EXHIBIT 10.32

TELLABS

ADVANTAGE PROGRAM

Amended and Restated
Effective January 1, 2003

Except as Specifically
Provided Otherwise

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TABLE OF CONTENTS

|      |      | Page                                  
|----- | ---- | --------------------------------------
|ARTIC | LE 1 | General                               
|1     | .1   | Purpose                               
|1     | .2   | Source of Funds                       
|1     | .3   | Scope of Plan Coverage                
|1     | .4   | Definitions                           
|      |      | Account                               
|      |      | Accounts                              
|      |      | Active Participant                    
|      |      | Actual Deferral Percentage            
|      |      | Administrative Committee              
|      |      | Affiliate                             
|      |      | After-Tax Contribution                
|      |      | Aggregate Limit                       
|      |      | Alternate Payee                       
|      |      | Annual Addition                       
|      |      | Annuity Starting Date                 
|      |      | Basic Before-Tax Contribution         
|      |      | Before-Tax Contribution               
|      |      | Board of Directors                    
|      |      | Business Day                          
|      |      | Code                                  
|      |      | Coherent Accounts                     
|      |      | Coherent Acquisition Date             
|      |      | Coherent Participant                  
|      |      | Coherent Plan                         
|      |      | Committees                            
|      |      | Company                               
|      |      | Compensation                          
|      |      | Contribution Percentage               
|      |      | Defined Contribution Dollar Limitation
|      |      | Dependent                             
|      |      | Designated Before-Tax Contributions   
|      |      | Determination Period                  
|      |      | Disability Plan                       
|      |      | Election Period                       
|      |      | Eligible Employee                     
|      |      | Eligible Individual                   
|      |      | Eligible Limited Participant          
|      |      | Eligible Participant                  
|      |      | Eligible Retiree                      

i

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TABLE OF CONTENTS
(continued)

| |  | Page                                  
| |  | --------------------------------------
| |  | Eligible Retirement Plan              
| |  | Eligible Rollover Distribution        
| |  | Eligibility Period                    
| |  | Employer                              
| |  | Entry Date                            
| |  | ERISA                                 
| |  | Employer Excess Contribution          
| |  | Excess Forfeiture Suspense Account    
| |  | Excess Tentative Employer Contribution
| |  | Five-Percent Owner                    
| |  | Funds                                 
| |  | Health Plan                           
| |  | Highly Compensated Employee           
| |  | Hour of Service                       
| |  | Individual Beneficiary                
| |  | Investment Committee                  
| |  | Investment Manager                    
| |  | Key Employee                          
| |  | Leased Employee                       
| |  | Limited Term Employee                 
| |  | Limitation Year                       
| |  | Matching Contribution                 
| |  | Maximum Annual Addition               
| |  | Medical Benefits                      
| |  | Medical Benefits Account              
| |  | Member of a Collective Bargaining Unit
| |  | Multiple Use                          
| |  | Non-Highly Compensated Employee       
| |  | Normal Retirement Date                
| |  | One-Percent Owner                     
| |  | Participant                           
| |  | Plan                                  
| |  | Permissive Aggregation Group          
| |  | Plan Year                             
| |  | Pre-Retirement Survivor Annuity       
| |  | Present Value                         
| |  | Prior Plan                            
| |  | Profit Sharing Contribution           
| |  | Provisional Annual Addition           
| |  | Qualified Domestic Relations Order    
| |  | Qualified Joint and Survivor Annuity  

ii

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TABLE OF CONTENTS
(continued)

|      |      | Page                                                              
|----- | ---- | ------------------------------------------------------------------
|      |      | Qualified Military Service                                        
|      |      | Required Aggregation Group                                        
|      |      | Required Beginning Date                                           
|      |      | Reserve Staff                                                     
|      |      | Retirement Contribution                                           
|      |      | Retirement Program                                                
|      |      | Rollover Contribution                                             
|      |      | Salix Accounts                                                    
|      |      | Salix Acquisition Date                                            
|      |      | Salix Participant                                                 
|      |      | Salix Plan                                                        
|      |      | Savings Program                                                   
|      |      | Service                                                           
|      |      | Simplified Employee Pension Plan                                  
|      |      | Supplemental Before-Tax Contribution                              
|      |      | Tellabs Stock Fund                                                
|      |      | Tentative Employer Contribution                                   
|      |      | Top-Heavy                                                         
|      |      | Top-Heavy Determination Date                                      
|      |      | Top-Heavy Ratio                                                   
|      |      | Trust                                                             
|      |      | Trustee                                                           
|      |      | Unit                                                              
|      |      | Valuation Date                                                    
|1     | .5   | EGTRRA Compliance                                                 
|ARTIC | LE 2 | Eligibility and Participation                                     
|2     | .1   | Eligibility Requirements                                          
|2     | .2   | Continued Participation; Reemployment                             
|2     | .3   | Transfers and Changes in Status                                   
|2     | .4   | Leaves of Absence                                                 
|2     | .5   | Qualified Military Service                                        
|ARTIC | LE 3 | Contributions                                                     
|3     | .1   | Employer Contributions                                            
|3     | .2   | Retirement Contribution Under the Retirement Program              
|3     | .3   | Profit Sharing and Company Contributions Under the Savings Program
|3     | .4   | Before-Tax Contributions Under the Savings Program                

iii

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TABLE OF CONTENTS
(continued)

|      |      | Page                                                                            
|----- | ---- | --------------------------------------------------------------------------------
|3     | .5   | Limitations on Before-Tax Contributions Under the Savings Program               
|3     | .6   | Matching Contribution Under the Savings Plan                                    
|3     | .7   | Limitations on Matching Contributions Under the Savings Program                 
|ARTIC | LE 4 | Contributions by Employee                                                       
|4     | .1   | No After-Tax Contributions                                                      
|4     | .2   | Rollover Contribution                                                           
|ARTIC | LE 5 | Accounting Provisions and Allocations                                           
|5     | .1   | Participant's Accounts                                                          
|5     | .2   | Common Fund                                                                     
|5     | .3   | Unit Values                                                                     
|5     | .4   | Eligibility to Share in Employer Contributions and Forfeitures                  
|5     | .5   | Allocation of Before-Tax Contributions                                          
|5     | .6   | Allocation of Matching Contributions                                            
|5     | .7   | Allocation of After-Tax Contributions                                           
|5     | .8   | Allocation of Retirement Contribution and Forfeitures                           
|5     | .9   | Allocation of Profit Sharing Contribution, Company Contribution and Forfeitures.
|5     | .10  | Crediting Accounts                                                              
|5     | .11  | Provisional Annual Addition                                                     
|5     | .12  | Limitation on Annual Additions                                                  
|ARTIC | LE 6 | Amount of Payments to Participants                                              
|6     | .1   | General Rule                                                                    
|6     | .2   | Normal Retirement                                                               
|6     | .3   | Death                                                                           
|6     | .4   | Disability                                                                      
|6     | .5   | Vesting                                                                         
|6     | .6   | Resignation or Dismissal                                                        
|6     | .7   | Treatment of Forfeitures                                                        
|ARTIC | LE 7 | Distributions                                                                   

iv

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TABLE OF CONTENTS
(continued)

|      |      | Page                                                                                                                                                                      
|----- | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7     | .1   | Commencement and Form of Distributions                                                                                                                                    
|7     | .2   | Qualified Joint and Survivor Annuity - Retirement Account, Salix Accounts, Coherent Accounts, and Ocular Account                                                          
|7     | .3   | Pre-Retirement Survivor Annuity - Retirement Account, Salix Accounts, Coherent Accounts and Ocular Account                                                                
|7     | .4   | Distributions to Beneficiaries                                                                                                                                            
|7     | .5   | Beneficiary Designations                                                                                                                                                  
|7     | .6   | Installment or Deferred Distributions                                                                                                                                     
|7     | .7   | Form of Elections and Applications for Benefits                                                                                                                           
|7     | .8   | Unclaimed Distributions                                                                                                                                                   
|7     | .9   | Distributions in Kind                                                                                                                                                     
|7     | .10  | Distribution of Participant's After-Tax Account, Rollover Account, Salix Rollover Account, Coherent Rollover Account and Ocular Account Prior to Termination of Employment
|7     | .11  | Loans                                                                                                                                                                     
|7     | .12  | Withdrawals Prior to Termination of Employment and After Age 59-1/2                                                                                                       
|7     | .13  | Pre-59-1/2 Coherent Account Withdrawals; Hardship Withdrawals                                                                                                             
|7     | .14  | Eligible Rollover Distributions                                                                                                                                           
|7     | .15  | Facility of Payment                                                                                                                                                       
|7     | .16  | Claims Procedure                                                                                                                                                          
|ARTIC | LE 8 | Top-Heavy Plan Requirements                                                                                                                                               
|8     | .1   | Top-Heavy Definitions                                                                                                                                                     
|8     | .2   | Top-Heavy Plan Requirements                                                                                                                                               
|ARTIC | LE 9 | Powers and Duties of Committees                                                                                                                                           
|9     | .1   | Appointment of Committees                                                                                                                                                 
|9     | .2   | Powers and Duties of Administrative Committee                                                                                                                             
|9     | .3   | Powers and Duties of the Investment Committee                                                                                                                             
|9     | .4   | Committee Procedures                                                                                                                                                      
|9     | .5   | Consultation with Advisors                                                                                                                                                
|9     | .6   | Committee Members as Participants                                                                                                                                         

v

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TABLE OF CONTENTS
(continued)

|      |       | Page                                                                                      
|----- | ----- | ------------------------------------------------------------------------------------------
|9     | .7    | Records and Reports                                                                       
|9     | .8    | Investment Policy                                                                         
|9     | .9    | Designation of Other Fiduciaries                                                          
|9     | .10   | Obligations of Each Committee                                                             
|9     | .11   | Indemnification of Each Committee                                                         
|ARTIC | LE 10 | Trustee and Trust Fund                                                                    
|10    | .1    | Trust Fund                                                                                
|10    | .2    | Payments to Trust Fund and Expenses                                                       
|10    | .3    | Trustee's Responsibilities                                                                
|10    | .4    | Reversion to the Employer                                                                 
|ARTIC | LE 11 | Amendment or Termination                                                                  
|11    | .1    | Amendment                                                                                 
|11    | .2    | Termination                                                                               
|11    | .3    | Form of Amendment, Discontinuance of Employer Contributions, and Termination              
|11    | .4    | Limitations on Amendments                                                                 
|11    | .5    | Level of Benefits Upon Merger                                                             
|11    | .6    | Vesting Upon Termination or Discontinuance of Employer Contributions; Liquidation of Trust
|ARTIC | LE 12 | Miscellaneous                                                                             
|12    | .1    | No Guarantee of Employment, Etc                                                           
|12    | .2    | Nonalienation                                                                             
|12    | .3    | Qualified Domestic Relations Order                                                        
|12    | .4    | Controlling Law                                                                           
|12    | .5    | Severability                                                                              
|12    | .6    | Notification of Addresses                                                                 
|12    | .7    | Gender and Number                                                                         
|12    | .8    | Instructions and Elections                                                                
|ARTIC | LE 13 | Adoption by Affiliates                                                                    
|13    | .1    | Adoption of Plan                                                                          

vi

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TABLE OF CONTENTS
(continued)

|      |       | Page                                                               
|----- | ----- | -------------------------------------------------------------------
|13    | .2    | The Company as Agent for Employer                                  
|13    | .3    | Adoption of Amendments                                             
|13    | .4    | Termination                                                        
|13    | .5    | Data to Be Furnished by Employers                                  
|13    | .6    | Joint Employers                                                    
|13    | .7    | Expenses                                                           
|13    | .8    | Withdrawal                                                         
|13    | .9    | Prior Plans                                                        
|ARTIC | LE 14 | Retiree Medical Benefits                                           
|14    | .1    | Medical Benefits Account                                           
|14    | .2    | Retiree Medical Benefits Definitions                               
|14    | .3    | Separate Account                                                   
|14    | .4    | Impossibility of Diversion Prior to Satisfaction of All Liabilities
|14    | .5    | Reversion upon Satisfaction of All Liabilities                     
|14    | .6    | Medical Benefits                                                   
|14    | .7    | Coordination with Health Plan                                      
|14    | .8    | Employer Contributions                                             
|14    | .9    | Reservation of the Right to Terminate Medical Benefits             

vii

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# ARTICLE 1

# General

1.1      Purpose. It is the
intention of the Employer to continue to provide for the administration of the Tellabs
Retirement Plan, a money purchase pension plan, together with a retiree medical benefits
account under the provisions of Code Section 401(h) and the Tellabs Profit Sharing
and Savings Plan, a profit sharing and Code Section 401(k) savings program as parts
of this Tellabs Advantage Program (the Plan) and a Trust Fund in conjunction
therewith for the benefit of eligible employees of an Employer, in accordance with the
provisions of Code Sections 401 and 501 and in accordance with other provisions of
law relating to money purchase pension plans and profit sharing plans containing a Code
Section 401(k) arrangement. Except as otherwise provided in this Plan or the Trust,
upon the transfer by an Employer of any funds to the Trust Fund in accordance with the
provisions of this Plan, all interest of the Employer therein shall cease and terminate,
and no part of the Trust Fund shall be used for, or diverted to, purposes other than the
exclusive benefit of Participants and their beneficiaries.

1.2      Source of Funds. The Trust
Fund shall be created, funded and maintained by contributions of an Employer, by
contributions of the Participants, and by such net earnings as are obtained from the
investment of the funds of the Trust Fund.

1.3      Scope of Plan Coverage.
The provisions of the Plan as herein restated shall be effective as of January 1,
2003, except for certain provisions the effective dates of which are set forth therein.
However, the rights and benefits of any Participant whose employment with an Employer
prior to the Effective Date shall be determined in accordance with the corresponding
provisions of the Prior Plan documents as in effect upon the Participants
termination of employment and, to the extent necessary, the provisions of the Prior Plan
documents are hereby specifically incorporated by reference into this Plan. Except as may
be required by ERISA or the Code, the rights of any person whose status as an employee of
the Employer and all Affiliates has terminated shall be determined pursuant to the Plan as
in effect on the date such employment terminated, unless a subsequently adopted provision
of the Plan is made specifically applicable to such person.

1.4       Definitions.  Certain terms are capitalized and have the respective meanings set forth in the Plan.

Account
means each of the individual accounts established pursuant to Article 5
(Accounting Provisions and Allocations) representing a Participants allocable share
of the Trust Fund.

Accounts
means the collective individual accounts established pursuant to Article 5
(Accounting Provisions and Allocations).

Active
Participant means a Participant who, on a given date, is employed by an Employer as
an Eligible Employee.

Actual
Deferral Percentage and Actual Deferral Percentage Tests are described
in Section 3.5(Limitations on Before Tax Contributions Under the Savings
Program).

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Administrative
Committee is the Committee so appointed in accordance with Article 9
(Powers and Duties of Committees) as the administrator and named fiduciary of the Plan.

Affiliate
means any corporation or enterprise, other than the Company, which, as of a given date, is
a member of the same controlled group of corporations, the same group of trades or
businesses under common control or the same affiliated service group, determined in
accordance with Code Sections 414(b), (c), (m) or (o), as is the Company. For
purposes of determining the amount of a Participants Annual Addition or Total
Compensation and applying the limitations of Code Section 415 set forth in
Article 5 (Accounting Provisions and Allocations), Affiliate shall
include any corporation or enterprise, other than the Company, which, as of a given date,
is a member of the same controlled group of corporations or the same group of trades or
businesses under common control, determined in accordance with Code Sections 414(b)
or (c) as modified by Code Section 415(h), as is the Company.

After-Tax
Contribution means after-tax employee contributions made by Participants under the
Plan prior to January 1, 1994.

Aggregate
Limit is described in Section 3.8 (Multiple Use).

Alternate Payee
means the person, other than the Participant, designated by a court to receive benefits
under the Plan in a Qualified Domestic Relations Order as further described in
Section 12.3 (Qualified Domestic Relations Order).

Annual
Addition means for any Limitation Year, the sum of (a) all Before-Tax
Contributions, Matching Contributions, Profit Sharing Contributions (including forfeitures
allocated as a part thereof), Retirement Contributions (including forfeitures allocated as
a part thereof), for Limitation Years beginning prior to January 1, 1994, After-Tax
Contributions, and for Limitation Years beginning on and after January 1, 2003, Company
Contributions (including forfeitures allocated as a part thereof), allocated to the
Accounts of a Participant under this Plan; (b) any employer contributions,
forfeitures and employee after-tax contributions allocated to such Participant under this
or any other defined contribution plan maintained by the Employer or an Affiliate; and
(c) amounts allocated to an individual medical account as defined in Code
Section 415(l)(2) and amounts attributable to post-retirement medical benefits
allocated to the separate account of a key employee, as described in Code
Section 419A(d)(3) maintained by the Employer or an Affiliate.

Annuity
Starting Date means the first day of the first period for which a benefit is payable
in the form of an annuity or any other form.

Basic
Before-Tax Contribution means, for any period, with respect to a Participant, the
portion of the Before-Tax Contribution made on his behalf by an Employer during such
period equal to the lesser of 3% (4% effective July 1, 2003) of the Participants
Considered Compensation paid during such period or the Participants Before-Tax
Contribution for such period. For any period, Basic Before-Tax Contribution
means, with respect to the Employer, the sum of such contributions.

2

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Before-Tax
Contribution means, with respect to a Participant, the contribution by an Employer
on his behalf described in Section 3.4 (Before-Tax Contribution Under the
Savings Program) and, with respect to the Employer, means the sum of such contributions.

Board
of Directors means the Board of Directors of the Company.

Business
Day means each day on which the Federal Reserve, the New York Stock Exchange and the
Trustee are open for business, or if different and to the extent applicable, each day as
of which trades are recognized under the rules governing an investment fund of the Plan.

Code
means the Internal Revenue Code of 1986 and the regulations promulgated thereunder, as
from time to time amended.

Coherent
Accounts means the separate Coherent Before-Tax Account, Coherent Employer Account
and Coherent Rollover Account of Coherent Participants described in
Section 5.1 (Participant Accounts).

Coherent
Acquisition Date means the date of the acquisition of Coherent Communications
Systems Corporation by Tellabs, Inc.

Coherent
Participant means employees of Coherent Communications Systems Corporation or any
subsidiary thereof who were participants in the Coherent Plan on December 31, 1998
and (a) became Participants in the Plan on January 1, 1999, or (b) whose
Coherent Accounts were subsequently transferred from the Coherent Plan to the Trust Fund
as a result of the merger of the Coherent Plan into the Plan effective April 1, 1999.

Coherent
Plan means the Coherent Communications Systems Corporation Savings Incentive Plan as
in effect on the Coherent Acquisition Date, and as amended from time to time thereafter up
to and including its merger into the Plan effective April 1, 1999.

Committees
means the Administrative Committee and the Investment Committee appointed pursuant to
Article 9 (Powers and Duties of the Committees).

Company
means Tellabs Operations, Inc., a Delaware corporation, a predecessor of such corporation,
or any successor to it in ownership of all or substantially all of its assets.

Company
Contribution means the contribution referred to in Section 3.3 (Profit
Sharing and Company Contributions under the Savings Program).

Compensation
means a Participants Considered Compensation or Total
Compensation, as follows:

3

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(a)    
          Considered Compensation for a period is the Participants Total
          Compensation paid during the period while he was an Active Participant but
          excluding reimbursements or other expense allowances, fringe benefits (cash and
          noncash), moving or education expenses, income from participation in any stock
          purchase plan, income from stock awards, income from the exercise of stock
          appreciation rights, dividends on restricted stock or other extraordinary
          remuneration, provided, however, beginning with the 1998 Plan Year Considered
          Compensation shall include amounts excluded from the Participants income
          for the period under Code Sections 125, 132(f)(4), 402(g)(3) or 457
          including before-tax contributions and elective contributions to a plan of the
          Employer established under Code Section 125.

(b)    
          Total Compensation for a period is the Participants
          compensation (as described in Treasury Regulation Section 1.415-2(d)(2))
          paid during the period for personal services actually rendered in the course of
          employment with the Employer and all Affiliates, excluding contributions made by
          an Employer (other than the Before-Tax Contribution) to a plan to the extent
          that such are not included in the gross income of the Participant in the year
          made and other amounts which receive special tax treatment (as described in
          Treasury Regulation Section 1.415-2(d)(3)); effective with the 1998 Plan
          Year, plus amounts excluded from the Participants income for the period
          under Code Sections 125, 132(f)(4), 402(g)(3) or 457; provided, however,
          that the Total Compensation for any Participant taken into account for
          determining all benefits provided under the Plan for any Plan Year shall not
          include any amount in excess of $160,000 (for any Plan Year beginning after
          December 31, 2001, shall not include any amount in excess of $200,000) as
          adjusted by the Commissioner of the Internal Revenue Service for increases in
          the cost of living in accordance with Code Section 401(a)(17)(B). The
          cost-of-living adjustment in effect for a calendar year applies to any period,
          not exceeding 12 months, over which compensation is determined
          (determination period) beginning in such calendar year. If a determination
          period consists of fewer than 12 months, the annual compensation limit will
          be multiplied by a fraction, the numerator of which is the number of months in
          the determination period, and the denominator of which is 12.

Contribution
Percentage and Contribution Percentage Tests are described in
Section 3.7 (Limitations on Matching Contributions Under the Savings Program).

Defined
Contribution Dollar Limitation effective for Limitation Years beginning after
December 31, 1994, means an amount equal to $30,000 ($40,000 beginning with the 2002
Limitation Year), as adjusted by the Secretary of the Treasury pursuant to Code
Section 415(d), prorated for any Limitation Year of less than 12 months;
provided that for purposes of Code Section 511(a)(ii), such amount shall be reduced
by the amounts allocated to any medical accounts described in subsection (c)
of the definition of Annual Addition.

Dependent
means an individual entitled to medical benefits as a dependent of an Eligible Retiree, as
described in Section 14.2 (Retiree Medical Benefits Definitions).

Designated
Before-Tax Contributions means the contributions referred to in Section 3.7
(Limitations on Matching Contributions Under the Savings Program).

Determination
Period means the Plan Year containing the Top-Heavy Determination Date and the
4 preceding Plan Years, as further referenced in Article 8 (Top-Heavy
Plan Requirements).

Disability
Plan with respect to any Participant means the long term disability plan maintained
by the Employer and covering such Participant.

4

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Election
Period means the period defined in Section 7.2 (Qualified Joint and
Survivor Annuity  Retirement Account, Salix Accounts, Coherent Accounts and Ocular
Account) relating to the period during which a Participant may elect to have the
Participants Retirement Account distributed in a form other than a Qualified Joint
and Survivor Annuity.

Eligible
Employee means any employee of the Employer but excluding any employee who is
(1) a Member of a Collective Bargaining Unit; (2) an individual providing
services to the Employer in the capacity of, or who is or was designated by the Employer
as, a Leased Employee, an independent contractor, intern or a Limited Term Employee; or
(3) are non-resident aliens who receive no earned income from the Employer which
constitutes income from services within the United States. Notwithstanding the foregoing,
any employee of Salix Technologies, Inc. or any subsidiary thereof who was eligible to
participate in the Salix Plan as of May 19, 2000 will be considered an Eligible Employee
as of May 19, 2000. Notwithstanding the foregoing, any individual employed by Coherent
Communications Systems Corporation or any subsidiary thereof as of the Coherent
Acquisition Date, or thereafter until December 31, 1998, shall not become an Eligible
Employee until January 1, 1999. Notwithstanding the foregoing, any individual
employed by Ocular Networks, Inc. or any subsidiary thereof who was eligible to
participate in the Ocular Plan as of the Ocular Acquisition Date shall not become an
Eligible Employee until April 1, 2002.

Eligible
Individual means an individual entitled to Medical Benefits, as described in
Section 14.2(Retiree Medical Benefits Definitions).

Eligible
Limited Participant means an individual eligible to make Before-Tax Contributions
under the Savings Program, but not entitled to receive the matching contribution portions
of the Profit Sharing Contribution and the Retirement Contribution provisions of the Plan,
as further described in subsection 2.1(d).

Eligible
Participant means (a) prior to July 1, 2003, an Active Participant who has completed
his Eligibility Period making him eligible to share in the Matching Contribution
bi-weekly, and share in the Profit Sharing Contribution and forfeitures and Retirement
Contribution and forfeitures for a given quarter of the Plan Year as of the last day of
the quarter for which such contribution or forfeitures are being allocated if he is then
employed by the Employer as an Eligible Employee and as further defined in
Section 5.4 (Eligibility to Share in Employer Contributions and Forfeitures);
and (b) effective July 1, 2003, means each Active Participant.

Eligible
Retiree means an individual entitled to receive retiree medical benefits under the
Health Plan, as described in Section 14.2 (Retiree Medical Benefits
Definitions).

Eligible
Retirement Plan with respect to a Participant, the surviving spouse of a Participant
or a former spouse of the Participant who is an Alternate Payee under a Qualified Domestic
Relations Order is (a) an individual retirement account described in Code
Section 408(a) or individual retirement annuity described in Code
Section 408(b), and, with respect to a Participant, is also (b) an annuity plan
described in Code Section 403(a) or a qualified trust described in Code
Section 401(a).

5

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Eligible
Rollover Distribution means any rollover distribution of the Accounts distributable
to a Participant, the surviving spouse of a Participant or the former spouse of the
Participant who is an Alternate Payee under a Qualified Domestic Relations Order;
provided, however, (a) the portion of any distribution required to be made under Code
Section 401(a)(9), (b) the portion of any distribution that is not includable in
the gross income of the recipient (determined without regard to the exclusion for net
unrealized appreciation with respect to Employer securities), shall not constitute an
Eligible Rollover Distribution and (c) the portion of the Account distributed to a
Participant as a hardship withdrawal pursuant to subsection 7.13(b)(Pre-591⁄2 Coherent Account Withdrawals; Hardship Withdrawals) shall not
constitute an Eligible Rollover Distribution.

Eligibility
Period means, for periods prior to July 1, 2003, a rolling one-year period used for
the purpose of determining when an employee is eligible to share in the Matching
Contribution, the Profit Sharing Contribution and forfeitures and the Retirement
Contribution and forfeitures. An employees first Eligibility Period shall commence
on the date on which he first completes an Hour of Service. Subsequent Eligibility Periods
shall commence on the first day of each month following such date. Notwithstanding the
foregoing, the initial Eligibility Period of a former employee who is reemployed after
incurring a Period of Severance of one year or more and who is not eligible for immediate
participation pursuant to Section 2.1(c) (Eligibility Requirements) shall
commence on the date on which he first performs duties for an Employer or an Affiliate
after such Period of Severance and subsequent Eligibility Periods shall commence on the
Entry Date following such date.

Employer
means the Company and any Affiliate which adopts this Plan pursuant to
Article 13 (Adoption by Affiliates).

Entry
Date means the first day of each Plan Year, the first day of the fourth month of
each Plan Year, the first day of the seventh month of each Plan Year and the first day of
the tenth month of the Plan Year shall be an Entry Date. Solely for purposes
of subsection 2.1(d) (Eligibility Requirements) and the ability to participate
in the Savings Program as an Eligible Limited Participant commencing April 1, 1999,
and effective July 1, 2003, for all purposes under the Plan, each business day shall also
be an Entry Date.

ERISA
means the Employee Retirement Income Security Act of 1974 and the regulations promulgated
thereunder, as from time to time amended.

Employer
Excess Contribution is the contribution defined in Section 3.1 (Employer
Contributions).

Excess
Forfeiture Suspense Account means the Account described in Section 5.12
(Limitations on Annual Additions).

Excess
Tentative Employer Contribution means the excess contribution described in
Section 5.12(Limitations on Annual Additions).

Five-Percent
Owner means an employee described in Code Section 416(i)(1).

Funds
means the separate investment funds as described in Section 5.2 (Common Fund).

6

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Health
Plan means a retiree medical plan maintained by an Employer, as described in
Section 14.2(Retiree Medical Benefits Definitions).

Highly
Compensated Employee means an employee of the Employer or an Affiliate who was a
Participant eligible during the Plan Year to make Before-Tax Contributions and who:

(a)    
          was a Five-Percent Owner at any time during the Plan Year or the preceding Plan
          Year; or

(b)    
          received Total Compensation in excess of $80,000 (as adjusted for increases in
          the cost of living by the Secretary of the Treasury) during the preceding Plan
          Year and was among the top 20% of the employees (disregarding those employees
          excludable under Code Section 414(q)(5)) when ranked on the basis of Total
          Compensation paid for that year.

To
the extent required by Code Section 414(q)(6), a former employee who was a Highly
Compensated Employee when he separated from service with the Employer and all Affiliates
or at any time after attaining age 55 shall be treated as a Highly Compensated
Employee.

Hour
of Service is:

|(a) | each hour for which an employee is paid or entitled to payment for the
          performance of duties for the Employer or an Affiliate;
|--- | ----------------------------------------------------------------------------------------------------------------------------------------

|(b) | each hour for which back pay, irrespective of mitigation of damages, is either
          awarded or agreed to by the Employer or an Affiliate; and
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | each hour for which an employee is paid or entitled to payment for a period
          during which no duties are performed (irrespective of whether the employment
          relationship has terminated) due to vacation, holiday, illness, incapacity,
          layoff, jury duty, military duty, or leave of absence. In crediting Hours of
          Service pursuant to this subparagraph (c), all payments made or due
          shall be taken into account, whether such payments are made directly by the
          Employer or an Affiliate or indirectly (e.g., through a trust fund or insurer to
          which the Employer or an Affiliate makes payments, or otherwise), except that:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | no more than 501 such Hours of Service shall be credited for any continuous
          period during which the employee performs no duties;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | no such Hours of Service shall be credited if payments are made or due under a
          plan maintained solely for the purpose of complying with any workers
          compensation, unemployment compensation or disability insurance laws; and
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | no such Hours of Service shall be credited for payments which are made solely to
          reimburse the employee for medical or medically related expenses.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

7

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The Hours of Service, if any, for
which an employee is credited for a period in which he performs no duties shall be
computed and credited to computation periods in accordance with 29 C.F.R. 2530.200b-2
and other applicable regulations promulgated by the Secretary of Labor. For purposes of
computing the Hours of Service to be credited to an employee for whom a record of hours
worked is not maintained, an employee shall be credited with 45 Hours of Service for
each week in which he completes at least one Hour of Service. In addition, an employee
shall be credited with Hours of Service for each week the employee is on a leave of
absence in accordance with Section 2.4(Leaves of Absence); provided however,
that except as provided in Section 2.4 (Leaves of Absence), no more than
501 Hours of Service shall be credited with respect to any continuous period of a
leave of absence.

Individual
Beneficiary means a natural person designated by the Participant in accordance with
Section 7.5 (Beneficiary Designations) to receive all or any portion of the
amounts remaining in the Participants Accounts at the time of the Participants
death. Individual Beneficiary also means a natural person who is a beneficiary
of a trust designated by the Participant in accordance with Section 7.5
(Beneficiary Designations) to receive all or a portion of such amount, provided the trust
complies with the requirements of Code Section 401(a)(9) and the regulations
promulgated thereunder, including that the trust is irrevocable, the beneficiaries with
respect to the trusts interest in the Participants Accounts are identifiable
from the trust agreement, and a copy of the trust agreement is provided to the
Administrative Committee prior to the date distributions commence to such trust.

Investment
Committee is the Committee so appointed in accordance with Article 9
(Powers and Duties of Committees).

Investment
Manager means a registered investment adviser or other entity, as described in
Section 9.8(Investment Policy).

Key
Employee means an employee described in Section 8.1 (Top-Heavy
Definitions).

Leased
Employee means any individual who is not carried on the payroll of the Employer or
an Affiliate and who, pursuant to an agreement between the Employer or an Affiliate and
any other person (leasing organization), has performed services for the
Employer or an Affiliate (or a related person as determined in accordance with Code
Section 414(n)(6)) on a substantially full-time basis for a period of at least one
year, and such services are performed under primary direction or control by the Employer
or Affiliate. Contributions or benefits provided a leased employee by the leasing
organization which are attributable to services performed for the Employer shall be
treated as provided by the Employer.

Limited
Term Employee means an employee whose employment is for a temporary basis and is
classified as a limited term employee or a coop employee under the records of his
Employer.

Limitation
Year means the relevant Plan Year.

Matching
Contribution is the contribution referred to in Section 3.6 (Matching
Contribution Under the Savings Program).

Maximum
Annual Addition is the amount defined in Section 5.12 (Limitations on
Annual Additions).

Medical
Benefits means the benefits described in Section 14.2 (Retiree Medical
Benefits Definitions).

8

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Medical
Benefits Account means the account established in accordance with Code
Section 401(h) as part of the Retirement Program for the purpose of providing retiree
medical benefits, as described in Article 14(Retiree Medical Benefits).

Member
of a Collective Bargaining Unit means any employee who is included in a collective
bargaining unit and whose terms and conditions of employment are or were covered by a
collective bargaining agreement if there is evidence that retirement benefits were the
subject of good-faith bargaining between representatives of such employee and the
Employer, unless such collective bargaining agreement makes this Plan applicable to such
employee.

Multiple
Use is described in Section 3.8 (Multiple Use).

Non-Highly
Compensated Employee means, for any Plan Year, any employee of the Employer or
Affiliate who:

(a)    
          at any time during the Plan Year was a Participant eligible to make Before-Tax
          Contributions, and

(b)    
          was not a Highly Compensated Employee for such Plan Year.

Normal
Retirement Date means a Participants 65th birthday.

Ocular Account
means the Ocular Participants funds which were transferred from the Ocular Plan to
the Trust Fund as a result of the merger of the Ocular Plan into the Plan effective June
28, 2002.

Ocular
Acquisition Date means the date of the acquisition of Ocular Networks, Inc. by
Tellabs, Inc., January 15, 2002.

Ocular
Participant means employees of Ocular Networks, Inc. or any subsidiary thereof who
were participants in the Ocular Plan on January 14, 2002 and (a) became Participants in
the Plan on April 1, 2002, or (b) whose Ocular accounts were subsequently transferred from
the Ocular Plan to the Trust Fund as a result of the merger of the Ocular Plan into the
Plan effective June 28, 2002.

Ocular
Plan means the Ocular Networks, Inc. 401(k) Plan as in effect on the Ocular
Acquisition Date, and as amended from time to time thereafter up to and including its
merger into the Plan effective June 28, 2002.

One-Percent
Owner means an employee described in Code Section 416(i)(1).

9

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Participant
means:

(a)    
          a current employee of the Employer or an Affiliate who has become a Participant
          in the Plan pursuant to subsections (a), (b), (c), (f), or (g) of
          Section 2.1 (Eligibility Requirements) or;

(b)    
          a former employee of the Employer or an Affiliate for whose benefit an Account
          in the Trust Fund is maintained.

Plan
means the Tellabs Advantage Program set forth herein, including all Appendices hereto.

Permissive Aggregation
Group means the Required Aggregation Group of plans plus any other plan or plans of
the Employer which, when considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of Code Sections 401(a)(4) and 410, as further
referenced in Article 8 (Top-Heavy Plan Requirements).

Plan
Year means a 12-month period beginning on January 1 and ending on
December 31.

Pre-Retirement
Survivor Annuity means the surviving spouse survivor annuity defined in
Section 7.3(Pre-Retirement Survivor Annuity  Retirement Account, Salix
Accounts, Coherent Accounts and Ocular Account).

Present
Value means the present value of accrued benefits under the aggregated defined
benefit plan or plans for all Participants as of the Top-Heavy Determination Date(s), as
determined in accordance with Code Section 416 and the regulations thereunder, as
further defined in Article 8 (Top-Heavy Plan Requirements).

Prior
Plan means prior versions of the Plan.

Profit
Sharing Contribution means the contribution referred to in Section 3.3
(Profit Sharing Contribution under the Savings Program).

Provisional
Annual Addition is the amount described in Section 5.11 (Provisional
Annual Addition).

Qualified
Domestic Relations Order means any domestic relations order that creates, recognizes
or assigns to an Alternate Payee the right to receive all or a portion of
Participants benefits payable hereunder and meets the requirements of Code
Section 414(p).

Qualified
Joint and Survivor Annuity for a married Participant, means an annuity for the life
of a Participant with a survivor annuity for the life of the Participants surviving
spouse equal to fifty percent (50%) of in the amount of the annuity which is payable
during the joint lives of the Participant and his surviving spouse. The Qualified Joint
and Survivor Annuity shall be the actuarial equivalent of the Participants vested
Account Balance.

10

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Qualified
Military Service means the performance of duty on a voluntary or involuntary basis
in the Uniformed Services of the United States by an Eligible Employee provided he is
re-employed by the Employer or an Affiliate within the applicable time period specified in
Chapter 43 of Title 38 of the United States Code (Employment and Reemployment
Rights of Members of the Uniformed Services) and the total length of all such absences
does not exceed the maximum specified by law for the retention of reemployment rights. The
term Uniformed Services of the United States means the Armed Forces, the Army
National Guard and the Air National Guard when engaged in active duty for training,
inactive duty training, or full-time National Guard duty, or full-time duty in the
commissioned corps of the Public Health Service as defined in Chapter 43 of
Title 38 of the United States Code.

Required
Aggregation Group means (i) each qualified plan of the Employer in which at least
one Key Employee participates or participated at any time during the Determination Period
(regardless of whether the plan has terminated), and (ii) any other qualified plan of the
Employer which enables a plan described in subsection (i) above to meet the
requirements of Code Sections 401(a)(4) or 410 as further referenced in
Article 8(Top-Heavy Plan Requirements).

Required
Beginning Date means:

(a)    
          for a Participant who is not a Five-Percent Owner, the April 1 following
          the later of the calendar year in which the Participant attains age 701⁄2
          or the calendar year in which the Participant terminates employment; or

(b)    
          for a Participant who is a Five-Percent Owner with respect to the Plan Year in
          which he attains age 701⁄2, the April 1 following the calendar year in
          which he attained age 701⁄2.

Reserve
Staff means an employee whose employment is on an as needed basis where Employer
will determine need every two weeks or such period as it deems appropriate and is
classified as a reserve employee under the records of his Employer.

Retirement
Contribution means the contribution referred to in Section 3.2
(Retirement Contribution Under the Retirement Program).

Retirement
Program means the provisions of this Plan relating to the Tellabs Retirement Plan,
the money purchase pension plan which forms a part hereof.

Rollover
Contribution means:

|(a) | all or a portion of a distribution received by an employee from another
          qualified plan which is eligible for tax-free rollover to a qualified plan and
          which is rolled over by the employee to this Plan within 60 days following
          his receipt thereof;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | amounts rolled over to this Plan from a conduit individual retirement account
          which has no assets other than assets (and the earnings thereon) which were
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | previously distributed to the employee by another qualified plan as a
          distribution which is eligible for tax-free rollover to a qualified plan and
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

11

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|(ii) | deposited in such conduit individual retirement account within 60 days of
          receipt thereof;
|---- | ----------------------------------------------------------------------------------------------------

|(c) | amounts distributed to the employee from a conduit individual retirement account
          meeting the requirements of (b) above, and rolled over by the employee to
          this Plan within 60 days of his receipt thereof from such conduit
          individual retirement account;
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | amounts rolled over directly to this Plan by the trustee of another qualified
          plan pursuant to the provisions of Code Section 401(a)(31) and to any other
          related laws and regulations as in effect at the time of such direct rollover;
          and
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | any amounts distributed from another qualified plan will not be eligible as a
          Rollover Contribution if such money had been contributed to that plan as an
          after-tax contribution.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Salix
Accounts means the separate Salix Before-Tax Account, Salix Employer Account and
Salix Rollover Account of Salix Participants described in Section 5.1
(Participant Accounts).

Salix
Acquisition Date means the date of the acquisition of Salix Technologies, Inc. by
Tellabs, Inc.

Salix
Participant means employees of Salix Technologies, Inc. or any subsidiary thereof
who were participants in the Salix Plan on May 19, 2000 and (a) became Participants
in the Plan on May 19, 2000, or (b) whose Salix Accounts were subsequently
transferred from the Salix Plan to the Trust Fund as a result of the merger of the Salix
Plan into the Plan effective May 19, 2000.

Salix
Plan means the Salix Technologies, Inc. 401(k) Plan as in effect on the Salix
Acquisition Date, and as amended from time to time thereafter up to and including its
merger into the Plan effective May 19, 2000.

Savings
Program means the provisions of the Plan relating to the Tellabs Profit Sharing and
Savings Plan, a profit sharing and Code Section 401 savings and matching contribution
plan which forms a part hereof.

Service
means the period credited to an Eligible Employee or Participant for purposes of
determining the level of a Participants nonforfeitable benefits under the Tellabs
Retirement Program. A Participants or Eligible Employees Service shall be the
period beginning on his Employment Commencement Date (or Re-employment Commencement Date,
if applicable) and ending on his Termination Date, computed in accordance with the
following rules:

|(a) | Special Definitions.
|--- | --------------------

|(i) | Employment Commencement Date means the date an employee first
          performs an Hour of Service.
|--- | ------------------------------------------------------------------------------------------------------

|(ii) | Termination Date means the earlier of:
|---- | ----------------------------------------

12

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|(A) | The date on which an employee quits, retires, is discharged or dies; or
|--- | -----------------------------------------------------------------------

|(B) | The first anniversary of the first day of a period in which an employee remains
          absent from service (with or without pay) for any reason other than a quit,
          retirement, discharge or death, such as vacation, holiday, sickness, disability,
          leave of absence or layoff, except that this clause (B) shall not apply to
          an employee on leave of absence for service in the United States armed forces or
          the Family and Medical Leave Act of 1993.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | Re-employment Commencement Date means the date on which an employee
          first performs an Hour of Service following a Period of Severance.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------

|(iv) | Period of Severance means the period beginning on an employees
          Termination Date and ending on his Re-employment Commencement Date.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------

|(v) | Year of Service means each full year (on the basis that
          365 days equal a full year) in the employees period of Service.
|--- | ------------------------------------------------------------------------------------------------------------------------------------

|(b) | Aggregation Rule. All of an employees periods of Service with any
          Affiliate shall be aggregated on the basis that 365 days equal a full year,
          except that if an employee has a Period of Severance of five years or more:
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | The prior period of Service shall be disregarded unless (A) his Retirement
          Account was nonforfeitable at the time the Period of Severance began or
          (B) the Period of Severance is less than the prior period of Service, and
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | Any period of Service after such Period of Severance shall be disregarded in
          determining the vested percentage of his Retirement Account which accrued before
          the Period of Severance.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Service Spanning Rule. If an employees Re-employment Commencement
          Date occurs within 12 months after his Termination Date, his Service shall
          include the intervening Period of Severance.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Service with Predecessor and Related Employers. An employees period
          of service,
|--- | ------------------------------------------------------------------------------------------

|(i) | with another employer before the acquisition of that employers business by
          the Employer shall, to the extent provided in the agreement pertaining to such
          acquisition or as approved by the Board of Directors, be included in his Service
          to the same extent as if such service was performed for the Employer, provided
          however, that in no event shall any service prior to January 6, 1975 be
          deemed Service hereunder; and
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | with any employer while such employer is an Affiliate shall be included in his
          Service to the same extent as if such service was performed for the Employer,
          provided however, that in no event shall any service prior to January 6,
          1975 be deemed Service hereunder.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

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|(e) | Recognition of Services under Salix Plan and Coherent Plan. Solely with
          respect to former Salix Participants, Coherent Participants and Ocular
          Participants, each such Participants period of service shall include such
          period or periods of employment previously credited to that Participant under
          the Salix Plan, Coherent Plan or Ocular Plan, as applicable; provided, however,
          that in no event shall any service prior to January 6, 1975 be deemed
          Service hereunder.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Simplified
Employee Pension Plan means a plan designed to meet the requirements of a simplified
pension plan pursuant to Code Section 408(k), as further referenced in
Article 8 (Top-Heavy Plan Requirements) and subsection11.6(c).

Supplemental
Before-Tax Contribution means for any period, with respect to a Participant, the
portion of the Before-Tax Contribution made on his behalf by an Employer during such
period which exceeds such Participants Basic Before-Tax Contribution for such
period. For any period, Supplemental Before-Tax Contribution means, with
respect to the Employer, the sum of such contributions.

Tellabs
Stock Fund is the Fund described in Section 5.2 (Common Fund).

Tentative
Employer Contribution is the contribution described in Section 3.3
(Profit Sharing Contribution Under the Savings Program).

Top-Heavy
describes a plan which is determined to be Top-Heavy in accordance with Code
Section 416 as further detailed in Section 8.1 (Top-Heavy Definitions).

Top-Heavy
Determination Date means, for any Plan Year subsequent to the first Plan Year, the
last day of the preceding Plan Year or, for the first Plan Year of the Plan, the last day
of that year as further described in Section 8.1 (Top-Heavy Definitions).

Top-Heavy
Ratio means the ratio set forth in Code Section 416, as further described in
Section 8.1 (Top-Heavy Definitions).

Trust
or Trust Fund means the Tellabs, Inc. Profit Sharing and Savings Trust or such
other trust established in accordance with Article 9 (Powers and Duties of
Committees).

Trustee
means the Trustee or Trustees under the Trust referred to in Article 9 (Powers
and Duties of Committees).

Unit
means the unit of measure (determined as provided in Article 5 (Accounting
Provisions and Allocations) of the proportionate measure, if any, of the Accounts of a
Participant in the investment Funds established pursuant to Section 5.2
(Common Fund).

Valuation
Date means each Business Day as of which the Administrative Committee shall
determine the value of each Account.

14

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1.5      EGTRRA Compliance. This
Plan reflects certain provisions of the Economic Growth and Tax Relief Reconciliation Act
of 2001 (EGTRRA). The provisions of the Plan relating to EGTRRA are intended
to demonstrate good faith compliance with the requirements of EGTRRA and are to be
construed in accordance with EGTRRA and guidance issued thereunder, including but not
limited to IRS Notice 2001-57. Except as otherwise provided, the provisions of the Plan
relating to EGTRRA shall be effective as of the first day of the 2002 Plan Year, and shall
supercede other provisions of the Plan to the extent such provisions are inconsistent
therewith.

15

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# ARTICLE 2

# Eligibility and Participation

2.1      Eligibility Requirements.

(a)    
          Every Participant on January 1, 2003 shall continue as such subject to the
          provisions of the Plan.

(b)    
          Prior to July 1, 2003, every other Eligible Employee shall first be eligible to
          participate in the Matching Contribution, the Profit Sharing Contribution and
          the Retirement Contribution provisions of the Plan, if he is then employed by an
          Employer, on the Entry Date coinciding with or next following his first
          nine (9) months of continuous employment, if he has completed 1,000 Hours
          of Service during such nine (9) month period and attained his 21st birthday
          (18th birthday, commencing with the April 1, 1999 Entry Date) on or before
          such Entry Date. An Eligible Employee who does not become a Participant pursuant
          to the preceding sentence shall first be eligible to participate, if he is then
          employed by an Employer, on the Entry Date coinciding with or next following the
          later of (i) the end of the first Eligibility Period in which he completes
          1,000 Hours of Service or (ii) his 21st birthday (18th birthday, commencing
          with the April 1, 1999 Entry Date).

(c)    
          Prior to July 1, 2003, any former employee of the Employer or an Affiliate who
          was a Participant or could have become a Participant under
          subsection (b) above had he been employed on a prior Entry Date, and
          is reemployed by the Employer as an Eligible Employee, shall be eligible to
          participate on the first Entry Date coinciding with or next following the date
          he is reemployed.

(d)    
          Prior to July 1, 2003 and notwithstanding any provisions of this
          Section 2.1 to the contrary, an Eligible Employee who does not meet
          the requirements of paragraph (a), (b) or (c) above and who is
          reasonably expected to meet the requirements of paragraph (b) shall first
          be eligible to participate in the Plan as an Eligible Limited Participant on the
          Entry Date coinciding with or next following the later of his Employment
          Commencement Date or 21st birthday (18th birthday, commencing with the
          April 1, 1999 Entry Date), solely for purposes of making a Before-Tax
          Contribution pursuant to Section 3.4 (Before-Tax Contributions under
          the Savings Program) (but not for purposes of receiving a Matching Contribution
          with respect thereto) and/or a Participant Rollover Contribution pursuant to
          Section 4.2 (Rollover Contribution), and exercising rights with
          respect to the Account(s) established thereby.

(e)    
          Effective July 1, 2003, any Eligible Employee shall first be eligible to
          participate in the Plan effective as of the Entry Date coinciding with the later
          of:

(i)    
          the Eligible Employees first day of employment or re-employment as an
          Eligible Employee,

(ii)    
          the date the Eligible Employee attains age 18, or

(iii)    
          July 1, 2003.

16

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(f)    
          Notwithstanding any provisions of this Plan to the contrary, any individual who
          was providing services to the Employer in the capacity of, or who was designated
          by the Employer as, an independent contractor, a Leased Employee, Reserve Staff
          or a Limited Term Employee and who is subsequently re-classified as an Eligible
          Employee for the purposes of this Plan (regardless of whether such
          re-classification is retrospective or prospective), shall be eligible to
          participate in the Plan on a prospective basis only from the date of the
          re-classification and shall not have any retroactive claim for benefits.

(g)    
          Notwithstanding the foregoing provisions of this Section 2.1
          (Eligibility Requirements) a Coherent Participant who is an Eligible Employee on
          January 1, 1999 shall become a Participant as of that date. Any other
          individual who was an employee of Coherent Communications Systems Corporation or
          any subsidiary thereof and first became an Eligible Employee on January 1,
          1999, shall become a Participant on the first Entry Date on which such Eligible
          Employees satisfies the requirements of paragraph (b), (c), or (d)
          above, as the case may be.

(h)    
          Notwithstanding the foregoing provisions of this Section 2.1 (Eligibility
          Requirements) a Salix Participant who is an Eligible Employee on May 19, 2000
          shall become a Participant as of that date.

(i)    
          Notwithstanding the foregoing provisions of this Section 2.1 (Eligibility
          Requirements) a Ocular Participant who is an Eligible Employee on April 1, 2002
          shall become a Participant as of that date.

2.2      Continued
Participation; Reemployment.

(a)    
          Prior to July 1, 2003 and except as provided in Section 2.3
          (Transfers and Changes in Status), once an Eligible Employee has become a
          Eligible Limited Term Participant eligible to elect to make Before-Tax
          Contributions pursuant to subsection 2.1(d), he shall continue to be
          eligible to make such Contributions, subject to the conditions and limitations
          in the Plan, until he incurs his Termination Date.

(b)    
          Prior to July 1, 2003 and except as provided in Section 2.3
          (Transfer and Changes in Status), once an Eligible Employee becomes a
          Participant for purposes of determining the amount of the Matching Contribution,
          the Profit Sharing Contribution and the Retirement Contribution and eligibility
          to share in the Matching Contribution, the Profit Sharing Contribution and the
          Retirement Contribution, he shall continue to be eligible to share in the
          Matching Contribution, the Profit-Sharing Contribution and the Retirement
          Contribution, subject to the conditions and limitations in the Plan, for each
          Plan Year as provided in Section 5.4 (Eligibility to Share in the
          Employer Contributions and Forfeiture).

(c)    
          Prior to July 1, 2003, in the event an Eligible Employee who has become a
          Participant incurs his Termination Date and he is subsequently reemployed, he
          shall be eligible to elect to make Before-Tax Contributions as of the first
          business day following such Re-Employment Commencement Date and to share in the
          Matching Contribution, the Profit Sharing Contribution and the Retirement
          Contribution for the Plan Year in which his Re-Employment Commencement Date
          occurs, provided the Participant is an Eligible Employee and, with respect to
          the Matching Contribution, the Profit Sharing Contribution and the Retirement
          Contribution, satisfies the requirements of Section 5.4 as of the
          first Entry Date after he becomes eligible  (Eligibility to Share in the
          Employer Contributions and Forfeiture).

17

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(d)    
          After June 30, 2003, in the event an Eligible Employee who has become a
          Participant incurs his Termination Date and he is subsequently reemployed, he
          shall be eligible to participate in the Plan as of such Re-Employment
          Commencement Date.

2.3      Transfers and Changes in Status.

|(a) | As provided in Section 1.4 (Definitions), an Eligible
          Employees Service with
|--- | ---------------------------------------------------------------------------------------

|(i) | an Employer while a Member of a Collective Bargaining Unit before his transfer
          to an employment status outside of the collective bargaining unit, or
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | another employer before the acquisition of that employers business by an
          Employer (but only to the extent approved by the Board of Directors and
          exclusive of any period prior to January 6, 1975), or
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | another employer while such employer is a Related Employer prior to the date the
          Employee is transferred to an Employer,
|----- | ----------------------------------------------------------------------------------------------------------------------------------

shall be taken into account (applying
the principles of Sections 2.1 (Eligibility Requirements) and 2.2(Continued Participation Reemployment)) for purposes of determining the Eligible
Employees eligibility to participate in the Plan. In the event that based upon such
service, the Eligible Employee would have become a Participant as of an Entry Date had he
been an Eligible Employee of the Employer, then such Eligible Employee shall become a
Participant for purposes of Section 2.1 (Eligibility Requirements) as of the
date of such acquisition or transfer provided he is an Eligible Employee as of such date.

(b)    
          If a Participant is transferred to a position with an Employer such that he no
          longer is an Eligible Employee, or is transferred to employment with an
          Affiliate which is not an Employer, he shall be treated for all purposes under
          this Plan as if he were on a leave of absence without Compensation while in that
          position.

2.4      Leaves of Absence. An
employee shall be credited with 45 Hours of Service for each full week the employee is on
a leave of absence, including, but not limited to a leave of absence required to be
recognized under the provisions of the Retirement Equity Act of 1984 or the Family and
Medical Leave Act of 1993, if he is not otherwise credited with such Hours of Service,
provided that other than with respect to a leave of absence for service in the United
States armed forces, not more than 501 Hours of Service shall be credited with respect to
any continuous period of leave of absence. Any leave of absence under this
Section 2.4 must be granted in writing and pursuant to the Employers
established leave policy, which shall be administered in a uniform and nondiscriminatory
manner to similarly situated employees.

18

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2.5      Qualified Military
Service. Notwithstanding any provision of this Plan to the contrary, effective on and
after December 12, 1994, contributions, benefits and service credit with respect to
Qualified Military Service will be provided in accordance with Code Section 414(u).

19

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# ARTICLE 3

# Contributions

3.1      Employer Contributions.
Subject to the right reserved to the Company to alter, amend or discontinue this Plan and
the Trust, each Employer shall for each Plan Year contribute to the Trust Fund an amount
equal to the sum of:

(a)    
          the Retirement Contribution (for periods ended prior to July 1, 2003);

(b)    
          the Profit Sharing Contribution (for periods ended prior to July 1, 2003);

(c)    
          the Company Contribution (for periods ended after June 30, 2003);

(d)    
          the Before-Tax Contribution; and

(e)    
          the Matching Contribution.

Such sum, which is known as the
Tentative Employer Contribution, shall be reduced by an amount equal to the Excess
Tentative Employer Contribution (as provided in Section 5.12 (Limitation on
Annual Additions)); provided that in no event shall the Tentative Employer Contribution,
as reduced by the Excess Tentative Employer Contribution, exceed the amount deductible by
the Employer for said year for federal income tax purposes.

In addition, each Employer shall
contribute to the Medical Benefits Account maintained as part of the Trust Fund such
amounts as may be determined in accordance with Article 14 (Retiree Medical
Benefits) hereof.

3.2      Retirement Contribution Under
the Retirement Program. Effective July 1, 2003, no further Retirement Contributions
will be made by the Employer under the Plan. Subject to the provisions of
Section 3.1(Employer Contributions), for periods prior to July 1, 2003, each
Employer shall pay to the Trustee for each quarter of each Plan Year an amount which,
together with the forfeitures allocable for such quarter, shall be equal to:

(a)    
          4.5% (four and five-tenths percent) effective January 1, 1999; or

(b)    
          3.6% (three and six-tenths percent) effective January 1, 1994;

of the Considered Compensation of
each Eligible Participant for such quarter. Such contribution is known as the
Retirement Contribution.

3.3      Profit Sharing and Company Contributions Under the Savings Program.  Subject to the provisions of
Section 3.1 (Employer Contributions):

(a)    
          With respect to periods prior to July 1, 2003, each Employer shall pay to the
          Trustee for each quarter of each Plan Year an amount which, together with the
          forfeitures allocable for such quarter, shall be equal to .5% (five-tenths of
          one percent) of the Considered Compensation of each Eligible Participant for
          such quarter;

20

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(b)    
          With respect to periods after June 30, 2003, each Employer shall pay to the
          Trustee for each quarter of each Plan Year a discretionary Company Contribution
          in an amount, if any, as the Board of Directors shall determine; and

(c)    
          Each Employer shall also pay to the Trustee for each Plan Year such additional
          amounts, if any, as the Board of Directors shall determine.

Prior to July 1, 2003, such
contributions described in subsections (a) and (c) are, collectively, known as the
Profit Sharing Contribution. After June 30, 2003, such contributions described
in subsections (b) and (c) are, collectively known as the Company
Contribution.

3.4      Before-Tax Contributions Under the Savings Program.

(a)    
          Subject to the provisions of Sections 3.1 (Employer Contributions)
          and 3.3 (Profit Sharing and Company Contributions Under the Savings
          Program), each Active Participant may for each payroll period elect to have the
          Employer make a Basic Before-Tax Contribution on his behalf in an amount of 1%
          up to 15% (effective January 1, 2002, up to 20% and effective January 1,
          2003, up to 50%) of his Considered Compensation (rounded to the nearest cent).
          Such initial election or any subsequent election (including a complete
          suspension of Before-Tax Contributions under this Section) shall be effective as
          of the beginning of any payroll period provided he notifies such Employer within
          such time and in accordance with such procedures as may from time to time be
          established by the Administrative Committee.

(b)    
          The Administrative Committee may establish procedures whereby each Eligible
          Participant on whose behalf the total contribution made under
          Section 3.4(a) is less than 15% (effective January 1, 2002,
          less than 20% and effective January 1, 2003, less than 50%) of his Considered
          Compensation for the Plan Year may, subject to the provisions of
          Section 3.1 (Employer Contributions) and 3.5 (Limitations on
          Before-Tax Contributions Under the Savings Program), elect to have his Employer
          make an additional contribution on his behalf in an amount not exceeding his
          annual incentive cash bonus for such Plan Year so long as the sum of such
          additional contribution and the contributions made on his behalf under
          subsection 3.4(a) above does not exceed 15% (effective
          January 1, 2002 does not exceed 20%, and effective January 1, 2003 does not
          exceed 50%) of his Considered Compensation for the Plan Year.

(c)    
          The amount of the Before-Tax Contributions to be made pursuant to a
          Participants election shall reduce the compensation otherwise payable to
          him by the Employer.

3.5      Limitations on Before-Tax Contributions Under the Savings Program.

|(a) | In no event shall a Participants Before-Tax Contributions during any
          calendar year exceed the dollar limitation in effect under Code
          Section 402(g) at the beginning of such calendar year; provided, however
          that:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | contributions made under Section 2.5 (Qualified Military Service)
          shall be subject to such limitation for the year to which they relate instead of
          the year they are actually made; and
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21

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|(ii) | effective as of the first day of the first Plan Year beginning after December
          31, 2001, all employees who are eligible to make elective deferrals under this
          Plan and who have attained age 50 before the close of the Plan Year shall be
          eligible to make catch-up contributions in accordance with, and subject to the
          limitations of, Code Section 414(v). Such catch-up contributions shall not be
          taken into account for purposes of the provisions of the Plan implementing the
          required limitations of Code Sections 402(g) and 415. The Plan shall not be
          treated as failing to satisfy the provisions of the Plan implementing the
          requirements of Code Sections 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416,
          as applicable, by reason of any such catch-up contributions.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If a Participants Before-Tax
Contributions, together with any additional elective contributions to any other qualified
cash or deferred arrangement, and any elective deferrals under a tax-sheltered annuity
program or a simplified employee pension plan, exceed such dollar limitation for any
calendar year, such excess, and any earnings allocable thereto, shall be distributed to
the Participant by April 15 of the following year; provided that, if such excess
contributions were made to a plan or arrangement not maintained by the Employer or an
Affiliate, the Participant must first notify the Administrative Committee of the amount of
such excess allocable to this Plan by March 1 of the following year.

|(b) |  | Notwithstanding any other provision of this Plan to the contrary, the Before-Tax
               Contributions for the Highly Compensated Employees for the Plan Year shall be
               reduced in accordance with the following provisions:
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) |  | The Before-Tax Contributions of the Highly Compensated Employees shall be
               reduced if neither of the Actual Deferral Percentage Tests set forth in (A) or
               (B) below is satisfied after taking into account the provisions of subsection
               (f) below:
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(A) |  | The 1.25 Test. The Actual Deferral Percentage of the Highly Compensated
               Employees is not more than the Actual Deferral Percentage of the Non-Highly
               Compensated Employees multiplied by 1.25.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) |  | The 2.0 Test. The Actual Deferral Percentage of the Highly Compensated
               Employees is not more than 2 percentage points greater than the Actual
               Deferral Percentage of the Non-Highly Compensated Employees and the Actual
               Deferral Percentage of the Highly Compensated Employees is not more than the
               Actual Deferral Percentage of the Non-Highly Compensated Employees multiplied by
               2.0.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The provisions of this
subsection (b) shall apply separately with respect to each group of employees
who are Members of a Collective Bargaining Unit (if any) and the group of employees who
are not Members of a Collective Bargaining Unit.

|(ii) | As used in this subsection, Actual Deferral Percentage means:
|---- | ---------------------------------------------------------------

|(A) | With respect to Non-Highly Compensated Employees, the average of the ratios of
          each Non-Highly Compensated Employees Before-Tax Contributions with
          respect to the prior Plan Year, to each such Participants Considered
          Compensation for such Plan Year; and
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22

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|(B) | With respect to Highly Compensated Employees, the average of the ratios of each
          Highly Compensated Employees Before-Tax Contributions with respect to the
          current Plan Year, to each such Participants Considered Compensation for
          such Plan Year.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | All Before-Tax Contributions made under this Plan and all before-tax
          contributions made under any other plan that is aggregated with this Plan for
          purposes of Code Sections 401(a)(4) and 410(b) shall be treated as made
          under a single plan. If any plan is permissively aggregated with this Plan for
          purposes of Code Section 401(k), the aggregated plans must also satisfy
          Code Sections 401(a)(4) and 410(b) as though they were a single plan. The
          Actual Deferral Percentage ratios of any Highly Compensated Employee will be
          determined by treating all plans subject to Code Section 401(k) under which
          the Highly Compensated Employee is eligible as a single plan. Notwithstanding
          the foregoing, Before-Tax Contributions made under Section 2.5
          (Qualified Military Service) corresponding to a preceding Plan Year shall not be
          included in the Actual Deferral Percentage Test.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iv) | If neither Actual Deferral Percentage Test is satisfied as of the end of the
          Plan Year, the Administrative Committee shall cause the Before-Tax Contributions
          for Highly Compensated Employees to be reduced and refunded to each such Highly
          Compensated Employee in accordance with this subsection (iv) and
          subsection (v), respectively, until either Actual Deferral
          Percentage Test is satisfied. The sequence for determining the amount of such
          reductions shall begin with Highly Compensated Employees who elected to defer
          the greatest percentage of Considered Compensation, assuming that Supplemental
          Before-Tax Contributions represent the last contribution made to the
          Participants Account, then the second greatest percentage amount,
          continuing until either Actual Deferral Percentage Test is satisfied. This
          process shall continue through the remaining Supplemental Before-Tax
          Contributions and continuing with the Basic Before-Tax Contributions until
          either Actual Deferral Percentage Test is satisfied.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(v) | Once the total amount of reductions has been determined under
          subsection (iv)above, the Administrative Committee shall direct the
          Trustee to distribute as a refund to the appropriate Highly Compensated
          Employees an allocable portion of such reduction attributable to excess
          Before-Tax Contributions, together with the net earnings or losses allocable
          thereto. The sequence for determining and refunding a Highly Compensated
          Employees allocable portion of excess Before-Tax Contributions shall begin
          with the Highly Compensated Employee who elected to defer the greatest dollar
          amount of Before-Tax Contributions. The Before-Tax Contributions of such
          Participant shall be reduced by the amount required to cause that
          Participants Before-Tax Contributions to equal the dollar amount of the
          Before-Tax Contributions of the Highly Compensated Employee with the next
          highest dollar amount of Before-Tax Contributions. If the total amount
          distributed is less than the total excess contributions, this process shall
          continue until all excess Before-Tax Contributions are distributed and excess
          Matching Contributions are forfeited. However, notwithstanding anything in the
          foregoing to the contrary, if a lesser reduction, when added to the total dollar
          amount previously reduced, would equal the total excess contributions, such
          lesser reduction shall be utilized. The Administrative Committee shall designate
          such distribution and forfeiture as a distribution of excess Before-Tax
          Contributions and forfeiture of excess Matching Contributions, determine the
          amount of the allocable net earnings or losses to be distributed and forfeited
          in accordance with subsections (c) and (d) below, and cause such
          distributions and forfeitures to occur prior to the end of the Plan Year
          following the Plan Year in which the excess Before-Tax Contributions and excess
          Matching Contributions were made.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

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|(c) | Net earnings or losses to be distributed with the excess Before-Tax
          Contributions shall be equal to the net earnings or losses on such contributions
          for the Plan Year in which the contributions were made. The net earnings or
          losses allocable to the excess Before-Tax Contributions for the Plan Year shall
          be determined in the manner set forth in Article 5 (Accounting
          Provisions and Allocations).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Net earnings or losses to be treated as forfeitures together with the Matching
          Contributions shall be equal to the net earnings or losses on such contributions
          for the Plan Year in which the contributions were made. Net earnings or losses
          on Matching Contributions shall be determined in the same manner as in
          subsection (c) above.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Any excess Matching Contribution treated as a forfeiture pursuant to
          subsection (b) above shall be used to reduce the Profit Sharing
          Contribution in Section 3.3 (Profit Sharing Contribution Under the
          Savings Program).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | For the purpose of avoiding the necessity of adjustments pursuant to this
          Section or Section 5.12(Limitations on Annual Additions), or to
          comply with any applicable laws or regulations:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | The Administrative Committee may adopt such rules as it deems necessary or
          desirable to:
|--- | --------------------------------------------------------------------------------------------------

|(A) | impose limitations during a Plan Year on the percentage or amount of Before-Tax
          Contributions elected by Participants pursuant to Section 3.2
          (Retirement Contribution Under the Retirement Plan); or
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) | increase during a Plan Year the percentage of Considered Compensation with
          respect to which a Participant may elect a Before-Tax Contribution for the
          purpose of providing Participants with the opportunity to increase their
          Before-Tax Contributions within the limitations of Section 3.3 (Profit
          Sharing Contribution Under the Savings Program).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | The Employer may at its sole discretion make fully vested contributions to the
          Plan which will be allocated to the Before-Tax Accounts of one or more
          Participants who are Non-Highly Compensated Employees in such amounts as the
          Employer directs for the purpose of complying with the applicable limits on
          Before-Tax Contributions in the Code. Such contributions will not be taken into
          account in the allocation of Matching Contributions.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24

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|(g) | The amount of each Participants Basic Before-Tax Contributions and
          Supplemental Before-Tax Contributions as determined under this
          Section 3.5 is also subject to the provisions of
          Sections 5.12(Limitations on Annual Additions).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3.6      Matching Contribution Under
the Savings Plan. Subject to the provisions of Section 3.1 (Employer
Contributions), each Employer shall each payroll period of the Plan Year contribute to the
Trust Fund 1 cent for each cent of Basic Before-Tax Contribution made on behalf of
each Eligible Participant for such payroll period. Each Employer shall also contribute as
of the last day of the Plan Year on behalf of each Eligible Participant employed by the
Employer on the last day of such Plan Year (beginning with the 2004 Plan Year, on behalf
of each Eligible Participant for whom Before-Tax Contributions were made during the Plan
Year) an amount equal to each such Participants Basic Before-Tax Contribution for
the Plan Year less the amount of the payroll period contributions made during such Plan
Year pursuant to the first sentence of this Section 3.6 on behalf of each such
Participant. With respect to the 2003 Plan Year, such Basic Before-Tax Contributions shall
not exceed 3% of the Participants Considered Compensation during the period starting
January 1, 2003 and ending June 30, 2003 plus 4% of his Considered Compensation during the
period from July 1, 2003 to the end of the Plan Year. The sum of such contributions is
known as the Matching Contribution.

3.7      Limitations on
Matching Contributions Under the Savings Program

|(a) |  | Notwithstanding any other provision to the contrary, the share of Matching
               Contributions of the Highly Compensated Employees shall be reduced in accordance
               with the following provisions:
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) |  | The share of Matching Contributions of the Highly Compensated Employees shall be
               reduced if neither of the Contribution Percentage Tests set forth in (A) or (B)
               below is satisfied after taking into account the provisions of
               subsection (f) below:
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(A) |  | The 1.25 Test. The Contribution Percentage of the Highly Compensated
               Employees is not more than the Contribution Percentage of all Non-Highly
               Compensated Employees multiplied by 1.25.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) |  | The 2.0 Test. The Contribution Percentage of the Highly Compensated
               Employees is not more than 2 percentage points greater than the Contribution
               Percentage of all Non-Highly Compensated Employees, and the Contribution
               Percentage of the Highly Compensated Employees is not more than the Contribution
               Percentage of all Non-Highly Compensated Employees multiplied by 2.0.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The provisions of this
subsection (a) shall not apply to any group of employees who are Members of a
Collective Bargaining Unit.

|(ii) | As used in this Section 3.7, Contribution Percentage
          means:
|---- | -----------------------------------------------------------------------

25

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|(A) | With respect to Non-Highly Compensated Employees, the average of the ratios of
          each Non-Highly Compensated Employees share of Matching Contributions,
          plus Designated Before-Tax Contributions (as defined in
          subsection (b) below), with respect to the prior Plan Year,
          to each such Participants Considered Compensation for such Plan Year; and
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) | With respect to Highly Compensated Employees, the average of the ratios of each
          Highly Compensated Employees share of Matching Contributions, plus
          Designated Before-Tax Contributions (as defined in subsection (b)
          below), with respect to the current Plan Year, to each such
          Participants Considered Compensation for such Plan Year.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | All Matching Contributions made under this Plan and all employee contributions
          and matching contributions made under any other plan that is aggregated with
          this Plan for purposes of Code Sections 401(a)(4) and 410(b) shall be
          treated as made under a single plan. If any plan is permissively aggregated with
          this Plan for purposes of Code Section 401(m), the aggregated plans must
          also satisfy Code Sections 401(a)(4) and 410(b) as though they were a
          single plan. The Contribution Percentage ratio of any Highly Compensated
          Employee will be determined by treating all plans subject to Code
          Section 401(m) under which the Highly Compensated Employee is eligible as a
          single plan. Notwithstanding the foregoing, Matching Contributions made under
          Section 2.5 (Qualified Military Service) corresponding to a
          preceding Plan Year shall not be included in the Contribution Percentage Test.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | To the extent necessary, and solely for the exclusive purpose of satisfying the
          Contribution Percentage Test in subsection 3.7(a), all or part of the
          Before-Tax Contributions of Participants and/or Matching Contributions may be
          treated by the Committee as After-Tax Contributions (Designated Before-Tax
          Contributions), provided that each of the following is satisfied:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | The Before-Tax Contributions, including Designated Before-Tax Contributions,
          satisfy the requirements of subsection 3.5(b); and
|--- | -----------------------------------------------------------------------------------------------------------------------------------------

|(ii) | The Before-Tax Contributions, excluding Designated Before-Tax Contributions,
          satisfy the requirements of subsection 3.5(b).
|---- | -------------------------------------------------------------------------------------------------------------------------------------

|(c) | If neither Contribution Percentage Test is satisfied as of the end of the Plan
          Year, the Committee shall first cause the Matching Contributions of the Highly
          Compensated Employees to be reduced and refunded or forfeited, as the case may
          be, in accordance with this subsection (c) and
          subsection (d) below until either Contribution Percentage Test is
          satisfied. The sequence for determining the amount of such reductions shall
          begin with Highly Compensated Employees who received the greatest amount of
          Matching Contributions as a percentage of Considered Compensation, then the
          second greatest percentage amount, continuing until either Contribution
          Percentage Test is satisfied. This process shall continue through the remaining
          Matching Contributions for Highly Compensated Employees until either
          Contribution Percentage Test is satisfied.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

26

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|(d) | Once the total amount of reductions has been determined under
          subsection (c) above, the Committee shall direct the Trustee to
          distribute as a refund to the appropriate Highly Compensated Employees an
          allocable portion of such reduction attributable to any excess vested Matching
          Contribution, and to treat as a forfeiture an allocable portion of such
          reduction attributable to any excess nonvested Matching Contributions, together
          with the net earnings or losses allocable thereto. The sequence for determining
          and refunding a Highly Compensated Employees allocable portion of excess
          vested Matching Contributions or forfeiture of nonvested Matching Contributions
          shall begin with the Highly Compensated Employee who elected and received the
          greatest dollar amount of such contributions. The Matching Contributions of such
          Participant shall be reduced by the amount required to cause that
          Participants Matching Contribution to equal the dollar amount of the
          Matching Contributions of the Highly Compensated Employee with the next highest
          dollar amount of such contributions. If the total amount distributed or
          forfeited is less than the total excess contributions, this process shall
          continue until all such excess Matching Contributions have been distributed or
          forfeited. However, notwithstanding anything in the foregoing to the contrary,
          if a lesser reduction, when added to the dollar amount previously reduced, would
          equal the total excess contribution, such lesser amount shall be utilized. The
          Committee shall designate such distribution and forfeiture as a distribution and
          forfeiture of excess contributions, determine the amount of the allocable net
          earnings or losses to be distributed in accordance with
          subsection (e) below, and cause such distributions and forfeitures
          to occur prior to the end of the Plan Year following the Plan Year in which such
          excess Matching Contributions were made.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Net earnings or losses to be distributed with the excess vested Matching
          Contribution or to be treated as forfeitures together with the excess nonvested
          Matching Contributions shall be equal to the net earnings or losses on such
          contributions for the Plan Year in which the contributions were made. Net
          earnings or losses shall be determined and allocated in the same manner as in
          subsection 3.5(c) above.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | Any Matching Contributions which are treated as forfeitures pursuant to
          subsection 3.7(d) above shall be used to reduce the Profit-Sharing
          Contribution in Section 3.3 (Profit-Sharing Contribution Under the
          Savings Plan) and Matching Contribution in Section 3.6 (Matching
          Contribution Under the Savings Plan).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(g) | For the purpose of avoiding the necessity of adjustments pursuant to this
          Section 3.7 or Section 5.12 (Limitations on Annual
          Additions), or to comply with any applicable laws or regulations:
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | The Employer may in its sole discretion make fully vested contributions to the
          Plan, which will be allocated to the Matching Accounts of one or more
          Participants who are Non-Highly Compensated Employees, in such amounts as the
          Employer directs for the purpose of complying with applicable limits on Matching
          Contributions in the Code.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | The Committee, in its sole discretion, may elect for a Plan Year to perform the
          test under subsection (b) above separately for those Active
          Participants who have not yet attained age 21 and completed one Year of Service
          or, alternatively, for Plan Years beginning after December 31, 1998,
          exclude such Active Participants who are Non-Highly Compensated Employees from
          testing under subsection (c) above.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

27

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3.8      Safe-Harbor Provisions.
Effective beginning January 1, 2004, the Plan shall be treated as automatically satisfying
the Actual Deferral Percentage Test described in Section 3.5 and the Contribution
Percentage Test described in Section 3.7 for each Plan Year that the safe harbor
contribution and notice requirements of Code Section 401(k)(12) are complied with,
including the following:

(a)    
          each Participant receives a fully vested Employer Matching Contribution under
          the Savings Plan for the Plan Year equal to the lesser of 4% of his/her
          Considered Compensation paid during such period or the Participants
          Before-Tax Contribution for such period which is not distributable earlier than
          the Participants separation from service, death, disability or an event
          described in Code Section 401(k)(10);

(b)    
          such contribution is made without regard to the rules governing social security
          and similar contributions under Code Section 401(1); and

(c)    
          each Participant receives, within a reasonable period before any Plan Year (or
          if later, after becoming a Participant) for which this subsection (c)
          will be applicable (or by such other times as prescribed by applicable Treasury
          Regulations or other similar guidance of general applicability), an accurate an
          comprehensive written explanation of their rights and obligations under this
          Section.

28

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# ARTICLE 4

# Contributions by Employee

4.1      No After-Tax  Contributions.  No  Participant  shall be required or permitted to make any  after-tax
contributions to this Plan.

4.2      Rollover Contribution.

(a)    
          A Rollover Contribution may be rolled over in cash to the Trust Fund for the
          benefit of a Participant with the permission of the Administrative Committee.
          Prior to accepting any contribution which is intended to be a Rollover
          Contribution, the Administrative Committee may require the Participant to
          establish that the amount to be rolled over meets the definition of a Rollover
          Contribution and any other limitations of the Code applicable to such rollovers.

(b)    
          Prior to July 1, 2003, an Eligible Employee who is not eligible to participate
          in the Plan solely by reason of failing to meet the eligibility requirements of
          Article 2 (Eligibility and Participation) and who reasonably expects
          to become a Participant when such requirements are met, may be a Participant in
          the Plan solely for the limited purposes of making a Rollover Contribution, and
          taking actions with respect to his Rollover Account for the purposes of loans in
          accordance with Article 7 (Distributions), investment options in
          accordance with this Section 4.2, and the withdrawal of Rollover
          Contributions in accordance with subsection (e)below, subject to
          the same conditions as any other Participant.

(c)    
          If the Administrative Committee determines after a Rollover Contribution has
          been made that such Rollover Contribution did not in fact constitute a Rollover
          Contribution as defined in Section 1.4 (Definitions), the amount of
          such Rollover Contribution and any earnings thereon shall be returned to the
          employee.

(d)    
          Each Participants Rollover Contribution shall be allocated to his Rollover
          Account as of the Valuation Date coinciding with or next succeeding the date on
          which such amount is received by the Trustee, and invested in accordance with
          Section 5.2 (Common Fund). A Participants Rollover Account
          shall be fully vested and nonforfeitable.

29

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# ARTICLE 5

# Accounting Provisions and Allocations

5.1      Participant's Accounts.

(a)    
          For each Participant there shall be maintained as appropriate a separate
          Retirement Account, a separate Profit Sharing Account (which shall, if
          applicable, consist of separate pre-1993 and post-1992 sub-accounts as
          prescribed by the Administrative Committee), a separate Matching Account, a
          separate After-Tax Account (which shall, if applicable, consist of a separate
          pre-1987 After-Tax sub-account and a separate post-1986 After-Tax sub-account as
          prescribed by the Administrative Committee), a separate Before-Tax Account
          (which shall, if applicable, consist of separate basic and supplemental
          sub-accounts as prescribed by the Administrative Committee), and a separate
          Rollover Account. Effective April 1, 1999, for each Coherent Participant, there
          shall also be maintained as appropriate a separate Coherent Before-Tax Account
          (which shall consist of a balance of the Coherent Participants pre-tax
          contribution account under the Coherent Plan), a separate Coherent Employer
          Account (which shall consist of the balance of the Coherent Participants
          matching and profit sharing accounts under the Coherent Plan) and a separate
          Coherent Rollover Account (such separate Accounts of the Coherent Participant
          sometimes referred to collectively as Coherent Accounts). Effective
          May 19, 2000, for each Salix Participant, there shall also be maintained as
          appropriate a separate Salix Before-Tax Account (which shall consist of a
          balance of the Salix Participants pre-tax contribution account under the
          Salix Plan), a separate Salix Employer Account (which shall consist of the
          balance of the Salix Participants matching and profit sharing accounts
          under the Salix Plan) and a separate Salix Rollover Account (such separate
          Accounts of the Salix Participant sometimes referred to collectively as
          Salix Accounts). Effective June 28, 2002, for each Ocular
          Participant, there shall also be maintained as appropriate a separate Ocular
          Account (which shall consist of the balance of an Ocular Participants
          funds which were transferred from the Ocular Plan to the Trust Fund as a result
          of the merger of the Ocular Plan into the Plan). Effective July 1, 2003, for
          each Active Participant there shall also be established a Company Contribution
          Account. Each Account (including any sub-accounts) shall be credited with the
          amount of contributions, interest and earnings of the Trust Fund allocated to
          such Account and shall be charged with all distributions, withdrawals and losses
          of the Trust Fund allocated to such Account.

(b)    
          The post-1986 After-Tax sub-account shall be a separate contract for
          the purposes of Code Section 72(e).

5.2      Common Fund.

|(a) | The Trust Fund shall be a common fund divided into separate investment funds
          (Funds) as provided in this Section 5.2. Each Fund as
          may from time to time be established shall be a common fund in which each
          Participant shall have an undivided interest in the respective assets of the
          Fund, provided that all accounts segregated and all loans made to Participants
          pursuant to the provisions of Section 7.11 (Loans) shall together
          with any income or expense of such Accounts or loans be accounted for separately
          and will not be included in any of the adjustments resulting from the
          application of this Section 5.2. Except as otherwise provided, the
          value of each Participants Accounts in such Funds shall be measured by the
          value of the shares or Units of such Fund credited to his Accounts as of the
          date that such valuation is being determined. For purposes of allocation of
          income and valuation, each Fund shall be considered separately. No Fund shall
          share in the gains and losses of any other, and no Fund shall be valued by
          taking into account any assets or distributions from any other.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

30

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|(b) | Each Fund shall be established and invested by the Trustee in accordance with
          investment policies determined, or as the Trustee may be directed, from time to
          time by the Investment Committee. The Investment Committee may from time to time
          also direct that Funds be terminated or that Funds with similar investment
          objectives be consolidated. Subject to the Investment Committees authority
          to consolidate, Funds shall be maintained for the various types of Accounts as
          follows:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | At least one Fund shall be established, maintained and invested with the
          objective of minimizing the effect of market fluctuations while producing a rate
          of return consistent with such objective.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | A second Fund shall be established, maintained and invested in common stock of
          Tellabs, Inc., the Companys parent holding company (Tellabs Stock
          Fund).
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | An additional Fund or Funds shall be established, maintained and invested as the
          Investment Committee may from time to time direct.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Participant investment elections shall be made as follows:
|--- | ----------------------------------------------------------

|(i) | Subject to subsection (iii) below, the Investment Committee shall
          direct the Trustee to invest each Participants Accounts from time to time
          among the Funds as the Participant may elect. A Participant may elect to have a
          uniform percentage of his Company Contribution Account, Retirement Account,
          Profit Sharing Account, After-Tax Account, Matching Account, Before-Tax Account,
          Rollover Account, effective as of April 1, 1999, each of his Coherent
          Accounts (excluding the value of any loan credited to any such Account),
          effective as of May 19, 2000, each of his Salix Accounts (excluding the value of
          any loan credited to any such Account) , and effective as of June 28, 2002, his
          Ocular Account (excluding the value of any loan credited to such Account)
          credited in increments of 1% to one or more of the Funds. All contributions to
          his Company Contribution Account, Retirement Account, Profit Sharing Account,
          After-Tax Account, Matching Account, Before-Tax Account, and Rollover Account
          shall be credited to such Funds in accord with such election.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

31

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|(ii) | Subject to subsection (iii)and(vi) below and to any
          restriction on transfer which result from the investment medium chosen for a
          Fund, a Participant may elect to transfer in multiples of 1% a uniform
          percentage of his Company Contribution Account, Retirement Account, Profit
          Sharing Account, Matching Account, After-Tax Account, Before-Tax Account,
          Rollover Account, effective as of April 1, 1999, each of his Coherent
          Accounts (excluding the value of any loan credited to any such Account),
          effective as of May 19, 2000, each of his Salix Accounts (excluding the value of
          any loan credited to any such Account) and effective as of June 28, 2002, his
          Ocular Account (excluding the value of any loan credited to any such Account)
          held in any Fund to one or more different Funds. Any such election shall not
          affect any prior election under subsection (i)above. Loans made
          pursuant to Section 7.11 (Loans) shall be treated as segregated
          investments from the Participants applicable Accounts, transferred to and
          from various Funds in accord with uniform rules established by the
          Administrative Committee.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | Investment of amounts allocated to a Participants Retirement Account and
          Profit Sharing Account shall be subject to the restrictions set forth in this
          subsection (iii). No amount attributable to the Retirement Account
          of any Participant shall be transferred to the Tellabs Stock Fund pursuant to
          subsection (ii) above. Amounts contributed to a Participants
          Profit Sharing Account after 1992 shall be invested in the Tellabs Stock Fund
          and no amount attributable thereto shall be transferred by a Participant from
          the Tellabs Stock Fund to any other Fund pursuant to subsection (ii)
          above prior to the date such Participant attains age 55. No amount attributable
          to the Profit Sharing Account which is transferred from the Tellabs Stock Fund
          pursuant to the preceding sentence shall thereafter be transferred to the
          Tellabs Stock Fund.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iv) | Elections under this Section shall be made at such times in accordance with
          procedures established by the Administrative Committee. Such elections shall be
          effective as of the Entry Date following timely receipt by the Administrative
          Committee.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(v) | To the extent provided in the Trust, or as may be prescribed by the Investment
          Committee, a Participant may direct the Trustee with respect to the voting or
          exercise of any other rights with respect to the Funds. Any such directions
          shall be made in the manner set forth in the trust agreement or as prescribed by
          the Administrative Committee.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(vi) | Transfer elections to or from the Tellabs Stock Fund (including, for this
          purpose, liquidation of amounts held in the Tellabs Stock Fund to fund loans or
          in-service withdrawals pursuant to Sections 7.10 (Distribution of
          Participants After-Tax Account and Rollover Account), 7.11 (Loans), 7.12
          (Withdrawals Prior to Termination of Employment and After Age 59-1/2) or 7.13
          (Hardship Withdrawals) below (other than distributions or transactions made in
          connection with death, disability, retirement or termination of employment))
          made by a Participant who is subject to the liability provisions of
          Section 16 of the Securities Exchange Act of 1934, as amended (the
          1934 Act), shall not be effective unless such transfer election is
          made at least six months following the date of the most recent transfer election
          made by such Participant under this Plan, or under any other plan maintained by
          the Employer, that effected a discretionary transaction within the
          meaning of Rule 16b-3 promulgated under Section 16 of the 1934 Act that was
          an opposite way transaction. For this purpose, a transfer into the
          Tellabs Stock Fund (or similar fund under another plan) is an opposite
          way transaction from a transfer or distribution out of the Tellabs Stock
          Fund (or similar fund under another plan), and vice versa.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

32

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|(vii) | Notwithstanding anything in this Article 5 (Accounting Provisions
          and Allocations) to the contrary, amounts contributed by the Employers pursuant
          to Article 14 (Retiree Medical Benefits) shall be allocated,
          invested and distributed in accordance with the provisions of
          Article 14 (Retiree Medical Benefits).
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Wherever in this Section 5.2 the term Participant is
          used, it shall be deemed to include, where applicable, (i) the beneficiary
          of a deceased Participant who is entitled to any portion of the deceased
          Participants Accounts, and (ii) an Alternate Payee under a Qualified
          Domestic Relations Order described in Code Section 414(p).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | The Plan is intended to constitute a plan described in ERISA Section 404(c)
          and Title 29 of Federal Regulations Section 2550.404c-1. To the extent
          permitted by law, the fiduciary of the Plan shall be relieved of liability for
          any losses which are the direct and necessary result of investment instructions
          given by any Participant.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5.3        Unit Values.

(a)    
          The value of a Unit in each Fund on any Valuation Date shall be the quotient
          obtained by dividing the sum of (i) the cash and (ii) the fair market
          value (as determined by the Trustee) of all securities and other property held
          in such Fund, less any charges and expenses accrued and properly chargeable to
          such Fund as of said Valuation Date by the aggregate number of Units credited to
          the Accounts of all Participants with respect to such Fund. The Trustee will
          furnish to the Committees a report with respect to the fair market value of all
          securities and other property held in any Fund as of any Valuation Date. To the
          extent that any assets of a Fund have been invested in one or more separate
          investment trusts, mutual funds, investment contracts or similar investment
          media, the net earnings or losses attributable to such investments shall be
          determined in accordance with the procedures of such investment media.

(b)    
          The value of each Unit in a Segregated Loan Account shall be equal to one
          dollar. The value of any note as of each Valuation Date shall be the amount of
          any outstanding principal.

5.4      Eligibility to Share in Employer Contributions and Forfeitures.

(a)    
          Under the Retirement Program. An Active Participant shall be eligible to
          share in the Retirement Contribution and forfeitures for a given quarter of the
          Plan Year as of the last day of the quarter for which such contribution or
          forfeitures are being allocated if he is then employed by the Employer as an
          Eligible Employee. A Participant who, during such quarter, retires on or after
          his Normal Retirement Date, dies or is initially deemed to be totally and
          permanently disabled in accordance with the Disability Plan shall also be
          eligible to share in the Retirement Contribution and forfeitures for such
          quarter. No Retirement Contributions shall be made to the Plan with respect to
          any period beginning after June 30, 2003.

33

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(b)    
          Profit Sharing and Company Contributions Under the Savings Program. An
          Active Participant shall be eligible to share in the Profit Sharing Contribution
          through June 30, 2003, and thereafter in the Company Contribution and
          forfeitures for a given quarter of the Plan Year as of the last day of the
          quarter for which such contribution or forfeitures are being allocated if he is
          then employed by the Employer as an Eligible Employee. An Active Participant
          who, during a Plan Year, retires on or after his Normal Retirement Date, dies or
          is initially deemed to be totally and permanently disabled in accordance with
          the Disability Plan, shall also be eligible to share in the Profit Sharing
          and/or Company Contribution and forfeitures for said Plan Year. The Participants
          eligible to share in the Profit Sharing and/or Company Contribution for a given
          Plan Year under subsection 3.3(b) or (c) above shall be as the Board
          of Directors shall determine in connection with its determination of the amount
          of the Profit Sharing and/or Company Contribution to be made under subsection
          3.3(b) or (c) above.

(c)    
          Matching Contribution Under the Savings Program. An Active Participant
          shall be eligible to share in the Matching Contribution for a given quarter of
          the Plan Year as of the first pay period of the quarter for which such
          contribution is being allocated. Eligibility to share in and sharing in the
          Matching Contribution shall be subject to the conditions and limitations of
          Sections 3.6 (Matching Contributions Under the Savings Plan) and
          3.7 (Limitations on Matching Conditions Under the Savings Plan).

(d)    
          A Participant eligible to share in the Matching Contribution, the Retirement
          Contribution, Profit Sharing Contribution and/or Company Contribution pursuant
          to the above subsections (a), (b) and/or (c) shall for
          purposes of such paragraphs be known as an Eligible Participant.

5.5      Allocation of Before-Tax
Contributions. The Before-Tax Contributions made on behalf of a Participant shall be
allocated to such Participants Before-Tax Account as soon as practicable after the
Trustee receives such contribution.

5.6      Allocation of Matching
Contributions. The portion of Matching Contributions made on a bi-weekly payroll basis
shall on behalf of a Participant be allocated to the Matching Account of such Participant
as soon as practicable after the Trustee receives such contribution.

5.7      Allocation of After-Tax
Contributions. While After-Tax Contributions are not allowed after January 1,
1994, for those Participants who still have an After-Tax Account then as of each Valuation
Date, the earnings and interest on the After-Tax Contributions of a Participant received
since the prior Valuation Date shall be allocated to such Participants After-Tax
Account.

5.8      Allocation of Retirement
Contribution and Forfeitures. As of the last day of a Plan Year, the Retirement
Contribution (together with the forfeitures taken into account in determining the
Retirement Contribution under Section 3.2 (Retirement Contribution Under the
Retirement Program), shall be allocated among the Retirement Accounts of all Eligible
Participants under subsection 5.4(a) in the ratio that the Considered
Compensation of each such Participant for such Plan Year bears to the Considered
Compensation of all such Participants for such Plan Year provided, however, that with
respect to the 2003 Plan Year, such contributions shall be allocated based on Considered
Compensation paid prior to July 1, 2003.

34

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5.9      Allocation of Profit Sharing
Contribution, Company Contribution and Forfeitures. As of the last day of each quarter
of a Plan Year, the Profit Sharing Contribution (through June 30, 2003) and Company
Contribution (together with the forfeitures taken into account in determining the Profit
Sharing Contribution under subsection 3.3(a) and the Company Contribution
under subsection 3.3(b)) above shall be allocated among the Profit Sharing Accounts
or Company Contribution Accounts, respectively, of all Eligible Participants under
subsection 5.4(b) above in the ratio that the Considered Compensation of each
such Participant for such quarter bears to the Considered Compensation of all such
Participants for such quarter of the Plan Year. Prior to July 1, 2003, as of the last day
of each Plan Year, the portion of the Profit Sharing Contribution under subsection
3.3(c) above, if any, to be allocated for the Plan Year shall be allocated among the
Profit Sharing Accounts, respectively, of all Eligible Participants under
subsection 5.4(b) above in the manner prescribed by the Board of Directors
with respect to such Profit Sharing Contribution.

5.10      Crediting Accounts.

(a)    
          All contributions or Rollover Amounts to the Trust made by or on behalf of a
          Participant shall be deposited in the form of cash or other assets acceptable to
          the Trustee and consistent with the investment Funds then maintained, including,
          but not limited to, securities of Tellabs, Inc. and shall be credited to the
          appropriate Accounts of such Participant as of the date received by the Trust
          Fund; provided, however, any contributions made with respect to a Plan Year
          shall be credited to the appropriate Accounts of such Participant as of the last
          day of such Plan Year.

(b)    
          For each amount allocable to the Accounts of any Participant with respect to any
          Fund, his Accounts with respect thereto shall be credited with a number of Units
          equal to the quotient obtained by dividing such amount by the value of a Unit,
          determined as of the applicable Valuation Date.

(c)    
          The Administrative Committee shall also establish and maintain an Account with
          respect to each Segregated Loan made to a Participant pursuant to
          Section 7.11 (Loans). The Participants Segregated Loan Account
          shall be credited with a number of Units determined in accordance with
          Section 5.3 (Unit Values) and equal to the value of any notes held
          by the Account. A number of Units equal to the value of any principal payments
          by the Participant to the Segregated Loan Account shall be promptly charged to
          the Segregated Loan Account and transferred along with any interest payments to
          the separate investment Funds in accordance with the Participants
          investment election then in effect under Section 5.2 (Common Fund).

5.11      Provisional Annual
Addition. The sum of the amounts allocated to the Accounts of each Participant
pursuant to Sections 5.5 (Allocation of Before-Tax Contributions), 5.6
(Allocation of Matching Contributions), 5.7 (Allocation of After-Tax Contributions),
5.8 (Allocation of Retirement Contribution and Forfeitures) and 5.9(Allocation of Profit Sharing Contribution, Company Contribution and Forfeitures) for
a Plan Year shall be known as the Provisional Annual Addition and shall be
subject to the limitation on Annual Additions in Section 5.12(Limitation on
Annual Additions).

35

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5.12      Limitation on Annual Additions.

|(a) | For the purpose of complying with the restrictions on Annual Additions to
          defined contribution plans imposed by Code Section 415, for each Active
          Participant during the Plan Year, there shall be computed a Maximum Annual
          Addition, which:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | for Plan Years effective prior to January 1, 2002, shall be the lesser of:
|--- | --------------------------------------------------------------------------

|(A) | 25% of his Total Compensation for the Plan Year; or
|--- | ---------------------------------------------------

|(B) | the Defined Contribution Dollar Limitation for the Plan Year.
|--- | -------------------------------------------------------------

|(ii) | for Plan Years effective on or after January 1, 2002, except as permitted under
          subsection 3.5(a)(ii) above and Code Section 414(v), if
          applicable, shall be the lesser of:
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(A) | 100% of his Total Compensation for the Plan Year; or
|--- | ----------------------------------------------------

|(B) | the Defined Contribution Dollar Limitation for the Plan Year.
|--- | -------------------------------------------------------------

| | The
compensation limit referred to in subsection (A) above shall not apply to any
contribution for medical benefits after separation from service (within the meaning of
Code Section 401(h) or Code Section 419A(f)(2)) which is otherwise treated as an Annual
Addition.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If a short Limitation Year is created
because of an amendment changing the Limitation Year to a different 12 consecutive
month period, the Maximum Annual Addition will not exceed the Defined Contribution Dollar
Limitation multiplied by the following fraction:

Number of months in
the short Limitation Year

12

The limitation under
subsection (a) above shall not apply to any contribution for medical benefits
within the meaning of Code Section 419A(f)(2) after separation from service which is
otherwise treated as an Annual Addition, or any amount otherwise treated as an Annual
Addition under Code Section 415(l)(2).

|(b) | If the Maximum Annual Addition for a Participant equals or exceeds the
          Provisional Annual Addition for that Participant, an amount equal to the
          Provisional Annual Addition shall be allocated to the Participants
          respective Accounts.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | If the Provisional Annual Addition exceeds the Maximum Annual Addition for that
          Participant, the Provisional Annual Addition shall be reduced as set forth below
          until the Provisional Annual Addition as so reduced equals the Maximum Annual
          Addition for such Participant:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

36

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|(i) | first, the Tentative Employer Contribution allocable to such Participants
          respective Accounts shall be reduced by reducing (A) the Supplemental
          Before-Tax Contributions, and (B) the Basic Before-Tax Contributions and
          Matching Contributions, proportionately, in that order;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | second, the Tentative Employer Contribution allocable to such Participants
          respective Accounts shall be reduced by reducing the Profit Sharing
          Contribution; and
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | third, the Tentative Employer Contribution allocable to such Participants
          respective Accounts shall be reduced by reducing the Retirement Contribution.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Provisional Annual Addition
remaining after such reductions shall be allocated to the Participants respective
Accounts.

(d)    
          Any forfeiture which cannot be allocated under the Plan because of the
          application of the above limit shall be carried in the Excess Forfeiture
          Suspense Account for such Plan Year. In the next succeeding Plan Year the
          amounts included in such Account shall be treated as a forfeiture for such Plan
          Year and shall be used to reduce Employer Contributions (as defined in
          Section 3.1 (Employer Contributions)) for such plan year. Amounts which
          are included in the Excess Forfeiture Suspense Account as of the end of a Plan
          Year shall be treated as a liability of the Trust Fund. Upon termination of the
          Plan, amounts then held in the Excess Forfeiture Suspense Account which cannot
          be allocated pursuant to this Section shall revert to the Employer.

(e)    
          The Excess Tentative Employer Contribution is an amount equal to the sum of the
          reductions in the Tentative Employer Contribution allocable to the Accounts of
          Participants pursuant to subsection (b) above.

(f)    
          Contributions made under Section 2.5 (Qualified Military Service)
          shall be treated as Annual Additions for the Plan Year to which they relate
          instead of the Plan Year when they are actually made.

37

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# ARTICLE 6

# Amount of Payments to Participants

6.1      General Rule. Upon the
retirement, disability, resignation or dismissal of a Participant, he, or in the event of
his death, his beneficiary, shall be entitled to receive from his respective Accounts in
the Trust Fund:

(a)    
          an amount equal to the value of the Units credited to the Participants
          Profit Sharing Account attributable to pre-1993 contributions, Before-Tax
          Account, Matching Account, Company Contribution Account, After-Tax Account,
          Rollover Account, Coherent Before-Tax Account, Coherent Rollover Account, Salix
          Before-Tax Account, Salix Employer Account, Salix Rollover Account, and Ocular
          Account plus any of the Participants Before-Tax Contributions and
          After-Tax Contributions made to the Trust Fund but not included in the
          Participants Units as of such Valuation Date; and

(b)    
          an amount equal to the value of the Units credited to the nonforfeitable portion
          of the Participants Retirement Account, Post-1992 Profit Sharing Account
          and Coherent Employer Account determined as hereafter set forth.

The time and manner of distribution
of a Participants Accounts shall be determined in accordance with Article 7(Distributions).

6.2      Normal Retirement. Any
Participant may retire on or after his Normal Retirement Date, at which date the
forfeitable portion, if any, of his Retirement Account and Post-1992 Profit Sharing
Account shall become nonforfeitable. If the retirement of a Participant is deferred beyond
his Normal Retirement Date, he shall continue in full participation in the Plan and Trust
Fund.

6.3      Death. As of the date any
Participant dies while employed by the Employer or an Affiliate, the forfeitable portion,
if any, of his Retirement Account and Post-1992 Profit Sharing Account shall become
nonforfeitable.

6.4      Disability. As of the date
any Participant shall be determined by the Administrative Committee to have become totally
and permanently disabled because of physical or mental infirmity in accordance with the
Disability Plan while in the employ of the Employer or an Affiliate and his employment
shall have terminated, the forfeitable portion, if any, of his Retirement Account and
Post-1992 Profit Sharing Account shall become nonforfeitable.

6.5      Vesting. A
Participants interest in his Accounts, other than his Retirement Account and
Post-1992 Profit Sharing Account (and Coherent Employer Account in accordance with
Section 6.6 (Resignation or Dismissal), shall be nonforfeitable at all times. A
Participant who has completed five (5) or more Years of Service shall have a
nonforfeitable interest in his Retirement Account, and his Post-1992 Profit Sharing
Account. Effective April 1, 2003 each Active Participant shall have a nonforfeitable
interest in his Retirement Account and Post-1992 Profit Sharing Account regardless of such
Participants Years of Service.

38

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6.6      Resignation or Dismissal.
If any Participant shall incur a Termination Date, prior to the date his Retirement
Account and Post-1992 Profit Sharing Account shall become nonforfeitable in accordance
with Section 6.5 (Vesting), other than in circumstances described in
Section 6.2 (Normal Retirement), 6.3 (Death) or 6.4 (Disability), then
the Retirement Account and Post-1992 Profit Sharing Account of such Participant shall be
treated as a forfeiture pursuant to Section 6.7 (Treatment of Forfeitures).
The Coherent Employer Account of any Coherent Participant who shall have incurred a
Termination Date prior to April 1, 1999 and who incurred a forfeiture because such Account
was not 100% nonforfeitable as of such Termination Date shall be treated as a forfeiture
pursuant to Section 6.7 (Treatment of Forfeitures) as if the Coherent
Participants termination of employment occurred on April 1, 1999.

6.7      Treatment of Forfeitures.

(a)    
          Upon termination of a Participants employment with the Company and all
          Affiliates, if his Retirement Account and Post-1992 Profit Sharing Account
          become a forfeiture pursuant to Section 6.6 (Resignation or
          Dismissal), each Account shall become allocable pursuant to Sections 5.8
          (Allocation of Retirement Contribution and Forfeitures) and 5.9
          (Allocation of Profit Sharing Contribution and Forfeitures), as applicable, at
          the end of the last day of the quarter of the Plan Year in which the termination
          of employment occurred if the Participant is not then reemployed by the Employer
          or an Affiliate. Any Coherent Employer Account treated as a forfeiture on
          April 1, 1999 pursuant to Section 6.6 (Resignation or
          Dismissal) shall be allocable pursuant to Section 5.9 (Allocation of
          Profit Sharing Contribution and Forfeitures) as of June 30, 1999.

(b)    
          If the Participant is reemployed by the Employer or an Affiliate without
          incurring a Period of Severance of five consecutive years, the amount of the
          forfeitures shall be restored to his Retirement Account, Profit Sharing Account
          and Coherent Employer Account as of the last day of the quarter of the Plan Year
          in which he is reemployed and shall be deducted from the forfeitures which
          otherwise would be allocable as of such date or, to the extent such forfeitures
          are insufficient, shall require a supplemental contribution from the Employer.

39

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# ARTICLE 7

# Distributions

7.1      Commencement and Form of Distributions.

|(a) |  | Except as otherwise provided in subsection (g) below a Participant
          (and, when applicable for distributions from the Retirement Account, the
          Participants spouse) must consent, in writing to any distribution of the
          Participants Accounts in the Trust Fund. Distribution of a
          Participants Accounts in the Trust Fund shall commence not later than the
          first to occur of:
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) |  | the 60th day after the close of the later of the Plan Year in which the
          Participant attains his Normal Retirement Date or terminates employment with the
          Company and all Affiliates, unless the Participant has requested to defer the
          distribution to a later date; or
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) |  | on or as soon as practicable after the date set forth in the Participants
          request for distribution, provided the Administrative Committee informs the
          Participant, as outlined in subsection 7.1(i) below, that the
          Participant has a right for a period of at least 30 days after receiving
          the notice to consider the decision of whether or not to elect a distribution
          (and a particular distribution option).
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | A Participant who continues employment after his Normal Retirement Date may
          elect to receive distribution of his Accounts in the manner described in
          subsection (a)(i) above. A Participant employed by an Employer after
          his Normal Retirement Date will be deemed to have requested a deferral, unless
          he specifically requests a distribution.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) |  | In all events, distribution shall commence no later than the Required Beginning
          Date, and subsequent distributions required to be made each year for compliance
          with Code Section 401(a)(9) and the regulations promulgated thereunder
          shall be made no later than December 31 of such year. However, in the event
          that a domestic relations order is received by the Administrative Committee,
          required distributions on or after the required beginning date may be postponed
          until the order is determined to be qualified or not pursuant to
          Section 12.3 (Qualified Domestic Relations Order).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) |  | Form of Distribution for Accounts other than the Retirement Account:
|--- |  | --------------------------------------------------------------------

|(i) |  | Effective for distributions made on or after February 1, 2002, the Accounts
          distributable to a Participant, other than the Retirement Account, shall be
          distributed in one or more of the following ways, as the Participant may request
          by filing such notice as shall be prescribed by the Administrative Committee,
          and in accordance with applicable laws and regulations:
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(A) |  | by payment in a single sum; or
|--- |  | ------------------------------

40

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|(B) |  | by a direct rollover to an employees trust in which he is a participant,
          which is described in Code Section 401(a) and which is exempt from tax
          under Code Section 501(a), or to an individual retirement arrangement
          described in Code Section 408, in accordance with Section 7.14
          (Eligible Rollover Distributions).
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) |  | Effective for distributions prior to February 1, 2002, the Accounts
          distributable to a Participant, other than the Retirement Account, shall be
          distributed in one or more of the following ways, as the Participant may request
          by filing such notice as shall be prescribed by the Administrative Committee,
          and in accordance with applicable laws and regulations:
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(A) |  | by payment in a single sum;
|--- |  | ---------------------------

|(B) |  | in substantially equal monthly, quarterly, semi-annual or annual installments
          which, except for the final payment, shall not be less than $100; or
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------

|(C) |  | by a direct rollover to an employees trust in which he is a participant,
          which is described in Code Section 401(a) and which is exempt from tax
          under Code Section 501(a), or to an individual retirement arrangement
          described in Code Section 408, in accordance with Section 7.14
          (Eligible Rollover Distributions).
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) |  | Notwithstanding the above provisions, all Tellabs Plan Participants who had been
          Ocular Participants immediately prior to the merger of such Ocular Plan into the
          Tellabs Plan on June 28, 2002 and their Beneficiaries shall be allowed to choose
          an alternate distribution option for their Ocular Account in accordance with the
          terms of the Ocular Plan until September 5, 2002. After close of business on
          September 5, 2002, all Ocular Participants will no longer be entitled to choose
          optional forms of distributions in accordance with the Ocular Plan and will be
          entitled to choose either a rollover or lump sum distribution as provided for in
          (i) above.
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) |  | The Retirement Account distributable to a Participant shall be distributed
          pursuant to Section 7.2(Qualified Joint and Survivor Annuity) and
          7.3 (Pre-Retirement Survivor Annuity  Retirement Account, Salix
          Accounts, Coherent Accounts, and Ocular Account) of this Article, unless
          the Qualified Joint and Survivor Annuity or Survivor Annuity form of
          distribution are waived and such Account is distributed pursuant to the
          Participants or Surviving Spouses election under
          subsection 7.1(d) above.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) |  | The value of the Participants Accounts shall be paid to the Participant
          over a period not to exceed his life expectancy or the joint life expectancy of
          the Participant and his Individual Beneficiary. The minimum amount of any
          installment distribution and determination of the life expectancy of a
          Participant and the joint life expectancy of a Participant and his Individual
          Beneficiary shall be determined in accordance with the regulations prescribed
          under Code Section 401(a)(9) and subsection 7.1(j) below; provided
          that the life expectancy of a Participant or his spouse shall be re-determined
          annually.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

41

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|(g) |  | Notwithstanding anything in this Section 7.1 to the contrary, if the
          present value of the nonforfeitable portion of the Participants Retirement
          Account, or if the vested balance of the Participants remaining Accounts
          does not exceed $3,500 at the time a distribution is to be made from the Plan
          (or at the time of any prior distributions did not exceed $3,500) and
          distribution pursuant to this Section 7.1 has not otherwise
          commenced, the Administrative Committee shall direct the Trustee to distribute
          such amount in a single sum payment to the individual so entitled and the
          payment thereof shall be in full satisfaction of any liability of the Trust to
          such individual. Any Participant whose vested balance of his Employer Account is
          0% shall be deemed to have received a single sum payment upon termination of
          employment. Effective with the 1998 Plan Year, $5,000 shall be substituted
          wherever $3,500 appears in this subsection (g). Effective for
          distributions made on or after March 22, 1999, the $5,000 cash out amount
          shall apply at the time a distribution is made, regardless of whether the
          Participants vested Account balances exceeded $5,000 at the time of any
          prior distribution. Effective for distributions made after December 31,
          2001, the present value of a Participants nonforfeitable accrued benefit
          may be determined without regard to the portion of the benefit that is
          attributable to Rollover Contributions (and any earnings allocable to the
          rollover contributions). Rollover Contributions are defined as any rollover
          contribution under Code Sections 402(c), 403(a)(4), 403(b)(8),
          438(d)(3)(A)(ii) and 457(e)(16).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(h) |  | Notwithstanding anything in this Section 7.1 to the contrary, if the
          amount of any distribution required to commence on a certain date cannot be
          ascertained by such date, a payment retroactive to such date may be made no
          later than 60 days after the earliest date on which such amount can be
          ascertained.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) |  | The Administrative Committee shall furnish each Participant who has a vested
          interest in a Retirement Account a general written explanation, in a manner that
          would satisfy the notice requirements of Sections 1.411(a)-11(c) and
          1.417(e)-1(b) of the income tax regulations, of the terms and conditions of the
          Qualified Joint and Survivor Annuity, the Participants right to make and
          the effect of an election to waive it, the rights of the Participants
          spouse, the Participants right to revoke an election to waive the
          Qualified Joint and Survivor Annuity and the effect of such a revocation. This
          general explanation shall be furnished to a Participant within 90 days
          before the Participants Annuity Starting Date.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) |  | General written explanations under this subsection 7.1(i) shall
          satisfy the following requirements:
|--- |  | -------------------------------------------------------------------------------------------------------------

|(A) |  | the Committee informs the Participant that the Participant has a right for a
          period of at least 30 days after receiving the general explanation to
          consider the decision of whether to waive the Qualified Joint and Survivor
          Annuity and consent to another form of distribution,
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) |  | the Participant may revoke an election to waive the Qualified Joint and Survivor
          Annuity until the later of his Annuity Starting Date or the seventh day
          following the date the general explanation is provided to the Participant,
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(C) |  | the Participants Annuity Starting Date is after the date that the general
          explanation is given to the Participant, and
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------

42

---

|(D) |  | the Participant, after receiving the general explanation, affirmatively elects a
          form of distribution (with appropriate spousal consent as provided in
          subsection 7.2(c) below), and the actual distribution begins more
          than seven days after the date the general explanation is provided to the
          Participant;
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) |  | However, notwithstanding the foregoing, a Participant may elect an Annuity
          Starting Date that is before the date on which the general explanation is
          provided to the Participant if the following conditions are met:
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(A) |  | the actual distribution begins more than seven days after the date the general
          explanation is provided to the Participant; and
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------

|(B) |  | the Plan makes retroactive payments to make up for any payments that would have
          been made since the Annuity Starting Date.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------

|(j) |  | Minimum Distributions.
|--- |  | ----------------------

|(i) |  | General Rules.
|--- |  | --------------

|(A) |  | Effective Date. The provisions of this subsection (j) will apply for purposes of
          determining required minimum distributions under Article 7 for calendar years
          beginning with the 2003 calendar year.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) |  | Precedence. The requirements of this subsection (j) will take precedence over
          any inconsistent provisions of the Plan; provided, that, nothing in this
          subsection (j) shall create any right to an installment form of distribution not
          otherwise permitted under Article 7.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(C) |  | Requirements of Treasury Regulations Incorporated. All distributions required
          under this subsection (j) will be determined and made in accordance with the
          Treasury regulations under Section 401(a)(9) of the Code.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) |  | Time and Manner of Distribution.
|---- |  | --------------------------------

|(A) |  | Required Beginning Date. The Participants entire interest will be
          distributed, or begin to be distributed, to the Participant no later than the
          Participants Required Beginning Date.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) |  | Death of Participant Before Distributions Begin. If the Participant dies before
          distributions begin, the Participants entire interest will be distributed,
          or begin to be distributed, no later than as follows:
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) |  | If the Participants surviving spouse is the Participants sole
          designated beneficiary, then, except as elected pursuant to subsection
          7.1(j)(ii)(B)(5), distributions to the surviving spouse will begin by December
          31 of the calendar year immediately following the calendar year in which the
          Participant died, or by December 31 of the calendar year in which the
          Participant would have attained age 701⁄2, if later.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

43

---

|(2) |  | If the Participants surviving spouse is not the Participants sole
          designated beneficiary, then, except as elected pursuant to subsection
          7.1(j)(ii)(B)(5), distributions to the designated beneficiary will begin by
          December 31 of the calendar year immediately following the calendar year in
          which the Participant died.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | If there is no designated beneficiary as of September 30 of the year following
          the year of the Participants death, the Participants entire interest
          will be distributed by December 31 of the calendar year containing the fifth
          anniversary of the Participants death.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | If the Participants surviving spouse is the Participants sole
          designated beneficiary and the surviving spouse dies after the Participant but
          before distributions to the surviving spouse begin, this Section 7.1(j)(ii)(B),
          other than subsection 7.1(j)(ii)(B)(1), will apply as if the surviving spouse
          were the Participant.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) |  | Elections.
|--- |  | ----------

|a. |  | Participants or beneficiaries may elect on an individual basis whether the
          5-year rule, or the life expectancy rule in subsection 7.1(j)(ii)(B) and
          subsection 7.1(j)(iv)(B) of the Plan, applies to distributions after the death
          of a Participant who has a designated beneficiary (and an election by a
          beneficiary after the death of the Participant will supersede any election by
          the Participant). The election must be made no later than the earlier of (A)
          September 30 of the calendar year in which distribution would be required to
          begin under Section 7.1(j)(ii)(B) of the Plan, or (B) by September 30 of the
          calendar year which contains the fifth anniversary of the Participants
          (or, if applicable, surviving spouses) death. If neither the Participant
          nor the beneficiary makes an election under this subsection 7.1(j)(ii)(B)(5),
          distributions will be made in accordance with subsection 7.1(j)(ii)(B) and
          subsection 7.1(j)(iv)(B) of the Plan (as apply in the absence of such election).
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

44

---

|b. |  | A designated beneficiary who is receiving payments under the 5-year rule may,
          until December 31, 2003, make a new election to receive payments under the life
          expectancy rule provided that all amounts that would have been required to be
          distributed under the life expectancy rule for all distribution calendar years
          before 2004 are distributed by the earlier of December 31, 2003 or the end of
          the 5-year period.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For purposes of this subsection 7.1(j)(ii)(B) and Section 7.1(j)(ii), unless subsection
7.1(j)(ii)(B)(4) applies, distributions are considered to begin on the Participants
Required Beginning Date. If subsection 7.1(j)(ii)(B)(4) applies, distributions are
considered to begin on the date distributions are required to begin to the surviving
spouse under subsection 7.1(j)(ii)(B)(1). If distributions of applicable Prior Plan
Accounts under an annuity purchased from an insurance company irrevocably commence to the
Participant before the Participants Required Beginning Date (or to the
Participants surviving spouse before the date distributions are required to begin to
the surviving spouse under Section 7.1(j)(ii)(B)), the date distributions are considered
to begin is the date distributions actually commence.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(C) |  | Forms of Distribution. Unless the Participants interest is from an
               applicable Prior Plan Account which is distributed in the form of an annuity
               purchased from an insurance company, or is a Participants interest in any
               Account that is distributed in a single sum on or before the Required Beginning
               Date, as of the first distribution calendar year distributions will be made in
               accordance with Section 7.1(j)(iii) and Section 7.1(j)(iv). If the
               Participants interest is from an applicable Prior Plan Account which is
               distributed in the form of an annuity purchased from an insurance company,
               distributions thereunder will be made in accordance with the requirements of
               Section 401(a)(9) of the Code and the Treasury regulations.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) |  | Required Minimum Distributions During Participants Lifetime.
|----- |  | -------------------------------------------------------------

|(A) |  | Amount of Required Minimum Distribution For Each Distribution Calendar Year.
               During the Participants lifetime, the minimum amount that will be
               distributed for each distribution calendar year is the lesser of:
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) |  | the quotient obtained by dividing the Participants Account balance by the
               distribution period in the Uniform Lifetime Table set forth in Section
               1.401(a)(9)-9 of the Treasury regulations, using the Participants age as
               of the Participants birthday in the distribution calendar year; or
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | if the Participants sole designated beneficiary for the distribution
               calendar year is the Participants spouse, the quotient obtained by
               dividing the Participants Account balance by the number in the Joint and
               Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury
               regulations, using the Participants and spouses attained ages as of
               the Participants and spouses birthdays in the distribution calendar
               year.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) |  | Lifetime Required Minimum Distributions Continue Through Year of
               Participants Death. Required minimum distributions will be determined
               under this Section 7.1(j)(iii) beginning with the first distribution calendar
               year and up to and including the distribution calendar year that includes the
               Participants date of death.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

45

---

|(iv) |  | Required Minimum Distributions After Participants Death.
|---- |  | ---------------------------------------------------------

|(A) |  | Death On or After Date Distributions Begin.
|--- |  | -------------------------------------------

|(1) |  | Participant Survived by Designated Beneficiary: If the Participant dies on or
               after the date distributions begin and there is a designated beneficiary, the
               minimum amount that will be distributed for each distribution calendar year
               after the year of the Participants death is the quotient obtained by
               dividing the Participants Account balance by the longer of the remaining
               life expectancy of the Participant or the remaining life expectancy of the
               Participants designated beneficiary, determined as follows:
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|a. |  | The Participants remaining life expectancy is calculated using the age of
               the Participant in the year of death, reduced by one for each subsequent year.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b. |  | If the Participants surviving spouse is the Participants sole
               designated beneficiary, the remaining life expectancy of the surviving spouse is
               calculated for each distribution calendar year after the year of the
               Participants death using the surviving spouses age as of the
               spouses birthday in that year. For distribution calendar years after the
               year of the surviving spouses death, the remaining life expectancy of the
               surviving spouse is calculated using the age of the surviving spouse as of the
               spouses birthday in the calendar year of the spouses death, reduced
               by one for each subsequent calendar year.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|c. |  | If the Participants surviving spouse is not the Participants sole
               designated beneficiary, the designated beneficiarys remaining life
               expectancy is calculated using the age of the beneficiary in the year following
               the year of the Participants death, reduced by one for each subsequent
               year.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | No Designated Beneficiary: If the Participant dies on or after the date
               distributions begin and there is no designated beneficiary as of September 30 of
               the year after the year of the Participants death, the minimum amount that
               will be distributed for each distribution calendar year after the year of the
               Participants death is the quotient obtained by dividing the
               Participants Account balance by the Participants remaining life
               expectancy calculated using the age of the Participant in the year of death,
               reduced by one for each subsequent year.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) |  | Death Before Date Distributions Begin.
|--- |  | --------------------------------------

46

---

|(1) |  | Participant Survived by Designated Beneficiary: Except as elected at subsection
               7.1(j)(ii)(B)(5), if the Participant dies before the date distributions begin
               and there is a designated beneficiary, the minimum amount that will be
               distributed for each distribution calendar year after the year of the
               Participants death is the quotient obtained by dividing the
               Participants Account balance by the remaining life expectancy of the
               Participants designated beneficiary, determined as provided in subsection
               7.1(j)(iv)(A).
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | No Designated Beneficiary: If the Participant dies before the date distributions
               begin and there is no designated beneficiary as of September 30 of the year
               following the year of the Participants death, distribution of the
               Participants entire interest will be completed by December 31 of the
               calendar year containing the fifth anniversary of the Participants death.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required
               to Begin: If the Participant dies before the date distributions begin, the
               Participants surviving spouse is the Participants sole designated
               beneficiary, and the surviving spouse dies before distributions are required to
               begin to the surviving spouse under subsection 7.1(j)(ii)(B)(4), this subsection
               7.1(j)(iv)(B) will apply as if the surviving spouse were the Participant.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(v) |  | Definitions.
|--- |  | ------------

|(A) |  | Designated beneficiary. The designated beneficiary means the
               individual who is designated as the beneficiary under Section 6.5 of the Plan
               and is the designated beneficiary under Section 401(a)(9) of the Code and
               Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) |  | Distribution calendar year. The distribution calendar year means a
               calendar year for which a minimum distribution is required. For distributions
               beginning before the Participants death, the first distribution calendar
               year is the calendar year immediately preceding the calendar year which contains
               the Participants required beginning date. For distributions beginning
               after the Participants death, the first distribution calendar year is the
               calendar year in which distributions are required to begin under Section
               7.1(j)(ii)(B). The required minimum distribution for the Participants
               first distribution calendar year will be made on or before the
               Participants Required Beginning Date. The required minimum distribution
               for other distribution calendar years, including the required minimum
               distribution for the distribution calendar year in which the Participants
               required beginning date occurs, will be made on or before December 31 of that
               distribution calendar year.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(C) |  | Life expectancy. Life expectancy means the life expectancy as
               computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the
               Treasury regulations.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

47

---

|(D) |  | Participants Account balance. The Account balance means the
               Account balance as of the last Valuation Date in the calendar year immediately
               preceding the distribution calendar year (valuation calendar year)
               increased by the amount of any contributions made and allocated or forfeitures
               allocated to the Account balance as of dates in the valuation calendar year
               after such Valuation Date and decreased by distributions made in the valuation
               calendar year after such Valuation Date. The Account balance for the valuation
               calendar year includes any amounts rolled over or transferred to the Plan either
               in the valuation calendar year or in the distribution calendar year if
               distributed or transferred in the valuation calendar year.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(E) |  | Required Beginning Date. Required Beginning Date is defined at
               Section 1.4 of the Plan.
|--- |  | --------------------------------------------------------------------------------------------------------

7.2      Qualified Joint and Survivor Annuity - Retirement Account,  Salix Accounts,  Coherent Accounts, and
Ocular Account.

|(a) | Distributions from a Participants Retirement Account and prior to February
          1, 2002, his Coherent Accounts shall be made in the form of a Qualified Joint
          and Survivor Annuity unless the Participant has elected not to receive a
          Qualified Joint and Survivor Annuity pursuant to subsection (c)
          below. Prior to February 1, 2002, distributions from a Participants Salix
          Accounts may be made in the form of a Qualified Joint and Survivor Annuity if
          the Participant makes a written election requesting such form of distribution to
          the Administrative Committee. Prior to September 5, 2002, distributions from a
          Participants Ocular Account may be made in the form of a Qualified Joint
          and Survivor Annuity if the Participant makes a written election requesting such
          form of distribution to the Administrative Committee. Distributions from a
          Participants Coherent Accounts or his Salix Accounts made on or after
          February 1, 2002, will only be offered in the form of a lump sum distribution.
          Distributions from a Participants Ocular Account made on or after
          September 5, 2002, will only be offered in the form of a rollover or lump sum
          distribution.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Benefits payable in the form of a Qualified Joint and Survivor Annuity shall be
          paid by distributing to the Participant an annuity contract purchased by the
          Trustee at the direction of the Administrative Committee with the nonforfeitable
          balance of the Participants Retirement Account, Salix Accounts, Coherent
          Accounts and Ocular Account determined on the Valuation Date preceding the date
          of purchase. Any such annuity contract shall be nonassignable and noncommutable
          and shall be subject to the election, consent, written explanation and Survivor
          Annuity requirements of this Article 7 (Distributions). Delivery of
          such contract shall be in full satisfaction of the rights of the Participant
          hereunder with respect to such Account, and upon delivery of any such contract,
          the Participant shall not have any interest in the Trust Fund but shall look
          solely to the insurer issuing such contract for the payment of benefits.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Elections and revocations of a Qualified Joint and Survivor Annuity shall be
          made as follows:
|--- | -------------------------------------------------------------------------------------------------------

48

---

|(i) | A Participant may, within 90 days before his Annuity Starting Date elect
          not to receive a Qualified Joint and Survivor Annuity and, in lieu thereof,
          elect to receive distribution of such Account in the same time and manner as
          distribution of his other Accounts. Such elections may be revoked and elections
          and revocations made at a time after the general explanation in
          subsection 7.1(a)(ii) above has been provided, and if so revoked the
          Participants benefit shall automatically be paid in the form of a
          Qualified Joint and Survivor Annuity unless he has elected another form of
          payment pursuant to subsection 7.1(d) above.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | If a Participant is married on his Annuity Starting Date, to be effective, any
          elections hereunder and under subsection 7.3(e) or 7.7(b)
          below must have the consent of the Participants spouse unless the
          Participant establishes to the satisfaction of the Administrative Committee that
          the consent of the spouse cannot be obtained because there is no spouse, such
          spouse cannot be located or by reason of such other circumstances as may be
          prescribed by regulations. Any consent (or establishment that the consent cannot
          be obtained) shall be effective only with respect to such spouse. Such consent
          shall be in writing, witnessed by a Plan representative or notary public,
          acknowledging the effect of the election and any nonspouse beneficiary,
          including any class of beneficiary or any contingent beneficiary, designated
          under the form of benefit elected, and shall be irrevocable with respect to such
          form and beneficiary designation.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | Notwithstanding the above, the consent of a Participants spouse to the
          waiver of a Qualified Joint and Survivor Annuity shall not be required if the
          Participant was not married throughout the one-year period ending on his Annuity
          Starting Date. A Participant who marries within one year before his Annuity
          Starting Date and is married to such spouse for a one-year period ending prior
          to his death shall be deemed to have been married throughout the one-year period
          ending on his Annuity Starting Date.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | If the spouse of a Participant dies, or is divorced from the Participant before
          the Participants Annuity Starting Date, the Participants retirement
          benefit shall not be reduced in accordance with this Section. If a
          Participants spouse dies or is divorced from the Participant on or after
          the Participants Annuity Starting Date, but prior to the death of the
          Participant, the Qualified Joint and Survivor Annuity shall continue to be paid
          in the same reduced amount determined under this Section.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | If the Participant dies before his Annuity Starting Date, no annuity shall be
          payable to his spouse pursuant to this Section and the benefit payable to such
          spouse, if any, shall be determined under Sections 7.3(Pre-Retirement Survivor Annuity  Retirement Account, Salix Accounts,
          Coherent Accounts and Ocular Account), 7.4(Distributions to
          Beneficiaries) or 7.6 (Installment or Deferred Distributions). If the
          Participant dies after his Annuity Starting Date and while receiving benefits in
          the form of a Qualified Joint and Survivor Annuity, the spouse to whom the
          Participant was married on his Annuity Starting Date shall, except as may be
          otherwise provided in any Qualified Domestic Relations Order, be entitled to
          receive the survivor annuity benefit whether or not the Participant and such
          spouse are married on the date of the Participants death.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

49

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7.3      Pre-Retirement Survivor Annuity - Retirement Account, Salix Accounts,  Coherent Accounts and Ocular
Account.

|(a) | The Retirement Account; and prior to February 1, 2002, the Coherent Accounts and
          Salix Accounts; and prior to September 5, 2002, the Ocular Account; in the Trust
          Fund distributable to a Participant who dies prior to his Annuity Starting Date
          and who is married on the date of his death shall be distributed in the form of
          an annuity for the life of his surviving spouse (Pre-Retirement Survivor
          Annuity) unless such Participant has elected not to have benefits paid in
          the form of a Pre-Retirement Survivor Annuity pursuant to subsection (e)below or the surviving spouse elects otherwise pursuant to
          subsection (d) below. For distributions made from a
          Participants Coherent Accounts or his Salix Accounts on or after February
          1, 2002, only a lump sum distribution will be offered. For distributions made
          from a Participants Ocular Account on or after September 5, 2002, only a
          rollover or lump sum distribution will be offered.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Benefits payable in the form of a Pre-Retirement Survivor Annuity shall be paid
          by distributing to the surviving spouse of the Participant an annuity contract
          purchased by the Administrative Committee with the nonforfeitable balance of the
          Participants Retirement Account, Salix Accounts, Coherent Accounts and
          Ocular Account on the Valuation Date preceding the date of purchase. Such
          annuity contract shall provide for level monthly payments for the life of the
          surviving spouse of the Participant commencing as soon as practicable
          thereafter. Any such annuity contract shall be nonassignable and noncommutable.
          Delivery of any such contract shall be in full satisfaction of the rights of the
          Participants spouse.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Payment of the Pre-Retirement Survivor Annuity shall commence as of the first
          day of the month coinciding with or next following the latest of:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | the date the Participant dies; or
|--- | ---------------------------------

|(ii) | the date the Participants surviving spouse elects, but not later than the
          Participants Normal Retirement Date.
|---- | --------------------------------------------------------------------------------------------------------------------------

|(d) | Notwithstanding subsection (b) above, the surviving spouse of a
          Participant may elect to receive a distribution of the balance of the deceased
          Participants Retirement Account, Salix Accounts, Coherent Accounts, and
          Ocular Account in a rollover or lump sum by filing an election with the
          Administrative Committee at such time and in such manner as the Administrative
          Committee shall provide.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | A Participant may elect not to have a Pre-Retirement Survivor Annuity paid to
          his surviving spouse. Such election may be made at any time during the Election
          Period described in subsection (f) below. In addition, a Participant
          may elect to waive the Pre-Retirement Survivor Annuity prior to the Election
          Period, provided he has been given the information described in
          subsection (g) below prior to making such election, and further
          provided that such election shall become invalid as of the first day of the Plan
          Year in which the Participant attains age 35. To be effective, any such
          election shall require the consent of the Participants spouse as provided
          in subsection 7.2(c). Any such election may be revoked by the
          Participant within the Election Period.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

50

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|(f) | The Election Period shall commence on the first day of the Plan Year in which
          the Participant attains age 35 and end on the earlier of:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | the date of the Participants death, or
|--- | ---------------------------------------

|(ii) | his Annuity Starting Date.
|---- | --------------------------

provided that, in the case of a
Participant who separates from service prior to attaining age 35 and who has a
nonforfeitable right to any portion of his Accounts, the Election Period shall commence on
the date of his separation from service with respect to his Accounts as of such date.

|(g) | The Administrative Committee shall furnish each Participant a general written
          explanation of the terms and conditions of the Pre-Retirement Survivor Annuity,
          the Participants right to make and the effect of an election to waive it,
          the rights of the Participants spouse, the Participants right to
          revoke an election to waive the Pre-Retirement Survivor Annuity and the effect
          of such revocation. Such information shall be provided within the period
          beginning on the first day of the Plan Year in which the Participant attains
          age 32, and ending with the last day of the Plan Year preceding the Plan
          Year in which the Participant attains age 35, provided however, that:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | If an individual becomes a Participant after attaining age 32, the
          information described above shall be provided no later than the close of the
          second Plan Year following the date he became a Participant; and
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | If a Participant separates from service prior to attaining age 35 and has a
          nonforfeitable right to any portion of his Retirement Account, Salix Accounts,
          Coherent Accounts and Ocular Account, the information described above shall be
          provided to him no later than one year after his separation from service.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.4      Distributions to Beneficiaries.

|(a) | Except as otherwise provided in this Section 7.4, the balance of a
          deceased Participants Accounts other than the Retirement Account; prior to
          February 1, 2002, his Salix Accounts and Coherent Accounts; and prior to
          September 5, 2002 his Ocular Account which are distributable to a beneficiary
          shall be distributed in one or more of the forms described in
          subsection 7.1(d)(i) or 7.1(d)(ii) above, in accordance with
          an effective designation filed by the Participant with the Administrative
          Committee or, if no such designation has been filed, in one of such forms as the
          beneficiaries shall request.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | If the distribution of the Participants Accounts has begun in accordance
          with Section 7.1(Commencement and Form of Distribution), any form
          of distribution to a beneficiary under this Section 7.4 shall be
          designed to distribute the balance of the deceased Participants Accounts
          at least as rapidly as under the method of distribution in effect at the time of
          the Participants death.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

51

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|(c) | If the distribution of a Participants Accounts has not commenced at the
          time of his death, any form of distribution to a beneficiary shall be designed
          to distribute the balance of the deceased Participants Accounts as
          follows:
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | Any portion of the Accounts payable to or for the benefit of an Individual
          Beneficiary may be distributed over a period not to exceed the life expectancy
          of such Individual Beneficiary if such payments commence not later than the
          December 31 coinciding with or next following the first anniversary of the
          Participants death, unless such Individual Beneficiary is the surviving
          spouse of the Participant, in which case such payments need not commence until
          the later of:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(A) | the December 31 coinciding with or next following the first anniversary of
          the Participants death, or
|--- | ----------------------------------------------------------------------------------------------------------------

|(B) | the December 31 of the calendar year in which the Participant would have
          attained age 701⁄2.
|--- | ----------------------------------------------------------------------------------------------------

|(ii) | If the Participants surviving spouse is an Individual Beneficiary and dies
          prior to the commencement of benefit payments to such spouse,
          subsection (i) above shall be applied as if the Participants
          death had occurred on the date of such spouses death.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | Unless distribution is made in accordance with subsection (i) or
          (ii) above, the balance of the Participants Accounts shall be
          distributed in full no later than the December 31 coinciding with or next
          following the 5th anniversary of the Participants death.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | If a beneficiary to whom payments have commenced dies prior to receipt of all
          such payments, the remaining balance of the Participants Accounts shall be
          distributed as described in subsection 7.5(d) at least as rapidly as
          under the method of distribution in effect at the time of the beneficiarys
          death.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | The life expectancy of an Individual Beneficiary who is the surviving spouse of
          the Participant shall be re-determined annually in accordance with regulations
          prescribed under Code Section 401(a)(9).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.5       Beneficiary Designations.

|(a) | Unless a Participant has effectively elected otherwise in accordance with this
          Section 7.5, the distributable balance of a deceased
          Participants Accounts shall be paid to his surviving spouse.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

52

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|(b) | The distributable balance of a deceased Participants Accounts shall be
          distributed to the persons effectively designated by the Participant as his
          beneficiaries. To be effective, the designation shall be filed with the
          Administrative Committee in such written form as the Administrative Committee
          requires and may include contingent or successive beneficiaries; provided that
          any designation by a Participant who is married at the time of his death or, if
          earlier, the date his benefit payments commence, which fails to name his
          surviving spouse as the sole primary beneficiary shall not be effective unless
          such surviving spouse has consented to the designation in writing, witnessed by
          a Plan representative or notary public, acknowledging the effect of the
          designation and the specific non-spouse beneficiary, including any class of
          beneficiaries or any contingent beneficiary. Such consent shall be irrevocable
          with respect to such beneficiary designation. Such consent shall not be required
          if the Participant establishes to the satisfaction of the Administrative
          Committee that the consent of the Participants spouse cannot be obtained
          because there is no spouse, such spouse cannot be located or by reason of such
          other circumstances as may be prescribed by regulations. Any consent (or
          establishment that the consent cannot be obtained) shall be effective only with
          respect to such spouse. Any Participant may change his beneficiary designation
          at any time by filing with the Administrative Committee a new beneficiary
          designation (with such spousal consent as may be required). Notwithstanding the
          foregoing, designation of a beneficiary by a Participant who did not have an
          Hour of Service after August 22, 1984, shall not require the consent of his
          surviving spouse to be effective.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | If a Participant dies, and to the knowledge of the Administrative Committee
          after reasonable inquiry leaves no surviving spouse, has not filed an effective
          beneficiary designation or has revoked all such designations, or has filed an
          effective designation but the beneficiary or beneficiaries predeceased him, the
          distributable portion of the Participants Accounts shall be paid to the
          executor or administrator of the Participants estate.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | If the beneficiary, having survived the Participant, dies prior to the final and
          complete distribution of the Participants Accounts, then the distributable
          portion of said Accounts shall be paid:
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | to the beneficiary named in the most recent effective beneficiary designation
          filed by the Participants original beneficiary in accordance with such
          designation; or
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | if no such beneficiary has been named, to the executor or administrator of the
          beneficiarys estate.
|---- | --------------------------------------------------------------------------------------------------------------

7.6      Installment or Deferred
Distributions. If distribution is made to a Participant or to the beneficiary of a
deceased Participant in installments or is deferred, the undistributed vested balance
shall share in the net earnings or losses (including the net adjustments in the value of
the Trust Fund) as provided in Section 5.3 (Unit Values) and such Participant
or beneficiary shall be entitled to make elections with respect to the transfer of such
balance among the investment Funds in accordance with Section 5.2 (Common
Fund).

7.7      Form of Elections and
Applications for Benefits. Any election, revocation of an election or application for
benefits pursuant to the Plan shall not be effective unless it is:

(a)    
          made on such form, if any, as the Administrative Committee may prescribe for
          such purpose;

(b)    
          signed by the Participant and, if required by subsection 7.2(c)
          above or Section 7.5 (Beneficiary Designations), by the
          Participants spouse; and

53

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(c)    
          filed with the Administrative Committee.

7.8      Unclaimed Distributions.
In the event any distribution cannot be made because the person entitled thereto cannot be
located and the distribution remains unclaimed for 2 years after the distribution
date established by the Administrative Committee, then such amount shall be treated as a
forfeiture as of the last day of the Plan Year in which such 2-year period ended, shall
reduce the Retirement Contribution and Profit Sharing Contribution of such persons
Employer for said Plan Year, and shall be allocated as part of such Contributions to the
Trust Fund in accordance with Section 5.8 (Allocation of Retirement
Contribution and Forefeitures). In the event such person subsequently files a valid claim
for such amount, such amount treated as a forfeiture (without any earnings thereon) shall
be restored to the Participants Accounts by an additional Employer Contribution (as
defined in Section 3.1 (Employer Contribution)) allocable to such Accounts.

7.9      Distributions in Kind. The
Administrative Committee shall, upon request of a Participant or beneficiary, distribute
amounts from the Fund invested in common stock of the Company in shares of such stock,
provided that cash in lieu of any fractional shares shall be distributed. In the event any
distributions to a Participant or beneficiary are made in kind, the assets so distributed
shall be valued at their fair market value as of the distribution date established by the
Administrative Committee.

7.10      Distribution of
Participants After-Tax Account, Rollover Account, Salix Rollover Account, Coherent
Rollover Account and Ocular Account Prior to Termination of Employment. A Participant,
with the written consent of his spouse if applicable, may direct the Administrative
Committee to make the following payments:

|(a) | An amount equal to the balance in the Participants After-Tax Account as
          determined on the Valuation Date coinciding with or immediately preceding such
          direction (less any distribution made to the Participant from the Valuation Date
          to the date of payment).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | An amount not to exceed his After-Tax Account on the Valuation Date coinciding
          with or immediately preceding such action provided the Participant limits such
          payments to one withdrawal for each Plan Year.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | An amount not to exceed the balance in the Participants Rollover
          Contribution Account, Salix Rollover Account, Coherent Rollover Account, and
          Ocular Account provided that no such distribution shall reduce the
          Participants Accounts to an amount equal to the amount of any unpaid loan
          made pursuant to Section 7.11(Loans).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Notwithstanding the foregoing:
|--- | ------------------------------

|(i) | No distribution pursuant to this Section 7.10 shall be made which
          reduces the aggregate balance of the Participants Accounts below the
          amount of the unpaid balance of any loan pursuant to Section 7.11
          (Loans); and
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | Only one distribution from a Participants Rollover Account pursuant to
          this Section 7.10 shall be permitted for each Plan Year; and
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------

54

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|(iii) | No more than an aggregate of two distributions from a Coherent
          Participants Coherent Rollover Account under this Section 7.10
          and from any Coherent Account under Sections 7.12 (Withdrawals Prior
          to Termination of Employment and After Age 59-1/2) and 7.13 (Pre-59-1/2
          Coherent Account Withdrawals; Hardship Withdrawals) shall be permitted for each
          Plan Year. This subsection (iii)shall expire December 31,
          2001.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Distributions pursuant to this Section 7.10 shall be made from the
          respective Account invested in the separate Funds. The amounts distributed from
          such separate Funds shall be determined pursuant to procedures established by
          the Administrative Committee and subject to the limitations or restrictions
          thereon imposed by the sponsor(s) of the respective Fund.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | Any distribution of a Participants After-Tax Account shall be deemed to be
          made in the following order:
|--- | ------------------------------------------------------------------------------------------------------------------

|(i) | contributions allocated to the pre-1987 After-Tax sub-account then earnings on
          the pre-1987 After-Tax sub-account;
|--- | ----------------------------------------------------------------------------------------------------------------------------

|(ii) | contributions allocated to the post-1986 After-Tax sub-account then earnings on
          the post-1986 After-Tax sub-account.
|---- | ------------------------------------------------------------------------------------------------------------------------------

|(g) | Withdrawals made pursuant to this Section 7.10 from a Coherent
          Participants Coherent Rollover Account, a Salix Participants Salix
          Rollover Account or an Ocular Participants Ocular Account shall be subject
          to the provisions of Section 7.2 (Qualified Joint and Survivor Annuity
           Retirement Account, Salix Accounts, Coherent Accounts and Ocular
          Account.)
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(h) | Any distribution from a Participants Rollover Account, Salix Rollover
          Account, Coherent Rollover Account, and Ocular Account shall be deemed to be
          made first from the Rollover Account and then from the Salix Rollover Account,
          Coherent Rollover Account or Ocular Account.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.11        Loans.

|(a) | Upon the submission by the Participant of a written loan application form as
          prescribed by the Administrative Committee, or any other process approved by the
          Administrative Committee, a Participant shall be able to apply for a loan. The
          funds for such loan may only come from a Participants After-Tax Account,
          Before-Tax Account, Rollover Account, Coherent Before-Tax Account, Coherent
          Employer Account, Coherent Rollover Account, Salix Before-Tax Account, Salix
          Employer Account, Salix Rollover Account, Profit Sharing Account attributable to
          pre-1992 Profit Sharing Contributions, Ocular Account and, prior to January 1,
          2004, Matching Account. Participants shall not be allowed to obtain a loan from
          their Retirement Account, Company Contribution Account, Profit Sharing Account
          attributable to post-1992 Profit Sharing Contributions and, after December 31,
          2003, Matching Account. If the Administrative Committee reasonably believes that
          the Participant either does not intend to repay the loan or lacks proper
          financial ability to repay the loan, it shall not grant such a loan. A
          Participant shall have no more than three loans outstanding at any time.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

55

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|(b) | Loans shall be an asset of the Participants Accounts and shall be treated
          in the manner of a segregated account.
|--- | ---------------------------------------------------------------------------------------------------------------------------

|(c) | The amount of any loan shall not be less than $1,000 unless, in the event that a
          Participant demonstrates financial hardship, the Administrative Committee, in
          its sole discretion, approves a loan in an amount less than $1,000. The maximum
          amount of a Participants loan shall not exceed the lesser of: (1) 50% of
          the amount which the Participant would be entitled to receive from all his
          Accounts other than his Retirement Account and his Profit Sharing Account
          attributable to post-1992 Profit Sharing Contributions, if he had resigned from
          the service of the Employer and all Affiliates on the Valuation Date immediately
          preceding the date of such authorization; (2) the total amount of funds
          available in a Participants After-Tax Account, Before-Tax Account,
          Rollover Account, Coherent Before-Tax Account, Coherent Employer Account,
          Coherent Rollover Account, Salix Before-Tax Account, Salix Employer Account,
          Salix Rollover Account, Profit Sharing Account attributable to pre-1992 Profit
          Sharing Contributions, Ocular Account and, prior to January 1, 2004, Matching
          Account; or (3) $50,000 reduced by the greater of:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | the highest outstanding balance of loans to the Participant from the Trust Fund
          during the one-year period ending on the day before the date on which such loan
          is made or modified; or
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | the outstanding balance of loans to the Participant from the Trust Fund on the
          date on which such loan is made or modified.
|---- | -------------------------------------------------------------------------------------------------------------------------------------

|(d) | Such loans shall be made available on a reasonably equivalent basis to all
          Participants and beneficiaries who have vested Account balances in the Plan and
          who either:
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | are active employees; or
|--- | ------------------------

|(ii) | are determined by the Administrative Committee to be parties in
          interest as that term is defined in ERISA Section 3(14), so long as
          the making of such loans does not discriminate in favor of Highly Compensated
          Employees.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Loans shall be made on such terms as the Administrative Committee may prescribe,
          provided that any such loan shall be evidenced by a note, shall bear interest on
          the unpaid balance thereof at a reasonable rate per annum to be set from time to
          time by the Administrative Committee which is commensurate with the interest
          rates charged by persons in the business of lending money for loans which would
          be made under similar circumstances, shall bear the loan processing fee as the
          Administrative Committee shall from time to time approve and shall be secured by
          the Participants segregated loan account and such other security as the
          Administrative Committee in its discretion deems appropriate.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | Repayment:
|--- | ----------

56

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|(i) | Loans shall be repaid by the Participant by payroll deduction or any other
          method approved by the Administrative Committee that requires level amortization
          of principal and the loan fee (which amounts shall be applied to defray the
          administrative expenses of the Plan) and repayments not less frequently than
          quarterly. Such loans shall be repaid over a period not to exceed 5 years
          or a reasonable amount of time as established by the Administrative Committee,
          not to exceed 15 years, for loans used to acquire a dwelling unit which
          within a reasonable time is to be used as the principal residence of the
          Participant as determined under the applicable Code provisions in accordance
          with procedures established by the Administrative Committee from time to time.
          The loan shall be amortized in substantially equal payments over the term of the
          loan.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | Loan repayments may, however, be suspended during a leave of absence of up to
          one year if a Participants pay from the Employer is insufficient to
          service the debt, but only if the loan is repaid by the latest date permitted
          under Code Section 72(p)(2)(B) (which is usually 5 years). The loan
          will not be considered in default as provided below during this one year period.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | Loan repayments may, as determined by the Administrative Committee, be suspended
          under this Plan as permitted under Code Section 414(u) during periods of
          Qualified Military Service.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(g) | If, at the time benefits are to be distributed (or to commence being
          distributed) to a Participant with respect to a separation from service or the
          death of the Participant, there remains any unpaid balance of a loan hereunder,
          such unpaid balance shall, to the extent consistent with Department of Labor
          Regulations, become immediately due and payable in full. Such unpaid balance,
          together with any accrued but unpaid interest on the loan, shall be deducted
          from the Participants Accounts, subject to the default provisions below,
          before any distribution of benefits is made, unless the Participant pays back
          the loan in full. No loan shall be made or remain outstanding with respect to a
          Participant under this Section 7.11 after the time distributions to
          the Participant with respect to a separation from service are to be paid.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(h) | Default:
|--- | --------

|(i) | Default occurs when any payment of principal or interest is not made as set
          forth in the promissory note. In the event of a default, the Participant shall
          be given a reasonable opportunity to cure such default. The cure period shall
          end not later than the last day of the calendar quarter following the calendar
          quarter in which the required installment payment was due.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | After the cure period has expired, if such default is not cured, the unpaid
          balance of the loan shall become due and payable, will be treated as a deemed
          distribution to the Participant. Further, the unpaid balance of such loan,
          together with any accrued but unpaid interest on the loan, may in the
          Administrative Committees discretion be charged against the
          Participants segregated loan account.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) | If after the Participants segregated loan account has been so charged,
          there remains an unpaid balance of any such loan and interest, then the
          remaining unpaid balance of such loan shall be charged against any property
          pledged as security with respect to such loan.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

57

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|(iv) | For any period of time after default during which the Participants
          outstanding loan balance has not been charged against his segregated loan
          account, the loan will be considered to be outstanding for purposes of
          determining the amount available for subsequent loans under
          subsection 7.11(c) above.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.12       Withdrawals Prior to Termination of Employment and After Age 59-1/2.

(a)    
          A Participant who has attained age 59-1/2 may elect to withdraw amounts from his
          Before-Tax Account, After-Tax Account, Rollover Account, Matching Account, Salix
          Before-Tax Account, Salix Rollover Account, Coherent Before-Tax Account,
          Coherent Rollover Account, and Ocular Account as of the Valuation Date
          coinciding with or immediately preceding the date of such withdrawal; provided,
          however, that during a Plan Year not more than one withdrawal shall be made
          pursuant to this Section 7.12; provided, further, for Plan Years
          starting before December 31, 2001, that during a Plan Year, not more than
          an aggregate of two withdrawals shall be made by a Coherent Participant from his
          Coherent Accounts under this Section 7.12, Section 7.10
          (Distribution of Participants After-Tax Account, Rollover Account, Salix
          Rollover Account, Coherent Rollover Account and Ocular Account Prior to
          Termination of Employment) and Section 7.13 (Pre-59-1/2 Coherent Account
          Withdrawals; Hardship Withdrawals).

(b)    
          Withdrawals made pursuant to this Section 7.12 shall be charged
          against the Participants Accounts in the following order:

(i)    
          Pre-1987 After-Tax Account;

(ii)    
          Post-1986 After-Tax Account;

(iii)    
          Rollover Account or Ocular Account;

(iv)    
          Matching Account;

(v)    
          Before-Tax Account;

(vi)    
          Salix Before-Tax Account or Coherent Before-Tax Account;

(vii)    
          Salix Rollover Account or Coherent Rollover Account.

and made from the separate Funds in
which such Accounts are invested pursuant to procedures established by the Administrative
Committee, subject to the limitations or restrictions thereon imposed by the sponsor(s) of
the respective Funds or by Section 5.2 (Common Fund).

7.13      Pre-59-1/2 Coherent Account Withdrawals; Hardship Withdrawals.

58

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|(a) |  | Withdrawals Prior to Age 591⁄2. Effective for Plan Years starting on
               or after December 31, 2001, no withdrawals will be allowed for Participants
               prior to the age of 591⁄2, except as provided in subsection (b)below. For Plan Years prior to January 1, 2002, a Coherent Participant who
               has completed at least five (5) Years of Service may elect to withdraw all or a
               portion of his Coherent Employer Account and Coherent Rollover Account.
               Withdrawals made pursuant to this subsection 7.13(a) shall be
               charged against the Coherent Participants Coherent Accounts in the
               following order; provided, however, that during a Plan Year not more than two
               withdrawals from a Coherent Participants Coherent Accounts shall be made
               pursuant to this Section 7.13, Section 7.10
               (Distribution of Participants After-Tax Account, Rollover Account, Salix
               Rollover Account, Coherent Rollover Account and Ocular Account Prior to
               Termination of Employment) and Section 7.12 (Withdrawals Prior to
               Termination of Employment and After Age 59-1/2).
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | Hardship. A Participant who has not attained age 591⁄2 may, upon the
               determination by the Administrative Committee that he has incurred a financial
               hardship, make a hardship withdrawal from his Before-Tax Contributions and
               Matching Contributions (together with any income allocated to his Before-Tax
               Account and Matching Account as of December 31, 1988), After-Tax Account,
               Rollover Account, Salix Before-Tax Account, Salix Rollover Account, Coherent
               Before-Tax Account, Coherent Rollover Account, and Ocular Account (but only to
               the extent of the pre-tax contributions made and pre-1989 earnings allocated
               thereto); provided, however, that after December 31, 2003, Matching
               Contributions and funds in the Matching Account will not be available for
               hardship withdrawal.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) |  | In any case where the Participant claims financial hardship, he shall submit a
               written request for such distribution in accordance with procedures prescribed
               by the Administrative Committee. The Administrative Committee shall determine
               whether the Participant has a financial hardship on the basis of such written
               request in accordance with this Section 7.13, and such determination
               shall be made in a uniform and nondiscriminatory manner. The Administrative
               Committee shall only make a determination of financial hardship if the
               distribution is requested on account of an immediate and heavy financial need of
               the Participant and the funds to be distributed are necessary to satisfy the
               Participants need, taking into account any amounts necessary to pay any
               Federal, state or local income taxes or penalties reasonably anticipated to
               result from the distribution.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) |  | The determination of whether a Participant has an immediate and heavy financial
               need is to be made by the Administrative Committee on the basis of all the
               relevant facts and circumstances. The following expenses shall be deemed to
               constitute an immediate and heavy financial need:
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(A) |  | expenses for medical care (as described in Code Section 213(d)) previously
               incurred by the Participant, the Participants spouse or any dependents of
               the Participant (as defined in Code Section 152) or necessary for these
               persons to obtain such medical care;
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) |  | the purchase (excluding mortgage payments) of a principal residence for the
               Participant;
|--- |  | -------------------------------------------------------------------------------------------------------

|(C) |  | tuition and related educational fees (including room and board) due for the next
               12 months of post-secondary education for the Participant, the
               Participants spouse, children or dependents;
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

59

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|(D) |  | the need to prevent the eviction of the Participant from his principal residence
               or foreclosure on the mortgage of the Participants principal residence; or
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(E) |  | payments necessary to prevent utility shut off or similar immediate housing
               needs, of the Participant, or the Participants spouse, children or
               dependents (as defined in Code Section 152), payments for child custody or
               dependent sponsorship fees and expenses, payments for emergency travel expenses,
               and other similar events or expenses determined to be an immediate and heavy
               financial need by the Administrative Committee.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) |  | The determination of whether a distribution is necessary to satisfy the
               immediate and heavy financial need of the Participant shall be made by the
               Administrative Committee on the basis of all relevant facts and circumstances.
               The Administrative Committee may determine that a distribution is necessary to
               satisfy the immediate and heavy financial need of the Participant if the
               Participant reasonably demonstrates that all of the following requirements are
               satisfied:
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(A) |  | the distribution is not in excess of the amount of the immediate and heavy
               financial need of the Participant, taking into account any amounts necessary to
               pay any federal, state or local income taxes or penalties reasonably anticipated
               to result from the distribution;
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) |  | the Participant has obtained all distributions (other than hardship
               distributions), and all nontaxable loans that would not cause a financial
               hardship under all of the plans maintained by the Employer or any Affiliate;
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(C) |  | the Participant will not make any contributions to any retirement plan (other
               than mandatory employee contributions to a defined benefit plan) maintained by
               the Employer or any Affiliate for 12 months (6 months effective for
               hardship distributions made after December 31, 2001) after receiving the
               hardship distribution; and
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(D) |  | the Participants Before-Tax Contributions to this Plan and to all plans
               maintained by the Employer or any Affiliate in the calendar year following the
               calendar year of the hardship distribution do not exceed the limitation in Code
               Section 402(g)(1) applicable to such following calendar year, minus the
               amount of his Before-Tax Contributions for the calendar year of the hardship
               distribution.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) |  | Any withdrawals under this Section 7.13 shall not reduce the
               Participants Before-Tax Account below the amount of twice the balance of
               any outstanding loan made pursuant to Section 7.11 (Loans).
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) |  | Withdrawals made pursuant to this Section 7.13 shall be charged
               against the respective Accounts invested in the separate Funds. The amounts
               withdrawn from such separate Funds shall be determined pursuant to procedures
               established by the Administrative Committee and subject to the limitations or
               restrictions thereon imposed by the sponsor(s) of the respective Funds.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

60

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|(f) |  | Withdrawals made pursuant to this Section 7.13 shall be charged
               against the Participants Accounts in the order provided in
               subsection 7.12(b) above.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(g) |  | Withdrawals made pursuant to this Section 7.13 from a Coherent
               Participants Coherent Accounts shall be subject to the provisions of
               Section 7.2 (Qualifying Joint and Survivor Annuity  Retirement
               Account, Salix Accounts, Coherent Accounts, and Ocular Account).
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7.14      Eligible Rollover
Distributions.

(a)    
          Notwithstanding any provision of the Plan to the contrary that would otherwise
          limit a distributees election under Article 6 (Amount of
          Payments to Participants), a distributee may elect, at the time and in the
          manner prescribed by the Administrative Committee, to have any portion of an
          eligible rollover distribution paid directly to an eligible retirement plan
          specified by the distributee in a direct rollover.

(b)    
          Eligible rollover distribution: an eligible rollover distribution is any
          distribution of all or any portion of the balance to the credit of the
          distributee, except that an eligible rollover distribution does not include: any
          distribution that is one of a series of substantially equal periodic payments
          (not less frequently than annually) made for the life (or life expectancy) of
          the distributee or the joint lives (or joint life expectancies) of the
          distributee and the distributees designated beneficiary, or for a
          specified period of ten years or more; any distribution to the extent such
          distribution is required under Code Section 401(a)(9); the portion of any
          distribution that is not includible in gross income (determined without regard
          to the exclusion for net unrealized appreciation with respect to employer
          securities), beginning with the 2000 Plan Year, any distribution that is a
          hardship distribution described in Code Section 401(k)(2)(B)(i)(IV); and
          beginning with the 2002 Plan Year, any distribution which is made upon hardship
          of the employee.

(c)    
          Eligible retirement plan: an eligible retirement plan is an individual
          retirement account described in Code Section 408(a), an individual
          retirement annuity described in Code Section 408(b), an annuity plan
          described in Code Section 403(a), or a qualified trust described in Code
          Section 401(a), that accepts the distributees eligible rollover
          distribution. However, in the case of an eligible rollover distribution made on
          or before December 31, 2001 to the surviving spouse, an eligible retirement plan
          is an individual retirement account or individual retirement annuity.

For
distributions made on or after January 1, 2002, an eligible retirement plan shall also
mean an annuity contract described in Code Section 403(b) and an eligible plan under Code
Section 457(b) which is maintained by a state, political subdivision of a state, or any
agency or instrumentality of a state or political subdivision of a state and which agrees
to separately account for amounts transferred into such plan from this Plan. The
definition of eligible retirement plan shall also apply in the case of a distribution to a
surviving spouse, or to a spouse or former spouse who is the Alternate Payee under a
Qualified Domestic Relation Order, as defined in Code Section 414(p).

61

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(d)    
          For distributions made on or after January 1, 2002, a portion of a distribution
          shall not fail to be an eligible rollover distribution merely because the
          portion consists of After-Tax Contributions which are not includible in gross
          income. However, such portion may be transferred only to an individual
          retirement account or annuity described in Code Section 408(a) or (b), or to a
          qualified defined contribution plan described in Code Section 401(a) or 403(a)
          that agrees to separately account for amounts so transferred, including
          separately accounting for the portion of such distribution which is includible
          in gross income and the portion of such distribution which is not so includible.

(e)    
          Distributee: a distributee includes an employee or former employee. In addition,
          the employees or former employees surviving spouse and the
          employees or former employees spouse or former spouse who is the
          Alternate Payee under a Qualified Domestic Relations Order, as defined in Code
          Section 414(p), are distributees with regard to the interest of the spouse
          or former spouse.

(f)    
          Direct rollover: a direct rollover is a payment by the Plan to the eligible
          retirement plan specified by the distributee.

7.15      Facility of Payment.
When, in the Administrative Committees opinion, a Participant or beneficiary is
under a legal disability or is incapacitated in any way so as to be unable to manage his
affairs, the Administrative Committee may direct the Trustee to make payments:

(a)    
          directly to the Participant or beneficiary;

(b)    
          to a duly appointed guardian or conservator of the Participant or beneficiary;

(c)    
          to a custodian for the Participant or beneficiary under the Uniform Gifts to
          Minors Act;

(d)    
          to an adult relative of the Participant or beneficiary; or

(e)    
          directly for the benefit of the Participant or beneficiary.

Any such payment shall constitute a
complete discharge therefor with respect to the Trustee and the Administrative Committee.

7.16       Claims Procedure.

|(a) | Any person who believes that he is then entitled to receive a benefit under the
          Plan, including one greater than that initially determined by the Administrative
          Committee, may file a claim in writing with the Administrative Committee.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

62

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|(b) | The Administrative Committee shall within 90 days of the receipt of a claim
          either allow or deny the claim in writing. A denial of a claim shall be written
          in a manner calculated to be understood by the claimant and shall include:
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | the specific reason or reasons for the denial;
|--- | ----------------------------------------------

|(ii) | specific references to pertinent Plan provisions on which the denial is based;
|---- | ------------------------------------------------------------------------------

|(iii) | a description of any additional material or information necessary for the
          claimant to perfect the claim and an explanation of why such material or
          information is necessary; and
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iv) | an explanation of the Plans claim review procedure.
|---- | ----------------------------------------------------

|(c) | A claimant whose claim is denied (or his duly authorized representative) may,
          within 60 days after receipt of denial of his claim:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------

|(i) | submit a written request for review to the Administrative Committee;
|--- | --------------------------------------------------------------------

|(ii) | review pertinent documents; and
|---- | -------------------------------

|(iii) | submit issues and comments in writing.
|----- | --------------------------------------

|(d) | The Administrative Committee shall notify the claimant of its decision on review
          within 60 days of receipt of a request for review. The decision on review
          shall be written in a manner calculated to be understood by the claimant and
          shall include specific reasons for the decision and specific references to the
          pertinent Plan provisions on which the decision is based.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | The 90-day and 60-day periods described in subsections (b) and
          (d) above, respectively, may be extended at the discretion of the
          Administrative Committee for a second 90- or 60-day period, as the case may be,
          provided that written notice of the extension is furnished to the claimant prior
          to the termination of the initial period, indicating the special circumstances
          requiring such extension of time and the date by which a final decision is
          expected.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | Participants and beneficiaries shall not be entitled to challenge the
          Administrative Committees determinations in judicial or administrative
          proceedings without first complying with the procedures in this Article. The
          Administrative Committees decisions made pursuant to this Section are
          intended to be final and binding on Participants, beneficiaries and others.
          Further, no legal actions may be commenced with respect to a request by
          Participant or Participants beneficiary for benefits later than
          two (2) years after the Participant or Participants beneficiary
          originally filed his claim for benefits.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

63

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# ARTICLE 8

# Top-Heavy Plan
Requirements

8.1      Top-Heavy Definitions.  For purposes of this Article 8:

(a)    
          For Plan Years prior to January 1, 2002, a Key Employee is any
          current or former employee (and the beneficiaries of such employee) who at any
          time during the Determination Period was an officer of the Employer or an
          Affiliate if such individuals annual compensation exceeds 50% of the
          defined benefit dollar limitation in Code Section 415(b)(1)(A), an owner
          (or considered an owner under Code Section 318) of one of the
          10 largest interests in the Employer if such individuals compensation
          exceeds 100% of the Defined Contribution Dollar Limitation, a Five-Percent
          Owner, or a One-Percent Owner of the Employer who has an annual compensation of
          more than $150,000. Annual compensation means Total Compensation plus amounts
          contributed by the Employer pursuant to a salary reduction agreement which are
          excludable from the employees gross income under Code Section 125,
          402(e)(3), 402(h)(1)(B) or 403(b).

For
Plan Years beginning on or after January 1, 2002, a Key Employee is any
employee or former employee (including any deceased employee) who at any time during the
Determination Period was an officer of the Employer having annual compensation greater
than $130,000 (as adjusted under Code Section 416(i)(1) for Plan Years beginning after
December 31, 2002), a 5-percent owner of the Employer, or a 1-percent owner of the
Employer having annual compensation of more than $150,000. For this purpose, annual
compensation means compensation within the meaning of Code Section 415(c)(3).

The
determination of who is a Key Employee will be made in accordance with Code
Section 416(i)(1) and the regulations thereunder.

|(b) |  | For any Plan Year beginning after December 31, 1983, this Plan is
               Top-Heavy if any of the following conditions exists:
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------

|(i) |  | The Top-Heavy Ratio for this Plan exceeds 60% and this Plan is not part of any
               Required Aggregation Group or Permissive Aggregation Group of plans;
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) |  | This Plan is a part of a Required Aggregation Group of plans but not part of a
               Permissive Aggregation Group and the Top-Heavy Ratio for the group of plans
               exceeds 60%;
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) |  | This Plan is a part of a Required Aggregation Group and part of a Permissive
               Aggregation Group of plans and the Top-Heavy Ratio for the Permissive
               Aggregation Group exceeds 60%.
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) |  | The Top-Heavy Ratio shall be determined as follows:
|--- |  | -----------------------------------------------------

64

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|(i) |  | If the Employer maintains one or more defined contribution plans (including any
               Simplified Employee Pension Plan) and the Employer has not maintained any
               defined benefit plan which during the 5-year period ending on the Top-Heavy
               Determination Date(s) has or has had accrued benefits, the Top-Heavy Ratio for
               this Plan alone or for the Required or Permissive Aggregation Group as
               appropriate is a fraction, the numerator of which is the sum of the Account
               balances of all Key Employees as of the Top-Heavy Determination Date(s)
               (including any part of any Account balance distributed in the 5-year period
               ending on the Top-Heavy Determination Date(s)), and the denominator of which is
               the sum of all Account balances (including any part of any Account balance
               distributed in the 5-year period ending on the Top-Heavy Determination Date(s)),
               both computed in accordance with Code Section 416 and the regulations
               thereunder. Both the numerator and denominator of the Top-Heavy Ratio are
               increased to reflect any contribution not actually made as of the Top-Heavy
               Determination Date, but which is required to be taken into account on that date
               under Code Section 416 and the regulations thereunder.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) |  | If the Employer maintains one or more defined contribution plans (including any
               Simplified Employee Pension Plan) and the Employer maintains or has maintained
               one or more defined benefit plans which during the 5-year period ending on the
               Top-Heavy Determination Date(s) has or has had any accrued benefits, the
               Top-Heavy Ratio for any Required or Permissive Aggregation Group as appropriate
               is a fraction, the numerator of which is the sum of Account balances under the
               aggregated defined contribution plan or plans for all Key Employees, determined
               in accordance with subsection (i) above, and the Present Value of
               accrued benefits under the aggregated defined benefit plan or plans for all Key
               Employees as of the Top-Heavy Determination Date(s), and the denominator of
               which is the sum of the Account balances under the aggregated defined
               contribution plan or plans for all Participants, determined in accordance with
               subsection (i) above, and the Present Value of accrued benefits
               under the aggregated defined benefit plan or plans for all Participants as of
               the Top-Heavy Determination Date(s), all determined in accordance with Code
               Section 416 and the regulations thereunder. The accrued benefits under a
               defined benefit plan in both the numerator and denominator of the Top-Heavy
               Ratio are increased for any distribution of an accrued benefit made in the
               5-year period ending on the Top-Heavy Determination Date.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) |  | For purposes of subsections (i) and (ii) above the
               value of Account balances and the Present Value of accrued benefits will be
               determined as of the most recent Valuation Date that falls within or ends with
               the 12-month period ending on the Top-Heavy Determination Date, except as
               provided in Code Section 416 and the regulations thereunder for the first
               and second plan years of a defined benefit plan. The Account balances and
               accrued benefits of a Participant:
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(A) |  | who is not a Key Employee but who was a Key Employee in a prior year; or
|--- |  | ------------------------------------------------------------------------

|(B) |  | who has not been credited with at least one Hour of Service with any Employer
               maintaining the Plan at any time during the 5-year period ending on the
               Top-Heavy Determination Date
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

65

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will be disregarded. The calculation
of the Top-Heavy Ratio, and the extent to which distributions, rollovers, and transfers
are taken into account, will be made in accordance with Code Section 416 and the
regulations thereunder. Deductible employee contributions will not be taken into account
for purposes of computing the Top-Heavy Ratio. When aggregating plans the value of Account
balances and accrued benefits will be calculated with reference to the Top-Heavy
Determination Date(s) that fall within the same calendar year. The accrued benefit of a
Participant other than a Key Employee shall be determined under (1) the method, if
any, that uniformly applies for accrual purposes under all defined benefit plans
maintained by the Employer, or (2) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted under the fractional rule
of Code Section 411(b)(1)(C).

|(d) | The Present Value shall be based on an interest assumption of 5% and
          a post-retirement mortality assumption based on the UP-1984 Mortality Table.
          However, for Plan Years beginning on or after January 1, 2002, see subsection
          (f) below.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Employer for the purposes of this Article8 (Top-Heavy
          Plan Requirements) means the Employer and all Affiliates except for purposes of
          determining ownership under Code Section 416(i)(1).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | For Plan Years beginning on or after January 1, 2002, this subsection (f)
          shall apply for purposes of determining the present values of accrued benefits
          and the amounts of account balances of employees as of the determination date.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | Distributions during year ending on the determination date. The present
          values of accrued benefits and the amounts of Account balances of an employee at
          any time during the Determination Period shall be increased by the distributions
          made with respect to the employee under the Plan and any plan aggregated with
          the Plan under Code Section 416(g)(2) during the 1-year period ending on the
          last day of the Determination Period. The preceding sentence shall also apply to
          distributions under a terminated plan which, had it not been terminated, would
          have been aggregated with the Plan under Code Section 416(g)(2)(A)(i). In the
          case of a distribution made for a reason other than separation from service,
          death, or disability, this provision shall be applied by substituting
          5-year period for 1-year period.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | Employees not performing services during the year ending on the Top Heavy
          Determination Date. The accrued benefits and Accounts of any individual who
          has not performed services for the Employer during the 1-year period ending on
          the Top Heavy Determination Date shall not be taken into Account.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(g) | Minimum Benefits. For Plan Years beginning on or after January 1, 2002,
          Employer Matching Contributions shall be taken into account for purposes of
          satisfying the minimum contribution requirements of Code Section 416(c)(2) and
          the Plan. The preceding sentence shall apply with respect to Matching
          Contributions under the Plan or, if the Plan provides that the minimum
          contribution requirement shall be met in another plan, such other plan. Employer
          Matching Contributions that are used to satisfy the minimum contribution
          requirements shall be treated as Matching Contributions for purposes of the
          actual contribution percentage test and other requirements of Code Section
          401(m).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

66

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8.2      Top-Heavy Plan Requirements.

|(a) | Except as otherwise provided in subsections (b) and (c)
          below, the Profit Sharing Contributions (exclusive of any Before-Tax
          Contributions) and forfeitures allocated on behalf of any Participant who is not
          a Key Employee shall not be less than the lesser of three percent of such
          Participants Total Compensation, or in the case where the Employer has no
          defined benefit plan which designates this Plan to satisfy Code
          Section 401, the largest percentage of Profit Sharing Contributions
          (inclusive of any Before-Tax Contributions) and forfeitures, as a percentage of
          the Key Employees Total Compensation, allocated on behalf of any Key
          Employee for that year. The minimum allocation is determined without regard to
          any Social Security contribution. This minimum allocation shall be made even
          though, under other Plan provisions, the Participant would not otherwise be
          entitled to receive an allocation, or would have received a lesser allocation
          for the year because of:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | the Participants failure to complete 1,000 Hours of Service (or any
          equivalent provided in the Plan);
|--- | ----------------------------------------------------------------------------------------------------------------

|(ii) | the Participants failure to make mandatory employee contributions to the
          Plan; or
|---- | --------------------------------------------------------------------------------------------

|(iii) | Total Compensation less than a stated amount.
|----- | ---------------------------------------------

|(b) | The provision in subsection (a) above shall not apply to any
          Participant who was not employed by the Employer or an Affiliate on the last day
          of the Plan Year.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | The provision in subsection (a) above shall not apply to any
          Participant to the extent the Participant is covered under any other plan or
          plans of the Employer and the Employers contribution and forfeitures
          allocated under such plan or plans are equal to or exceed the amount required to
          be allocated under subsection (a) above.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | The minimum allocation required (to the extent required to be nonforfeitable
          under Code Section 416(b)) may not be forfeited under Code
          Section 411(a)(3)(B) or 411(a)(3)(D).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | For any Plan Year in which this Plan is Top-Heavy, the following schedule shall
          be substituted for the schedule set forth in Section 6.5 (Vesting),
          provided that Section 6.5 (Vesting) shall apply to the extent that
          the nonforfeitable percentage thereunder is greater than the following schedule:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                  | 
|----------------- | 
|
|Less than 2       | 
|2 but less than 3 | 
|3 but less than 4 | 
|4 but less than 5 | 
|5 or more         | 

67

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The minimum vesting schedule applies
to all benefits within the meaning of Code Section 411(a)(7) except those
attributable to employee contributions, including benefits accrued before the effective
date of Code Section 416 and benefits accrued before the Plan became Top-Heavy.
Further, no decrease in a Participants nonforfeitable percentage may occur in the
event the Plans status as Top-Heavy changes for any Plan Year. However, this Section
does not apply to the Account balances of any employee who does not have an Hour of
Service after the Plan has initially become Top-Heavy and such employees Account
balance attributable to Profit Sharing Contributions and forfeitures will be determined
without regard to this Section 8.2.

(f)    
          If a Participant has 3 or more Years of Service as of the last day of the Plan
          Year for which the vested percentage of his Employer Account was subject to
          subsection (e) above, he may elect to have the vested percentage of
          his Employer Account determined under subsection (e) above in any
          subsequent Plan Year when this Section 8.2 is not applicable.

68

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# ARTICLE 9

# Powers and Duties of
Committees

9.1       Appointment of Committees.

(a)    
          The Board of Directors of the Company shall name an Administrative Committee to
          consist of not less than 3 persons to serve as administrator and named
          fiduciary of the Plan. The Board of Directors shall also name an Investment
          Committee hereunder to review investment performance of the Trust Fund, to
          establish the investment policy for the Trustee, to direct investment of the
          assets of the Trust Fund and to take such other action provided in this Plan.
          Any person, including directors, shareholders, officers and employees of the
          Employer, shall be eligible to serve on the Committees. Every person appointed a
          member of the Committees shall signify his acceptance in writing to the Board of
          Directors. In the event the Board of Directors does not appoint an
          Administrative Committee pursuant to this Section 9.1, the Company
          shall act as the administrator and a named fiduciary of the Plan and all
          references to the Administrative Committee shall mean references to the Company
          so acting as administrator and a named fiduciary of the Plan.

(b)    
          Members of the Committees shall serve at the pleasure of the Board of Directors
          and may be removed by the Board of Directors at any time with or without cause.
          Any member of the Committees may resign by giving ten days advanced written
          notice to the Company and other Committee members. Such resignation shall become
          effective at delivery or at any later date specified therein. While there is a
          vacancy in the membership on a Committee the remaining Committee members shall
          have the same powers as the full Committee until the vacancy is filled.

(c)    
          Usual and reasonable expenses of the Committees may be paid in whole or in part
          by the Employer and any such expenses not paid by the Employer shall be paid by
          the Trustee out of the principal or income of the Trust Fund. The members of the
          Committees shall not receive any compensation for their services as such.

9.2      Powers and Duties of
Administrative Committee. Except as otherwise provided in this Article 9,
the Administrative Committee shall have final and binding discretionary authority to
control and manage the operation and administration of the Plan, including all rights and
powers necessary or convenient to the carrying out of its functions hereunder, whether or
not such rights and powers are specifically enumerated herein. In exercising its
responsibilities hereunder, the Administrative Committee may manage and administer the
Plan through the use of agents who may include employees of the Employer.

Without
limiting the generality of the foregoing, and in addition to the other powers set forth in
this Article 9, the Administrative Committee shall have the following
discretionary authorities:

(a)    
          To construe and interpret the Plan, decide all questions of eligibility and
          determine the amount, manner and time of payment of any benefits hereunder.

69

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(b)    
          To prescribe procedures and regulations to be followed by Participants or
          beneficiaries with respect to the filing of elections, requests, applications
          for benefits, consents and waivers, which procedures and regulations may include
          the utilization of telephone voice response, internet or intranet systems or
          other electronic media as an equivalent means for filing written paper
          documents.

(c)    
          To prepare and distribute, in such manner as the Administrative Committee
          determines to be appropriate, information explaining the Plan and a
          Participants or beneficiarys rights hereunder, which manner may
          include utilization of a telephone voice response, internet or intranet system,
          or other electronic media as an equivalent means for filing written paper
          documents.

(d)    
          To request and receive from each Employer, Participants and others such
          information as shall be necessary for the proper administration of the Plan.

(e)    
          To furnish the Company upon request such annual and other reports with respect
          to the administration of the Plan as are reasonable and appropriate.

(f)    
          To receive, review and maintain on file reports of the financial condition and
          of the receipts and disbursements of the Trust Fund from the Trustee.

(g)    
          To fix and determine the respective amounts payable by the Employers pursuant to
          Article 3(Contributions).

(h)    
          To take such action not included within responsibilities allocated to the Board
          of Directors, the Investment Committee, or the Trustee under the provisions of
          the Plan as may be needed to carry out the orderly administration of the Plan.

(i)    
          To determine all questions relating to the eligibility, benefits and other
          rights of employees, Participants and beneficiaries under the Plan.

(j)    
          To allocate fiduciary responsibilities (other than Trustee responsibilities)
          among its members and to designate other persons to carry out nonfiduciary and
          fiduciary responsibilities (other than Trustee responsibilities).

(k)    
          To take such action as it deems appropriate to correct any errors or omissions
          with respect to the administration of the Plan, including but not limited to
          causing to be allocated from future Contributions to the Trust Fund or causing
          distributions from the Trust Fund to be withheld, accelerated or adjusted in
          order to accord to a Participant or beneficiary the allocations to his Accounts
          or distributions therefrom to which he is entitled under the Plan.

9.3      Powers and Duties of the Investment Committee.

|(a) | Except for responsibilities retained by the Board of Directors of the Company,
          the Investment Committee shall have the responsibility to (i) review
          investment performance of the Trust Fund; (ii) establish investment Funds
          pursuant to Section 5.2 (Common Fund); (iii) direct the Trustee
          with regard to the investment of assets; and (iv) such other
          responsibilities as may be delegated to it by the Board of Directors or pursuant
          to the Plan or trust agreement.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

70

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|(b) | In connection with these responsibilities, the Investment Committee shall have
          the following powers and duties:
|--- | -------------------------------------------------------------------------------------------------------------------------

|(i) | to establish investment guidelines and objectives for the investment of the
          Trust Fund and each investment Fund as a part thereof, including, but not by way
          of limitation, the establishment of additional investment funds or the
          consolidation of one or more of the existing funds;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | to review the performance of and appoint and dismiss the Trustee;
|---- | -----------------------------------------------------------------

|(iii) | to receive, review and retain (as it deems convenient or proper) reports of the
          investments and the receipts and disbursements of the Trust Fund from the
          Trustee and/or any Investment Managers; and
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iv) | to manage the investment of any assets for which the Investment Committee serves
          as investment advisor.
|---- | -----------------------------------------------------------------------------------------------------------------

|(c) | The Investment Committee may, subject to periodic review, (i) allocate or
          delegate among its members certain powers, (ii) authorize one or more of
          its members or an agent to execute or deliver any instruments or make payment on
          the Investment Committees behalf, and (iii) utilize the services of
          agents and employ persons to perform ministerial, clerical, record-keeping,
          consulting or legal services to assist the Investment Committee in the
          performance of its duties.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | The Investment Committee shall maintain records and accounts showing the fiscal
          transactions and performance evaluations of the Trust Fund. At least annually,
          the Investment Committee shall submit to the Board a report regarding the
          operation of the Trust during the past year and shall also submit such other
          reports as the Board shall request.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9.4      Committee Procedures.

(a)    
          Each Committee may adopt such bylaws and regulations as it deems desirable for
          the conduct of its affairs.

(b)    
          A majority of the members of each Committee at the time in office shall
          constitute a quorum for the transaction of business. All resolutions or other
          actions taken by the Committees at any meeting shall be by the vote of the
          majority of the members of the Committees present at the meeting. Each Committee
          may act without a meeting by written consent of a majority of its members.

(c)    
          Each Committee may elect one of its members as chairman and may appoint a
          secretary, who may or may not be a Committee member, and shall advise the
          Trustee and the Company of such actions in writing. The secretary shall keep a
          record of all actions of the Committees and shall forward all necessary
          communications to the Company or the Trustee.

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(d)    
          Filing or delivery of any document with or to the secretary of a Committee in
          person or by registered or certified mail, addressed in care of the Company,
          shall be deemed a filing with or delivery to the Committee.

9.5      Consultation with
Advisors. Each Committee (or any fiduciary designated by a Committee pursuant to
Section 9.9 (Designation of Other Fiduciaries)) may employ or consult with
counsel, actuaries, accountants, physicians or other advisors (who may be counsel,
actuaries, accountants, physicians or other advisors for the Employer).

9.6      Committee Members as
Participants. Each Committee member may also be a Participant, but no Committee member
shall have power to take part in any discretionary decision or action affecting his own
interest as a Participant under this Plan unless such decision or action is upon a matter
which affects all other Participants similarly situated and confers no special right,
benefit or privilege not simultaneously conferred upon all other such Participants.

9.7      Records and Reports. Each
Committee shall take all such action as it deems necessary or appropriate to comply with
governmental laws and regulations relating to the maintenance of records, notifications to
Participants, registrations with the Internal Revenue Service, reports to the U.S.
Department of Labor and all other requirements applicable to the Plan. At the end of each
Plan Year and such other periods as the Administrative Committee may determine, the
Administrative Committee will provide each Participant with a statement of the balances in
his Accounts.

9.8      Investment Policy.

|(a) | As provided in Section 9.3 (Powers and Duties of the Investment
          Committee), the Investment Committee from time to time shall determine the
          Plans short-term and long-term financial needs, with which the investment
          policy of the Trust shall be appropriately coordinated, and such needs shall be
          communicated from time to time to the Trustee, Investment Managers or others
          having any responsibility for management and control of the Trust assets.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Subject to the provisions of Section 5.2 (Common Fund) relating to
          the investment direction of Participants, and to subsection (c)
          below, the Trustee shall have exclusive authority and discretion to manage and
          control the assets of the Trust pursuant to an investment policy coordinated
          with the needs of the Plan as determined by the Investment Committee.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | The Investment Committee may in its discretion manage or may appoint one or more
          Investment Managers to manage (including the power to acquire and dispose of)
          any assets of the Plan pursuant to an investment policy coordinated with the
          needs of the Plan as determined by the Investment Committee, in which event the
          Trustee shall not be liable for the acts or omissions of the Investment
          Committee or any such Investment Manager or be under an obligation to invest or
          otherwise manage any asset of the Plan which is subject to the management of the
          Investment Committee or any such Investment Manager except as directed. Any such
          Investment Manager shall acknowledge in writing that he is a fiduciary with
          respect to the Plan.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|(d) | The term Investment Manager shall mean:
|--- | -----------------------------------------

|(i) | a registered investment adviser under the Investment Advisers Act of 1940, as
          amended;
|--- | ------------------------------------------------------------------------------------------------

|(ii) | a bank as defined in the Investment Advisers Act of 1940, as amended; or
|---- | ------------------------------------------------------------------------

|(iii) | an insurance company qualified under the laws of more than one state to manage,
          acquire and dispose of plan assets.
|----- | -----------------------------------------------------------------------------------------------------------------------------

9.9      Designation of Other
Fiduciaries. Each Committee may designate in writing other persons to carry out a
specified part or parts of its responsibilities hereunder (including the power to
designate other persons to carry out a part of such designated responsibility), but not
including the power to appoint Investment Managers. Any such designation shall be accepted
by the designated person, who shall acknowledge in writing that he is a fiduciary with
respect to the Plan.

9.10      Obligations of Each Committee.

(a)    
          Each Committee or its properly authorized delegate shall make such
          determinations as are necessary to accomplish the purposes of the Plan with
          respect to individual Participants or classes of such Participants. The Company
          shall notify each Committee of facts relevant to such determinations, including,
          without limitation, length of Service, compensation for services, dates of
          death, permanent disability, granting or terminating of leaves of absence, ages,
          retirement and termination of Service for any reason (but indicating such
          reason), and termination of participation. The Company shall also be responsible
          for notifying each Committee of any other facts which may be necessary for the
          Committee to discharge its responsibilities hereunder.

(b)    
          Each Committee is hereby authorized to act solely upon the basis of such
          notifications from the Company and to rely upon any document or signature
          believed by the Committee to be genuine and shall be fully protected in so
          doing. For the purpose of this Section 9.10, a letter or other
          written instrument signed in the name of the Company by any officer thereof
          shall constitute a notification from the Company; except that any action by the
          Company or its Board of Directors with respect to the appointment or removal of
          a member of a Committee or the amendment of the Plan and Trust or the
          designation of a group of employees to which the Plan is applicable shall be
          evidenced by an instrument in writing, signed by a duly authorized officer or
          officers, certifying that said action has been authorized and directed by a
          resolution of the Board of Directors of the Company.

(c)    
          Each Committee shall notify the Trustee of its actions and determinations
          affecting the responsibilities of the Trustee and shall give the Trustee
          directions as to payments or other distributions from the Trust Fund to the
          extent they may be necessary for the Trustee to fulfill the terms of the trust
          agreement.

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(d)    
          Each Committee shall be under no obligation to enforce payment of contributions
          hereunder or to determine whether contributions delivered to the Trustee comply
          with the provisions hereof relating to contributions, and is obligated only to
          administer this Plan pursuant to the terms hereof.

9.11      Indemnification of Each
Committee. Each Employer shall indemnify members of each Committee and its authorized
delegates who are employees of an Employer for any liability or expenses, including
attorneys fees, incurred in the defense of any threatened or pending action, suit or
proceeding by reason of their status as members of the Committee or its authorized
delegates, to the full extent permitted by the law of the Employers state of
incorporation.

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# ARTICLE 10

# Trustee and Trust Fund

10.1      Trust Fund. A Trust Fund
to be known as the Tellabs, Inc. Profit Sharing and Savings Trust has been established by
the execution of a trust agreement with one or more Trustees and is maintained for the
purposes of this Plan. The assets of the Trust will be held, invested and disposed of by
the Trustee, in accordance with the terms of the Trust, for the benefit of the
Participants and their beneficiaries.

10.2      Payments to Trust Fund and
Expenses. All contributions hereunder will be paid into and credited to the Trust Fund
and all benefits hereunder and expenses chargeable thereto will be paid from the Trust
Fund and charged thereto.

10.3      Trustees
Responsibilities. The powers, duties and responsibilities of the Trustee shall be as
set forth in the trust agreement and nothing contained in this Plan, either expressly or
by implication, shall impose any additional powers, duties or responsibilities upon the
Trustee.

10.4      Reversion to the
Employer. An Employer has no beneficial interest in the Trust Fund and no part of the
Trust Fund shall ever revert or be repaid to the Employer, directly or indirectly, except
that an Employer shall upon written request have a right to recover:

(a)    
          within one year of the date of payment of a contribution by an Employer, any
          amount (less any losses attributable thereto) contributed through a mistake of
          fact;

(b)    
          within one year of the date on which any deduction for a contribution by an
          Employer under Code Section 404 is disallowed, an amount equal to the
          amount disallowed (less any losses attributable thereto);

(c)    
          at the termination of the Plan, any amounts remaining in the Excess Forfeiture
          Suspense Account;

(d)    
          upon satisfaction of all liabilities for Medical Benefits arising out of the
          operation of Article 14 (Retiree Medical Benefits), any amounts remaining
          in the Medical Benefits Account.

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# ARTICLE 11

# Amendment or
Termination

11.1      Amendment. The Company
reserves the right to amend this Plan at any time to take effect retroactively or
otherwise, in any manner which it deems desirable including, but not by way of limitation,
the right to increase or diminish contributions to be made by an Employer hereunder, to
change or modify the method of allocation of its contributions, to change any provision
relating to the distribution or payment, or both, of any assets of the Trust.

11.2      Termination.  The Company further reserves the right to terminate this Plan at any time.

11.3      Form of Amendment,
Discontinuance of Employer Contributions, and Termination. Any such amendment,
discontinuance of Employer Contributions (as defined in Section 3.1 (Employer
Contributions)) or termination shall be made only by resolution of the Board of Directors
or by an officer of the Company or by any person so duly authorized by resolution of the
Board of Directors.

11.4      Limitations on
Amendments. The provisions of this Article 11 are subject to the following
restrictions:

|(a) | Except as provided in Section 10.4 (Reversion to the Employer), no
          amendment shall operate either directly or indirectly to give an Employer any
          interest whatsoever in any funds or property held by the Trustee under the terms
          hereof, or to permit corpus or income of the Trust to be used for or diverted to
          purposes other than the exclusive benefit of the Participants and their
          beneficiaries.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Except to the extent necessary to conform to the laws and regulations or to the
          extent permitted by any applicable law or regulation, no amendment shall operate
          either directly or indirectly to deprive any Participant of his nonforfeitable
          beneficial interest in his Accounts as they are constituted at the date of the
          amendment.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | No amendment shall change any vesting schedule unless each Participant who has
          completed 3 or more Years of Service is permitted to elect to have the
          nonforfeitable percentage of his Accounts, if applicable, computed under the
          Plan without regard to such amendment. The period for making such election shall
          commence no later than the date of the adoption of such amendment and shall
          expire no earlier than 60 days after the latest of the following dates:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) | the date the Plan amendment is adopted; or
|--- | ------------------------------------------

|(ii) | the date the Plan amendment becomes effective; or
|---- | -------------------------------------------------

|(iii) | the date the Participant is issued written notice of the Plan amendment by the
          Administrative Committee.
|----- | ------------------------------------------------------------------------------------------------------------------

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Notwithstanding the foregoing, no
election need be offered to a Participant whose nonforfeitable percentage of his Accounts,
if applicable, cannot at any time be lower than such percentage determined without regard
to such amendment.

(d)    
          Except as permitted by applicable law, no amendment shall eliminate or reduce an
          early retirement benefit or a retirement-type subsidy or eliminate an optional
          form of benefit.

11.5      Level of Benefits Upon
Merger. This Plan shall not merge or consolidate with, or transfer assets or
liabilities to, any other plan, unless each Participant shall be entitled to receive a
benefit immediately after said merger, consolidation or transfer (if such other plan were
then terminated) which shall be not less than the benefit he would have been entitled to
receive immediately before said merger, consolidation or transfer (if this Plan were then
terminated).

11.6       Vesting Upon Termination or Discontinuance of Employer Contributions; Liquidation of Trust.

(a)    
          This Plan shall be deemed terminated if and only if the Plan terminates by
          operation of law or pursuant to Section 11.2 (Termination). In the
          event of any termination or partial termination within the meaning of the Code,
          or in the event an Employer permanently discontinues the making of contributions
          to the Plan, the Retirement Account and Post-1992 Profit Sharing Account of each
          affected Participant who is employed by such Employer on the date of the
          occurrence of such event shall be nonforfeitable; provided, however, that in no
          event shall any Participant or beneficiary have recourse to other than the Trust
          Fund for the satisfaction of benefits hereunder.

(b)    
          In the event an Employer permanently discontinues the making of contributions to
          the Plan, the Trustee shall make or commence distribution to each Participant or
          his beneficiaries of the value of such Participants Accounts as provided
          herein within the time prescribed in Article 7 (Distributions).
          However, if, after such discontinuance, the Company shall determine it to be
          impracticable to continue the Trust any longer, the Company may, in its
          discretion, declare a date to be the Valuation Date for all Participants whose
          Valuation Date has not yet occurred, and the Trustee shall thereupon, as
          promptly as shall then be reasonable under the circumstances, liquidate the
          Trust assets and distribute to each such Participant his Accounts in the Trust
          Fund. Such date shall also constitute the final distribution date for each
          Participant or beneficiary whose Accounts are being distributed in installments.
          Upon completion of such liquidation and distribution, the Trust shall finally
          and completely terminate.

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(c)    
          The liquidation of the Trust, if any, in connection with any Plan termination
          shall be accomplished by the Administrative Committee acting on behalf of the
          Company. After directing that sufficient funds be set aside to provide for the
          payment of all expenses incurred in the administration of the Plan and the
          Trust, to the extent not paid or provided for by the Employer, the
          Administrative Committee shall, as promptly as shall then be reasonable under
          the circumstances, liquidate the Trust assets and distribute to each Participant
          or beneficiary his Accounts in the Trust Fund. Notwithstanding the foregoing, if
          the Employer or an Affiliate maintains another defined contribution plan, other
          than an employee stock ownership plan (as defined in Code Section 4975(e)
          or 409) or a Simplified Employee Pension Plan, the Accounts of all Participants
          shall be transferred to the other plan; provided, however, that if fewer than 2%
          of the Participants in this Plan at the time this Plan is terminated are or were
          eligible to participate under such other defined contribution plan at any time
          during the 24-month period beginning 12 months before the time of
          termination, a Participants Accounts shall be transferred to the other
          plan only if the vested balance of the Participants Accounts exceeds
          $3,500 and the Participant does not consent to the distribution of such
          Accounts. Upon completion of such liquidation and distribution, the Trust shall
          finally and completely terminate. In the event the Administrative Committee is
          no longer in existence, the actions to be taken by the Administrative Committee
          pursuant to this Section shall be taken by the Trustee. Effective with the
          1998 Plan Year, $5,000 shall be substituted for $3,500 in this
          subsection (c).

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# ARTICLE 12

# Miscellaneous

12.1      No Guarantee of Employment,
Etc. Neither the creation of the Plan nor anything contained in the Plan or trust
agreement shall be construed as a contract of employment between the Employer and the
Participant or as giving any Participant hereunder or other employee of the Employer any
right to remain in the employ of an Employer, any equity or other interest in the assets,
business or affairs of the Employer, or any right to complain about any action taken or
any policy adopted or pursued by the Employer.

12.2      Nonalienation.

(a)    
          Except as may be provided in the Plan with respect to loans to Participants, no
          Participant shall have any right to sell, assign, pledge, hypothecate,
          anticipate or in any way create a lien upon any part of the Trust Fund. Except
          to the extent required by law or provided in the Plan, no interest in the Trust
          Fund, or any part thereof, shall be assignable in or by operation of law, or be
          subject to liability in any way for the debts or defaults of Participants, their
          beneficiaries, spouses or heirs-at-law, whether to the Employer or to others.

(b)    
          Prior to the time that distributions are to be made hereunder, the Participants,
          their spouses, beneficiaries, heirs-at-law or legal representatives shall have
          no right to receive cash or other things of value from an Employer or the
          Trustee from or as a result of the Plan and Trust.

12.3      Qualified Domestic Relations
Order. Notwithstanding anything in this Plan to the contrary, the Administrative
Committee shall distribute a Participants Accounts, or any portion thereof, in
accordance with the terms of any domestic relations order entered on or after
January 1, 1985, which the Administrative Committee determines to be a Qualified
Domestic Relations Order described in Code Section 414(p). Further notwithstanding
any other provision of this Plan to the contrary, such distribution of a
Participants Accounts, or any portion thereof, to an Alternate Payee under a
Qualified Domestic Relations Order shall, unless such order otherwise provides, be made in
a single sum as soon as administratively practicable after the Administrative Committee
has determined that a domestic relations order is a Qualified Domestic Relations Order
described in Code Section 414(p). No Qualified Domestic Relations Order shall permit
the payment of any benefit in any amount, form of benefit, time of payment or any option
not otherwise provided; however, to the extent provided in Code Section 414(p),
benefits may be paid to an Alternate Payee in any form in which benefits may be paid to
the Participant (even though the Participant has not separated from Service) as if he had
retired on the date payment is to begin under such Qualified Domestic Relations Order. The
account of any Alternate Payee shall be paid to such Alternate Payee immediately if the
Qualified Domestic Relations Order so states.

12.4      Controlling Law. To the
extent not preempted by the laws of the United States of America, the laws of the State of
Illinois shall be controlling state law in all matters relating to the Plan.

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12.5      Severability. If any
provision of this Plan shall be held illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining parts of this Plan, but this Plan shall be
construed and enforced as if said illegal or invalid provision had never been included
herein.

12.6      Notification of
Addresses. Each Participant and each beneficiary eligible for benefits under this Plan
shall file with the Administrative Committee from time to time in writing his post-office
address and each change of post-office address. Any communication, statement or notice
addressed to the last post-office address filed with the Administrative Committee, or if
no such address was filed with the Administrative Committee, then to the last post-office
address of the Participant or beneficiary as shown on an Employers records, will be
binding on the Participant and his beneficiary for all purposes of this Plan and neither
the Administrative Committee nor the Employer shall be obliged to search for or ascertain
the whereabouts of any Participant or beneficiary, nor shall any Employer, Committee,
director, officer, employee or agent of any of them be liable for any loss, cost or
expense associated with any Participants or beneficiarys failure to so file
such Participants or beneficiarys address with the Administrative Committee.

12.7      Gender and Number.
Whenever the context requires or permits, the gender and number of words shall be
interchangeable.

12.8      Instructions and
Elections. Any instructions or elections required to be made by a Participant in
writing under this Plan shall be made in such form and manner (which may include
electronic format) as prescribed by the Committee. The Committee shall not be obligated to
act with respect to any instructions or elections until receipt thereof in the prescribed
form and manner. The Committee shall take or cause to be taken appropriate action with
respect to such instructions or elections as soon as administratively feasible after
receipt thereof in the prescribed form and manner.

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# ARTICLE 13

# Adoption by Affiliates

13.1      Adoption of Plan. Subject
to any resolution or terms of any agreement approved by the Board of Directors of the
Company or a Committee thereof to the contrary, any Affiliate may adopt this Plan for the
benefit of its eligible employees if authorized to do so by the Board of Directors of the
Company. Such adoption shall be by resolution of such Affiliates board of directors,
a certified copy of which shall be filed with the Company, the Administrative Committee
and the Trustee. Upon such adoption, such Affiliate shall become an Employer.

13.2      The Company as Agent for
Employer. Each Employer which has adopted this Plan pursuant to
Section 13.1 (Adoption of Plan) hereby irrevocably gives and grants to the
Company full and exclusive power conferred upon it by the terms of the Plan and Trust to
take or refrain from taking any and all action which such Employer might otherwise take or
refrain from taking with respect to the Plan, including sole and exclusive power to
exercise, enforce or waive any rights whatsoever which such Employer might otherwise have
with respect to the Trust, and each such Employer, by adopting this Plan, irrevocably
appoints the Company its agent for such purposes. Neither the Trustee nor any Committee
nor any other person shall have any obligation to account to any such Employer or to
follow the instructions of or otherwise deal with any such Employer, the intention being
that all persons shall deal solely with the Company as if it were the sole company which
had adopted this Plan. Each such Employer shall contribute such amounts as determined
under Article 3 (Contributions).

13.3       Adoption of Amendments.

(a)    
          Any Employer which adopts this Plan pursuant to Section 13.1
          (Adoption of Plan) may amend this Plan with respect to its own employees by
          resolution of its board of directors, if authorized to do so by the Board of
          Directors of the Company or any person so duly authorized by the Board of
          Directors of the Company.

(b)    
          Any Employer shall be deemed conclusively to have assented to any amendment of
          this Plan by the Company without the necessity of any affirmative action on the
          part of such Employer.

13.4      Termination. Any Employer
which adopts this Plan pursuant to Section 13.1 (Adoption of Plan) may
terminate this Plan with respect to its own employees by resolution of its board of
directors, if authorized to do so by the Board of Directors of the Company, or any person
so duly authorized by the Board of Directors of the Company.

13.5      Data to Be Furnished by
Employers. Each Employer which adopts this Plan pursuant to Section 13.1(Adoption of Plan) shall furnish information and maintain such records with respect to
its Participants as called for hereunder, and its determinations and notifications with
respect thereto shall have the same force and effect as comparable determinations by the
Company with respect to its Participants.

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13.6      Joint Employers. If a
Participant receives Considered Compensation during a Plan Year from more than one
Employer, the total amount of such Considered Compensation shall be considered for the
purposes of the Plan, and the respective Employers shall share in contributions to the
Plan on account of said Participant based on the Considered Compensation paid to such
Participant by the Employer.

13.7      Expenses. Except to the
extent paid by the Employers, all expenses of the Plan shall be paid from the Trust Fund
as the Administrative Committee from time to time may direct in accordance with the trust
agreement.

13.8      Withdrawal. An Employer
may withdraw from the Plan by giving 60 days written notice of its intention to
the Company and the Trustee, unless a shorter notice shall be agreed to by the Company.

13.9      Prior Plans. If an
Employer adopting the Plan already maintains a defined contribution plan covering
employees who will be covered by this Plan, it may, with the consent of the Company,
provide in its resolution adopting this Plan for the termination of its own plan or for
the merger, restatement and continuation, of its own plan by this Plan. In either case,
such Employer may, subject to the approval of the Company, provide in its resolution of
adoption of this Plan for the transfer of the assets of such plan to the Trust for this
Plan for the payment of benefits accrued under such other plan.

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# ARTICLE 14

# Retiree Medical
Benefits

14.1      Medical Benefits Account.
Effective April 1, 1999, there is created, established and maintained a separate
Medical Benefits Account as part of the Retirement Program for the purposes of providing
certain medical benefits to Eligible Individuals in accordance with this
Article 14 and Code Section 401(h).

14.2      Retiree Medical Benefits Definitions. For purposes of this Article 14, the following  definitions
shall apply:

|(a) | Dependent. The term Dependent shall mean any individual who
          is entitled to benefits under the Health Plan as a dependent of an eligible
          retiree provided that such individual is a dependent within the
          meaning of Code Section 152.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Eligible Individual. The term Eligible Individual shall mean
          an Eligible Retiree or a Dependent.
|--- | ------------------------------------------------------------------------------------------------------------

|(c) | Eligible Retiree. The term Eligible Retiree shall mean an
          individual who:
|--- | -------------------------------------------------------------------------------------

|(i) | is a Participant in the Retirement Program and who retires under circumstances
          which entitle the Participant to receive retiree medical benefits under the
          Health Plan; and
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) | is not a Key Employee (as defined in Code Section 416(i)(1)) at any time
          during the current Plan Year and has not been a Key Employee at any time during
          any previous Plan Year for which contributions were made to the Medical Benefits
          Account.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Health Plan. The term Health Plan shall mean Tellabs Retiree
          Medical Plan, or such other medical plan maintained by an Employer, but only as
          such plan relates to retired individuals and dependents, as such Retiree Medical
          Plan or plans may be amended from time to time, and the provisions of such
          Retiree Medical Plan or plans are incorporated herein by reference.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Medical Benefits. The term Medical Benefits shall mean the
          benefits specified and payable under Section 14.6 (Medical Benefits)
          from the Medical Benefits Account.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | Medical Benefits Account. The term Medical Benefits Account
          shall mean the separate account established pursuant to Section 14.3
          (Separate Account) for contributions to fund Medical Benefits payable under this
          Article 14.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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14.3      Separate Account. A
Medical Benefits Account shall be maintained with respect to contributions to fund the
benefits payable under this Article 14, which shall be kept separate (for
record-keeping purposes only) from the amounts contributed to the Retirement Program to
fund all other benefits. The funds in the Medical Benefits Account shall be invested as
the Investment Committee shall determine, and may, but need not be, invested in one or
more of the Funds; provided, however, that in no event shall amounts allocable to the
Medical Benefits Account be invested in the Tellabs Stock Fund.

14.4      Impossibility of Diversion
Prior to Satisfaction of All Liabilities. Prior to the satisfaction of all liabilities
under this Article 14 to provide for the payment of Medical Benefits, no part
of the corpus or income of the Medical Benefits Account may be used for, or diverted to,
any purpose other than the providing of Medical Benefits or the payment of any necessary
or appropriate expenses attributable to the administration thereof.

14.5      Reversion upon Satisfaction
of All Liabilities. Any amounts which are contributed to fund Medical Benefits and
that remain in the Medical Benefits Account upon the satisfaction of all liabilities
arising out of the operation of this Article 14 are to be returned to the
Employer in accordance with Section 10.4 (Reversion to the Employer).

14.6      Medical Benefits. The
Medical Benefits payable from the Medical Benefits Account shall be limited to the payment
of medical benefits for Eligible Individuals under the Health Plan. Notwithstanding any
other provision of this Article 14, the Medical Benefits paid out of the
Medical Benefits Account at any time shall be limited to the amount in such Account. The
Medical Benefits provided under the Health Plan and the contributions by the Employers to
fund said Medical Benefits shall not discriminate in favor of Highly Compensated
Employees.

14.7      Coordination with Health
Plan. Medical Benefits under the Medical Benefits Account shall be provided by
reimbursing, no less frequently than annually, the Employers or other paying agent under
the Health Plan for amounts not to exceed the aggregate Medical Benefits, as defined in
Section 14.6 (Medical Benefits), for Eligible Individuals.

14.8      Employer Contributions.
All contributions to fund Medical Benefits provided under the Medical Benefits Account
shall be made by the Employers. The Employers may, in their discretion, contribute to the
Medical Benefits Account amounts which in the aggregate shall not exceed the amount
reasonably estimated to cover the total cost of the Medical Benefits to be provided
hereunder. Such total cost shall be determined in accordance with any generally accepted
actuarial method which is reasonable in view of the provisions and coverage of the Health
Plan, the investment of the Medical Benefits Account and other applicable considerations.
Notwithstanding the foregoing, Employer contributions to the Medical Benefits Account
shall be limited so that the aggregate actual contributions made to the Medical Benefits
Account shall not exceed 25% of the total aggregate actual contributions made after
April 1, 1999 under the Retirement Program to the Retirement Accounts of Participants
and the Medical Benefit Account. At the time an Employer makes a contribution to the
Retirement Program, it shall designate the portion allocable to the Medical Benefits
Account.

14.9      Reservation of the Right to
Terminate Medical Benefits. In addition to the rights set forth in
Article 11 (Amendment or Termination), the Employers reserve the right to
amend, suspend, curtail or terminate the Medical Benefits provided hereunder or under the
Health Plan at any time.

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