-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MaKG+iBhvGhlPUus5IXGW4zy/5nzjlZJGyydZhJlfb/yFx4iAjCpBnQkejVZEt5g eviNiBhYt2rRXQpYzFqtEw== 0000950144-96-000572.txt : 19960216 0000950144-96-000572.hdr.sgml : 19960216 ACCESSION NUMBER: 0000950144-96-000572 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19951229 FILED AS OF DATE: 19960215 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCIENTIFIC ATLANTA INC CENTRAL INDEX KEY: 0000087777 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 580612397 STATE OF INCORPORATION: GA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-05517 FILM NUMBER: 96521691 BUSINESS ADDRESS: STREET 1: ONE TECHNOLOGY PKWY S CITY: NORCROSS STATE: GA ZIP: 30092-2967 BUSINESS PHONE: 7709035000 MAIL ADDRESS: STREET 1: ONE TECHNOLOGY PKWY S CITY: NORCROSS STATE: GA ZIP: 30092-2967 FORMER COMPANY: FORMER CONFORMED NAME: SCIENTIFIC ASSOCIATES INC DATE OF NAME CHANGE: 19671024 10-Q/A 1 SCIENTIFIC ATLANTA,INC. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 29, 1995 ------------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO -------------------- ----------------------- COMMISSION FILE NUMBER 1-5517 SCIENTIFIC-ATLANTA, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) GEORGIA 58-0612397 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) ONE TECHNOLOGY PARKWAY, SOUTH NORCROSS, GEORGIA 30092-2967 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) 770-903-5000 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ] AS OF JANUARY 26, 1996, SCIENTIFIC-ATLANTA, INC. HAD OUTSTANDING 76,410,954 SHARES OF COMMON STOCK. 1 of 31 2 PART I - FINANCIAL INFORMATION SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
Three Months Ended Six Months Ended ------------------------------ ----------------------------- December 29, December 30, December 29, December 30, 1995 1994 1995 1994 ------------ ------------ ------------ ------------ SALES $261,100 $269,690 $503,293 $494,666 COSTS AND EXPENSES Cost of sales 193,383 195,880 374,499 353,433 Sales and administrative 33,663 32,601 66,389 63,937 Research and development 23,871 20,057 46,638 39,102 Interest expense 220 190 367 418 Interest (income) (223) (617) (974) (1,503) Other (income) expense, net 479 (1,222) 658 (1,188) -------- -------- -------- -------- Total costs and expenses 251,393 246,889 487,577 454,199 EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 9,707 22,801 15,716 40,467 PROVISION (BENEFIT) FOR INCOME TAXES Current 4,331 9,015 4,881 15,433 Deferred (1,225) (1,719) 148 (2,484) -------- -------- -------- -------- NET EARNINGS FROM CONTINUING OPERATIONS 6,601 15,505 10,687 27,518 LOSS FROM DISCONTINUED OPERATIONS NET OF TAX -- (492) (1,038) (396) ESTIMATED LOSS ON SALE OF DISCONTINUED OPERATIONS NET OF TAX -- -- (12,172) -- -------- -------- -------- -------- NET EARNINGS (LOSS) $ 6,601 $ 15,013 $ (2,523) $ 27,122 ======== ======== ======== ======== EARNINGS (LOSS) PER COMMON SHARE AND COMMON EQUIVALENT SHARE PRIMARY CONTINUING OPERATIONS $ 0.09 $ 0.20 $0.14 $ 0.36 DISCONTINUED OPERATIONS -- (0.01) (0.17) (0.01) -------- -------- -------- -------- NET EARNINGS (LOSS) $ 0.09 $ 0.19 $ (0.03) $ 0.35 ======== ======== ======== ======== FULLY DILUTED $ 0.09 $ 0.19 $ (0.03) $ 0.35 ======== ======== ======== ======== WEIGHTED AVERAGE NUMBER OF COMMON SHARES AND COMMON EQUIVALENT SHARES OUTSTANDING PRIMARY 76,379 78,231 76,699 77,923 ======== ======== ======== ======== FULLY DILUTED 76,379 78,251 76,699 78,032 ======== ======== ======== ======== DIVIDENDS PER SHARE PAID $ 0.015 $ 0.03 $ 0.03 $ 0.03 ======== ======== ======== ========
SEE ACCOMPANYING NOTES 2 of 31 3 SCIENTIFIC-ATLANTA, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
In Thousands ------------------------------------ December 29, June 30, 1995 1995 ------------ ---------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 22,802 $ 80,311 Receivables, less allowance for doubtful accounts of $3,514,000 at December 29 and $3,823,000 at June 30 215,500 243,420 Inventories 246,348 257,427 Deferred income taxes 38,719 28,271 Other current assets 19,472 5,950 -------- -------- TOTAL CURRENT ASSETS 542,841 615,379 -------- -------- PROPERTY, PLANT AND EQUIPMENT, at cost Land and improvements 7,027 7,005 Buildings and improvements 40,616 36,847 Machinery and equipment 147,442 145,301 -------- -------- 195,085 189,153 Less-Accumulated depreciation and amortization 61,629 64,539 -------- -------- 133,456 124,614 -------- -------- COST IN EXCESS OF NET ASSETS ACQUIRED 6,565 6,940 -------- -------- OTHER ASSETS 38,560 38,331 -------- -------- TOTAL ASSETS $721,422 $785,264 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Short-term debt $ 11,154 $ 1,071 Current maturities of long-term debt 318 315 Accounts payable 89,253 148,260 Accrued liabilities 101,123 113,947 Income taxes currently payable 17,007 12,121 -------- -------- TOTAL CURRENT LIABILITIES 218,855 275,714 -------- -------- LONG-TERM DEBT, less current maturities 739 773 -------- -------- OTHER LIABILITIES 39,685 34,588 -------- -------- STOCKHOLDERS' EQUITY Preferred stock, authorized 50,000,000 shares; no shares issued -- -- Common stock, $0.50 par value, authorized 350,000,000 shares; issued 77,255,528 shares at December 29 and 76,950,029 shares at June 30 38,628 38,475 Additional paid-in capital 163,442 160,206 Retained earnings 270,018 274,840 Accumulated translation adjustments 677 668 -------- -------- 472,765 474,189 -------- -------- Less - Treasury stock, at cost (879,524 shares) 10,622 -- -------- -------- 462,143 474,189 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $721,422 $785,264 ======== ========
SEE ACCOMPANYING NOTES 3 of 31 4 SCIENTIFIC-ATLANTA, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
Six Months Ended ---------------- December 29, December 30, 1995 1994 ------------ ------------ NET CASH USED BY OPERATING ACTIVITIES: $(22,661) $(28,884) -------- -------- INVESTING ACTIVITIES: Purchases of property, plant, and equipment (29,704) (27,241) Proceeds from sale of investment in joint venture -- 4,214 Other (1,973) (3,909) -------- -------- Net cash used by investing activities (31,677) (26,936) -------- -------- FINANCING ACTIVITIES: Net short-term borrowings 10,083 86 Principal payments on long-term debt (31) (32) Dividends paid (2,299) (2,278) Issuance of common stock 1,487 3,757 Treasury shares acquired (12,411) -- -------- -------- Net cash provided (used) by financing activities (3,171) 1,533 -------- -------- DECREASE IN CASH AND CASH EQUIVALENTS (57,509) (54,287) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 80,311 123,387 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 22,802 $ 69,100 ======== ======== SUPPLEMENTAL CASH FLOW DISCLOSURES Interest paid $ 306 $ 438 ======== ======== Income taxes paid, net $ 3,580 $ 17,082 ======== ========
SEE ACCOMPANYING NOTES 4 of 31 5 NOTES: (Amounts in thousands except share data). A. The accompanying consolidated financial statements include the accounts of the company and all subsidiaries after elimination of all material intercompany accounts and transactions. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These condensed financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the 1995 Form 10-K. The financial information presented in the accompanying statements reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the periods indicated. All such adjustments are of a normal recurring nature. B. Earnings per share for the three and six months ended December 29,1995 were computed based on the weighted average number of shares of common stock outstanding. Earnings per share for the three and six months ended December 30, 1994, were computed based on the weighted average number of shares outstanding and equivalent shares derived from dilutive stock options. See Exhibit 11. C. Inventories consist of the following:
December 29, June 30, 1995 1995 ------------ ---------- Raw materials and work-in-process $128,632 $142,418 Finished goods 117,716 115,009 -------- -------- Total inventory $246,348 $257,427 ======== ========
D. During the quarter ended September 29, 1995, the company decided to discontinue its defense-related businesses in San Diego, California because these businesses are not aligned with the company's core business strategies. The company anticipates that the sale of the net assets of the defense-related businesses will be completed within one year. A one-time charge of $12,172, net of a tax benefit of $5,728, for the estimated loss on sale of discontinued operations was recorded in the quarter ended September 29, 1995. Sales and losses from discontinued operations were as follows:
Three Months Ended Six Months Ended ----------------------------- ----------------------------- December 29, December 30, December 29, December 30, 1995 1994 1995 1994 ------------ ------------ ------------ ------------ Sales $7,495 $7,703 $12,515 $15,028 Loss from discontinued operations, net of tax $ -- $ (492) $(1,038) $ (396) Tax benefit $ -- $ 231 $ 488 $ 185
The net assets of the discontinued operations include inventory, accounts receivable, machinery and equipment, accounts payable, and accrued expenses and are included in other current assets in the Consolidated Statement of Financial Position. E. In October 1995, the company announced that it had adopted a stock buyback program for the purchase of up to 5,000,000 shares of its common stock. During the quarter ended December 29, 1995, the company repurchased 1,010,000 shares at an aggregate cost of $12,411 and re-issued 130,476 shares under the company's stock option plan, voluntary employee retirement and investment plan, and employee stock purchase plan. 5 of 31 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION Scientific-Atlanta had stockholders' equity of $462.1 million and cash on hand was $22.8 million at December 29, 1995. Cash decreased $57.5 million during the six months ended December 29, 1995 as expenditures for equipment, expansion of manufacturing capacity and the repurchase of 1,010,000 shares of the company's common stock exceeded cash generated from earnings, accounts receivable collections and short-term borrowings under a senior credit facility. The current ratio was 2.5:1 at December 29, 1995, compared to 2.2:1 at June 30, 1995. At December 29, 1995, total debt was $12.2 million or less than 3 percent of total capital invested. Short-term debt consists of a $10.0 million borrowing under a senior credit facility and borrowings by the company's international operations to support their working capital requirements. The company believes that funds generated from operations, existing cash balances and its available senior credit facility will be sufficient to support growth and planned expansion of manufacturing capacity. RESULTS OF OPERATIONS Sales for the quarter ended December 29, 1995 were $261.1 million, down 3 percent from the prior year's sales of $269.7 million. Sales for the six months ended December 29, 1995 were $503.3 million, up 2 percent from the prior year's sales of $494.7 million. Higher sales volume of transmission products, digital set-tops and Sega game adapters were offset by declines in most Broadband product lines. Sales of satellite systems were lower in the quarter and six months ended December 29, 1995 as compared to the prior year due to substantial completion of deliveries of equipment to Orbit Communications Company for its direct to home satellite services in fiscal 1995. Sales in the three and six months ended December 29, 1995 were negatively impacted by reduced levels of spending by domestic cable operators and telephone companies. The company believes that customer uncertainty over the types of communications technology to be deployed in advanced networks, the fact that many of the products to be utilized in these networks are still under development by the industry and not yet ready for commercial production, and delays in the passage of telecommunications reform legislation recently enacted, were significant factors in the reduced spending. Gross margins of 25.9 percent and 25.6 percent for the three and six months ended December 29, 1995 declined 1.5 and 3.0 percentage points, respectively, from the prior year primarily as the result of unfavorable exchange rate changes in Japanese yen. Continued strength of the yen would also adversely affect gross margins. Certain material purchases are denominated in Japanese yen and, accordingly, the purchase price in U.S. dollars is subject to change based on exchange rate fluctuations. The company has forward exchange contracts to purchase yen to hedge a portion of its exposure on purchase commitments for a period of approximately one year. Research and development costs were up $3.8 million, or 19 percent, and $7.5 million, or 19 percent, for the three and six months ended December 29, 1995, respectively, over the comparable periods of the prior year due to increased research and development activity, particularly development of digital products and cable telephony. The company anticipates that spending during the second half of fiscal 1996 will increase over the prior year at a slightly lower rate than the first half of fiscal 1996. Selling and administrative expense increased approximately 4 percent from the prior year. Increased expenses reflect costs associated with ongoing investments to support expansion into international markets and the introduction of new products. Other expense for the three and six months ended December 29, 1995, included net losses from foreign currency transactions and partnership activities and net gains from rental income and other miscellaneous items. There were no significant items in other income and expense in the first six months of fiscal 1996. Other income of $1.2 million for the quarter ended December 30, 1994, included net gains of $0.6 million from partnership activities and net gains of $0.6 million from foreign currency transactions, rental income and other miscellaneous items. Other income of $1.2 million for the six months ended December 30, 1994, included net gains of $0.3 million from foreign currency transactions, $0.3 million of rental income and net gains of $0.6 million from royalty income, partnership activities and other miscellaneous items. 6 of 31 7 The company's effective income tax rate was 32 percent, unchanged from the prior year. Net earnings from continuing operations were $6.6 million for the quarter ended December 29, 1995, down $8.9 million from the prior year. Net earnings for the six months ended December 29, 1995 was $10.7 million, down $16.8 million from the prior year. Net earnings in the quarter and for the first half were negatively impacted by the exchange rate for the yen, higher spending for research and development and investment in sales and marketing to support the company's international growth. The net loss of $2.5 million for the first half of fiscal 1996 included a charge of $13.2 million, net of tax, for losses related to discontinued operations and the estimated loss on the sale of discontinued operations. 7 of 31 8 PART II - OTHER INFORMATION Item 4 Submission of Matters to a Vote of Security Holders The following information is furnished with respect to matters submitted to a vote of security holders through the solicitation of proxies: (a) The matters described below were submitted to a vote of security holders at the Annual Meeting of Shareholders held on November 8, 1995. (b) Election of directors:
Votes For Withhold Authority ---------- ------------------ Wilbur B. King 65,245,261 1,268,350 Alonzo L. McDonald 66,025,724 487,887 James F. McDonald 65,970,940 542,671
Marion H. Antonini, William E. Kassling, Mylle Bell Mangum, David J. McLaughlin, James V. Napier and Sidney Topol continue as directors. (c) (i) Approval of Stock Plan for Non-Employee Directors
Votes For Votes Against Abstain ---------- ------------- ------- 54,422,754 11,712,740 378,117
(ii) Selection of Arthur Andersen LLP as independent auditors
Votes For Votes Against Abstain ---------- ------------- ------- 66,199,344 201,434 112,833
Item 6 Exhibits and Reports on Form 8-K (a) Exhibits.
EXHIBIT NO. DESCRIPTION ----------- ----------- 10.1 Stock Plan for Non-Employee Directors (incorporated by reference to Exhibit number 4 to the Form S-8 Registration Statement filed on November 8, 1995) 10.2 Amendment Number One to the Non-Employee Directors Stock Option Plan 10.3 Amended and Restated Scientific-Atlanta, Inc. Retirement Plan for Non-Employee Directors 10.4 Amended and Restated Deferred Compensation Plan for Non-Employee Directors of Scientific-Atlanta, Inc. 11 Computation of Earnings Per Share 27 Financial Data Schedule (for SEC use only)
(b) No reports on Form 8-K were filed during the quarter ended December 29, 1995. Date: February 15, 1996 /s/Harvey A. Wagner ------------------------ ------------------------------------------ Harvey A. Wagner Senior Vice President Chief Financial Officer and Treasurer (Principal Financial Officer and duly authorized signatory of the Registrant) 8 of 31 EX-10.2 2 NON EMPLOYEE STOCK OPTION PLAN 1 EXHIBIT 10.2 AMENDMENT NUMBER ONE TO THE NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN WHEREAS, Section 4(b) of Scientific-Atlanta, Inc.'s (the "Corporation's") Non-Employee Directors Stock Option Plan (the "Option Plan") provides for the grant of an option for 10,000 shares of the Corporation's common stock to a non-employee director upon commencing service on the Corporation's Board of Directors; WHEREAS, Section 4(c) of the Option Plan provides for the grant of options for 2,500 shares of the Corporation's common stock to each non-employee director at each Board meeting held on the date of the annual meeting of shareholders each year; and WHEREAS, pursuant to Section 6 of the Option Plan, as a result of stock splits declared by the Corporation since the adoption of the Option Plan, the initial option grant has increased to 30,000 shares and the annual option grant has increased to 7,500 shares; NOW, THEREFORE, Sections 4(b) and 4(c) of the Stock Option Plan are hereby amended to read in their entirety as follows: (b) INITIAL GRANT. Each Non-Employee Director will receive an initial grant of 20,000 shares upon approval by the Board of this plan or upon the initial appointment or election to the Board. (c) AUTOMATIC GRANTS. An Option to Purchase 5,000 shares of Common Stock shall be granted at the annual meeting of the Board held on the date of the Annual Meeting of Shareholders beginning in 1995 and at each succeeding Board meeting held on that date provided the Non-Employee Director continues in office after the Board meeting date on which the Option is granted. All other sections and provisions of the Option Plan shall remain in full force and effect as written, without amendment. 9 of 31 2 To record the adoption of this Amendment by the Board on November 8, 1995, the Company has caused its authorized officers to execute this Amendment and affix the corporate name and seal hereto. SCIENTIFIC-ATLANTA, INC. By: /s/ Brian C. Koenig ------------------------------------- Name: Brian C. Koenig ----------------------------------- Title: Vice President Human Resources ---------------------------------- By: /s/ William E. Eason, Jr. ------------------------------------- Name: William E. Eason, Jr. ----------------------------------- Title: Secretary ---------------------------------- [Seal] 10 of 31 EX-10.3 3 RETIREMENT PLAN FOR NON - EMPLOYEE DIRECTORS 1 [LOGO SCIENTIFIC- ATLANTA] EXHIBIT 10.3 SCIENTIFIC-ATLANTA, INC. RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS As Amended November 8, 1995 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 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. 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 11 of 31 2 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." (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 ------------ ------ 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 12 of 31 3 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 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 13 of 31 4 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 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 is February 15, 1989. 14 of 31 5 To record the adoption of the Plan (as amended and restated) by the Board on November 8, 1995, 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 ------------------------------------- Name: Brian C. Koenig ----------------------------------- Title: Vice President Human Resources ---------------------------------- By: /s/ William E. Eason, Jr. ------------------------------------- Name: William E. Eason, Jr. ----------------------------------- Title: Secretary ---------------------------------- [Seal] 15 of 31 EX-10.4 4 DEFERRED COMPENSATION PLAN 1 [LOGO SCIENTIFIC ATLANTA] EXHIBIT 10.4 DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS OF SCIENTIFIC-ATLANTA, INC. As Amended November 8, 1995 ARTICLE I - INTRODUCTION 1.1 Name of the Plan This Plan shall be known as the Deferred Compensation Plan for Non-Employee Directors of Scientific-Atlanta, Inc. 1.2 Purpose of Plan The purpose of the Plan is to provide non-employee directors of Scientific-Atlanta, Inc. the opportunity to defer receipt of cash compensation and compensation in the form of stock payable to them for services to Scientific-Atlanta, Inc. as directors. 1.3 Restatement of Plan This document amends and restates the Plan effective as of November 8, 1995. (a) Deferrals Affected by Restatement: All deferral elections made on or after November 8, 1995, shall be governed by the terms of the Plan as amended and restated herein. In addition, deferral elections made before November 8, 1995, by an individual who is a non-employee member of the Board on November 8, 1995, shall be governed prospectively by the terms of the Plan as amended and restated herein. ARTICLE II - DEFINITIONS For purposes of this Plan the following words and phrases shall have the meanings and applications set forth below: 2.1 Plan This Deferred Compensation Plan for Non-Employee Directors of Scientific-Atlanta, Inc., as amended from time to time. 16 of 31 2 2.2 Participant A non-employee member of the Board of Directors of Scientific-Atlanta, Inc. who elects to participate in this Plan. 2.3 Plan Year The period beginning on the first day of July of each calendar year and ending on and including the last day of June of the next calendar year. The first Plan Year began on July 1, 1993, and ended on June 30, 1994. 2.4 Compensation The total of a Participant's Awards granted, and a Participant's Annual Retainer, Meeting Fees, and Committee Chair Retainer payments paid to the Participant, by Scientific-Atlanta, Inc. during a Plan Year. 2.5 Annual Retainer The amount paid each year, in quarterly payments, to non-employee members of the Board of Directors of Scientific-Atlanta, Inc. 2.6 Meeting Fees The amounts paid to a non-employee member of the Board of Directors of Scientific-Atlanta, Inc. for each meeting of the Board and each meeting of a standing or special committee he or she attends. 2.7 Committee Chair Retainer The amount paid each year, in quarterly payments to a non-employee director who chairs a standing or special committee of the Board of Directors. 2.8 Awards The right to receive shares of Scientific-Atlanta Common Stock, granted under a stock award or elective grant made pursuant to the Scientific-Atlanta, Inc. Stock Plan for Non-Employee Directors. 2.9 Election Form The form completed by a Participant in order to make one or more Compensation Deferral Elections for the next Plan Year. 17 of 31 3 2.10 Compensation Deferral Election Each election made by a Participant to defer a portion of his or her Compensation by executing and submitting an Election Form. 2.11 Deferred Benefit Account An account maintained pursuant to and in accordance with the terms and conditions set forth in Article V hereof by or on behalf of Scientific-Atlanta, Inc. for each Compensation Deferral Election made by a Participant under this Plan. 2.12 Deferred Benefit Commencement Date The date irrevocably designated by a Participant with respect to each Compensation Deferral Election entered on an Election Form as the date on which the payment of the Deferred Benefits that accumulate as a result of each respective election is to begin. 2.13 Beneficiary A person or entity designated in accordance with the terms and conditions of this Plan to receive benefits upon the death of a Participant. 2.14 Election Amount The compensation amount (and right to a certain number of shares of Scientific-Atlanta Common Stock, if applicable) to be deferred pursuant to a single Compensation Deferral Election. 2.15 Service Termination Date The last day of the month immediately preceding the date of a Participant's Retirement, termination of service, determination of Total Disability, or death, whichever is applicable. 2.16 Retirement The discontinuation of service on the Board of Directors by a Participant who is fifty-five years of age or older with at least three years of Board service. 2.17 Total Disability A physical or mental condition which is expected to be totally and permanently disabling as determined in accordance with the terms and conditions of the long-term disability insurance plan currently or most recently maintained by Scientific-Atlanta, Inc. for the benefit of its employees claiming to be totally disabled. 18 of 31 4 2.18 Plan Committee The Human Resources and Compensation Committee of the Board of Directors of Scientific-Atlanta, Inc. 2.19 Determination Date The last day of each Plan Year. 2.20 Plan Interest Rate An annual rate of interest that shall be determined by the Plan Committee prior to the start of each Plan Year and credited to a Participant's Deferred Benefit Account during the Plan Year. 2.21 Deferred Benefits The amounts (and right to a certain number of shares of Scientific-Atlanta Common Stock, if applicable) payable to a Participant or to his or her Beneficiary or estate following the Participant's Retirement, termination of service as a non-employee member of the Board, determination of Total Disability, or death. 2.22 Scientific-Atlanta Common Stock The common stock of Scientific-Atlanta, Inc. ARTICLE III - ELIGIBILITY AND PARTICIPATION 3.1 Eligibility Directors who are not employees of Scientific-Atlanta, Inc. and who are actively serving on the Board of Directors of Scientific-Atlanta, Inc. shall be eligible to participate in this Plan. 3.2 Participation The Plan Committee shall notify in writing each director who becomes eligible to participate in this Plan of his or her eligibility. Eligible directors may participate in this Plan by completing an Election Form on or before the end of the month immediately preceding the month in which he or she wants to begin deferring Compensation. If timely received, such election to participate shall be effective on the first day of the succeeding month. 19 of 31 5 ARTICLE IV - COMPENSATION DEFERRAL 4.1 Compensation Deferral Election A Participant shall effect a Compensation Deferral Election by executing and submitting to the Plan Committee an Election Form. Subsequently, Scientific-Atlanta, Inc. shall defer Election Amounts deferred from the Participant's Awards, Annual Retainer, Committee Chair Retainer or Meeting Fees at the time cash compensation would have been paid (or at the time the right to receive shares of Scientific-Atlanta Common Stock was granted, as applicable). Each Election Amount shall be deferred for the Deferral Period specified with respect to the particular Compensation Deferral Election in the Election Form. All Compensation Deferral Elections shall apply solely to Compensation which will be paid (or granted) to a Participant beginning with the first day of the month commencing subsequent to the month in which the Compensation Deferral Election is received. Any Compensation Deferral Election will apply only to Compensation paid (or granted) during the Plan Year in which the election becomes effective. 4.2 Election Amounts Each Election Amount specified by a Participant on an Election Form with respect to any Plan Year shall state in percentages the amount (and, to the extent applicable, the right to receive a specific number of shares of Scientific-Atlanta Common Stock), if any, which the Participant wishes to defer. An election to defer Compensation must equal a minimum of five percent up to a maximum of one hundred percent, in increments of five percentage points, of the Annual Retainer and/or Committee Chair Retainer and/or Meeting Fees and/or Awards which the Participant may be paid during the Plan Year. As to Awards, the election must be in whole shares, with no right to receive fractional shares being deferred. 4.3 Investment Election A Participant shall specify in his or her Compensation Deferral Election the percentage of the Election Amount to be credited to an Interest Sub-Account, the percentage to be credited to a Phantom Stock Sub-Account, and the number of shares to be credited to an Award Sub-Account; provided, however, that no percentage of the Election Amount may be credited to a Phantom Stock Sub-Account and no number of shares may be credited to an Award Sub-Account if the Deferred Benefit Commencement Date for such Sub-Account is not at least six months after the date of such credit. 4.4 Deferral Period A Participant shall irrevocably specify in his or her Compensation Deferral Election a Deferred Benefit Commencement Date for all of the Election Amount to be deferred pursuant to such Compensation Deferral Election, which date shall be (i) to a set date which is no earlier than July 1 of the calendar year following the end of the Plan Year in which the Election Amount is 20 of 31 6 deferred; (ii) the Participant's Retirement; or (iii) to a date which is either the fifth or the tenth anniversary following the date of the Participant's Retirement. 4.5 Deferred Benefit Commencement Date; Method of Payment and Issuance Except as otherwise provided in Article VI hereof, the Election Amounts that accumulate in a Deferred Benefit Account as a result of a Participant's making a Compensation Deferral Election will be paid (or issued, in the case of deferred Awards) by Scientific-Atlanta, Inc. to the Participant in the manner and commencing on the Deferred Benefit Commencement Date designated with respect to the Compensation Deferral Election in an Election Form. (a) Method of Cash Payments: Except as otherwise provided in Article VI hereof, the Participant may elect to receive payment of the Deferred Benefits held in the form of cash, which Deferred Benefits are attributable to a Compensation Deferral Election and which are held in an Interest Sub-Account, a Phantom Stock Sub-Account or an Award Sub-Account pursuant to one of the following methods: (1) Annual, semi-annual or quarterly installments payable over a five, ten or fifteen year period, and commencing on the respective Deferred Benefit Commencement Date; or (2) A single lump sum payment of the entire balance of the respective Deferred Benefit Account, determined as of and payable on the Deferred Benefit Commencement Date. (b) Method of Issuance of Shares: Except as otherwise provided in Article VI hereof, the Participant may elect to receive issuance of the Deferred Benefits held in the form of shares of Common Stock, which Deferred Benefits are attributable to a Compensation Deferral Election and which are held in an Award Sub-Account pursuant to one of the following methods: (1) Annual, semi-annual or quarterly issuance of shares of Scientific-Atlanta Common Stock from an Award Sub-Account over a five, ten or fifteen year period, and commencing on the respective Deferred Benefit Commencement Date; provided, however, that no fractional shares of Scientific-Atlanta Common Stock will be issued; or (2) A single issuance of all shares subject to the specific Award Sub-Account, determined as of and payable on the Deferred Benefit Commencement Date. (c) Change in Payment or Issuance Method. A Participant may change the method of payment (or issuance of shares) selected with respect to a Compensation Deferral Election by submitting a request in writing to the Plan Committee on or before the earlier of (i) the 21 of 31 7 date which is six months prior to the Deferred Benefit Commencement Date, or (ii) the December 31 immediately preceding the Deferred Benefit Commencement Date. 4.6 Designation of Beneficiaries A Participant shall designate a Beneficiary with respect to each Compensation Deferral Election and may change the Beneficiary designation with respect to any Compensation Deferral Election at any time by submitting to the Plan Committee a revised Beneficiary designation in writing reflecting the change. ARTICLE V - DEFERRED BENEFIT ACCOUNTS 5.1 Deferred Benefit Accounts Scientific-Atlanta, Inc. shall cause to be established and maintained a separate Deferred Benefit Account, and within each such Deferred Benefit Account an Interest Sub-Account, a Phantom Stock Sub-Account and an Award Sub-Account with respect to each Compensation Deferral Election. Scientific-Atlanta, Inc. shall credit the Election Amount deferred pursuant to each such election to the Participant's appropriate Deferred Benefit Account, and to the Interest Sub-Account, Phantom Stock Sub-Account and Award Sub-Account as specified in the Election, as of the date deferred from Participant's Compensation as provided in Section 4.1 hereof. 5.2 Accrual of Interest Except as otherwise provided by Section 6.2(a) hereof, interest shall accrue at the Plan Interest Rate on any amounts credited to an Interest Sub-Account from the date on which the amount is credited. 5.3 Phantom Stock Sub-Account If a Participant elects all or a portion of the Election Amount to be credited to the Phantom Stock Sub-Account, the amount so credited shall, solely for purposes of determining the value of the Phantom Stock Sub-Account, be deemed to be a number of shares of Scientific-Atlanta, Inc. Common Stock determined as follows: (a) Conversion into Scientific-Atlanta Common Stock: The amount credited to the Phantom Stock Sub-Account shall be converted into an equivalent number of hypothetical shares of Scientific-Atlanta Common Stock (including hypothetical fractional shares) by dividing the amount credited by the average closing price of Scientific-Atlanta Common Stock, as reported on the composite tape of New York Stock Exchange issues, for the 20 business days immediately preceding the last day of the month in which such amount is credited. 22 of 31 8 (b) Deemed Reinvestment of Dividends: The number of hypothetical shares of Scientific-Atlanta Common Stock credited to a Participant's Phantom Stock Sub-Account shall be increased on each date that a dividend is paid on Scientific-Atlanta Common Stock. The number of additional hypothetical shares of Scientific-Atlanta Common Stock credited to a Participant's Phantom Stock Sub-Account as a result of such increase shall be determined, first, by multiplying the total number of hypothetical shares of Scientific-Atlanta Common Stock credited to such Sub-Account immediately before such increase by the amount of the dividend paid per share of Scientific-Atlanta Common Stock on the dividend payment date, and, then, by dividing the product so determined by the closing sale price of Scientific-Atlanta Common Stock on the composite tape of New York Stock Exchange issues on the dividend payment date (or if there was no reported sale of Scientific-Atlanta Common Stock on such date, on the next preceding day on which there was such a reported sale). (c) No Rights as Shareholder: At no time shall the hypothetical shares credited to a Phantom Stock Sub-Account be considered as actual shares of Scientific-Atlanta Common Stock, and a Participant shall have no rights as a shareholder of Scientific-Atlanta, Inc. by virtue of such hypothetical shares. 5.4 Award Sub-Account If a Participant elects that an Award be deferred and credited to an Award Sub-Account, such Award will remain in such Award Sub-Account until the Deferred Benefit Commencement Date related to such Award Sub-Account occurs. No interest will accrue on the Award in such Award Sub-Account, but amounts equivalent to the dividends that would have been paid if the shares had been issued will accrue on such Awards ("Accrued Dividends"). A Participant shall not have any rights as a shareholder of Scientific-Atlanta, Inc. while an Award is held in an Award Sub-Account. 5.5 Determination of Account Balance (a) As of each Determination Date, the current balance of a Participant's Deferred Benefit Account shall be the sum of (i) the balance credited to the Interest Sub-Account as of the immediately preceding Determination Date, plus any Compensation deferred by such Participant and credited to such Interest Sub-Account since the previous Determination Date, plus the amount of interest credited to such Interest Sub-Account since the preceding Determination Date, plus (ii) the value of the hypothetical shares of Scientific-Atlanta Common Stock, determined as set forth in Section 5.5(a) above, in the Phantom Stock Sub-Account at that time, including deferred amounts credited to that Sub-Account since the last Determination Date and deemed reinvestment, if any, of dividends since the last Determination Date, plus (iii) the number of shares the Participant has the right to receive under Awards credited to the Award Sub-Account and the total Accrued Dividends credited to the Award Sub-Account, as of the immediately preceding Determination Date, plus the number of shares the participant has the right to receive under additional Awards and 23 of 31 9 additional Accrued Dividends credited to such Award Sub-Account since the previous Determination Date, minus any payments to or withdrawals by the Participant from the Deferred Benefit Account since the previous Determination Date. (b) The dollar value of the hypothetical shares of Scientific-Atlanta Common Stock credited to a Participant's Phantom Stock Sub-Account on any date shall be determined by multiplying the number of hypothetical shares of Scientific-Atlanta Common Stock credited to such Sub-Account on that date by the average closing price of Scientific-Atlanta Common Stock, as reported on the composite tape of New York Stock Exchange issues for the 12 months immediately preceding that date, or for that number of whole months for which the hypothetical shares have been credited to such sub-account, if less than 12 months. (c) Effect of Recapitalization: In the event of a transaction or event described in this paragraph (c), the number of hypothetical shares of Scientific-Atlanta Common Stock credited to a Participant's Phantom Stock Sub-Account and the number of shares of Scientific-Atlanta Common Stock subject to Awards credited to a Participant's Award Sub-Account shall be adjusted in such a manner as the Plan Committee deems equitable. A transaction or event is described in this paragraph (c) if and only if (i) it is a dividend or other distribution (whether in the form of cash, shares, other securities, or other property), extraordinary cash dividend, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, re-purchase, or exchange of shares or other securities, the issuance of warrants or other rights to purchase shares or other securities, or other similar corporate transaction or event, and (ii) the Plan Committee determines that such transaction or event affects the shares of Scientific-Atlanta Common Stock, such that an adjustment pursuant to this paragraph (c) is appropriate to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan. 5.6 Statement of Accounts Within ninety (90) days after each Determination Date, the Plan Committee shall submit to each Participant a statement in such form as the Plan Committee shall deem desirable, setting forth a summary of the Compensation Deferral Elections made and the current balances of the Deferred Benefit Accounts and related Sub-Accounts maintained for the Participant as of the Determination Date. ARTICLE VI - PAYMENT (AND ISSUANCE) OF DEFERRED BENEFITS 6.1 General Except as otherwise provided herein, Deferred Benefits shall be payable (and issued, if applicable) to a Participant upon the Deferred Benefit Commencement Date and pursuant to the manner of payment (or issuance, if applicable) selected by the Participant on the applicable Compensation Deferral Election or any permitted modification thereof. If the Participant has elected 24 of 31 10 to receive such Deferred Benefits in installments, the amount payable in the first year of such installments shall be an amount that will fully amortize the balance in the Participant's Deferred Benefit Account determined as of the Deferred Benefit Commencement Date over the five, ten or fifteen year period, based on assumed interest earnings at the Plan Interest Rate (to the extent applicable) in effect for such first year. Thereafter, the amount payable (or to be issued) in each succeeding year shall be adjusted to an amount that will fully amortize the remaining balance in such Deferred Benefit Account over the remaining years in the aforesaid five, ten, or fifteen year installment period based on the Plan Interest Rate (to the extent applicable) for such succeeding year. 6.2 Service Termination Deferred Benefits shall be paid (or issued, as appropriate) to a Participant after his or her termination, as follows: (a) Upon termination of service as a director by a Participant prior to the Participant's attaining fifty-five years of age: (1) the amounts in each of the Participant's Deferred Benefit Accounts shall cease to earn interest (to the extent applicable) and the balance of each Deferred Benefit Account shall be determined in accordance with Article V hereof, and (2) Scientific-Atlanta, Inc. shall pay (or issue, as appropriate) to the Participant the balance of each of the Participant's Deferred Benefit Accounts not according to the Participant's elections as specified in his or her Election Forms but in a lump sum, to be paid within sixty days of the termination. (b) For purposes of this Plan, termination of service as a director by a Participant who is fifty-five years or older with at least three years of Board Service will in all instances be construed to be and will be treated as Retirement by such a Participant, and Scientific-Atlanta, Inc. will pay (or issue) to such a Participant all amounts in his or her Deferred Benefit Accounts in accordance with Section 6.1 hereof. 6.3 Total Disability Deferred Benefits shall be paid (or issued, as appropriate) to a Participant after his or her becoming Totally Disabled, as follows: (a) Upon the determination that a Participant is Totally Disabled, no further deferrals will be made from his or her Compensation, and Scientific Atlanta, Inc. shall pay (or issue, as appropriate) to the Participant the balance in each of the Participant's Deferred Benefit Accounts as follows: (1) the date of Total Disability shall be deemed to be (i) the Deferred Benefit 25 of 31 11 Commencement Date, if the Deferred Benefit Commencement Date for one or more Deferred Benefit Accounts is a set date prior to the Participant's fifty-fifth birthday and the Total Disability occurs before such date, or (ii) the Participant's Retirement, for those Deferred Benefit Accounts, if any, for which the Deferred Benefit Commencement Date is the Participant's Retirement or later; (2) following Total Disability, the amounts in his or her Interest Sub-Account shall continue to earn interest, and the hypothetical shares in the Phantom Stock Sub-Account shall continue to earn dividends, as provided in the Plan, until paid out to the Participant as provided herein; and (3) the amount (including shares of Scientific-Atlanta Common Stock) in any Deferred Benefit Account shall be payable (or issued) to the Participant on the Deferred Benefit Commencement Date which applies to such Deferred Benefit Account, taking into consideration the aforesaid deemed dates (Section 6.3(a)(1)(i) and (ii)) pursuant to the method(s) requested by the Participant in his or her Election Form. (b) For purposes of this Plan, once a Participant is determined to be Totally Disabled, he or she will continue to be deemed Totally Disabled irrespective of the Participant's ceasing to be considered Totally Disabled for purposes of any other plan maintained by Scientific-Atlanta, Inc. (c) In the event that a Totally Disabled Participant resumes service with the Board following his or her Service Termination Date, such Totally Disabled Participant may resume participation in this Plan at the discretion of the Plan Committee; provided, however, that in any event the Totally Disabled Participant shall continue to receive payments of Deferred Benefits pursuant to the terms of this Plan. 6.4 Death Deferred Benefits shall be paid (or issued, as appropriate) after the death of a Participant, as follows: (a) After the death of a Participant, Scientific-Atlanta, Inc. shall pay the amounts (or issue shares of Scientific-Atlanta Common Stock, if applicable) in each of the Participant's Deferred Benefit Accounts to the Beneficiary designated by the Participant with respect to each Compensation Deferral Election in each of his or her respective Election Forms, or, if the Participant fails to so designate a Beneficiary, to his or her estate. (b) If the Participant dies prior to Retirement, Scientific-Atlanta, Inc. shall pay to each respective Beneficiary or to the Participant's estate, as the case may be, the amounts in each of the Participant's respective Deferred Benefit Accounts (or issue the shares held in the 26 of 31 12 Award Sub-Account), in the same manner as set forth in Section 6.3(a). (c) If the Participant dies following Retirement or being determined to be Totally Disabled but prior to his or her receiving the full payment of all Deferred Benefits payable to him or her, Scientific-Atlanta, Inc. shall pay (or issue, if appropriate) to the respective Beneficiaries or to the Participant's estate, as the case may be, the same Deferred Benefits in the same manner as it otherwise would have paid (or issued) to the Participant as if the Participant had not died, unless the Participant has specified in his or her Election Form a different manner of payment to a Beneficiary. (d) Notwithstanding the other provisions of Section 6.4, a Beneficiary may request a different payment schedule than what has been elected by the Participant, if such change does not further defer the scheduled payout, by submitting a request in writing to the Plan Committee. The granting of any such request shall be within the discretion of the Plan Committee. (e) If a Beneficiary who is receiving Deferred Benefits pursuant to this Plan dies, the remainder of the Deferred Benefits to which such Beneficiary was entitled at the time of his or her death shall continue to be payable to the Beneficiary or to beneficiaries designated by such Beneficiary in writing to the Plan Committee (or to the Beneficiary's estate or heirs if he or she fails to designate a beneficiary or beneficiaries). ARTICLE VII - PLAN ADMINISTRATION 7.1 Plan Committee This Plan and all matters related to it shall be administered by the Plan Committee. The Plan Committee shall have the authority to interpret the provisions of this Plan and to determine all questions arising in the administration, interpretation and application of this Plan. The Plan Committee may, in its sole discretion, delegate any or all of its responsibilities relative to administration of this Plan to such officers of Scientific-Atlanta, Inc. as it designates. ARTICLE VIII - PARTICIPANT'S RIGHTS 8.1 Ineligibility to Participate in Plan In the event that the Plan Committee determines that a Participant has become ineligible to continue to participate in this Plan, the Plan Committee may terminate Participant's participation in this Plan upon ten (10) days' prior written notice to the Participant. In such event, the Participant will not be entitled to make further Compensation Deferral Elections, but all current Compensation Deferral Elections shall continue in effect. All Deferred Benefit Accounts shall be payable as 27 of 31 13 otherwise provided in Article VI hereof. 8.2 Termination of Plan The Board of Directors of Scientific-Atlanta, Inc. may terminate this Plan at any time, and termination of this Plan shall be effective upon ten (10) days' written notice to all Participants in the Plan. Upon such termination of this Plan, Scientific-Atlanta, Inc. shall pay all active Participants their Deferred Benefits as provided in Section 6.1 as if each such Participant had actually reached the Deferred Benefit Commencement Date for all of his or her Deferred Benefit Accounts. 8.3 Participant's Rights The right of a Participant or his or her Beneficiary or estate to receive any benefits under this Plan shall be solely that of an unsecured creditor of Scientific-Atlanta, Inc. Any asset acquired or held by Scientific-Atlanta, Inc. or funds allocated by Scientific-Atlanta, Inc. in connection with the liabilities assumed by Scientific-Atlanta, Inc. pursuant to this Plan shall not be deemed to be held under any trust for the benefit of any Participant or of any of Participant's Beneficiaries or to be security for the performance of Scientific Atlanta, Inc.'s obligations hereunder but shall be and remain a general asset of Scientific-Atlanta, Inc. 8.4 Spendthrift Provision Neither a Participant nor any person claiming through a Participant shall have the right to commute, sell, assign, transfer, pledge, mortgage or otherwise encumber, transfer, hypothecate or convey any Deferred Benefit payable hereunder or any part thereof in advance of its actually having been received by a Participant or other appropriate recipient under this Plan, and the right to receive all such Deferred Benefits is expressly declared to be non-assignable and non-transferable. Prior to the actual payment (or issuance, if appropriate) thereof, no part of the Deferred Benefits payable hereunder shall be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any person claiming through a Participant or be transferable by operation of law in the event of a Participant's or any such other person's bankruptcy or insolvency. 8.5 Cooperation Each Participant will cooperate with Scientific-Atlanta, Inc. by furnishing any and all information reasonably requested by Scientific-Atlanta, Inc. in order to facilitate the payment of Deferred Benefits hereunder and by taking any such other actions as Scientific-Atlanta, Inc. or the Plan Committee may reasonably request. 28 of 31 14 ARTICLE IX - MISCELLANEOUS 9.1 Amendments and Modifications The Board of Directors of Scientific-Atlanta, Inc. may amend this Plan in any respect at any time. In addition, the Plan Committee may authorize the following types of amendments to the Plan without Board approval: (a) amendments required by law; (b) amendments that relate to the administration of the Plan and that do not materially increase the cost of the Plan; and (c) amendments that are designed to resolve possible ambiguities, inconsistencies or omissions in the Plan and that do not materially increase the cost of the Plan. All authorized amendments shall be effective upon ten (10) days' written notice to the Participants. If any such amendment affects a Participant's Deferred Benefits, such affected Participant may, within ninety (90) days after the effective date of such amendment, elect to terminate his or her participation in the Plan pursuant to this Section 9.1, in which event the date of such election shall be deemed to be such Participant's Deferred Benefit Commencement Date. 9.2 Inurement This Plan shall be binding upon and shall inure to the benefit of Scientific-Atlanta, Inc. and each Participant hereto, and their respective beneficiaries, heirs, executors, administrators, successors and assigns. 9.3 Governing Law This Plan is made in accordance with and shall be governed in all respects by the laws of the state of Georgia. 9.4 Securities Law Restrictions Notwithstanding any other provision of this Plan, no provision hereof shall be applied in a manner that would cause a Participant or a former Participant to be deemed to have made a purchase or sale of a derivative security of Scientific-Atlanta, Inc. that would be subject to Section 16 of the Securities Exchange Act of 1934, as amended (the "Act"), or the rules, regulations, or interpretations thereunder. The Plan Committee shall have complete power from time to time to adopt, amend, and rescind such rules as the Plan Committee shall deem necessary, appropriate, or prudent in order to avoid having the Plan or any interest in it deemed to constitute a derivative security subject to Section 16 of the Act, as amended, or the rules promulgated thereunder from time to time. 9.5 Tax Withholding All payments (and issuances of shares) 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 29 of 31 15 applicable law. The Plan Committee shall have the right, before delivery of a cash payment or a stock certificate, to require the recipient to make arrangements satisfactory to the Plan Committee to satisfy such withholding requirements. A Participant receiving shares of Scientific-Atlanta, Inc. Common Stock may satisfy such withholding requirements by having the Plan Committee withhold shares otherwise issuable to the Participant if such Participant makes an irrevocable election, by way of a written statement in a form acceptable to the Plan Committee, at least six (6) months before the date the Participant recognizes federal taxable income with respect to the receipt of such shares or during any period set forth in Rule 16b-3(e)(3) under the Securities Exchange Act of 1934. To record the adoption of the Plan (as amended and restated) by the Board on November 8, 1995, 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 ------------------------------------- Name: Brian C. Koenig ----------------------------------- Title: Vice President Human Resources ---------------------------------- By: /s/ William E. Eason, Jr. ------------------------------------- Name: William E. Eason, Jr. ----------------------------------- Title: Secretary ----------------------------------- [Seal] 30 of 31 EX-11 5 COMPUTATION OF EARNINGS 1 EXHIBIT 11 SCIENTIFIC-ATLANTA, INC., AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
Three Months Ended Six Months Ended ----------------------------- ---------------------------- December 29, December 30, December 29, December 30, 1995 1994 1995 1994 ------------ ------------ ------------ ------------ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 76,379 76,019 76,699 75,800 Add - Additional shares of common stock assumed issued upon exercise of options using the "treasury stock" method as it applies to the computation of primary earnings per share 969 2,212 1,297 2,123 ------- ------- ------- ------- NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 77,348 78,231 77,996 77,923 Add - Additional shares of common stock assumed issued upon exercise of options using the "treasury stock" method as it applies to the computation of fully diluted earnings per share 50 20 20 109 ------- ------- ------- ------- NUMBER OF SHARES OUTSTANDING ASSUMING FULL DILUTION 77,398 78,251 78,016 78,032 ======= ======= ======= ======= NET EARNINGS (LOSS) FOR PRIMARY AND FULLY DILUTED COMPUTATION Continuing Operations $ 6,601 $15,505 $10,687 $27,518 Discontinued Operations -- (492) (13,210) (396) ------- ------- ------- ------- Net Earnings (Loss) $ 6,601 $15,013 $(2,523) $27,122 ======= ======= ======= ======= EARNINGS (LOSS) PER COMMON SHARE AND COMMON EQUIVALENT SHARE PRIMARY Continuing Operations $ 0.09 $ 0.20 $ 0.14 $ 0.36 Discontinued Operations -- $ (0.01) $ (0.17) $ (0.01) ------- ------- ------- ------- Net Earnings (Loss) $ 0.09 $ 0.19 $ (0.03) $ 0.35 ======= ======= ======= ======= FULLY DILUTED Continuing Operations $ 0.09 $ 0.20 $ 0.14 $ 0.36 Discontinued Operations -- (0.01) (0.17) (0.01) ------- ------- ------- ------- Net Earnings (Loss) $ 0.09 $ 0.19 $ (0.03) $ 0.35 ======= ======= ======= =======
Note: In the three and six months ended December 29, 1995 the dilutive effect of equivalent shares derived from stock options was less than 3 percent and therefore, the equivalent shares were not included in the computation of earnings per share. 31 of 31 EX-27 6 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q/A FOR THE QUARTER ENDED DECEMBER 29, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS JUN-28-1996 JUL-01-1995 DEC-29-1995 22,802 0 215,500 3,514 246,348 542,841 195,085 61,629 721,422 207,383 11,472 0 0 38,628 423,515 721,422 503,293 503,293 374,499 374,499 46,638 405 367 15,716 5,029 10,687 (13,210) 0 0 (2,523) (0.03) (0.03)
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