Document:

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                                                                    EXHIBIT 10.1

                                 March 2, 2001

Mr. Kent A. Savage
54 St. Stephens School Road
Austin, Texas 78746

Dear Mr. Savage:

     The purpose of this letter is to set forth the terms and conditions of the
agreement (the "Agreement"), which we have reached in connection with the
termination of your employment with Netpliance, Inc. ("Netpliance"), the
termination or affirmation of certain agreements previously entered into between
you and Netpliance, and your engagement by Netpliance as an independent
consultant.  We feel that it is in the best interest of both yourself and
Netpliance if the termination of your employment is done under circumstances
that do not reflect adversely on either yourself or Netpliance.  Therefore, we
have agreed that you will resign your position at Netpliance as Vice President
of Sales and Marketing of the Office of the President under the terms and
conditions set forth herein.

     The Agreement embodied in this letter is a legally binding agreement, which
we have mutually reached in connection with the matters outlined herein.
Therefore, for and in good consideration of the mutual covenants and promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by you, both you and Netpliance
hereby agree as follows:

     1.   Resignation of Employment from Netpliance.  You hereby submit and
          -----------------------------------------
Netpliance hereby accepts your voluntary resignation as Vice President of Sales
and Marketing of the Office of the President and as an officer, agent, and
employee of Netpliance effective March 15, 2001 (the "Separation Date").
Accordingly, effective as of the Separation Date your employment with Netpliance
will be permanently and irrevocably terminated. Your participation in our 401k
plan and other benefit plans will end in accordance with the terms of such
plans. You will be paid all wages or compensation actually owed to you as of the
Separation Date, and Netpliance will pay you for any reasonable unreimbursed
business expenses, which remain outstanding as of the Separation Date. During
the Consulting Period described in Paragraph 3 below, you may be allowed to
participate in group health and dental coverage if permitted pursuant to the
provisions of the applicable group plan(s).

     2.   Employment Agreement.  Effective as of the Separation Date, you agree
          --------------------
that the Employment Agreement dated February 1, 1999 (the "Employment
Agreement") between you and Netpliance and all rights, duties and obligations
thereunder shall automatically and mutually terminate and cease to exist;
provided, however, you hereby reaffirm and agree to fully comply with all of the
terms, obligations, and conditions contained in Section 5 (relating to an
assignment of intellectual property rights), Section 6 (relating to confidential
information), Section 7 (relating to restrictive covenants) and Section 8
(relating to enforcement), which provisions shall survive
<PAGE>

Mr. Kent A. Savage
March 2, 2001
Page 2

the termination of your employment and shall remain in full force and effect in
accordance with their terms. You acknowledge that Netpliance is entitled to the
protections of the Employment Agreement regarding your activities after
termination of your employment with Netpliance. By signing this letter, you
affirm and acknowledge the existence and validity of such protections referenced
above and the conditions and restrictions contained therein, and further agree
to continue to fully abide by those conditions and restrictions pursuant to the
terms of this Agreement and the Employment Agreement. Section 1, Section 2,
Section 3 and Section 4 of the Employment Agreement is hereby expressly and
mutually terminated.

     3.   Consulting Relationship.  For the period beginning on the Separation
          -----------------------
Date and ending September 15, 2001 unless otherwise terminated pursuant to the
terms of this Agreement (the "Consulting Period") your relationship with
Netpliance will be solely that of an independent consultant (the "Consulting
Relationship") for the consideration provided for in this Agreement and upon the
following terms and conditions:

          (a)  Consulting Services.  During the Consulting Period, you agree to
               -------------------
     furnish to Netpliance advisory and consulting services related to the sale
     of our portal and back-end infrastructure and other related consulting
     services as based upon the direction of the Chairman of the Board of
     Directors of Netpliance (the "Consulting Services"). All Consulting
     Services will be performed in a timely, good and professional manner by
     you. You agree to provide Netpliance with Consulting Services requested by
     Netpliance from time to time in an amount of not more than 150 hours of
     actual services per month (the "Maximum Requirement"). You may be required
     to perform Consulting Services either in the United States or outside of
     the United States. Provided you do not violate the provisions of this
     Agreement or the provisions of the Employment Agreement referred to in
     Paragraph 2 above, you may provide employment and/or other consulting
     services to persons or parties other than Netpliance, provided, however,
     you must first obtain the prior written authorization of Netpliance to
     engage in such employment and/or consulting activities. Both you and
     Netpliance acknowledge and agree that at all times subsequent to the
     Separation Date that the relationship between the parties shall be solely
     that of an independent contractor and nothing in this Agreement or
     otherwise shall constitute you as an employee, agent or officer of
     Netpliance.

          (b)  Consulting Fees.  Netpliance will pay you a monthly gross
               ---------------
     consulting fee of $16,250.00 (the "Consulting Fee") during the Consulting
     Period in connection with your performance of Consulting Services.
     Netpliance will also pay you commissions equal to 4% of the net proceeds to
     Netpliance associated with sales of our portal and back-end infrastructure
     to third parties that are a direct result from significant efforts by you
     in performance the Consulting Services and consummated during the
     Consulting Period; provided, however, the aggregate amount of commissions,
     if any, to paid hereunder shall in no event exceed $1,000,000. Netpliance
     agrees to pay all reasonable and actual expenses incurred by you in the
     sole and direct performance of Consulting Services,
<PAGE>

Mr. Kent A. Savage
March 2, 2001
Page 3

     including but not limited to, travel expenses. Netpliance shall also
     provide you with office space similar to the space that it provides to its
     other consultants, which shall be an office other than your current office,
     and reasonable telephone, fax and internet services (but not secretarial
     support) in connection with your performance of Consulting Services,
     provided, however, all such expenses must be reasonably necessary, actual
     and approved in advance by Netpliance.

          (c)  Termination of Consulting Relationship.  Notwithstanding any
               --------------------------------------
     agreement to the contrary, unless extended by written agreement of the
     parties, the Consulting Period and all obligations of Netpliance pursuant
     to this Paragraph 3, including, without limitation, the obligation to pay
     the Consulting Fee, shall automatically terminate at the earlier of (1)
     September 15, 2001 or (2) an event giving rise for a termination for Cause
     of the Consulting Relationship. A termination for "Cause" of the Consulting
     Relationship shall include: (i) a willful and material failure or refusal
     by you to timely, properly and professionally perform Consulting Services
     pursuant to this Agreement; (ii) a breach or violation by you of any of the
     terms, covenants, or provisions of this Agreement, including, without
     limitation, the terms or provisions of the Employment Agreement (referred
     to in Paragraph 2 above) or your covenants and obligations under Paragraph
     5 of this Agreement; or (iii) any unlawful misconduct by you, including,
     without limitation, the commission of an act of fraud or embezzlement
     against Netpliance or the commission of a crime involving moral turpitude.

          (d)  Property Rights.  All documents or other tangible property
               ---------------
     relating in any way to the business of Netpliance which were conceived or
     generated by you or which came into your possession during the Consulting
     Period shall remain the property of Netpliance and you will return all such
     documents and tangible property to Netpliance at the end of the Consulting
     Relationship or at such earlier time as Netpliance may request. You further
     agree that all non-confidential property or equipment provided by
     Netpliance to you in the performance of Consulting Services under this
     Agreement will remain the property of Netpliance and you agree to return
     such property to Netpliance upon request. You further agree that all
     records of the accounts of customers, customer lists, business records and
     any other books, records, papers or documents relating in any manner
     whatsoever to Netpliance customers or the business of Netpliance, whether
     prepared by Netpliance or otherwise, coming into your possession during the
     Consulting Period, shall be the exclusive property of Netpliance regardless
     of by whom actually purchased, obtained or compiled. Likewise, all data,
     passwords, inventions, customer lists, software, patents, copyrights or
     business programs which may be or may have been developed, compiled,
     produced or arranged by Netpliance in connection with this Agreement or
     coming into your possession during the Consulting Relationship shall also
     remain the exclusive property of Netpliance.
<PAGE>

Mr. Kent A. Savage
March 2, 2001
Page 4

          (e)  Assignment.  You shall have the right to assign your obligation
               ----------
     to provide Consulting Services under this Agreement to any corporation or
     business entity wholly owned and operated by you which you hereafter
     establish for the performance of Consulting Services under this Agreement,
     so long as the Consulting Services continue to be provided solely and
     directly by you and you remain liable for all duties, obligations and
     liabilities hereunder.

     4.   Disclosure of Resignation.  With regard to third parties inquiries,
          -------------------------
Netpliance and you agree to disclose if necessary that you have elected to
pursue other opportunities outside of your employment with Netpliance.
Likewise, you agree not to discuss your resignation or disclose the terms of
this Agreement with any customers, agents, employees, stockholders or other
persons or entities associated with Netpliance or to any other persons or
entities unless and until authorized in writing by Netpliance.

     5.   Comments About Netpliance or You.  You represent and warrant that you
          --------------------------------
have not and will not make or provide any derogatory comments to any third party
regarding Netpliance, its management, or any prior or ongoing projects taking
place or otherwise. Netpliance agrees not to make or provide any derogatory
comments to any third party regarding you, and, consistent with its policies,
Netpliance will only provide dates of employment in response to third party job
reference inquires. Notwithstanding the foregoing, either party may disclose
factual information regarding the other party pursuant to any valid
administrative or judicial action, provided, however, that the party compelled
to disclose such information will attempt to maintain the confidentiality of
such information by asserting in such action any applicable privileges and
immediately after receiving notice of such action notifies the other party of
such action to give such other party the opportunity to seek legal remedies to
maintain the confidentiality of same.

     6.   Voluntary Severance Compensation.  In exchange for the covenants and
          --------------------------------
promises that you have made in this Agreement, including but not limited to your
relinquishment of employment rights and resignation of employment and status as
an officer and agent sand the Release of All Claims in Paragraph 7, Netpliance
also agrees to pay you severance compensation in the total net amount of
$1,000.00 within five (5) days of your written acceptance of this Agreement.
You expressly acknowledge that this severance compensation together with the
other representations and consideration paid and promised to you under this
Agreement is sufficient and adequate consideration for the Release of All Claims
in Paragraph 7.  Netpliance will deduct from the foregoing payment any
applicable income and employment taxes and other deductions as may be required
or permitted by law to be made from wage payments to employees.  You acknowledge
that you have no other claims for compensation, bonus or other incentive
payments other than those specified in this Paragraph 6.

     7.   Release of All Claims.  In exchange for the amounts and benefits
          ---------------------
provided to you under this Agreement (to which you are not entitled except
pursuant to this Agreement), except
<PAGE>

Mr. Kent A. Savage
March 2, 2001
Page 5

for a breach of the promises contained in this Agreement, you hereby forever
waive and release, and promise never to assert any claims, demands, or causes of
action of any kind or nature whatsoever, in law or equity, known or unknown,
direct or indirect, that you have, or might have in the future have, against
Netpliance and its predecessors, successors, subsidiaries, affiliates,
associates, owners, divisions, representatives, related entities, officers,
directors, stockholders, partners, insurers, employee benefit plans (and their
trustees, administrators and other fiduciaries), attorneys, agents and employees
(collectively and singularly referred to in this Agreement as "Netpliance"),
including, without limitation, those arising from or related to your employment
with Netpliance, the termination thereof, and/or your status as an officer,
option holder, owner, and any other relationship, and whether arising from tort,
contract, common law or statute. You understand that the claims, demands, causes
of action, liabilities and obligations you are waiving, releasing and promising
not to assert include, but are not limited to, claims arising under federal,
state and local statutory, regulatory, and common law, including but not limited
to claims under Texas Labor Code, the Texas Commission on Human Rights Act, the
Texas Payday Law, Title VII of the Civil Rights Act of 1964, as amended, 42
U.S.C. (S)(S) 1981, 1983, 1985, 1986, the Age Discrimination in Employment Act,
the Older Worker Benefit Protection Act, the Americans with Disabilities Act,
the Rehabilitation Act of 1973, the Employee Retirement Income and Security Act,
the Family and Medical Leave Act, the Fair Labor Standards Act, the Equal Pay
Act, the Consolidated Omnibus Budget Reconciliation Act, the Worker Adjustment
and Retraining Notification Act, all as amended, any and all discrimination or
civil rights acts, and any and all other fair employment practices laws. This
release and discharge also includes but is not limited to all existing, future,
known and unknown claims, obligations, demands, liabilities and causes of action
under any other federal, state or local law, regulation or ordinance and all
claims at common law, including without limitation negligence, contract,
indemnity, or any tort claims, including without limitations claims for
harassment, discrimination, defamation, outrage, intentional or negligent
infliction of emotional distress, assault, battery, retaliation, invasion of
privacy, wrongful or retaliatory discharge, constructive discharge, breach of
contract, fraud, misrepresentation and any other statutory, regulatory, or
common law claim including all claims for wages or benefits, back pay, front
pay, reinstatement, damages, liquidated damages, exemplary and punitive damages,
injunctive relief, and costs or attorneys' fees. Furthermore, you agree and
understand that the claims, causes of action, demands, obligations, and
liabilities you are waiving, releasing and promising never to assert include
claims that you now know or have reason to know exist, as well as those that you
do not presently have any reason to know, believe or suspect. You represent and
warrant that you have not filed any complaint with any local, state or federal
court or agency against Netpliance, and that you shall have no right whatsoever
to file any complaint with any local, state or federal court or agency for
claims released under this Agreement. You also represent that you have not sold,
assigned, transferred, conveyed or otherwise disposed of any claim, demand,
cause of action, obligation, damage or liability covered by this Release.
Finally, you acknowledge that you have been given the opportunity to seek legal
counsel of your own choosing before executing this Agreement. In exchange for
the promises and benefits provided to it under this Agreement, Netpliance waives
and releases, and promises never to assert any known claims of any kind or
nature whatsoever, in law or equity, direct or
<PAGE>

Mr. Kent A. Savage
March 2, 2001
Page 6

indirect, arising as of the date of this Agreement that Netpliance has against
you arising from or related to your employment with Netpliance and/or the
termination thereof. Notwithstanding the foregoing, nothing contained herein
shall release either party from their obligations under this Agreement or from
the enforcement of its terms.

     8.   Enforcement and Representations.  Each party acknowledges that the
          -------------------------------
restrictions and agreements contained in this Agreement are necessary for the
protection of the other party and that any breach of any of the provisions of
this Agreement by a party will cause the other party irreparable damages for
which the other party could not be adequately or reasonably compensated for in
monetary damages.  Accordingly, each party consents to the issuance of an
injunction in favor of the other party, where a party has acted upon reasonable
information concerning the potential breach, to enjoin the breach of any
covenant of the other party contained in this Agreement by any court of
competent jurisdiction.  Nothing contained in this Paragraph shall be in
limitation of any other rights or remedies that a party may have at law or in
equity should the other party breach the terms of this Agreement.  You also
represent and warrant to Netpliance, as of the date hereof, that the execution,
delivery and performance by you of the terms and provisions of this Agreement do
not require the consent of any spouse or other person which has not already been
obtained and that this Agreement, including without limitation the Release of
All Claims in Paragraph 7, constitutes a legal, valid and binding obligation of
you and is enforceable against you in accordance with its terms.

     9.   Governing Law; Venue and Severability.  You and Netpliance agree that
          -------------------------------------
Texas law shall govern the construction, interpretation and enforcement of this
Agreement, and the parties agree that venue for any action brought to enforce
this Agreement shall be a court of competent jurisdiction in the County of
Travis, State of Texas. If any provision, or portion thereof, of this Agreement
shall for any reason be held to be invalid or unenforceable or to be contrary to
public policy or any law, then the remainder of this Agreement shall be affected
thereby. If at any time you claim that any portion of this Agreement is
unenforceable or invalid, you must immediately tender back all consideration
paid to you pursuant to this Agreement, and provide written notice of the basis
for your claim.

     10.  Terms Confidential.  Unless required by applicable law, each party
          ------------------
agrees to keep the terms and conditions of this Agreement confidential and
further agrees to not disclose its terms to any third party, provided, however,
that the terms and conditions contained herein may be disclosed, as necessary,
to each party's attorneys, accountants or financial advisers; provided, that
such parties will be bound to the obligations of confidentiality contained
herein.

     11.  Compliance with Securities Laws.  You agree to comply with any
          -------------------------------
applicable federal and state securities laws including, without limitation,
compliance with any applicable reporting requirements under Section 16 of the
Securities Exchange Act of 1934, as amended, for a period of six (6) months
after the Separation Date. You should consult with an attorney of your choice
after the Separation Date to determine any continuing obligations you may have
with
<PAGE>

Mr. Kent A. Savage
March 2, 2001
Page 7

respect to the federal and state securities laws including applicable insider
trading regulations and Section 16 reporting obligations.

     12.  No Admission of Wrongdoing.  It is understood and agreed that neither
          --------------------------
this Agreement, nor any provision of the Agreement, shall be deemed to be,
constitute or should be construed as, an admission of liability or wrongdoing by
you or by Netpliance.

     13.  Indemnity Agreement.  Netpliance and you are parties to that certain
          -------------------
Indemnity Agreement dated March 17, 2000 (the "Indemnity Agreement") which
agreement shall remain unaffected by this Agreement and is hereby ratified and
continued by you and Netpliance and shall remain in full force and effect in
accordance with its terms.

     14.  Entire Agreement.  You and Netpliance agree that no promises or
          ----------------
representations were or are made which do not appear written in this Agreement,
the Employment Agreement, or the Indemnity Agreement; that this Agreement, the
Employment Agreement, and the Indemnity Agreement contains the voluntary and
entire agreement between us and supersedes any and all previous verbal or
written promises, representations, agreements, negotiations and discussions
between us; that this is a final and binding settlement agreement; that neither
of us is relying on any representation or promise that does not appear in this
Agreement, the Employment Agreement, or the Indemnity Agreement; that this
Agreement is the result of negotiations between us after the opportunity to
consult with counsel of our own respective choosing; and that this Agreement
cannot be terminated or changed except by a writing signed by you and a duly
authorized representative of Netpliance.

     If this letter adequately outlines the terms and conditions of the
Agreement we have reached in regard to the matters contained therein, we ask
that you please signify your acceptance by executing a counterpart original of
this letter where indicated below by 5:00 P.M. central time on March 5, 2001.

                                       Sincerely,

                                       NETPLIANCE, INC.

                                       By: /s/ John F. McHale
                                           ------------------
                                           John F. McHale
                                           Chairman and CEO
<PAGE>

Mr. Kent A. Savage
March 2, 2001
Page 8

Agreed and Accepted this 2nd day of March, 2001:

/s/ Kent A. Savage
------------------
Kent A. Savage<PAGE>

                                                                    Exhibit 10.1

                           SCIENTIFIC-ATLANTA, INC.
                            SUPPLEMENTAL EXECUTIVE
                                RETIREMENT PLAN

                                       Amended and Restated on February 18, 2001
<PAGE>

                           SCIENTIFIC-ATLANTA, INC.
                    SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                   PREAMBLE
                                   --------

     This Scientific-Atlanta, Inc. Supplemental Executive Retirement Plan is
designed to provide supplemental retirement benefits to certain key executive
employees of Scientific-Atlanta, Inc. and its subsidiaries (the "Company").
This Plan is not intended to qualify under Section 401(a) of the Internal
Revenue Code, but is an unfunded plan maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees.  The Plan constitutes an unfunded, unsecured contractual
obligation of the Company to pay certain retirement benefits to Participants out
of the general assets of the Company.

                                   ARTICLE I

                                  DEFINITIONS

     For purposes of this Plan, each term defined below, when capitalized, shall
have the meaning specified below:

     1.1  "Accrue" shall mean the rate at which the benefits under this Plan are
credited to a Participant.  Benefits which Accrue under this Plan do not Vest in
the employee except as provided in Section 3.3 and Articles VII and VIII hereof.

     1.2  "Accrued Benefit" shall mean that percentage of a Participant's Final
Average Earnings which has Accrued pursuant to Section 3 hereof, as determined
from time to time.  Accrued Benefits are not earned by or payable to a
Participant unless such Benefits have Vested as provided in Section 3.3 and
Articles VII and VIII hereof.

     1.3  "Cause" shall have the meaning set forth in Section 1.17.

     1.4  "Change in Control" shall have the meaning set forth in Section 8.4
hereof.

     1.5  "Committee" shall mean the Human Resources and Compensation Committee
of the Board of Directors of Scientific-Atlanta, Inc.

     1.6  "Company" shall mean Scientific-Atlanta, Inc. and any of its majority-
owned subsidiaries.

     1.7  "Compensation" shall mean a Participant's base salary and any bonus
payments received by the Participant pursuant to the Scientific-Atlanta, Inc.
Annual Incentive Plan and the Senior Officer Annual Incentive Plan.
Compensation shall include any amounts deferred under

                                       1
<PAGE>

the Scientific-Atlanta, Inc. Executive Deferred Compensation Plan. The year that
such deferred amounts will be included in compensation for purposes of this Plan
will be the year in which the amount would have been paid but for the deferral
election.

     1.8  "Continuous Service" shall mean the period of time during which a
Participant is continuously employed by the Company.  A Participant shall be
credited with a month of Continuous Service if he or she is employed by the
Company on any day during a calendar month.  In addition, if an employee is re-
employed by the Company after a break in service, the employee's prior service
shall be treated as Continuous Service if the break in service was less than
twelve (12) months or if service prior to the break was of a longer duration
than the break in service.

     1.9  "Early Retirement Date" shall mean either (a) the first day of the
calendar month in which a Participant is at least fifty-five (55) years of age
and has completed ten (10) years of Continuous Service, or (b) the first day of
the calendar month in which the Participant is at least sixty (60) years of age,
regardless of years of service.

     1.10 "Eligible Employee" shall  have the meaning set forth in Section 2.1

     1.11 (a)  "Final Average Earnings" shall mean the average annual
Compensation of a Participant for each of the three (3) calendar years in which
such Compensation was the highest during each of the ten (10) calendar years
preceding and including the calendar year in which the date of the Participant's
retirement, death or termination of employment occurs.

          (b)  If a Change of Control occurs (as defined in Article VIII),
the following special rules shall apply to the calculation of "Final Average
Earnings," but only if using these special rules results in a benefit to the
Participant which is greater than the benefit calculated using the regular
calculation set forth in 1.11(a) above.

          (i)  Annual Compensation for any calendar year during which the
Participant was employed for less than the full calendar year shall be the
greater of:

               (A)  the Participant's actual Compensation (as determined under
Section 1.7) for such partial calendar year of employment, or

               (B)  the Participant's annualized base salary and target
incentive compensation, as determined by the Company, that is in effect during
such partial calendar year of employment.

          (ii) For a Participant who has been re-employed for less than
three (3) full calendar years after a break in service, Compensation shall be
computed using the annual Compensation for only the full calendar years and
partial calendar years (calculated in accordance with subsection (a) above)
since re-employment, unless inclusion of Compensation for one or more full or
partial calendar years from the period of prior employment that fall within the
ten (10) calendar years preceding and including the calendar year in which the
date of the

                                       2
<PAGE>

Participant's retirement, death or termination of employment occurs would result
in a higher Final Average Earnings.

     1.12 "Normal Retirement Date" shall mean the first day of the calendar
month in which a Participant is at least sixty-five (65) years of age and has
completed ten (10) years of Continuous Service.

     1.13 "Participant" shall mean any Eligible Employee selected to participate
in the Plan pursuant to Section 2.2 hereof.

     1.14 "Plan" shall mean the Scientific-Atlanta, Inc. Supplemental Executive
Retirement Plan, as it may be amended from time to time.

     1.15 "Reduced Retirement Benefit" shall have the meaning set forth in
Section 4.2.

     1.16 "Reduced Service Period" shall mean, in the case of a Participant who
is first employed by the Company after the first day of the month in which the
Participant attains forty-five (45) years of age, the period between the first
day of the calendar month during which the Participant's employment commences
and the first day of the calendar month during which the Participant would
attain age sixty-five (65), provided, however, that if the Participant is fifty-
                            --------  -------
five years of age or older at the date of his employment, the Reduced Service
Period shall mean the ten (10) year period commencing on the first day of the
calendar month during which the Participant's employment commences.

     1.17 "retire" or "retirement" shall include any voluntary termination of
the Participant's employment by the Participant or any involuntary termination
of the Participant's employment by the Company without "Cause."  For purposes of
this Plan, a termination for "Cause" is a termination evidenced by a resolution
adopted in good faith by two-thirds (2/3) of the Board of Directors of the
Company that the Participant (i) has been convicted of a felony, or (ii) has
engaged in conduct which constitutes (A) willful neglect in carrying out his
duties to the Company or (B) willful misconduct, in either case which is
demonstrably and materially injurious to the Company, monetarily or otherwise;
provided, however, that no termination of the Participant's employment shall be
--------  -------
for Cause as set forth in clause (ii) above until (x) there shall have been
delivered to the Participant a copy of the written notice setting forth that the
Participant was guilty of the conduct set forth in clause (ii) and specifying
the particulars thereof in detail, and (y) the Participant shall have been
provided an opportunity to be heard by the Board (with the assistance of the
Participant's counsel if the Participant so desires).  No act, or failure to
act, on the Participant's part shall be considered "willful" unless he has
acted, or failed to act, with an absence of good faith and without a reasonable
belief that this action or failure to act was in the best interest of the
Company.  Notwithstanding anything contained in this Plan to the contrary, no
benefits shall be paid under this Plan to any Participant when such
Participant's employment is terminated by the Company for Cause.

                                       3
<PAGE>

     1.18 "Vest" shall mean that the benefits Accrued under this Plan for a
Participant are payable to the Participant at the times and in the amounts
provided for herein.  Benefits under this Plan Vest only as provided in Section
3.3 and Articles VII and VIII hereof.

                                  ARTICLE II

                                 PARTICIPATION

     2.1  Eligible Employees.
          ------------------

          The class of eligible employees from which Participants may be
selected is limited to officers, both elected and appointed, and  other key
executives of the Company ("Eligible Employees").

     2.2  Selection of Participants.
          -------------------------

          From time to time, the Committee shall select from among the class of
Eligible Employees one or more individuals for admission to the Plan.  The
Committee's determinations shall be made in its sole discretion and shall be
conclusive and binding on all persons.  The Committee shall notify in writing
each Participant of his or her selection as a Participant.

                                  ARTICLE III

                         BENEFIT ACCRUALS AND VESTING

     3.1  General.
          -------

          Except as provided in Sections 3.2 and 4.2 hereof, benefits shall
Accrue under this Plan at an annual rate of three and one-half percent (3 1/2%)
of Final Average Earnings for each of the Participant's first ten (10) years (or
partial years computed on a monthly basis (expressed in decimal form)) of
Continuous Service and at an annual rate of one and one-half percent (1 1/2%) of
Final Average Earnings for each of the next ten (10) years (or partial years
computed on a monthly basis (expressed in decimal form)) of Continuous Service.
The maximum Accrued Benefit to which a Participant may be entitled under the
Plan shall be equal to fifty percent (50%) of the Participant's Final Average
Earnings.

     3.2  Reduced Service Period.
          ----------------------

          In the event a Participant is first employed by the Company after the
first day of the month in which the Participant attains the age of forty-five
(45) years, benefits shall Accrue under this Plan over the Participant's Reduced
Service Period as follows:

          (a) For each full or partial year of Continuous Service during the
first half of the Reduced Service Period, benefits shall Accrue under this Plan
at an annual rate determined by dividing thirty-five percent (35%) of Final
Average Earnings by one-half (1/2) of the number of

                                       4
<PAGE>

years (including any partial year computed on a monthly basis (expressed in
decimal form)) contained in the Reduced Service Period; and

          (b) For each full or partial year of Continuous Service during the
second half of the Reduced Service Period, benefits shall Accrue under this Plan
at an annual rate determined by dividing fifteen percent (15%) of Final Average
Earnings by one-half (1/2) of the number of years (including any partial year
computed on a monthly basis (expressed in decimal form)) contained in the
Reduced Service Period.

     3.3  Vesting.
          -------

          A Participant shall Vest in his or her Accrued Benefit hereunder on
the earlier of the completion of ten (10) years of Continuous Service or the
attainment of age sixty (60), regardless of service, provided, however, that an
Eligible Employee who is selected by the Committee to be a Participant in the
Plan on or after August 1, 1999, and who has been re-employed after having a
break in service, shall not Vest in his or her Accrued Benefit if he or she
either voluntarily terminates employment or is involuntarily terminated for
Cause within three (3) years after being re-employed, unless such Participant
has attained age sixty (60) prior to voluntary termination. Notwithstanding the
foregoing, nothing in this Article 3.3 shall override or supercede the vesting
provisions set forth in Articles VII and VIII hereof. Also notwithstanding the
foregoing, a Participant who (a) terminates employment with the Company prior to
completing ten (10) years of Continuous Service and (b) has not vested in any of
his or her Accrued Benefit as a result of a Change in Control, shall be vested
in an amount equal to the benefit he or she would be entitled to receive if he
or she had participated in the Scientific-Atlanta, Inc. Restoration Retirement
Plan during the period he or she was a Participant in this Plan.

                                  ARTICLE IV

                              RETIREMENT BENEFITS

     4.1  Normal Retirement.
          ------------------

          A Participant who retires from the Company on or after his or her
Normal Retirement Date shall be entitled to receive an annual retirement benefit
(the "Normal Retirement Benefit") for life, equal to the excess of:

          (a)  the Participant's Accrued Benefits determined under Sections 3.1
or 3.2 hereof; over

          (b)  the sum of:

               (i) the annual retirement benefits payable to the Participant as
a life annuity pursuant to the defined benefit retirement plan of the Company
(as such plan might be

                                       5
<PAGE>

amended, supplemented or superseded from time to time) which is the actuarial
equivalent (as defined in Section 5.3) of such Participant's Pension Equity
Account as defined in such plan;

               (ii)  the annual retirement benefits payable to the Participant
pursuant to any employer-funded defined benefit plan maintained by a prior
employer of the Participant, assuming that such benefits are payable in the form
of a single life annuity for the life of the Participant; and

               (iii) the Participant's annual primary insurance amount under the
Federal Social Security Act as in effect on the Participant's Normal Retirement
Date or, if applicable, his date of death.  In determining such amount under
Section 4.2 below for a Participant who severs from service prior to his Normal
Retirement Date, it shall be assumed that the Participant will continue to
receive, until his Normal Retirement Date, annual compensation (which would be
treated as wages for purposes of the Federal Social Security Act) at the same
rate which is in effect immediately prior to his termination of employment.

     4.2  Early Retirement.
          ----------------

          (a)  A Participant who retires from the Company on or after his or her
Early Retirement Date but prior to his or her Normal Retirement Date shall be
entitled to receive his or her Normal Retirement Benefit commencing on the date
of his or her retirement; provided, however, that such date of commencement may,
                          --------  -------
at the election of the Participant pursuant to Section 4.3 (or, if the
Participant has not made an election, at the election of the Committee), be
deferred to the date that the Participant attains age sixty (60).  If the
Participant retires prior to age sixty (60) and begins to receive benefits under
this Plan prior to age sixty (60), such Participant shall be entitled to receive
only a Reduced Retirement Benefit (determined as hereinafter provided)
commencing at his or her date of retirement. "Reduced Retirement Benefit" shall
mean the amount equal to that percentage of the Participant's Normal Retirement
Benefit determined by subtracting from one hundred percent (100%) the aggregate
of 6.67% for each year (prorated over any partial year based on completed months
of service) between the Participant's retirement date and the date on which the
Participant would reach age sixty (60). If a Participant retires prior to age
sixty (60) but does not begin receiving benefits under this Plan until he or she
is at least age sixty (60), there shall be no reduction in the Participant's
Normal Retirement Benefit. For purposes of determining the amount of the Normal
Retirement Benefit or the Reduced Retirement Benefit, as the case may be, for a
Participant who retires after August 1, 1996, and prior to age sixty-five (65),
each of the offset amounts under paragraphs (i), (ii) and (iii) of Section
4.1(b) shall be calculated by: (i) determining the value of the projected amount
such Participant would receive if he or she began receiving the benefits
described in such paragraphs beginning on the earliest date such benefits become
payable and (ii) converting this amount to an actuarially equivalent (determined
in accordance with Section 5.3) single life annuity beginning on the date such
Participant begins receiving benefits under this Plan.

          (b)  If a Participant retires prior to his or her Early Retirement
Date, the Participant shall be entitled to receive any of his or her  Normal
Retirement Benefit which is then Vested.  Such Normal Retirement Benefit shall
be payable, at the election of the Participant

                                       6
<PAGE>

pursuant to Section 4.3 (or, if the Participant has not made an election, at the
election of the Committee), as follows: (1) beginning at the time the
Participant becomes age fifty-five (55) (or at Participant's current age if he
is age fifty-five (55) or older), with a Reduced Retirement Benefit determined
as provided in subparagraph (a) above, or (2) beginning at the time the
Participant becomes age sixty (60), with no reduction in the Normal Retirement
Benefit, or (3) if Participant is under fifty-five (55) years of age when he or
she retires, as a single lump sum payment at the time of retirement equal to the
present value of his or her Normal Retirement Benefit, determined using the
actuarial equivalent, as defined in Section 5.3.

     4.3  Elections Related to Early Retirement.
          -------------------------------------

          For a Participant retiring after his Early Retirement Date but prior
to his Normal Retirement Date pursuant to Section 4.2(a), he may elect, by a
written election delivered to the Corporate Secretary of the Company at least
thirty (30) days prior to his retirement, whether he wishes to receive: (1) a
Reduced Retirement Benefit which will begin being paid immediately pursuant to
the payment terms of Article V (not applicable if Participant is age sixty (60)
or older),  or (2) a Normal Retirement Benefit that will not begin being paid
until age sixty (60) (or his current age if he is age sixty (60) or older).  For
a Participant retiring prior to his Early Retirement Date pursuant to Section
4.2(b), he may elect, by a written election delivered to the Corporate Secretary
of the Company at least thirty (30) days prior to his retirement, whether he
wishes to receive:  (1) a Reduced Retirement Benefit which will become payable,
per the payment terms of Article V, at age fifty-five (55) (or his current age
if he is age fifty-five (55) or older), or (2) a Normal Retirement Benefit which
will become payable, per the payment terms of Article V, at age sixty (60), or
(3) if a Participant is under age fifty-five (55), the actuarial equivalent,
determined in accordance with Section 5.3, of his Normal Retirement Benefit,
paid as a lump sum payment.  For each Participant electing either option (1) or
option (2) above, such Participant may elect an optional form of payment under
the terms of Section 5.4.

     4.4  Election to Receive Insurance Benefit.
          -------------------------------------

          In lieu of receiving all or a portion of the retirement benefits
provided under this Plan, a Participant may elect to receive an insurance
benefit on the terms and conditions established by the Committee, which terms
and conditions shall be set forth in an insurance agreement executed by such
Participant and the Company.  In the event that a Participant elects to receive
an insurance benefit and forfeit all or a portion of the retirement benefits
provided under this Plan, none of the provisions of this Plan shall apply to the
insurance benefit, but the provisions of this Plan will continue to apply to the
portion, if any, of the Participant's retirement benefits which the Participant
did not forfeit in exchange for the insurance benefit.

                                       7
<PAGE>

                                   ARTICLE V

                                FORM OF PAYMENT

     5.1  Normal Form of Payment.
          ----------------------

          Unless an optional form of payment is elected by the Participant in
accordance with Section 5.4 (or by the Committee in accordance with Section 4.2
or Section 5.2 hereof), all retirement benefits payable pursuant to this Plan
will be paid in the form of a single life annuity, payable monthly, for the life
of the Participant.  Except as otherwise provided in this Plan, the first
monthly payment shall be made on the first day of the calendar month following
the Participant's retirement date.

     5.2  Other Forms of Payment.
          ----------------------

          Each Participant may elect, pursuant to Section 5.4, to receive
payment of his retirement benefits via one of the following optional forms of
payment, rather than via the form of payment described in Section 5.1:

          (a) A one hundred percent (100%) joint and survivor annuity, pursuant
to which an annuity is payable for the life of the Participant with a survivor's
annuity for the life of the Participant's spouse, which annuity is equal to one
hundred percent (100%) of the amount of the annuity payable during the joint
lives of the Participant and his or her spouse.

          (b) A fifty percent (50%) joint and survivor annuity, pursuant to
which an annuity is payable for the life of the  Participant with a survivor's
annuity for the life of the  Participant's spouse, which annuity is equal to
fifty percent (50%) of the amount of the annuity payable during the joint lives
of the  Participant and his or her spouse.

          (c) A ten (10) year certain installment payment, pursuant to which a
fixed monthly benefit is payable to the Participant for the lesser of ten (10)
years or the life of the  Participant, with the continuation of the same benefit
to the Participant's designated beneficiary for any remaining portion of the ten
(10) year certain period if the Participant dies prior to the end of such
period.

          (d) A five (5) year certain installment payment, pursuant to which a
fixed monthly benefit is payable to the  Participant for the lesser of five (5)
years or the life of the  Participant, with the continuation of the same benefit
to the Participant's designated beneficiary for any remaining portion of the
five (5) year certain period if the Participant dies prior to the end of such
period.

          (e)  A single lump sum payment.

          If a Participant does not make a timely election to receive payment of
his retirement benefits via one of the optional forms of payment described in
Subsections (a) through

                                       8
<PAGE>

(e) above, the Committee may elect one of the above-described optional forms of
payment for such Participant, but only with his written consent.

     5.3  Actuarial Equivalent.
          --------------------

          Any optional form of payment described in Section 5.2 shall be the
actuarial equivalent of the normal form of payment specified in Section 5.1
hereof.  All determinations of actuarial equivalency will be based on the 1983
Unloaded Group Annuity Mortality Table weighted fifty percent (50%) male and an
interest rate of eight percent (8.0%). The lump sum amount will equal the
present value of future payments under this Plan, assuming payment of benefits
commenced immediately (or age fifty-five (55) for a Vested termination on or
before the Participant's 55th birthday).

     5.4  Election of Form of Payment.
          ----------------------------

          If a Participant does not make a written election to the contrary at
least thirty (30) days prior to his retirement, such Participant's retirement
benefits under this Plan shall be payable in the form of a single life annuity,
paid pursuant to the terms of Section 5.1, unless the Committee (with the
consent of such Participant) elects to pay the retirement benefits pursuant to
one of the other forms of payment set forth in Section 5.2.  If a Participant
makes a written election at least thirty (30) days prior to his retirement, he
may elect one of the forms of payment described in Sections 5.2(a) through
5.2(e), and the Committee must comply with such payment election.  Participant
may modify his election at any time by making another written election, provided
such written election is received by the Company's Corporate Secretary at least
thirty (30) days prior to his retirement.  For a written election to be validly
made, Participant must deliver such a written election to the Corporate
Secretary of the Company and such election shall be deemed made on the date on
which the Corporate Secretary receives it.

                                  ARTICLE VI

                          SPOUSAL AND ESTATE BENEFIT

     In the event a Participant who is Vested shall die while actively employed,
or after his or her Early Retirement Date but prior to the commencement of
payment of retirement benefits, the Participant shall be deemed to have retired
for purposes of this Plan on the later of (i) the day immediately preceding his
or her death, or (ii) the first day of the first calendar month thereafter in
which the Participant would have attained age fifty-five (55), and the
Participant's Beneficiary (as hereinafter defined) shall be entitled to a
benefit equal to fifty percent (50%) of the retirement benefit the Participant
would have received if he or she had actually retired on such deemed retirement
date.  If the Participant has a surviving spouse, then the Participant's
Beneficiary shall be such Participant's surviving spouse and such benefit shall
be payable in the form of a single life annuity for the life of the surviving
spouse. If the Participant does not have a surviving spouse, then the
Participant's Beneficiary shall be such Participant's estate and such benefit
shall be payable in the form of a single lump sum payment equal to the present
value of such benefit, determined using the actuarial equivalent, as defined in
Section 5.3.

                                       9
<PAGE>

                                  ARTICLE VII

                                  DISABILITY

     In the event a Participant becomes disabled and is eligible for benefits
under the Scientific-Atlanta, Inc. Long Term Disability Plan, such Participant
shall continue to receive credit, for Vesting purposes only, toward the
Participant's years of Continuous Service during the period of such disability.

                                 ARTICLE VIII

                               CHANGE IN CONTROL

     8.1  Immediate Vesting and Continued Vesting.
          ---------------------------------------

          In the event of a Change in Control of the Company, a Participant
shall be immediately Vested in his Accrued Benefits hereunder as of the date of
such Change in Control.  Participant also shall be automatically vested in any
Accrued Benefits that are accrued after a Change in Control, regardless of the
terms of Section 3.3.

     8.2  Termination Following Change in Control.
          ---------------------------------------

          If a Participant's employment with the Company is terminated by the
Company or by the Participant following a Change in Control for any reason other
than Cause, the Participant shall receive retirement benefits in accordance with
the terms of Articles III, IV and V of this Plan.

     8.3  Continuation of the Plan
          ------------------------

          For  a period of two (2) years following a Change in Control, the Plan
shall not be terminated or amended in any way nor shall the manner in which the
Plan is administered be changed in a way that adversely affects the level of
retirement benefits received by a Participant under the Plan.

     8.4  Definition of Change in Control.
          -------------------------------

          For purposes of this Plan, a Change in Control shall mean 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 Securities
Exchange Act of 1934, as amended (the "1934 Act")) of "Beneficial Ownership"
(within the meaning of Rule 13d-3 promulgated under the 1934 Act) of twenty
percent (20%) or more of the combined voting power

                                       10
<PAGE>

of the Company's then outstanding voting securities (the "Voting Securities");
provided, however, that for purposes of this Section 8.4, 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 (as defined
below)  cease for any reason to constitute at least two-thirds (2/3) of the
Board.  The "Incumbent Board" shall include the individuals who as of August 20,
1990, are members of the Board and any individual becoming a director subsequent
to August 20, 1990, whose election, or nomination for election, by the Company
stockholders was approved by a vote of at least two-thirds (2/3) 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 (2) 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 1934 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; or

          (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 eight
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 the foregoing, 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 the foregoing, 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 acquisition, by reducing the number of Voting Securities outstanding,
increases the proportional number of shares Beneficially Owned by the Subject
Person, provided that if, after a Change in Control would occur (but for
        --------

                                       11
<PAGE>

the operation of this sentence) as a result of such 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.

                                  ARTICLE IX

                              PLAN ADMINISTRATION

     9.1  Committee.
          ---------

          This Plan and all matters related to it shall be administered by the
Committee. The Committee shall have the authority to interpret the provisions
of this Plan and to resolve all questions arising in the administration,
interpretation and application of this Plan.  Any such determination by the
Committee shall be conclusive and binding on all persons.

     9.2  Claim Procedures.
          ----------------

          Any Participant claiming a benefit, or requesting an interpretation,
any information, or a ruling under this Plan, shall present the request, in
writing, to the Committee, which shall respond in writing within thirty (30)
days from the date on which it receives the claim or request.

                                   ARTICLE X

                                 MISCELLANEOUS

     10.1 Termination or Amendment of the Plan.
          ------------------------------------

          Except as provided in Section 8.3 hereof, the Committee may, at any
time and from time to time, modify, amend, suspend or terminate the Plan in any
respect; provided, however, that any modification, amendment, suspension, or
         --------  -------
termination of the Plan shall not reduce or otherwise adversely affect any
Participant's Vested rights under any terms, provisions or conditions of the
Plan on the date of any modification, amendment, suspension or termination,
without the consent of the Participant.

     10.2 Non-Assignability.
          -----------------

          No benefit payable pursuant to this Plan, nor any other right under
this Plan, shall be subject to anticipation, alienation, sale, assignment,
pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell,
assign, pledge, encumber or charge the same shall be void and shall not be
recognized or given effect by the Company.

                                       12
<PAGE>

     10.3 No Right to Employment.
          ----------------------

          Nothing in the Plan shall confer upon any Participant the right to
continue in the employment of the Company nor does participating in the Plan
obligate the Participant to continue in the employ of the Company.

     10.4 Effective Date.
          --------------

          The Plan became effective on June 21, 1993, and Participants may be
designated at any time on and after that date.

     10.5 Governing Law.
          -------------

          This Plan is made in accordance with and shall be governed in all
respects by the laws of the state of Georgia, to the extent not preempted by
federal law.

          The Company has caused the following officers to execute this Plan to
evidence that this Plan, as amended and restated by the Board on February 18,
2001, accurately reflects the Plan approved by the Board.

                                        Scientific-Atlanta, Inc.

                                        By: /s/ Brian C. Koenig
                                            -------------------------------
                                            Brian C. Koenig
                                            Senior Vice President-
                                            Human Resources

                                        By: /s/ William E. Eason, Jr.
                                            -------------------------------
                                            William E. Eason, Jr.
                                            Senior Vice President,
                                            General Counsel &
                                            Corporate Secretary

                                       13

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