EXHIBIT 10.3
SCIENTIFIC-ATLANTA, INC.
RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS
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As Amended, Effective November 12, 1997
1. PURPOSE
The purpose of this plan ("Plan") is to enhance the ability of Scientific-
Atlanta, Inc. ("Company") to attract and retain the service of experienced, able
and knowledgeable persons to serve as members of the Company's board of
directors ("Board") over a substantial period of years during which the full
benefit of their capabilities can be realized to further the growth and
profitability of the Company and return to the shareholders.
2. ADMINISTRATION
The Plan shall be administered by a Plan Administrator, who shall be
appointed by the Board. In addition to the duties stated elsewhere in the Plan,
the Plan Administrator shall have full authority, consistent with the Plan, to
interpret the Plan and to make all determinations necessary or desirable for the
administration of the Plan.
3. ELIGIBLE PARTICIPANTS
Each person who is or becomes a member of the Board on or after the
effective date of this Plan but before January 1, 1997, and who has never been a
participant in an employee retirement plan of the Company shall be deemed a
participant in this Plan after having been a member of the Board for thirty-six
consecutive months (a "Participant"). Each person who was a Participant in the
Plan as of January 1, 1997 (the "Conversion Date"), and who was not already
receiving retirement benefits under the Plan as of the Conversion Date, shall,
on or before September 1, 1997, make an election as to whether he or she desires
(a) to continue as a Participant under this Plan, or (b) to discontinue
participation in this Plan and to receive in lieu thereof (1) annual grants of
retirement awards (currently 1,500 shares of the Company's common stock), under
the terms of the Stock Plan for Non-Employee Directors, and (2) a lump sum
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distribution equal to the greater of either (i) the present value, actuarially
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determined by the Company as of the Conversion Date, of the retirement benefits
of such Participant under this Plan through the Conversion Date, reduced by the
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present value, actuarially determined by the Company, as of the Conversion Date,
of the stream of annual grants of retirement awards described under clause (1)
above through such Participant's Normal Retirement Date, or (ii) an amount equal
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to the value of 750 shares of the Company's common stock. $.50 par value (at the
closing price on the Conversion Date) multiplied by such Participant's total
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years of service as a director, as of the Conversion Date, which lump sum
distribution shall be converted, under the terms of the Stock Plan for Non-
Employee Directors, into shares of the Company's common
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stock, $.50 par value, at the fair market value on the Conversion Date.
Participants electing to receive a lump sum distribution shall be also entitled
to receive a further distribution in the form of shares to be issued under the
Stock Plan for Non-Employee Directors, upon the death of such Participant, such
further distribution to be equal to the difference, if any, between (a) the
value of the spousal benefits otherwise payable to the spouse of a Participant
under the provisions of paragraph 7 below, and (b) the assumed value (as defined
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in the assumptions approved by the Board) of the lump sum distribution to such
Participant described above plus the annual retirement awards granted to such
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Participant under the Stock Plan for Non-Employee Directors prior to his or her
death. Except to the extent otherwise provided in the preceding sentence,
individuals who are Participants under this Plan as of the Conversion Date, and
who elect on or before September 1, 1997, to receive the lump sum distribution
described above, shall cease to be Participants under this Plan, effective as of
the Conversion Date.
4. RETIREMENT DATES
(a) A Participant's "Normal Retirement Date" is the first day of the
calendar month in which a Participant attains the age of sixty-five (65) years
and is no longer a member of the Board or any subsequent month designated by a
Participant in accordance with paragraph 6 below.
(b) A Participant's "Early Retirement Date" is the first day of the
calendar month designated by a Participant in accordance with paragraph 6 below,
prior to the Normal Retirement Date, on or after the month in which a
Participant attains the age of fifty-five (55) years.
5. RETIREMENT BENEFIT
(a) The annual retirement benefit payable to any Participant who retires on
the Normal Retirement Date, or any date thereafter, will be an amount equal to
(i) the regular annual retainer paid by the Company to each director for the
last fiscal year of the Company that the Participant served as a director, plus
(ii) the value, as of the date of grant, of the shares of the Company's Common
Stock granted to the Participant as a "Stock Award" under the Company's Stock
Plan for Non-Employee Directors during the last fiscal year of the Company that
the Participant served as a director. The "regular annual retainer" as used in
the preceding sentence means the annual retainer received by each director of
the Company, excluding any committee chair annual retainer, meeting fees and
other fees received by a director; and, if the Participant elects to receive all
or a portion of his or her annual retainer in the form of shares of the
Company's common stock under the Company's Stock Plan for Non-Employee
Directors, any portion of such annual retainer received in shares shall be
included in the definition of "regular annual retainer."
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(b) The annual early retirement benefit payable to any Participant who
retires on the Early Retirement Date will be the amount specified in 5(a) above,
reduced by the following early retirement factors:
Age at Commencement Factor
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64 .933
63 .867
62 .800
61 .733
60 .667
59 .633
58 .600
57 .567
56 .533
55 .500
If a Participant's age at the Early Retirement Date falls between any two
of these ages, these factors shall be adjusted by straight-line interpolation.
(c) No retirement benefit will be payable to any person who is a member of
the Board for less than thirty-six (36) consecutive months.
6. BENEFIT PAYMENTS
A Participant may retire by written notice to the Plan Administrator or the
Secretary of the Company, designating a retirement date in accordance with
paragraph 4 above. Retirement benefit payments will be payable on the first day
of each calendar quarter following retirement or in accordance with such other
schedule of payments as may be requested by the Participant and approved by the
Board. Benefit payments will continue to be paid to the Participant for the
remainder of the Participant's life. Notwithstanding the foregoing, in lieu of
the normal form of payment otherwise provided under this Plan, the Plan
Administrator may direct, in its sole and absolute discretion, that benefits
shall be paid in a single sum that is the actuarial equivalent of the annual
benefit payable to the Participant or, in the event of the Participant's death,
to his or her surviving spouse.
7. SPOUSAL BENEFITS
Should a Participant die before retirement benefits have begun to be paid
to the Participant under this Plan, the Participant shall be deemed to retire on
the later of (i) the day before his/her death, or (ii) the first day of the
first calendar month thereafter in which the Participant would have attained the
age of fifty-five (55), and the Participant's surviving spouse, if any, shall be
entitled to a benefit equal to the benefit that would have been paid to the
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Participant. If the Participant dies after retirement benefits have commenced,
the Participant's surviving spouse shall be entitled to annual benefit payments
equal to the annual benefit previously payable to the Participant. In each
case, the benefit shall continue for the lesser of (i) ten years or (ii) a
number of years equal to the number of years that the Participant was a member
of the Board; provided, however, that payments shall not continue after the
death of the spouse.
8. DISABILITY
Should a Participant become totally and permanently disabled prior to
retirement for a period of six (6) consecutive months while a member of the
Board and the Board determines that such disability will continue, the
Participant will be deemed to have retired on the first day of the calendar
month following the month in which the Board makes such determination and the
age of the Participant on such retirement date shall be deemed the older of (i)
fifty-five (55), or (ii) the Participant's actual age on that date. Payments
will be made on the same basis as described in Sections 5, 6, and 7 above.
9. CHANGE OF CONTROL
Notwithstanding anything contained in this Plan to the contrary, the
provisions of this paragraph 9 shall apply to any Participant whose membership
on the Board ends before a Change of Control occurs or who is a member of the
Board on the date that a Change of Control occurs and who ceases within twenty-
four (24) months after a Change of Control to be a member of the Board for any
reason.
(a) Each such Participant shall be immediately vested in his or her
retirement benefit payable under this Plan.
(b) The Company shall contribute to the trust maintained pursuant to the
Scientific-Atlanta, Inc. Benefits Protection Trust Agreement a lump sum amount
equal to the then-present value of the Participant's retirement benefit. This
lump sum payment to the trust shall be due on the later of (i) the date when
the Change of Control occurs or (ii) the date the Participant ceases to be a
member of the Board. The retirement benefit of a Participant who ceases to be a
member of the Board within twenty-four (24) months after a Change of Control
shall be computed as if the Participant would retire on the first day that he or
she is eligible to retire (whether an Early Retirement Date or a Normal
Retirement Date) following the Change of Control and the end of his or her
membership on the Board. Any retirement benefits to which the Participant is
entitled under the terms of this Plan shall be payable from the trust, except to
the extent that the benefits are paid from the general assets of the Company.
(c) Notwithstanding the foregoing, in lieu of the form of payment otherwise
provided for in this paragraph 9, the Plan Administrator may direct, in its sole
and absolute discretion, that upon a Change of Control benefits under this Plan
shall be paid in a single lump sum that is the
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actuarial equivalent of the annual benefits payable to the Participant or, in
the event of the Participant's death, to his or her surviving spouse.
(d) "Change of Control" means a change of twenty-five percent (25%) or more
of the membership of the Board (excluding membership changes resulting from
normal retirement of directors) within a twenty-four (24) month period following
the acquisition of beneficial ownership by any person or entity, or group of
persons or entities and their affiliates acting in concert, of twenty percent
(20%) or more of the voting securities of the Company. "Affiliates" and
"beneficial ownership" shall be defined in accordance with Rules 12b-2 and 13d-3
of the Securities and Exchange Commission, as the same may from time to time be
amended.
10. TERMINATION AND AMENDMENT OF THE PLAN
The Board may terminate the Plan at any time and may amend the Plan from
time to time but no such termination and amendment shall adversely affect the
rights of Participants under the Plan, which shall be deemed fully vested and
irrevocable on the date that a director becomes a Participant in accordance with
paragraph 3 above.
11. EFFECTIVE DATE
The effective date of this Plan was February 15, 1989.
To record the adoption of the Plan (as amended and restated) by the Board,
effective as of November 12, 1997, 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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