<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 1999
-----------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED].
For the transition period from _________ to __________
Commission file number 1-5517
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below: Scientific-Atlanta Inc.
Voluntary Employee Retirement and Investment Plan and Trust
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Scientific-Atlanta, Inc.
One Technology Parkway, South
Norcross, Georgia 30092
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REQUIRED INFORMATION
Scientific-Atlanta, Inc.
Voluntary Employee Retirement
and Investment Plan and Trust
Financial Statements and Schedule
as of December 31, 1999 and 1998
Together With Auditors' Report
2
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SCIENTIFIC-ATLANTA, INC.
VOLUNTARY EMPLOYEE RETIREMENT
AND INVESTMENT PLAN AND TRUST
FINANCIAL STATEMENTS AND SCHEDULE
DECEMBER 31, 1999 AND 1998
TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Plan Benefits--December 31, 1999 and
1998
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1999
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE
SCHEDULE SUPPORTING FINANCIAL STATEMENTS
Schedule I: Schedule H, Line 4i - Schedule of Assets Held for Investment
Purposes--December 31, 1999
3
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Scientific-Atlanta, Inc.
Voluntary Employee Retirement and Investment Plan and Trust:
We have audited the accompanying statements of net assets available for plan
benefits of the SCIENTIFIC-ATLANTA, INC. VOLUNTARY EMPLOYEE RETIREMENT AND
INVESTMENT PLAN AND TRUST as of December 31, 1999 and 1998 and the related
statement of changes in net assets available for plan benefits for the year
ended December 31, 1999. These financial statements and the schedule referred
to below are the responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements and the schedule based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the
Scientific-Atlanta, Inc. Voluntary Employee Retirement and Investment Plan and
Trust as of December 31, 1999 and 1998 and the changes in its net assets
available for plan benefits for the year ended December 31, 1999 in conformity
with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental schedule of assets held for
investment purposes is presented for the purpose of additional analysis and is
not a required part of the basic financial statements but is supplementary
information required by the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The schedule has been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
/s/ Arthur Andersen LLP
Atlanta, Georgia
June 14, 2000
4
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SCIENTIFIC-ATLANTA, INC.
VOLUNTARY EMPLOYEE RETIREMENT
AND INVESTMENT PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
INVESTMENTS $268,162,042 $193,247,564
EMPLOYERS CONTRIBUTION RECEIVABLE 1,696,079 1,669,953
------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $269,858,121 $194,917,517
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
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SCIENTIFIC-ATLANTA, INC.
VOLUNTARY EMPLOYEE RETIREMENT
AND INVESTMENT PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
ADDITIONS:
Investment income:
Net appreciation in fair value of investments $ 63,299,075
Dividends and interest 13,063,030
------------
76,362,105
Contributions: ------------
Participant 11,581,972
Employer 6,343,855
Roll-over deposits 1,445,594
------------
19,371,421
------------
Total additions 95,733,526
DEDUCTIONS:
Benefits paid to participants or beneficiaries (20,697,280)
Administrative expenses (95,642)
------------
NET INCREASE 74,940,604
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 194,917,517
------------
End of year $269,858,121
============
</TABLE>
The accompanying notes are an integral part of this statement.
6
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SCIENTIFIC-ATLANTA, INC.
VOLUNTARY EMPLOYEE RETIREMENT
AND INVESTMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE
DECEMBER 31, 1999 AND 1998
1. PLAN DESCRIPTION
The following description of the Scientific-Atlanta, Inc. Voluntary
Employee Retirement and Investment Plan and Trust (the "Plan") provides
only general information. Participants should refer to the official plan
document for complete information.
General
The Plan is a defined contribution plan established January 1, 1986 by
Scientific-Atlanta, Inc. (the "Company"). The Plan's assets are held by
Fidelity Management Trust Company (the "Trustee"). Company contributions
are held and managed by the Trustee, which invests cash received, interest,
and dividend income and makes distributions to participants. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of
1974 ("ERISA"), as amended.
Effective January 1, 1999, the Company adopted Statement of Position
("SOP") 99-3, "Accounting for and Reporting of Certain Defined Contribution
Plan Investments and Other Disclosure Matters." SOP 99-3 establishes new
disclosure requirements for defined contribution plans.
Eligibility
All employees of the Company are eligible to participate in the Plan if
they are at least 18 years of age, except that the following individuals
shall not be eligible to participate: (i) individuals who are classified by
the Company as casual or temporary employees (including co-op employees);
(ii) any person rendering services to the Company purportedly as (1) an
independent contractor or (2) an employee of a company providing services
to the Company (even if the individual is determined to be a common law
employee of the Company entitled to credit for vesting or any other
purposes under this Plan) before the date the Company actually begins to
withhold federal income taxes from his or her pay; (iii) persons to whom
the Company did not extend the opportunity of participating in this Plan
and who agreed orally or in writing to such non-participant status; (iv)
persons deemed to be employees under Code Section 4.14(o); (v) persons
classified as Leased Employees; and (vii) non-resident aliens within the
meaning of Code Section 7701(b)(1)(B). Eligibility for participation begins
immediately upon employment, provided the individual meets the age
requirement set forth above and does not fall into any of the categories of
persons who are excluded from eligibility to participate by the terms of
the Plan.
Contributions and Vesting
Participants may elect to contribute up to 15% of their eligible
compensation, as defined by the Plan. Individual accounts are maintained
for each of the Plan's participants to reflect the participant's share of
the Plan's income, the Company's contribution, and the participant's
contribution. Allocations of income are based on participant account
balances, as defined by the Plan.
The Company matches 100% of the participant's contribution up to 3% of
his/her annual compensation plus 50% of the participant's contribution
between 3% and 6% of the participant's annual compensation. For any plan
year, the Company's matching contribution shall not exceed 4.5% of the
participant's annual compensation for such plan year. The Company's
matching contributions to the Plan are in the form of the Company's common
stock and are made only at the end of each quarter. Vesting is immediate
for both the participant's contribution and the Company's matching
contribution.
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Investment Funds
The following investment funds have been established by the Plan for
investing participants' contributions. All investment elections are
participant-directed. Participants may change their investment elections
daily with the exception of the Fidelity Scientific-Atlanta Common Stock
Fund, in which participants may only change their investment elections once
each calendar month. The prospectus of each fund has specific guidelines
and limitations as to the type of securities eligible for investment.
Fidelity Retirement Money Market Fund. This is a fixed income fund
invested in short-term securities with the objective of current income
that is designed to provide investors with a return that reflects
current short-term money market rates.
Fidelity Intermediate Bond Fund. This is a fixed income fund invested
in U.S. Treasury bonds or other government bonds and corporate bonds
with a fixed interest rate.
Fidelity Equity Income Fund. This is a fund containing a variety of
corporate securities with more investment risk than the Bond Fund and
Money Market Fund and with the objective of both current income and
capital appreciation.
Fidelity Spartan U.S. Equity Index Fund. This is a fund that invests
primarily in the common stocks of the 500 companies included in the
Standard & Poor's 500 Index. The objective is for both current income
and long-term capital appreciation.
Fidelity Magellan Fund. This fund is invested in securities of large
United States and foreign corporations as well as smaller, lesser-
known companies with the objective of long-term capital appreciation.
This fund offers more overall investment risks than the other funds
currently offered under the Plan.
Fidelity Puritan Fund. This fund invests in a broad list of high-
yielding securities among a variety of companies and industries. The
fund's objective is to obtain as much income as possible, consistent
with the preservation of capital.
Fidelity Low-Priced Stock Fund. This fund seeks long-term capital
appreciation and invests mainly in equity securities that are
considered by the fund's management to be low-priced at the time of
purchase.
Fidelity Scientific-Atlanta Common Stock Fund. This fund is invested
primarily in the Company's common stock with the balance in short-term
money market investments. The objective of this fund is to give
employees the opportunity to become shareholders of the Company and to
share in the Company's performance. Employees have the option to
redirect the Company's matching contribution, which is made only to
this fund, to the other investment options. Investments in this fund
are assigned units of participation.
Founders Growth Fund. This fund invests in the common stock of well-
established, high-quality growth companies, both domestic and abroad.
The fund's objective is to increase its investment over the long term
through capital growth.
Templeton Foreign Fund I. This fund invests primarily in the common
stock of companies in developed and developing foreign countries. The
fund's objective is capital appreciation and growth; however, foreign
investments involve greater risks, causing share price and return to
vary.
Participant Loans
A participant may borrow a minimum of $1,000 up to a maximum equal to the
lesser of $50,000 or 50% of his/her account balance. Loans are secured by
the participant's account balance and bear interest at a fixed rate over
the life of the loan. Repayments of the loans are made in substantially
equal payroll deductions amortized over the life of the loan. The loan must
be repaid within five years or up to ten years
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for the purchase of a primary residence. Repayment of principal and payment
of interest will be effected through payroll withholding. The principal
amount of the loan, together with all accrued interest, shall immediately
become due when the participant is no longer employed by an employing
company, as defined by the Plan, and is no longer a party in interest under
Section 3(14) of ERISA.
Administrative Expenses
Certain administrative functions are performed by officers or employees of
the Company or its subsidiaries, and they act as the plan administrator. No
such officer or employee receives compensation from the Plan.
Administrative expenses, such as trustee fees, are paid by the Plan.
Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements are prepared on the accrual basis in accordance
with generally accepted accounting principles.
Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires the Plan's management to use
estimates and assumptions that affect the accompanying financial statements
and disclosures. Actual results could differ from these estimates.
Investment Valuation
Net realized gains (losses) and changes in unrealized appreciation
(depreciation) are recorded in the accompanying statement of changes in net
assets available for plan benefits as net appreciation in fair value of
investments, which consists of the realized gains or losses and the
unrealized appreciation (depreciation) of those investments. Investments
are stated at market value, based on quoted market prices, in the
accompanying statements of net assets available for plan benefits. The
following table summarizes the net appreciation from investments as of
December 31, 1999:
<TABLE>
<CAPTION>
<S> <C>
Net appreciation in fair value of Scientific-Atlanta,
Inc. common stock $52,181,740
Net gain from mutual funds 11,117,335
-----------
$63,299,075
===========
</TABLE>
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3. INVESTMENTS
The following table presents the fair values of investments that represent
5% or more of the Plan's total investments as of December 31, 1999 and
1998:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Fidelity Retirement Money Market Fund $32,062,405 $24,656,889
Fidelity Equity Income Fund 30,412,786 33,253,457
Fidelity Spartan U.S. Equity Index Fund 33,157,885 25,423,649
Fidelity Magellan Fund 57,409,042 39,564,981
Fidelity Low-Priced Stock Fund 5,952,640 7,863,603
Fidelity Scientific-Atlanta Common Stock Fund 79,477,522 39,092,320
</TABLE>
4. NONPARTICIPANT-DIRECTED INVESTMENTS (UNAUDITED)
Information about the net assets as of December 31, 1999 and 1998 and the
significant components of the changes in net assets for the year ended
December 31, 1999 relating to the nonparticipant-directed investments is as
follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Net assets:
Common stock $ 79,477,522 $39,092,320
------------ -----------
Changes in net assets:
Contributions $ 7,463,496
Dividends and interest 395,495
Net appreciation 52,181,245
Other (256,632)
Benefits paid to participants (2,489,399)
Net transfers to participant-directed investments (16,909,003)
------------
$ 40,385,202
============
</TABLE>
The above information includes participant- and nonparticipant-directed
amounts, as the amounts cannot be separately determined.
5. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated September 29, 1995 that the Plan was designed in accordance
with applicable sections of the Internal Revenue Code ("IRC"). The Plan has
been amended since receiving this letter; however, the plan administrator
believes that the Plan is currently designed and is being operated in
compliance with the applicable requirements of the IRC. Therefore, the plan
administrator believes that the Plan was qualified and the related trust
was tax-exempt as of the financial statement dates.
6. SUBSEQUENT EVENT
In April 2000, the Company sold its Satellite Network Division to Viasat
Inc. As such, the net assets of the Satellite Network Division Employees
participants were transferred out of the Plan at that time.
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SCHEDULE I
SCIENTIFIC-ATLANTA, INC.
VOLUNTARY EMPLOYEE RETIREMENT
AND INVESTMENT PLAN AND TRUST
SCHEDULE H, LINE 4i--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Identity of Issuer Investment Description Cost Current Value
------------------ ---------------------- ----- -------------
<S> <C> <C> <C>
* FIDELITY INVESTMENTS Retirement Money Market Fund, 32,062,405 units (a) $ 32,062,405
Intermediate Bond Fund, 864,317 units (a) 8,435,735
Equity Income Fund, 568,676 units (a) 30,412,786
Spartan U.S. Equity Index Fund, 636,550 units (a) 33,157,885
Magellan Fund, 420,179 units (a) 57,409,042
Puritan Fund, 198,027 units (a) 3,768,463
Low-Priced Stock Fund, 262,926 units (a) 5,952,640
Scientific-Atlanta Common Stock Fund, 2,618,179 shares $43,392,763 79,477,522
FOUNDERS MANAGEMENT Founders Growth Fund, 379,747 units (a) 9,064,566
FRANKLIN TEMPLETON Templeton Foreign Fund I, 359,309 units (a) 4,031,444
* THE PLAN Participant loans (interest rate at 9.25%) 4,389,554
------------
Total investments $43,392,763 $268,162,042
=========== ============
</TABLE>
*Indicates a party in interest.
(a) Participant-directed.
The accompanying notes are an integral part of this schedule.
11
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Scientific-Atlanta, Inc. Voluntary Employee
Retirement and Investment Plan and Trust
By: Scientific-Atlanta, Inc.
Employee Benefit Committee
By: /s/ Brian C. Koenig
--------------------
Name: Brian C. Koenig
Title: Senior Vice President, Human
Resources
Date: June 27, 2000
12
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Exhibit Index
23 Consent of Arthur Andersen LLP
13
