NON-QUALIFIED STOCK OPTION AGREEMENT Exhibit 4
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This Option Agreement (the "Agreement") is made and entered into as of
the 15th day of January, 1997, by and between Scientific-Atlanta, Inc., a
Georgia corporation (the "Company"), and Xxxxx X. Xxxxxxxxx (the "Optionee").
R E C I T A L S:
WHEREAS, the Company desires to grant the Optionee an Option (as
defined below); and
WHEREAS, the parties hereto desire to set forth herein the terms and
conditions applicable to such Option;
NOW, THEREFORE, the parties hereto do hereby agree as follows:
1. Definitions. Each capitalized term used herein which is not
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otherwise defined herein shall have the meaning ascribed to such term in
Schedule 1 attached hereto.
2. Grant. The Company hereby grants to the Optionee an option (the
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"Option") to purchase from the Company 125,000 shares of the $0.50 par value
common stock of the Company ("Common Stock") at an exercise price of $15 - 7/8
per share, which exercise price is subject to adjustment as provided in
Paragraph 11 hereof. The Option is intended to be treated as a non-qualified
stock option for all purposes and is not intended to qualify as an incentive
stock option for purposes of the Code.
3. Term. The term of the Option shall commence on January 15, 1997,
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the date on which Optionee commenced employment with the Company ("Date of
Grant") and shall terminate and expire, to the extent not previously exercised,
on January 14, 2007.
4. Time for Exercise. The Optionee shall have the right to exercise
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the Option in the following percentages, during the following periods:
(a) twenty-five percent (25%) of the total number of shares covered
by the Option immediately upon, and during the year following,
the Date of Grant;
(b) fifty percent (50%) of the total number of shares covered by the
Option on, and during the year following, the first anniversary
of the Date of Grant;
(c) seventy-five percent (75%) of the total number of shares covered
by the Option on, and during the year following, the second
anniversary of the Date of Grant;
(d) one hundred percent (100%) of the total number of shares covered
by the Option on the third anniversary of the Date of Grant and
thereafter prior to the expiration of the Option.
5. Manner of Exercise of the Option. The Option may be exercised
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from time to time, in whole or in part, by delivering a written notice of
exercise to the Corporate Secretary of the Company. Such notice is irrevocable
and must be accompanied by full payment of the purchase price (i) in cash, (ii)
by delivery of shares of Common Stock at the Fair Market Value of such shares
determined as of the exercise date, or a combination of (i) and (ii).
6. Cessation of Employment; etc. After the Optionee ceases to be an
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employee, his rights to exercise any unexercised Option then held by him shall
be determined as provided in this Paragraph 6. The Option may not be exercised
after the term set forth in Paragraph 3 expires or after the Option is otherwise
cancelled.
(a) Retirement. If the Optionee ceases to be an employee because of
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Retirement (and not on account of termination for "cause" (as
hereinafter defined)), the Optionee shall have the right to
exercise
the Option immediately with respect to (i) the shares which he
could have purchased at the time of Retirement and (ii) any
shares which would have become available for purchase under the
Option if the Optionee's employment had continued for one (1)
year after the date of Retirement. To the extent unexercised,
the Option shall expire two (2) years after the date of
Retirement or the date of expiration of the term of the Option
as set forth in Paragraph 3, whichever shall occur first.
(b) Death. If the Human Resources and Compensation Committee (the
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"Committee") does not determine otherwise with respect to the
Option, upon the death of the Optionee, the Option shall be
exercisable immediately (by the executor or the administrator of
the deceased Optionee's estate or by a person who acquired the
right to exercise the option by bequest or inheritance or by
reason of such death) with respect to (i) the shares as to which
the deceased Optionee had the right to exercise the Option at
the time of his death and (ii) any shares which would have
become available for purchase under the Option if the Optionee's
employment had continued for one (1) year after the date of
death. To the extent unexercised, the Option shall expire (i)
one (1) year after the date of such death, or (ii) in the event
of death following termination of employment by reason of
Retirement as described in Paragraph 6(a) immediately above, the
expiration date of the Option after Retirement, whichever occurs
last. Notwithstanding the foregoing, the Committee may, in a
special case, permit a longer period for exercise of an Option
after the death of the Optionee, but in no event shall such
period extend beyond the date of expiration of the Option as set
forth in this Agreement.
(c) Disability. If the Optionee ceases active service as an employee
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by reason of Disability, he shall have the right to exercise the
Option at any time within one (1) year after such cessation of
employment, but except as provided in this Agreement, only to
the extent that, at the date of such cessation of employment,
the Optionee's right to exercise such Option had accrued
pursuant to the terms of this Agreement and had not previously
been exercised.
(d) Termination for Cause. If the Optionee's employment is
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terminated for "cause" (as hereinafter defined), this Option
shall expire immediately upon the giving to him of the notice of
such termination. "Cause," for purposes of this Paragraph 6(d),
shall mean dishonest or fraudulent conduct which would normally
be considered as sufficient basis for discharging an employee
from a management and/or a supervisory position, or negligence,
inaction or misconduct which constitutes failure by the Optionee
to meet such Optionee's obligations and perform such Optionee's
duties of employment.
(e) Other Reasons. If the Optionee ceases to be an employee for any
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reason other than those mentioned above in Subparagraphs (a),
(b), (c) or (d), the Optionee shall have the right to exercise
the Option at any time within thirty (30) days following such
cessation, discharge or termination, but, except as otherwise
provided in this Agreement, only to the extent that, at the date
of cessation, discharge or termination, the Optionee's right to
exercise such Option had accrued pursuant to the terms of this
Agreement and had not previously been exercised.
(f) Leave of Absence. Optionee's employment with the Company shall
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not be considered as having been terminated while the Optionee
is on military or sick leave or other bona fide leave of absence
(such as temporary employment by the U.S. government) if the
period of such leave does not exceed ninety (90) days, or, if
longer, so long as the Optionee's right to re-employment with
the Company is guaranteed either by statute or by contract.
Where the period of such leave exceeds ninety (90) days and
where the Optionee's right to re-employment is not guaranteed
either by statute or by contract, the Optionee's employment will
be deemed to have terminated on the ninety-first (91st) day of
such leave.
7. Exercise of Options upon a Change of Control of the Company. In
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the event of a Change of Control of the Company, this Option, whether or not
vested at such time, shall automatically vest and be immediately
exercisable in full, without regard to the years which have elapsed or events
which have occurred since the Date of Grant.
8. Termination of Employment Following Change in Control. If the
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Optionee's employment terminates following a Change in Control other than for
"cause" (as defined in Paragraph 6(d)), the applicable provisions of Paragraph 6
of this Agreement shall apply, except that as of and after the date of the
Change in Control, neither the Committee nor the Board shall make any
determination or take any action in connection with the Optionee's termination
of employment which would cause the Option either (i) to not be exercisable in
full or (ii) to expire earlier than the latest date allowable under Paragraph 6
as applicable.
9. Amendment or Termination.
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(a) Paragraphs 7 and 8 of this Agreement shall not be amended or
terminated at any time.
(b) Any amendment or termination of this Agreement prior to a Change
in Control which (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, or (ii) otherwise arose in
connection with or in anticipation of a Change in Control, shall
be null and void and shall have no effect whatsoever.
(c) Except as provided in subparagraphs (a) and (b) above, the Board
shall have the authority and right to amend this Agreement at
any time upon ten (10) days' prior written notice to Optionee,
provided that such amendment does not adversely affect
Optionee's rights under this Agreement.
10. Rights of a Shareholder; Non-Transferability. No one shall have
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rights as a shareholder with respect to any shares covered by this Option until
the date of issuance of a stock certificate for such shares. Nothing in this
Option confers on Optionee any right to continue in the employ of the Company or
to continue to perform services for the Company or interferes in any way with
the right of the Company to terminate his services as an officer or other
employee at any time.
Unless the Committee passes a resolution granting Optionee the right to
transfer the Option or a portion of the Option to others, no Option shall be
transferable by the Optionee other than by will or the laws of descent and
distribution and may only be exercised during his lifetime by the Optionee, or
by a guardian or legal representative.
11. Recapitalizations. In the event of any change in the outstanding
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shares of Common Stock by reason of any stock dividend or split,
recapitalization, merger, consolidation, spin-off, reorganization, combination
or exchange of shares, or other similar corporate change, or other increase or
decrease in such shares without receipt or payment of consideration by the
Company, the Company will make such adjustments to the Option, to prevent
dilution or enlargement of the rights of Optionee, including any or all of the
following:
(a) adjustments in the aggregate number or kind of shares of Common
Stock which may be issued upon exercise of the Option;
(b) adjustments in the purchase price of the Common Stock covered by
the Options.
No such adjustments, however, may change materially the value of benefits
available to Optionee under the Option.
12. Taxes; Withholding. In the event the Company determines that it
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is required to withhold state or federal taxes as a result of the exercise of an
Option, as a condition to the exercise thereof, the Optionee must make
arrangements satisfactory to the Corporate Secretary to enable the Company to
satisfy such withholding requirements. Payment of such withholding requirements
may be made (i) in cash, (ii) by delivery of shares registered in the name of
Optionee, which shares have a Fair Market Value at the time of exercise equal to
the amount to be withheld, (iii) by the Company withholding shares subject to
the Option, which shares have a Fair Market Value at the time of exercise equal
to the amount to be withheld, or (iv) any combination of (i), (ii) and (iii)
above.
13. Securities Law Requirements.
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(a) Securities Act Requirements. No Option granted pursuant to this
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Agreement shall be exercisable in whole or in part, and the
Company shall not be obligated to sell any shares subject to any
such Option, if such exercise and sale would, in the opinion of
the Corporate Secretary, violate the Securities Act of 1933 (or
other federal or state statutes having similar requirements) as
it may be in effect at that time.
As a condition to the issuance of any shares upon exercise of an
Option under this Agreement, the Corporate Secretary may require
the Optionee to furnish a written representation that he is
acquiring the shares for investment and not with a view to
distribution to the public. Such representations shall be
required in cases where, in the opinion of the Corporate
Secretary, they are necessary to enable the Company to comply
with the provisions of the Securities Act of 1933, and any
shareholder who gives such representation shall be released from
it at such a time as the shares to which it applies are
registered pursuant to the Securities Act of 1933.
(b) Listing and Regulatory Requirements. Each Option shall be
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subject to the further requirements that if at any time the
Committee shall determine in its discretion that the listing or
qualification of the shares of stock subject to such Option
under any securities exchange requirements or under any
applicable law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or
in connection with, the granting of such Option or the issue of
Shares thereunder, such Option may not be exercised in whole or
in part unless and until such listing, qualification, consent or
approval shall have been effected or obtained free of any
conditions not acceptable to the Committee.
14. Notices. Any notice, payment or communication required or
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permitted to be given by any provision of this Agreement shall be in writing and
shall be delivered personally or sent by certified mail, return receipt
requested, addressed as follows: if to the Company at Xxx Xxxxxxxxxx Xxxxxxx
Xxxxx, Xxxxxxxx, Xxxxxxx 00000, Attention: Corporate Secretary, if to Optionee,
at the address set forth on the signature page hereto. Each party may, from time
to time, by notice to the other party hereto, specify a new address for delivery
of notices to such party hereunder. Any such notice shall be deemed to be
delivered, given, and received for all purposes as of the date such notice is
received or properly mailed.
15. Binding Effect. Except as otherwise provided in this Agreement,
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every covenant, term, and provision of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legatees,
legal representatives, successors, transferees, and assigns.
16. Headings. Section and other headings contained in this Agreement
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are for reference purposes only and are not intended to describe, interpret,
define or limit the scope, event or intent of this Agreement or any provision
hereof.
17. Severability. Every provision of this Agreement is intended to
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be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
or legality of the remainder of this Agreement.
18. Governing Law. The laws of the state of Georgia shall govern the
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validity of this Agreement, the construction of its terms, and the
interpretation of the rights and duties of the parties hereto.
IN WITNESS WHEREOF, this Agreement is executed as of the 15th day of
January, 1997.
COMPANY:
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SCIENTIFIC-ATLANTA, INC.
By: /s/ Xxxxx X. Xxxxxx
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Its: Senior Vice President - Human Resources
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OPTIONEE:
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/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
OPTIONEE'S ADDRESS:
0000 Xxxxxx Xxxx Xxxxx
Xxxxx Xxxx, Xxxxxxx 00000
