**	AMENDMENT TO THE TELLABS, INC.
1987 STOCK OPTION PLAN FOR

NON-EMPLOYEE CORPORATE DIRECTORS

(As Amended and Restated Effective June 26, 1992)

 

	**WHEREAS,** Tellabs, Inc. (the "Corporation") has heretofore established the Tellabs, Inc. 1987 Stock Option Plan for Non-Employee Corporate Directors (the "Plan") for the benefit of non-employee corporate directors of theCorporation;

	**WHEREAS,**the Corporation deems it desirable to make certain amendments to the Plan relating to the vesting of options and/or the post-directorship exercise period in the event of the death, disability, or retirement of an option holder, ora change in control of the Corporation; and

	**WHEREAS,** the Board of Directors of the Corporation has considered the recommendations and has approved this Amendment to the Plan.

	**NOW, THEREFORE, BE IT RESOLVED,** that the Plan is hereby amended, effective June 30, 2000, as follows :
- Under Article 2 of the Plan, the following definition of "Change in Control" shall be added:

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

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

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

		(iii)	Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Corporation (a "Business Combination"), in each case, unless, following such BusinessCombination, (A) all or substantially all of the individuals and entities who were the beneficial owners of outstanding voting securities of the Corporation immediately prior to such Business Combination beneficially own, directly or indirectly, more than50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, acorporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediatelyprior to such Business Combination of the outstanding voting securities of the Corporation; (B) no person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Corporation or suchcorporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then combined voting power of the then outstanding voting securities of such corporation except to the extent that suchownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of theinitial agreement, or of the action of the Board, providing for such Business Combination; or

		(iv)	Approval by the stockholders of the Corporation of a complete liquidation or dissolution of the Corporation.

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

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

- Article 11 shall be amended in its entirety to read as follows:

11.	Termination of Directorship.

	Except as set forth in Article 11A with respect to the effect of a Change in Control or except as the Board may otherwise expressly provide in the Option Agreement, the following rules shall apply upon termination of the Grantee'sdirectorship with the Corporation:

	(a)	Except as set forth in subsections (b), (c) and (d) below, in the event a Grantee ceases to be a director of the Corporation for any reason, any Option or unexercised portion thereof granted under this Plan may be exercised, to the extentsuch Option would have been exercisable by the Grantee hereunder on the date on which the Grantee ceased to be a director, within three months of such date (seven months in the event such termination occurs after the occurrence of a Change in Control),but in no event later than the date of expiration of the term of the Option.

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

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

	(d)	In the event of the Grantee's death or Disability during the first three months of the period described in subsection (a) above, then each unexercised Option held by the Grantee may, to the extent exercisable at the time ofGrantee's death or Disability, be exercised at any time prior to the expiration date of the Option or within one year of the date the Grantee ceased to be a director, whichever period is shorter.  

- The Plan shall hereby be amended by adding a new Article 11A to read:

11A.	Change in Control.

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

- Article 12 of the Plan shall be amended in its entirety to read as follows:

12.	Effect of Change in Stock Subject to Plan.

	Except as provided below, the Board shall make equitable adjustments in the number and class of shares of stock subject to the Plan, and to the Option rights granted hereunder and the exercise prices of such Option rights, in the event of a stockdividend, stock split, reverse stock split, recapitalization, reorganization, merger, consolidation, acquisition, separation or other change in the capital structure of the Corporation.

	**IN WITNESS WHEREOF,** the foregoing amendments to the Tellabs, Inc. 1987 Stock Option Plan for Non-Employee Corporate Directors are hereby adopted as of the 30th day of June, 2000, by the undersigned officer duly authorized by resolutionsadopted by the written consent of the Board of Directors dated June 30, 2000.

 

							TELLABS, INC.

 

							By: /s Michael J. Birck 	
							Name: Michael J. Birck 	
							Its: President and Chief Executive Officer 	**