UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
[X] AMENDMENT TO QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-9692
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TELLABS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 36-3831568
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(State of Incorporation) (I.R.S. Employer Identification No.)
4951 Indiana Avenue, Lisle, Illinois 60532
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (708) 969-8800
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
None N/A
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Securities registered pursuant to Section 12 (g) of the Act:
Common shares, with $ .01 par value
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(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
YES [X] NO[ ]
On March 29, 1996, 88,919,761 common shares of Tellabs, Inc. were
outstanding.
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TELLABS, INC.
INDEX
Note: This amended Form 10-Q is being refiled due to computer error
with regard to the original Form 10-Q filed by Tellabs, Inc. on
May 9, 1996.
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Comparative
Balance Sheets 3
Condensed Consolidated Comparative
Statements of Earnings 4
Condensed Consolidated Comparative
Statements of Cash Flow 5
Notes to Condensed Consolidated Comparative
Financial Statements 6
Item 2. Management's Discussion and Analysis 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURE 10
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TELLABS, INC.
CONDENSED CONSOLIDATED COMPARATIVE BALANCE SHEETS
(Unaudited)
Mar. 29, Dec. 29,
1996 1995
Assets --------- ---------
Current assets (In thousands)
Cash and cash equivalents $99,812 $92,485
Investments in marketable securities 75,721 69,751
Accounts receivable, less allowance 125,839 127,565
Inventories
Raw materials 29,745 31,302
Work in process 13,124 11,694
Finished goods 23,074 24,719
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65,943 67,715
Other current assets 9,433 8,854
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Total Current Assets 376,748 366,370
Property, plant, and equipment 207,205 201,441
Less accumulated depreciation 87,592 84,419
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119,613 117,022
Goodwill 41,627 44,958
Other assets 22,822 23,701
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$560,810 $552,051
Liabilities ========= =========
Current Liabilities
Accounts payable $28,349 $30,097
Accrued liabilities 30,697 42,183
Income taxes 22,111 26,284
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Total Current Liabilities 81,157 98,564
Long-term debt 2,850 2,850
Other long-term liabilities 7,264 6,179
Deferred income taxes 11,051 11,225
Stockholders' Equity
Preferred stock, with $.01 par value-
5,000,000 shares authorized, no shares issued - -
Common stock, with $.01 par value -
200,000,000 shares authorized 88,919,761
shares issued and outstanding at March 29, 1996
and 88,798,372 at December 29, 1995 889 888
Additional paid-in capital 73,834 72,385
Cumulative foreign currency translation adjustment 1,167 7,842
Unrealized net holding (losses) gains on
available-for-sale securities (599) 48
Retained earnings 383,197 352,070
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Total Stockholders' Equity 458,488 433,233
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$560,810 $552,051
========= =========
The accompanying notes are an integral part of these statements.
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TELLABS, INC.
CONDENSED CONSOLIDATED COMPARATIVE STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended
March 29, March 31,
1996 1995
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(In thousands, except
per share data)
Net sales $172,256 $142,212
Cost of sales 74,482 62,943
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Gross Profit 97,774 79,269
Marketing, general & administrative expense 33,613 27,670
Research and development expense 21,602 19,788
Goodwill amortization 611 665
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Total Operating Expense 55,826 48,123
Operating Profit 41,948 31,146
Interest income (1,975) (1,126)
Interest expense 28 31
Other (income) expense, net (572) (70)
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Earnings before income taxes 44,467 32,311
Income taxes 13,340 9,370
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Net Earnings $31,127 $22,941
========= =========
Earnings per share * $0.34 $0.25
========= =========
Average number of shares of
common stock outstanding * 92,020 91,302
* 1995 share amounts are restated to give effect to the two-for-one
stock split effective May 19, 1995.
The accompanying notes are an integral part of these statements.
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TELLABS, INC.
CONDENSED CONSOLIDATED COMPARATIVE STATEMENTS OF CASH FLOW
(Unaudited)
For The Three Months Ended
March 29, March 31,
1996 1995
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(In thousands)
Cash Flows from Operating Activities:
Net earnings $31,127 $22,941
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 6,461 5,548
Provision for doubtful receivables 390 289
Deferred income taxes (457) 2,632
Gain on sale of long-term investment ---- (929)
Net (increase) decrease in current assets:
Accounts receivable (467) 2,389
Inventories 536 (7,488)
Other current assets 36 1,185
Net decrease in current liabilities:
Accounts payable (1,527) (1,336)
Accrued liabilities (10,945) (4,114)
Income taxes (3,527) (1,452)
Net increase in other assets (325) (1,784)
Net increase in other liabilities 1,125 623
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Net Cash Provided by Operating Activities 22,427 18,504
Cash Flows from Investing Activities:
Acquisition of property, plant and equipment, net (9,371) (7,627)
Payments for purchases of marketable securities (39,622) (25,597)
Proceeds from sales of marketable securities 33,005 1,364
Proceeds from sale of long-term investment ---- 3,429
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Net Cash Used by Investing Activities (15,988) (28,431)
Cash Flows from Financing Activities:
Common stock sold through stock-option plans 1,450 3,943
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Net Cash Provided by Financing Activities 1,450 3,943
Effect of exchange rate changes on cash (562) 1,795
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Net increase (decrease) in cash and cash equivalents 7,327 (4,189)
Beginning of period cash and cash equivalents 92,485 51,460
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End of period cash and cash equivalents $99,812 $47,271
========= =========
Supplemental Disclosures:
Interest paid $32 $26
Income taxes paid $17,550 $4,844
The accompanying notes are an integral part of these statements.
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TELLABS, INC.
NOTES TO CONDENSED CONSOLIDATED COMPARATIVE FINANCIAL STATEMENTS
1. Financial Information:
The unaudited financial information reflects all adjustments (consisting
only of normal recurring accruals) which are, in the opinion of
management, necessary for a fair presentation of the statements
contained herein. Certain reclassifications have been made in the 1995
financial statements to conform to the 1996 presentation.
2. Basis of Presentation:
These financial statements are presented in accordance with the
requirements of Form 10-Q and consequently may not include all
disclosures normally required by generally accepted accounting
principles or those normally reflected in the Company's Annual Report on
Form 10-K. Accordingly, the financial statements and notes herein
should be read in conjunction with the financial statements and related
notes in the Company's Form 10-K for the year ended December 29, 1995.
3. Subsequent Event:
On April 17, 1996, Tellabs Operations, Inc., a wholly owned subsidiary
of Tellabs, Inc. (the "Company") acquired all of the outstanding
shares of Steinbrecher Corporation ("Steinbrecher") located in
Burlington, Massachusetts pursuant to a Merger Agreement entered into on
March 11, 1996. Steinbrecher supplies wideband base station products
for digital cellular and wireless data applications. Effective April
19, 1996, Steinbrecher's name was changed to "Tellabs Wireless, Inc."
("Tellabs Wireless") which will operate within the Tellabs Wireless
Systems division, a division of Tellabs International, Inc. The Company
intends to continue the Tellabs Wireless business and to coordinate the
development and marketing of its products with those of the Tellabs
Wireless Systems division.
The consideration paid for the purchase of all of the outstanding shares
of Steinbrecher was approximately $76 million in cash and was determined
through arms-length negotiations. The purchase price was paid with $40
million obtained through a bank loan from Bank of America and the remainder
from the Company's existing cash and cash equivalent balances.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of 1996, the Company's cash, cash equivalents
and marketable securities portfolio increased $13,297,000 to an all-time
high of $175,533,000. The Company's record first quarter earnings of
$31,127,000 were the primary contributor, partially offset by payments
of $11,486,000 to reduce accrued liabilities. Accrued liabilities
decreased from the December 29, 1995 balance due primarily to payments
made during the first quarter for year-end obligations related to
employee compensation programs.
The Company invested the cash provided by operating activities in higher
yielding marketable securities and in property, plant, and equipment.
Investments in property, plant, and equipment (net of disposals and
translation adjustments) totalled approximately $9,400,000. Additions
were made to increase manufacturing capacity at the Company's Texas
facility, with a 41,000 square foot addition and accompanying equipment,
along with worldwide investments in research and development equipment.
The Company currently expects total capital expenditures for 1996 to be
approximately $50,000,000. This amount includes approximately
$10,000,000 of the $33,000,000 planned for the expansion of the
Company's Bolingbrook, Illinois manufacturing and research and
development facility. Construction of the addition is expected to begin
in the second quarter of 1996 with completion scheduled for mid-1997.
The remaining 1996 expenditures are expected to be for manufacturing
capacity and research and development equipment in Finland and Texas.
Net working capital at March 29, 1996 was $295,591,000, compared with
working capital of $267,806,000 at December 29, 1995. The Company's
current ratio at the end of the first quarter was 4.6 to 1. This
increase in working capital was primarily due to the cash generated by
operating activities offset by payments of year end accruals.
Management believes that the existing level of working capital will be
adequate for the Company's liquidity needs related to normal operations
both currently and in the foreseeable future. On April 17, 1996, the
Company obtained bank financing of $40,000,000 to finance a portion of
the acquisition of Steinbrecher and associated expenses. The Company
believes that sufficient resources continue to be available to support
the Company's growth either through currently available cash, through
cash generated from future operations, or through additional short-term
or long-term financing.
RESULTS OF OPERATIONS
Sales for the first quarter of 1996 were a record $172,256,000, up 21.1
percent from the previous first quarter record of $142,212,000 set in
1995. Sales growth during the first quarter of 1996 was driven
primarily by a 66 percent increase in sales of the SONET-based TITAN
(a registered trademark of Tellabs Operations, Inc.) 5500 digital
cross-connect system. Martis DXX (a trademark of Martis Oy) system
sales reached an all time quarterly high.
Net earnings for the first quarter of 1996 were $31,127,000, up 35.7
percent from $22,941,000 a year earlier. Earnings per share for the
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current quarter were 34 cents compared with 25 cents for the first
quarter of 1995. The 1995 earnings per share amount has been restated
to give effect to the two-for-one stock split effective May 19, 1995.
The increase in earnings for the first quarter of 1996 was primarily the
result of the aforementioned sales growth, a decrease in operating
expenses as a percentage of sales, and an increas in the gross profit
margin. Total operating expenses of $55,826,000 for the first quarter
of 1996 were 32.4 percent of sales compared to $48,123,000, or 33.8
percent of sales, for the same period in 1995. Increased headcount and
the related expenses necessary to support and service domestic and
international products were the primary reasons for this increase in
operating expenses. The increase in gross profit margin from 55.7
percent for the first quarter of 1995 to 56.8 percent in the first
quarter of 1996 was realized through continued efficiencies in
manufacturing operations and sales of higher margin products, as volumes
increased.
Interest income contributed $1,975,000 to pre-tax income in the first
quarter of 1996, up 75.4 percent from $1,126,000 in the first quarter of
1995. This increase was due to significantly higher average cash
balances and higher market interest rates. Interest expense was $28,000
for the first quarter of 1996 compared to $31,000 for the first quarter
of 1995. Interest expense for the remainder of 1996 will increase due
to the increase in outstanding debt during the second quarter to
support the acquisition of Steinbrecher.
Other non-operating income was $572,000 for the first quarter of 1996
compared to $70,000 for the first quarter of 1995. Foreign exchange
gains of $411,000 were the primary contributor to 1996's first quarter
other non-operating income. The foreign exchange gains were the
result of the weakness of the Finnish markka against the Swedish krona
and the U.S. dollar. Other non-operating income for the first quarter
of 1995 was primarily the result of a gain on the sale of stock held as
a long-term investment being partially offset by foreign exchange
losses.
The effective tax rate was approximately 30 percent for the first
quarter of 1996 and 29 percent for the first quarter of 1995. The
increase in the effective tax rate for 1996 is reflective of the
increase in TITAN 5500 system sales to the domestic market, where the
tax rate is significantly higher than at our Ireland and Finland
subsidiaries. The 1996 effective tax rate reflects adjustments from the
Federal statutory rate primarily attributable to foreign tax rate
benefits.
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PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(A) Exhibits:
Exhibit 10.12 - Bank of America Promissory Note
Exhibit 10.13 - Stock Bonus Plan
Exhibit 11 - Calculation of Per Share Earnings.
Exhibit 27 - Financial Data Schedule.
(B) Reports on Form 8-K
The Registrant filed a report on Form 8-K on March 11,
1996, to announce its intention to acquire Steinbrecher
Corporation.
The Registrant filed a report on Form 8-K on
May 1, 1996, prior to the filing of this quarterly
report of From 10-Q, with respect to the acquisition of
Steinbrecher Corporation which included financial
statements of Steinbrecher Corporation and pro forma
financial statements of Tellabs, Inc. and subsidiaries as
required by Item 7 of Form 8-K and Rule 3-05(b) of
Regulation S-X.
The Registrant also filed a report on Form 8-K/A on
May 2, 1996. This amended Form 8-K was filed due to a
computer error with regard to the original Form 8-K filed
by the Registrant on May 1, 1996.
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TELLABS, INC.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
TELLABS, INC.
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(Registrant)
s\ J. Peter Johnson
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J. Peter Johnson
Vice President/Controller
& Chief Accounting Officer
May 10, 1996
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(Date)
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Exhibit 10.12
Promissory Note
Chicago, Illinois:
April 17, 1996
On the earlier of April 16, 1997 (the "Termination Date") or
demand, for value received, Tellabs, Inc. (the "Borrower")
hereby promises to pay to the order of BANK OF AMERICA ILLINOIS
(the "Bank"), the principal sum of FIFTY MILLION AND NO/100
DOLLARS ($50,000,000.00) or, if less, the aggregate unpaid
principal amount of all Advances made by the Bank to the
undersigned hereunder. The initial Advance, all subsequent
Advances and all payments made on account of principal will be
recorded by the holder in its records. Capitalized terms used
herein and not otherwise defined herein shall have the meanings given
such terms in the Loan Agreement, hereinafter defined.
The Borrower further promises to pay to the order of the Bank
interest on the aggregate unpaid principal amount of this Note
outstanding from time to time, from the date of this Note until paid in
full, at the rates per annum which shall be determined in accordance
with the provisions of the Loan Agreement. Accrued interest shall be
payable on the dates specified in the Loan Agreement.
All payments of principal and interest under this Note shall be
made in lawful money of the United States of America in
immediately available funds at the Bank's office at 231 South
LaSalle Street, Chicago, Illinois 60697, or at such other place
as may be designated by the Bank to the Borrower in writing.
This Note is the Note referred to in, and evidences
indebtedness incurred under, a Demand Loan Agreement (as it may
be amended, modified or supplemented from time to time, the
"Loan Agreement"), dated as of April 17, 1996, between the
Borrower and the Bank, to which Loan Agreement reference is made
for a statement of the terms and provisions thereof.
All parties hereto, whether as makers, endorsers or otherwise,
severally waive presentment, demand, protest and notice of
dishonor in connection with this Note.
This Note is governed by the internal laws of the State of
Illinois.
TELLABS, INC.
By: s\ Michael J. Birck
____________________
Michael J. Birck
President and Chief
Executive Officer
By: s\ Peter Guglielmi
____________________
Peter Guglielmi
Chief Financial Officer
1000 Remington Boulevard
Bolingbrook, Illinois 60440
Attention: Mr. Michael J. Birck
President and Chief
Executive Officer
Telephone:
Fax No.:
Exhibit 10.13
TELLABS, INC.
STOCK BONUS PLAN
FOR EMPLOYEES OF STEINBRECHER CORPORATION
I. INTRODUCTION
1.1 Purposes. The purposes of the Tellabs, Inc. Stock Bonus
Plan for Employees of Steinbrecher Corporation (the "Plan") are
(i) to align the interests of the stockholders of Tellabs, Inc.
(the "Company") and its subsidiaries from time to time
(individually a "Subsidiary" and collectively the Subsidiaries")
and the recipients of awards under this Plan by increasing the
proprietary interest of such recipients in the Company's growth
and success, (ii) to advance the interests of the Company by
retaining key employees of Steinbrecher Corporation, a Delaware
corporation in the process of becoming a Subsidiary, and (iii) to
satisfy the Company's obligations under Section 8.2 of the
Agreement of Merger dated as of March 11, 1996, among Tellabs,
Inc., Tiger Merger Co. and Steinbrecher Corporation. For
purposes of this Plan, references to employment by the Company
shall also mean employment by a Subsidiary.
1.2 Certain Definitions.
"Board" shall mean the Board of Directors of the Company.
"Bonus Stock" shall mean shares of Common Stock awarded
under this Plan.
"Bonus Stock Award" shall mean an award to an eligible
employee of a right to receive Bonus Stock under Article II of
this Plan.
"Cause" shall mean any act of deliberate dishonesty with
respect to the Company or any Subsidiary, conviction of a felony,
significant activities harmful to the reputation of the Company
or a Subsidiary, refusal to perform or substantial disregard of
duties properly assigned or significant violation of any
statutory or common law duty of loyalty to the Company or a
Subsidiary.
"Closing Date" means the date on which Steinbrecher
Corporation becomes a Subsidiary.
"Committee" shall mean the Compensation Committee of the
Board of Directors of the Company.
"Common Stock" shall mean the common stock, $.01 par value,
of the Company.
"Company" has the meaning specified in Section 1.1.
"Constructive Discharge" shall mean the voluntary
resignation of a holder of a Bonus Stock Award from employment
with the Company either (i) as a result of a decision by such
holder not to accept a decrease in the rate of his annual salary,
or (ii) as a result of a substantial and unreasonable change in
such holder's responsibilities or working conditions.
"Disability" shall mean the inability of the holder of a
Bonus Stock Award to perform substantially such holder's duties
and responsibilities for a continuous period of at least six
months, as determined by the Committee in its sole discretion.
"Fair Market Value" shall mean the average of the high and
low transaction prices of a share of Common Stock as reported in
the National Association of Securities Dealers Automated
Quotation National Market System ("NASDAQNMS") on the date as of
which such value is being determined, or, if the Common Stock is
not listed on the NASDAQNMS, the average of the high and low
transaction prices of a share of Common Stock on the principal
national stock exchange on which the Common Stock is traded on
the date as of which such value is being determined, or, if there
shall be no reported transactions for such date, on the next
preceding date for which transactions were reported; provided,
however, that if Fair Market Value for any date cannot be so
determined, Fair Market Value shall be determined by the
Committee by whatever means or method as the Committee, in the
good faith exercise of its discretion, shall at such time deem
appropriate.
1.3 Administration. This Plan shall be administered by the
Committee. The Committee shall, subject to the terms of this
Plan, interpret this Plan and the application thereof and
establish rules and regulations it deems necessary or desirable
for the administration of this Plan. All such interpretations,
rules and regulations shall be conclusive and binding on all
parties.
The Committee may delegate some or all of its power and
authority hereunder to the President and Chief Executive Officer
or other executive officer of the Company as the Committee deems
appropriate.
1.4 Eligibility. Participants in this Plan shall consist of the
employees of the Steinbrecher Corporation whose names appear on
Schedule A attached hereto. No other persons shall be eligible
to participate in this Plan.
1.5 Shares Available. Subject to adjustment as provided in
Section 3.3, 20,212 shares of Common Stock shall be available
under this Plan.
II. BONUS STOCK AWARDS
2.1 Bonus Stock Awards. Effective on the Closing Date, the
Company hereby grants Bonus Stock Awards to the eligible persons
whose names are listed on Schedule A hereto. Such grant shall be
evidenced by a notice to such effect sent by the Company to each
such person as soon as practicable following effectiveness of
this Plan.
2.2 Terms of Bonus Stock Awards. Bonus Stock Awards shall be
subject to the following terms and conditions.
(a) Number of Shares and Other Terms. The number of shares
of Common Stock subject to a Bonus Stock Award granted pursuant
to this Plan to an employee shall be the number of such shares
set forth opposite the name of such employee on Schedule A
hereto.
(b) Vesting and Forfeiture. One-half of the number of
shares of Common Stock subject to a Bonus Stock Award shall vest
and be payable on the first anniversary of the Closing Date and
the other half of such number shall vest and be payable on the
second anniversary of the Closing Date, in each case (subject to
Section 2.3(b)) if the holder of such award remains continuously
in the employment of the Company or a Subsidiary until such
anniversary date of the Closing Date. Such holder shall forfeit
the unvested portion of any such shares if such holder does not
remain continuously in the employment of the Company as specified
above, except as otherwise provided in Section 2.3(b).
(c) Share Certificates. Upon the vesting of a portion of a
Bonus Stock Award pursuant to Sections 2.2(b) or 2.3(b), in each
case subject to the Company's right to require payment of any
taxes in accordance with Section 3.2, a certificate or
certificates evidencing ownership of the requisite number of
shares of Common Stock shall be delivered to and in the name of
the holder of such award. Notwithstanding the foregoing, in lieu
of the delivery of shares representing all or a portion of the
vested portion of a Bonus Stock Award, the Committee may, in its
sole discretion, deliver to the holder cash in an amount equal to
the Fair Market Value on the date such shares become vested of
the vested portion of such award less any applicable withholding
as required by Section 3.2.
2.3 Termination of Employment. (a) Terminations Resulting in
Forfeiture. If (i) the employment with the Company of the holder
of a Bonus Stock Award is terminated by the Company by reason of
Cause, (ii) such employment terminates by reason of the holder's
Disability, or death, or (iii) a holder voluntarily terminates
his employment with the Company for any reason other than
Constructive Discharge, the portion of such award which is not
then vested pursuant to Section 2.2(b) shall be forfeited by such
holder and such portion shall be cancelled by the Company.
(b) Other Termination. If the Company terminates the
employment of the holder of a Bonus Stock Award for any reason
other than Cause or Disability, or if a holder of a Bonus Stock
Award voluntarily terminates his employment with the Company as a
result of a Constructive Discharge, the portion of such award
which is not otherwise vested shall vest without regard to such
termination, and be payable within 30 days of such termination,
in accordance with Section 2.2(c).
2.4 Registration. The Company will use its best commercial
efforts to cause the shares of Common Stock subject to Bonus
Stock Awards to be registered on Form S-8 under the Securities
Act of 1933, as amended, on or before the first anniversary of
the Closing Date. No such registration shall be required to the
extent the Company determines, based on the advice of counsel,
that such registration is not required for a holder of a Bonus
Stock Award to transfer vested shares of Common Stock issued to
such holder hereunder free of the transfer restrictions of the
Securities Act of 1933, as amended.
III. GENERAL
3.1 Amendments. The Board may amend this Plan as it shall deem
advisable, provided, however, that no amendment shall be made if
such amendment would increase or decrease the maximum number of
shares of Common Stock available under this Plan (subject to
Section 3.3). No amendment may impair the rights of a holder of
an outstanding award whether vested or unvested without the
consent of such holder.
3.2 Tax Withholding. The Company shall have the right to
require, prior to the issuance or delivery of any shares of
Common Stock or the making of any other payment pursuant to an
award made hereunder, payment by the holder of such award of any
Federal, state, local or other taxes which may be required to be
withheld or paid in connection with such award. The Committee
may allow shares of Common Stock to be delivered or withheld
having an aggregate Fair Market Value not in excess of the
minimum amount required to be withheld, and in such event, any
fraction of a share of Common Stock which would be required to
satisfy such an obligation shall be disregarded and the remaining
amount due shall be paid in cash by the holder.
3.3 Adjustment. In the event of any stock split, stock
dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation,
spin-off or other similar change in capitalization or event, or
any distribution to holders of Common Stock other than a regular
cash dividend, the number and class of securities available under
this Plan, the number and class of securities subject to each
outstanding Bonus Stock Award, and/or the asset issuable or
payable upon the vesting thereof shall be adjusted or modified
accordingly, as determined by the Committee. The decision of the
Committee regarding any such adjustment or modification shall be
final, binding and conclusive. If any such adjustment or
modification would result in a fractional security being subject
to an award under this Plan, the Company shall pay the holder of
such award, in connection with the first vesting of such award,
in whole or in part, occurring after such adjustment or
modification, an amount in cash determined by multiplying (i) the
fraction of such security (rounded to the nearest hundredth) by
(ii) the Fair Market Value on the vesting date.
3.4 No Assignment. It is a condition of this Plan, and the
rights of all holders of Bonus Stock Awards shall be subject
thereto, that no right or interest of any such holder shall be
assignable or transferable in whole or in part, either directly
or by operation of law or otherwise, including, but not by way of
limitation, execution, levy, garnishment, attachment, pledge or
bankruptcy, and no right or interest of any such holder under
this Plan shall be liable for, or subject to, any obligation of
any such holder, including claims for alimony or the support of
any spouse.
3.5 No Right of Employment. Neither this Plan nor any award
made hereunder shall confer upon any person any right to
continued employment by the Company, any Subsidiary or any
affiliate of the Company or affect in any manner the right of the
Company, any Subsidiary or any affiliate of the Company to
terminate the employment of any person at any time without
liability hereunder.
3.6 Rights as Stockholder. No person shall have any right as a
stockholder of the Company with respect to any shares of Common
Stock or other equity security of the Company which is subject to
an award hereunder unless and until such person becomes a
stockholder of record with respect to such shares of Common Stock
or equity security. The Company's obligation to deliver shares
of Common Stock pursuant to this Plan shall be unfunded, and the
Company shall not be obligated to set aside any of its assets for
the purpose of satisfying its obligations hereunder. The claims
of holders of Bonus Stock Awards shall be solely those of an
unsecured creditor of the Company.
3.7 Governing Law. The corporate law of the State of Delaware
shall govern all issues concerning the relative rights of the
Company and the holders of Bonus Stock Awards with respect to
this Plan, the Bonus Stock Awards and Bonus Stock issuable under
the Plan. The law of the State of Illinois, except its law with
respect to choice of law, shall be controlling in all other
matters relating to the Plan.
3.8 Effective Date. This Plan shall become effective on the
Closing Date.
SCHEDULE A - Intentionally Omitted
EXHIBIT 11
TELLABS, INC.
COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
(In thousands, except per share data)
Three Months Ended
March 29, March 31,
1996 1995
--------- ---------
PRIMARY EARNINGS PER SHARE *
- ------------------------------------
Weighted average number of common
shares outstanding during the period 88,858 87,532
Net additional shares assuming
dilutive stock options exercised and
proceeds used to purchase treasury
shares at average fair market value 3,083 3,682
--------- ---------
Weighted average number of common
shares and common equivalent shares
outstanding 91,941 91,214
========= =========
Net earnings $31,127 $22,941
========= =========
Primary earnings per share $0.34 $0.25
========= =========
FULLY DILUTED EARNINGS PER SHARE *
- ------------------------------------
Weighted average number of common
shares outstanding during the period 88,858 87,532
Net additional shares assuming
dilutive stock options exercised and
proceeds used to purchase treasury
shares at fair market value 3,162 3,770
--------- ---------
Weighted average number of common
shares and common equivalent shares
outstanding 92,020 91,302
========= =========
Net earnings $31,127 $22,941
========= =========
Fully diluted earnings per share $0.34 $0.25
========= =========
* 1995 share amounts are restated to give effect to the two-for-one
stock split effective May 19, 1995.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
March 29, 1996, Income Statment and Balance Sheet and is qualified in its
entirety by reference to such 10Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-27-1996
<PERIOD-END> MAR-29-1996
<CASH> 99812
<SECURITIES> 75721
<RECEIVABLES> 128538
<ALLOWANCES> 2699
<INVENTORY> 65943
<CURRENT-ASSETS> 376748
<PP&E> 207205
<DEPRECIATION> 87592
<TOTAL-ASSETS> 560810
<CURRENT-LIABILITIES> 81157
<BONDS> 2850
0
0
<COMMON> 889
<OTHER-SE> 457599
<TOTAL-LIABILITY-AND-EQUITY> 560810
<SALES> 172256
<TOTAL-REVENUES> 172256
<CGS> 74482
<TOTAL-COSTS> 74482
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 390
<INTEREST-EXPENSE> (1947)
<INCOME-PRETAX> 44467
<INCOME-TAX> 13340
<INCOME-CONTINUING> 31127
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31127
<EPS-PRIMARY> .34
<EPS-DILUTED> .34
</TABLE>
