Exhibit 10.1

AGREEMENT

THIS AGREEMENT (“Agreement”), dated as of February 27, 2013, is made by and
among Tellabs, Inc., a Delaware corporation (the “Company”), and Third Avenue
Management LLC (“TAM”) (each of the Company and the TAM, a “Party” to this
Agreement, and collectively, the “Parties”).

WHEREAS, TAM is the investment adviser to certain funds and investment vehicles
that, as of February 22, 2013, beneficially own shares of common stock of the
Company (the “Common Stock”) totaling, in the aggregate, 33,696,950 shares, or
approximately 9.17% of the Common Stock issued and outstanding;

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 Board is permitted to have up to twelve members and is currently
comprised of eleven members;

WHEREAS, TAM has provided notice to the Company of its intention to nominate
Alex Mashinsky (the “Third Avenue Nominee”) to the Board at its 2013 annual
meeting of stockholders (the “2013 Annual Meeting”);

WHEREAS, Michael J. Birck (a Class III Director) had previously advised the
Company of his decision not to stand for re-election to the Board at the 2013
Annual Meeting (Mr. Birck’s seat being referred to as the “Class III Vacancy”);

WHEREAS, it is considered desirable to nominate the Third Avenue Nominee to fill
the Class III Vacancy; and

WHEREAS, the Company and TAM 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 2013 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:

SECTION 1 Representations and Warranties of TAM. TAM represents and warrants to
the Company that (a) TAM has full investment and dispositive authority over the
Common Stock owned by various funds and investment vehicles affiliated with TAM;
(b) this Agreement has been duly authorized, executed and delivered by TAM and
is a valid and binding obligation of TAM enforceable against TAM 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 (c) 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, or any order of any court
or other agency of government, applicable to TAM or to which TAM is a party, or
the organizational documents of TAM.

SECTION 2 Representations and Warranties of the Company. The Company hereby
represents and warrants to TAM 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

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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.

SECTION 3 Director Nomination and Annual Meeting.

(a) Subject to the agreement of the Third Avenue Nominee to comply with the
Company’s governance policies and to complete a D&O Questionnaire, and further
subject to the Third Avenue Nominee qualifying as “independent” pursuant to
NASDAQ listing standards, in order to fill the Class III Vacancy, the Company
has taken all actions necessary and appropriate to (i) nominate the Third Avenue
Nominee 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 Third Avenue Nominee as a
Class III Director of the Board at the 2013 Annual Meeting, and (iii) support
and solicit proxies for the Third Avenue Nominee’s election as a Class III
Director of the Board, all in the same manner as for the Company’s other
nominees who are up for election at the 2013 Annual Meeting.

(b) The Third Avenue Nominee shall agree to resign from the Board if TAM at any
time is the beneficial owner of less than 1% of the shares of the outstanding
Common Stock. TAM will notify the Company promptly after becoming aware of such
occurrence.

(c) The Company agrees that TAM shall have the right to appoint a new director
in the event the Third Avenue Nominee resigns from the Board or becomes
incapable of fulfilling his duties as a Board member during the duration of this
Agreement.

(d) At the 2013 Annual Meeting, and at each special meeting of stockholders of
the Company prior to the 2014 Annual Meeting, so long as the Third Avenue
Nominee is serving as a director, TAM 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 such Affiliate or Associate of TAM) 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”).

(e) 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 12 directors. The Company further
agrees to use reasonable efforts to effectuate an amendment to Section 3.2 of
the Company’s Amended and Restated Bylaws, dated January 29, 2009, pursuant to
which the number of directors shall be reduced from twelve to ten on or before
the date of the 2014 Annual Meeting, except as otherwise limited by the
Company’s Restated Certificate of Incorporation, provided that, notwithstanding
the reduction in the number of directors, the directors appointed at the behest
of TAM and Dialectic Capital Partners, LP, shall continue to serve as directors
for the full duration of their term.

 

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SECTION 4 Standstill. TAM 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
2015 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 TAM);

(iv) at any time, without consent from the Company, be the beneficial owner, in
the aggregate, of more than 15% 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 TAM;

(vi) control, influence or seek to control or influence the Board other than
through the Third Avenue Nominee, 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;

(viii)(1) make any proposal for consideration by stockholders at the 2014 or any
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 TAM and the Company;

(ix) seek, alone or in concert with others, representation on the Board; 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 TAM;

 

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provided, however, that, except as otherwise provided in Section 3, nothing
herein will limit the ability of (1) any member of TAM, 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) TAM 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) TAM, 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.

SECTION 5 Public Announcement. The Company and TAM 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.

SECTION 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.

SECTION 7 Releases.

(a) TAM 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:

 

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(i) TAM, 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 2013 Annual Meeting (collectively, “Third
Avenue Claims”) that TAM 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) TAM understands and agrees that the Third Avenue Claims released by TAM
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 Third Avenue Claims as described above. TAM 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 Third Avenue Claims, but they nevertheless waive any claims or rights based
on different or additional facts.

(b) During the Standstill Period, TAM agrees that, except as counsel to TAM or
any of its Affiliates or Associates reasonably determines is required in order
for any member of TAM to comply with its fiduciary duties to its investors,
(i) no member of TAM 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 TAM 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) TAM 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 TAM, the Third Avenue Nominee
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 TAM
(TAM, the Third Avenue Nominee 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 TAM’s notice to the Company of its intention to
nominate new candidates to the Company’s Board at the 2013 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.

 

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(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.

The Parties expressly acknowledge and agree that this Section 7 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 Third Avenue 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.

SECTION 8 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 8) 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 TAM:   

Third Avenue Management LLC

622 Third Avenue, 32nd Floor

 

New York, NY 10017

Attention: W. James Hall and Brian S. Lennon

Telephone: (212) 906-1190

 

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SECTION 9 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.

SECTION 10 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.

SECTION 11 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.

SECTION 12 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.

SECTION 13 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/ Michael J. Birck  

Name: Michael J. Birck

Title: Chairman

 

THIRD AVENUE MANAGEMENT LLC By:   /s/ W. James Hall  

Name: W. James Hall

Title: General Counsel

 

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