employee
Directors, for a minimum period of two (2) years after the date of the grant
thereof (a "Deferred Retirement Award"), or (ii) to receive such Retirement
Award as restricted stock that
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cannot be sold, assigned or otherwise disposed of by the Eligible Director for a
period of two (2) years after the date of the grant thereof (a "Restricted
Retirement Award").
(b) Subject to the provisions of Section 8, as soon as practicable after
the expiration of (i) the deferral period under the Deferred Compensation Plan
for Non-employee Directors applicable to a Deferred Retirement Award, or (ii)
the restriction period under this Plan applicable to a Restricted Retirement
Award, as applicable, the Company shall cause to be issued to the pertinent
Eligible Director a stock certificate registered in the name of such Eligible
Director evidencing the Deferred Retirement Award or the Restricted Retirement
Award, as applicable.
(c) Eligible Directors shall not be deemed for any purpose to be, or
have any rights as, shareholders of the Company with respect to any Retirement
Award until the stock certificates are issued and then only from the date of the
issuance of such stock certificates. Appropriate adjustments shall be made for
dividends or distributions or other rights for which the record date is after an
Annual Meeting and prior to the issuance of such stock certificates.
(d) No right to a Retirement Award and no interests therein may be
assigned, pledged, hypothecated, or otherwise transferred by an Eligible
Director except that, in the event of the death of a Non-employee Director prior
to the issuance of a stock certificate evidencing a Retirement Award, such right
to such Retirement Award may be transferred to the Non-employee Director's
designated beneficiary or, in the absence of such designation, by will or the
laws of descent and distribution..
(e) During the two (2) year restriction period applicable to a Restricted
Retirement Award, Eligible Directors shall have all rights of a shareholder with
respect to the Shares granted under the Retirement Award, including the right to
vote such Shares and to receive dividends and other distributions paid with
respect to such Shares, but they shall not have the right to sell, exchange,
transfer, pledge, hypothecate or otherwise dispose of such Restricted Retirement
Award, except that such Shares may be transferred upon the death of the Eligible
Director to such of his legal representatives, heirs and legatees as may be
entitled thereto by will or the laws of intestacy.
6. LUMP SUM DISTRIBUTIONS
(a) As soon as practicable after the 1997 Annual Meeting, every Eligible
Director who has elected to receive a Lump Sum Distribution, in accordance with
paragraph 3 of the Retirement Plan for Non-employee Directors, shall be granted
a Lump Sum Distribution under this Plan. Each Eligible Director shall elect to
defer his or her right to receive such Lump Sum Distribution, under the Deferred
Compensation Plan for Non-employee Directors, until not earlier than such
Eligible Director's Retirement, Death or Total Disability (as such terms are
defined in that plan).
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(b) Subject to the provisions of Section 8, as soon as practicable after
the expiration of the deferral period under the Deferred Compensation Plan for
Non-employee Directors applicable to such Lump Sum Distribution for an Eligible
Director, the Company shall cause to be issued to such Eligible Director
receiving a Lump Sum Distribution a stock certificate registered in the name of
such Eligible Director evidencing the Lump Sum Distribution.
(c) Eligible Directors shall not be deemed for any purpose to be, or
have any rights as, shareholders of the Company with respect to any Lump Sum
Distribution until the stock certificates are issued and then only from the date
of the issuance of such stock certificates. Appropriate adjustments shall be
made for dividends or distributions or other rights for which the record date is
after an Annual Meeting and prior to the issuance of such stock certificates.
(d) No right to a Lump Sum Distribution and no interests therein may be
assigned, pledged, hypothecated, or otherwise transferred by an Eligible
Director except that, in the event of the death of a Non-employee Director prior
to the issuance of a stock certificate evidencing a Lump Sum Distribution, such
right to such Lump Sum Distribution may be transferred to the Non-employee
Director's designated beneficiary or, in the absence of such designation, by
will or the laws of descent and distribution..
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
If a reorganization, recapitalization, stock split, stock dividend, combination
of shares, merger, consolidation, rights offering, or any other change in the
corporate structure of the Company or the Shares occurs, then the number and/or
kind of shares to be awarded under the Plan shall be automatically adjusted as
required in order to prevent an unfavorable effect upon the value of the Awards
to be made under this Plan.
8. ELECTION FOR TAX PURPOSES/TAX WITHHOLDING/DEFERRAL
(a) All Awards made pursuant to this Plan shall be subject to the
withholding of state and federal income taxes, FICA tax or other taxes to the
extent required by applicable law. The Company shall, before delivery of a
stock certificate evidencing an Award, require the recipient to make
arrangements satisfactory to the Company to satisfy such withholding
requirement, if any. An Eligible Director receiving an Award may satisfy such
withholding requirement by having the Company withhold Shares otherwise issuable
to the Eligible Director if such Director makes a written election to do so,
which election must be delivered to the Secretary of the Company. Each Eligible
Director receiving a Restricted Retirement Award shall have the right to make an
election, under the terms of Section 83(b) of the U.S. tax code and related
regulations, whereby such Eligible Director would treat such Restricted
Retirement Award as creating income on the date of the grant thereof, rather
than on the date upon which the restriction period expires.
(b) The right to receive any Shares under this Plan, at the election of
the Non-employee Director receiving an Award (without need for Committee
approval), may be deferred under the provisions of the Company's Deferred
Compensation Plan for Non-employee
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Directors. In the event of such a deferral, the Eligible Director will not have
any rights of ownership, such as voting, selling or receipt of dividends, until
the deferral period for such Award expires.
9. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall have full
authority, consistent with the Plan, to interpret the Plan and to promulgate
such rules and regulations with respect to the Plan as it deems desirable for
the administration of the Plan. The Committee shall have authority to determine
all matters relating to the administration and granting of Awards. All
decisions, determinations and interpretations of the Committee shall be binding
upon all persons.
10. COMPLIANCE WITH APPLICABLE LEGAL REQUIREMENTS
The Plan, the Awards, and the obligation of the Company to deliver Shares under
the Plan shall be subject to all applicable laws, regulations, and the
requirements of the exchanges on which Shares may, at the time, be listed. In
the event that the Shares to be issued under this Plan are not registered under
the Securities Act of 1933 and/or any applicable state securities laws prior to
the delivery of such Shares, the Company may require, as a condition to the
issuance thereof, that each Eligible Director to whom such Shares are to be
issued represent and warrant in writing to the Company that the Shares are being
acquired by him or her for investment for his or her account and not for resale
or with any intent of participating directly or indirectly in any distribution
of such Shares and a legend to that effect may be placed on the stock
certificates representing such Shares.
11. AMENDMENTS
The Committee with Board Approval may amend this Plan or any provision thereof
from time to time for the purpose of satisfying the requirements of any changes
in applicable laws or regulations or for any other purpose which at the time may
be permitted by law, provided that no amendment, except with shareholder
Approval, shall: (i) change the calculation of the Awards so as to increase the
value of the award to the Non-employee Directors; (ii) increase the frequency of
the Awards, (iii) materially increase in any other way the benefits to the Non-
employee Directors, (iv) materially modify the definitions of Non-employee
Director or Eligible Directors as defined herein, or (v) disqualify a Non-
employee Director from being a "Non-Employee Director" administrator (within the
meaning of Rule 16b-3 or any successor rule of the Securities and Exchange
Commission) of any stock-based plan of the Company. Notwithstanding the
foregoing, in no case may the Plan provisions pertaining to the amount or
determination of a Stock Award, Elective Grant, Retirement Award, or the
determination of Eligible Directors be amended more than once every six months,
other than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder.
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12. DISCONTINUANCE
The Board may suspend or discontinue this Plan in whole or in part, but any such
suspension or discontinuance shall not affect Awards granted under this Plan
prior thereto.
13. Governing Law
This Plan is made in accordance with and shall be governed in all respects by
the laws of the State of Georgia.
14. EFFECTIVE DATE
This Plan was effective on August 24, 1995.
15. TERM
The term of this Plan shall be for the period commencing as of the date of Board
Approval and ending with the Annual Meeting held in 2009.
To record the adoption of the Plan by the Board on August 24, 1995, and by the
shareholders on November 8, 1995, and to record the amendment of the Plan by the
Board on November 13, 1996, and on June 17, 1997, with an effective date of
November 12, 1997, the date of Shareholder Approval thereof, the Company has
caused its authorized officers to execute this Plan and affix the corporate name
and seal hereto.
SCIENTIFIC-ATLANTA, INC.
By: /s/ Brian C. Koenig
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Name: Brian C. Koenig
Title: Senior Vice President - Human Resources
By: /s/ William E. Eason, Jr.
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Name: William E. Eason, Jr.
Title: Corporate Secretary
[Corporate Seal]
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