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EXHIBIT 10(L)
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
(AS AMENDED AND RESTATED ON JUNE 14, 2000)
1. PURPOSE. The purposes of the plan ("Plan") are to advance the interests of
Scientific-Atlanta, Inc. ("Company") and its shareholders by (i)
encouraging increased share ownership by members of the Board of Directors
("Board") of the Company who are not employees of the Company or any of its
subsidiaries, (ii) enhancing the Company's ability to attract and retain
the services of experienced, able and knowledgeable persons to serve as
directors, and (iii) providing additional incentive for directors to
contribute their best efforts to the Company's success.
2. ADMINISTRATION. The Plan shall be administered by the Board. The Board
shall have full authority, consistent with the Plan, to interpret the Plan,
to promulgate such rules and regulations with respect to the Plan as it
deems desirable and to make all other determinations necessary or desirable
for the administration of the Plan. All decisions, determinations and
interpretations of the Board shall be binding upon all persons.
3. SHARES TO BE ISSUED. Shares of the Company's common stock ("Common Stock")
delivered on the exercise of stock options ("Options") granted under the
Plan may be authorized, but previously unissued, shares or previously
issued shares reacquired by the Company.
4. GRANTING OF OPTIONS.
(a) Eligible Directors. "Eligible Directors" are all members of the Board
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who are not employees of the Company.
(b) Initial Grant. Each Non-Employee Director will receive an initial
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grant of 40,000 shares upon approval by the Board of this Plan or upon
his or her initial appointment or election to the Board.
(c) Automatic Grants. An Option to purchase 5,000 shares of Common Stock
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shall be granted at the annual meeting of the Board held on the date
of the Annual Meeting of Shareholders beginning in 2000 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.
(d) Option Agreement. Each Option shall be evidenced by a written
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instrument which shall state the terms and conditions of the grant,
not inconsistent with the Plan, as the Board in its sole discretion
shall determine and approve.
(e) Option Price. The purchase price for each share of Common Stock
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subject to an Option shall be the fair market value of the Common
Stock on the date the Option is granted. For this purpose, as well as
other purposes under the Plan, fair market value shall be deemed to be
the closing selling price of a share of Common Stock as reported on
the New York Stock Exchange Composite on the date on which the Option
is granted or, if there is no trade on such Exchange on that date,
then on the next preceding date on which there was a trade of Common
Stock on such Exchange. (In the event the Company's Common Stock is
not listed on the New York Stock Exchange on the date of an Option
grant, the fair market value shall be determined as stated above but
with
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reference to trades on the largest stock exchange on which the Common
Stock is then traded.)
(f) Transferability. An Option shall be nonassignable and nontransferable
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other than: (1) by an Eligible Director pursuant to a will or the laws
of descent and distribution; or (2) by an Eligible Director to a
Family Member by gift or pursuant to a domestic relations order (a
"Permitted Transferee"). "Family Member" means any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the Eligible Director's household
(other than a tenant or employee of the Eligible Director), a trust in
which these persons have more than fifty percent of the beneficial
interest, a foundation in which these persons (or the Eligible
Director) control the management of assets, and any other entity in
which these persons (or the Eligible Director) own more than fifty
percent of the voting interests. Options may not be transferred for
value. The following transactions are not prohibited transfers for
value:
(i) a transfer under a domestic relations order in settlement of
marital property rights; and
(ii) a transfer to an entity in which more than fifty percent (50%) of
the voting interests are owned by Family Members (or the Eligible
Director) in exchange for an interest in that entity.
An Option shall be exercisable during the Eligible Director's lifetime
only by him if he has not transferred his Option pursuant to the
preceding sentence or, in the event of his incompetence or a Permitted
Tranferee's incompetence, by a duly appointed guardian. If an Option
has been transferred in accordance with this subsection (f), such
Option may be exercised, in accordance with the terms of the Plan, by
the transferee during the transferee's life (or existence if the
transferee is a legal entity), provided the Option has not expired
pursuant to the terms of the Plan.
An Option may not be assigned or transferred by a Permitted
Transferee, except by will or the laws of descent and distribution
(collectively, "Inheritance"), but in the event of an assignment or
transfer by Inheritance, the Option may only be assigned or
transferred to a Family Member of the Eligible Director who
transferred the Option to the Permitted Transferee, unless the Board
consents to another person or entity receiving the Option pursuant to
Inheritance.
5. OPTION EXERCISES.
(a) Exercise Timing. Except as provided in Sections 5(c) and 6 below,
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each Option shall become exercisable for twenty-five percent (25%) of
the shares of Common Stock covered by the Option after the expiration
of one (1) year following the date of grant and for an additional
twenty-five percent (25%) of the shares after the expiration of each
of the succeeding three (3) years following the date of grant.
(b) Method of Exercise. Options may be exercised by delivery of written
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notice of exercise to the Secretary of the Company, accompanied by the
full purchase price of the shares being purchased. The price shall be
paid at the time of exercise (i) in cash, (ii) by the
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transfer to the Company of shares of the Company's Common Stock
acquired by the Optionholder prior to the exercise of the Option, or
(iii) by any combination of cash or such shares of the Company's
Common Stock. Each such share so transferred in full or part payment
of the Option price shall be deemed to have a value equal to the
closing price of a share of the Common Stock of the Company, as traded
on the New York Stock Exchange (or the largest stock exchange on which
it is then traded), on the date of transfer to the Company, or if
there is no trade on such Exchange on that date, on the nearest date
preceding the date of transfer on which a trade on such Exchange was
made, and each such share at the time of such transfer shall be free
and clear of any and all claims, pledges, liens and encumbrances, or
any restrictions which would in any manner restrict the transfer of
such shares to the Company in full or part payment of the Option
price.
(c) Effect of Change of Control. In the event of "Change of Control" of
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the Company, all Options held by Eligible Directors or by a Permitted
Transferee on the date of Change of Control shall be immediately
exercisable in full, irrespective of the amount of time that has
elapsed from the date of grant. "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.
6. EXPIRATION OF OPTIONS. Except as hereinafter provided, all Options shall
expire on the earlier of (i) the last day of the tenth (10th) year after
the date of grant or (ii) the date that an Eligible Director ceases to be a
member of the Board; provided, however, that to the extent any unexpired
Options are otherwise exercisable on the date that an Eligible Director
ceases to be a member of the Board for any reason other than Cause (as
defined below), death, Early Retirement (as defined below) or Mandatory
Retirement (as defined below), such Options shall remain exercisable for
one (1) year following the last day of the Eligible Director's Board
membership and shall expire if not exercised within said one (1) year
period. If Board membership ceases on account of death or Mandatory
Retirement, all unexpired Options held by the Eligible Director or by a
Permitted Transferee on the last day of the Eligible Director's Board
membership, whether exercisable or not exercisable, shall be immediately
exercisable and remain exercisable for three (3) years following the last
day of the Eligible Director's Board membership and shall expire at the end
of such three (3) year period if not exercised within said three (3) year
period. If Board membership ceases on account of Early Retirement, all
unexpired Options held by the Eligible Director or by a Permitted
Transferee on the last day of the Eligible Director's Board membership,
which are then exercisable or would have become exercisable had the
Director continued as a member of the Board for one (1) additional year,
whether exercisable or not exercisable, shall be immediately exercisable
and remain exercisable for one (1) year following the last day of the
Eligible Director's Board membership and shall expire if not exercised
within said one (1) year period. To the extent any otherwise unexpired
Options are not exercisable in accordance with the immediately preceding
sentence, they shall expire as of the effective date of such Eligible
Director's Early Retirement. If an Eligible Director's membership on the
Board ends after the occurrence of Cause, all Options held by an Eligible
Director or by a Permitted Transferee shall expire immediately on his or
her last day of Board membership. "Cause," for the purposes of this Section
6, means any act or omission for which indemnification
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of the Director is prohibited by the Georgia Business Corporation Code
(Sections 14-2-171 of the Code until July 1, 1989 and Section 14-2-856, as
amended, on and after July 1, 1989). "Mandatory Retirement," for the
purposes of this Section 6, means an Eligible Director's ineligibility to
be re-elected to the Board due to the terms of the retirement policy
adopted by the Board (as amended from time to time), provided such
ineligibility occurs after at least thirty-six (36) consecutive months of
service on the Board. "Early Retirement," for the purposes of this Section
6, means an Eligible Director's voluntary resignation from the Board after
at least thirty-six (36) consecutive months of service on the Board.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. If a reorganization,
recapitalization, stock split, stock dividend, combination of shares,
merger, consolidation, rights offering, or any other change in the
corporate structure or shares of Common Stock of the Company occurs, the
number and kind of shares authorized by this Plan, and the number, Option
price and kind of shares covered by the Options granted hereunder, shall be
automatically adjusted as required in order to prevent an unfavorable
effect upon the value of the shares covered by then outstanding Options and
shares covered by Options subsequently granted.
8. TAX WITHHOLDING. Any exercise of an Option pursuant to the Plan shall be
subject to withholding of state and federal income taxes, FICA tax or other
taxes to the extent required by applicable law.
9. LAWS AND REGULATIONS. The Plan, the grant and exercise of Options, and the
obligation of the Company to sell or deliver shares of Common Stock under
the Plan shall be subject to all applicable laws, regulations and rules. In
the event that the shares of Common Stock to be issued under this Plan are
not registered under the Securities Act of 1933 and any applicable state
securities laws prior to the delivery of such shares, the Company may
require, as a condition to the issuance thereof, that the persons to whom
such shares are to be issued represent and warrant in writing to the
Company that the shares are being acquired by him or her for investment for
his or her own account and not with a view to, for resale in connection
with, or with an intent of participating directly or indirectly in, any
distribution of such shares within the meaning of that Act, and a legend to
that effect may be placed on the certificates representing such shares.
10. TERMINATION AND AMENDMENT OF THE PLAN. The Board may at any time terminate
the Plan or may at any time or times amend the Plan or amend any
outstanding Options for the purpose of satisfying the requirements of any
changes in applicable laws or regulations or for any other purpose which at
the time may be permitted by law, provided that:
(i) no amendment of any outstanding Option shall contain terms or
conditions that negatively impact any rights of an Eligible Director
under such Option, unless such Eligible Director consents to such
terms or conditions; and
(ii) except as provided in Section 7, no such amendment shall, without the
approval of the shareholders of the Company: (a) increase the number
of shares of Common Stock for which each Option may be granted under
the Plan; (b) increase the frequency of Option grants; (c) reduce the
price at which Options may be granted or exercised below the price
provided for in Section 4(e); (d) extend the period during which any
outstanding Option may be exercised; (e) materially increase in any
other way the benefits accruing to Eligible Directors; (f) expand Plan
eligibility beyond Eligible Directors as defined herein, or (g)
disqualify an Eligible Director from being a "disinterested"
administrator,
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within the meaning of Rule 16b-3 (or any successor rule) of the
Securities and Exchange Commission, of any stock option plan or other
stock-based plan of the Company.
11. EFFECTIVE DATE. The Plan shall become effective on the date of approval by
the Board; provided, however, that the Plan shall be submitted to the
shareholders of the Company for approval, and if not approved by the
shareholders within one (1) year from the date of approval by the Board,
the Plan shall be of no force and effect. Options granted under the Plan
before approval of the Plan by the shareholders shall be granted subject to
such approval and shall not be exercisable before such approval.
To record the adoption of this Plan (as amended and restated) by the Board as of
June 14, 2000, the Company has caused its authorized officers to execute this
Plan in the space below.
SCIENTIFIC-ATLANTA, INC.
By: /s/ Brian C. Koenig
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Name: Brian C. Koenig
Title: Senior Vice President - Human
Resources
By: /s/ William E. Eason, Jr.
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Name: William E. Eason, Jr.
Title: Senior Vice President, General
Counsel and Corporate Secretary
[ Corporate Seal]
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