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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 3, 1998
REGISTRATION NO. 333-49557
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
ON FORM S-8
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
TELLABS, INC.
(Exact Name of Registrant as Specified in Its Charter)
____________________
DELAWARE 3831568
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
4951 INDIANA AVENUE
LISLE, ILLINOIS 60532
(Address of Principal Executive Offices) (Zip Code)
COHERENT COMMUNICATIONS SYSTEMS CORPORATION 1982 STOCK OPTION PLAN
COHERENT COMMUNICATIONS SYSTEMS CORPORATION AMENDED AND RESTATED 1993 EQUITY
COMPENSATION PLAN
(Full Titles of the Plans)
MARGARET MAXWELL ZAGEL
VICE PRESIDENT AND GENERAL COUNSEL
TELLABS OPERATIONS, INC.
4951 INDIANA AVENUE
LISLE, ILLINOIS 60532-1698
(630) 378-8800
(Name, Address and Telephone Number, Including Area Code, of Agent for Service)
Copy to:
SIDLEY & AUSTIN
ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60603
(312) 853-7000
ATTENTION: IMAD I. QASIM
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INTRODUCTORY STATEMENT
TELLABS, INC., a Delaware corporation (the "Registrant"), hereby amends
its Registration Statement on Form S-4 (Registration No. 333-49557) by filing
this Post-Effective Amendment No. 1 on Form S-8.
On August 3, 1998, Coherent Communications Systems Corporation, a Delaware
corporation ("Coherent"), became a wholly-owned subsidiary of the Registrant
upon consummation of the merger (the "Merger") contemplated by the Agreement
and Plan of Merger dated as of February 16, 1998 (the "Merger Agreement") among
the Registrant, a wholly-owned subsidiary of the Registrant, and Coherent.
Each option (an "Outstanding Option") to purchase Common Stock, $.01 par value
per share, of Coherent ("Coherent Common Stock"), which was outstanding
immediately prior to the effective time of the Merger (the "Effective Time")
pursuant to Coherent's Amended and Restated 1982 Stock Option Plan and Amended
and Restated 1993 Equity Compensation Plan became an option to purchase the
number of shares of Common Stock, $.01 par value per share, of the Registrant
("Common Stock") decreased to the nearest whole share, determined by
multiplying (i) the number of shares of Coherent Common Stock subject to such
Outstanding Option immediately prior to the Effective Time by (ii) .72 (the
"Exchange Ratio"), at an exercise price per share of Common Stock (increased to
the nearest whole cent) equal to the exercise price per share of Coherent
Common Stock immediately prior to the Effective Time divided by the Exchange
Ratio. Each Outstanding Option will otherwise be exercisable upon the same
terms and conditions as were applicable immediately prior to the Effective
Time.
This Post-Effective Amendment relates to the offer and sale after the
Effective Time of Common Stock pursuant to and in accordance with the
Outstanding Options.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed (file number 0-9692) by the
Registrant with the Securities and Exchange Commission (the "SEC") pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated herein by reference:
1. The Registrant's Annual Report on Form 10-K for the year ended January 2,
1998, as amended by the Form 10K/A filed on March 31, 1998;
2. The Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998;
3. The Registrant's Current Reports on Form 8-K filed with the SEC on
February 16, 1998, April 20, 1998, June 2, 1998 and July 24, 1998; and
4. The description of the Common Stock contained in the Registration
Statement on Form S-4 (Registration No. 333-49557) to which this
Post-Effective Amendment No. 1 relates under the caption "Description of
Tellabs Common Stock".
All reports and other documents filed by the Registrant pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
hereof and prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which deregisters all
securities then remaining unsold shall be deemed to be incorporated by
reference herein and to be a part hereof from the dates of filing of such
reports and documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein, or in any other subsequently filed document which
also is incorporated or deemed to be incorporated by reference herein, modifies
or supersedes such statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the shares of Common Stock registered hereby has been
passed upon for the Registrant by Carol Coghlan Gavin, at the time of such
opinion the Vice President, General Counsel and Secretary of Tellabs Operations,
Inc., a wholly-owned subsidiary of the Registrant. Ms. Gavin is the beneficial
owner of less than 1% of the outstanding shares of Common Stock.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Amended and Restated By-Laws of Tellabs (the "Tellabs By-Laws")
provide, among other things, that each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he or she is or was a director or officer of Tellabs, or is or
was serving at the request of Tellabs as a director, officer, employee,
fiduciary or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, shall be indemnified and held harmless by Tellabs as
provided in the Tellabs By-Laws and to the fullest extent which it is empowered
to do so by the Delaware General Corporation Law (the "DGCL") against all
expense, liability and loss (including attorneys' fees) actually and reasonably
incurred by such person in connection with such action, suit or proceeding, and
such indemnification shall inure to the benefit of his or her heirs, executors
and administrators; provided, however, that, subject to certain conditions,
Tellabs shall indemnify any such person seeking indemnification in connection
with an action, suit or proceeding, whether civil, criminal, administrative or
investigative, initiated by such person only if such action, suit or proceeding
was authorized by the Board of Directors of Tellabs. The right to
indemnification under the Tellabs By-Laws is a contract right and, subject to
certain conditions, includes the right to be paid by Tellabs the expenses
incurred in defending any such action, suit or proceeding in advance of its
final disposition. The Tellabs By-Laws further provide that the
indemnification and payment of expenses incurred provided therein shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled.
Section 145 of the DGCL authorizes indemnification by Tellabs of directors
and officers under the circumstances provided in the provisions of the Tellabs
By-Laws described above, and requires such indemnification for expenses
actually and reasonably incurred to the extent a director or officer is
successful in the defense of any action, or any claim, issue or matter therein.
Tellabs has purchased insurance which purports to insure Tellabs against
certain costs of indemnification which may be incurred by it pursuant to the
Tellabs By-laws and to insure the officers and directors of Tellabs, and of its
subsidiary companies, against certain liabilities incurred by them in the
discharge of their functions as such officers and directors except for
liabilities resulting from their own malfeasance.
ITEM 7. EXEMPTIONS FROM REGISTRATION CLAIMED.
Not Applicable
ITEM 8. EXHIBITS.
(a) The following is a list of Exhibits included as part of this
Post-Effective Amendment. Items marked with a single asterisk are filed
herewith. Items marked with a double asterisk were filed by the Registrant
with the SEC on April 7, 1998 with the Registration Statement on Form S-4 to
which this Post-Effective Amendment relates.
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4.1 Registrant's Restated Certificate of Incorporation is hereby incorporated
by reference to Exhibit 4.1 of the Registration Statement on Form S-4 of
the Registrant filed on July 21, 1998.
4.2 Registrant's Amended and Restated By-laws, as amended as of January 27,
1993, are hereby incorporated by reference to Exhibit 3.2 to Registrant's
Annual Report on Form 10-K for the fiscal year ended January 1, 1993.
*4.3 Coherent Communications Systems Corporation Amended and Restated 1982
Stock Option Plan.
*4.4 Coherent Communications Systems Corporation Amended and Restated 1993
Equity Compensation Plan.
**5.1 Opinion of Carol Coghlan Gavin regarding the legality of the securities
being registered.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Grant Thornton LLP.
23.3 Consent of Carol Coghlan Gavin (included in the opinion filed as Exhibit
5.1 to this Registration Statement).
**24.1 Powers of Attorney.
(b) Not applicable.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed
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with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the SEC
by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Post-Effective
Amendment to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lisle, State of Illinois, on August 3, 1998.
TELLABS, INC.
By: /s/ Michael J. Birck
------------------------------
Michael J. Birck
President
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Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ Michael J. Birck President, Chief Executive August 3, 1998
- ------------------------------ Officer and Director
Michael J. Birck (Principal Executive Officer)
* Executive Vice President and August 3, 1998
- ------------------------------ Director (Principal Financial
Peter A. Guglielmi Officer)
* Controller
- ------------------------------ (Principal Accounting Officer) August 3, 1998
J. Peter Johnson
*
- ------------------------------ Director August 3, 1998
John D. Foulkes, Ph.D.
*
- ------------------------------ Director August 3, 1998
Brian J. Jackman
*
- ------------------------------ Director August 3, 1998
Frederick A. Krehbiel
*
- ------------------------------ Director August 3, 1998
Stephanie Pace Marshall, Ph.D.
*
- ------------------------------ Director August 3, 1998
William F. Souders
*
- ------------------------------ Director August 3, 1998
Jan H. Suwinski
*By: /s/ Carol Coghlan Gavin
- ------------------------------
Carol Coghlan Gavin
As Attorney-in-Fact
</TABLE>
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EXHIBIT INDEX
The following is a list of Exhibits included as part of this
Post-Effective Amendment. Items marked with a single asterisk are filed
herewith. Items marked with a double asterisk were filed by the Registrant
with the SEC on April 7, 1998 with the Registration Statement on Form S-4 to
which this Post-Effective Amendment relates.
4.1 Registrant's Restated Certificate of Incorporation is hereby incorporated
by reference to Exhibit 4.1 of the Registration Statement on Form S-4 of
the Registrant filed on July 21, 1998.
4.2 Registrant's Amended and Restated By-laws, as amended as of January 27,
1993, are hereby incorporated by reference to Exhibit 3.2 to Registrant's
Annual Report on Form 10-K for the fiscal year ended January 1, 1993.
*4.3 Coherent Communications Systems Corporation Amended and Restated 1982
Stock Option Plan.
*4.4 Coherent Communications Systems Corporation Amended and Restated 1993
Equity Compensation Plan.
**5.1 Opinion of Carol Coghlan Gavin regarding the legality of the securities
being registered.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Grant Thornton LLP.
23.3 Consent of Carol Coghlan Gavin (included in the opinion filed as Exhibit
5.1 to this Registration Statement).
**24.1 Powers of Attorney.
<PAGE> 1
Exhibit 4.3
COHERENT COMMUNICATIONS SYSTEMS CORPORATION
AMENDED AND RESTATED
1982 STOCK OPTION PLAN
1. PURPOSE. The purpose of this Stock Option Plan ("Plan") is to provide
additional incentive, in the form of stock options which may be either
incentive stock options or non-qualified stock options, to employees (as
described in Section 4 hereof) of Coherent Communications Systems Corporation
("Corporation") or of other corporations ("Subsidiary" or "Subsidiaries") in
which stock possessing more than 50% of the total combined voting power of all
classes of stock is owned by the Corporation or any Subsidiary, whose judgment,
initiative, and efforts are responsible for the successful operation of the
Corporation's business and to increase their proprietary interest in the
success of the enterprise to the benefit of the Corporation and its
stockholders.
2. DEFINITIONS. When used in this Plan, unless the context otherwise
requires:
(a) "ISOs" shall mean incentive stock options (as defined in Section
422(b) of the Internal Revenue Code of 1986, as amended, (the "Code") for the
purchase of Shares issued pursuant to this Plan.
(b) "NQSOs" shall mean all stock options for the purchase of Shares
issued pursuant to this Plan which are not ISOs.
(c) "Options" shall mean all ISOs and NQSOs which from time to time may
be granted under this Plan.
(d) "President" shall mean the person who at the time shall be the
President of the Corporation.
(e) "Share" shall mean a share of the Common Stock of the Corporation.
3. ADMINISTRATION. The Plan shall be administered by a committee
("Committee") of not less than two members of the Board of Directors of the
Corporation appointed by the Board of Directors. Until the Committee has been
appointed, all of the members of the Board of Directors shall constitute the
Committee. Vacancies which may occur in the membership of the Committee shall
be filled by appointment by the Board of Directors. A majority of the
Committee shall constitute a quorum, and the acts of a majority of the members
present at any meeting at which a quorum is present, or acts approved in
writing by a majority of the Committee, shall be the acts of the Committee.
Subject to the provisions of the Plan, the Committee shall be authorized
to interpret the Plan and the grants under the Plan, to establish, amend and
rescind any rules and regulations
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relating to the Plan, to determine (or to effectuate the Board of Directors'
determination of) the terms and provisions of the Agreements referred to in
Section 6 hereof, and to make all other determinations necessary or advisable
for the administration of the Plan. The Committee may correct any defect,
supply any omission and reconcile any inconsistency in the Plan or in any
option or grant in the manner and to the extent it shall deem desirable. The
determinations of the Committee in the administration of the Plan, as described
herein, shall be final and conclusive. The Committee may adopt such rules and
regulations as it deems necessary for governing its affairs.
4. ELIGIBLE EMPLOYEES. The employees of the Corporation or of any
Subsidiary who, in the sole discretion of the Committee, are from time to time
responsible for the management, growth and protection of the business of the
Corporation or of such Subsidiaries (including Officers and Directors who are
salaried employees of the Corporation or any Subsidiary) shall be eligible to
be granted Options to purchase shares of the Common Stock of the Corporation
under the Plan.
The Committee shall, from time to time, determine the eligibility and the
identity of those to whom Options should be granted, the number of shares to be
covered by such Options, the type of Option to be granted (ISO or NQSO), the
term of such Options, and the time and dates at which such Options shall be
granted and exercisable. The Committee also may condition the grant of any
such options upon exchange of existing options held by the optionee.
Notwithstanding the foregoing, no ISO shall be granted to a person who
owns (within the meaning of Section 422(b)(6) of the Code) stock possessing
more than ten percent of the total combined voting power or value of all
classes of stock of the Corporation or of any parent or Subsidiary (as defined
in Section 424 of the Code) of the Corporation unless the option price is at
least 110% of the fair market value (at the time the option is granted) of the
stock subject to the option and the exercise term does not exceed 5 years from
date of grant. The conditions set forth in this paragraph shall not apply to
NQSOs.
5. AMOUNT OF STOCK. The stock to be offered for purchase pursuant to
Options granted under this Plan shall be Treasury or authorized but unissued
shares of Common Stock of the Corporation of the par value of $.01 each, and
the total number of such shares which may be issued pursuant to Options under
this Plan shall not exceed 1,000,000 shares of the Corporation's common stock,
subject to adjustment as provided in Section 15 hereof. Stock released from
option upon the termination, expiration or surrender of any option prior to
complete exercise of the option, or upon the exchange of unexercised options
for new options may again be subjected to options under the Plan. More than
one Option may be granted to one person.
6. STOCK OPTION AGREEMENT. Each Option granted under this Plan shall
be evidenced by an appropriate Stock Option Agreement ("Agreement"), which
Agreement shall be executed by the Corporation and by the person to whom the
Option is granted ("Optionee"). The Agreement shall continue such terms and
provisions, not inconsistent with the Plan, as shall be determined by the
Committee. Such terms and provisions may vary between Optionees or as to the
same Optionee to whom more than one Option may be granted. The Agreement shall
be signed by the President or
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such other officer as may be designated by the Committee, and shall be attested
to by the Treasurer or Secretary of the Corporation.
7. OPTION PRICE. The purchase price under each Option granted hereunder
shall be determined by the Committee, provided, however, that the exercise
price of an ISO shall in no event be less than an amount equal to the fair
market value of the shares at the time of the granting of the ISO as determined
by the Committee in accordance with the provisions of the Code and the
regulations promulgated thereunder. The exercise price of each share purchased
pursuant to each Option shall be paid in full at the time of such purchase.
With the consent of the Committee, payment of the purchase price may be paid,
in whole or in part, through the surrender of shares of the Common Stock of the
Corporation having market value equal to the Option Price, provided that shares
of Common Stock of the Corporation shall not be used for such purpose more than
once very six calendar months.
8. TERM AND EXERCISE OF OPTION. Each Option shall expire on such date as
may be determined by the Committee with respect to such option, but in no event
shall any Option expire more than ten years from the date it is granted. The
date on which an Option shall be granted shall be the date of the Committee's
authorization of the Option or such later date as may be determined by the
Committee at the time the Option is authorized.
The Options shall be exercisable by the holders in whole or in part from
time to time within the term of the Option, in such manner as may be determined
by the Committee, provided, however, that no Option shall be exercisable prior
to one year from the date it is granted. The Committee may accelerate the
exercise date of any outstanding Options, in its discretion, if it deems such
acceleration to be desirable. Except as provided in Section 10, no Option
shall be exercised unless at the time of such exercise the Optionee is then an
employee of the Corporation or any Subsidiary.
Notwithstanding the foregoing, under no circumstances shall an ISO which
was granted on or before December 31, 1986 be exercisable while there is
outstanding (within the meaning of Section 422(c)(7) of the Code) "incentive
stock option" defined in Section 422(b) of the Code previously granted to
purchase shares of stock of the Corporation, or any parent or Subsidiary
corporation of the Corporation, whether or not pursuant to this Plan, to the
holder of such ISO.
9. MAXIMUM VALUE OF ISOs. The aggregate fair market value of the Shares,
determined as of the date of grant, which first become exercisable during any
calendar year as a result of "incentive stock options" (as defined in Section
422(b) of the Code under this Plan and any other plan of the Corporation or any
parent or Subsidiary) shall not exceed $100,000.
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10. TERMINATION OF EMPLOYMENT.
(a) Except as set forth below, in the event of termination (voluntary or
involuntary) for any reason of the holder's employment by the Corporation, any
unexercised Option shall be exercisable by the Optionee at any time within 30
days after the date of such termination but only to the extent such option was
exercisable on the date of such termination. In no event shall such unexercised
Option be exercisable after the expiration of its term.
(b) If, however, the termination of employment is due to the disability
of the Optionee (to an extent and in a manner as shall be determined in each
case by the Committee in its sole discretion), the holder shall have the
privilege of exercising the unexercised Option to the extent such option was
exercisable on the date of such termination due to disability, within three (3)
months of such date, but in no event shall any Option be exercisable after the
expiration of its term.
(c) If, however, the termination of employment is due to death of the
Optionee while in the employ of the Corporation or a Subsidiary, the estate of
the holder or the person or persons who acquired the right to exercise such
Option by bequest or inheritance, shall have the privilege of exercising the
unexpired Option, to the extent such option was exercisable on the date of such
termination due to death, within six months of such date, but in no event shall
any Option be exercisable after the expiration of its term.
(d) If, however, the termination of employment is due to the normal or
early retirement of the Optionee, the holder shall have the privilege of
exercising the unexercised Option, to the extent such option was exercisable on
the date of such termination due to normal or early retirement, within three
months of such date, but in no event shall any Option be exercisable after the
expiration of its term.
(e) If, however, the Optionee dies within three months after normal or
early retirement the estate of the holder or the person or persons who acquired
the right to exercise such Option by bequest or inheritance, shall have the
privilege of exercising the unexpired Option, to the extent such option was
exercisable on the date of such termination due to normal or early retirement,
within three months of the Optionee's death, but in no event shall any Option be
exercisable after the expiration of its term.
11. NON-ASSIGNABILITY. Each Option granted under the Plan shall be
non-transferable by the Optionee except by will or the laws of descent and
distribution, and each Option shall be exercisable during the Optionee's
lifetime only by him.
12. RESTRICTIONS ON TRANSFER.
(a) The Corporation shall have the right of first refusal to
repurchase any shares offered for sale by the Optionee, his executor,
administrator, or beneficiaries, which shares were issued to the Optionee
pursuant to one or more Options granted to the Optionee under this Plan.
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Such offer shall be communicated to the Corporation by written notice,
stipulating the terms and conditions of such offer therein, forwarded by
registered or certified mail. In the event that such offer shall not be
accepted by written notice forwarded by registered mail no later than 30 days
after the date of the receipt of the offer, the Optionee, his executor,
administrator or beneficiaries may dispose of the shares offered to any other
person, firm or corporation, without restriction, except that the subsequent
transfer of such shares shall not be on terms more favorable to the transferee
than the terms upon which the shares were originally offered to the
Corporation. If, within 60 days after the expiration of the 30 day period of
any offer made hereunder, the Optionee, his executor, administrator, or
beneficiaries offering to sell any shares issued hereunder, shall fail to
consummate a sale thereof to any other purchaser, then no sale of such shares
may be made thereafter by the offer or without again reoffering the same to
the Corporation in accordance with the provisions of this subparagraph.
(b) In the event of any termination of Optionee's employment, the
Corporation shall have the right to repurchase all shares issued to the Optionee
under this Plan. The repurchase price per share shall be Optionee's cost plus
the amount, if any, determined by subtracting the cumulative retained earnings
(loss) of the Corporation as of the end of the quarter preceding the date of the
grant of the Option from the cumulative retained earnings (loss) of the
Corporation as of the end of the fiscal year preceding termination of Optionee's
employment, and dividing that amount by the number of fully diluted shares of
the Corporation at the end of the fiscal year preceding termination.
(c) The right of first refusal and buy-back rights shall terminate when
the Corporation has made a public offering of its Common Stock pursuant to the
Securities Act of 1933, as amended.
(d) The right of first refusal and buy-back rights granted to the
Corporation pursuant to subparagraphs 12(a) and 12(b) above shall not be
construed as an absolute obligation on the part of the Corporation to repurchase
any shares tendered.
(e) Each certificate for shares issued by the Corporation to the Buyer
shall bear an appropriate legend that the transfer of such shares is restricted
by the provisions of this Plan.
13. ISSUANCE OF SHARES AND COMPLIANCE WITH SECURITIES ACTS. Within a
reasonable time after exercise of an Option, the Corporation shall cause to be
delivered to the employee a certificate for the Shares purchased pursuant to the
exercise of the Option. At the time of any exercise of any option, the
Corporation may, if it shall deem it necessary and desirable for any reason
connected with any law or regulation of any governmental authority relative to
the regulation of securities, require the Optionee to represent in writing to
the Corporation that it is his then intention to acquire the Common Stock for
investment and not with a view to distribution thereof and that such Optionee
will not dispose of such shares in any manner that would involve a violation of
applicable securities laws. In such event, no shares shall be issued to such
holder unless and until the Corporation is satisfied
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with the correctness of such representation. Certificates for Shares
issued pursuant to the exercise of Options may bear as appropriate securities
law legend.
14. RIGHTS AS A STOCKHOLDER. An Optionee shall have no rights as a
stockholder with respect to Shares covered by his Option until the date of the
issuance or transfer of the Shares to him and only after such Shares are fully
paid. No adjustment shall be made for dividends or other rights for which the
record date is prior to the date of such issuance or transfer.
15. STOCK ADJUSTMENTS. In the event that each of the outstanding shares
of Common Stock (except shares held by dissenting shareholders) shall be
changed into or exchanged for a different number or kind of shares of stock or
other securities of the Corporation or of another corporation, whether through
reorganization, recapitalization, merger or consolidation, then there shall be
substituted for each share of Common Stock subject to any Option granted
pursuant to this Plan, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock (except shares
held by dissenting shareholders) shall be so changed or for which each such
share shall be exchanged.
In the event of any stock dividend, split-up, combination or exchange of
shares or recapitalization or change in capitalization, then the number of any
kind of shares that are then subject to an outstanding Option and the Option
price per share shall be proportionately and appropriately adjusted without any
change in the aggregate purchase price to be paid therefor upon exercise of the
Option, and the number and kind of shares that may be made the subject of
Options to be granted pursuant to the Plan shall be similarly adjusted.
In the event that there shall be any change, other than as specified
above, in the number or kind of outstanding shares of Common Stock or of any
stock or other securities into which such Common Stock shall have been changed
for which it shall have been exchanged or in the event of a dividend to holders
of Common Stock payable other than in cash or stock of the Corporation, then if
the Board of Directors in its sole discretion shall determine that such change
equitably requires an adjustment in the number or kind of shares theretofore
appropriated for the purposes of the Plan but not yet covered by an Option or
an adjustment with respect to the number, price or kind of shares then subject
to an Option or Options, such adjustment shall be made by the Board of
Directors and shall be effective and binding for all purposes of the Plan.
If the Corporation shall distribute to its stockholders the stock of a
Subsidiary, or transfer assets to another corporation and distribute the stock
of such other corporation, in either case without the surrender of Common Stock
of the Corporation, and if such distribution is not taxable as a dividend and
no gain or loss is recognized by reason of the applicable provisions of the
Code, then in such event, the cash consideration payable under the terms of
each outstanding Option shall be reduced by an amount which bears the same
ratio to such consideration as the market value of the stock distributed in
respect of a share of the Common Stock of the Corporation, immediately
following the distribution, bears to the aggregate of the market values
at such time of a share of the Common Stock of the Corporation and the stock
distributed in respect thereof.
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Except as hereinbefore expressly provided, the issue by the Corporation of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash, property, labor or services, either upon direct sale or
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Corporation convertible into such
shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of shares of Common Stock
subject to each Option.
16. TERMINATION AND AMENDMENT OF THE PLAN. Subject to the right of the
Board of Directors to terminate the Plan prior thereto, the Plan shall
terminate on, and no Options shall be granted hereunder after December 31,
1995. The Board of Directors shall have power at any time, in its discretion,
to amend, abandon or terminate the Plan, in whole or in part, provided that no
such action shall affect any Options theretofore granted and then outstanding
under the Plan.
Any amendment which would (1) materially increase the number of Shares
which may be issued under the Plan, except pursuant to paragraph 15 above; (2)
modify the requirements as to eligibility for participation in the Plan; or (3)
materially increase the benefits accruing to participants under the Plan, shall
not be effective unless approved by the stockholders of the Corporation at any
meeting called for such purpose or by the unanimous consent of the
stockholders.
17. ADOPTION BY BOARD AND APPROVAL BY STOCKHOLDERS. This Plan becomes
effective on March 15, 1982 (the date the Plan was adopted by the Board),
provided, however, that if the Plan is not approved by a majority of the votes
cast at a duly held meeting at which a quorum representing a majority of all
outstanding voting stock of the Corporation is, either in person or by proxy,
present and voting on the Plan, within 12 months after said date, the Plan and
all Options granted hereunder shall be null and void and no additional Options
shall be granted hereunder.
18. INTERPRETATION. A determination of the Committee as to any question
which may arise with respect to the interpretation of the provisions of this
Plan or any Options shall be final and conclusive, and nothing in this Plan, or
in any regulation hereunder, shall be deemed to give any employee, his legal
representatives, assigns or any other person any right to participate herein
except to such extent, if any, as the Committee may have determined or approved
pursuant to this Plan. The Committee may consult with legal counsel who may be
counsel to the Corporation and shall not incur any liability for any action
taken in good faith in reliance upon the advice of such counsel.
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Exhibit 4.4
COHERENT COMMUNICATIONS SYSTEMS CORPORATION
AMENDED AND RESTATED 1993 EQUITY COMPENSATION PLAN
SECTION 1. Purpose; Definitions
The purpose of the Coherent Communications Systems Corporation 1993 Equity
Compensation Plan (the "Plan") is to provide employees (including employees who
are also officers or directors), non-employee directors, and Eligible
Independent Contractors (as hereinafter defined) of Coherent Communications
Systems Corporation (the "Company") with the opportunity to receive grants of
incentive stock options, nonqualified stock options, stock appreciation rights
and restricted stock awards. The Company believes that the Plan will enable the
Company to attract, retain and motivate its employees, non-employee directors
and Eligible Independent Contractors, will encourage Plan participants to
contribute materially to the growth of the Company for the benefit of the
Company's stockholders, and will align the economic interests of the Plan
participants with those of the stockholders.
For the purposes of the Plan, the following terms shall be defined as set
forth below:
a. "Board" means the Board of Directors of the Company.
b. "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
c. "Committee" means the Committee designated by the Board to
administer the Plan.
d. "Company" means Coherent Communications Systems Corporation,
its subsidiaries or any successor organization.
e. "Disability" means permanent and total disability within the
meaning of Section-22(e)(3) of the Code.
f. "Eligible Independent Contractor" means an independent
consultant or advisor hired by the Company to provide bona fide
services for the Company that are not in connection with the offer
or sale of securities in a capital-raising transaction.
g. "Employed by the Company" shall mean employment as an employee or
Eligible Independent Contractor or member of the Board, so that for
purposes of exercising Stock Options and Stock Appreciation Rights
and satisfying conditions with respect to Restricted Stock Grants, a
Participant shall not be considered to have terminated employment
until the Participant ceases to be an employee, Eligible Independent
Contractor or member of the Board, unless the Committee determines
otherwise.
<PAGE> 2
h. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
i. "Fair Market Value" means the fair market value of the Stock
as determined by the Committee in good faith based on the best
available facts and circumstances at the time; provided, however,
that where there is a public market for the Stock and the Stock is
registered under the Exchange Act, Fair Market Value shall mean the
per share or aggregate value of the Stock as of any given date,
determined as follows: (i) if the principal trading market for the
Stock is a national securities exchange or the Nasdaq National
Market, the last reported sale price thereof on the relevant date
or, if there were no trades on that date, the latest preceding date
upon which a sale was reported, or (ii) if the Stock is not
principally traded on such exchange or market, the mean between the
last reported "bid" and "asked" prices of Stock on the relevant
date, as reported on Nasdaq or, if not so reported, as reported
by the National Daily Quotation Bureau, Inc. or as reported in a
customary financial reporting services, as applicable and as the
Committee determines.
j. "Grant" means any Stock Option, Stock Appreciation Right or
Restricted Stock award granted pursuant to the Plan.
k. "Incentive Stock Option" means any Stock Option intended to
be and designated as an "Incentive Stock Option" within the
meaning of Section 422 of the Code.
l. "Insider" means a Participant who is subject to Section 16 of
the Exchange Act.
m. "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
n. "Participant" means an employee, non-employee director or
Eligible Independent Contractor to whom an award is granted pursuant
to the Plan.
o. "Plan" means the Coherent Communications Systems Corporation
1993 Equity Compensation Plan, as hereinafter amended from time to
time.
p. "Restricted Stock" means an award of shares of Stock that is
subject to restrictions pursuant to Section 7 below.
q. "Securities Act" shall mean the Securities Act of 1933, as
amended.
r. "Securities Broker" means the registered securities broker
acceptable to the Company who agrees to effect the cashless exercise
of an Option pursuant to Section 5(d) hereof.
s. "Stock" means the Common Stock of the Company, par value $.01
per share.
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t. "Stock Appreciation Right" means the right, pursuant to an award
granted under Section 6 below, to surrender to the Company all
(or a portion) of a Stock Option in exchange for an amount in cash
and/or shares of Stock equal in value to the excess of (i) the Fair
Market Value, as of the date such right is exercised and the related
Stock Option (or such portion thereof) is surrendered, of the shares
of Stock covered by such Stock Option (or such portion thereof), over
(ii) the aggregate exercise price of such Stock Appreciation Right (or
such portion thereof).
u. "Stock Option" or "Option" means any option to purchase shares of
Stock (including Restricted Stock, if the Committee so determines)
granted pursuant to Section 5 below.
v. "Termination for Cause" shall mean, except to the extent specified
otherwise by the Committee, a finding by the Committee that the
Participant has breached his or her employment or service contract,
non-competition agreement or other obligation with the Company, or has
been engaged in disloyalty to the Company, including, without
limitation, fraud, embezzlement, theft, commission of a felony or
proven dishonesty in the course of his or her employment or service,
or has disclosed trade secrets or confidential information of the
Company to persons not entitled to receive such information.
SECTION 2. Administration
The Plan shall be administered by a Committee which shall consist of two
or more non-employee directors appointed by the Board. In the absence of the
designation of a Committee to administer the Plan, the Plan shall be
administered by the full Board.
The Committee shall have the authority to:
(a) select the Participants to whom Grants may from time to time
be made hereunder;
(b) determine the type, size and terms of the Grants to be made
to each such Participant;
(c) determine the time when the Grants will be made and the duration
of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability;
(d) amend the terms of any outstanding award (with the consent of
the Participant) to reflect terms not otherwise inconsistent with
the Plan, including, but not limited to, amendments concerning
vesting acceleration or forfeiture waiver regarding any award
or the extension of a Participant's right with respect to Grants under
the Plan as a result of termination of employment or service or
otherwise, based on such
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<PAGE> 4
factors as the Committee shall determine, in its sole iscretion,
or substitution of new Stock Options for previously granted Stock
Options, including previously granted Stock Options having high option
prices;
(e) establish from time to time any policy or program to
encourage or require Participants to achieve or maintain equity
ownership in the Company through the use of the Plan upon such terms
and conditions as the Committee may determine in its sole
discretion, and thereafter to amend, modify or terminate such policy
or program as the Committee may from time to time deem appropriate;
and
(f) deal with any other matters arising under the Plan.
The Committee shall have full power and authority to administer and
interpret the Plan and any Grant made under the Plan, to make factual
determinations and to adopt, alter and repeal such administrative rules,
guidelines, practices, agreements and instruments for implementing the Plan and
for the conduct of its business as it deems necessary or advisable, in its sole
discretion. All decisions made by the Committee pursuant to the provisions of
the Plan shall be final and binding on all persons having any interest in the
Plan or in any Grants made hereunder. All power of the Committee shall be
executed in its sole discretion, in the best interest of the Company, not as a
fiduciary, and in keeping with the objectives of the Plan.
No member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Grant made
under it. Nothing herein shall be deemed to expand the personal liability of a
member of the Board or Committee beyond that which may arise under any
applicable standards set forth in the Company's Certificate of Incorporation,
by-laws and Delaware law, nor shall anything herein limit any rights to
indemnification or advancement of expenses to which any member of the Board or
the Committee may be entitled under any applicable law, the Company's
Certificate of Incorporation or by-laws, agreement, vote of the stockholders or
directors, or otherwise.
SECTION 3. Stock Subject to the Plan
(a) The aggregate number of shares of Stock that may be issued or
transferred under the Plan is 1,500,000, subject to adjustment
pursuant to Section 3(b) below. Such shares may be authorized but
unissued shares or reacquired shares of Stock, including shares
purchased by the Company on the open market for purposes of the
Plan. In the event the number of shares of Stock issued under the
Plan and the number of shares of Stock subject to outstanding awards
equals the maximum number of shares of Stock authorized under the
Plan, no further awards shall be made unless the Plan is amended to
increase the number of shares of Stock issuable and transferable
hereunder or additional shares of Stock become available for further
awards under the Plan. If and to the extent that Options or Stock
Appreciation Rights granted under the Plan terminate, expire or are
canceled,
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<PAGE> 5
forfeited, exchanged or surrendered without having been
exercised, or if any shares of Restricted Stock are forfeited, the
shares subject to such Grants shall again be available for
subsequent awards under the Plan.
(b) If there is any change in the number or kind of shares of
Company Stock outstanding (i) by reason of a stock dividend, spin
off, recapitalization, stock split, or combination or exchange of
shares, (ii) by reason of a merger, reorganization or consolidation
in which the Company is the surviving corporation, (iii) by reason
of a reclassification or change in par value, or (iv) by reason of
any other extraordinary or unusual event affecting the outstanding
Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company
Stock is substantially reduced as a result of a spin off or the
Company's payment of an extraordinary dividend or distribution, then
unless such event or change results in the termination of all
outstanding awards under the Plan, the Committee shall preserve the
value of the outstanding awards by adjusting the maximum number and
class of shares issuable under the Plan to reflect the effect of
such event or change in the Company's capital structure, and by
making appropriate adjustments to the number and class of shares
subject to an outstanding award and/or the option price of each
outstanding Option and Stock Appreciation Right, except that any
fractional shares resulting from such adjustments shall be
eliminated by rounding any portion of a share equal to .5 or greater
up, and any portion of a share equal to less than .5 down, in each
case to the nearest whole number.
SECTION 4. Eligibility; Participant Limitations Concerning Issuances
All employees, non-employee directors and Eligible Independent Contractors
are eligible to participate in the Plan. The maximum aggregate number of shares
of Stock that shall be subject to Grants made under the Plan to any Participant
shall not exceed 600,000. The terms and provisions of Grants made under the
Plan may vary between Participants or as to the same Participant to whom more
than one Grant may be awarded.
SECTION 5. Stock Options
Stock Options may be granted alone, in addition to, or in tandem with
other awards granted under the Plan. Any Stock Option granted under the Plan
shall be in such form as the Committee may from time to time approve. Stock
Options granted under the Plan may be of two types: (i) Incentive Stock Options
and (ii) Non-Qualified Stock Options.
The Committee shall have the authority to grant Incentive Stock Options,
Non-Qualified Stock Options or both types of Stock Options (in each case with
or without Stock Appreciation Rights). To the extent that any Stock Option
does not qualify as an Incentive Stock Option, it shall constitute a Non-
Qualified Stock Option.
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<PAGE> 6
Anything in the Plan to the contrary notwithstanding, no term of this Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised,
so as to disqualify the Plan under Section 422 of the Code, or, without the
consent of the Participant affected, to disqualify any Incentive Stock Option
under Section 422.
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem
appropriate:
(a) Option Price. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the
time of grant, provided, however, that the option price per share
for any Incentive Stock Option shall be not less than 100% of the
Fair Market Value of the Stock at the time of grant.
Any Incentive Stock Option granted to any Participant who, at the time the
Option is granted, owns more than 10% of the voting power of all classes of
stock of the Company or of a Parent or Subsidiary corporation (within the
meaning of Section 424 of the Code), shall have an exercise price no less than
110% of the Fair Market Value per share on the date of the grant.
(b) Option Term. The term of each Stock Option shall be fixed by
the Committee, but no Stock Option shall be exercisable more than
ten years after the date the Stock Option is granted. However, any
Incentive Stock Option granted to any Participant who, at the time
the Option is granted, owns more than 10% of the voting power of all
classes of stock of the Company or of a Parent or Subsidiary
corporation may not have a term of more than five years. No Stock
Option may be exercised by any person after expiration of the term
of the Stock Option.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be
determined by the Committee at or after grant. If the Committee
provides, in its discretion, that any Stock Option is exercisable
only in installments, the Committee may waive such installment
exercise provisions at any time at or after grant in whole or in
part, based on such factors as the Committee shall determine, in its
sole discretion.
(d) Method of Exercise. Subject to whatever installment exercise
provisions apply under Section 5(c), Stock Options may be exercised,
in whole or in part at any time and from time to time during the
Option period, by giving written notice of exercise to the Company
specifying the number of shares to be purchased. Such notice shall
be accompanied by payment in full of the purchase price, either by
cash, check, or such other instrument as the Committee may accept.
As determined by the Committee, in its sole discretion, at or after
grant, payment in full or in part may also be made in the form of
unrestricted Stock already owned by the
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<PAGE> 7
Participant (including Company Stock acquired in connection with
the exercise of an Option, subject to such restrictions as the
Committee deems appropriate); provided, however, that (i) in the case
of an Incentive Stock Option, the right to make a payment in the form
of unrestricted Stock already owned by the Participant may be
authorized only at the time the Option is granted and (ii) the Company
may require that the Stock has been owned by the Participant for the
requisite period of time necessary to avoid a charge to the Company's
earnings for financial reporting purposes and adverse accounting
consequences to the Company with respect to the Option.
If specified by the Committee in the agreement governing a Stock Option at
the time of grant, the Committee may, in its sole discretion, upon receipt of
such Participant's written notice to exercise, elect to cash out all or part of
the portion of the Stock Option to be exercised by paying the Participant an
amount, in cash or Stock, equal to the excess of the Fair Market Value of the
Stock over the option price on the effective date of such cash-out.
To the extent permitted under the applicable laws and regulations, at the
request of the Participant and if authorized by the Committee, in its sole
discretion, at or after grant, the Company agrees to cooperate in a "cashless
exercise" of a Stock Option. The cashless exercise shall be effected by the
Participant delivering to the Securities Broker instructions to sell a
sufficient number of shares of Stock to cover the cost and expenses associated
therewith.
No shares of Stock shall be issued until full payment therefor has been
made. A Participant shall not have any right to dividends or other rights of a
stockholder with respect to shares subject to the Option until such time as
Stock is issued in the name of the Participant following exercise of the Option
in accordance with the Plan.
(e) Stock Option Agreement. Each Option granted under this Plan
shall be evidenced by an appropriate Stock Option agreement, which
agreement shall expressly specify whether such Option is an
Incentive Stock Option or a Non-Qualified Stock Option and shall be
executed by the Company and the Participant. The agreement shall
contain such terms and provisions, not inconsistent with the Plan,
as shall be determined by the Committee.
(f) Replacement Options. The Committee may, in its sole
discretion and at the time of the original option grant, authorize
the Participant to automatically receive replacement Options
pursuant to this part of the Plan. Any such replacement option shall
be granted upon such terms and subject to such conditions and
limitations as the Committee may deem appropriate. Any replacement
option shall cover a number of shares determined by the Committee,
but in no event equal to more than the number of shares covered by
the original option exercised. The per share exercise price of any
replacement option shall equal the then current Fair Market
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<PAGE> 8
Value of a share of Stock, and shall have a term as determined
by the Committee at the time of grant of the original Option.
The Committee shall have the right, and may reserve the right in any
Option grant, in its sole discretion and at any time, to discontinue the
automatic grant of replacement options if it determines the continuance of such
grants to no longer be in the best interest of the Company.
(g) Non-transferability of Options. Except as provided below, no
Stock Option shall be transferable by the Participant other than by
will or by the laws of descent and distribution, and all Stock
Options shall be exercisable, during the Participant's lifetime,
only by the Participant. When a Participant dies, the representative
or other person entitled to succeed to the rights of the Grantee may
exercise such rights, subject to the Company receiving satisfactory
proof of his or her right to receive the Grant under the
Participant's will or under the applicable laws of descent and
distribution. Notwithstanding the foregoing, the Committee may
provide, at or after Grant, that a Participant may transfer
Nonqualified Stock Options pursuant to a domestic relations order or
to family members or other persons or entities according to such
terms as the Committee may determine.
(h) Termination of Employment; Disability; Death
(i) Unless otherwise determined by the Committee at or after
grant, in the event of a Participant's termination of employment
(voluntary or involuntary) for any reason other than as provided
below, any Stock Option held by such Participant may thereafter
be exercised by the Participant, to the extent it was exercisable
at the time of such termination or on such accelerated basis as the
Committee may determine at or after grant, for a period of three
months (or such shorter period as the Committee may specify at
grant) from the date of such termination of employment or until the
expiration of the stated term of such Stock Option, whichever
period is shorter.
(ii) Unless otherwise determined by the Committee at or after
grant, if any Participant ceases to be employed by the Company on
account of a Termination for Cause by the Company, any Stock Option
held by such Participant shall terminate as of the date the
Participant ceases to be employed by the Company, and the
Participant shall automatically forfeit all Stock underlying any
exercised portion of an Option for which the Company has not yet
delivered the share certificates, upon refund by the Company of the
Exercise Price paid by the Participant for such Stock.
(iii) Unless otherwise determined by the Committee at or after
grant, if a Participant's employment by the Company terminates by
reason of Disability, any Stock Option held by such Participant may
thereafter be exercised by the
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<PAGE> 9
Participant, to the extent it was exercisable at the time of
termination, or on such accelerated basis as the Committee may
determine at or after grant, for a period of one year (or such shorter
period as the Committee may specify at grant) from the date of such
termination of employment or until the expiration of the stated term
of such Stock Option, whichever period is shorter.
(iv) Unless otherwise determined by the Committee at or after
grant, if any Participant dies while employed by the Company or within
three months after the date on which the Participant ceases to be
employed by the Company on account of termination of employment
specified in Section 5(h)(i) above (or within such other period of
time as may be specified by the Committee), any Stock Option held by
such Participant may thereafter be exercised, to the extent then
exercisable or on such accelerated basis as the Committee may
determine at or after grant, by the legal representative of the estate
or by the legatee of the Participant under the will of the
Participant, for a period of one year (or such shorter period as the
Committee may specify at grant) from the date of such termination of
employment or until the expiration of the stated term of such Stock
Option, whichever period is shorter.
(i) Incentive Stock Option Limitation. The aggregate Fair Market Value
(determined as of the time of grant) of the Stock with respect to
which Incentive Stock Options are exercisable for the first time
by the Participant during any calendar year under the Plan and/or
any other stock option plan of the Company shall not exceed $100,000.
An Incentive Stock Option shall not be granted to any person who is
not an employee of the Company or a parent or subsidiary (within the
meaning of section 424(f) of the Code).
(j) Issuance of Shares Issuance of Shares and Compliance with Securities
Acts. Within a reasonable time after exercise of an Option, the
Company shall cause to be delivered to the Participant a certificate
for the Stock purchased pursuant to the exercise of the Option.
SECTION 6. Stock Appreciation Rights
(a) Grant and Exercise. Stock Appreciation Rights may be granted
either separately or in tandem with all or part of any Stock Option
granted under the Plan. The provisions of Stock Appreciation Rights
awarded under the Plan need not be the same with respect to each
Participant. In the case of a Non-Qualified Stock Option, such
rights may be granted either at the grant of such Stock Option or at
any time thereafter while the Option remains outstanding. In the
case of an Incentive Stock Option, such rights may be granted only
at the time of the grant of such Stock Option. The Committee shall
establish the base amount of the Stock Appreciation Rights at the time
the Stock Appreciation Right is granted. Unless the Committee
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determines otherwise, the base amount of each Stock Appreciation
Right shall be equal to the per share option price of the related
Stock Option or, if there is no related Stock Option, the Fair Market
Value of a share of Stock as of the date of grant of such Stock
Appreciation Right.
A Stock Appreciation Right or applicable portion thereof granted with
respect to a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, except that,
unless otherwise determined by the Committee, in its sole discretion, at the
time of grant, a Stock Appreciation Right granted with respect to less than the
full number of shares covered by a related Stock Option shall not be reduced
until the number of shares covered by an exercise or termination of the related
Stock Option exceeds the number of shares not covered by the Stock
AppreciationRight.
A Stock Appreciation Right may be exercised by a Participant, in
accordance with Section 6(b), by surrendering the applicable portion of the
related Stock Option. Upon such exercise and surrender, the Participant shall
be entitled to receive an amount determined in the manner prescribed in Section
6(b). Stock Options which have been so surrendered, in whole or in part, shall
no longer be exercisable to the extent the related Stock Appreciation Rights
have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be
subject to such terms and conditions, not inconsistent with the
provisions of the Plan, as shall be determined from time to time by
the Committee, including the following:
(i) Stock Appreciation Rights shall be exercisable only at such
time or times and to the extent that the Stock Options to which they
relate, if any, shall be exercisable in accordance with the
provisions of Section 5 and this Section 6 of the Plan.
(ii) Upon the exercise of a Stock Appreciation Right, a
Participant shall be entitled to receive up to, but not more than, an
amount in cash and/or shares of Stock equal in value to the excess of
the Fair Market Value of one share of Stock (as of the date the Stock
Appreciation Right is exercised and the related Stock Option is
surrendered) over the exercise price of the Stock Appreciation Right,
multiplied by the number of shares of Stock in respect of which the
Stock Appreciation Right shall have been exercised, with the
Committee having the right to determine the form of payment.
(iii) Stock Appreciation Rights shall be transferable only when
and to the extent that the underlying Stock Option would be
transferable under Section 5(g) of the Plan.
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(iv) A Stock Appreciation Right granted in connection with an
Incentive Stock Option may be exercised only if and when the market
price of the Stock subject to the Incentive Stock Option exceeds the
exercise price of such Stock Option.
SECTION 7. Restricted Stock
(a) Administration. Shares of Restricted Stock may be issued either alone
or in addition to other awards granted under the Plan. The Committee
shall determine the employees, non-employee directors or Eligible
Independent Contractors to whom, and the time or times at which,
grants of Restricted Stock will be made, the number of shares to be
awarded, the price (if any) to be paid by the recipient of Restricted
Stock (subject to Section 7(b)), the time or times within which such
awards may be subject to forfeiture, and all other conditions of the
awards. The Committee may condition the grant of Restricted Stock upon
the attainment of specified performance goals or such other factors as
the Committee may determine, in its sole discretion. The provisions of
Restricted Stock awards need not be the same with respect to each
Participant.
(b) Awards and Certificates. The prospective recipient of a Restricted
Stock award shall not have any rights with respect to such award
unless and until such recipient has executed an agreement evidencing
the award and has delivered a fully executed copy thereof to the
Company, and has otherwise complied with the applicable terms and
conditions of such award.
(i) The purchase price for shares of Restricted Stock shall be
established by the Committee and may be zero.
(ii) Awards of Restricted Stock may be accepted within a period
of 60 days (or such shorter period as the Committee may specify at
grant) after the grant date, by executing a Restricted Stock award
agreement and paying whatever price (if any) is required under
Section 7(b)(i).
(iii) Each Participant receiving a Restricted Stock award shall
be issued a certificate in respect of such shares of Restricted
Stock. Such certificate shall be registered in the name of such
Participant, and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such award,
substantially in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) of the Coherent Communications Systems
Corporation 1993 Equity Compensation Plan and an Agreement entered
into between the registered owner and Coherent
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<PAGE> 12
Communications Systems Corporation. Copies of such Plan and
Agreement are on file at the offices of Coherent Communications
Systems Corporation."
(iv) The Committee shall require that the certificates
evidencing such Restricted Stock be held in custody by the Company
until the restrictions thereon shall have lapsed, and that, as a
condition of any Restricted Stock award, the Participant shall have
delivered a stock power, endorsed in blank, relating to the Stock
covered by such award.
(c) Restrictions and Conditions. The shares of Restricted Stock
awarded pursuant to this Section 7 shall be subject to the following
restrictions and conditions:
(i) Subject to the provisions of this Plan and the Restricted
Stock award agreement, during a period set by the Committee
commencing with the date of such award (the "Restriction Period"),
the Participant shall not be permitted to sell, transfer, pledge,
assign or otherwise encumber shares of Restricted Stock awarded under
the Plan. Within these limits, the Committee, at its sole discretion,
may provide for the lapse of such restrictions in installments and
may accelerate or waive such restrictions in whole or in part,
based on service, performance and/or such other factors or criteria
as the Committee may determine, in its sole discretion.
(ii) Except as provided in this paragraph (ii) and Section
7(c)(i), the Participant shall have, with respect to the shares of
Restricted Stock, all of the rights of a stockholder of the Company,
including the right to vote the shares and the right toreceive any
cash dividends. The Committee, in its sole discretion, as determined
at the time of award, may permit or require the payment of cash
dividends to be deferred and, if the Committee so determines,
reinvested in additional Restricted Stock to the extent shares are
available under Section 3.
(iii) Subject to the applicable provisions of the Restricted
Stock award agreement and this Section 7, upon termination of a
Participant's employment with the Company for any reason during the
Restriction Period, all shares still subject to restriction shall be
forfeited by the Participant, subject to any payments for such shares
as may be provided in the Restricted Stock award agreement.
(iv) The Committee may, in its sole discretion, waive in whole
or in part any or all remaining restrictions with respect to such
Participant's shares of Restricted Stock, based on such factors as
the Committee may deem appropriate.
(v) If and when the Restriction Period expires without a prior
forfeiture of the Restricted Stock subject to such Restriction
Period, the certificates for such shares shall be delivered to the
Participant promptly.
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<PAGE> 13
SECTION 8. Withholding and Use of Shares to Satisfy Tax Obligations
(a) Required Withholding. All Grants under the Plan shall be
subject to applicable federal (including FICA), state and local
withholding requirements. The Company shall have the right to
deduct from all Grants paid in cash, or from other wages paid to the
Participant, any federal, state or local taxes required by law to be
withheld with respect to such Grants. In the case of Grants paid in
Company Stock, the Company may require the Participant or other
person receiving such Stock to pay to the Company the amount of any
such taxes that the Company is required to withhold with respect to
such Grants, or the Company may deduct from other wages paid by the
Company the amount of any withholding taxes due with respect to such
Grants.
(b) Election to Withhold Shares. If the Committee so permits, a
Participant may elect to satisfy the Company's income tax
withholding obligation with respect to a Grant paid in Company Stock
by having shares withheld up to an amount that does not exceed the
Participant's maximum marginal tax rate for federal (including
FICA), state and local tax liabilities. The election must be in a
form and manner prescribed by the Committee and shall be subject to
the prior approval of the Committee.
SECTION 9. Amendments and Termination
The Board may amend or terminate the Plan at any time and from time to
time, but no amendment or termination shall be made which would impair the
rights of a Participant under a Grant theretofore awarded without the
Participant's consent; and provided, further, that the Board shall not amend
the Plan without stockholder approval if such approval is required pursuant to
the Code or the rules of any national securities exchange or over-the-counter
market on which the Company's Stock is then listed or included. Subject to the
above provisions, the Board shall have broad authority to amend the Plan to
take into account changes in applicable tax laws, securities laws and
accounting rules, as well as other developments.
SECTION 10. Unfunded Status of Plan
The Plan is intended to constitute an "unfunded" plan. The Company shall
not be required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Grants under this Plan. In
no event shall interest be paid or accrued on any Grant, including unpaid
installments of Grants.
SECTION 11. General Provisions
(a) The Committee may require each person purchasing shares
pursuant to a Stock Option or receiving Stock upon the expiration of
any Restriction Period under the Plan to represent to and agree with
the Company in writing that the Participant is
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<PAGE> 14
acquiring the shares for investment and not with a view to
distribution thereof and that such Participant will not dispose of
such Stock in any manner that would involve a violation of applicable
securities laws. In such event no Stock shall be issued to such
Participant unless and until the Company is satisfied with such
representation. The certificates for such shares may include any
legend which the Committee deems appropriate to reflect any
restrictions on transfer under the Securities Act or any state
securities law.
All certificates for shares of Stock or other securities delivered under
the Plan shall be subject to such stop-transfer orders and other restrictions
as the Committee may deem advisable under the rules, regulations and other
requirements of the Securities Act, the Exchange Act, any stock exchange or
over-the-counter market upon which the Stock is then listed or included, and
any applicable federal or state securities law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required, and such
arrangements may be either generally applicable or applicable only
in specific cases.
(c) The adoption of the Plan shall not confer upon any Participant any
right to continued employment with the Company nor shall it interfere
in any way with the right of the Company to terminate its relationship
with any of its employees, directors or independent contractors at any
time.
(d) At the time of grant, the Committee may provide in connection
with any grant made under this Plan that (i) the shares of Stock
received as a result of such grant shall be subject to a right of
first refusal, pursuant to which the Participant shall be required
to offer to the Company any shares that the Participant wishes to
sell, with the price being the then Fair Market Value of the Stock,
subject to such other terms and conditions as the Committee may
specify at the time of grant; and (ii) the shares of Stock received
or to be received as a result of such grant shall be subject to
repurchase by the Company upon termination of employment, subject to
a repurchase price and such other terms and conditions as the
Committee may specify at the time of grant.
(e) The reinvestment of dividends in additional Restricted Stock
at the time of any dividend payment shall only be permissible if
sufficient shares of Stock are available under Section 3 for such
reinvestment.
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<PAGE> 15
(d) The Committee shall establish such procedures as it deems
appropriate for a Participant to designate a beneficiary to whom any
amounts payable in the event of the Participant's death are to be
paid.
(e) The Plan shall be governed by and subject to all applicable
laws and to the approvals by any governmental or regulatory agency
as may be required.
SECTION 12. Effective Date and Term of Plan
The Plan shall be effective as of December 10, 1993, subject to the
consent or approval of the Company's stockholders. No Stock Option, Stock
Appreciation Right or Restricted Stock award shall be granted pursuant to the
Plan on or after December 10, 2003, but awards granted prior to such tenth
anniversary may extend beyond that date; provided, however, that if the Plan is
not approved by the unanimous consent of all stockholders or by a majority of
the votes cast at a duly held meeting at which a quorum representing a majority
of all outstanding voting stock of the Company is, either in person or by
proxy, present and voting on the Plan, within 12 months after said date, the
Plan and all Grants awarded hereunder shall be null and void and no additional
Grants shall be awarded hereunder.
SECTION 13. Interpretation
A determination of the Committee as to any question which may arise with
respect to the interpretation of the provisions of this Plan or any Grants
awarded thereunder shall be final and conclusive, and nothing in this Plan, or
in any regulation hereunder, shall be deemed to give any Participant, his legal
representatives, assigns or any other person any right to participate herein
except to such extent, if any, as the Committee may have determined or approved
pursuant to this Plan. The Committee may consult with legal counsel who may be
counsel to the Company and shall not incur any liability for any action taken
in good faith in reliance upon the advice of such counsel.
SECTION 14. Governing LawGoverning Law
With respect to any Incentive Stock Options granted pursuant to the Plan
and the agreements thereunder, the Plan, such agreements and any Incentive
Stock Options granted pursuant thereto shall be governed by the applicable Code
provisions to the maximum extent possible. Otherwise, the laws of the State of
Delaware shall govern the operation of, and the rights of Participants under,
the Plan, the agreements and any Grants awarded thereunder.
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<PAGE> 16
SECTION 15. Compliance With Section 16b of the Exchange Act
Unless an Insider could otherwise transfer shares of Stock issued
hereunder without incurring liability under Section 16b of the Exchange Act, at
least six months must elapse from the date of grant of an Option, Stock
Appreciation Right or Restricted Stock award to the date of disposition of the
Stock issued upon exercise of such Option or Stock Appreciation Right or grant
of such Restricted Stock award.
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<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Post-Effective Amendment
No.1 on Form S-8 to the Registration Statement (Form S-4 No.333-49557) of
Tellabs, Inc. of our reports dated January 26, 1998, with respect to the
consolidated financial statements of Tellabs, Inc., incorporated by reference in
its Annual Report (Form 10-K) for the year ended January 2, 1998 and related
financial statement schedules included therein, filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
July 31, 1998
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated January 15, 1997, accompanying the consolidated
financial statements of Tellabs, Inc. and Subsidiaries as of December 27, 1996
and for the two years then ended incorporated by reference in this
Post-Effective Amendment on Form S-8 to the Registration Statement on Form S-4.
GRANT THORNTON LLP
Chicago, Illinois
August 3, 1998
