**Exhibit 10.a**

 

**2005 TELLABS, INC.**

**EMPLOYEE STOCK PURCHASE PLAN**

 

Effective June 1,2005

 

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**Purpose**.  The purpose of the Plan is to provideEmployees of the Company and Participating Subsidiaries with an opportunity topurchase common stock of the Company through accumulated payrolldeductions.  It is the intention of theCompany to have the Plan qualify as an “Employee Stock Purchase Plan” under Section 423of 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 mannerconsistent with the requirements of that Section of the Code.

 

**Definitions**.  As used herein, the terms set forth belowhave the meanings assigned to them in this Section 2 and shall include theplural 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 brokeragefirm or financial institution (if any) retained to perform administrativeservices described in Section 10(b).

 

*Board ofDirectors* or *Board*means the board of directors ofTellabs, Inc.

 

*BusinessDay* shall mean a dayon which the NASDAQ Stock Market (“NASDAQ”) is open for trading.

 

*BrokerageAccount*means theaccount in which the Purchased Shares are held.

 

*Code*means the Internal Revenue Code of 1986, asamended from time to time.

 

*Committee*means the Compensation Committee of the Boardof Directors, or the designee of the Compensation Committee.

 

*Company*means Tellabs, Inc., a Delawarecorporation.

 

*Compensation*means the base payreceived by a Participant, including commissions, overtime and bonuses(including cash retention bonuses), but excluding stock option awards, stockgrants, expense reimbursements, relocation-related payments and automobileallowances.  Forms of compensation notspecifically listed herein shall be included or excluded from “Compensation” asdetermined in the sole discretion of the Committee.

 

*EffectiveDate* means June 1,2005.

 

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

 

*EnrollmentDate*means the firstBusiness Day of each Offering Period.

 

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*ExerciseDate* means the lastBusiness Day of each Offering Period.

 

*FairMarket Value*on or asof any date means the “NASDAQ Official Closing Price” (as defined onwww.nasdaq.com) (or such substantially similar successor price thereto) forShares as reported on www.nasdaq.com (or a substantially similar successorwebsite) on the relevant valuation date or, if no NASDAQ Official Closing Priceis reported on such date, on the preceding day on which a NASDAQ OfficialClosing 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 otherexchange on which the Shares are listed.

 

*OfferingPeriod* means a periodof days as established by the Committee from time to time, which period shallnot exceed six (6) months; provided, that the first Offering Period shallbe the five (5)-month period beginning June 1, 2005 through October 31,2005 and, until different Offering Periods are established by the Committee andcommunicated to Participants in accordance with Section 18(b); subsequentOffering Periods shall be six (6)-month periods beginning on each May 1and November 1 thereafter, commencing November 1, 2005.

 

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

 

*ParticipatingSubsidiary* means aSubsidiary that has been authorized by the Committee or the Board to extend thebenefits of the Plan to its Employees. The Committee or the Board may extend the Plan to a Subsidiary in thefuture.

 

*Plan*means this 2005 Tellabs, Inc. EmployeeStock Purchase Plan.

 

*PurchaseAccount*means theaccount used to purchase Shares through the exercise of Purchase Rights underthe Plan.

 

*PurchaseDate*means the lastBusiness Day of each Offering Period, or such other date as shall beestablished by the Committee.

 

*PurchasePrice*means an amountequal to 85% (or such other percent as determined by the Committee, which maynot be less than 85%) of (i) the Fair Market Value of a Share on theExercise Date or (ii) the lower of the Fair Market Value of a Share oneither the Enrollment Date or on the Exercise Date; with such percent and theapplication of (i) or (ii) as determined by the Committee prior tothe Offering Period and communicated to Participants in accord with Section 18(b) below;provided that until a different Purchase Price is established by the Committeeand communicated to Participants in accordance with Section 18(b), thePurchase Price shall be 85% of the Fair Market Value of a Share on the ExerciseDate.

 

*PurchaseRight* means an optiongranted under this Plan that entitles a Participant to purchase Shares.

 

*PurchasedShares*means the fullShares 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 bythe Company or a Subsidiary, whether or not such entity now exists or ishereafter organized or acquired by the Company or a Subsidiary.

 

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**Eligibility**.

 

Only Employees ofthe Company or a Participating Subsidiary shall be eligible to be grantedPurchase Rights under the Plan.

 

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

 

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

 

**Participation**

 

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

 

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

 

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

 

Payroll deductionsfor a Participant shall commence on the first payroll date following theEnrollment Date and shall end on the last payroll date in the Offering Periodto which such authorization is applicable, unless sooner terminated by theParticipant as provided in Section 11 hereof.

 

**PayrollDeductions**.

 

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

 

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credited to his or herPurchase Account.  A Participant may notmake any additional payments into his or her Purchase Account.

 

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

 

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

 

**Grantof Purchase Right**. On the applicable Enrollment Date, each Participant in an OfferingPeriod shall be granted a Purchase Right to purchase on the next followingPurchase Date a number of full Shares determined by dividing such Participant’spayroll deductions accumulated prior to such Purchase Date and retained in theParticipant’s Purchase Account as of the Purchase Date by the applicablePurchase Price; provided, however, that such purchase shall be subject to thelimitations set forth in Section 3 and 14 and subject to decrease per Section 6(c).

 

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

 

**Approvalby Shareholders**.  The effectiveness of the Plan shall besubject 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 ata duly held shareholders’ meeting by the affirmative vote of the holders of amajority of the Shares of the Company present at the meeting or represented andentitled to vote thereon.

 

**Administration**.

 

**Powersand Duties of the Committee**.  The Plan shall be administered by theCommittee.  Subject to the provisions ofthe Plan, Section 423 of the Code and the regulations thereunder, theCommittee shall have the discretionary authority to determine the time andfrequency of granting Purchase Rights, the terms and conditions of the PurchaseRights and the number of Shares subject to each Purchase Right.  The Committee shall also have thediscretionary authority to do everything necessary and appropriate to administerthe Plan, including, without limitation, interpreting the provisions of thePlan (but any such interpretation shall not be inconsistent with the provisionsof Section 423 of the Code).  Allactions, decisions and determinations of, and interpretations by the Committeewith respect to the Plan shall be final and binding upon all Participants andupon their executors, administrators, personal representatives, heirs andlegatees.  No member of the Board ofDirectors or the Committee shall be liable for any action, decision,determination or interpretation made in good faith with respect to the Plan orany Purchase Right granted hereunder.

 

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**Administrator**.  The Company, Board or the Committee mayengage the services of a brokerage firm or financial institution (the “Administrator”) toperform certain ministerial and procedural duties under the Plan including, butnot limited to, mailing and receiving notices contemplated under the Plan,determining the number of Purchased Shares for each Participant, maintaining orcausing to be maintained the Purchase Account and the Brokerage Account,disbursing funds maintained in the Purchase Account or proceeds from the saleof Shares through the Brokerage Account, and filing with the appropriate taxauthorities proper tax returns and forms (including informationreturns) and providing to each Participant statements as required by lawor regulation.

 

**Indemnification**.  Each person who is or shall have been (a) amember of the Board, (b) a member of the Committee, or (c) an officeror employee of the Company to whom authority was delegated in relation to thisPlan, shall be indemnified and held harmless by the Company against and fromany loss, cost, liability or expense that may be imposed upon or reasonablyincurred 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 maybe involved by reason of any action taken or failure to act under the Plan andagainst 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 anyjudgment 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 itsown expense, to handle and defend the same before he or she undertakes tohandle 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 exceptas expressly provided by statute.

 

Theforegoing right of indemnification shall not be exclusive of any other rightsof indemnification to which such persons may be entitled under the Company’scertificate of incorporation or bylaws, any contract with the Company, as amatter of law, or otherwise, or of any power that the Company may have toindemnify them or hold them harmless.

 

**Withdrawal**.  AParticipant may withdraw from the Plan by properly completing and submitting tothe Company the on-line tool for withdrawal or the withdrawal form supplied bythe Company.  Upon withdrawal, anypayroll deductions credited to the Participant’s Purchase Account prior to theeffective date of the Participant’s withdrawal from the Plan will be returnedto the Participant.  No further payrolldeductions for the purchase of Shares will be made during subsequent OfferingPeriods, unless the Participant properly completes and submits the on-lineenrollment tool provided by the Company or, alternatively, an election form, bythe deadline prescribed by the Company. A Participant’s withdrawal from an offering will not have any effectupon his or her eligibility to participate in the Plan or in any similar planthat may hereafter be adopted by the Company.

 

**Terminationof Employment**.  Upontermination of a Participant’s employment for any reason prior to the PurchaseDate, whether voluntary or involuntary, including retirement, death or as aresult of liquidation, dissolution, sale, merger or a similar event affectingthe Company or a Participating Subsidiary, the payroll deductions credited tohis or her Purchase Account will be returned to him or her or, in the case ofthe 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 payrolldeductions of a Participant in the Plan.

 

**Stock**.

 

The stock subjectto Purchase Rights shall be: (i) common stock of the Company; (ii) registeredsecurities as required under the 1933 Act and 1934 Act; (iii) listed onthe NASDAQ or on such other exchange as the Shares may be listed; and (iv) eitherauthorized but unissued shares or treasury shares.

 

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

 

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with respect to whichPurchase Rights are to be exercised exceeds the number of Shares then availableunder the Plan, the Committee shall make a pro rata allocation of the Sharesremaining available for purchase in as uniform a manner as shall be practicableand as it shall determine to be equitable.

 

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

 

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

 

**Assignabilityof Purchase Rights**. Neither payroll deductions credited to a Participant’s Purchase Accountnor any rights with regard to the exercise of a Purchase Right or to receiveShares under the Plan may be assigned, transferred, pledged or otherwisedisposed of in any way (other than by will, the laws of descent anddistribution or as provided in Section 15 hereof) by theParticipant.  Any such attempt atassignment, transfer, pledge or other disposition shall be without effect,except that the Company may treat such act as an election to withdraw from anOffering Period in accordance with Section 11 hereof.

 

**Adjustmentof Number of Shares Subject to Purchase Rights**.

 

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

 

Dissolution orLiquidation.  In theevent of the proposed dissolution or liquidation of the Company, the OfferingPeriod then in progress shall be shortened by setting a new Exercise Date (the “NewExercise Date”), and shall terminate immediately prior to the consummation ofsuch proposed dissolution or liquidation, unless provided otherwise by theBoard.  The New Exercise Date shall bebefore the date of the Company’s proposed dissolution or liquidation.  The Board will notify each Participant inwriting, as soon as administratively practicable prior to the New ExerciseDate, that the Purchase Date for the Participant’s Purchase Right has been changedto the New Exercise Date and that the Participant’s Purchase Right shall beexercised automatically on the New Exercise Date, unless prior to such date theParticipant has withdrawn from the Offering Period as provided in Section 11hereof.

 

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

 

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shall be before the dateof the Company’s proposed sale or merger. The Board will notify each Participant in writing, as soon asadministratively practicable prior to the New Exercise Date, that the PurchaseDate for the Participant’s Purchase Right has been changed to the New ExerciseDate and that the Participant’s Purchase Right shall be exercised automaticallyon the New Exercise Date, unless prior to such date the Participant has withdrawnfrom the Offering Period as provided in Section 11 hereof.

 

**Amendmentsor Termination of the Plan**.

 

The Board ofDirectors or the Committee may at any time and for any reason amend,modify, suspend, discontinue or terminate the Plan without notice; providedthat no Participant’s existing rights in respect of existing Purchase Rightsare adversely affected thereby; provided, further, upon any such amendment ormodification, all Participants shall continue to have the same rights andprivileges in respect of existing Purchase Rights.  To the extent necessary to comply with Section 423of 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 adegree as required.

 

Withoutshareholder consent and without regard to whether any Participant rights may beconsidered to have been “adversely affected,” the Board or theCommittee shall be entitled to change the Offering Periods, limit thefrequency and/or number of changes in the amount withheld during an OfferingPeriod, establish the exchange ratio applicable to amounts withheld in acurrency other than U.S. dollars, permit payroll withholding in excess of theamount designated by a Participant in order to adjust for delays or mistakes inthe Company’s processing of properly completed withholding elections, establishreasonable waiting and adjustment periods and/or accounting and creditingprocedures to ensure that amounts applied toward the purchase of Shares foreach Participant properly correspond with amounts withheld from the Participant’sCompensation, and establish such other limitations or procedures as the Boardor the Committee determines in its sole discretion advisable which areconsistent with the Plan; provided, however, that changes to (i) thePurchase Price, (ii) the Offering Period, or (iii) the maximum ofpercentage 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 theBoard or the Committee.

 

**No OtherObligations**.  Thereceipt of a Purchase Right pursuant to the Plan shall impose no obligationupon the Participant to purchase any Shares covered by such PurchaseRight.  Nor shall the granting of aPurchase Right pursuant to the Plan constitute an agreement or anunderstanding, express or implied, on the part of the Company to employ theParticipant for any specified period.

 

**Notices**.  Any notice which the Company or anyParticipant may be required or permitted to give to the other shall be inwriting and may be delivered personally or by mail, postage prepaid,addressed:  if to the Company, to suchaddress as the Company, by notice to such Participant, may designate in writingfrom time to time; and, if to the Participant, at his or her address as shownon the payroll records of the Company.

 

**ConditionUpon Issuance of Shares**.

 

Shares shall notbe issued with respect to a Purchase Right unless the exercise of such PurchaseRight and the issuance and delivery of such Shares pursuant thereto shallcomply with all applicable provisions of law, domestic or foreign, including,without limitation, the 1933 Act and the 1934 Act and the rules and regulationspromulgated thereunder, and the requirements of any stock exchange upon whichthe Shares may then be listed, and shall be further subject to the approval ofcounsel for the Company with respect to such compliance.

 

As a condition tothe exercise of a Purchase Right, the Company may require the person exercisingsuch Purchase Right to represent and warrant at the time of any such exercisethat the Shares are being purchased only for investment and without any presentintention to sell or distribute such Shares if, in the opinion of counsel forthe Company, such a representation is required by any of the aforementionedapplicable provisions of law.

 

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**GeneralCompliance**.  The Plan will be administered and PurchaseRights will be exercised in compliance with the 1933 Act, 1934 Act and allother applicable securities laws and Company policies, including withoutlimitation, the Company’s Insider Trading Policy.

 

**Termof the Plan**.  ThePlan shall continue in effect for a term of ten (10) years unless soonerterminated under Section 18.

 

**GoverningLaw**.  The Plan andall Purchase Rights granted hereunder shall be construed in accordance with andgoverned by the laws of the State of Delaware without reference to choice oflaw principles and subject in all cases to the Code and the regulationsthereunder.

 

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