Exhibit 10.35

TELLABS, INC. 2010 Executive Performance Stock Units Award Statement for:

Congratulations! You were granted a 2010 Executive Performance Stock Units (PSU)
Award on March 8, 2010 as authorized by the Compensation Committee of the
Tellabs, Inc. (the “Company”) Board of Directors. The following summarizes your
PSU Award: [NAME]

PERFORMANCE STOCK UNITS AWARD

 

PSUs Awarded:      [NUMBER] PSUs (subject to the vesting and payout terms
provided in the Terms of the 2010 Executive Performance Stock Units Award
Agreement attached to this PSU statement).

PERFORMANCE TARGETS/PAYOUT/VESTING:

 

Performance Targets:      There are two (2) independent equally-weighted
performance targets (a) 2010 operating earnings, and (b) completion of strategic
goals, as detailed in the Terms of the 2010 Executive Performance Stock Units
Award Agreement attached to this PSU Statement. Payout Range:      Up to two (2)
shares of Tellabs common stock may be earned for each PSU based upon the level
of 2010 operating earnings achieved and strategic goals completed, as detailed
in the Terms of the 2010 Executive Performance Stock Units Agreement attached to
this PSU Statement. Vesting and Payout Dates:      Except in limited
circumstances, earned shares will vest and be issued to you in equal annual
installments in March 2011, March 2012 and March 2013, if you are continually
employed by the Company or its subsidiaries through those vesting dates. The
vesting and payment provisions are detailed in the Terms of the 2010 Executive
Performance Stock Units Award Agreement attached to this PSU Statement.

This PSU Award is issued under the Amended and Restated Tellabs, Inc. 2004
Incentive Compensation Plan (“Plan”) in consideration of you remaining an
employee of the Company and/or one of its subsidiaries. If you accept the terms
of this PSU Award, you consent to be bound by all of the terms and conditions of
this PSU Award Statement, which includes the accompanying Terms of the 2010
Executive Performance Stock Units Award Agreement, and the Plan. You also
acknowledge that you have been given access to the summary description of the
Plan and a copy of the Plan. Payment under both portions of the PSUs is
determined by the Compensation Committee based on an assessment of performance
relative to goals. The number of PSUs awarded is subject to the discretion of
the Compensation Committee.

To the extent not otherwise defined herein, capitalized terms shall have the
meaning ascribed to them in the Plan.

This Award Statement, including the accompanying Terms of the 2010 Executive
Performance Stock Units Award Agreement, constitutes part of a prospectus
covering securities that have been registered under the Securities Act of 1933,
as amended.

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TELLABS, INC. Terms of the 2010 Executive Performance Stock Units Award
Agreement

 

Type of Award:    Performance Stock Units (“PSUs”), representing an opportunity
to earn shares of common stock of Tellabs, Inc. (the “Company” or “Tellabs”).   
The number of shares, if any, earned with respect to the PSUs will depend upon
the Company’s certified financial results during the 2010 fiscal year as
compared to the performance targets described below and the Company’s certified
achievement of strategic goals as compared to the strategic goals targets
described below, and, except as provided below, your right to receive any shares
earned will depend on your continued employment through the vesting dates.
Performance Targets:    The operating earnings performance targets and scores
are as follows:   

1)       operating earnings of $[NUMBER ] million score 0.25x of PSUs;

  

2)       operating earnings between $[NUMBER ] million and $[NUMBER ] million
score up to 0.5x of PSUs;

  

3)       operating earnings between $[NUMBER ] and $[NUMBER ] million score up
to 1.0x of PSUs; and

  

4)       operating earnings at or above $[NUMBER ] million score 1.0x of PSUs.

   “Operating earnings” for the measurement period and the resulting 2010
operating earnings shall be the amount certified by the Company’s Compensation
Committee based upon the Company’s published financial results for 2010
determined on a GAAP basis, with operating earnings adjusted to exclude the
effects of (a) purchased intangible asset amortization, (b) acquisition-related
charges, (c) equity-based compensation award expenses under ASC 718, and
(d) restructuring charges and certain asset impairment charges. The amount as
certified is referred to below as “2010 Operating Earnings”. The financial
statements contained in the Company’s Form 10-K filed with the United States
Securities and Exchange Commission for the Company’s 2010 fiscal year shall
qualify as certified financial results for the Company’s Compensation Committee
to certify PSUs earned. The Compensation Committee shall have final authority
over the interpretations of any item not covered in this definition.    The
strategic goal performance targets and scores are as follows:   

1)       completion of [NUMBER ] strategic goals score 0.25x of PSUs;

  

2)       completion of [NUMBER ] strategic goals score 0.5x of PSUs; and

  

3)       completion of [NUMBER ] strategic goals score 1.0x of PSUs

   Strategic goals are defined as [GOALS]

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Payout Range:    The number of shares of Tellabs stock earned with respect to
each PSU granted is based in part on the certified levels of 2010 Operating
Earnings achieved, and the payout score set forth in the following table (with
straight line extrapolation between performance levels):    [TABLE]    The
“payout rate” reflects the number of shares earned per PSU as a result of the
corresponding financial performance achieved. The maximum payout rate based on
Operating Earnings performance is 1.0x, or one (1) share per PSU.    The number
of shares of Tellabs stock earned with respect to each PSU granted is based in
part on the number of strategic goals achieved. The following table shows the
payout corresponding to each achievement level. Payout for each strategic goal
is binary (e.g., all or nothing).    [TABLE]    For example, if 2010 Operating
Earnings is $[NUMBER] million, then the “payout rate” based on operating
earnings will be 0.5x, or 0.5 shares of common stock for each PSU. If [NUMBER]
strategic goals are achieved the “payout rate” based on achieving strategic
goals will be 0.25x or 0.25 shares of common stock for each PSU. This will
result in a total combined payout of 0.75 or 0.75 shares of common stock for
each PSU. Vesting and Payout Dates:    Subject to the provisions below relating
to termination of employment or Change in Control, your right to receive any
earned shares will vest as follows, provided you remain continuously employed by
Tellabs through the applicable vesting date:   

•     One-third will vest on March 8, 2011;

  

•     One-third will vest on March 8, 2012; and

  

•     One-third will vest on March 8, 2013

   Once vested, the earned shares of Tellabs stock will be issued to you no
later than March 15th following the vesting date. Once vested, those shares are
no longer at risk of forfeiture. Effect of Termination of Employment and Change
in Control:    All PSUs held by you and your right to receive unvested earned
shares will be forfeited and/or cancelled if you cease to be an employee of the
Company and/or one of its subsidiaries for any reason.

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   In the event of a Change in Control prior to certification by the
Compensation Committee of the number of shares earned based on certified 2010
Operating Earnings and certified strategic goals achieved, shares of Tellabs
stock will be deemed to be earned with respect to the outstanding PSUs at a
payout rate of 1.0 shares for each PSU or, if greater, the payout rate
determined by the Compensation Committee based on the Committee’s assessment of
the Company’s financial performance and performance against strategic goals as
of the Change of Control taking into account the Performance Target as of such
Change of Control, but in no event greater than the maximum payout rate, and
such earned shares shall be fully vested as of the date of the Change of
Control.    In the event of a Change in Control after the number of shares
earned has been certified, all unvested earned shares shall be fully vested as
of the date of the Change in Control.    Earned shares that become vested due to
a Change in Control shall be issued on or as promptly as practicable, and in no
event later than thirty (30) days after the date of the Change of Control.
No Voting or Dividend Rights; Adjustments:    Since PSUs and unvested earned
shares do not represent actual shares, you do not have any voting rights or
dividend rights under the PSUs or with respect to any unvested earned shares.   
The number of PSUs and/or number of shares of stock issuable with respect to a
PSU or unvested earned shares shall be adjusted in the event of a stock
dividend, split or other corporate event as more fully set forth in the Plan.
Tax Considerations:    Refer to the accompanying Summary of Tax Considerations.
Transferability:    No PSUs or unvested earned shares granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution.

TELLABS, INC.

Summary of Tax Considerations

Relating to Executive Performance Stock Units Awards under the Plan

Set forth below is a summary of certain tax consequences relating to the
Executive Performance Stock Units Awards (“PSUs) and unvested earned shares
relating thereto, under the Amended and Restated Tellabs, Inc. 2004 Incentive
Compensation Plan. This discussion does not purport to be complete and does not
cover, among other things, state, provincial and local tax treatment, and should
not be considered tax advice by the Company. This summary is provided merely to
inform you of certain potential tax consequences. The taxes applicable to you
may vary depending on your personal situation, and the Company strongly
recommends that you consult with your own tax advisors regarding the actual tax
consequences to you.

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UNITED STATES

Federal Income Tax Considerations: No income is recognized upon receipt of an
award of PSUs or the determination of the number of earned shares relating to
the PSU award. At the time vested earned shares are issued, income equal to the
then fair market value of stock issued is recognized. The capital gain or loss
holding period for any stock begins when ordinary income is recognized. Any
subsequent capital gain or loss is measured by the difference between the fair
market value of the stock upon which the ordinary income recognized was based
and the amount received upon sale or exchange of the shares.

Tax Withholding: Any income or other tax withholding which applies at the time
shares are issued will be satisfied by the Company withholding from the shares
of stock issuable, a number of shares of stock then having a fair market value
equal to the amount sufficient to satisfy the minimum statutory Federal, state
and local tax (including the FICA and Medicare tax obligation) withholding
required by law.