Document:

EXHIBIT 10(22)
                     [CANARGO ENERGY COPORATION LETTERHEAD]

MEMORANDUM

TO:         Paddy  Chesterman

FROM:       Michael  Binnion

SUBJECT:    Employment  agreement

DATE:       February  24,  2000

This  memo  outlines  the  terms  of  the  employment  agreement  between  Paddy
Chesterman  and  CanArgo  Energy  Corporation.

Position          Vice  President  Geology

Responsibilities  To  lead  and  facilitate technical projects within CanArgo
                  for  itself  and  with  its project investment teams.  To
                  represent the technical aspects  of  CanArgo's  project
                  investments to potential investors and partners.To  initiate
                  projects  and  ideas  that  will  enhance  the  value of
                  CanArgo's investments.  To  create  and maintain a technical
                  data base as a valuable asset to  CanArgo.  To  facilitate in
                  a  positive  manner  the  adoption of relevant technologies
                  and procedures by our project investment teams. To communicate
                  to the  President,  CEO and board of directors the status of
                  technical projects and activities  in writing  at least once
                  per  month.

Domicile          Calgary  based position with requirements to travel between 3
                  and 6 months per year to project locations. It is anticipated
                  that 5 to 6 months will be required in the first year.  In no
                  one year will more than 6 months travel away from Calgary  be
                  required and Paddy Chesterman will have flexibility and
                  responsibility to arrange his travel schedule to meet company
                  and personal requirements.

Salary            $100,000  Cdn.per  year.

Options           Subject to board and regulatory approval 100,000 options
                  vesting 1/3 each year of service according to our  standard
                  option  plan.

Expenses          All reasonable expenses incurred on behalf of CanArgo will be
                  reimbursed including all living expenses incurred in  Georgia.

Travel            In  lieu of overseas bonus and based on the seniority of the
                  position and the requirements for 5 or more trans-Atlantic
                  flights per year, business class upgrades will be made
                  available unless travelling with CanArgo personnel or
                  consultants. Upgrade stickers earned on company travel will be
                  used where possible.

Benefits          Participation in the company standard benefit plan with the
                  three-month wait period to be waived. Benefit plan includes
                  emergency medical evacuation.

Vacation          Four weeks vacation annually. Vacation must be taken within
                  one-year of being earned or it will be lost. Paddy  Chesterman
                  has the flexibility and responsibility to plan vacation time
                  to meet both personal and company  requirements.

Severance         This  contract  may be terminated on  three  months  notice by
                  either  party. If  within 6 months of a corporate  transaction
                  (e.g.take- over or merger) that results in a change in control
                  of CanArgo Energy Corporation or its  board, this  contract is
                  terminated   by   CanArgo,   its  successor  or  an  event  of
                  constructive  dismissal occurs then a severance payment of six
                  months will be due.

Agreed  this  1st  Day  of  February,  2000

CanArgo  Energy  Corporation

/s/ Michael Binnion                           /s/ Paddy Chesterman
------------------------------------          -----------------------------
                                              Paddy  Chesterman<PAGE>
                                                                  EXHIBIT 10(23)
                                LETTER OF INTENT

                   AES/NOC Georgian Natural Gas Joint Venture

BACKGROUND

CanArgo  Energy  Corporation  is  the controlling shareholder of Ninotsminda Oil
Company ("NOC").  NOC is the holder of a Production Sharing Contract ("PCS") for
the Ninotsminda license in Georgia.  The not for profit operator of this license
is  GBOC  Ninotsminda.  All  agreements  are  in  good  standing.

CanArgo has identified a significant natural gas prospect within the NOC license
area.  This  prospect  is  referred  to  as  the Ninotsminda Cretaceous prospect
(Attachment  1).  Should  this  prospect  be  successful it has the potential to
fulfill  the  natural  gas  needs  of  Gardabani  Power  Plant.

AES  Telasi  and  AES Gardabani control the Gardabani Power Plant (Units 9 & 10)
and  the  electrical  distribution  network  in  Tiblisi.

PROPOSAL

AES  Gardabani  would  pay  for  2/3  of  a Cretaceous well in each of the three
Ninotsminda  field  divisions and NOC would pay for 1/3 of these wells including
testing  and completions costs.  All subsequent costs/wells will be split evenly
(50%/50%)  between  the  parties,  including gas gathering and facilities costs.

The  wells  would  included  typical  costs for this type of project and, unless
agreed  by  AES,  would  not  cost  more  than $5 million for the first well, $4
million  for  the  second  well, and $3.5 million for the third well.  GBOC will
operate the wells and NOC will be project manager.  A fixed fee of $200,000 will
be  payable  for  operations  and  administration during drilling of each of the
three  wells,  payable  at  $50,000  per  month  during  drilling.

A  gas sales contract will be established between AES Gardabani and NOC based on
a  $45  /  mcm  price  subject to regulatory approval for the first three years.
During  the  following  years  we would gradually introduce a portion of the gas
priced  on a market basis, subject to the market being within the range of $50 /
mcm  ceiling  and $35 / mcm minimum.  The fourth year would be set at 1/3 priced
at  the  average  market  value  within the range and 2/3's at $45, year five at
2/3's  the  average  market  value  with the range and 1/3 at $45, and the sixth
year  and  subsequent  years  at average market value within the range.  Volumes
will  be  set  based on the results of the wells and consumption requirements of
AES  Gardabani with an estimated take of 400 million cubic meters per year.  NOC
and  AES  will  collaborate  to  sell excess gas to third parties at best price.

AES will receive the equivalent in cash, based on the well head price, of 50% of
the  Cretaceous  cost  recovery  hydrocarbons  and  50% of the Cretaceous profit
hydrocarbons  until  it  has received it's share of the cost of the project back
(32.5%).  Thereafter,  it would receive 50% of the Cretaceous profit hydrocarbon
(15%).  Annual  operation and administration budgets will be agreed upon between
the  parties.

A  Joint  Operating  Committee  will  be  formed with 2 members from each party.

AES  and  NOC  will  cooperate  on  transportation of gas, gas sales, and other.

AES will have the right to participate in all future Cretaceous prospects within
the  Ninotsminda  License  on  the  similar  terms  as  this  Letter  of Intent.

/s/ Bob Reese
------------------------------          AES  Gardabani

/s/ David Robson
------------------------------          Ninotsminda Oil Company

                                  Date: 10 March 2000

SCHEMATIC MAP OF CRETACEOUS PROSPECTS ON NINOTSMINDA LICENSETELLABS ADVANTAGE PROGRAM

TELLABS

ADVANTAGE PROGRAM

 

 

As Amended and Restated

Effective as of January 1, 1999

 

 

	TABLE OF CONTENTS		PAGE
	ARTICLE 1 General		1
	  1.1 Purpose		1
	  1.2 Source of Funds		1
	  1.3 Scope of Plan Coverage		1
	  1.4 Definitions		1
	    Account		1
	    Accounts		1
	    Actual Deferral Percentage		1
	    Actual Deferral Percentage Tests		1
	    Administrative Committee		1
	    Affiliate		1
	    After-Tax Contribution		2
	    Aggregate Limit		2
	    Annual Addition		2
	    Annuity Starting Date		2
	    Basic Before-Tax Contribution		2
	    Before-Tax Contribution		2
	    Board of Directors		2
	    Code		2
	    Coherent Accounts		2
	    Coherent Acquistion Date		2
	    Coherent Participant		2
	    Coherent Plan		3
	    Committees		3
	    Company		3
	    Compensation		3
	      Considered Compensation		3
	      Section 415 Compensation		3
	      Total Compensation		3
	    Contribution Percentage		4
	    Contribution Percentage Tests		4
	    Dependent		4
	    Defined Contribution Dollar Limitation		4
	    Election Period		4
	    Eligible Employee		4
	    Eligible Individual		4
	    Eligible Participant		4
	    Eligible Retiree		4
	    Eligible Retirement Plan		4
	    Eligible Rollover Distribution		4
	    Eligibility Period		5
	    Employer		5
	    Entry Date		5
	    ERISA		5
	    Employer Excess Contribution		5
	    Excess Forfeiture Suspense Account		5
	    Excess Tentative Employer Contribution		5
	    Five-Percent Owner		5
	    Funds		5
	    Health Plan		5
	    Highly Compensated Employee		5
	    Hour of Service		6
	    Individual Beneficiary		7
	    Investment Committee		7
	    Investment Manager		7
	    Key Employee		7
	    Limited Term Employee		7
	    Limitation Year		7
	    Matching Contribution		7
	    Maximum Annual Addition		7
	    Medical Benefits		8
	    Medical Benefits Account		8
	    Member of a Collective Bargaining Unit		8
	    Multiple Use		8
	    Non-Highly Compensated Employee		8
	    Normal Retirement Date		8
	    One-Percent Owner		8
	    Participant		8
	    Permissive Aggregation Group		8
	    Required Aggregation Group		8
	    Plan		8
	    Plan Year		8
	    Present Value		8
	    Profit Sharing Contribution		8
	    Provisional Annual Addition		8
	    Qualified Joint and Survivor Annuity		8
	    Required Beginning Date		9
	    Retirement Contribution		9
	    Retirement Program		9
	    Rollover Contribution		9
	    Savings Program		9
	    Service		9
	      Special Definitions		9
	        Employment Compensation Date		9
	        Termination Date		9
	        Re-employment Commencement Date		10
	        Period of Severance		10
	        Year of Service		10
	        Aggregation Rule		10
	        Service Spanning Rule		10
	        Service with Predecessor and
Related Employers		10
	        Recognition of Services under
Steinbrecher Plan and Coherent Plan		11
	    Social Security Disability Plan		11
	    Supplemental Before-Tax Contribution		11
	    Survivor Annuity		11
	    Tellabs Stock Fund		11
	    Top-Heavy		11
	    Top-Heavy Determination Date		11
	    Top-Heavy Ratio		11
	    Tentative Employer Contribution		11
	    Trust		11
	    Trust Fund		11
	    Trustee		11
	    Unit		11
	    Valuation Date		11
			
	ARTICLE 2 ELIGIBILITY AND PARTICIPATION		12
	  2.1 Eligibility Requirements		12
	  2.2 Continued Participation; Reemployment		13
	  2.3 Transfers and Changes in Status		13
	  2.4 Leaves of Absence		14
	  2.5 Qualified Military Service		14
			
	ARTICLE 3 CONTRIBUTIONS BY EMPLOYER		15
	  3.1 Employer Contributions		15
	  3.2 Retirement Contribution Under the Retirement Program		15
	  3.3 Profit Sharing Contribution Under the Savings Program		15
	  3.4 Before-Tax Contribution Under the Savings Program		15
	  3.5 Limitations on Before-Tax Contribution Under the Savings Program		16
	  3.6 Matching Contribution Under the Savings Program		18
	  3.7 Limitation on Matching Contributions Under the Savings Program		19
	  3.8 Multiple Use		20
			
	ARTICLE 4 CONTRIBUTIONS BY EMPLOYER		22
	  4.1 Rollover Contribution		22
			
	ARTICLE 5 ACCOUNTING PROVISIONS AND ALLOCATIONS		23
	  5.1 Participant Accounts		23
	  5.2 Common Fund		23
	  5.3 Unit Values		25
	  5.4 Eligibility to Share in Employer Contribution and Forfeitures		25
	  5.5 Allocation of Before-Tax Contributions		26
	  5.6 Allocation of Matching Contributions		26
	  5.7 Allocation of Retirement Contribution		26
	  5.8 Allocation of Profit Sharing Contribution		27
	  5.9 Crediting Accounts		27
	  5.10 Provisional Annual Additions		27
	  5.11 Limitation on Annual Additions		27
			
	ARTICLE 6 AMOUNT OF PAYMENTS TO PARTICIPANTS		29
	  6.1 General Rule		29
	  6.2 Normal Retirement		29
	  6.3 Death		29
	  6.4 Disability		29
	  6.5 Vesting		29
	  6.6 Resignation of Dismissal		29
	  6.7 Treatment of Forfeitures		30
			
	ARTICLE 7 DISTRIBUTIONS		31
	  7.1 Commencement and Form of Distributions		31
	  7.2 Qualified Joint and Survivor Annuity - Retirement Account and
Coherent Accounts		33
	  7.3 Surviving Spouse Survivor Annuity - Retirement Account and
Coherent Accounts		34
	  7.4 Distributions to Beneficiaries		35
	  7.5 Beneficiaries		36
	  7.6 Installment or Deferred Distributions		37
	  7.7 Form of Elections and Applications for Benefits		37
	  7.8 Unclaimed Distributions		38
	  7.9 Distributions in Kind		38
	  7.10 Distribution of Participants' After-Tax Account, Rollover Account and
Coherent Rollover Accounts		38
	  7.11 Loans		39
	  7.12 Withdrawals Prior to Termination of Employment and After Age 59-1/2		40
	  7.13 Pre-59-1/2 Coherent Account Withdrawals; Hardship Withdrawals		41
	  7.14 Eligible Rollover Distributions		43
	  7.15 Facility of Payment		43
	  7.16 Claims Procedure		44
			
	ARTICLE 8 TOP-HEAVY PLAN REQUIREMENTS		45
	  8.1 Top-Heavy Definitions		45
	  8.2 Top-Heavy Plan Requirements		47
			
	ARTICLE 9 POWERS AND DUTIES OF COMMITTEES		49
	  9.1 Appointment of Committees		49
	  9.2 Powers and Duties of Administrative Committee		49
	  9.3 Powers and Duties of the Investment Committee		50
	  9.4 Committee Procedures		51
	  9.5 Consultation with Advisors		51
	  9.6 Committee Members as Participants		52
	  9.7 Records and Reports		52
	  9.8 Investment Policy		52
	  9.9 Designation of Other Fiduciaries		53
	  9.10 Obligations of Each Committee		53
	  9.11 Indemnification of Each Committee		53
			
	ARTICLE 10 TRUSTEE AND TRUST FUND		55
	  10.1 Trust Fund		55
	  10.2 Payments to Trust Fund and Expenses		55
	  10.3 Trustee's Responsibilities		55
	  10.4 Reversion to the Employer		55
			
	ARTICLE 11 AMENDMENT OR TERMINATION		56
	  11.1 Amendment		56
	  11.2 Termination		56
	  11.3 Form of Amendment, Discontinuance of Employer Contributions, and
Termination		56
	  11.4 Limitations on Amendments		56
	  11.5 Level of Benefits upon Merger		56
	  11.6 Vesting upon Termination or Discontinuance of Employer Contributions;
Liquidation of Trust		57
			
	ARTICLE 12 MISCELLANEOUS		58
	  12.1 No Guarantee of Employment, Etc		58
	  12.2 Rights of Participants and Others		58
	  12.3 Qualified Domestic Relations Order		58
	  12.4 Controlling Law		58
	  12.5 Severability		58
	  12.6 Notification of Addresses		58
	  12.7 Gender and Number		59
			
	ARTICLE 13 ADOPTION BY AFFILIATES		60
	  13.1 Adoption of Plan		60
	  13.2 The Company as Agent for Employer		60
	  13.3 Adoption of Amendments		60
	  13.4 Termination		60
	  13.5 Data to Be Furnished by Employers		60
	  13.6 Joint Employers		60
	  13.7 Expenses		61
	  13.8 Withdrawal		61
	  13.9 Prior Plans		61
			
	ARTICLE 14 RETIREE MEDICAL BENEFITS		62
	  14.1 Medical Benefits Account		62
	  14.2 Retiree Medical Benefits Definitions		62
	  14.3 Separate Account		62
	  14.4 Impossibility of Diversion Prior to Satisfaction of All Liabilities		63
	  14.5 Reversion upon Satisfaction of All Liabilities		63
	  14.6 Medical Benefits		63
	  14.7 Coordination with Health Plan		63
	  14.8 Employer Contributions		63
	  14.9 Reservation of the Right to Terminate Medical Benefits		63
			
	Appendix A		A-1

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
Section 401(h) of the Code, 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 the Employer, in accordance with the provisions of Sections 401 and
501 of the Code and in accordance with other provisions of law relating to money purchase
pension and profit sharing plans.  Except as otherwise provided in this Plan or 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 an 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 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, 1999 except for certain provisions the
effective dates of which are set forth therein.  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).

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

"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 Section 415 Compensation or applying the limits of Section 415 of the
Code 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
Section 414(b) or (c) of the Code as modified by Section 415(h) thereof, 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).

"Annual Addition" means for any Limitation Year, the
sum of (a) all Before-Tax Contributions, Matching Contributions, Employer
Contributions (including forfeitures allocated as a part thereof) and, for Limitation Years
beginning prior to January 1, 1994, After-Tax Contributions, 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 any other defined contribution
plan maintained by an Employer or 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 an account described in Code
Section 419A(d)(2) maintained by an Employer or Affiliate.

"Annuity Starting Date" is 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% 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.

"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.

"Code" means the Internal Revenue Code of 1986, 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.

2

"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.

"Compensation" means a Participant's "Considered
Compensation," "Section 415 Compensation," or "Total
Compensation", as follows:

(a)"Considered Compensation" means a Participant's
Total Compensation during any period paid while he was a Participant but excluding any
automobile allowance, reimbursement for moving, relocation or education expenses, income
from participation in any stock purchase plan, income from stock awards, income from the
exercise of stock options, stock appreciation rights, dividends on restricted stock, hiring
bonuses or similar remuneration or other extraordinary remuneration; provided, however,
that Considered Compensation for a Plan Year shall not include any amount in excess of
$160,000, (or, if greater, the compensation limit under Code Section 401(a)(17)(B), as
adjusted by the Secretary of the Treasury for increases in the cost of living).  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.

(b)"Section 415 Compensation" for a period is
the Participant's wages as defined in Code Section 3401(a) for purposes of income tax
withholding at the source, and all other payments of compensation to the Participant by the
Employer for which the Employer is required to furnish the Participant a written statement
under Code Sections 6041(d), 6051(a)(3) and 6052, but determined without regard to any
rules under Code Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed, plus for the 1998  and
subsequent Plan Years, amounts excluded from the Participant's income for the period under
Code Sections 125, 401(k) or 403(b).

(c)"Total Compensation" for a period is the
Participant's wages as defined in Code Section 3401(a) for purposes of income tax
withholding at the source, and all other payments of compensation to the Participant by the
Employer for which the Employer is required to furnish the Participant a written statement
under Code Sections 6041(d), 6051(a)(3) and 6052, but determined without regard to any
rules under Code Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed, plus amounts excluded from
the Participant's income for the period under Code Sections 125, 401(k) or 403(b).

3

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

"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).

"Defined Contribution Dollar Limitation" is an amount
equal to $30,000, as adjusted by the Secretary of the Treasury for increases in the cost of
living pursuant to Code Section 415(d), prorated for any Limitation Year of less than
12 months; provided that for purposes of Section 511(a)(ii), such amount shall be
reduced by the amounts allocated to any medical accounts described in subsection (c) of
"Annual Addition."

"Election Period" means the period defined in
Section 7.2 (Qualified Joint and Survivor Annuity - Retirement 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" is any individual who is employed
by the Employer, other than (a) a Leased Employee, (b) a Limited Term Employee,
(c) a Member of a Collective Bargaining Unit, (d) an individual providing
services to the Employer in the capacity of, or who is or was designated by the Employer
as, an independent contractor, or (e) a non-resident alien with no earned income from
sources within the United States.  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.

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

"Eligible Participant" is a Participant as defined in
Section 5.4 (Eligibility to Share in Employer Contribution and Forfeiture).

"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).

"Eligible Rollover Distribution" is any distribution of
all or a portion 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), and (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.

4

"Eligibility Period" is a rolling one-year period used
for the purpose of determining when an employee is eligible to participate in the Plan.  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 or any Affiliate which
becomes an Employer pursuant to the provisions of Article 13 (Adoption by Affiliate),
and, for purposes of Article 8 (Top Heavy Plan Requirements), is described in
Section 8.1 (Top Heavy Definitions).

"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 Section 2.1(d) and the ability to
participate in the Savings Program on a limited basis commencing April 1, 1999, each
business day shall also be an "Entry Date."

"ERISA" means the Employee Retirement Income Security
Act of 1974, 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 5.11 (Limitations on Annual Additions).

"Excess Tentative Employer Contribution" means the
excess contribution described in Section 5.11 (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.

"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, for the
Determination Year, an employee of the Employer or an Affiliate who was an Eligible
Participant during the Plan Year and who:

(a) during the immediately preceding Plan Year:
(i) was a Five-Percent Owner; or

(ii) received Total Compensation in excess of $80,000 (as adjusted
annually for increases in the cost of living by the Secretary of the Treasury) 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;
or

5

(b) at any time during the Determination Year is a Five-Percent
Owner.

For purposes of this definition, "Determination Year" means
the current Plan 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 an Employer or an Affiliate;

(b) each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by an 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 an Employer or an Affiliate or indirectly (e.g.,
through a trust fund or insurer to which an 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.

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, no more than 501
Hours of Service shall be credited with respect to any continuous period of a leave of
absence.

6

"Individual Beneficiary" means a natural person
designated by the Participant in accordance with Section 7.5 (Beneficiaries) 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 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 an
employee of an Employer or an Affiliate and who provides services for an Employer if:

(a) such services are provided pursuant to an agreement between the
Employer or an Affiliate and any other person;

(b) such individual has performed such services for the Employer (or a
related person within the meaning of Section 144(a)(3) of the Code) on a substantially
full-time basis for a period of at least one year; and

(c) such services have been performed under the primary direction or
control of an Employer or an Affiliate.

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

"Limitation Year" means the 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 5.11 (Limitations on Annual Additions).

7

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

"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" is 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 an Employer or Affiliate who (a) at any time during the Plan
Year was an Eligible Participant, and (b) was not a Highly Compensated Employee for
such Plan Year.

"Normal Retirement Date" means a Participant's 65th
birthday.

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

"Participant" means (a) a current employee of an
Employer or an Affiliate who has become eligible to participate in the Plan pursuant to
Section 2.1 (Eligibility Requirements) or (b) a former employee for whose
benefit an Account in the Trust Fund is maintained.

"Permissive Aggregation Group" and "Required
Aggregation Group" are described in Section 8.1 (Top-Heavy Definitions).

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

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

"Present Value" is described in Section 8.1
(Top-Heavy Definitions).

"Profit Sharing Contribution" means the contribution
referred to in Section 3.3 (Profit Sharing Contribution Under the Savings
Program).

"Provisional Annual Addition" means the amount
described in Section 5.10 (Provisional Annual Addition).

"Qualified Joint and Survivor Annuity" for a married
Participant means an annuity for the life of a Participant with payments continued upon the
death of the Participant for the life of his spouse in an amount which is 1/2 of the amount
payable while  the Participant was living, and for an unmarried Participant means an
annuity for the life of the Participant only.

8

"Required Beginning Date" means:

(a) for a Participant other than a Five-Percent Owner, the April 1
following the later of the calendar year in which the Participant attains age 70-1/2 or the
calendar year in which the Participant terminates employment with all Employers and
Affiliates, or

(b) for a Participant who at any time during or after the calendar year
in which he attained age 66-1/2 was or became a Five-Percent Owner, the April 1 following
the later of (1) the calendar year in which he attained age 70-1/2 or (2) the
earlier of the calendar year in which he became a Five-Percent Owner or his employment with
all Employers and Affiliates terminates.

"Retirement Contribution" means the contribution
referred to in Section 3.2 (Retirement Contribution Under 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 (i) all or a portion
of a qualified total distribution received by an employee from another qualified plan which
is eligible for tax-free rollover to a qualified plan and which is transferred by the
employee to this Plan within 60 days following his receipt thereof; (ii) amounts
transferred to this Plan from a conduit individual retirement account which has no assets
other than assets (and the earnings thereon) which were (A) previously distributed to
the employee by another qualified plan as a qualified total distribution, (B) eligible
for tax-free rollover to a qualified plan and (C) deposited in such conduit individual
retirement account within 60 days of receipt thereof; (iii) amounts distributed to the
employee from a conduit individual retirement account meeting the requirements of clause
(ii) above, and transferred by the employee to this Plan within 60 days of his receipt
thereof from such conduit individual retirement account; and (iv) an eligible rollover
distribution within the meaning of Code Section 401(a)(31).

"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:
(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) with any Affiliate 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.

9

(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 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; 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.

10

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

"Social Security Disability Plan" with respect to any
Participant means the disability benefits program maintained under the Social Security
Act.

"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.

"Survivor Annuity" means the surviving spouse survivor
annuity defined in Section 7.3 (Surviving Spouse Survivor Annuity - Retirement
Account).

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

"Top-Heavy", "Top-Heavy Determination
Date" and "Top-Heavy Ratio" are described in Section 8.1
(Top-Heavy Definitions).

"Tentative Employer Contribution" means the
contribution described in Section 3.1 (Employer Contributions).

"Trust" or "Trust Fund" is the Trust
established in accordance with Article 10 (Trustee and Trust Fund).

"Trustee" means the Trustee or Trustees under the Trust
referred to in Article 10 (Trustee and Trust Fund).

"Unit" means the unit of measure (determined as
provided in Article 5) 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 the daily date as of which the
Administrative Committee shall determine the value of each Account.

11

ARTICLE 2

Eligibility and Participation

2.1 Eligibility Requirements.

(a) Every Participant on January 1, 1999 shall continue as a
Participant, subject to the provisions of the Plan.

(b) Every other Eligible Employee shall first be eligible to
participate, 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) Any former employee of an 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 an Employer as an Eligible Employee
shall be eligible to participate on the first Entry Date after reemployment.

(d) 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 reasonably expects to meet the requirements of paragraph (b) shall first
be eligible to participate in the Plan on a limited basis 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 Contribution 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 4.1 (Rollover
Contribution), and exercising rights with respect to the Account(s) established thereby.

(e) 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 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.

(f) Notwithstanding the foregoing provisions of Section 2.1 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.

12

2.2 Continued Participation; Reemployment.

(a) Except as provided in Section 2.3 (Transfers and Changes in
Status), once an Eligible Employee has become a Participant eligible to elect to make
Before-Tax Contributions pursuant to Section 2.1 (Eligibility Requirements), 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) Except as provided in Section 2.3 (Transfers and Changes in
Status), once an Eligible Employee becomes a Participant for purposes of determining the
amount of the Profit Sharing Contribution and the Retirement Contribution and eligibility
to share in the Profit Sharing Contribution and the Retirement Contribution, he shall
continue to be eligible to share in 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 Contribution and
Forfeiture).

(c) 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 any Entry Date following such Re-Employment
Commencement Date and to share in 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 Profit Sharing
Contribution and the Retirement Contribution, satisfies the requirements of
Section 5.4 (Eligibility to Share in the Employer Contribution and Forfeiture).

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 an Affiliate 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 as of the date of such
acquisition or transfer provided he is an Eligible Employee as of such date.

13

(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 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.

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

14

ARTICLE 3

Contributions by Employer

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

(a) the Retirement Contribution;

(b) the Profit Sharing Contribution;

(c) the Before-Tax Contribution; and

(d) the Matching Contribution.

Such sum, which is known as the Tentative Employer Contribution, shall
be reduced by an amount equal to the Excess Tentative Contribution (as described in
Section 5.11 (Limitation on Annual Additions)).

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.
Subject to the provisions of Section 3.1 (Employer Contributions), 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 4.5% (four and five-tenths
percent) of the Considered Compensation of each Eligible Participant for such quarter.
Such contribution is known as the "Retirement Contribution."

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

(a) 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; and

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

Such contributions are, collectively, known as the "Profit Sharing
Contribution."

3.4 Before-Tax Contribution Under the Savings Program.

(a) Subject to the provisions of Section 3.1 (Employer
Contributions) and 3.5 (Limitations on Before-Tax Contributions Under the Savings Program),
each Participant may for each payroll period elect to have his Employer make a Before-Tax
Contribution to the Trust Fund on his behalf in an amount equal to 1%, 2%, 3%, 4%, 5%, 6%,
7%, 8%, 9%, 10%, 11%, 12%, 13%, 14% or 15% of his Considered Compensation (rounded to the
nearest cent).  Such elections (other than a complete suspension of Before-Tax
Contributions under this Section) shall be subject to change effective on any Entry Date in
accordance with procedures established by the Administrative Committee from time to time.
A Participant may elect to have his Employer suspend all Before-Tax Contributions to be
made on his behalf under this Section 3.4 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.

15

(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% 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 Section 3.4(a) does not exceed 15% 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 contained in Code Section 402(g) in
effect at the beginning of such calendar year.  If a Participant's Before-Tax
Contributions, together with any additional employer contributions to a qualified cash or
deferred arrangement, any elective deferrals under a tax-sheltered annuity program or a
simplified employee pension plan, exceeds such dollar limit for any calendar year, such
excess, and any earnings allocable thereto, shall be distributed to the Participant by
April 15 of such 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 Contribution elected by Highly Compensated Employees pursuant to
Section 3.4(a) and (b) (Before-Tax Contribution under the Savings Program) for the
Plan Year shall be reduced in accordance with the following provisions:

(i) The Before-Tax Contribution for the Highly Compensated Employees
shall be reduced and refunded if neither of the Actual Deferral Percentage tests set forth
in (A) or (B) below is satisfied:

16

(A) The 1.25 Test.  The Actual Deferral Percentage for the Highly
Compensated Employees is not more than the Actual Deferral Percentage of all 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 all Non-Highly Compensated Employees, and the Actual Deferral Percentage of
the Highly Compensated Employees is not more than the Actual Deferral Percentage of all
Non-Highly Compensated Employees multiplied by 2.0.

(ii) (A) As used in this subsection, "Actual Deferral
Percentage" means:

(1) 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 Total Compensation for such Plan
Year; and

(2) 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 year Plan Year, to each such Participant's Total Compensation for such
Plan Year.

(B) 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.

(iii) 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 the Highly Compensated Employees to be reduced until either Actual Deferred Percentage
Test is satisfied.  The sequence of such reductions and refunds shall begin with Highly
Compensated Employees who elected to defer the greatest dollar amount, and will assume that
Supplemental Before-Tax Contributions represent the last contributions made to the
Participant's account, then proceed to the Highly Compensated Employees who elected to
defer the second greatest dollar amount, continuing until either Actual Deferred Percentage
Test is satisfied. However, 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.  Once such reductions have
been determined, the Administrative Committee shall direct the Trustee with respect to the
disposition of  the amount of the reduction of the Before-Tax Contributions of each such
Highly Compensated Employee, together with the net earnings or losses allocable thereto.
The Administrative Committee shall designate such disposition as excess contributions,
determine the amount of the allocable net earnings or losses in accordance with subsection
(c) below, and cause such disposition to occur prior to the end of the Plan Year following
the Plan Year in which the excess Before-Tax Contributions were made.

17

(iv) Notwithstanding anything in this subsection (b) to the contrary,
the provisions of this subsection 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.

(c) Net earnings or losses with respect to 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 by multiplying
the net earnings or losses allocable to the Participant's Before-Tax Account for the Plan
Year by a fraction, the numerator of which is the amount of the Participant's Before-Tax
Contributions to be refunded and the denominator of which is the balance of the
Participant's Before-Tax Account as of the last day of the Plan Year, reduced by the net
earnings (or increased by the net loss) allocable to the Participant's Before-Tax Account
for the Plan Year; provided that to the extent the assets of the Trust 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
allocated to such excess Before-Tax Contributions for the Plan Year in accordance with the
procedures of the respective investment media in which such assets are invested.

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

(i) impose limitations during a Plan Year on the percentage of
Before-Tax Contributions elected by Participants pursuant to Section 3.4 (Before-Tax
Contributions) for the purpose of avoiding the necessity of adjustments pursuant to this
Section or Section 5.11 (Limitations on Annual Additions); or

(ii) 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 this Section 3.5.

(e) The amount of each Participant's Basic Before-Tax Contribution and
Supplemental Before-Tax Contribution as determined under this Section 3.5 is subject
to the provisions of Section 5.11 (Limitations on Annual Additions).

3.6 Matching Contribution Under the Savings Program.  Subject to
the provisions of Section 3.1 (Employer Contributions), each Employer shall for each
payroll period of the Plan Year contribute to the Trust Fund an amount equal to 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 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.  The sum of such contributions is known as the "Matching
Contribution."

18

3.7 Limitation on Matching Contributions under the Savings
Program.  Notwithstanding any other provision to the contrary, the Matching
Contributions of the Highly Compensated Employees shall be reduced in accordance with the
following provisions:

(a) The Matching Contributions of the Highly Compensated Employees shall
be reduced if neither of the Contribution Percentage Tests set forth in (i) or (ii) below
is satisfied:

(i) 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.

(ii) 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.

(b) As used in this Section 3.7, "Contribution
Percentage" means:

(i) With respect to:

(A) Non-Highly Compensated Employees, the average of the ratios for
the prior Plan Year of each Non-Highly Compensated Employee's Matching Contributions
to each such Participant's  Total Compensation for such Plan Year; and

(B) Highly Compensated Employees, the average of the ratios for the
current Plan Year of each Highly Compensated Employee's Matching Contributions to
each such Participant's Total Compensation for such Plan Year.

(ii) 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.

19

(c) If neither Contribution Percentage Test is satisfied as of the end
of the Plan Year, the Administrative Committee shall cause the Contributions of the Highly
Compensated Employees to be reduced (or forfeited if nonvested) until either Contribution
Percentage Test is satisfied. The sequence of such reductions (or forfeitures) shall begin
with the Highly Compensated Employees who elected the greatest dollar amount, then the
second greatest dollar amount.  This process shall continue through the remaining After-Tax
Contributions until either Contribution Percentage Test is satisfied.  However,
notwithstanding anything in the foregoing to the contrary, if a lesser reduction, when
added to the amount previously reduced, would equal the total excess contribution, such
lesser amount shall be utilized.  Once such reductions have been determined, the Committee
shall direct the Trustee with respect to the disposition of the amount of the reduction of
the Matching Contribution of each such Highly Compensated Employee, together with the net
earnings or losses allocable thereto (or treat such amount as a forfeiture).  The
Administrative Committee shall designate such disposition as excess contributions,
determine the amount of the allocable net earnings or losses in accordance with subsection
(d) below, and cause such disposition and forfeitures to occur prior to the end of the Plan
Year following the Plan Year in which such excess Matching Contributions were made.

(d) Net earnings or losses with respect to the excess 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 Section 3.5(c) (Limitations on Before-Tax
Contributions under the Savings Program), based on the balance of the Highly Compensated
Employee's Matching Account.

3.8 Multiple Use.

(a) This Section 3.8 will be applicable if The 2.0 Test is used to
satisfy both the Actual Deferral Percentage Test in Section 3.5 and the Contribution
Percentage Test in Section 3.7 (Limitation on Matching Contributions under the Savings
Program).  If this Section 3.8 is applicable, the Committee shall determine whether a
"Multiple Use" has occurred, and if such a Multiple Use has occurred, the
After-Tax Contributions of the Highly Compensated Employees shall be reduced and refunded
in accordance with the provisions of subsection (c) below.

(b) A Multiple Use occurs when for the Highly Compensated Employees, the
sum of the Actual Deferral Percentage used to satisfy The 2.0 Test plus the Contribution
Percentage used to satisfy The 2.0 Test exceeds the "Aggregate Limit."  The
Aggregate Limit is the greater of (i) or (ii) below, determined as follows:

(i) (A) First, multiply 1.25 by the greater of (1) the Actual
Deferral Percentage, or (2) the Contribution Percentage of the Non-Highly Compensated
Employees;

(B) Second, add 2.0 to the lesser of (1) or (2) above provided
that such sum shall not exceed 2 times the lesser of (1) or (2) above;

20

(C) Finally, add the results from (A) and (B) to determine the Aggregate
Limit;

(ii) (A) First, multiply 1.25 by the lesser of (1) the
Actual Deferral Percentage, or (2) the Contribution Percentage of the Non-Highly
Compensated Employees;

(B) Second, add 2.0 to the greater of (1) or (2) above provided
that such sum shall not exceed 2 times the greater of (1) or (2) above;

(C) Finally, add the results from (A) and (B) to determine the Aggregate
Limit.

(c) If a Multiple Use has occurred, such Multiple Use shall be corrected
by reducing the Contribution Percentage of Highly Compensated Employees and refunding
Matching Contributions to those Participants in the same manner as in Section 3.7(c)
(Limitation on Matching Contributions under the Savings Program).

(d) Net earnings or losses with respect to 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 shall be determined and
allocated in the same manner as in Section 3.7(d) (Limitation on Matching
Contributions under the Savings Program).

21

ARTICLE 4

Contributions by Employer

4.1 Rollover Contribution.

(a) A Rollover Contribution may be transferred in cash to the Trust Fund
for the benefit of an Eligible Employee with the permission of the Administrative
Committee.  Prior to accepting any transfer which is intended to be a Rollover
Contribution, the Administrative Committee may require the employee to establish that the
amount to be transferred meets the definition of a Rollover Contribution and any other
limitations of the Code applicable to such transfers.

(b) 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
Contribution Account for the purposes of loans in accordance with Article 7
(Distributions), and investment options in accordance with Section 5.2 (Common Fund),
and the withdrawal of Rollover Contributions in accordance with (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 employee's Rollover Contribution shall be credited to his
Rollover Account and invested in accordance with Section 5.2 (Common Fund).  A
Participant's Rollover Account shall be fully vested and nonforfeitable.

(e) Subject to the provisions of Article 7 (Distributions), a
Participant's Rollover Account shall be distributed to the Participant (or his beneficiary
in the event of his death) at the time and in the manner directed by the Participant.

22

ARTICLE 5

Accounting Provisions and Allocations

5.1 Participant 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").  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 Section 72(e) of the Code.

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.

(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 the 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:

23

(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) Subject to paragraph (e) below, the Administrative 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 Retirement Account, Profit Sharing Account, After-Tax Account, Matching Account,
Before-Tax Account, Rollover Account and, effective as of April 1, 1999, each of his
Coherent Accounts (excluding the value of any loan credited to any such Account) credited
in increments of 1% to one or more of the Funds.  All contributions to his Retirement
Account, Profit Sharing Account, After-Tax Account, Before-Tax Account, Trustee Transfer
Account and Rollover Account shall be credited to such Funds in accord with such
election.

(d) Subject to paragraphs (e) and (h) 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 Retirement Account, Profit
Sharing Account, Matching Account, After-Tax Account, Before-Tax Account, Rollover Account
and, effective as of April 1, 1999, each of his Coherent Accounts (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 paragraph (c) 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.

(e) Investment of amounts allocated to a Participant's Retirement
Account and Profit Sharing Account shall be subject to the restrictions set forth in this
paragraph (e).  No amount attributable to the Retirement Account of any Participant shall
be transferred to the Tellabs Stock Fund pursuant to paragraph (d) 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 paragraph (d) 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.

(f) 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.

24

(g) 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.

(h) 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.

(i) 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.

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 Fund 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 the Employer Contribution and
Forfeitures.

(a) Under the Retirement Program.  A Participant shall be
eligible to share in 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) 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.

25

(b) Under the Savings Program.  A Participant who has received
Considered Compensation during a Plan Year as of a day on which all or a portion of the
Before-Tax Contribution and/or Matching Contribution is being allocated shall be eligible
to share in the Before-Tax Contribution and Matching Contribution. A Participant shall be
eligible to share in the Profit Sharing Contribution (together with the forfeitures taken
into account in determining the Profit Sharing Contribution) under Section 3.3(a)
(Profit Sharing Contribution Under the Savings Program) 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 an Employer as an Eligible Employee.  A Participant
who, during a quarter, retires on or after his Normal Retirement Date, dies or is initially
determined to be totally and permanently disabled in accordance with the Disability Plan,
shall also be eligible to share in the Profit Sharing Contribution under Section 3.3(a) for
said quarter of the Plan Year. The Participants eligible to share in the Profit Sharing
Contribution for a given Plan Year under Section 3.3(b) (Profit Sharing Contribution Under
the Savings Program) shall be as the Board of Directors shall determine in connection with
its determination of the amount of the Profit Sharing Contribution to be made under Section
3.3(b).

(c) A Participant eligible to share in the Retirement Contribution
and/or Profit Sharing Contribution pursuant to the above paragraphs (a) and/or (b) shall
for purposes of such paragraphs be referred to 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 Contribution made on behalf of a Participant on a payroll period basis shall be
allocated to the Matching Account of such Participant as soon as practicable after the
Trustee receives such contribution.

5.7 Allocation of Retirement Contribution.  As of the last day of
each quarter 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 Section 5.4(a) (Eligibility to
Share in Employer Contribution and Forfeiture) 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.

26

5.8 Allocation of Profit Sharing Contribution.  As of the last
day of each quarter of a Plan Year, the Profit Sharing Contribution (together with the
forfeitures taken into account in determining the Profit Sharing Contribution) under
Section 3.3(a) (Profit Sharing Contributions Under the Savings Program), shall be
allocated among the Profit Sharing Accounts of all Eligible Participants under
Section 5.4(b) (Eligibility to Share in Employer Contribution and Forfeitures) 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.  As
of the last day of each Plan Year, the portion of the Profit Sharing Contribution under
Section 3.3(b)(Profit Sharing Contributions Under the Savings Program), if any, to be
allocated for the Plan Year shall be allocated among the Profit Sharing Accounts of all
Eligible Participants under Section 5.4(b) in the manner prescribed by the Board of
Directors with respect to such Profit Sharing Contribution.

5.9 Crediting Accounts.

(a) All contributions or Rollover Contributions 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 Committee shall also establish and maintain a Segregated Loan
Fund with respect to each loan made to a Participant pursuant to Sections 7.11 (Loans).
The Participant's Segregated Loan Fund 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 Fund shall be promptly charged to the Segregated Loan
Fund 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).

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

5.11 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 Eligible
Participant and each other Participant who has made Before-Tax Contributions during the
Plan Year, there shall be computed a Maximum Annual Addition, which shall be the lesser
of

27

(i) 25% of his Section 415 Compensation for the Plan Year; or

(ii) the Defined Contribution Dollar Limitation for the Plan Year.

(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:

(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 for such Plan year.  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 the amount equal to
the sum of the reductions in the Tentative Employer Contribution allocable to the Accounts
of Participants pursuant to subsection (b) above.

28

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, After-Tax Account, Rollover Account, Coherent Before-Tax Account
and Coherent Rollover Account plus any of the Participant's Before-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 his Retirement Account, Post-1992 Profit Sharing
Account and Coherent Employer 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 shall die while in the
employ of the Employer or an Affiliate, his Retirement Account, Post-1992 Profit Sharing
Account and Coherent Employer 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 Social Security Disability
Plan while in the employ of the Employer or an Affiliate and his employment shall have
terminated, his Retirement Account, Post-1992 Profit Sharing Account and Coherent Employer
Account shall become nonforfeitable.

6.5 Vesting.  A Participant's interest in his Accounts, other
than his Retirement Account and Post-1992 Profit Sharing, 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.

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
(Distribution), 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.

29

6.7 Treatment of Forfeitures.

(a) Upon termination of a Participant's employment with the Employer 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 5.7 (Allocation of Retirement Contribution) and 5.8
(Allocation of Profit Sharing Contribution), as applicable, at the end 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 5.8 (Allocation of Profit Sharing Contribution)
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
for as of such date or, to the extent such forfeitures are insufficient, shall require a
supplemental contribution from the Employer.

30

ARTICLE 7

Distributions

7.1 Commencement and Form of Distributions.

(a) Subject to Section 7.1(f) below, distribution of a
Participant's Accounts in the Trust Fund following termination of employment with the
Employer and all Affiliates shall commence on or as soon as practicable after the first to
occur of:

(i) the date set forth in the Participant's request for distribution;
provided that (1) the Administrative Committee has notified the Participant of the
availability of such distribution, including an explanation of the optional forms of
distribution available under the Plan, in a manner that would satisfy the notice
requirements of Section 1.411(a)-11(c) of the income tax regulations, and
(2) such notification is given no less than 30 days and no more than 90 days prior to
the distribution date requested by the Participant; provided, further, that such
distribution may commence less than 30 days after the date the notice required under
Section 1.411(a)-11(c) of said regulations is given, provided that:

(A) the Administrative Committee clearly informs the Participant that
the Participant has a right to 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), and

(B) the Participant, after receiving the notice, affirmatively elects a
distribution; or

(ii) 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
Employer and all Affiliates, unless the Participant has requested to defer the distribution
to a later date; provided that any such deferral shall not be to a date which is after the
Required Beginning Date.

(b) Subject to Section 7.1(f) below, if a Participant is employed
with the Employer or an Affiliate on the last day of the Plan Year in which the Participant
attains age 70-1/2, distribution of a Participant's Accounts in the Trust Fund shall
commence on the April 1 of the Plan Year following the Plan Year during which the
Participant attains age 70-1/2, unless the Participant has deferred the right to such
distribution by filing a written deferral (on a form supplied by the Administrative
Committee for such purpose) with the Administrative Committee on or before such date
(December 31, 1997 with respect to distributions otherwise required by April 1, 1997).  A
Participant who has filed a deferral pursuant to this paragraph (b) may request
distribution of his Accounts to commence on any subsequent December 31, or such other
dates as the Administrative Committee may provide.  The Participant's right to request
distribution pursuant to this paragraph shall be in addition to any rights to request
distributions set forth in Sections 7.10 (Distribution of Participant's After-Tax Account
and Rollover Account) and 7.12 (Withdrawals Prior to Termination of Employment and After
Age 59-1/2).  A Participant's request to begin distribution pursuant to the previous
sentence shall be made to the Administrative Committee on a form supplied for such purpose
by the Administrative Committee.  Notwithstanding the foregoing, no required distributions
shall be made, deferral election required or subsequent distribution request permitted
under this Section 7.1(b) with respect to any Participant who attains age 70-1/2 in or
after calendar year 1999.

31

(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.

(d) Subject to Section 7.1(e) below, the Accounts in the Trust Fund
distributable to any Participant, other than the Retirement Account, shall be distributed
in one of the following ways as the Participant or beneficiary may elect and in accordance
with applicable laws and regulations:

(i) by payment in one lump sum to the Participant or beneficiary or, if
permitted, by direct rollover in accordance with Section 7.14 (Eligible Rollover
Distributions); or

(ii) in substantially equal monthly, quarterly, semi-annual or annual
installments to the Participant or beneficiary which, except for the final payment, shall
not be less than $100.

(e) The Retirement Account and Coherent Accounts distributable to a
Participant shall be distributed pursuant to Section 7.2 (Qualified Joint and Survivor
Annuity) and 7.3 (Surviving Spouse Survivor Annuity - Retirement 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 Section 7.1(d) above.

(f) Any method or form of distribution to the Participant under this
Section 7.1 shall be designed to pay to the Participant the value of his Accounts over
a period not to exceed his life expectancy or the joint life expectancy of the Participant
and his Individual Beneficiary.  The life expectancy of a Participant and the joint life
expectancy of a Participant and his Individual Beneficiary shall be determined in
accordance with applicable law and regulations; provided that the life expectancy of a
Participant or his spouse shall be redetermined annually.  In no event shall the amount
distributable in any year be less than the amount determined in accordance with the minimum
distribution incidental benefit requirements of Treasury Regulation
Section 1.401(a)(9)-2.

(g) 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.

(h) Notwithstanding anything in this Section 7.1 to the contrary,
if following termination of employment with the Employer and all Affiliates the present
value of the nonforfeitable portion (i) of the Participant's Retirement Account does not
exceed $5,000, or (ii) of the remainder of his Accounts does not exceed $5,000, the
Administrative Committee shall direct the Trustee to distribute such amount of the
Retirement Account and/or of such other Accounts, respectively, in a lump 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 with respect to such Accounts, unless such
distribution constitutes an Eligible Rollover Distribution, in which case such individual
may elect to have such distribution made as a direct rollover pursuant to
Section 7.14 (Eligible Rollover Distribution) in lieu of distribution to such
individual.  If the present value of the Retirement Account, or of the remainder of the
Accounts, respectively, at the time of distribution under this Section 7.1 to the
individual so entitled exceeds $5,000, then the present value of the Retirement Account, or
of the remainder of the Accounts, respectively at any subsequent time shall be deemed to
exceed $5,000 and therefore shall not be subject to immediate distribution under this
Section 7.1(h).  Any Participant whose nonforfeitable portion of his Retirement Account,
Post-1992 Profit Sharing Account or Coherent Employer Account is 0% shall be deemed to have
received a lump sum payment upon termination of employment.

32

(i) In the event a Participant entitled to a distribution is reemployed
before the Participant's lump sum or final installment is paid, distributions will be
suspended until the Participant again qualifies for a distribution.

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

(a) Distributions from a Participant's Retirement Account and 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.

(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 and Coherent Accounts determined on the
Valuation Date preceding the date of purchase.  Any such annuity contract shall be
non-assignable and non-commutable 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) A Participant may, within 90 days before his Annuity Starting Date
(the "Election Period"), 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 election may be revoked at any
time during the Election Period and if so revoked the Participant's benefit shall
automatically be paid in the form of a Qualified Joint and Survivor Annuity unless he again
elects within the Election Period not to receive his benefit in such form.  Elections and
revocations may continue to be made under this Section within the Election Period.

33

(d) The Administrative Committee shall furnish each Participant a
general written explanation 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 a reasonable period before
the Participant's Annuity Starting Date.

(e) Any election under subsections 7.1 (Commencement and For of
Distributions), 7.2(c), 7.3(d) (Surviving Spouse Survivor Annuity - Retirement Account and
Coherent Accounts), and 7.5(a) (Beneficiaries), with respect to the Participant's
Retirement Account and Coherent Accounts, must have the consent of the Participant's spouse
to be effective unless, at the time of filing such election, the Participant established to
the satisfaction of the Administrative Committee that the consent of the spouse could not
be obtained because there is no spouse, such spouse could not be located or by reason of
such other circumstances as may be prescribed by regulations.  Any consent (or
establishment that the consent could not 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 the designation of the specific
non-spouse beneficiary, including any class of beneficiary or any contingent beneficiary,
to receive the Participant's Accounts in the Trust Fund in the event of the Participant's
death, and shall be irrevocable with respect to such form and beneficiary designation.

(f) 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 Section 7.3 (Surviving Spouse Survivor
Annuity - Retirement Account) or 7.4 (Distributions to Beneficiaries).

7.3 Surviving Spouse Survivor Annuity - Retirement Account and
Coherent Accounts.

(a) The Retirement Account and Coherent Accounts 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 ("Survivor Annuity") unless such Participant has
elected not to have benefits paid in the form of a Survivor Annuity pursuant to subsection
(d) below or the surviving spouse elects otherwise pursuant to subsection (c) below.

(b) Benefits payable in the form of a 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 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 non-assignable and non-commutable.  Delivery of any such contract shall be in full
satisfaction of the rights of the Participant's spouse.

34

(c) 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 and Coherent Accounts in one lump sum by filing an
election with the Administrative Committee at such time and in such manner as the
Administrative Committee shall provide.

(d) A Participant may elect not to have a Survivor Annuity paid to his
surviving spouse.  Such election may be made at any time during the Election Period
described in subsection (e) below.  To be effective any such election shall require the
consent of the Participant's spouse as provided in Section 7.2(e) (Qualified Joint and
Survivor Annuity - Retirement Account).  Any such election may be revoked by the
Participant within the Election Period.

(e) 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 Retirement Account and Coherent Accounts, the
Election Period shall commence on the date of his separation from service with respect to
his Accounts as of such date.

(f) The Administrative Committee shall furnish each Participant a
general written explanation of the terms and conditions of the 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 Participants' right to revoke an election to waive the Survivor
Annuity and the effect of such a 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 his Retirement Account and Coherent Accounts, the
combination described above shall be provided to him no later than one year after his
Termination Date.

7.4 Distributions to Beneficiaries.

(a) Except as otherwise provided in this Section 7.4, the amount of
a deceased Participant's Accounts other than the Retirement Account and Coherent Accounts
which are distributable to a beneficiary shall be distributed in one of the forms described
in Section 7.1(d)(i) or (ii) (Commencement and Form of Distributions), 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 beneficiary shall
elect.

(b) In the event that the distribution of the Participant's Accounts has
begun in accordance with Section 7.1 (Commencement and Form of Distributions), 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.

35

(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 on or before December 31 of
the calendar year immediately following the calendar year of the Participant's death,
unless such Individual Beneficiary is the surviving spouse of the Participant, in which
case such payments must commence on or before the later of (A) December 31 of the
calendar year immediately following the calendar year of the death of the Participant or
(B) December 31 of the calendar year in which the Participant would have attained
age 70-1/2.

(ii) If the Participant's surviving spouse is an Individual Beneficiary
and dies prior to the commencement of benefit payments to such spouse,
Section 7.4(c)(i) shall be applied as if the Participant's death had occurred on the
date of such spouse's death.

(iii) If neither (i) nor (ii) above applies, the balance shall be
distributed no later than December 31 of the calendar year which contains the fifth
anniversary of the death of the Participant.

(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 to any contingent or successor beneficiary at least as rapidly as under the
method of distribution in effect at the time of the beneficiary's death, or if there is no
such contingent or successor beneficiary, in a lump sum to the deceased beneficiary's
estate.

(e) The life expectancy of an Individual Beneficiary shall be determined
in accordance with applicable laws and regulations.  The life  expectancy of a surviving
spouse shall be redetermined annually.

7.5 Beneficiaries.

(a) Except as otherwise provided in this Section 7.5, the
distributable balance of a deceased Participant's Accounts shall be paid to his surviving
spouse.

36

(b) The Accounts in the Trust Fund which are distributable by reason of
a Participant's death, and are not distributable as a Survivor Annuity to the Participant's
surviving spouse pursuant to Section 7.3 (Surviving Spouse Survivor Annuity -
Retirement Account and Coherent 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 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 not be required if, at the time of
filing such election, the Participant established to the satisfaction of the Administrative
Committee that the consent of the Participant's spouse could not be obtained because there
is no spouse, the spouse could not be located or by reason of such other circumstances as
may be prescribed by regulations.  Any consent (or establishment that the consent could not
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.

(i) If the beneficiary, having survived the Participant, shall die prior
to the final and complete distribution of the Participant's Accounts, then the
distributable portion of said Accounts shall be paid:

(A) to the contingent or successive beneficiary named in the most recent
effective beneficiary designation filed by the Participant in accordance with such
designation; or

(B) 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 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 Sections 7.2(c) (Qualified Joint and Survivor Annuity - Retirement Account and
Coherent Accounts) or 7.5 (Beneficiaries) by the Participant's spouse; and (c) filed
with the Administrative Committee.

37

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 Sections 5.8 (Allocation
of Retirement Contribution) and Section 5.9 (Allocation of Profit Sharing
Contribution).  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 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 date of distribution.

7.10 Distribution of Participants' After-Tax Account, Rollover
Account and Coherent Rollover Accounts.  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 and the Participant's Coherent Rollover Account.

(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

(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.

38

(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 or by Section 5.2(h) (Common 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 and
earnings on the pre-1987 After-Tax sub-account;

(ii) contributions allocated to the post-1986 After-Tax sub-account and
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 shall be subject to the provisions of Section 7.2
(Qualified Joint and Survivor Annuity - Retirement Account and Coherent Accounts.)

(h) Any distribution from a Participant's Rollover Account and Coherent
Rollover Account shall be deemed to be made first from the Rollover Account and then from
the Coherent Rollover Account.

7.11 Loans

(a) Upon the submission by the Participant of a written loan
application form as prescribed by the Administrative Committee, the Administrative
Committee shall grant a loan to such Participant from his Accounts other than the
Retirement Account; provided, however, that 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.

(b) The amount of any loan shall not be less than $1,000 and shall not
exceed 50% of the amount which the Participant would be entitled to receive from 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 date of such authorization; provided, however, that the
Administrative Committee may, in its sole discretion, approve a loan in an amount less than
$1,000 in the event that a Participant demonstrates financial hardship; provided further,
that the amount of such loan shall not exceed $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.

(c) 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
Section 3(14) of ERISA, so long as the making of such loans does not discriminate in
favor of Highly Compensated Employees.

39

(d) 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 a rate
of interest on the unpaid principal thereof 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.

(e) Loans shall be repaid by the Participant by payroll deduction (in
after-tax dollars) or any other method approved by the Administrative Committee which
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.  This provision
does not apply to 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.  Such loans must be repaid over a period not exceeding fifteen years in
accordance with procedures established by the Administrative Committee from time to time.

(f) Loans shall be an asset of the Participant's Accounts, shall be made
from the respective Accounts invested in the separate Funds and shall be treated in the
manner of a segregated loan account.  The Accounts from which the loan is deemed made and
the amounts withdrawn from the separate Funds to fund the loan shall be determined pursuant
to procedures prescribed by the Administrative Committee and subject to the limitations or
restrictions thereon imposed by the sponsor(s) of the respective Funds or by
Section 5.2(h) (Common Fund).  Upon the failure of a Participant to make loan payments
or some other event of default set forth in the promissory note, upon the Participant's
termination of employment, or upon termination of the Plan pursuant to Section 11.2
(Termination), such loan shall become due and payable, and the unpaid balance of such loan,
including any unpaid interest and loan fee, may in the Administrative Committee's
discretion be charged against the Participant's segregated loan account; provided, that any
unpaid balance of such loan, including any unpaid interest and loan fee, shall be charged
against the Participant's segregated loan account and, if necessary, other assets of his
Accounts, before any distribution to the Participant.

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,
Coherent Before-Tax Account and Coherent Rollover 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, 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 Participants' After-Tax Account, Rollover
Accounts and Coherent Rollover Account) and Section 7.13 (Pre-59-1/2 Coherent Account
Withdrawals; Hardship Withdrawals).

40

(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;

(iv) Matching Account;

(v) Before-Tax Account;

(vi) Coherent Before-Tax Account;

(vii) 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(h) (Common Fund).

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

(a) A Coherent Participant who has completed at least five (5) Years of
Services may elect to withdrawal all or a portion of his Coherent Employer Account and
Coherent Rollover Account.  Withdrawals made pursuant to this Section 7.13(a) shall be
charged against the Coherent Participants 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 and Coherent Rollover
Account) and Section 7.12 (Withdrawals Prior to Termination and of Employment and After Age
59-1/2).

(b) A Participant who has not attained age 59-1/2 may elect to withdraw
his Before-Tax Contributions and Employer 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, Coherent Before-Tax Account and Coherent Rollover
Account (but only to the extent of the pre-tax contributions made and pre-1989 earnings
allocated thereto) upon the determination by the Administrative Committee that he has
incurred a financial hardship. 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 make a
determination of "financial hardship" if (i) the distribution is to be made
on account of an immediate and heavy financial need of the Participant and (ii) the
conditions of paragraph (d) are met.

(c) 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
relevant facts and circumstances.  A distribution is on account of an immediate and heavy
financial need if it is made on account of:

41

(i) medical expenses described in Section 213(d) of the Code
previously incurred by the Participant, the Participant's spouse or any dependents of the
Participant (as defined in Section 152 of the Code) or necessary for these persons to
receive medical care described in said Section 213(d);

(ii) costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Participant;

(iii) payment of tuition and related educational fees for the next 12
months of post-secondary education for the Participant or the Participant's spouse,
children or dependents (as defined in Section 152 of the Code);

(iv) payments necessary to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage on the Participant's principal
residence; or

(v) 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 Section 152 of the Code), 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.

(d) A distribution will be deemed by the Administrative Committee to be
necessary to satisfy an immediate and heavy financial need of a Participant only if the
Participant reasonably demonstrates that all of the following requirements are
satisfied:

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

(ii) the Participant has obtained all distributions (other than hardship
distributions) and all nontaxable loans currently available under all of the plans
maintained by the Employer; and

(iii) the Participant will not make any Before-Tax Contributions for
twelve months after receiving the hardship distribution; and

(iv) notwithstanding the limitations set forth in Section 3.5
(Limitations on Before-Tax Contributions Under the Savings Program), the Participant will
restrict in all plans maintained by the Company his Before-Tax Contributions in his next
taxable year following the taxable year of the hardship distribution to an amount not in
excess of the applicable limit under 402(g) of the Code, minus the amount of his Before-Tax
Contributions for the taxable year of the hardship distribution.

(e) Any withdrawals under this Section 7.13 shall not reduce the
non-forfeitable portion of the Participant's Accounts below an amount equal to the amount
of any unpaid loan made pursuant to Section 7.11 (Loans).

(f) Withdrawals made pursuant to this Section 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 or by Section 5.2(h) (Common Fund).

42

(g) Withdrawals made pursuant to this Section 7.13 shall be charged
against the Participant's Accounts in the order provided in Section 7.12(b)
(Withdrawals Prior to Termination of Employment and After Age 59-1/2).

(h) 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 and Coherent Accounts).

7.14 Eligible Rollover Distributions.

(a) Notwithstanding any provisions of the Plan to the contrary that
would otherwise limit a distributee's election under this Section, a distributee (as
defined in Section 7.14(b) below) 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 (as defined in Section 7.14(c) below).

(b) For purposes of Section 7.14(a) above, 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.

(c) For purposes of Section 7.14(a) above, 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.

43

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.

(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),
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 shall be final and binding on
Participants, beneficiaries and others.

44

ARTICLE 8

Top-Heavy Plan Requirements

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

(a) 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 Section 415
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(a)(8), 402(h) or 403(b).  The "Determination Period" is the
Plan Year containing the Top-Heavy Determination Date and the 4 preceding Plan Years.

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:

45

(i) If the Employer maintains one or more defined contribution plans 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
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 (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 (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 (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 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) "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.

46

(e) "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 (i) to
meet the requirements of Code Section 401(a)(4) or 410.

(f) "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.

(g) "Present Value" shall be based on an interest assumption
of 5% and a post-retirement mortality assumption based on the UP-1984 Mortality Table.

(h) "Employer" means the Employer and all Affiliates except
for purposes of determining ownership under Code Section 416(i)(1).

8.2 Top-Heavy Plan Requirements.

(a) Except as otherwise provided in (ii) and (iii) below, the Employer
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
Section 415 Compensation or in the case where the Employer has no defined benefit plan
which designates this Plan to satisfy Code Sections 401(a)(4) or 410, the largest
percentage of Employer contributions and forfeitures, as a percentage of the Key Employee's
Section 415 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 (A) the Participant's failure to complete 1,000
Hours of Service (or any equivalent provided in the Plan), (B) the Participant's
failure to make mandatory employee contributions to the Plan, or (C) Section 415
Compensation less than a stated amount.

(i) The provision in (i) 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.

(ii) The provision in (i) 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 (i) above.

(b) 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).

(c) 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:

47

	
Years of Service
	
Nonforfeitable Percentage

	
Less than 2
	
0

	
2 but less than 3
	
20

	
3 but less than 4
	
40

	
4 but less than 5
	
60

	
5 or more
	
100

The minimum vesting schedule applies to all benefits within the meaning
of Code Section 411(a)(7) except those attributable to after-tax contributions,
including benefits accrued before the effective date of Code Section 416 and benefits
accrued before the Plan became Top-Heavy.  Further, no reduction in vested benefits may
occur in the event the Plan's Top-Heavy status 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 Employer contributions and forfeitures will be determined without regard to
this Section.

48

ARTICLE 9

Powers and Duties of Committees

9.1 Appointment of Committees.

(a) The Board of Directors shall name an Administrative Committee (the
"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.

(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 shall be paid by the
Trustee out of the principal or income of the Trust Fund except to the extent the Employer
agrees to pay such expenses in whole or in part.  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.

(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.

49

(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 by Employer).

(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
or pursuant to the Plan or Trust Agreement.

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

50

(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 shall
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.

(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) 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).

51

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 Section 5.2 (Common Fund) relating to the establishment
and investment of assets among the Investment Funds, Section 9.3 (Powers and Duties of the
Investment Committee and (c) below relating to management of assets for which the
Investment Committee serves as investment advisor and (c) below relating to the authority
of Investment Managers, 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.

(d) The term "Investment Manager" shall mean:  (i) a
registered investment adviser under the Investment Advisers Act of 1940; (ii) a bank
as defined in the Investment Advisers Act of 1940; or (iii) an insurance company
qualified under the laws of more than one state to manage, acquire and dispose of plan
assets.

52

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, a letter or other written instrument signed in the name of the Company by any
officer thereof shall constitute a notification therefrom; 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.

(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.

53

 

 

54

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 (herein referred to as the "Trust" or the
"Trust Fund") 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
an 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; and

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

(c) at the termination of the Plan, any amounts with respect to its
employees remaining in the Excess Forfeiture Suspense Account; and

(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.

55

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 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
are subject to the following restrictions:

(a) Except as provided in Section 10.4 (Reversion to 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 time 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, within such
reasonable period after the adoption of such an amendment as the Company may designate, to
have the nonforfeitable percentage of his Employer Account and Matching Account computed
under the Plan without regard to such amendment.  The period for making such election shall
expire no earlier than 60 days after the latest of the following dates:  (i) the date
the Plan amendment is adopted, (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.  Notwithstanding the foregoing, no election need be offered to a
Participant whose nonforfeitable percentage of his Employer Account and Matching Account
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
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).

56

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 Determination Date for
all Participants whose Determination 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.

(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 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 (as defined in Code Section 408(k)), the Accounts of
such Participant shall be transferred to such other plan unless the distributable balance
of such Accounts does not exceed $5,000 or the Participant consents to distribution of such
Accounts.  If the vested balance of a Participant's Accounts at the time of any
distribution to the Participant exceeds $5,000, then the vested balance of a Participant's
Accounts at any subsequent time shall be deemed to exceed $5,000.  Upon completion of such
liquidation and distribution, the Trust shall finally and completely terminate.  In the
event the Committee is no longer in existence, the actions to be taken by the Committee
pursuant to this Section shall be taken by the Trustee.

57

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 an Employer any right to remain in the employ of
the 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 Rights of Participants and Others.

(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
Section 414(p) of the Code.  Effective September 1, 1997, 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 lump
sum as soon as administratively practicable after the Administrative Committee has
determined that the order is qualified under Code Section 414(p).

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.

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 of a deceased Participant 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.

58

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

59

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 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 either of the Committees 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 by Employer).

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.

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.

60

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.

61

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
Section 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; any of the following; provided that (ii) 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 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
Section 14.

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.

62

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 twenty-five percent
(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.

63

APPENDIX A TO THE TELLABS ADVANTAGE PROGRAM

APPLICABLE TO FORMER PARTICIPANTS IN THE

STEINBRECHER CORPORATION SALARY DEFERRAL PLAN

This Appendix A sets forth provisions applicable to Participants
in the Plan who were employees of Steinbrecher Corporation (now known as "Tellabs
Wireless, Inc.") on April 17, 1996, who became Participants in the Plan on April
17, 1996 or July 1, 1996, and/or whose assets and liabilities were subsequently transferred
from the Steinbrecher Corporation Salary Deferral Plan (the "Steinbrecher Plan")
to the Trust as a result of the merger of the Steinbrecher Plan into the Plan ("Former
Steinbrecher Participants").  Except to the extent expressly modified by this Appendix
A, the provisions of the Plan, including the Appendices thereto, shall apply to the
participation of such Former Steinbrecher Participants.  The provisions of this Appendix A
shall, unless provided otherwise, be effective as of April 17, 1996.

A.1 A new definition of Steinbrecher Plan shall be added reading
as follows:

"Steinbrecher Plan" means the Steinbrecher Corporation
Salary Deferral Plan as in effect on June 30, 1996, and as amended from time to time
thereafter up to and including its merger into the Plan."

A.2 Section 2.1A shall be added reading as follows:

"2.1A  Special Provision Applicable to Former Steinbrecher
Participants. Notwithstanding the foregoing provisions of Section 2.1 (Eligibility
Requirements), a Former Steinbrecher Participant who is an Eligible Employee on April 17,
1996 shall become a Participant as of that date with respect to the ability to receive an
allocation of Retirement Contributions and Profit Sharing Contributions under
Section 5.4 (Eligibility to Share in the Employer Contribution and Forfeitures) of the
Plan.  A Former Steinbrecher Participant who is an Eligible Employee on July 1, 1996 shall
become a Participant as of that date with respect to the ability to make Before-Tax
Contributions and to receive Matching Contributions under Section 3.2 (Before-Tax
Contribution) of the Plan.  Any other Eligible Employee of Tellabs Wireless, Inc. shall
become a Participant 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; provided, however, that any person who has attained age 21 and
has completed 1,000 Hours of Service in his first nine months of continuous employment
shall be eligible to participate on the Entry Date coinciding with or next following the
end of such 9-month period."

A-1

A.3 Section 3.4A shall be added reading as follows:

"3.4A  Profit Sharing Contribution Under the Savings Program
Applicable to Former Steinbrecher Participants for the Quarter Ended June 30, 1996.
Subject to the provisions of Section 3.1 (Employer Contributions), the Employer shall
pay to the Trustee for the calendar quarter ending June 30, 1996 an amount which, together
with the forfeitures allocable for such calendar quarter, shall be equal to .4%
(four-tenths of one percent) of the Considered Compensation of each Former Steinbrecher
Participant for the period beginning April 17, 1996 and ending June 30, 1996.  The Employer
shall also pay to the Trustee for such calendar quarter such additional amounts, if any, as
the Board of Directors shall determine.  Such contributions are, collectively, known as the
`Profit Sharing Contribution'".

A.4 Section 3.6A shall be added reading as follows:

"3.6 Retirement Contribution Under the Retirement Program
Applicable to Former Steinbrecher Participants for the Quarter Ended June 30, 1996.
Subject to the provisions of Section 3.1 (Employer Contributions), the Employer shall
pay to the Trustee for the calendar quarter ending June 30, 1996 an amount which, together
with the forfeitures allocable for such calendar quarter, shall be equal to 3.6% (three and
six-tenths percent) of the Considered Compensation of each Former Steinbrecher Participant
for the period beginning April 17, 1996 and ending June 30, 1996.  Such contribution is
known as the `Retirement Contribution'".

A.5 Section 6.6A shall be added reading as follows:

"6.6A  Recognition of Service under the Steinbrecher Plan.
Solely with respect to Former Steinbrecher Participants, such period or periods of
employment shall include any period or periods previously credited to that employee under
the Steinbrecher Plan."

A.6 Section 11.5A shall be added reading as follows:

"11.5A  Merger.  Effective as of the close of June 30, 1996
or such later date as the Committee may, in its sole discretion, determine, the
Steinbrecher Plan shall be merged into the Savings Plan portion of the Plan with all
accrued benefits under the Steinbrecher Plan becoming accrued benefits under this Plan and
such amounts shall be allocated among the Profit Sharing, Matching and Before-Tax Accounts
of such Participants as the Committee shall determine.  To the extent required by law or
otherwise appropriate, the provisions of this Appendix A and the applicable provisions of
the Plan shall be deemed to apply retroactively to the Steinbrecher Plan."

A-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}]]