1999 TELLABS, INC.
STOCK BONUS PLAN
1. INTRODUCTION
1.2 Certain Definitions
"Board" shall mean the Board of Directors of Tellabs.
"Bonus Stock" shall mean shares of Common Stock awarded under the Plan.
"Bonus Stock Award" shall mean an award to an eligible employee of a right to receive Bonus Stock under the Plan.
"Cause" shall mean any act of dishonesty, commission of an indictable criminal offense, activities harmful to the reputation of Tellabs or a Subsidiary, the refusal to perform or the substantial disregard of duties properly assigned or a significant violation of any legal duty of loyalty to Tellabs or a Subsidiary, as determined by the Committee in its sole discretion.
"Committee" shall mean the Compensation Committee of the Board of Tellabs or any successor Committee thereto.
"Common Stock" means the common stock of Tellabs.
"Disability" shall mean disability as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended from time to time or any successor thereto or as determined by the Committee in its sole discretion.
"Fair Market Value" shall mean the average of the high and low transaction prices of a share of Common Stock as reported in the National Association of Securities Dealers Automated Quotation National Market System ("NASDAQNMS") on the date as of which such value is being determined, or, if the Common Stock is not listed on the NASDAQNMS, the average of the high and low transaction prices of a share of Common Stock on the principal national stock exchange on which the Common Stock is traded on the date as of which such value is being determined, or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported; provided, however, that if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or method as the Committee, in the good faith exercise of its discretion, shall at such time deem appropriate.
1.3 Administration
This Plan shall be administered by the Committee. The Committee shall, subject to the
terms of this Plan, interpret this Plan and the application thereof, establish rules and
regulations it deems necessary or desirable for the administration of this Plan. All such
interpretations, rules and regulations shall be conclusive and binding on all parties.
The Committee may delegate some or all of its power and authority hereunder to the President and Chief Executive Officer or other executive officer of Tellabs or a Subsidiary as the Committee deems appropriate.
1.4 Eligibility
Participants eligible to participate in this Plan shall consist of employees of,
individuals accepting employment with and other individuals providing services to (as
determined by the Board or the Committee) Tellabs or one of its Subsidiaries, provided
however, that in no event shall any person who is an executive officer (other than in
connection with the hiring of such officer) or member of the Tellabs Board be eligible to
participate in this Plan. No other persons shall be eligible to participate in this
Plan.
2. BONUS STOCK AWARDS
2.2 Terms of Bonus Stock Awards
Except as otherwise determined by the Board or the Committee and provided in the Bonus
Stock Award documents, Bonus Stock Awards shall be subject to the following terms and
conditions:
a. Number of Shares and Other Terms
The number of shares of Common Stock subject to a Bonus Stock Award granted pursuant to
this Plan shall be the number of such shares determined by the Board or the Committee.
b. Vesting and Forfeiture
One-half of the number of shares of Common Stock subject to a Bonus Stock Award shall vest
and be payable on the first anniversary of the date of the Bonus Stock Award and the other
half of such number shall vest and be payable on the second anniversary of the Bonus Stock
Award, in each case, subject to Section 2.3(b), if the holder of such award remains
continuously in the employment or service of Tellabs or a Subsidiary until such anniversary
date. Such holder shall forfeit the unvested portion of any such shares if such holder
does not remain continuously in the employment or service of Tellabs or a Subsidiary as
specified above, except as otherwise provided in Section 2.3(b) hereof.
c. Share Certificates
Upon the vesting of a portion of a Bonus Stock Award pursuant to Section 2.2(b) or 2.3(b),
in each case subject to Tellabs' or a Subsidiary's rights to require payment of any taxes
in accordance with Section 3.2, a certificate or certificates evidencing ownership of the
number of shares of Common Stock so vested shall be delivered to and in the name of the
holder of such award. Notwithstanding the foregoing, in lieu of the delivery of shares
representing all or a portion of the vested portion of a Bonus Stock Award, the Committee
may, in its sole discretion, deliver to the holder cash in an amount equal to the Fair
Market Value on the date such shares become vested equal to all or a portion of the vested
portion of such award, less any applicable withholding, as required by Section 3.2, as the
case may be.
2.3 Termination of Employment/Service
b. Other Termination
Except as otherwise determined by the Board or the Committee and provided in the Bonus Stock Award documents, if Tellabs or a Subsidiary terminates the employment/service of the holder of a Bonus Stock Award for any reason other than as provided in Section 2.3(a), the portion of such award which is not otherwise vested shall vest pursuant to Section 2.2(b) without regard to such termination and be payable within thirty (30) days of such termination, in accordance with Section 2.2(c).3. GENERAL
3.1 Amendments
The Board or the Committee may amend this Plan as it shall deem advisable. No amendment
may impair the rights of a holder of an outstanding award without the consent of such
holder.
3.2 Tax Withholding
Tellabs shall have the right to require, prior to the issuance or delivery of any shares
of Common Stock or the payment of any cash pursuant to an award made hereunder, payment by
the holder of such award of any federal, provincial, local or other taxes which may be
required to be withheld or paid in connection with such award. The Committee may allow
shares of Common Stock to be delivered or withheld having an aggregate Fair Market Value
not in excess of the minimum amount required to be withheld and in such event, any fraction
of a share of Common Stock which would be required to satisfy such an obligation shall be
disregarded and the remaining amount due shall be paid in cash by the holder.
3.3 Adjustment
In the event of any stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off or other similar
change in capitalization or event, or any distribution to holders of Common Stock other
than a regular cash dividend, the number and class of securities available under this Plan,
and the number and class of securities subject to each outstanding Bonus Stock Award shall
be adjusted or modified accordingly, as determined by the Committee, which adjustment may
include providing for payment of an asset not constituting a security upon the vesting of
an outstanding Bonus Stock Award. The decision of the Committee regarding any such
adjustment shall be final, binding and conclusive. If any such adjustment would result in
a fractional security being (i) available under this Plan, such fractional security shall
be disregarded, or (ii) subject to an award under this Plan, Tellabs shall pay the holder
of such award, in connection with the first vesting of such award, in whole or in part,
occurring after such adjustment, an amount in cash determined by multiplying (a) the
fraction of such security (rounded to the nearest hundredth) by (b) the excess, if any, of
the Fair Market Value on the vesting date.
3.4 No Assignment
It is a condition of this Plan, and the rights of all holders of Bonus Stock Awards shall
be subject thereto, that no right or interest of any such holder shall be assignable or
transferable in whole or in part, either directly or by operation of law or otherwise,
including, but not by way of limitation, execution, levy, garnishment, attachment, pledge
or bankruptcy, and no right or interest of any such holder under this Plan shall be liable
for, or subject to, any obligation of any such holder, including claims for alimony or the
support of any spouse.
3.5 No Right of Employment/Service
Neither this Plan nor any award made hereunder shall confer upon any person any right to
continued employment/service by Tellabs or any Subsidiary or affiliate thereof or affect in
any manner the right of Tellabs or any Subsidiary or affiliate thereof to terminate the
employment/service of any person at any time without liability hereunder.
3.6 Right as Stockholder
No person shall have any right as a stockholder of Tellabs with respect to any shares of
Common Stock or other equity security of Tellabs which is subject to an award hereunder
unless and until such person becomes a stockholder of record with respect to such shares of
Common Stock or equity security. Tellabs' obligation to deliver shares of Common Stock
pursuant to this Plan shall be unfunded, and Tellabs shall not be obligated to set aside
any of its assets for the purpose of satisfying its obligations hereunder. The claims of
holders of Bonus Stock Awards shall be solely those of an unsecured creditor of Tellabs.
3.7 Beneficiary Designation
Each holder of a Bonus Stock Award under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or she receives
any or all of such benefit. Each such designation shall revoke all prior designations by
the same holder, shall be in a form prescribed by Tellabs or its Subsidiary, and will be
effective only when filed by the holder in writing with the person or persons designated by
Tellabs or its Subsidiary to receive such designations during the holder's lifetime. In
the absence of any such designation, benefits remaining unpaid at the holder's death shall
be paid to the holder's estate.
3.8 Requirements of Law
The granting of Bonus Stock Awards and the issuance of Common Stock under the Plan shall be
subject to all applicable laws, rules, regulations, and to such approval by any
governmental agencies or national securities exchanges or NASDAQNMS as may be required
3.8 Governing Law
The corporate law of the State of Delaware shall govern all issues concerning the relative
rights of Tellabs and the holders of Bonus Stock Awards with respect to this Plan. The law
of the State of Illinois, except its law with respect to choice of law, shall be
controlling in all other matters relating to the Plan.
3.8 Effective Date
This Plan shall become effective on the date adopted by the Board.