Exhibit 10.1

AGREEMENT

THIS AGREEMENT (“Agreement”), dated as of April 5, 2012, is made by and among
Tellabs, Inc., a Delaware corporation (the “Company”), and the other entities
and natural persons listed on the signature pages hereto (collectively, the
“Dialectic Group”) (each of the Company and the Dialectic Group, a “Party” to
this Agreement, and collectively, the “Parties”).

WHEREAS, the Dialectic Group may be deemed to beneficially own shares of common
stock of the Company (the “Common Stock”) totaling, in the aggregate, 6,508,420
shares, or approximately 1.78% of the Common Stock issued and outstanding on the
date hereof;

WHEREAS, the Company from time to time holds discussions with certain of its
stockholders relating to governance matters, including with respect to
preferences relating to the composition of the Company’s board of directors (the
“Board”);

WHEREAS, the Dialectic Group has provided notice to the Company of its intention
to nominate new candidates to the Board at its 2012 annual meeting of
stockholders (the “2012 Annual Meeting”) and to communicate with stockholders of
the Company in connection with the election of directors of the Company at the
Annual Meeting;

WHEREAS, Linda Wells Kahangi (a Class III Director) (“Kahangi”) and William
Souders (a Class I Director) (“Souders”) have advised the Company of their
willingness to retire from the Board, immediately upon the completion of the
2012 Annual Meeting;

WHEREAS, it is considered desirable to appoint one of the nominees identified by
the Dialectic Group to fill the Class III vacancy and a separate candidate to
fill the Class I vacancy, which candidate was identified after consultation by
the Company with certain of the Company’s other stockholders, as more fully
described below; and

WHEREAS, the Company and the Dialectic Group have agreed that it is in their
mutual interests to enter into this Agreement to set forth, among other things,
the parties’ mutual understanding relating to the 2012 Annual Meeting.

NOW, THEREFORE, in consideration of the premises and the representations,
warranties, and agreements contained herein, and other good and valuable
consideration, the Parties mutually agree as follows:

1. Representations and Warranties of the Dialectic Group. The Dialectic Group
represents and warrants to the Company that (a) this Agreement has been duly
authorized, executed and delivered by each member of the Dialectic Group, and is
a valid and binding obligation of each member of the Dialectic Group,
enforceable against each member of the Dialectic Group in accordance with its
terms, except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
generally affecting the rights of creditors and subject to general equity
principles; and (b) the execution of this Agreement, the consummation of any of
the transactions contemplated hereby, and the fulfillment of the terms hereof,
in each case in accordance with the terms hereof,

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will not conflict with, or result in a breach or violation of, any law, or any
order of any court or other agency of government, applicable to any member of
the Dialectic Group or to which any member of the Dialectic Group is a party, or
the organizational documents of any member of the Dialectic Group.

2. Representations and Warranties of the Company. The Company hereby represents
and warrants to the Dialectic Group that (a) this Agreement has been duly
authorized, executed and delivered by the Company, and is a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws generally affecting the rights of creditors and subject to general
equity principles; and (b) the execution of this Agreement, the consummation of
any of the transactions contemplated hereby, and the fulfillment of the terms
hereof, in each case in accordance with the terms hereof, will not conflict
with, or result in a breach or violation of, any law, any order of any court or
other agency of government, the Company’s Certificate of Incorporation or
Bylaws, each as amended to date, or any agreement applicable to the Company or
to which the Company is a party or is bound, nor trigger any “change of control”
provision in any agreement or employee benefit plan to which the Company is a
party or is bound.

3. Director Appointments and Annual Meeting.

(a) Each of Kahangi and Souders has executed and delivered to the Company a
resignation letter pursuant to which he or she is retiring from the Board
effective upon the completion of the 2012 Annual Meeting. Subject to the
agreement of the 2012 Appointees (defined below) to comply with the Company’s
governance policies, in order to fill the vacancies created by such
resignations, the Company has taken all actions necessary and appropriate to
have its Board appoint, effective upon the completion of the 2012 Annual
Meeting, (i) Gregory J. Rossmann as a Class III Director with a term expiring at
the Company’s 2013 annual meeting of stockholders (the “2013 Annual Meeting”),
and (ii) Vincent D. Kelly as a Class I Director with a term expiring at the
Company’s 2014 annual meeting of stockholders (the “2014 Annual Meeting”).
Mr. Rossmann is referred to herein as the “Dialectic Appointee,” and
Mr. Rossmann and Mr. Kelly are collectively referred to as the “2012
Appointees.” The 2012 Appointees shall be invited to attend all meetings of the
Board in the capacity of observers (subject to providing customary
confidentiality undertakings in the same manner as a director of the Company)
pending the effectiveness of their appointments to the Board. The Company shall
provide to each 2012 Appointee, in his capacity as an observer, copies of all
notices, minutes, consents and other materials, financial and otherwise, as and
when provided to the Board.

(b) So long as the Dialectic Group certifies in writing to the Company that, on
December 31, 2012, it is the beneficial owner of not less than 1% of the
outstanding shares of the Common Stock, the Company agrees to take all actions
necessary and appropriate to (i) nominate the Dialectic Appointee for election
at the 2013 Annual Meeting as a Class III Director of the Board, (ii) recommend,
and to reflect such recommendation in the Company’s definitive proxy statement
in connection with the 2013 Annual Meeting, that the stockholders of the Company
vote to elect the Dialectic Appointee as a Class III Director of the Board at
the 2013 Annual Meeting, and (iii) support and solicit proxies for the Dialectic
Appointee’s election as a Class III Director of the Board, all in the same
manner as for the Company’s other nominees who

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are up for election at the 2013 Annual Meeting. The Company agrees that if, for
any reason, the Dialectic Appointee is unable to stand for reelection as a Class
III Director at the 2013 Annual Meeting, the Dialectic Group shall have the
opportunity to recommend a substitute nominee, who shall qualify as
“independent” pursuant to NASDAQ listing standards and who has relevant
financial and business experience, subject to the approval of the Nominating and
Governance Committee of the Board in good faith after exercising its fiduciary
duties, which approval shall not be unreasonably withheld. In the event the
Nominating and Governance Committee of the Board does not accept the substitute
nominee recommended by the Dialectic Group, the Dialectic Group will have the
right to recommend one or more additional substitute nominees for consideration
by the Nominating and Governance Committee. Upon the acceptance of a substitute
director nominee by the Nominating and Governance Committee, the Company will
take all action set forth in the first sentence of this clause (b) with respect
to such substitute director nominee. The foregoing provisions in this subsection
3(b) with respect to the Dialectic Appointee shall also apply mutatis mutandis
with respect to the Mutual Appointee (defined below) if and only if the Mutual
Appointee is appointed to a Class III directorship. For the avoidance of doubt,
any reference in this Agreement to the “Dialectic Appointee” and “Mutual
Appointee” shall include any such replacement nominee selected in accordance
with the provisions of this clause (b).

(c) So long as the Dialectic Group certifies in writing to the Company that it
is the beneficial owner of not less than 1% of the outstanding shares of the
Common Stock at the applicable time, the Company agrees to take all actions
necessary and appropriate to cause a candidate mutually agreeable to the Company
and the Dialectic Group (or J.C. Huang, if the Company and the Dialectic Group
are unable to agree on such other candidate) to be appointed to the Board not
later than December 31, 2012 (J.C. Huang or such mutually agreeable candidate
being referred to as the “Mutual Appointee”). To the extent necessary, the
Company may increase the size of the Board to 11 to effectuate the foregoing.

(d) Each of the Dialectic Appointee and the Mutual Appointee shall agree to
resign from the Board if the Dialectic Group at any time is the beneficial owner
of less than 1% of the shares of the outstanding Common Stock. The Dialectic
Group will notify the Company promptly after becoming aware of such occurrence.

(e) The Dialectic Group hereby irrevocably withdraws its letter to the Company
dated February 3, 2012 (the “Dialectic Nomination Letter”).

(f) At the 2012 Annual Meeting and the 2013 Annual Meeting, and at each special
meeting of stockholders of the Company prior to the 2013 Annual Meeting, so long
as either of the Dialectic Appointee or the Mutual Appointee is serving as a
director, the Dialectic Group agrees to vote, and cause their respective
Affiliates and Associates within their control to vote, all of the shares of
Common Stock beneficially owned by them or over which it has or shares (with any
other member of the Dialectic Group or any such Affiliate or Associate) voting
power in accordance with the recommendation of the Board as set out in the
related proxy statement solely with respect to matters not requiring the Company
to file a preliminary proxy statement with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended, or the
rules or regulations thereunder (the “Exchange Act”), provided that
Institutional Shareholder Services has recommended in favor thereof.

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(g) The Company agrees that during the Standstill Period (as defined below), it
shall not, and shall cause the Board not to, take any action to increase the
number of members on the Board to more than 10 directors, except as provided for
in subsection 3(c) above.

(h) The Company agrees that it shall hold the 2012 Annual Meeting no later than
May 15, 2012.

4. Standstill. Each member of the Dialectic Group agrees that, from the date of
this Agreement through the earlier of (x) the date that is eighteen months from
the date of this Agreement, and (y) the date that is 10 days prior to the
deadline for stockholders to nominate director candidates for election to the
Board at the 2014 Annual Meeting (the “Standstill Period”):

(a) neither it nor any of its Affiliates or Associates under its control or
direction will, and it will cause each of its Affiliates and Associates under
its control not to, directly or indirectly, in any manner:

(i) engage in any solicitation of proxies or consents or become a “participant”
in a “solicitation” (as such terms are defined in Regulation 14A under the
Exchange Act) of proxies or consents (including, without limitation, any
solicitation of consents to call a special meeting of stockholders, action by
written consent of stockholders or any other solicitation or nomination), in
each case, with respect to securities of the Company;

(ii) seek to advise, encourage, support, cooperate with, or influence any person
with respect to the voting or disposition of any securities of the Company at
annual or special meetings of stockholders;

(iii) form, join or in any way participate in any “group” (within the meaning of
Section 13(d)(3) of the Exchange Act) with respect to the Common Stock (other
than a “group” that includes all or some lesser number of the persons identified
herein as part of the Dialectic Group);

(iv) at any time be the beneficial owner, in the aggregate, of more than 5% of
the outstanding shares of the Common Stock;

(v) deposit any Common Stock in any voting trust or subject any Common Stock to
any arrangement or agreement with respect to the voting of any Common Stock,
other than any such voting trust, arrangement or agreement solely among the
Dialectic Group;

(vi) control, influence or seek to control or influence the Board other than
through the Dialectic Appointee and/or the Mutual Appointee, other than through
non public communications with the officers and directors of the Company;

(vii) seek or encourage any person to submit nominations in furtherance of a
“contested solicitation” for the election or removal of directors with respect
to the Company or any other solicitation or nomination;

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(viii) (1) make any proposal for consideration by stockholders at any annual or
special meeting of stockholders or (2) make any offer or proposal (with or
without conditions) with respect to a merger, acquisition, disposition or other
business combination involving the Dialectic Group and the Company;

(ix) seek, alone or in concert with others, representation on the Board, other
than in accordance with Section 3(b); or

(x) make any request to amend, waive or terminate any provision of this
Agreement, other than through non public communications with the officers and
directors of the Company that do not trigger any disclosure obligation on the
part of the Company or any member of the Dialectic Group;

provided, however, that, except as otherwise provided in Section 3, nothing
herein will limit the ability of (1) any member of the Dialectic Group, or any
of its respective Affiliates and Associates, to vote its shares of Common Stock
on any matter submitted to a vote of the stockholders of the Company in such
manner as it may determine in its sole discretion; (2) the Dialectic Group to
disclose, publicly or otherwise, how it intends to vote or act with respect to,
or to announce its opposition to, including, in any such case, the reasons
therefor, any publicly-announced proposals, including, but not limited to, a
merger, acquisition, disposition of all or substantially all of the assets of
the Company or other business combination or divestiture involving the Company;
or (3) any member of the Dialectic Group, or any of its respective Affiliates
and Associates from taking any action as, based on the advice of counsel, is
reasonably required to comply with applicable law (including any Federal or
State securities laws, rules or regulations or the rules and regulations of any
stock exchange or stock market).

As used in this Agreement, the terms “Affiliate” and “Associate” shall have the
respective meanings set forth in Rule 12b-2, and the term “beneficial owner”
shall have the meaning set forth under Rule 13d-3, in each case promulgated by
the SEC under the Exchange Act.

5. Public Announcement. The Company and the Dialectic Group shall promptly
disclose the existence of this Agreement after its execution pursuant to a joint
press release that is mutually acceptable to the Parties, including a
description of the material terms of this Agreement. Subject to applicable law,
none of the Parties shall disclose the existence of this Agreement until the
joint press release is issued. During the Standstill Period, each Party agrees
that it shall refrain from any disparagement, defamation, libel or slander with
respect to any other Party and from publicly criticizing any other Party or a
Party’s respective Affiliates and Associates. Except as provided in Section 4,
nothing in this Agreement shall prohibit or be construed to prohibit any Party
or any of its Affiliates and Associates from commenting or presenting its views
on any issue or matter that has been publicly disclosed by the other Party and
making any filings with the Securities and Exchange Commission which, based on
the advice of counsel, any of the foregoing Parties is reasonably required to
make in connection therewith.

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6. Remedies.

(a) Each of the Parties acknowledges and agrees that a breach or threatened
breach by any Party may give rise to irreparable injury inadequately compensable
in damages, and accordingly each Party shall be entitled to seek injunctive
relief to prevent a breach of the provisions hereof and to enforce specifically
the terms and provisions hereof in any state or federal court having
jurisdiction, in addition to any other remedy to which such aggrieved Party may
be entitled to at law or in equity, and without posting a bond or other
security.

(b) In the event a Party institutes any legal action to enforce such Party’s
rights under, or recover damages for breach of, this Agreement, the prevailing
party or parties in such action shall be entitled to recover from the other
party or parties all out-of-pocket costs and expenses, including but not limited
to reasonable attorneys’ fees, court costs, witness fees, disbursements and any
other out-of-pocket expenses of litigation or negotiation, incurred by such
prevailing party or parties in connection with such action.

7. Expenses. The Company shall reimburse the Dialectic Group for its reasonable,
documented out-of-pocket fees and expenses incurred in connection with matters
related to the 2012 Annual Meeting and the negotiation and execution of this
Agreement in the amount of $50,000 in the aggregate.

8. Releases.

(a) The Dialectic Group hereby agrees for the benefit of the Company, and each
controlling person, officer, director, stockholder, agent, affiliate, employee,
member, manager, partner, attorney, heir, assign, executor, administrator,
predecessor and successor, past and present, of the Company (the Company and
each such person being a “Company Released Person”) as follows:

(i) The Dialectic Group, for themselves and for their members, officers,
directors, assigns, agents and successors, past and present, hereby agrees and
confirms that, effective from and after the date of this Agreement, they hereby
acknowledge full and complete satisfaction of, and covenant not to sue, and
forever fully release and discharge each Company Released Person of, and hold
each Company Released Person harmless from, any and all rights, claims,
warranties, demands, debts, obligations, liabilities, costs, attorneys’ fees,
expenses, suits, losses and causes of action of any nature whatsoever, whether
known or unknown, suspected or unsuspected (collectively, “Claims”) and arising
out of or related to the Company’s solicitation of nominees for directors and
related proxy solicitation in connection with the 2012 Annual Meeting
(collectively, “Dialectic Claims”) that the Dialectic Group may have against the
Company Released Persons, in each case with respect to events occurring prior to
the date of the execution of this Agreement.

(ii) The Dialectic Group understands and agrees that the Dialectic Claims
released by the Dialectic Group above include not only those Claims presently
known but also include all unknown or unanticipated claims, rights, demands,
actions, obligations, liabilities, and causes of action of every kind and
character that would

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otherwise come within the scope of the Dialectic Claims as described above. The
Dialectic Group understands that they may hereafter discover facts different
from or in addition to what they now believe to be true, which if known, could
have materially affected this release of Dialectic Claims, but they nevertheless
waive any claims or rights based on different or additional facts.

(b) During the Standstill Period, the Dialectic Group agrees that, except as
counsel to the Dialectic Group or any of its Affiliates or Associates reasonably
determines is required in order for any member of the Dialectic Group to comply
with its fiduciary duties to its investors, (i) no member of the Dialectic Group
shall, without the consent of the Company, instigate, solicit, assist, intervene
in, or otherwise voluntarily participate in any litigation or arbitration in
which the Company or any of its officers or directors are named as parties in a
manner adverse to such parties; provided that the foregoing shall not prevent
any member of the Dialectic Group from responding to or complying with a validly
issued legal process (including, without limitation, court order, deposition,
interrogatories, requests for information or documents in legal proceedings,
subpoena, civil investigative demand or other similar process) and (ii) the
Dialectic Group agrees to give the Company at least five business days notice of
the receipt of any legal process prior to furnishing information requested
thereby regarding the Company or any of its officers or directors, to the extent
that such notice is legally permissible.

(c) The Company hereby agrees for the benefit of the Dialectic Group, the 2012
Appointees, the Mutual Appointee and each controlling person, officer, director,
stockholder, agent, affiliate, employee, member, manager, partner, attorney,
heir, assign, executor, administrator, predecessor and successor, past and
present, of any member of the Dialectic Group or any 2012 Appointee or Mutual
Appointee (the Dialectic Group, the 2012 Appointees, the Mutual Appointee and
each such person being a “Stockholder Released Person”) as follows:

(i) The Company, for itself and for its affiliates, officers, directors,
assigns, agents and successors, past and present, hereby agrees and confirms
that, effective from and after the date of this Agreement, it hereby
acknowledges full and complete satisfaction of, and covenants not to sue, and
forever fully releases and discharges each Stockholder Released Person of, and
holds each Stockholder Released Person harmless from, any and all Claims of any
nature whatsoever, whether known or unknown, suspected or unsuspected and
arising out of or related to the Dialectic Group’s notice to the Company of its
intention to nominate new candidates to the Company’s Board at the 2012 Annual
Meeting (collectively, the “Company Claims”), that the Company may have against
the Stockholder Released Persons, in each case with respect to events occurring
prior to the date of the execution of this Agreement.

(ii) The Company understands and agrees that the Company Claims released by the
Company above include not only those Claims presently known but also include all
unknown or unanticipated claims, rights, demands, actions, obligations,
liabilities, and causes of action of every kind and character that would
otherwise come within the scope of the Company Claims as described above. The
Company understands that it may hereafter discover facts different from or in
addition to what it now believes to be true, which if known, could have
materially affected this release of the Company Claims, but it nevertheless
waives any claims or rights based on different or additional facts.

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The Parties expressly acknowledge and agree that this Section 8 is also intended
to include in its effect, without limitation, all such claims which they do not
know or suspect to exist at the time of the execution of this Agreement, and
that this Agreement contemplates the extinguishment of those claims.

(d) The Parties intend that the foregoing release be broad with respect to the
matter released, provided, however, this release of Dialectic Claims and Company
Claims shall not include claims to enforce the terms of this Agreement; and
provided further that nothing in the foregoing release shall be deemed or
construed, now or hereafter, as limiting in any manner any right of
indemnification inuring to the benefit of any director or former director of the
Company arising under the Company’s Certificate of Incorporation, Bylaws or
otherwise.

9. Notices. Any notice or other communication required or permitted to be given
under this Agreement will be sufficient if it is in writing, sent to the
applicable address set forth below (or as otherwise specified by a Party by
notice to the other Parties in accordance with this Section 9) and delivered
personally or sent by recognized overnight courier, postage prepaid, and will be
deemed given (a) when so delivered personally, or (b) if sent by recognized
overnight courier, one day after the date of sending.

 

If to the Company:   

Tellabs, Inc.

One Tellabs Center

1415 West Diehl Road

Naperville, Illinois 60563

Attention: James M. Sheehan

Telephone: (630) 798-8800

Facsimile: (630) 798-3231

with a copy to:   

Vedder Price P.C.

222 N. LaSalle Street, Suite 2600

Chicago, Illinois 60601

Attention: Thomas P. Desmond or John T. Blatchford

Telephone: (312) 609-7500

Facsimile: (312) 609-5005

If to the Dialectic Group:   

Dialectic Capital Partners, LP

875 Third Avenue, 15th Floor

New York, New York 10022

Attention: John Fichthorn

Telephone: (212) 230-3220

Facsimile: (212) 980-2635

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with a copy to:   

Olshan Grundman Frome Rosenzweig & Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

Attention: Steve Wolosky, Esq.

Telephone: (212) 451-2333

Facsimile: (212) 451-2222

10. Entire Agreement. This Agreement constitutes the entire agreement among the
Parties pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions of the
Parties in connection with the subject matter hereof.

11. Amendments; Severability; Counterparts; Facsimile. This Agreement may not be
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by all of the Parties. In the event one
or more of the provisions of this Agreement should, for any reason, be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. This Agreement may be executed in any
number of counterparts and by the Parties in separate counterparts, and
signature pages may be delivered by facsimile or electronic mail, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

12. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without regard to choice of law principles that would compel the application of
the laws of any other jurisdiction. The Parties to this Agreement agree that any
suit, action or proceeding to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement may be brought only in a
federal court located in Delaware or in any Delaware state court, and each of
the Parties irrevocably consents to the jurisdiction of such courts (and of the
appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives any objection it may now or hereafter have to the laying of
venue of any such suit, action or proceeding in any such court or that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.

13. Successors and Assigns. This Agreement shall not be assignable by any of the
Parties. This Agreement, however, shall be binding on successors of the Parties.

14. Further Action. Each Party agrees to execute such additional reasonable
documents, and to do and perform such reasonable acts and things necessary or
proper to effectuate or further evidence the terms and provisions of this
Agreement.

[Signatures are on the following page.]

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and
year first above written.

 

TELLABS, INC. By:   /s/ Robert W. Pullen   Name: Robert W. Pullen   Title:
President, Chief Executive Officer and Director THE DIALECTIC GROUP: DIALECTIC
CAPITAL PARTNERS, LP By:   /s/ John Fichthorn   Dialectic Capital, LLC   Its
General Partner DIALECTIC OFFSHORE, L2, LTD. By:   /s/ John Fichthorn   John
Fichthorn, Director DIALECTIC ANTITHESIS OFFSHORE, LTD. By:   /s/ John Fichthorn
  John Fichthorn, Director DIALECTIC ANTITHESIS PARTNERS, LP By:   /s/ John
Fichthorn  

Dialectic Capital, LLC

Its General Partner

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DIALECTIC OFFSHORE, LTD. By:   /s/ John Fichthorn   John Fichthorn, Director
DIALECTIC CAPITAL MANAGEMENT, LLC By:   /s/ John Fichthorn  

John Fichthorn

Managing Member, and Individually

By:   /s/ Luke Fichthorn  

Luke Fichthorn

Managing Member