Exhibit 10.a


 


2005 TELLABS, INC.


EMPLOYEE STOCK PURCHASE PLAN


 


Effective June 1,
2005


 





















 


Purpose.  The purpose of the Plan is to provide
Employees of the Company and Participating Subsidiaries with an opportunity to
purchase common stock of the Company through accumulated payroll
deductions.  It is the intention of the
Company to have the Plan qualify as an “Employee Stock Purchase Plan” under Section 423
of the Internal Revenue Code of 1986, as amended.  The provisions of the Plan, accordingly,
shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that Section of the Code.


 


Definitions.  As used herein, the terms set forth below
have the meanings assigned to them in this Section 2 and shall include the
plural as well as the singular.


 


1933 Act means the Securities Act of 1933, as amended.


 


1934 Act means the Securities Exchange Act of 1934,
as amended.


 


Administrator
means the brokerage
firm or financial institution (if any) retained to perform administrative
services described in Section 10(b).


 


Board of
Directors or Board means the board of directors of
Tellabs, Inc.


 


Business
Day shall mean a day
on which the NASDAQ Stock Market (“NASDAQ”) is open for trading.


 


Brokerage
Account means the
account in which the Purchased Shares are held.


 


Code means the Internal Revenue Code of 1986, as
amended from time to time.


 


Committee means the Compensation Committee of the Board
of Directors, or the designee of the Compensation Committee.


 


Company means Tellabs, Inc., a Delaware
corporation.


 


Compensation
means the base pay
received by a Participant, including commissions, overtime and bonuses
(including cash retention bonuses), but excluding stock option awards, stock
grants, expense reimbursements, relocation-related payments and automobile
allowances.  Forms of compensation not
specifically listed herein shall be included or excluded from “Compensation” as
determined in the sole discretion of the Committee.


 


Effective
Date means June 1,
2005.


 


Employee means any individual who is an employee of
the Company or Tellabs Operations, Inc. or any other Participating
Subsidiary for tax purposes whose customary employment with such entity is at
least twenty (20) hours per week and more than five (5) months in a
calendar year.  For purposes of the Plan,
the employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the Company
or the Participating Subsidiary, as appropriate.


 


Enrollment
Date means the first
Business Day of each Offering Period.


 





















 


Exercise
Date means the last
Business Day of each Offering Period.


 


Fair
Market Value on or as
of any date means the “NASDAQ Official Closing Price” (as defined on
www.nasdaq.com) (or such substantially similar successor price thereto) for
Shares as reported on www.nasdaq.com (or a substantially similar successor
website) on the relevant valuation date or, if no NASDAQ Official Closing Price
is reported on such date, on the preceding day on which a NASDAQ Official
Closing Price was reported; or, if the Shares are no longer listed on NASDAQ,
the closing price for Shares as reported on the official website for such other
exchange on which the Shares are listed.


 


Offering
Period means a period
of days as established by the Committee from time to time, which period shall
not exceed six (6) months; provided, that the first Offering Period shall
be the five (5)-month period beginning June 1, 2005 through October 31,
2005 and, until different Offering Periods are established by the Committee and
communicated to Participants in accordance with Section 18(b); subsequent
Offering Periods shall be six (6)-month periods beginning on each May 1
and November 1 thereafter, commencing November 1, 2005.


 


Participant means an Employee who satisfies the
requirements of Sections 3 and 5 of the Plan.


 


Participating
Subsidiary means a
Subsidiary that has been authorized by the Committee or the Board to extend the
benefits of the Plan to its Employees. 
The Committee or the Board may extend the Plan to a Subsidiary in the
future.


 


Plan means this 2005 Tellabs, Inc. Employee
Stock Purchase Plan.


 


Purchase
Account means the
account used to purchase Shares through the exercise of Purchase Rights under
the Plan.


 


Purchase
Date means the last
Business Day of each Offering Period, or such other date as shall be
established by the Committee.


 


Purchase
Price means an amount
equal to 85% (or such other percent as determined by the Committee, which may
not be less than 85%) of (i) the Fair Market Value of a Share on the
Exercise Date or (ii) the lower of the Fair Market Value of a Share on
either the Enrollment Date or on the Exercise Date; with such percent and the
application of (i) or (ii) as determined by the Committee prior to
the Offering Period and communicated to Participants in accord with Section 18(b) below;
provided that until a different Purchase Price is established by the Committee
and communicated to Participants in accordance with Section 18(b), the
Purchase Price shall be 85% of the Fair Market Value of a Share on the Exercise
Date.


 


Purchase
Right means an option
granted under this Plan that entitles a Participant to purchase Shares.


 


Purchased
Shares means the full
Shares issued pursuant to the exercise of Purchase Rights under the Plan.


 


Shares means the common stock of the Company.


 


Subsidiary
means an entity,
domestic or foreign, of which not less than 50% of the voting equity is held by
the Company or a Subsidiary, whether or not such entity now exists or is
hereafter organized or acquired by the Company or a Subsidiary.


 





















 


Eligibility.


 


Only Employees of
the Company or a Participating Subsidiary shall be eligible to be granted
Purchase Rights under the Plan.


 


Any provisions of
the Plan to the contrary notwithstanding, no Employee shall be granted a
Purchase Right under the Plan if (i) immediately after the grant, such
Employee (or any other person whose stock would be attributed to such Employee
pursuant to Section 424(d) of the Code) would own capital stock
of the Company and/or hold outstanding Purchase Rights or options to purchase
stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or of any subsidiary of
the Company, or (ii) such Purchase Right would permit his or her rights to
purchase stock under all employee stock purchase plans (described in Section 423
of the Code) of the Company and its Subsidiaries to accrue at a rate that
exceeds twenty-five thousand dollars ($25,000) of the Fair Market Value of
such stock (determined at the time each such Purchase Right is
granted) for each calendar year in which such Purchase Right is
outstanding at any time.


 


Exercise
of a Purchase Right. 
Purchase Rights shall be exercised on behalf of Participants in the Plan
every Purchase Date, using payroll deductions that have accumulated in the
Participants’ Purchase Accounts during the preceding Offering Period.


 


Participation


 


An Employee, whose
first date of employment with the Company or a Participating Subsidiary is on
or before March 1, 2005, shall be eligible to participate on the Effective
Date; provided, that such Employee properly completes and submits by the
deadline prescribed by the Company the on-line enrollment form or,
alternatively, the paper enrollment form, each as provided by the Company.


 


An Employee, whose
first date of employment with the Company or a Participating Subsidiary is
after March 1, 2005, shall be eligible to participate on the first
Enrollment Date that occurs three (3) months after the Employee’s first
day of employment with the Company or Participating Subsidiary; provided, that
such Employee properly completes and submits by the deadline prescribed by the
Company the on-line enrollment form or, alternatively, the paper enrollment form,
each as provided by the Company.


 


An Employee who
does not become a Participant on the first Enrollment Date on which he or she
is eligible may thereafter become a Participant on any subsequent Enrollment
Date by properly completing and submitting by the deadline prescribed by the
Company the on-line enrollment form or, alternatively, the paper enrollment
form, each as provided by the Company.


 


Payroll deductions
for a Participant shall commence on the first payroll date following the
Enrollment Date and shall end on the last payroll date in the Offering Period
to which such authorization is applicable, unless sooner terminated by the
Participant as provided in Section 11 hereof.


 


Payroll
Deductions.


 


A Participant
shall elect to have payroll deductions made during an Offering Period equal to
no less than 1% of the Participant’s Compensation and no greater than a
percentage of such Participant’s Compensation as established by the Committee
from time to time, which shall not be greater than 20%.  As of the Effective Date, the maximum
percentage of Compensation a Participant may deduct is ten percent (10%), until
modified by the Committee per the terms of the Plan.  If the Committee modifies the maximum
percentage of Compensation a Participant may deduct, such change will not be
effective until communicated to the Participants per Section 18(b) below.  The amount of such payroll deductions shall
be in whole percentages (for example, 3%, 12%, 20%).  All payroll deductions made by a Participant
shall be


 





















 


credited to his or her
Purchase Account.  A Participant may not
make any additional payments into his or her Purchase Account.


 


A Participant may
change his or her payroll deduction percentage under subsection (a) above
by properly completing and submitting by the deadline prescribed by the
Company, the on-line change form or, alternatively, the paper change form, each
as provided by the Company.  If the
on-line or paper form is properly completed and submitted by the deadline
prescribed by the Company, the change in amount shall be effective as of the
first Enrollment Date following the date of filing; if the on-line or paper
form is not properly completed and submitted by such deadline, the change in
amount shall be effective as of the next Enrollment Date.


 


Notwithstanding
the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(b) hereof, a Participant’s payroll deductions
may be decreased to zero percent (0%) at any time during an Offering
Period.  Payroll deductions shall
recommence at the rate provided in such Participant’s election form at the
beginning of the first Offering Period which is scheduled to end in the
following calendar year, unless terminated by the Participant as provided in Section 11
hereof.


 


Grant
of Purchase Right. 
On the applicable Enrollment Date, each Participant in an Offering
Period shall be granted a Purchase Right to purchase on the next following
Purchase Date a number of full Shares determined by dividing such Participant’s
payroll deductions accumulated prior to such Purchase Date and retained in the
Participant’s Purchase Account as of the Purchase Date by the applicable
Purchase Price; provided, however, that such purchase shall be subject to the
limitations set forth in Section 3 and 14 and subject to decrease per Section 6(c).


 


Exercise
of Purchase Right. 
A Participant’s Purchase Right for the purchase of Shares shall be
exercised automatically on the Exercise Date, and the maximum number of Shares
subject to the Purchase Right shall be purchased for such Participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
Purchase Account.  No fractional Shares
shall be purchased; any payroll deductions accumulated in a Participant’s
Purchase Account which are not sufficient to purchase a full Share shall be
retained in the Purchase Account for the next subsequent Offering Period,
subject to earlier withdrawal by the Participant as provided in Section 11
hereof.  During a Participant’s lifetime,
a Participant’s Purchase Right is exercisable only by him or her.


 


Approval
by Shareholders.  The effectiveness of the Plan shall be
subject to approval by the shareholders of the Company within twelve
(12) months before or after the date the Plan is adopted by the Board.  Such shareholder approval may be obtained at
a duly held shareholders’ meeting by the affirmative vote of the holders of a
majority of the Shares of the Company present at the meeting or represented and
entitled to vote thereon.


 


Administration.


 


Powers
and Duties of the Committee.  The Plan shall be administered by the
Committee.  Subject to the provisions of
the Plan, Section 423 of the Code and the regulations thereunder, the
Committee shall have the discretionary authority to determine the time and
frequency of granting Purchase Rights, the terms and conditions of the Purchase
Rights and the number of Shares subject to each Purchase Right.  The Committee shall also have the
discretionary authority to do everything necessary and appropriate to administer
the Plan, including, without limitation, interpreting the provisions of the
Plan (but any such interpretation shall not be inconsistent with the provisions
of Section 423 of the Code).  All
actions, decisions and determinations of, and interpretations by the Committee
with respect to the Plan shall be final and binding upon all Participants and
upon their executors, administrators, personal representatives, heirs and
legatees.  No member of the Board of
Directors or the Committee shall be liable for any action, decision,
determination or interpretation made in good faith with respect to the Plan or
any Purchase Right granted hereunder.


 





















 


Administrator.  The Company, Board or the Committee may
engage the services of a brokerage firm or financial institution (the “Administrator”) to
perform certain ministerial and procedural duties under the Plan including, but
not limited to, mailing and receiving notices contemplated under the Plan,
determining the number of Purchased Shares for each Participant, maintaining or
causing to be maintained the Purchase Account and the Brokerage Account,
disbursing funds maintained in the Purchase Account or proceeds from the sale
of Shares through the Brokerage Account, and filing with the appropriate tax
authorities proper tax returns and forms (including information
returns) and providing to each Participant statements as required by law
or regulation.


 


Indemnification.  Each person who is or shall have been (a) a
member of the Board, (b) a member of the Committee, or (c) an officer
or employee of the Company to whom authority was delegated in relation to this
Plan, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company’s approval, or paid by him or her in satisfaction of any
judgment in any such claim, action, suit or proceeding against him or her;
provided, however, that he or she shall give the Company an opportunity, at its
own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf, unless such loss, cost,
liability or expense is a result of his or her own willful misconduct or except
as expressly provided by statute.


 


The
foregoing right of indemnification shall not be exclusive of any other rights
of indemnification to which such persons may be entitled under the Company’s
certificate of incorporation or bylaws, any contract with the Company, as a
matter of law, or otherwise, or of any power that the Company may have to
indemnify them or hold them harmless.


 


Withdrawal.  A
Participant may withdraw from the Plan by properly completing and submitting to
the Company the on-line tool for withdrawal or the withdrawal form supplied by
the Company.  Upon withdrawal, any
payroll deductions credited to the Participant’s Purchase Account prior to the
effective date of the Participant’s withdrawal from the Plan will be returned
to the Participant.  No further payroll
deductions for the purchase of Shares will be made during subsequent Offering
Periods, unless the Participant properly completes and submits the on-line
enrollment tool provided by the Company or, alternatively, an election form, by
the deadline prescribed by the Company. 
A Participant’s withdrawal from an offering will not have any effect
upon his or her eligibility to participate in the Plan or in any similar plan
that may hereafter be adopted by the Company.


 


Termination
of Employment.  Upon
termination of a Participant’s employment for any reason prior to the Purchase
Date, whether voluntary or involuntary, including retirement, death or as a
result of liquidation, dissolution, sale, merger or a similar event affecting
the Company or a Participating Subsidiary, the payroll deductions credited to
his or her Purchase Account will be returned to him or her or, in the case of
the Participant’s death, to the person or persons entitled thereto under Section 15,
and his or her Purchase Right will be automatically terminated.


 


Interest.  No interest shall accrue on the payroll
deductions of a Participant in the Plan.


 


Stock.


 


The stock subject
to Purchase Rights shall be: (i) common stock of the Company; (ii) registered
securities as required under the 1933 Act and 1934 Act; (iii) listed on
the NASDAQ or on such other exchange as the Shares may be listed; and (iv) either
authorized but unissued shares or treasury shares.


 


Subject to
adjustment upon changes in capitalization of the Company as provided in Section 17
hereof, the maximum number of Shares which shall be made available for sale
under the Plan shall be ten million (10,000,000) Shares.  If, on a given Exercise Date, the number of
Shares


 





















 


with respect to which
Purchase Rights are to be exercised exceeds the number of Shares then available
under the Plan, the Committee shall make a pro rata allocation of the Shares
remaining available for purchase in as uniform a manner as shall be practicable
and as it shall determine to be equitable.


 


A Participant
shall have no interest or voting right in Shares covered by his or her Purchase
Right until such Purchase Right has been exercised.


 


Designation
of Beneficiary.  A
Participant may designate a beneficiary who is to receive payroll deductions,
if any, in the Participant’s account under the Plan in the event of such
Participant’s death.  If the Participant
is married and the designated beneficiary is not the spouse, spousal consent
shall be required for such a designation to be effective.  Beneficiary designations shall be made in
accordance with procedures prescribed by the Company.  If no properly designated beneficiary
survives the Participant, the payroll deductions will be distributed in
accordance with the applicable laws of descent and distribution.


 


Assignability
of Purchase Rights. 
Neither payroll deductions credited to a Participant’s Purchase Account
nor any rights with regard to the exercise of a Purchase Right or to receive
Shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the
Participant.  Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw from an
Offering Period in accordance with Section 11 hereof.


 


Adjustment
of Number of Shares Subject to Purchase Rights.


 


Adjustment.  Subject to any required action by the
stockholders of the Company, the maximum number of Shares each Participant may
purchase per Offering Period, as well as the price per Share and the number of
Shares covered by each Purchase Right under the Plan which has not yet been
exercised shall be proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the common stock of the
Company, or any other increase or decrease in the number of Shares effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been “effected without receipt of consideration”.  Such adjustment shall be made by the Board or
the Committee, whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of Shares subject to a Purchase Right. 
The Purchase Rights granted pursuant to the Plan shall not be adjusted
in a manner that causes the Purchase Rights to fail to qualify as options
issued pursuant to an “employee stock purchase plan” within the meaning of Section 423.


 


Dissolution or
Liquidation.  In the
event of the proposed dissolution or liquidation of the Company, the Offering
Period then in progress shall be shortened by setting a new Exercise Date (the “New
Exercise Date”), and shall terminate immediately prior to the consummation of
such proposed dissolution or liquidation, unless provided otherwise by the
Board.  The New Exercise Date shall be
before the date of the Company’s proposed dissolution or liquidation.  The Board will notify each Participant in
writing, as soon as administratively practicable prior to the New Exercise
Date, that the Purchase Date for the Participant’s Purchase Right has been changed
to the New Exercise Date and that the Participant’s Purchase Right shall be
exercised automatically on the New Exercise Date, unless prior to such date the
Participant has withdrawn from the Offering Period as provided in Section 11
hereof.


 


Merger or Asset
Sale.  In the event of
a proposed sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, each outstanding
Purchase Right shall be assumed or an equivalent option substituted by the
successor corporation or a parent or subsidiary of the successor
corporation.  In the event that the
successor corporation refuses to assume or substitute for the Purchase Right,
the Offering Period then in progress shall be shortened by setting a new Exercise
Date (the “New Exercise Date”).  The New
Exercise Date


 





















 


shall be before the date
of the Company’s proposed sale or merger. 
The Board will notify each Participant in writing, as soon as
administratively practicable prior to the New Exercise Date, that the Purchase
Date for the Participant’s Purchase Right has been changed to the New Exercise
Date and that the Participant’s Purchase Right shall be exercised automatically
on the New Exercise Date, unless prior to such date the Participant has withdrawn
from the Offering Period as provided in Section 11 hereof.


 


Amendments
or Termination of the Plan.


 


The Board of
Directors or the Committee may at any time and for any reason amend,
modify, suspend, discontinue or terminate the Plan without notice; provided
that no Participant’s existing rights in respect of existing Purchase Rights
are adversely affected thereby; provided, further, upon any such amendment or
modification, all Participants shall continue to have the same rights and
privileges in respect of existing Purchase Rights.  To the extent necessary to comply with Section 423
of the Code (or any other applicable law, regulation or stock exchange rule),
the Company shall obtain shareholder approved in such a manner and to such a
degree as required.


 


Without
shareholder consent and without regard to whether any Participant rights may be
considered to have been “adversely affected,” the Board or the
Committee shall be entitled to change the Offering Periods, limit the
frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a Participant in order to adjust for delays or mistakes in
the Company’s processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Shares for
each Participant properly correspond with amounts withheld from the Participant’s
Compensation, and establish such other limitations or procedures as the Board
or the Committee determines in its sole discretion advisable which are
consistent with the Plan; provided, however, that changes to (i) the
Purchase Price, (ii) the Offering Period, or (iii) the maximum of
percentage of Compensation that may be deducted pursuant to Section 6(a),
shall not be effective until communicated to Participants in a reasonable manner,
with the determination of such reasonable manner in the sole discretion of the
Board or the Committee.


 


No Other
Obligations.  The
receipt of a Purchase Right pursuant to the Plan shall impose no obligation
upon the Participant to purchase any Shares covered by such Purchase
Right.  Nor shall the granting of a
Purchase Right pursuant to the Plan constitute an agreement or an
understanding, express or implied, on the part of the Company to employ the
Participant for any specified period.


 


Notices.  Any notice which the Company or any
Participant may be required or permitted to give to the other shall be in
writing and may be delivered personally or by mail, postage prepaid,
addressed:  if to the Company, to such
address as the Company, by notice to such Participant, may designate in writing
from time to time; and, if to the Participant, at his or her address as shown
on the payroll records of the Company.


 


Condition
Upon Issuance of Shares.


 


Shares shall not
be issued with respect to a Purchase Right unless the exercise of such Purchase
Right and the issuance and delivery of such Shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the 1933 Act and the 1934 Act and the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.


 


As a condition to
the exercise of a Purchase Right, the Company may require the person exercising
such Purchase Right to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
applicable provisions of law.


 





















 


General
Compliance.  The Plan will be administered and Purchase
Rights will be exercised in compliance with the 1933 Act, 1934 Act and all
other applicable securities laws and Company policies, including without
limitation, the Company’s Insider Trading Policy.


 


Term
of the Plan.  The
Plan shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 18.


 


Governing
Law.  The Plan and
all Purchase Rights granted hereunder shall be construed in accordance with and
governed by the laws of the State of Delaware without reference to choice of
law principles and subject in all cases to the Code and the regulations
thereunder.