<PAGE> 1
As filed with the Securities and Exchange Commission on November 14, 1994
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Scientific-Atlanta, Inc.
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C>
GEORGIA 58-0612397
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
ONE TECHNOLOGY PARKWAY, SOUTH 30092
NORCROSS, GEORGIA (Zip Code)
(Address of Principal Executive Offices)
</TABLE>
LONG-TERM INCENTIVE PLAN
of
SCIENTIFIC-ATLANTA, INC.
(Full Title of the Plan)
<TABLE>
<S> <C>
James F. McDonald Please address a copy of all communications to:
Chief Executive Officer
Scientific-Atlanta, Inc. William E. Eason, Jr., Esq.
One Technology Parkway, South Scientific-Atlanta, Inc.
Norcross, Georgia 30092 One Technology Parkway, South
(Name and Address of Agent For Service) Norcross, Georgia 30092
Telephone: (404) 903-5000
(404) 903-5000
(Telephone Number, Including Area Code, of Agent for Service)
</TABLE>
CALCULATION OF REGISTRATION FEE
<TABLE>
=========================================================================================================
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share(1) Price Fee
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common
Stock, Par
Value $0.50 2,500,000 $20.6875 $51,718,750 $17,835
Per Share shares
=========================================================================================================
</TABLE>
(1) Calculated pursuant to Rules 457(c) and 457(h)(1), based on the
average of the high and low sale prices ($20.6875 per share) of the
Common Stock of the Registrant on the New York Stock Exchange on
November 8, 1994.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
* Information required by Part I to be contained in the Section
10(a) prospectus is omitted from the Registration Statement in
accordance with Rule 428 under the Securities Act of 1933 and the
Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are incorporated herein by
reference:
(a) The Registrant's annual report for the fiscal year
ended July 1, 1994 filed pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act");
(b) All other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered by the
Registrant's annual report referred to in (a) above; and
(c) The description of the Registrant's common stock, par
value $.50, which is contained in its registration statement on Form 10 filed
under Section 12 of the Exchange Act, and the description of the rights to
purchase Common Stock, which is contained in its registration statement on Form
8-A filed under Section 12 of the Exchange Act, including any amendments or
reports filed for the purpose of updating such descriptions.
All documents subsequently filed with the Commission by
the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act prior to the filing of a post-effective amendment to this Registration
Statement which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Mr. Eason, an executive officer of the Registrant, is
eligible to receive awards under the Registrant's Long-Term Incentive Plan.
Mr. Eason is also a partner at the law firm of Paul, Hastings, Janofsky &
Walker, which Firm performs legal services for the Registrant. Mr. Eason
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<PAGE> 3
receives a fixed salary from the Firm for work which he performs for clients of
the Firm other than the Registrant, but has no interest in the Firm's earnings
and profits.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 14-2-850 through 14-2-859 of the Georgia Business
Corporation Code provide for the indemnification of officers and directors
under certain circumstances against reasonable expenses incurred in defending
against a claim and authorizes Georgia corporations to indemnify their officers
and directors under certain circumstances against reasonable expenses and
liabilities incurred in legal proceedings involving such persons because of
their being or having been an officer or director. The By-laws of the
Registrant provide for indemnification of its officers and directors to the
full extent authorized by such sections.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The exhibits filed as part of this Registration Statement
are as follows:
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
- -------------- ----------------------
<S> <C>
4 Long-Term Incentive Plan of Scientific-Atlanta, Inc.
5 Opinion of Paul, Hastings, Janofsky & Walker as to the
legality of the securities being registered
23 Consent of Arthur Andersen LLP
24 Power of Attorney authorizing James F. McDonald and Harvey
A. Wagner to sign amendments to this Registration Statement
on behalf of officers and directors of the Registrant
(contained on Signature Page of Registration Statement)
</TABLE>
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement to
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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<PAGE> 4
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) That, for the purposes of determining any liability
under the Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
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<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Gwinnett County, State of Georgia, on this 11th
day of November, 1994.
SCIENTIFIC-ATLANTA, INC.
By: /s/ James F. McDonald
-------------------------------------
JAMES F. MCDONALD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints James F. McDonald and Harvey
A. Wagner, jointly and severally, his or her attorneys-in-fact, each with power
of substitution for him or her in any and all capacities, to sign any
amendments to this Registration Statement, and to file the same, with the
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<S> <C>
/s/ James F. McDonald November 11, 1994
- ----------------------------------------------- -------------------------
JAMES F. MCDONALD, PRESIDENT AND CHIEF Date
EXECUTIVE OFFICER AND DIRECTOR
(PRINCIPAL EXECUTIVE OFFICER)
/s/ Harvey A. Wagner November 11, 1994
- ----------------------------------------------- -------------------------
HARVEY A. WAGNER, SENIOR VICE PRESIDENT, Date
CHIEF FINANCIAL OFFICER AND TREASURER
(PRINCIPAL FINANCIAL OFFICER)
/s/ Julian W. Eidson November 11, 1994
- ----------------------------------------------- -------------------------
JULIAN W. EIDSON Date
VICE PRESIDENT AND CONTROLLER
(PRINCIPAL ACCOUNTING OFFICER)
</TABLE>
[Signatures continued on next page]
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<PAGE> 6
[Signatures continued from preceding next page]
<TABLE>
<S> <C>
/s/ Marion H. Antonini November 11, 1994
- -------------------------------------------- ------------------------
MARION H. ANTONINI Date
DIRECTOR
/s/ William E. Kassling November 11, 1994
- -------------------------------------------- ------------------------
WILLIAM E. KASSLING Date
DIRECTOR
/s/ Wilbur Branch King November 11, 1994
- -------------------------------------------- ------------------------
WILBUR BRANCH KING Date
DIRECTOR
/s/ Mylle Belle Mangum November 11, 1994
- -------------------------------------------- ------------------------
MYLLE BELLE MANGUM Date
DIRECTOR
/s/ Alonzo L. McDonald November 11, 1994
- -------------------------------------------- ------------------------
ALONZO L. MCDONALD Date
DIRECTOR
/s/ David J. McLaughlin November 11, 1994
- -------------------------------------------- ------------------------
DAVID J. MCLAUGHLIN Date
DIRECTOR
/s/ James V. Napier November 11, 1994
- -------------------------------------------- ------------------------
JAMES V. NAPIER Date
DIRECTOR
/s/ Sidney Topol November 11, 1994
- -------------------------------------------- ------------------------
SIDNEY TOPOL Date
DIRECTOR
</TABLE>
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<PAGE> 7
EXHIBIT INDEX
Exhibits
<TABLE>
<S> <C>
4. Long-Term Incentive Plan of Scientific-Atlanta, Inc.
5. Opinion of Paul, Hastings, Janofsky & Walker as to the
legality of the securities being registered
23. Consent of Arthur Andersen LLP
24. Power of Attorney authorizing James F. McDonald and
Harvey A. Wagner to sign amendments to this Registration
Statement on behalf of officers and directors of the
Registrant (contained on Signature Page of Registration Statement)
</TABLE>
-7-
<PAGE> 1
EXHIBIT 4
LONG-TERM INCENTIVE PLAN
OF
SCIENTIFIC-ATLANTA, INC.
As adopted by the Board of Director on
August 25, 1994
and by the stockholders on
November 11, 1994
<PAGE> 2
LONG-TERM INCENTIVE PLAN
OF
SCIENTIFIC-ATLANTA, INC.
1. PURPOSE OF THE PLAN. This Long-Term Incentive Plan of Scientific
Atlanta, Inc. originally adopted on the 11th day of May 1994, and amended and
restated on August 25, 1994, is intended to encourage officers and key
employees of the Company and its Subsidiaries to acquire or increase their
ownership of common stock of the Company on reasonable terms, to provide
compensation opportunities for superior financial results and outstanding
personal performance, to foster in participants a strong incentive to put forth
maximum effort for the continued success and growth of the Company and its
Subsidiaries, and to assist in attracting and retaining the best available
individuals to the Company and its Subsidiaries.
2. DEFINITIONS. When used herein, the following terms shall have the
meaning set forth below:
2.1 "Affiliate" means, with respect to any specified person or
entity, a person or entity that directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the person or entity specified.
2.2 "Award" means an SAR, an Option, an Option granted in
tandem with an SAR, a Restricted Stock Award, a Performance Share, a
Performance Unit, a Performance Award, or any or all of them.
2.3 "Award Agreement" means a written agreement in such form
as may from time to time be hereafter approved by the Committee, which Award
Agreement shall set forth the terms and conditions of an Award under the Plan,
and be duly executed by the Company and the Employee.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Change in Control" shall mean the occurrence of any of the
following events:
(a) The acquisition in one or more transactions by any
"Person" (as the term person is used for purposes of Section 13(d)
or 14(d) of the Exchange Act of "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty
percent (20%) or more of the combined voting power of the Company's
then outstanding voting securities (the "Voting Securities"),
provided, however, that for purposes of this paragraph (a), the
Voting Securities acquired directly from the Company by any Person
shall be excluded from the determination of such Person's Beneficial
Ownership of Voting Securities (but such Voting Securities shall be
included in the calculation of the total number of Voting
Securities then outstanding); or
(b) The individuals who are members of the Incumbent Board
cease for any reason to constitute at least two-thirds of the
Board; or
1
<PAGE> 3
(c) Approval by stockholders of the Company of (i) a
merger or consolidation involving the Company if the stockholders
of the Company immediately before such merger or consolidation do
not own, directly or indirectly, immediately following such merger
or consolidation, more than eighty percent (80%) of the combined
voting power of the outstanding voting securities of the
corporation resulting from such merger or consolidation in
substantially the same proportion as their ownership of the Voting
Securities immediately before such merger or consolidation, or (ii)
a complete liquidation or dissolution of the Company or an
agreement for the sale or other disposition of all or substantially
all of the assets of the Company.
Notwithstanding anything in this Section 2.5 to the contrary, a Change in
Control shall not be deemed to occur solely because twenty percent (20%) or
more of the then outstanding Voting Securities is acquired by (i) a trustee or
other fiduciary holding securities under one or more employee benefit plans
maintained by the Company or any of its subsidiaries, or (ii) any corporation
which, immediately prior to such acquisition, is owned directly or indirectly
by the stockholders of the Company in the same proportion as their ownership of
stock in the Company immediately prior to such acquisition.
Moreover, notwithstanding anything in this Section 2.5 to the contrary, a
Change in Control shall not be deemed to occur solely because any Person (the
"Subject Person") acquired Beneficial Ownership of more than the permitted
amount of the outstanding Voting Securities as a result of the acquisition of
Voting Securities by the Company which, by reducing the number of Voting
Securities outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided, that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Company, and after such share
acquisition by the Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the percentage of the then
outstanding Voting Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur.
2.6 "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and reference to any specific provisions of the Code shall
refer to the corresponding provisions of the Code as it may hereafter be
amended or replaced.
2.7 "Committee" means the Human Resources and Compensation
Committee of the Board or any other committee appointed by the Board whose
members meet the requirements for eligibility to serve set forth in Section 4
of the Plan and which is vested by the Board with responsibility for the
administration of the Plan; provided, however, that only those members of the
Human Resources and Compensation Committee of the Board who participate in
decisions relative to Awards under this Plan shall be deemed to be part of the
"Committee" for purposes of this Plan.
2.8 "Company" means Scientific-Atlanta, Inc.
2.9 "Employees" means officers (including officers who are
members of the Board) and other key salaried employees of the Company or any
of its Subsidiaries.
2
<PAGE> 4
2.10 "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, and reference to any specific provisions of the
Exchange Act shall refer to the corresponding provisions of the Exchange Act
as it may hereafter be amended or replaced.
2.11 "Fair Market Value" means, with respect to the Shares, the
closing price on the New York Stock Exchange - Composite Tape of such Shares on
the date(s) in question, or, if the Shares shall not have been traded on any
such date(s), the closing price on the New York Stock Exchange - Composite Tape
on the first day prior thereto on which the Shares were so traded or if the
Shares are not traded on the New York Stock Exchange, such other amount as may
be determined by the Committee by any fair and reasonable means. Fair Market
Value determined by the Committee in good faith shall be final, binding and
conclusive on all parties.
2.12 "Incumbent Board" means the individuals who as of August
20, 1990 were members of the Board and any individual becoming a director
subsequent to August 20, 1990 whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least two-thirds of the
directors then comprising the Incumbent Board; provided, however, that any
individual who is not a member of the Incumbent Board at the time he or she
becomes a member of the Board shall become a member of the Incumbent Board upon
the completion of two full years as a member of the Board; provided, further,
however, that notwithstanding the foregoing, no individual shall be considered
a member of the Incumbent Board if such individual initially assumed office (i)
as a result of either an actual or threatened "election contest" (within the
meaning of Rule 14a-11 promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board (a "Proxy Contest"), or (ii) with the approval of the
other Board members, but by reason of any agreement intended to avoid or settle
a Proxy Contest.
2.13 "Incentive Stock Option" means an Option meeting the
requirements and containing the limitations and restrictions set forth in
Section 422 of the Code.
2.14 "Non-Qualified Stock Option" means an Option other than
an Incentive Stock Option.
2.15 "Option" means the right to purchase, at a price and for
a term fixed by the Committee in accordance with the Plan, and subject to such
other limitations and restrictions as the Plan and the Committee impose, the
number of Shares specified by the Committee. An Option may be either an
Incentive Stock Option or a Non-Qualified Stock Option.
2.16 "Parent" means any corporation, other than the employer
corporation, in an unbroken chain of corporations ending with the Company if
each of the corporations other than the employer corporation owns stock
possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.
2.17 "Participant" means any Employee to whom a grant of an
Award has been made and is outstanding under the Plan.
2.18 "Performance Award" means Performance Units, Performance
Shares or either or both of them.
3
<PAGE> 5
2.19 "Performance Objectives" means the specific targets and
objectives established by the Committee under the following four factors:
earnings per share of the Company's common stock, return on average
stockholders' equity, return on capital, and total stockholder returns of the
Company compared to a peer group of comparable companies established by the
Committee. Earnings per share, return on average stockholders' equity, return
on capital and total Company stockholder returns shall be determined and
measured in accordance with generally accepted accounting principles as
utilized by the Company in its reports filed under the Exchange Act.
2.20 "Performance Period" means a period of time established
by the Committee for which Performance Objectives have been established, of not
less than one nor more than ten consecutive Company fiscal years.
2.21 "Performance Share" means a right, granted to a
Participant under Section 12 of the Plan, that may be paid out as a Share.
2.22 "Performance Unit" means a right, granted to a
Participant under Section 12 of the Plan, that may be paid entirely in cash,
entirely in Shares, or such combination of cash and Shares as the Committee in
its sole discretion shall determine.
2.23 "Plan" means this Long-Term Incentive Plan.
2.24 "Regulation T" means Part 220, Chapter II, Title 12 of
the Code of Federal Regulations, issued by the Board of Governors of the
Federal Reserve System pursuant to the Exchange Act, as amended from time to
time, or any successor regulation which may hereafter be adopted in lieu
thereof.
2.25 "Restricted Stock Award" means the right to receive
Shares, but subject to forfeiture and/or other restrictions set forth in the
related Award Agreement and the Plan. Restricted Stock Awards may be subject
to restrictions which lapse over time with or without regard to Performance
Objectives as the Committee in its sole discretion shall determine.
2.26 "Rule 16b-3" means Rule 16b-3 of the General Rules and
Regulations of the Exchange Act (or any successor rule or regulation).
2.27 "SAR" means a stock appreciation right, which is a right
to receive an amount in cash, or Shares, or a combination of cash and Shares,
as determined or approved by the Committee in its sole discretion, no greater
than the excess, if any, of (i) the Fair Market Value of a Share on the date
the SAR is exercised, over (ii) the SAR Base Price.
2.28 "SAR Base Price" means the Fair Market Value of a Share
on the date an SAR was granted, or if the SAR was granted in tandem with an
Option (whether or not the Option was granted on a different date than the
SAR), in the Committee's discretion, the option price of a Share subject to the
Option.
2.29 "Securities Act" means the Securities Act of 1933, as
amended from time to time, and reference to any specific provisions of the
Securities Act shall refer to the corresponding provisions of the Securities
Act as it may hereafter be amended or replaced.
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<PAGE> 6
2.30 "Share" or "Shares" means a share or shares of the
Company's $0.50 par value common stock, any security of the Company issued in
lieu of or in substitution of such common stock or, if by reason of the
adjustment provisions contained herein any rights under an Award under the Plan
pertain to any other security, such other security.
2.31 "Subsidiary" or "Subsidiaries" means any corporation
other than the employer corporation in an unbroken chain of corporations
beginning with the employer corporation if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
2.32 "Successor" means the legal representative of the estate
of a deceased Employee or the person or persons who shall acquire the right to
exercise an Award by bequest or inheritance or by reason of the death of the
Employee.
2.33 "Ten-Percent Stockholder" means an individual who "owns"
as defined in Section 425 of the Code, stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of: (i) the
Company; (ii) if applicable, a Subsidiary, or (iii) if applicable, the Parent.
2.34 "Term" means the period during which a particular Award
may be exercised.
2.35 "Window Period" means the period beginning on the third
business day following the date of release of the financial data specified in
paragraph (e)(l)(ii) of Rule 16b-3 and ending on the twelfth business day
following such date.
3. STOCK SUBJECT TO THE PLAN.
3.1 MAXIMUM NUMBER OF SHARES TO BE AWARDED. The maximum number
of Shares in respect for which Awards may be granted under the Plan in each
fiscal year of the Company during any part of which the Plan is effective shall
be one and one-half percent (1-1/2%) of the number of Shares of the Company
outstanding as of the first day of such fiscal year; and commencing in the
Company's 1995 fiscal year and in each fiscal year thereafter, subtracting from
such maximum number of Shares the number of Shares subject to options, if any,
granted pursuant to the Company's 1992 Employee Stock Option Plan. The maximum
number of Shares available for which Awards may be granted in any particular
fiscal year pursuant to the previous sentence may be increased by an amount of
up to one-half of one percent (.5%) of the number of Shares outstanding as of
the first day of such fiscal year, provided that the number of Shares which
would otherwise be available for Awards in the next fiscal year shall be
decreased by the increased number of Shares made available pursuant to this
sentence. Such Shares may be in whole or in part, as the Board shall from time
to time determine, authorized but unissued Shares, or issued Shares which shall
have been reacquired by the Company. Notwithstanding anything to the contrary
contained in this Section 3.1, in no event shall more than four million
(4,000,000) Shares be cumulatively available for Awards of Incentive Stock
Options under this Plan. The number of SARs payable in cash and the number of
Units payable in cash under the Plan shall be counted when computing the total
number of Shares available for Awards under the Plan to the extent they are
paid out in cash and to the extent that such cash-only units are intended to
satisfy the exclusion of Rule 16a-1(c)(3)(i) under the Exchange Act. Any
unused portion of the percentage limit for any year shall be carried forward
and made available for Awards in succeeding years.
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<PAGE> 7
3.2 CERTAIN LIMITATIONS. The maximum number of Shares with
respect to which Options and SARs payable in Shares which may be granted during
any fiscal year to any Employee shall not exceed 400,000. The maximum dollar
value with respect to which Awards (other than Options and SARs payable in
Shares) that are intended to qualify as performance-based compensation under
Code Section 162(m)(4)(C) which may be paid to any Employee for any particular
Performance Period shall be Four Million Dollars ($4,000,000).
3.3 SHARES UNDERLYING EXPIRED, CANCELLED OR UNEXERCISED
AWARDS. Any Shares subject to issuance upon exercise of an Option or
SAR, but which are not issued because of a surrender, lapse, expiration or
termination of any such Option or SAR prior to issuance of the Shares, or any
Shares subject to an SAR paid in cash, shall once again be available for
issuance in satisfaction of Awards. Similarly, any Shares issued or issuable
pursuant to a Restricted Stock Award or Performance Award which are
subsequently forfeited or not issued pursuant to the terms of the grant shall
once again be available for issuance in satisfaction of Awards; provided,
however, that any Shares issued or issuable pursuant to an Award which are
subsequently forfeited or not issued as to which the forfeiting Employee
received any benefits of ownership such as dividends (but excluding voting
rights) from the Shares (as determined under Rule 16b-3) shall not be available
again for issuance.
4. ADMINISTRATION OF THE PLAN. The Board shall appoint the
Committee, which shall consist of not less than two (2) members of the Board,
each of whom is a "disinterested person" as defined in Rule 16b-3. Unless the
Board determines otherwise, the Committee shall be comprised solely of
"outside" directors within the meaning of Section 162(m)(4)(C)(i) of the Code.
Subject to the provisions of the Plan, the Committee shall have full authority,
in its discretion, to determine the Employees to whom Awards shall be granted,
the number of Shares, units or SARs to be covered by each of the Awards, and
the terms (including restrictions) of any such Award; to amend or cancel Awards
(subject to Section 21 of the Plan); to accelerate the vesting of Awards; to
require the cancellation or surrender of any options, stock appreciation
rights, units or restricted stock awards (to the extent the restrictions have
not yet lapsed) previously granted under this Plan or any other plans of the
Company as a condition to the granting of an Award; to interpret the Plan; and
to prescribe, amend, and rescind rules and regulations relating to it, and
generally to interpret and determine any and all matters whatsoever relating to
the administration of the Plan and the granting of Awards hereunder. The Board
may, from time to time, appoint members to the Committee in substitution for or
in addition to members previously appointed and may fill vacancies, however
caused, in the Committee. The Committee shall make such rules and regulations
for the conduct of its business as it shall deem advisable. All determinations
and decisions by the Committee in the exercise of its powers shall be final,
binding and conclusive. No member of the Committee shall be liable, in the
absence of bad faith, for any act or omission with respect to his service on
the Committee.
5. EMPLOYEES TO WHOM AWARDS MAY BE GRANTED. Awards may be
granted in each year or portion thereof while the Plan is in effect to such of
the Employees as the Committee, in its discretion, shall determine. In
determining the Employees to whom Awards shall be granted, the amount of the
Award, the number of Shares to be granted or subject to purchase under such
Awards and the number of SARs to be granted, the Committee shall take into
account the duties of the respective Employees, their present and potential
contributions to the success of the Company and its Subsidiaries, and such
other factors as the Committee shall deem relevant in connection with
accomplishing the purposes of the Plan. No Award shall be granted to any member
of the Committee
6
<PAGE> 8
so long as his or her membership on the Committee continues or to any member of
the Board who is not also an Employee.
6. STOCK OPTIONS.
6.1 TYPES OF OPTIONS. Options granted under this
Plan may be (i) Incentive Stock Options, (ii) Non-Qualified Stock
Options, or (iii) a combination of the foregoing. The Award Agreement shall
designate whether an Option is an Incentive Stock Option or a Non-Qualified
Stock Option. Any Option which is designated as a Non-Qualified Stock Option
shall not be treated by the Company or the Participant to whom the Option is
granted as an Incentive Stock Option for federal income tax purposes.
6.2 OPTION PRICE. The option price per Share of any
Option granted under the Plan shall not be less than the Fair Market
Value of the Shares covered by the Option on the date the Option is granted.
Notwithstanding anything herein to the contrary, in the event an Incentive
Stock Option is granted to an Employee who, at the time such Incentive Stock
Option is granted, is a Ten-Percent Stockholder, then the option price per
Share of such Incentive Stock Option shall not be less than one hundred ten
percent (110%) of the Fair Market Value of the Shares covered by the Incentive
Stock Option on the date the Incentive Stock Option is granted.
6.3 TERM OF OPTIONS. Options granted hereunder
shall be exercisable for a Term of not more than ten (10) years from
the date of grant and shall be subject to earlier termination as hereinafter
provided. Each Award Agreement issued hereunder shall specify the Term of the
Option, which Term shall be determined by the Committee in accordance with its
discretionary authority hereunder. Notwithstanding anything herein to the
contrary, in the event an Incentive Stock Option is granted to an Employee who,
at the time such Incentive Stock Option is granted, is a Ten-Percent
Stockholder, then such Incentive Stock Option shall not be exercisable more
than five (5) years from the date of grant and shall be subject to earlier
termination as hereinafter provided.
7. LIMIT ON FAIR MARKET VALUE OF INCENTIVE STOCK OPTIONS. In
any calendar year, no Employee may be granted an Incentive Stock Option
hereunder to the extent that the aggregate fair market value (such fair market
value being determined as of the date of grant of the Option in question) of
the Shares with respect to which Incentive Stock Options first become
exercisable by the Employee during any calendar year (under all such plans of
the Employee's employer corporation, its Parent, if any, and its Subsidiaries,
if any) exceeds the sum of One Hundred Thousand Dollars ($100,000). For
purposes of the preceding sentence, Options shall be taken into account in the
order in which they were granted. Any Option granted under the Plan which is
intended to be an Incentive Stock Option, but which exceeds the limitation set
forth in this Section 7, shall be a Non-Qualified Stock Option to the extent
that a portion of the Option exceeds this limitation.
8. STOCK APPRECIATION RIGHTS.
8.1 GRANT OF SAR. The Committee, in its discretion,
may grant an Employee an SAR in tandem with an Option or may grant an
Employee an SAR on a stand alone basis. The Committee, in its discretion, may
grant an SAR in tandem with an Option either at the time the Option is granted
or at any time after the Option is granted, but no later than six (6) months
and one (1) day prior to the end of the Term of the Option, so long as the
grant of the SAR is made during the period in which grants of SARs may be made
under the Plan. The Committee, in its discretion, may grant an
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SAR in tandem with an Option, which is exercisable either in lieu of, or in
addition to, exercise of the related Option.
8.2 LIMITATIONS ON EXERCISE. Each SAR granted in tandem with an
Option shall be exercisable to the extent, and only to the extent, the
related Option is exercisable and shall be for such Term as the Committee may
determine (which Term, which is not to exceed ten (10) years, may expire prior
to the Term of the related Option). Each SAR granted on a stand alone basis
shall be exercisable to the extent, and for such Term, as the Committee may
determine. If, and to the extent, an Employee who is subject to Section 16(b)
of the Exchange Act is to receive cash in exchange for an SAR, the SAR and any
related Option shall be exercisable only during a Window Period. The SARs
shall be subject to such other terms and conditions as the Committee, in its
discretion, shall determine and which are not otherwise inconsistent with the
Plan. The terms and conditions may include Committee approval of the exercise
of the SAR, limitations on the time within which and the extent to which such
SAR shall be exercisable, and limitations, if any, on the amount of
appreciation in value which may be recognized with regard to such SAR. The
Company's obligation to any Participant exercising an SAR may be paid in cash
or Shares, or partly in cash or Shares, at the sole discretion of the
Committee. The Committee shall have at all times final control and authority
over the form of payment of any SAR. If, and to the extent that, Shares are
issued in satisfaction of amounts payable on exercise of an SAR, the Shares
shall be valued at their Fair Market Value on the date of exercise.
8.3 SARS IN TANDEM WITH INCENTIVE STOCK OPTIONS. With respect to SARs
granted in tandem with Incentive Stock Options, the following shall apply:
(a) No SAR shall be exercisable unless the Fair Market Value of the
Shares on the date of exercise exceeds the option price of the related
Incentive Stock Option.
(b) In no event shall any amounts paid pursuant to the SAR exceed
the difference between the Fair Market Value of the Shares on the date of
exercise and the option price of the related Incentive Stock Option.
(c) The SAR must expire no later than the last date the related
Incentive Stock Option can be exercised.
8.4 SURRENDER OF OPTION OR SAR GRANTED IN TANDEM. If the Award
Agreement related to the grant of an SAR in tandem with an Option
provides that the SAR can only be exercised in lieu of the related Option,
then, upon exercise of such SAR, the related Option or portion thereof with
respect to which such SAR is exercised shall be deemed surrendered and shall
not thereafter be exercisable and, similarly, upon exercise of the Option, the
related SAR or portion thereof with respect to which such Option is exercised
shall be deemed surrendered and shall not thereafter be exercisable. If the
Award Agreement related to the grant of an SAR in tandem with an Option
provides that the SAR can be exercised in addition to the related Option, then,
upon exercise of such SAR, the related Option or portion thereof with respect
to which such SAR is exercised shall not be deemed surrendered and shall
continue to be exercisable and, similarly, upon exercise of the Option, the
related SAR or portion thereof with respect to which such Option is exercised
shall not be deemed surrendered and shall continue to be exercisable.
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9. EXERCISE OF RIGHTS UNDER OPTION OR SAR AWARDS.
9.1 NOTICE OF EXERCISE. An Employee entitled to exercise an
Option or SAR may do so by delivery of a written notice to that effect
specifying the number of Shares with respect to which the Option or SAR is
being exercised and any other information the Committee may prescribe. Except
as provided in Section 9.2 below, the notice shall be accompanied by payment in
full of the purchase price of any Shares to be purchased, which payment may be
made in cash or, with the Committee's approval (and subject to the requirements
of Rule 16b-3), in Shares valued at Fair Market Value at the time of exercise
or, with the Committee's approval, a combination thereof. No Shares shall be
issued upon exercise of an Option until full payment has been made therefor.
All notices or requests provided for herein shall be delivered to the Company
as determined by the Committee.
9.2 CASHLESS EXERCISE PROCEDURES. The Committee, in its sole
discretion, may establish procedures whereby an Employee, subject to
the requirements of Rule 16b-3, Regulation T, federal income tax laws, and
other federal, state and local tax and securities laws, can exercise an Option
or a portion thereof without making a direct payment of the option price to the
Company. If the Committee so elects to establish a cashless exercise program,
the Committee shall determine, in its sole discretion, and from time to time,
such administrative procedures and policies as it deems appropriate and such
procedures and policies shall be binding on any Employee wishing to utilize the
cashless exercise program.
10. RIGHTS OF OPTION AND SAR HOLDERS. The holder of an Option or SAR
shall not have any of the rights of a stockholder with respect to the Shares
subject to purchase or issuance under such Award, except to the extent
that one or more certificates for such Shares shall be delivered to the holder
upon due exercise of the Option or SAR.
11. RESTRICTED STOCK AWARDS. Restricted Stock Awards granted under
the Plan shall be subject to such terms and conditions as the Committee
may, in its discretion, determine. Restricted Stock Awards issued under the
Plan shall be evidenced by an Award Agreement in such form as the Committee may
from time to time determine. Restricted Stock Awards may be subject to
restrictions which lapse over time with or without regard to Performance
Objectives for a specific Performance Period.
11.1 RECEIPT OF SHARES. Each Award Agreement shall set forth
the number of Shares issuable under the Restricted Stock Award evidenced
thereby. Subject to the restrictions of Sections 11.2, 11.3 and 11.4
of the Plan and as set forth in the related Award Agreement, the number of
Shares granted under a Restricted Stock Award shall be issued to the recipient
Employee thereof on the date of grant of such Restricted Stock Award or as soon
as may be practicable thereafter and deposited into escrow, if applicable. If
the Committee determines that a Restricted Stock Award is intended to qualify
as performance-based compensation under Code Section 162(m)(4)(C), then such
Restricted Stock Award shall be subject to the attainment of Performance
Objectives for a Performance Period. Such specific Performance Objectives
shall be established in writing no later than ninety (90) days after the
commencement of the Performance Period to which the Performance Objectives
relate, but in no event after twenty-five percent (25%) of the Performance
Period has elapsed. In establishing the Performance Objective or Performance
Objectives, the Committee shall also establish a schedule or schedules setting
forth the portion of the Award which will be earned or forfeited based on the
degree of achievement of the Performance Objectives actually achieved or
exceeded as determined by the Committee. The Committee may at any time adjust
the Performance
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<PAGE> 11
Objectives and any schedules and portions of payments related thereto, adjust
the way Performance Objectives are measured, or shorten any Performance Period
if it determines that conditions or the occurrence of events warrants such
actions; provided, that this provision shall not apply to any Restricted Stock
Award that is intended to qualify as performance-based compensation under Code
Section 162(m)(4)(C) if and to the extent that it would prevent the Award from
so qualifying. The Committee shall have the right to reduce or eliminate the
Restricted Stock Award payable upon the attainment of a Performance Objective,
but shall not have the discretion to increase an Award upon the attainment of a
Performance Objective with respect to a Participant whose compensation for the
particular year is subject to the limits on tax deductibility in Code Section
162(m).
11.2 RIGHTS OF RECIPIENT PARTICIPANTS. Shares received pursuant to
Restricted Stock Awards shall be duly issued or transferred to the Participant,
and a certificate or certificates for such Shares shall be issued in the
Participant's name. Subject to the restrictions in Section 11.3 of the Plan
and as set forth in the related Award Agreement, the Participant shall
thereupon be a stockholder with respect to all the Shares represented by such
certificate or certificates and shall have all the rights of a stockholder with
respect to such Shares, including the right to vote such Shares and to receive
dividends and other distributions paid with respect to such Shares. As a
condition to issuing Shares, the Committee may require a Participant to execute
an escrow agreement and any other documents which the Committee may determine.
In aid of such restrictions, certificates for Shares awarded hereunder,
together with a suitably executed stock power signed by each recipient
Participant, shall be held by the Company in its control for the account of
such Participant (i) until the restrictions determined by the Committee, in its
discretion, and as set forth in the related Award Agreement, lapse pursuant to
the Plan or the agreement, at which time a certificate for the appropriate
number of Shares (free of all restrictions imposed by the Plan or the Award
Agreement except those established by the Committee at the time of grant of the
Award) shall be delivered to the Participant, or (ii) until such Shares are
forfeited to the Company and cancelled as provided by the Plan or the Award
Agreement.
11.3 NON-TRANSFERABILITY OF RESTRICTED STOCK AWARDS. Until such
time as the restrictions determined by the Committee or otherwise set
forth in the related Award Agreement have lapsed, the Shares awarded to a
Participant and held by the Company pursuant to Section 11.2 of the Plan, and
the right to vote such Shares or receive dividends on such Shares, may not be
sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of;
provided, however, that, if so provided in the Award Agreement, such Shares may
be transferred upon the death of the Participant to such of his legal
representatives, heirs and legatees as may be entitled thereto by will or the
laws of intestacy.
11.4 RESTRICTIONS. Shares received pursuant to Restricted Stock
Awards shall be subject to the terms and conditions as the Committee
may determine, including, without limitation, restrictions on the sale,
assignment, transfer or other disposition of such Shares and the requirement
that the Participant forfeit such Shares back to the Company upon termination
of employment for any reason or for specified reasons.
12. PERFORMANCE AWARDS.
12.1 PERFORMANCE PERIODS. The Committee shall establish Performance
Periods applicable to Performance Awards. There shall be no limitation on the
number of Performance Periods
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established by the Committee and more than one Performance Period may encompass
the same fiscal year.
12.2 PERFORMANCE OBJECTIVES. If the Committee determines that a
Performance Award is intended to qualify as performance-based compensation
under Code Section 162(m)(4)(C), then such Performance Award shall be subject
to the attainment of Performance Objectives for a Performance Period. Such
specific Performance Objectives shall be established in writing no later than
ninety (90) days after the commencement of the Performance Period to which the
Performance Objectives relate, but in no event after twenty-five percent (25%)
of the Performance Period has elapsed. In establishing the Performance
Objective or Performance Objectives, the Committee shall also establish a
schedule or schedules setting forth the portion of the Performance Award which
will be earned or forfeited based on the degree of achievement of the
Performance Objectives actually achieved or exceeded as determined by the
Committee. The Committee may at any time adjust the Performance Objectives and
any schedules and portions of payments related thereto, adjust the way
Performance Objectives are measured, or shorten any Performance Period if it
determines that conditions or the occurrence of events warrant such actions;
provided, that this provision shall not apply to any Performance Award that is
intended to qualify as performance-based compensation under Code Section
162(m)(4)(C) if and to the extent that it would prevent the Award from so
qualifying. The Committee shall have the right to reduce or eliminate the
compensation or Award payable upon the attainment of a Performance Objective
but shall not have the discretion to increase an Award upon the attainment of a
Performance Objective with respect to a Participant whose compensation for the
particular year is subject to the limits on tax deductibility in Code Section
162(m).
12.3 GRANTS OF PERFORMANCE AWARDS. Performance Awards may be granted
under the Plan in such form and to such Employees as the Committee may
from time to time approve. Performance Awards may be granted alone, in
addition to or in tandem with other Awards under the Plan. Subject to the
terms of the Plan, the Committee shall determine the amount or number of
Performance Awards to be granted to a Participant and the Committee may impose
different terms and conditions on any particular Performance Award granted to
any Participant. Each grant of a Performance Award shall be evidenced by a
written instrument stating the number of Performance Shares or Performance
Units granted, the Performance Period, the Performance Objective or Performance
Objectives, the proportion of payments for performance between the minimum and
full performance levels, if any, restrictions applicable to Shares receivable
in settlement, if any, and any other terms, conditions, restrictions and rights
with respect to such grant as determined by the Committee. The Committee may
determine that the Participant forfeit such Performance Awards back to the
Company upon termination of employment for any reason or for specified reasons.
The Committee may provide, in its sole discretion, that during a Performance
Period, a Participant shall be paid cash amounts, with respect to each
Performance Share or Performance Unit held by such individual in the same
manner, at the same time, and in the same amount paid, as a dividend on any
Share.
12.4 NONTRANSFERABILITY OF PERFORMANCE AWARDS. Until such time as the
Performance Objectives as determined by the Committee have been met and until
any restrictions upon the Shares issued pursuant to any Performance Awards have
lapsed, Performance Awards and any rights related thereto may not be sold,
exchanged, transferred, pledged, hypothecated or otherwise disposed of by any
Participant.
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12.5 PAYMENT OF AWARDS. As soon as practicable after the end of
the applicable Performance Period as determined by the Committee, the Committee
shall determine the extent to which the Performance Objectives have been met
and the extent to which Performance Awards are payable. Payment and settlement
of a Performance Award shall be as follows:
(a) In the case of Performance Shares, one or more stock
certificates representing the number of Shares payable shall be
delivered to the Participant, free of all restrictions except those
established by the Committee at the time of the grant of the
Performance Shares; and
(b) In the case of Performance Units, entirely in cash,
entirely in Shares, or in such combination of Shares and cash as the
Committee may determine, in its discretion, at any time prior to such
payment. If payment is to be made in the form of cash, the amount
payable for each Performance Unit earned shall be equal to the dollar
value of each Performance Unit (as determined by the Committee) times
the number of earned Performance Units.
13. AWARD TERMS AND CONDITIONS. Each Award Agreement setting forth an
Award shall contain such other terms and conditions not inconsistent herewith as
shall be approved by the Board or by the Committee. The Committee shall from
time to time adopt policies and procedures applicable to Awards that will
govern the lapse or non-lapse of restrictions and the rights of Participants
and beneficiaries in the event of death, disability, termination of employment,
or retirement of Participants or upon the occurrence of any other event
determined by the Committee, in its sole discretion, to be appropriate. The
Committee shall have authority to define disability and retirement and other
terms, and the Committee's policies and procedures may differ with respect to
Awards granted at different times. A Participant's rights in the event of
death, disability, termination of employment, or retirement or such other
events shall be set forth in the Award Agreement that evidences an Award to the
Participant.
14. NONTRANSFERABILITY OF AWARDS. No Award under the Plan and no rights
and interests therein, including the right to any amounts or Shares payable,
may be assigned, pledged, hypothecated or otherwise transferred by a Participant
except, in the event of a Participant's death to his or her designated
beneficiary or, in the absence of such designation, by will or the laws of
descent and distribution to the extent so permitted under the terms of the
Award Agreement. During the lifetime of a Participant, Options and SARs are
exercisable only by, and payments in settlement of Awards will be payable only
to, the Participant or his or her legal representative.
15. VESTING OF AWARDS. The Committee may, in its sole discretion, grant
Awards which vest over time and/or are based upon satisfaction of Performance
Objectives. The Committee may, in its discretion, modify or change any
Performance Objectives concerning any Award or accelerate the vesting of any
Award; provided that the Committee shall not modify or change any Performance
Objective or accelerate the vesting of any Award that is intended to qualify as
performance-based compensation under Code Section 162(m)(4)(C) if and to the
extent that such modification, change or acceleration would prevent the Award
from so qualifying.
16. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes
in all of the outstanding Shares by reason of stock dividends, stock splits,
recapitalizations, mergers, consolidations, combinations, or exchanges of
shares, separations, reorganizations or liquidations or
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similar events or in the event of extraordinary cash or non-cash dividends
being declared with respect to outstanding Shares or other similar
transactions, the number and class of Shares available under the Plan in the
aggregate, the number and class of Shares subject to Awards theretofore
granted, the number of SARs therefore granted, applicable purchase prices,
applicable Performance Objectives for the Performance Periods not yet completed
and performance levels and portion of payments related thereto, and all other
applicable provisions, shall, subject to the provisions of the Plan, be
equitably adjusted by the Committee. The foregoing adjustment and the manner
of application of the foregoing provisions shall be determined by the Committee
in its sole discretion. Any such adjustment may provide for the elimination of
any fractional Share which might otherwise become subject to an Award.
17. CHANGE IN CONTROL.
17.1 EFFECT ON AWARDS. In the event of a Change in Control, then
(i) all Options, SARs and Options in tandem with SARs then outstanding
shall become fully exercisable as of the date of the Change in Control, whether
or not then exercisable, (ii) all restrictions and conditions of all Restricted
Stock Awards then outstanding shall be deemed satisfied as of the date of the
Change in Control, and (iii) all Performance Shares and Performance Units shall
be deemed to have been fully earned as of the date of the Change in Control.
Moreover, the Committee, in its sole discretion, may at any time, and subject
to the terms and conditions as it may impose: (a) grant Awards that become
exercisable only in the event of a Change in Control, (b) provide for Awards to
be exercised automatically and only for cash in the event of a Change in
Control, and (c) provide in advance or at the time of a Change in Control for
cash to be paid in settlement of any Award in the event of a Change in Control.
17.2 TERMINATION OF EMPLOYMENT. Notwithstanding anything
contained in this Plan to the contrary, in the event a Change in
Control takes place and a Participant's employment is terminated prior to the
Change in Control and the Participant reasonably demonstrates that such
termination (i) was at the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect a Change in Control
and who effectuates the Change in Control or (ii) otherwise occurred in
connection with or in anticipation of a Change in Control which actually
occurs, then for all purposes of this Plan, the date of the Change in Control
in respect of such Participant shall mean the date immediately prior to the
date of termination of such Participant's employment.
18. FORM OF AWARDS. Nothing contained in the Plan nor any resolution
adopted or to be adopted by the Board or the stockholders of the Company shall
constitute the granting of any Award. An Award shall be granted hereunder at
such date or dates as the Committee may determine, subject to the Plan.
Whenever the Committee determines to grant an Award, the Secretary or the
President of the Company, or such other person as the Committee appoints, shall
send notice thereof to the Employee, in such form as the Committee approves,
stating the number of Shares, units and SARs subject to the Award, its Term,
and the other provisions, restrictions and conditions thereof. The notice
shall be accompanied by a written Award Agreement (and, in the case of a
Restricted Stock Award, by a blank stock power and/or escrow agreement for
execution by the Employee) which shall have been duly executed by or on behalf
of the Company. If the surrender of previously issued Awards is made a
condition of the grant, the notice shall set forth the pertinent details of
such condition. Execution of an Award Agreement by the recipient in accordance
with the provisions of the Plan shall be a condition precedent to the exercise
or settlement of any Award.
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19. WITHHOLDING FOR TAXES.
19.1 COMPANY'S RIGHT TO PAYMENT FOR TAXES REQUIRED TO BE
WITHHELD. The Company shall have the right, before any payment is made
or a certificate for any Shares is delivered or any Shares are credited to any
brokerage account, to deduct or withhold from any payment under the Plan any
Federal, state, local or other taxes, including transfer taxes, required by law
to be withheld or to require the Participant or his beneficiary or estate, as
the case may be, to pay any amount, or the balance of any amount, required to
be withheld. The Company may elect to deduct such taxes from any amounts
payable then or any time thereafter in cash or Shares or otherwise to the
Employee and, in the Committee's discretion, the Committee may permit the
payment of such taxes from Shares previously held by any Participant. If the
Employee disposes of Shares acquired pursuant to an Incentive Stock Option in
any transaction considered to be a disqualifying transaction under Sections 421
and 422 of the Code, the Employee must give the Company written notice of such
transfer and the Company shall have the right to deduct any taxes required by
law to be withheld from any amounts otherwise payable to the Employee.
19.2 EMPLOYEE ELECTION TO WITHHOLD SHARES. The Committee may
permit an Employee who is subject to Section 16(b) of the Exchange Act
to satisfy his or her tax liability with respect to the exercise, vesting or
settlement of an Award, by having the Company withhold Shares otherwise
issuable upon the exercise, vesting or settlement of the Award if such Employee
makes an irrevocable election, by way of a written statement in a form
acceptable to the Committee, at least six (6) months before the date the
Employee recognizes federal taxable income with respect to the receipt of such
Shares or during any Window Period. With regards to any determination made
during a Window Period, the Committee shall have the sole discretion to
determine the form in which payment of the tax liability will be made (by cash,
securities or any combination thereof) and to approve any such election.
20. TERMINATION OF PLAN. The Plan shall terminate ten (10) years from
the date hereof, and an Award shall not be granted under the Plan after
that date although the terms of any Awards may be amended at any date prior to
the end of its Term in accordance with the Plan. Any Awards outstanding at the
time of termination of the Plan shall continue in full force and effect
according to the terms and conditions of the Award and this Plan.
21. AMENDMENT OF THE PLAN. The Plan may be amended at any time and
from time to time by the Board, but no amendment without the approval
of the stockholders of the Company shall be made if stockholder approval under
Section 422 of the Code or Rule 16b-3 would be required. Notwithstanding the
previous sentence, no amendment to the Plan shall be made without the approval
of the stockholders of the Company which would change the material terms of
performance goals that were previously approved by the Company's stockholders
within the meaning of Proposed Treasury Regulation Section 1.162-27(e)(4)(vi)
or a successor provision, unless the Board determines that such approval is not
necessary to avoid loss of a deduction under Section 162(m) of the Code, such
approval will not avoid such a loss of deduction or such approval is not
advisable. Notwithstanding the discretionary authority granted to the Committee
in Section 4 of the Plan, no amendment of the Plan or any Award granted under
the Plan shall impair any of the rights of any Participant, without his or her
consent, under any Award theretofore granted under the Plan.
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22. GOVERNING LAW; REGULATIONS AND APPROVALS.
22.1 GOVERNING LAW. This Plan and the rights of all persons
claiming hereunder shall be construed and determined in accordance of
the laws of the State of Georgia without giving effect to the conflicts of laws
principles thereof, except to the extent that such laws are preempted by
federal law.
22.2 DELIVERY OF SHARES. The obligation of the Company to issue,
sell and deliver Shares with respect to any Awards granted under this
Plan shall be subject to all applicable laws, rules and regulations, including
all applicable federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or appropriate by
the Committee.
22.3 SECURITIES ACT REQUIREMENTS. No award shall be granted and
no certificates for Shares pursuant to the grant or exercise of an Award shall
be delivered pursuant to this Plan if the grant or delivery would, in
the opinion of counsel for the Company, violate the Securities Act or any other
Federal or state statutes having similar requirements as may be in effect at
that time. As a condition of the issuance of any Shares pursuant to the grant
or exercise of an Award under this Plan, the Committee may require the
recipient to furnish a written representation that he or she is acquiring the
Shares for investment and not with a view to distribution to the public. In
the event that the disposition of Shares acquired pursuant to the Plan is not
covered by a then current registration statement under the Securities Act, as
amended, and is not otherwise exempt from such registration, such Shares shall
be restricted against transfer to the extent required by the Securities Act and
Rule 144 of the Securities Act or the regulations hereunder.
22.4 LISTING AND REGULATORY REQUIREMENTS. Each Award is subject
to the further requirements that, if at any time the Committee shall
determine, in its discretion, that the listing, registration or qualification
of the Shares subject to the Award is required by any securities exchange or
under any applicable law or the rule of any regulatory body, or is necessary or
desirable as a condition of, or in connection with, the granting of such Award
or the issuance of Shares thereunder, such Award will not be granted or
exercised and the Shares may not be issued unless and until such listing,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.
22.5 SECTION 16. With respect to persons subject to Section 16
of the Exchange Act, transactions under this Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision under the Plan or action by the
Committee fails to so comply, it shall be deemed null and void to the extent
permitted by law and deemed advisable by the Committee.
22.6 PERFORMANCE-BASED COMPENSATION. The Plan is intended to
give the Committee the authority, in its discretion, to grant Awards
that qualify as performance-based compensation under Code Section 162(m)(4)(C).
23. DEFERRAL ELECTIONS. The Committee may permit any Participant
receiving an Award to elect to defer his or her receipt of a payment of
cash or the delivery of Shares that would be otherwise due such individual by
virtue of the exercise, settlement, vesting or lapse of restrictions regarding
any Award made under the Plan. If any such election is permitted, the
Committee shall establish rules and procedures for such payment deferrals,
including the possible payment or crediting
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of reasonable interest on such deferred amounts credited in cash and the
payment or crediting of dividend equivalents in respect of deferrals credited
in Shares.
24. MISCELLANEOUS.
24.1 EMPLOYMENT RIGHTS. Neither the Plan nor any action taken
hereunder shall be construed as giving any Employee the right to
participate under the Plan, and a grant of an Award under the Plan shall not be
construed as giving any recipient of the grant any right to be retained in the
employ of the Company.
24.2 NO TRUST OR FUND CREATED. Neither the Plan nor any grant
made hereunder shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company and
any recipient of a grant of an Award or any other person. To the extent that
any person acquires a right to receive payments from the Company pursuant to a
grant under the Plan, such right shall be no greater than the right of any
unsecured general creditor of the Company. Nothing herein shall prevent or
prohibit the Company from establishing a trust or other arrangement for the
purpose of providing for the payment of the benefits payable under the Plan.
24.3 FEES AND COSTS. The Company shall pay all original issue
taxes on the exercise of any Award granted under the Plan and all other fees
and expenses necessarily incurred by the Company in connection therewith .
24.4 AWARDS TO FOREIGN NATIONALS. Without amending the Plan,
Awards may be granted to participants who are foreign nationals or who
are employed outside the United States or both, on such terms and conditions
different than those specified in the Plan as may, in the judgment of the
Committee, be necessary or desirable to further the purpose of the Plan.
24.5 OTHER PROVISIONS. As used in the Plan, and in Awards and
other documents prepared in implementation of the Plan, references to
the masculine pronoun shall be deemed to refer to the feminine or neuter, and
references in the singular or the plural shall refer to the plural or the
singular, as the identity of the person or persons or entity or entities being
referred to may require. The captions used in the Plan and in such Awards and
other documents prepared in implementation of the Plan are for convenience only
and shall not affect the meaning of any provision hereof or thereof.
25. EFFECTIVENESS OF THE PLAN. The Plan shall become effective when
approved by the Board. The Plan shall thereafter be submitted to the
Company's stockholders for approval and unless the Plan is approved by the
affirmative votes of the holders of shares having a majority of the voting
power of all shares represented at a meeting duly held in accordance with
Georgia law within twelve (12) months after being approved by the Board, the
Plan and all Awards made under it shall be void and of no force and effect.
To record the adoption of the Plan by the Board on August 25, 1994, the
Company has caused its authorized officers to affix the corporate name and seal
hereto.
16
<PAGE> 18
SCIENTIFIC-ATLANTA, INC.
By: /S/
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Name:
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Title:
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By: /S/
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Name:
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Title:
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[Seal]
17
<PAGE> 1
EXHIBIT 5
LAW OFFICES OF
PAUL, HASTINGS, JANOFSKY & WALKER
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
SEVENTEENTH FLOOR
695 TOWN CENTER DRIVE
COSTA MESA, CALIFORNIA 92626-1924
TELEPHONE (714) 668-6200
FACSIMILE (714) 979-1921
November 14, 1994
Scientific-Atlanta, Inc.
One Technology Parkway, South
Norcross, Georgia 30392
Re: Scientific-Atlanta, Inc.
Long-Term Incentive Plan
Registration Statement Form S-8
Gentlemen and Mesdames:
As counsel for Scientific-Atlanta, Inc. a Georgia corporation
(the "Company"), you have requested our opinion in connection with the
preparation and filing with the Securities and Exchange Commission of a
Registration Statement on Form S-8 (the "Registration Statement") registering
2,500,000 shares of the Company's common stock, par value $0.50 per share, for
issuance pursuant to awards to be granted by the Company under the Company's
Long-Term Incentive Plan.
We have examined such records and documents and made such
examination of law as we have deemed relevant in connection with this opinion.
Based on the foregoing, we are of the opinion that the 2,500,000 shares covered
by said Registration Statement, when issued in accordance with the terms of the
Prospectus forming a part of the Registration Statement, will be legally
issued, fully-paid and nonaccessible.
We hereby consent to the filing of this opinion as an exhibit
to the above-referenced Registration Statement.
Respectfully submitted,
PAUL, HASTINGS, JANOFSKY & WALKER
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in Scientific-Atlanta, Inc.'s Form S-8 Registration Statement of our
report dated August 4, 1994, appearing on page 11 of Scientific-Atlanta, Inc.'s
Form 10-K for the year ended July 1, 1994.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
November 11, 1994
