exv4w3



 





Exhibit 4.3




TEKELEC




FORM OF NONSTATUTORY STOCK OPTION AGREEMENT




     Tekelec, a California corporation (“Tekelec” or the “Company”), hereby
enters into this Nonstatutory Stock Option Agreement (this “Option Agreement”)
with _______ (the “Optionee”) effective as of April 8, 2004, whereby
the Company grants to the Optionee the right and option to purchase an
aggregate of _______ shares of Common Stock (the “Shares”) of the Company in
accordance with the terms of that certain Employment Agreement dated
______ between Taqua, Inc., a Delaware corporation (“Taqua”) and wholly
owned subsidiary of the Company, and the Optionee (the “Employment Agreement”).
The grant of this Option fully discharges Tekelec’s obligations with respect
to the grant to the Optionee of stock options to purchase Tekelec Common Stock
under Section 3 of the Employment Agreement.



     1. Nature of the Option. This Option is intended to be a nonstatutory
stock option and is not intended to be an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”), or to otherwise qualify for any special tax benefits to the Optionee.



     2. Exercise Price. The exercise price is $18.08 per Share, which price is
not less than 100% of the fair market value thereof on the date of the grant.



     3. Method of Payment. The consideration to be paid for the Shares to be
issued upon exercise of this Option shall consist entirely of cash or check
payable to the Company.



     4. Exercise of Option. This Option shall be exercisable during its term
only in accordance with the terms and provisions of this Option Agreement as
follows:



          (a) This Option shall vest and become exercisable cumulatively in 16 equal
quarterly installments of ______ shares each as long as the Optionee
continues to serve as an employee of the Company, with the first of such
installments vesting on September 30, 2004 and one additional installment
vesting on the last day of each calendar quarter thereafter. Each vested
installment of this Option will expire on the four-year anniversary of its
vesting date (e.g., the installment vesting on September 30, 2004 will expire
at the close of business on September 30, 2008). Subject to Sections 6, 7 and
8 hereof, the Optionee may exercise the exercisable portion of this Option in
whole or in part at any time during the term hereof; provided, however, that
the Option may not be exercised for a fraction of a Share. In the event of the
Optionee’s termination of employment with the Company or the Optionee’s
disability or death, the provisions of Sections 6 or 7 below, as applicable,
shall apply to the right of the Optionee to exercise this Option.



          (b) This Option shall be exercisable by written notice which shall state
the election to exercise this Option, the number of Shares in respect to which
this Option is being exercised and such other representations and agreements as
may be required by the Company. Such written notice shall be in the form of
the Notice of Exercise of Nonstatutory Stock Option



1









 




in the form attached hereto, shall be signed by the Optionee and shall be
delivered in person or by certified mail to the Secretary of the Company or
such other person as may be designated by the Company. The written notice
shall be accompanied by payment of the purchase price or shall include a
commitment to deliver the purchase price pursuant to a special sale and
remittance procedure commonly referred to as a “cashless exercise,” in which
case the Optionee shall concurrently provide irrevocable written instructions
to a brokerage firm to effect the immediate sale of a sufficient number of the
Shares purchased upon exercise of the Option to enable such brokerage firm to
remit out of the sales proceeds available upon the settlement date sufficient
funds to the Company to cover the aggregate exercise price payable for the
purchased Shares plus all applicable Federal, state and local income and
employment taxes required to be withheld by the Company by reason of such
exercise and/or sale. As soon as practicable after any proper exercise of this
Option in accordance with the provisions hereof, the Company shall deliver to
the Optionee at the principal executive office of the Company or such other
place as shall be mutually agreed upon between the Company and the Optionee, a
certificate or certificates representing the Shares for which the Option shall
have been exercised. The certificate or certificates for the Shares as to
which this Option is exercised shall be registered in the name of the Optionee.




          (c) No rights of a shareholder shall exist with respect to the Shares
under this Option as a result of the mere grant of this Option or the exercise
of this Option. Such rights shall exist only after issuance of a stock
certificate in accordance with Section 4(b) hereof.



     5. Restrictions on Exercise. This Option may not be exercised if the
issuance of Shares upon the Optionee’s exercise or the method of payment of
consideration for such Shares would constitute a violation of any applicable
Federal or state securities law or other applicable law or regulation. As a
condition to the exercise of this Option, the Company may require the Optionee
to make any representation and warranty to the Company as may be required by
any applicable law or regulation.



     6. Termination of Employment. If the Optionee ceases to serve as an
employee of the Company for any reason other than death or permanent and total
disability (within the meaning of Section 22(e)(3) of the Code) and thereby
terminates his continuous status as an employee of the Company, the Optionee
shall have the right to exercise this Option at any time within three months
after the date of such termination to the extent that the Optionee was entitled
to exercise this Option at the date of such termination. To the extent that
the Optionee was not entitled to exercise this Option at the date of
termination, or to the extent this Option is not exercised within the time
specified herein, this Option shall terminate. Notwithstanding the foregoing,
this Option shall not be exercisable as to any vested installment after the
expiration of the term of such installment set forth in Section 8 hereof.



     7. Death or Disability. If the Optionee ceases to serve as an employee of
the Company due to death or permanent and total disability (within the meaning
of Section 22(e)(3) of the Code), this Option may be exercised at any time
within six months after the date of death or termination of employment due to
disability, in the case of death, by the Optionee’s estate or by a person who
acquired the right to exercise this Option by bequest or inheritance, or, in
the



2









 




case of disability, by the Optionee, but in any case only to the extent
the Optionee was entitled to exercise this Option at the date of such
termination. To the extent that the Optionee was not entitled to exercise this
Option at the date of termination, or to the extent this Option is not
exercised within the time specified herein, this Option shall terminate.
Notwithstanding the foregoing, this Option shall not be exercisable as to any
vested installment after the expiration of the term of such installment set
forth in Section 8 hereof.




     8. Term of Option. Notwithstanding any provision to the contrary in this
Option Agreement, each vested installment of this Option may not be exercised
more than four years after the date on which such installment vested and may be
exercised during such four-year period only in accordance with the terms of
this Option Agreement. Notwithstanding any provision herein with respect to
the post-employment exercise of this Option, this Option may not be exercised
as to any vested installment after the expiration of its four-year term.



     9. Reservation of Shares. The Company covenants and agrees that all
Shares will, upon issuance and payment in accordance herewith, be fully paid,
validly issued and nonassessable. The Company further covenants and agrees
that during the term of this Option, the Company will at all times have
authorized and reserved for the purpose of issuance upon exercise of this
Option at least the maximum number of Shares as are issuable upon such
exercise.



     10. Dissolution; Liquidation, Consolidation, Merger or Reclassification.
In the event that while this Option is outstanding, the Company proposes to
dissolve or liquidate or to sell all or substantially all of its assets (other
than in the ordinary course of business), or to merge or consolidate with or
into another corporation as a result of which the Company is not the surviving
and controlling corporation, the Board of Directors shall (i) make provision
for the assumption of this Option by the successor corporation or (ii) declare
that this Option shall terminate as of a date fixed by the Board of Directors
which is at least 30 days after the notice thereof to the Optionee and shall
give the Optionee the right to exercise this Option as to all or any part of
the Shares, including Shares as to which this Option would not otherwise be
exercisable, provided such exercise does not violate Section 8 hereof.



     11. Adjustment of Exercise Price and Number of Shares.



          (a) The number of Shares subject to this Option, as well as the exercise
price per Share hereunder, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of the Company’s Common Stock
resulting from a stock split or combination or the payment of a stock dividend
(but only on the Company’s Common Stock) or any other increase or decrease in
the number of issued shares of the Company’s Common Stock effected without
receipt of consideration by the Company (other than stock awards to employees
or directors of the Company); provided, however, that the conversion of any
convertible securities of the Company shall not be deemed to have been effected
without the receipt of consideration. Such adjustment shall be automatic and
the form of this Agreement need not be changed because of any such adjustment
in the exercise price or in the number of Shares purchasable upon exercise of
all or any portion of this Option. Except as expressly provided herein, no
issue by the



3









 




Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of Shares subject to this
Option.




          (b) No fractional shares of Common Stock shall be issuable on account of
any action contemplated by Section 10 or Section 11(a) hereof, and the
aggregate number of shares into which Shares then covered by this Option, when
changed as the result of any such action, shall be reduced to the largest
number of whole shares resulting from such action, unless the Company’s Board
of Directors, in its sole discretion, shall determine to issue scrip
certificates in respect to any fractional shares, which scrip certificates
shall be in a form and have such terms and conditions as the Board of Directors
in its discretion shall prescribe.



     12. Withholding upon Exercise of Option. The Company reserves the right
to withhold, in accordance with any applicable laws, from any consideration
payable to the Optionee any taxes required to be withheld by Federal, state or
local law as a result of the grant or exercise of this Option or the sale or
other disposition of the Shares issued upon exercise of this Option. If the
amount of any consideration payable to the Optionee is insufficient to pay such
taxes or if no consideration is payable to the Optionee, upon the request of
the Company, the Optionee shall pay to the Company in cash an amount sufficient
for the Company to satisfy any Federal, state or local tax withholding
requirements it may incur as a result of the grant or exercise of this Option
or the sale or other disposition of the Shares issued upon the exercise of this
Option.



     13. Nontransferability of Option. This Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner either
voluntarily or involuntarily by operation of law, other than by will or by the
laws of descent or distribution or transfer between spouses incident to a
divorce. Subject to the foregoing, the terms of this Option shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Optionee.



     14. No Right of Employment. This Option shall not confer upon the
Optionee any right to continue in the employment of the Company or limit in any
respect the right of the Company to discharge the Optionee at any time, with or
without cause and with or without notice.



     15. Miscellaneous.



          (a) Successors and Assigns. This Option Agreement shall bind and inure
only to the benefit of the parties to this Option Agreement (the “Parties”) and
their respective successors and assigns.



          (b) No Third-Party Beneficiaries. Nothing in this Option Agreement is
intended to confer any rights or remedies on any persons other than the Parties
and their respective successors or assigns. Nothing in this Option Agreement
is intended to relieve or discharge the obligation or liability of third
persons to any Party. No provision of this Option Agreement shall give any
third person any right of subrogation or action over or against any Party.



4









 





          (c) Amendments.



               (i) The Company reserves the right to amend the terms and provisions of
this Option without the Optionee’s consent to comply with any Federal or state
securities law.



               (ii) Except as specifically provided in subsection (i) above, this Option
Agreement shall not be changed or modified, in whole or in part, except by
supplemental agreement signed by the Parties. Either Party may waive
compliance by the other Party with any of the covenants or conditions of this
Option Agreement, but no waiver shall be binding unless executed in writing by
the Party making the waiver. No waiver or any provision of this Option
Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver. Any consent under this Option Agreement shall be in writing and shall
be effective only to the extent specifically set forth in such writing. For
the protection of the Parties, amendments, waivers and consents that are not in
writing and executed by the Party to be bound may be enforced only if they are
detrimentally relied upon and proved by clear and convincing evidence. Such
evidence shall not include any alleged reliance.



          (d) Notice. Any notice, instruction or communication required or
permitted to be given under this Option Agreement to either Party shall be in
writing and shall be deemed given when actually received or, if earlier, five
days after deposit in the United States mail by certified or express mail,
return receipt requested, first class postage prepaid, addressed to the
principal office of the Company, in the case of the Company, or to the most
recent principal residence address of the Optionee reflected in the Company’s
records, in the case of the Optionee, or to such other address as either Party
may request by written notice.



          (e) Governing Law. To the extent that Federal laws do not otherwise
control, all determinations made or actions taken pursuant hereto shall be
governed by the laws of the State of California, without regard to the conflict
of laws rules thereof.



          (f) Entire Agreement. This Option Agreement constitutes the entire
agreement between the Parties with regard to the subject matter hereof. This
Option Agreement supersedes all previous agreements between the Parties, and
there are now no agreements, representations, or warranties between the
Parties, other than those set forth herein.



     (g) Severability. If any provision of this Option Agreement or the
application of such provision to any person or circumstances is held invalid or
unenforceable, the remainder of this Option Agreement, or the application of
such provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby.



5









 





     IN WITNESS WHEREOF, this Option Agreement has been duly executed on behalf
of the Company by an authorized representative of the Company and by the
Optionee as of the date and year first written above.



	 	 	 	 	 	 	 	 	 	 
	DATE OF GRANT: April 8, 2004

	 	TEKELEC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	

	 	By:	 	 	 	 	 	 	 
	 	 	 	

	

	 	 	 	 	Frederick M. Lax	 	 	 	 
	

	 	 	 	 	President and Chief Executive Officer	 	 	 	 
	 
	 	 	 	

	

	 	 	 	 	Employee name	 	 	 	 







6









 





THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXECUTION OF THIS
OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE, TRANSFER OR
DISTRIBUTION THEREOF. NO SUCH SALE, TRANSFER OR DISTRIBUTION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.





 










 










TEKELEC




NOTICE OF EXERCISE OF NONSTATUTORY STOCK OPTION




     I, Employee name (“Optionee”), hereby agree, represent and warrant to
Tekelec (the “Company”) as follows:




	1.	 	I was granted a Nonstatutory Stock Option (the “Option”) on
April 8, 2004.
	 
	2.	 	Pursuant to the Option, I was granted the right to purchase
____________________ shares of the Company’s Common Stock (the “Optioned
Shares”).
	 
	3.	 	I am eligible to exercise the Option.
	 
	4.	 	I hereby elect to exercise the Option to purchase ____________ of such
Optioned Shares (the “Shares”) at U.S.$18.08 per share, for an
aggregate purchase price of U.S.$__________.
	 
	5.	 	Payment of Purchase Price (please check applicable box):






	o	 	This Notice of Exercise is accompanied by a check
representing payment in full of the purchase price for the
Shares plus all applicable withholding taxes.
	 
	 	 	OR
	 
	o	 	This exercise is a “cashless exercise” effected through my
broker. Payment in full for the Shares (including all
applicable withholding taxes) in the form of a check will be
transmitted by my broker to the Company.






	6.	 	In connection with my exercise of the Option, I have received
a copy of any Prospectus of the Company’s relating to the shares of
the Company’s Common Stock issuable under the Option.





	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	, 200
	 	 
	 	 
	 	OPTIONEE
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	Signature:	 	
	Social Security Number	 	 	 	 	 	 
	 	 	 	 	Employee Name


	

	 	 	 	 	 	Address:	 	 
	

	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 







	 	 	 	 	 	 	 	 	 	 
	Received on behalf of Tekelec on

	 	 	, 200
	 	 	.	 	 	 







	 	 	 	 	 
	 

	 	Signature:
	 	 
	 

	 	 
	 	 







 









 






SCHEDULE OF OPTIONEES




Joseph Bennett

Gary Brown

Todd Daniels

Pablo Gargiulo

Thomas Hartnett

David Long

Donald Pratt, Jr.

Hermon Pon

Charles Vogt