Exhibit 10.1
TEKELEC
2009 Executive Officer Bonus Plan
     Tekelec (“Tekelec” or the “Company”) believes that a portion of each
executive officer’s annual compensation should be directly related to the
Company’s financial performance. The 2009 Officer Bonus Plan (“2009 Bonus Plan”
or the “Plan”) is designed to motivate Tekelec’s executive officers and to
reward them for their continuing contributions to the Company’s business if, in
2009, the Company achieves certain financial results. The effective date of the
2009 Bonus Plan is February 27, 2009 (the “Effective Date”).
2009 Bonus Plan
Each Eligible Officer (as defined below), by virtue of his or her continuing
employment with Tekelec, will be eligible to receive a bonus (“2009 Bonus”)
based on the Company’s financial performance as measured by the degree to which
the Company achieves the following pre-set, Board of Directors-approved,1
financial targets for the 2009 fiscal year: (i) Adjusted Operating Income before
Bonus, (ii) revenue, and (iii) orders.
The 2009 Bonus payable to an Eligible Officer will be calculated as a percentage
of such Officer’s annual base salary of record in effect at the end of the
annual period for which the bonuses are payable (the “Salary”). If an Eligible
Officer is on a leave of absence in excess of 60 days during the annual period,
the Eligible Officer’s Salary will be calculated based on the Eligible Officer’s
annualized actual earnings for the annual period. In determining an Eligible
Officer’s annual base salary of record or actual earnings, certain compensation
and payments (e.g., reimbursement for moving expenses, bonus payments received
under the 2008 Executive Officer Bonus Plan or this Plan, stock option or other
equity incentive compensation, discretionary bonuses, disability benefits,
sign-on bonuses, vacation cash outs, and on call pay) shall be excluded.
If an executive officer commences his/her employment as an Eligible Officer in
the first, second, or third calendar quarter of 2009, then for purposes of
determining the amount payable as a 2009 Bonus, an Officer’s annual base salary
will be prorated based on the ratio of (i) the number of days that an executive
officer serves as an Eligible Officer during the annual period to (ii) 365. An
executive officer who commences his/her employment during the fourth calendar
quarter of 2009 will not be eligible to receive a 2009 Bonus.
Eligible Officers
The following executive officers have been designated by the Board as “Eligible
Officers” for purposes of the 2009 Bonus Plan and will be eligible to
participate in the 2009 Bonus Plan (all titles are positions with Tekelec unless
otherwise specified):
Eligible Officers List
Chief Executive Officer & President
Executive Vice President & Chief Financial Officer
Executive Vice President, Global Product Solutions
Senior Vice President, Corporate Affairs & General Counsel
 

1   This and further references to Board of Directors (“Board”) action or
approval shall be interpreted as a duly adopted Board resolution following
consideration and a recommendation by the Compensation Committee of the Board,
if the Board accepts such recommendation, or alternatively by a duly adopted
resolution of the Board based on a vote by the independent members of the Board
as defined by NASDAQ rules.

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Senior Vice President, Global Operations & Service
Vice President, Corporate Controller & Chief Accounting Officer
Vice President, Information Technology & Chief Information Officer
A person appointed as an Executive Officer of the Company after the Effective
Date shall be eligible to participate in the 2009 Bonus Plan if he/she is
expressly designated by the Board as an Eligible Officer under the 2009 Bonus
Plan.
An Eligible Officer whose title changes after the Effective Date shall be
entitled to participate in the 2009 Bonus Plan on the same terms and conditions
as applied immediately prior to such title change unless either (i) the terms of
such Eligible Officer’s participation in the 2009 Bonus Plan are changed
pursuant to a duly adopted resolution of the Board; (ii) the Board amends this
Plan to add the new title as an Eligible Officer in the Eligible Officer table
above in which case such Officer shall participate at the bonus participation
level corresponding to such new title; or (iii) as a result of the change in
title, such individual is no longer an Eligible Officer.
In order to earn and be eligible to receive bonuses payable under the 2009 Bonus
Plan, an Eligible Officer must be actively employed by Tekelec or one of its
subsidiaries as an Eligible Officer on the date on which such bonuses are paid,
unless such requirement is waived by the Board.  An Eligible Officer who is on
an approved leave of absence from the Company at any time during 2009 will, for
purposes of determining eligibility under the 2009 Bonus Plan, be treated as
being employed by the Company during such leave of absence provided, however,
that an Eligible Officer who is on an approved leave of absence from the Company
on the date on which the 2009 Bonus is paid by the Company and thereafter
returns to active status as an Eligible Officer upon the end of such leave of
absence, will be paid his/her Company Bonus to which he/she is otherwise
entitled within 30 days following his/her return to active status as an Eligible
Officer.  An Eligible Officer who is on an approved leave of absence from the
Company on the date on which the 2009 Bonus is paid by the Company and
thereafter fails to return to active status as an Eligible Officer upon the end
of such leave of absence, will not be eligible to receive a 2009 Bonus.
2009 Bonus Computation
The Company’s consolidated operating income from continuing operations before
bonus (as adjusted to exclude the effects of equity incentive compensation
expense, restructuring charges, impairment charges, acquisition-related
amortization and other M&A-related charges or income, and similar non-GAAP
charges or income, “Adjusted Operating Income before Bonus”), revenue and orders
will be the financial measures for calculating the amount of the Company Bonus
under the 2009 Bonus Plan.
All payouts under the 2009 Bonus Plan are contingent upon the company performing
at or above a threshold percentage of the Adjusted Operating Income before Bonus
target established by the Board (“OI Target”). The threshold percentage is 80%
of the OI Target, and thus for performance below 80% of the OI Target, there is
no funding of a pool for payouts of a bonus. The Board will also establish
performance targets for Orders and Revenue (“Orders Target” and “Revenue
Target”, respectively, and together with the OI Target or individually,
“Targets”).
Upon Tekelec’s achievement of 80% of the Operating Income Target, the 2009 Bonus
shall be calculated as the sum of the result of the following computation
applied to each of the Targets:

  •   For that portion of the Performance Relative to Target equal to or greater
than 80% but less than or equal to 100%, the product of A (x) B (x) C (x) T,
where “A” is the Eligible Officer’s Salary, “B” is the Payout Percentage
corresponding to the Performance Relative to Target in the Payout Percentage
Table, below, “C” is the 2009 Bonus Opportunity in the Bonus Participation Table

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      below, and “T” is the Target Weighting corresponding to the Target, and
the performance against such Target, in the Target Weighting Table below, plus  
  •   For that portion of the Performance Relative to Target above 100% for the
OI Target or the Orders Target, the product of A (x) B (x) C (x) T, as each is
defined above.

Payout Percentage Table

      Performance Relative to Target     (OI, Orders, and Revenue)   Payout
Percentage
<80%
      0%
  80%
    50%
  90%
    75%
100%
  100%   Performance Relative to Target     (OI and Orders)   Additional Payout
Percentage
  110%
  25%
³120%
  50%

The Payout Percentages in the above table increase in a linear manner between
each performance level relative to each target.
Target Weighting Table

                      Target Weighting for Performance   Target Weighting for
Performance Target   ³ 80% £ 100%   >100%
OI
    50 %     75 %
Orders
    25 %     25 %
Revenue
    25 %     0 %

Except as otherwise provided herein, the 2009 Bonus will be payable in one lump
sum (subject to applicable withholding taxes and other deductions) within
30 days after all the Company’s consolidated financial results covering the
annual period are filed with the Securities and Exchange Commission.
Bonus Participation Levels
For purposes of determining an Eligible Officer’s 2009 Bonus, the 2009 Bonus
Opportunity for each of the Eligible Officers identified below shall be as
follows:
Bonus Participation Table

              2009 Bonus Title   Opportunity
Chief Executive Officer & President
    120 %
Executive Vice President & Chief Financial Officer
    90  
Executive Vice President, Global Product Solutions
    90  
Senior Vice President & General Counsel
    70  
Senior Vice President, Global Operations & Service
    60  
Vice President, Corporate Controller & Chief Accounting Officer
    50  
Vice President, Information Technology & Chief Information Officer
    40  

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Discretionary Bonuses
In addition to bonuses payable under the 2009 Bonus Plan, discretionary bonuses
may also be paid by the Company, but only upon the express approval of the Board
in its sole discretion.
Amendment, Termination, and Administration
The Board reserves the right to amend, modify or terminate the Plan, or any
payment owed thereunder, at any time without prior notice to participants in its
sole discretion; provided, that the Company may not amend, modify or terminate
the Plan or such payments once they become Vested to an eligible employee. A
payment becomes “Vested” upon the filing of the Company’s financial statements
with the Securities and Exchange Commission covering the annual period for which
such bonus amount is earned under the terms of the Plan. The Plan shall be
administered by the Board, and the Board shall have the authority to interpret
the Plan with such interpretation being binding and final. The Plan shall be
governed by the laws of North Carolina.
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