Exhibit 10.16
TELLABS, INC.
RESTRICTED STOCK AWARD
for
JOHN E. VAUGHAN
1.1 Certain Definitions
"Award" shall mean this Award which is a right to receive
Restricted Stock.
"Board" shall mean the Board of Directors of Tellabs, Inc.
("Tellabs").
"Cause" shall mean any act of deliberate dishonesty with respect
to Tellabs, conviction of a felony, significant activities
harmful to the reputation of Tellabs, refusal to perform or
substantial disregard of duties properly assigned, or
significant violation of any Tellabs policy or any statutory or
common law duty of loyalty to Tellabs.
"Committee" shall mean the Compensation Committee of the Board
of Tellabs or any successor Committee thereto.
"Common Stock" means the common stock of Tellabs, Inc.
"Disability" shall mean the inability of the Recipient to
perform substantially such Recipient'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.
"Recipient" means John E. Vaughan.
"Restricted Stock" shall mean shares of Common Stock awarded
pursuant to this Award.
-1-
1.2 Administration
This Award shall be administered by the Committee. The
Committee shall, subject to the terms of this Award, interpret
this Award and the application thereof, establish rules and
regulations it deems necessary or desirable for the
administration of this Award. 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 Tellabs or a
Subsidiary (other than the Recipient) as the Committee deems
appropriate.
2. RESTRICTED STOCK AWARD
2.1 Restricted Stock Award
Tellabs hereby grants 10,000 shares of Restricted Stock to
Recipient subject to the terms hereof.
2.2 Terms of Restricted Stock Award
This Award shall be subject to the following terms and
conditions.
a. Vesting and Forfeiture
One-half of the number of shares of Common Stock subject to
this Award shall vest and be payable on May 1, 1998 and the
other half of such number shall vest and be payable on
May 1, 1999, in each case, subject to Section 2.3, if the
Recipient remains continuously in the employment of Tellabs
or a Subsidiary until such dates. Recipient shall forfeit
the unvested portion of any such shares if Recipient does
not remain continuously in the employment of Tellabs or a
Subsidiary as specified above, except as otherwise provided
in Section 2.3 hereof.
b. Shares Certificates
Upon the vesting of a portion of the Award pursuant to
Section 2.2(a) or 2.3(b), in each case subject to Tellabs
or a Subsidiary rights to require payment of any taxes in
accordance with Section 3.2, a certificate or certificates
evidencing ownership of the number of shares of Common Stock
so vested shall be delivered to and in the name of the
Recipient.
2.3 Termination of Employment
a. Termination Resulting in Forfeiture
If (i) employment with Tellabs or a Subsidiary of the
Recipient of the Award is terminated by Tellabs or a
-2-
Subsidiary for Cause, (ii) such employment terminates by
reason of the Recipient's Disability or death, or (iii) the
Recipient voluntarily terminates his employment with Tellabs
or a Subsidiary for any reason, the portion of such Award
which is not vested pursuant to Section 2.2(a) shall be
forfeited by such Recipient and such portion shall be
canceled by Tellabs.
b. Other Termination
If Tellabs or a Subsidiary terminates the employment of the
Recipient of the Award for any reason other than as
provided in Section 2.3(a), the portion of such Award which
is not otherwise vested shall vest pursuant to Section
2.2(a) without regard to such termination and be payable
within thirty (30) days of such termination, in accordance
with Section 2.2(b).
3. GENERAL
3.1 Amendments
The Board or the Committee may amend this Award as it shall deem
advisable, provided, however, that no amendment may adversely
impact the rights of the Recipient in the outstanding Award
without the consent of the Recipient.
3.2 Tax Withholding
Tellabs shall have the right to require, prior to the issuance
or delivery of any shares of Common Stock or the payment of
any cash pursuant to the Award made hereunder, payment by the
Recipient of such Award of any federal, provincial, 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 Recipient.
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 subject to the outstanding
Award shall be adjusted or modified accordingly, as determined
by the Committee, which adjustment may include providing for
payment of an asset not constituting a security upon the vesting
of an outstanding Award. The decision of the Committee
regarding any such adjustment shall be final, binding and
conclusive. If any such adjustment would result in a fractional
security being subject to the Award, Tellabs shall pay the
-3-
Recipient of such Award, in connection with the first vesting of
such Award, in whole or in part, occurring after such
adjustment, an amount in cash determined by multiplying (a) the
fraction of such security (rounded to the nearest hundredth) by
(b) the excess, if any, of the Fair Market Value on the vesting
date.
3.4 No Assignment
It is a condition of this Award, and the rights of the Recipient
shall be subject thereto, that no right or interest of the
Recipient 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 the Recipient under this Award shall be liable
for, or subject to, any obligation of the Recipient, including
claims for alimony or the support of any spouse.
3.5 No Right of Employment
The Award made hereunder shall not confer upon any person any
right to continued employment by Tellabs, Tellabs
International, Inc. or any Subsidiary or affiliate thereof or
affect in any manner the right of Tellabs, Tellabs
International, Inc. or any Subsidiary or affiliate thereof to
terminate the employment of any person at any time without
liability hereunder.
3.6 Right as Stockholder
No person shall have any right as a stockholder of Tellabs with
respect to any shares of Common Stock or other equity security
of Tellabs 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. Tellabs'
obligation to deliver shares of Common Stock pursuant to this
Award shall be unfunded, and Tellabs shall not be obligated to
set aside any of its assets for the purpose of satisfying its
obligations hereunder. The claims of the Recipient of an Award
shall be solely those of an unsecured creditor of Tellabs.
3.7 Governing Law
The corporate law of the State of Delaware shall govern all
issues concerning the relative rights of Tellabs and the
Recipient with respect to this Award. 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 Award.
3.8 Effective Date
This Award shall become effective on May 1, 1997.
-4-