AMENDMENT TO THE

COHERENT COMMUNICATIONS SYSTEMS CORPORATION

AMENDED AND RESTATED 1982 STOCK OPTION PLAN

WHEREAS, Coherent Communications Systems Corporation ("Coherent") has heretofore
established the Coherent Communications Systems Corporation Amended and Restated
1982 Stock Option Plan (the "Plan") for the benefit of employees of Coherent
Communications Systems Corporation and its subsidiaries;

WHEREAS, Coherent was acquired by Tellabs, Inc. ("Tellabs") in a merger on
August 3, 1998, and Coherent subsequently merged into Tellabs Operations, Inc.
(the "Corporation");

WHEREAS, the Board of Directors of Tellabs deems it desirable to make certain
amendments to the Plan relating to the vesting of options and/or the
post-employment exercise period in the event of the death, disability, or
retirement of an option holder, or a change in control of Tellabs;

WHEREAS, the Board of Directors has considered the recommendations; and

WHEREAS, the Board of Directors of the Corporation has approved this Amendment
to the Plan.

NOW, THEREFORE, BE IT RESOLVED, that the Plan is hereby amended, effective
June 30, 2000, as follows:

Under Section 2 of the Plan, the following definition of "Change in Control"
shall be added:

(f) "Change in Control" means the first to occur of:

(1) Any "person" (as defined in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), excluding for this
purpose, Tellabs, Inc. ("Tellabs") or any subsidiary of Tellabs, or any employee
benefit plan of Tellabs or any subsidiary of Tellabs, or any person or entity
organized, appointed or established by Tellabs for or pursuant to the terms of
any such plan which acquires beneficial ownership of voting securities of
Tellabs, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly of securities of Tellabs representing
20% or more of the combined voting power of Tellabs's then outstanding
securities; provided, however, that no Change in Control will be deemed to have
occurred as a result of a change in ownership percentage resulting solely from
an acquisition of securities by Tellabs; and provided further that no Change in
Control will be deemed to have occurred if a person inadvertently acquires an
ownership interest of 20% or more but then promptly reduces that ownership
interest below 20%;

(2) During any two consecutive years (not including any period beginning prior
to June 30, 2000), individuals who at the beginning of such two-year period
constitute the Board of Directors of Tellabs and any new director (except for a
director designated by a person who has entered into an agreement with Tellabs
to effect a transaction described elsewhere in this definition of Change in
Control) whose election by the Board or nomination for election by Tellabs'
stockholders was approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved (such
individuals and any such new director, the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board;

(3) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of Tellabs (a "Business
Combination"), in each case, unless, following such Business Combination,
(i) all or substantially all of the individuals and entities who were the
beneficial owners of outstanding voting securities of Tellabs immediately prior
to such Business Combination beneficially own, directly or indirectly, more than
50% of the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may be, of
the company resulting from such Business Combination (including, without
limitation, a company which as a result of such transaction owns Tellabs or all
or substantially all of Tellabs' assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the outstanding voting
securities of Tellabs; (ii) no person (excluding any company resulting from such
Business Combination or any employee benefit plan (or related trust) of Tellabs
or such company resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then combined voting
power of the then outstanding voting securities of such company except to the
extent that such ownership existed prior to the Business Combination; and
(iii) at least a majority of the members of the board of directors of the
company resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or

(4) Approval by the stockholders of Tellabs of a complete liquidation or
dissolution of Tellabs.

 

Under Section 2 of the Plan, the following definition of "Disability" shall be
added:

(i) "Disability" shall have the meaning ascribed to such term in
Section 22(e)(3) of the Code.

Section 10 shall be amended in its entirety to read as follows:

10. TERMINATION OF EMPLOYMENT. Except as set forth in Section 10A with respect
to the effect of a Change in Control or except as the Committee may otherwise
expressly provide in the Stock Option Agreement, the following rules shall apply
upon termination of the Optionee's employment with the Corporation and all
Subsidiaries:

(a) Except as set forth in subsections (b), (c), (d) and (e) below, in the event
of termination (voluntary or involuntary) for any reason of the holder's
employment by the Corporation, any unexercised Option shall be exercisable by
the Optionee at any time within 30 days after the date of such termination but
only to the extent such Option was exercisable on the date of such termination.
In no event shall such unexercised Option be exercisable after the expiration of
its term.

(b) In the event of termination of employment due to the death the Optionee,
each Option held by the Optionee shall become exercisable in full and may be
exercised at any time prior to the expiration date of the Option or within one
year after the date of the Optionee's death, whichever period is shorter.

(c) In the event of termination of employment due to the Disability of the
Optionee, each Option held by the Optionee may, to the extent exercisable at the
time of termination of employment, be exercised at any time prior to the
expiration date of the Option or within three years after the date of the
Optionee's termination of employment, whichever period is shorter.

(d) In the event of termination of employment due to the retirement of the
Optionee on or after attaining age 55, all or a portion of each Option held by
the Optionee, to the extent not then exercisable, shall become exercisable in
accordance with the schedule set forth below based upon one point for the
Optionee's attained age and one point for each year of continuous service with
the Corporation or its Subsidiaries as of the date of retirement (including for
this purpose, continuous service with an entity prior to the date such entity
was acquired by the Corporation or a Subsidiary of the Corporation, but
excluding any service prior to January 1, 1975),

At least 70 but less than 80 points          50% of each unvested option shall
vest
At least 80 but less than 90 points           75% of each unvested option shall
vest
At least 90 points                                   100% of each unvested
option shall vest

and all Options held by the Optionee to the extent then exercisable may be
exercised at any time prior to the expiration date of the Option or within three
years after the date of the Optionee's retirement, whichever period is shorter.

(e) Notwithstanding anything in this Plan to the contrary, any ISO which is
exercised after the expiration of three months following the cessation of
employment for any reason other than Disability or death or one year after the
date of termination of employment due to Disability or death, shall be treated
as a NQSO.

The Plan shall hereby be amended by adding a new Section 10A to read:

10A. CHANGE IN CONTROL.

(a) Upon the occurrence of a Change in Control, any and all Options granted
hereunder shall become immediately exercisable and remain exercisable until such
Options expire or terminate under the provisions of this Plan.

(b) Upon the occurrence of a Change in Control not approved by the Incumbent
Board, any and all Options granted hereunder shall become immediately
exercisable, and shall remain exercisable throughout their entire term without
regard to termination of employment subsequent to Change in Control.

IN WITNESS WHEREOF, the foregoing amendments to the Coherent Communications
Systems Corporation Amended and Restated 1982 Stock Option Plan are hereby
adopted as of the 30th day of June, 2000, by the undersigned officer duly
authorized by resolutions adopted by the written consent of the Board of
Directors dated June 30, 2000.

 

TELLABS OPERATIONS, INC.

 

By:/s Brian J. Jackman

Name:Brian J. Jackman

Its: President