Document:

exv10w2

Exhibit 10.2

2011 OFFICER SEVERANCE PLAN

1. Purpose.

     The Tekelec 2011 Officer Severance Plan (this “Plan”) is intended to provide severance
benefits to certain salaried officers of Tekelec (“Tekelec” or the “Company”) who shall become
eligible for benefits under this Plan. The purpose of this Plan is to provide certain benefits to
Eligible Officers during the transition period following involuntary loss of employment under
circumstances outlined in this Plan. The provisions herein are being offered and provided at the
sole discretion of the Company. This Plan is effective as of May 13, 2011 (the “Effective Date”)
and shall serve as a successor to the Company’s 2007 Officer Severance Plan, as amended (the “2007
Plan”), other than for those individuals designated as Eligible Officers by the Board under the
2007 Plan prior to the Effective Date of this Plan with the terms and conditions of such 2011 Plan
governing the severance benefits of such individuals.

2. Definitions.

     As used herein, the terms identified below shall have the meanings indicated:

     (a) “Administrator” means the Compensation Committee of the Board of Directors of the
Company (or such other committee as may be appointed by the Board to administer this Plan); and, in
the absence of any such committee, shall mean the Board of Directors of the Company.

     (b) “Annual Compensation” means the Eligible Officer’s highest regular rate of annual
base salary paid by the Company during the calendar year in which the Termination Date occurs (or
such other date specified herein) plus the Eligible Officer’s target bonus amount, if any, for the
bonus year in which the Termination Date occurs but excluding all other compensation including, but
not limited to, commissions, incentive compensation, automobile allowances, pension payments,
401(k) matching contributions, gains realized in connection with the exercise of a stock option or
participation in a stock option or stock purchase program, employer contributions for benefits,
relocation payments, expense reimbursements, noncash compensation, and other similar payments.

     (c) “Base Salary” means the Eligible Officer’s highest regular rate of annual base
salary paid by the Company during the calendar year in which the Termination Date occurs and
excluding all other forms of compensation including, but not limited to, any bonus or target bonus
amounts, commissions, incentive compensation, automobile allowances, pension payments, 401(k)
matching contributions, gains realized in connection with the exercise of a stock option or
participation in a stock purchase program, employer contributions for benefits, relocation
payments, expense reimbursements, noncash compensation, and similar payments.

     (d) “Board” means the Board of Directors of the Company.

     (e) “Cause” Termination by Tekelec of an Eligible Officer’s employment for “Cause”
means termination as a result of:

 

 

	 	(i)	 	willful refusal or failure to follow one or more important
Company policies;
	 
	 	(ii)	 	any conduct amounting to gross incompetence;
	 
	 	(iii)	 	any absence (excluding vacations, illnesses or leaves of
absence) from work for more than five consecutive work days or chronic absences
from work (also excluding vacations, illnesses or leaves of absence), all of
which are neither authorized, justified nor excused;
	 
	 	(iv)	 	refusal or failure, after written notice and reasonable time to
comply, to perform material, appropriate duties;
	 
	 	(v)	 	refusal, after written notice and reasonable time to comply, to
obey any lawful resolution of the Board;
	 
	 	(vi)	 	embezzlement, misappropriation of any property or other asset
of the Company (other than de minimis properties or assets) or misappropriation
of a corporate opportunity of the Company;
	 
	 	(vii)	 	offer, payment, solicitation or acceptance in violation of
Company policy or law of any bribe, kickback or item of value with respect to
the Company’s business;
	 
	 	(viii)	 	conviction of the Eligible Officer for or the entering of a plea of nolo
contendere with respect to any felony whatsoever or for any misdemeanor
involving moral turpitude;
	 
	 	(ix)	 	any act or failure to act by the Eligible Officer that is
widely reported in the general or trade press or otherwise and which achieves a
general notoriety and which act or failure to act involves conduct that is
illegal or generally considered immoral or scandalous;
	 
	 	(x)	 	any willful material breach of the Eligible Officer’s
obligations to the Company under any nondisclosure or proprietary agreement
with or on behalf of the Company or any material unauthorized disclosure of any
important and confidential information of the Company;
	 
	 	(xi)	 	unlawful use (including being under the influence) or
possession of illegal drugs on Company premises; or
	 
	 	(xii)	 	death or long-term disability.

     (f) “Change in Control” A “Change in Control” of the Company shall be deemed to have
occurred at such time as (i) any “person” (as such term is used in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934 (the “Exchange Act”)) becomes after the Effective Date of this
Plan the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or

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indirectly, of securities of the Company representing 50% or more of the combined voting power
of the Company’s then outstanding securities; (ii) during any period of 12 consecutive months,
individuals who at the beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof unless the election, or the nomination for election by the
Company’s shareholders, of each new director was approved by a vote of at least a majority of the
directors then still in office who were directors at the beginning of the period; (iii) the closing
of a merger or consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after such merger or
consolidation; (iv) the shareholders of the Company approve a plan of liquidation of the Company;
or (v) the closing of the sale or disposition (other than in the ordinary course of business) by
the Company of all or substantially all of the Company’s assets (or any transaction having
essentially the same effect); provided, however, that each such event constitutes a “change in the
ownership or effective control of a corporation” or a “change in the ownership of a substantial
portion of the assets of a corporation” as such terms are defined in Code Section 409A.

     (g) “Change in Control Severance Allowance” means the aggregate gross amount of
severance payments determined in accordance with Section 6(c) of this Plan to be paid to an
Eligible Officer who is entitled to receive such severance benefits under this Plan.

     (h) “Change in Control Severance Period” means the period of time designated in
Section 6(f) herein.

     (i) “Code” means the Internal Revenue Code of 1986, as amended.

     (j) “Code Section 409A” shall mean Section 409A of the Code, as amended, and the
regulations and official guidance promulgated thereunder.

     (k) “Eligible Officers” mean only those duly elected or appointed officers of the
Company that: (i) are expressly designated as ‘Eligible Officers’ by the Board for the purposes of
this Plan on or after the Effective Date pursuant to resolutions duly adopted by the Board, (ii)
receive written notice of their status as designated Eligible Officers under the Plan, and (iii)
provide service in their capacity as officers of the Company on or following the Effective Date of
the Plan.

     (l) “Employment Period” means the aggregate period of time during which an individual
has been employed as a duly elected or appointed officer (other than solely as Chairman of the
Board, Secretary and/or Assistant Secretary) by the Company prior to the Termination Date.

     (m) “General Severance Allowance” means the aggregate gross amount of severance
payments determined in accordance with Section 4(a) of this Plan to be paid to an Eligible Officer
who is entitled to receive such severance benefits under this Plan.

     (n) “General Severance Period” means the period of time designated in Section 4(b)
herein.

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     (o) “Good Reason” means, without the express written consent of the Eligible Officer,
the occurrence after, or concurrently in connection with, a Change in Control of the Company of any
of the following materially adverse conditions, provided the Eligible Officer provides notice to
the Company of the existence of the condition within 90 days of the initial existence of the
condition and the Company fails to remedy the condition within 30 days of receipt of such notice:

	 	(i)	 	a reduction by the Company (or the surviving and controlling
company if other than the Company (the “Acquiror”)) in the Eligible Officer’s
annual base salary as in effect on the date immediately prior to the Change in
Control of the Company;
	 
	 	(ii)	 	the Company or the Acquiror requiring the Eligible Officer to
be based for six months or more at a Company office more than 50 miles from the
Company’s offices at which such Eligible Officer was principally employed
immediately prior to the date of the Change in Control of the Company except
for required and appropriate travel on the Company’s or the Acquiror’s business
to an extent substantially consistent with the Eligible Officer’s business
travel obligations immediately prior to the Change in Control of the Company;
	 
	 	(iii)	 	the assignment to the Eligible Officer of duties substantially
inconsistent with the position in the Company that such Eligible Officer held
immediately prior to the Change in Control of the Company, or a significantly
adverse change in the nature or status of the officer’s responsibilities or the
conditions of the Eligible Officer’s employment from those in effect
immediately prior to such Change in Control;
	 
	 	(iv)	 	the failure by the Company or the Acquiror to continue in
effect any compensation or benefit plan or perquisites in which the Eligible
Officer participates immediately prior to the Change in Control of the Company
which is material to the Eligible Officer’s total compensation, unless an at
least equally beneficial arrangement (embodied in an ongoing, substitute or
alternative plan) has been made with respect to such plan, or the failure by
the Company or the Acquiror to continue such Eligible Officer’s participation
therein (or in such ongoing, substitute or alternative plan) on a basis at
least as favorable, both in terms of the amount of benefits provided and the
level of the Eligible Officer’s participation relative to comparably situated
participants, as existed immediately prior to such Change in Control;
	 
	 	(v)	 	the failure by the Company or the Acquiror to continue to
provide the Eligible Officer with benefits substantially similar to those
enjoyed by such Eligible Officer under any of the Company’s life insurance,
medical, dental, accident, or disability plans in which the Eligible Officer
was participating immediately prior to such Change in Control of the Company or
the taking

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	 	 	 	of any action by the Company or the Acquiror which would directly or
indirectly materially reduce any such benefits; or
	 
	 	(vi)	 	failure of the Acquiror to offer employment to the Eligible
Officer at least ten days prior to a Change in Control on terms and conditions
generally no less favorable than the terms and conditions of the Eligible
Officer’s employment in effect with the Company immediately prior to the Change
in Control.

     (p) “Specified Employee” means a key employee (as defined in Code Section 416(i)
without regard to Code Section 416(i)(5)) determined in accordance with the meaning of such term
under Code Section 409A. The Company shall determine whether an Eligible Officer is a Specified
Employee by applying reasonable, objectively determinable identification procedures for Specified
Employees as set forth in a resolution of the Board regarding such determination procedures as may
be amended from time to time. In the event such procedures are not so established, the
identification date for purposes of determining the Company’s key employees shall be December 31.

     (q) “Termination Date” means the date on which an Eligible Officer has a separation
from service with the Company.

3. Eligibility.

     (a) Eligible Officers. Only Eligible Officers designated by the Board as eligible to
participate in this Plan on or after the Effective Date shall be eligible to receive benefits under
this Plan.

     (b) Qualifying Terminations. Tekelec will pay severance benefits under Section 4 of
this Plan on account of the termination of an Eligible Officer’s employment with Tekelec only if
the conditions set forth in Section 5 are fulfilled, the termination is non-temporary and
attributable to one of the following conditions, and in the case of the conditions described in
Sections 3(b)(v) — (vii), below, the Eligible Officer provides notice to the Company of the
existence of the condition within 90 days of the initial existence of the condition and the Company
fails to remedy the condition within 30 days of receipt of such notice:

	 	(i)	 	the result of a reduction in force (an involuntary separation
without Cause and due to elimination of position or a layoff of personnel);
	 
	 	(ii)	 	the result of Tekelec’s belief that the Eligible Officer is
unable to fulfill or is not fulfilling the requirements of or should not hold
an officer position for a reason other than for Cause;
	 
	 	(iii)	 	the result of such Eligible Officer’s having submitted to the
Company his/her written resignation or offer of resignation (even if such
indicates that such resignation is “voluntary”) upon and in accordance with (A)
the request by the Board in writing or pursuant to a duly adopted resolution of
the Board or (B) with respect to all Eligible Officers other than the Chief
Executive

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	 	 	 	Officer of the Company, the written request of the Chief Executive Officer
of the Company;
	 
	 	(iv)	 	the result of a divestment by Tekelec of the operating unit in
which such Eligible Officer works and which unit is sold, conveyed or
transferred to another corporation or entity (whether in connection with a sale
of assets, stock or other form of transaction) and the Eligible Officer is not
offered employment by the acquiring corporation or entity on substantially the
same or comparable terms and conditions as his/her employment with Tekelec;
	 
	 	(v)	 	the result of an otherwise voluntary separation following the
Company requiring the Eligible Officer to be based more than 50 miles from the
Company’s offices at which such Eligible Officer was principally employed and
such Eligible Officer declines to relocate except for required and appropriate
travel on the Company’s business consistent with the Eligible Officer’s prior
business travel obligations;
	 
	 	(vi)	 	the result of an otherwise voluntary separation within 30 days
following a greater than 10% reduction by the Company of the Eligible Officer’s
annual base salary as in effect from time to time;
	 
	 	(vii)	 	solely with respect to severance benefits to be provided to
the Chief Executive Officer (“CEO”), the Chief Financial Officer (“CFO”), or an
Executive Vice President (“EVP”) as a result of such Eligible Officer’s
termination due to “Good Reason” as defined in Section 2(o) above; or
	 
	 	(viii)	 	for the convenience of Tekelec or otherwise for any reason other than one or
more of the reasons set forth in Section 3(c).

     (c) Nonqualifying Terminations. Notwithstanding Section 3(b), Tekelec will not be
obligated to pay severance benefits to an Eligible Officer if the termination is the result of:

	 	(i)	 	voluntary separation (a separation, including retirement,
initiated by the Eligible Officer), other than a voluntary separation by an
Eligible Officer pursuant to Section 3(b)(iii), and (v)-(vi) hereof or
separation by the CEO, CFO, or an EVP pursuant to Section 3(b)(vii) hereof;
	 
	 	(ii)	 	voluntary retirement, whether early retirement, retirement at
normal retirement age or retirement following normal retirement age;
	 
	 	(iii)	 	the Company having terminated such Eligible Officer’s
employment for Cause; or
	 
	 	(iv)	 	the removal of an Eligible Officer from one or more officer
positions but such Eligible Officer is offered and accepts (and continuing to
work at the Company in such new officer position shall, among other methods, be
a

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	 	 	 	method of acceptance) one or more other officer positions (other than merely
Secretary or Assistant Secretary) at the Company.

4. Amount and Payment of Benefits.

     (a) General Severance Compensation. Unless otherwise provided in Section 6 herein, an
Eligible Officer who is entitled to receive severance benefits under this Plan shall receive a
General Severance Allowance in an amount equal to the product of (i) such Eligible Officer’s Base
Salary and (ii) a percentage determined in accordance with the following table:

	 	 	 
	Officer Position Held at Termination	 	General Percentage
	CEO
	 	200%
	CFO and EVPs
	 	150%
	All Other Officer Positions
	 	100%

     (b) Method of Payment. Any General Severance Allowance will be paid in equal monthly
installments, less all applicable withholding taxes, over the Eligible Officer’s General Severance
Period as determined in accordance with the following table:

	 	 	 
	Officer Position Held at Termination	 	General Severance Period
	CEO
	 	24 months
	CFO and EVPs
	 	18 months
	All Other Officer Positions
	 	12 months

          The installment payments will commence on the sixtieth (60) day following the Termination Date
provided the terminated Eligible Officer has timely executed and not revoked the Agreement required
under Section 5 of this Plan. Notwithstanding the preceding sentence, if the terminated Eligible
Officer is a Specified Employee, any payment which would otherwise occur within the first six
months following the Eligible Officer’s Termination Date shall be made in a lump sum, with interest
accruing at a reasonable rate from the Termination Date, on the first day of the seventh month
immediately following the Termination Date to the extent necessary for the Eligible Officer to
avoid adverse tax consequences under Code Section 409A.

     (c) Health Care Coverage Continuation. For a period of eighteen (18) months in case
of the CEO, CFO, and EVPs and twelve (12) months for all other officer positions, Tekelec will
reimburse premiums paid by a terminated Eligible Officer for health care continuation coverage
under Tekelec’s group health plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”) for the terminated Eligible Officer and the terminated Eligible Officer’s immediate
family members who elect coverage as “Qualified Beneficiaries” as such term is defined in COBRA.
All reimbursements for COBRA premium payments shall be made as soon as possible following the
terminated Eligible Officer’s submission to Tekelec of proof of timely COBRA premium payments;
provided, however, all such claims for COBRA reimbursements shall be

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submitted by the terminated Eligible Officer and paid by Tekelec no later than 2 1/2 months
following the end of the year in which COBRA premiums were paid. In the event the Eligible Officer
and his or her family members become eligible for group health care coverage elsewhere on terms
generally no less favorable to the terminated Eligible Officer during the applicable COBRA
reimbursement period set forth above, the terminated Eligible Officer shall provide notice to
Tekelec, and Tekelec reserves the right to discontinue reimbursing COBRA premiums under Tekelec’s
group health plans. Upon exhaustion of the applicable COBRA reimbursement period set forth above,
or after Tekelec ceases paying for coverage (if applicable), such terminated Eligible Officer may
elect coverage under a conversion health plan available under Tekelec’s group health plan(s) from
the Company’s health insurance carrier if and to the extent the Eligible Officer is entitled to do
so as a matter of right under federal or state law. Any expense associated with the continuation
of any health care coverage beyond the maximum applicable COBRA reimbursement period pursuant to
this Section 4(c) will be the sole responsibility of the terminated Eligible Officer.

     (d) Other Benefit Plans. Except as otherwise expressly provided in this Section 4 or
as required by applicable law, a terminated Eligible Officer shall have no right to continue
his/her participation in any Tekelec benefit plan following such Eligible Officer’s termination.
Without limiting the generality of the foregoing, a terminated Eligible Officer shall not be
entitled to participate in the Company’s 401(k) Plan or any similar plan following the Eligible
Officer’s Termination Date.

     (e) Vacation Pay. A terminated Eligible Officer will be promptly paid for accrued and
unused vacation entitlement on and through the Termination Date.

5. Condition Precedent to Severance Benefits.

     (a) Separation Agreement. Notwithstanding anything herein to the contrary and in
consideration for and as a condition precedent to the payment of severance or any other benefits
under this Plan, an Eligible Officer otherwise entitled to receive payments or benefits under this
Plan shall, following the Eligible Officer’s Termination Date, execute and deliver to the Company a
written separation agreement (the “Agreement”), in substantially the form attached hereto as
Attachment I. Except as otherwise provided in the last sentence of Section 5(b), an Eligible
Officer shall not have any rights whatsoever to receive severance benefits under this Plan unless
the Eligible Officer timely executes and delivers to the Company the Agreement and does not revoke
said Agreement. The obligations set forth in the Agreement shall be in addition to any existing
and continuing duties that such Eligible Officer may otherwise have under law to the Company as a
result of the Eligible Officer’s former capacity as an officer, employee, director, shareholder or
otherwise.

     (b) Waiver. Not later than 20 days after an Eligible Officer’s Termination Date, the
Company shall provide such Eligible Officer with the Agreement for execution. Unless such
Agreement is duly executed and returned by the Eligible Officer to the Company within 21 days after
the Eligible Officer receives it or the Eligible Officer lodges a bona fide dispute or challenge
with the Company’s determination of the severance payments payable under this Plan and has made a
timely claim in accordance with Section 8(a) hereof, such Eligible Officer shall be deemed to have

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waived and forfeited his/her rights to severance payments and benefits under this Plan and the
Company shall have no further obligations whatsoever to such Eligible Officer under this Plan. If
the Company shall not provide the Agreement to the Eligible Officer within 20 days after such
Eligible Officer’s Termination Date, the Company shall be deemed to have waived the condition set
forth in this Section 5 and the Eligible Officer shall not be required to execute the Agreement as
a condition to receiving any severance payments or other benefits under this Plan.

6. Change in Control Provisions.

     (a) Eligibility. In the event of a Change in Control of the Company, this Section 6
will apply in lieu of all the provisions contained in Section 4 herein. However, in the event that
an Eligible Officer’s employment with the Company is terminated for any reason prior to the Change
in Control of the Company, and subsequently a Change in Control of the Company occurs, such
Eligible Officer shall not be entitled to any benefits under this Section 6 unless such termination
was within two (2) months of said Change in Control and was in connection with or otherwise
directly because of such anticipated Change in Control.

     (b) Qualifying Termination. In the event that a Change in Control of the Company
shall occur, Tekelec will pay the severance benefits provided in this Section 6 to an Eligible
Officer (CEO, CFO, EVP, or all other officers) who (i) elects to terminate his/her employment
within eighteen months of such Change in Control for “Good Reason” as defined in Section 2(o) above
or (ii) is terminated by the Company (or the Acquiror) without Cause within 18 months following the
Change in Control of the Company.

     (c) Change in Control Severance Compensation. An Eligible Officer who is entitled to
receive severance benefits under Section 6(b) of this Plan shall receive, subject to Section 6(h),
a Change in Control Severance Allowance in an amount equal to the product of (i) such Eligible
Officer’s Annual Compensation and (ii) a percentage determined in accordance with the following
table:

	 	 	 
	Officer Position Held at Termination	 	Change in Control Percentage
	CEO
	 	200%
	CFO and EVPs
	 	150%
	All Other Officer Positions
	 	100%

     (d) Method of Payment. Any Change in Control Severance Allowance will be paid in a
lump sum, less all applicable withholding taxes, on the sixtieth (60) day following the Termination
Date provided the terminated Eligible Officer has timely executed and not revoked the Agreement
required under Section 5 of this Plan. Notwithstanding the preceding sentence, if the terminated
Eligible Officer is a Specified Employee, payment shall be made in a lump sum, with interest
accruing at a reasonable rate, on the first day of the seventh month immediately following the
Termination Date to the extent necessary for the Eligible Officer to avoid adverse tax consequences
under Code Section 409A.

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     (e) Health Care Insurance Continuation. If the terminated Eligible Officer and the
Eligible Officer’s family members who qualify as “Qualifying Beneficiaries” under COBRA elect to
continue coverage under Tekelec’s group health plan(s) pursuant to COBRA, Tekelec will reimburse
the Eligible Officer for applicable premium payments to continue such coverage for a period of up
to twenty-four (24) months with respect to the CEO, up to eighteen (18) months with respect to the
CFO or an EVP, and up to twelve (12) months for all other officer positions. All reimbursements
for COBRA premium payments shall be made as soon as possible following the terminated Eligible
Officer’s submission to the Company of proof of timely payments; provided, however, all such claims
for reimbursement shall be submitted by the terminated Eligible Officer and paid by Tekelec no
later than 2 1/2 months following the end of the year in which such premiums were timely paid. Any
expense associated with the continuation of any health care coverage beyond the Eligible Officer’s
health care coverage reimbursement period provided herein shall be the sole responsibility of the
terminated Eligible Officer. A terminated Eligible Officer (at the Eligible Officer’s expense) may
elect coverage under a conversion health plan available under Tekelec’s group health plan(s) from
the Company’s health insurance carrier if and to the extent the Eligible Officer is entitled to do
so as a matter of right under federal or state law.

     (f) Acceleration of Vesting.

          (i) If within the period commencing two (2) months prior to, and ending eighteen (18) months
after, a Change in Control of the Company, (i) an Eligible Officer’s employment with the Company
(or the Acquiror) is terminated by the Company (or the Acquiror) without Cause or (ii) an Eligible
Officer terminates his/her employment with the Company (or the Acquiror) for “Good Reason,” then
all of such Eligible Officer’s then unvested options, stock appreciation rights (“SARs”),
restricted stock units (“RSUs”) and other rights to purchase or acquire securities or other
property of the Company or the Acquiror (including but not limited to any options or rights assumed
by the Acquiror in connection with the Change in Control), other than any equity awards or grants
subject to performance-based vesting provisions and any options or rights that were granted after
the effective date of the Change in Control, shall automatically vest and become immediately
exercisable in full, and all of such Eligible Officer’s options, SARs, RSUs and rights to purchase
securities or other property of the Company and/or the Acquiror (other than equity awards subject
to performance-based vesting provisions and such options and rights that were granted after the
effective date of the Change in Control, which options and rights shall be governed by the terms
thereof) shall be exercisable for a period of one year following the effective date of such
Eligible Officer’s termination of employment with the Company or the Acquiror, as the case may be
(notwithstanding any terms or provisions to the contrary in any applicable stock option plan, stock
option agreement or other plan or agreement); provided, however, that any such option or other
right shall not be exercisable after the expiration of the term of such option or other right set
forth in the option agreement or other agreement evidencing such right.

          (ii) If in connection with a Change in Control of the Company, an Eligible Officer is not
offered, prior to the effective date of such Change in Control, employment with the Acquiror after
the effective date of the Change in Control on terms and conditions generally no less favorable to
the Eligible Officer than the terms and conditions of the Eligible Officer’s

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employment in effect with the Company immediately prior to the effective date of the Change in
Control, then all of such Eligible Officer’s unvested options, SARs, RSUs, and other rights to
purchase or acquire the Company’s securities that are outstanding immediately prior to the
effective date of the Change in Control (other than equity awards subject to performance-based
vesting provisions) shall automatically vest and become immediately exercisable in full, and all of
such Eligible Officer’s options, SARs, RSUs, and rights to purchase or acquire the Company’s
securities that are outstanding immediately prior to the effective date of the Change in Control
(other than equity awards subject to performance-based vesting provisions) shall be exercisable for
a period of one year following the effective date of such Change in Control (notwithstanding any
terms or provisions to the contrary in any applicable stock option plan, stock option agreement or
other plan or agreement); provided, however, that any such option, SAR, RSU or other right shall
not be exercisable after the expiration of the term of such option, SAR, RSU, or other right set
forth in the option agreement or other agreement evidencing such right.

          (iii) For the avoidance of doubt, the vesting and exercisability of equity awards or grants
subject to performance-based vesting provisions shall be governed solely by the terms of the
individual award or grant agreements evidencing such awards rather than the accelerated vesting and
extended exercise rights provided in connection with a Change in Control pursuant to this Plan.

     (g) 280G Modified Cap. In the event that any payment or benefits of any type by
Tekelec to or for the benefit of an Eligible Officer, whether paid or payable or distributed or
distributable pursuant to the terms of this Plan or otherwise, would exceed the statutory limit
under Code Section 280G and result in an excise tax imposed on the Eligible Officer by Code Section
4999 (or any similar tax that may hereafter be imposed), then such Eligible Officer shall receive,
subject to the conditions of this Plan and in full satisfaction of his or her rights under this
Plan, (A) such payment and benefits, or (B) an amount equal to the product of 2.99 and the Eligible
Officer’s “base amount” (as defined in Code Section 280G), whichever yields the highest after-tax
benefit to the Eligible Officer. In the event the benefit described under the foregoing Section
6(h)(B) yields the highest after-tax benefit, such amount shall be paid in a lump sum, less all
applicable withholding taxes, ten days after the effective date of the Agreement required under
Section 5 of this Plan; however, if the terminated Eligible Officer is a Specified Employee,
payment shall be made in a lump sum, with interest accruing at a reasonable rate of interest from
the Eligible Officer’s Termination Date, on the first day of the seventh month immediately
following the Termination Date to the extent necessary for the Eligible Officer to avoid adverse
tax consequences under Code Section 409A.. In the event the requirements of Section 5 of this Plan
are waived, the phrase “effective date of the Agreement” in this Section 6(h) shall be replaced
with “Termination Date.”

     (h) Overpayment. If, after the receipt by the Eligible Officer of an amount paid or
advanced by Tekelec pursuant to this Section 6), the Eligible Officer becomes entitled to receive
any refund with respect to such claim, the Eligible Officer shall promptly pay to Tekelec the
amount of such refund (together with any interest paid or credited thereon after taxes applicable
thereto).

     (i) Other Benefit Plans. Except as otherwise expressly provided in this Section 6 or
as required by applicable law, a terminated Eligible Officer shall have no right to continue
his/her

11

 

participation in any Tekelec benefit plan following such officer’s termination. Without
limiting the generality of the foregoing, a terminated Eligible Officer shall not be entitled to
participate in the Company’s 401(k) Plan or any similar plan following his/her Termination Date.

     (j) Vacation Pay. A terminated Eligible Officer will be promptly paid for accrued and
unused vacation entitlement on and through the Termination Date.

7. Administration of this Plan.

     This Plan is a top-hat welfare plan under the Employee Retirement Income Security Act of 1974.
The Plan shall be interpreted and administered for the Company by the Administrator who shall also
be the named fiduciary of this Plan. The Administrator shall administer this Plan in accordance
with its terms and shall have all powers necessary to carry out this Plan’s provisions on behalf of
the Company. The Administrator shall have discretionary authority on behalf of the Company to
determine reasonably and in good faith all questions arising in the administration, interpretation
and application of this Plan and to construe the terms of this Plan, including any disputed or
doubtful terms or the eligibility of an Eligible Officer for any benefit hereunder. Except as
otherwise expressly provided in this Plan, the Administrator shall have no power or authority to
add to, subtract from or modify any of the terms of this Plan, or to change or modify any of the
benefits provided by this Plan, or to waive or fail to apply any requirements for eligibility for a
benefit under this Plan.

8. Claims for Benefits.

     (a) Initial Claim. In the event an Eligible Officer disputes or otherwise disagrees
with the Company’s determination of the severance benefits payable to him or her and desires to
make a claim (a “claimant”) with respect to any of the benefits provided hereunder, the claimant
shall so notify, in writing, the Administrator by actual receipt or registered mail (addressed to
the “Officer Severance Plan Administrator,” Tekelec, 5200 Paramount Parkway, Morrisville, North
Carolina 27560) and shall submit evidence of events constituting a termination of employment with
the Company. Any claim with respect to any of the benefits provided under this Plan shall be made
in writing within 90 days of the later of his/her becoming aware of the event which the claimant
asserts entitles him or her to severance benefits or the Company notifying him or her of its
determination of the severance benefits payable to him or her under this Plan as a result of the
occurrence of that event. Failure by the claimant to submit his/her claim within such 90-day
period shall bar the claimant from disputing the Company’s notification to him or her of its
determination of the severance benefits payable to him or her under this Plan as a result of the
occurrence of that event.

     (b) Appeal. In the event that a claim which is made by a claimant is wholly or
partially denied, the claimant will receive from the Administrator within 60 days of the claimant’s
above-referenced notice a written explanation of the reason for denial and the claimant or his/her
duly authorized representative may appeal the denial of the claim to the Administrator at any time
within 60 days after the receipt by the claimant of written notice from the Administrator of the
denial of the claim. In connection therewith, the claimant or his/her duly authorized
representative may request a review of the denied claim, may review pertinent documents, and may
submit issues and comments in writing. Upon receipt of a request for review of a denied claim, the
Administrator

12

 

shall make a decision with respect thereto and, not later than 60 days after receipt of a
request for review, shall furnish the claimant with a decision on the review in writing, including
the specific reasons for the decision written in a manner reasonably calculated to be
understandable by the claimant or the claimant’s attorney or accountant, as well as specific
reference to the pertinent provisions of this Plan upon which the decision is based. In reaching
its decision, the Administrator shall have the discretionary authority in good faith to determine
on behalf of the Company all questions arising under this Plan.

9. Miscellaneous Provisions.

     (a) Offset. (i) If an Eligible Officer shall become entitled to receive benefits or
payments from the Company pursuant to the provisions of any statute, rule or regulation of the
United States or any state, territory, commonwealth or political subdivision thereof as the result
of a plant or facility shutdown or closing, or the change in the control or ownership of the
Company (other than unemployment benefits), the amount of severance benefits payable hereunder
shall be offset dollar for dollar and reduced by such benefits otherwise payable to the Eligible
Officer under such statute, rule or regulation. (ii) To the maximum extent permitted by Code
Section 409A or other applicable law, the amount of any severance benefit payable under this Plan
may be offset by the Company against any and all amounts due the Company by the terminated Eligible
Officer.

     (b) Waiver. The failure of the Company to enforce at any time any of the provisions
of this Plan, or to require at any time performance of any of the provisions of this Plan, shall in
no way be construed to be a waiver of these provisions, nor in any way to affect the validity of
this Plan or any part thereof, or the right of the Company thereafter to enforce every provision.

     (c) Benefits Not Transferable. Except as may be required by law, no benefit which
shall be payable under this Plan to any Eligible Officer shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any
attempt to alienate, sell, transfer, assign, pledge, encumber or charge all or any part of the
benefit shall be void; provided, however, in the event of the death of a terminated Eligible
Officer prior to the end of the period over which such Eligible Officer is entitled to receive
severance benefits under this Plan, the severance benefits payable hereunder shall be paid to the
estate of such Eligible Officer or to the person who acquired the rights to such benefits by
bequest or inheritance. Except as may be provided by law, no benefit shall in any manner be liable
for, or subject to, the debts, contracts, liabilities, engagements or torts of any Eligible
Officer, nor shall it be subject to attachment or legal process for, or against, the Eligible
Officer and the same shall not be recognized under this Plan.

     (d) Successors of the Company. The rights and obligations of the Company under the
Plan shall inure to the benefit of, and shall be binding upon, the successors and assigns of the
Company.

     (e) No Contract of Employment. The definitions and criteria set forth herein are
solely for the purpose of defining Plan eligibility. No legal rights to employment are created or
implied by this Plan, nor are any conditions or restrictions hereby placed on termination of
employment. Unless the employee has a written employment agreement binding on Tekelec which
provides otherwise, employment with Tekelec is employment-at-will. This means termination of
employment

13

 

may be initiated by the Eligible Officer or by Tekelec at any time for any reason which is not
unlawful, with or without cause.

     (f) Governing Law. This Plan shall be construed, administered and governed under and
by the laws of the State of North Carolina and the laws of the United States to the extent they
preempt state law or are otherwise applicable to this Plan.

     (g) Controlling Plan. This Plan constitutes the Company’s entire Officer Severance
Plan for the Eligible Officer and supersedes all previous representations, understandings and plans
with respect to officer severance for the Eligible Officer, and any such representations,
understandings and plans with respect to officer severance are hereby canceled and terminated in
all respects.

     (h) Validity. In the event any provision of the Plan is held invalid, void or
unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other
provisions of the Plan.

     (i) Duration, Amendment and Termination. If a Change in Control has not occurred,
this Plan shall automatically expire, without need for further Board action, upon the third
anniversary of the Effective Date unless earlier terminated pursuant to this Section 9(i). If,
however, a Change in Control has occurred while this Plan is in effect, this Plan shall continue in
full force and effect for at least eighteen (18) months following such Change in Control and shall
not terminate or expire until all Eligible Officers who become entitled to any payments or benefits
hereunder shall have received such payments and benefits in full, at which time this Plan shall
automatically expire, without need for further Board action. Following any automatic expiration of
this Plan, the Board shall have the sole discretion to decide whether to renew this Plan and, if so
renewed, upon what terms. Subject to the limitations herein provided, this Plan and each provision
hereof may be amended, modified, supplemented, terminated or waived at any time by the Board. Each
such amendment, modification, supplement, termination or waiver shall be in writing, shall be
promptly sent in writing to each Eligible Officer and shall be effective on the date on or after
such Board action as is specified by the Board; provided, however, that: (i) no such action shall
have the effect of retroactively changing or depriving any terminated Eligible Officers of their
rights to benefits payable with respect to events occurring prior to the effective date of such
amendment, modification, supplement, termination or waiver unless the explicit written consent or
waiver of such Eligible Officer thereto is obtained and (ii) no such action shall adversely
diminish the rights under this Plan of an officer who is an Eligible Officer at the time such
amendment, modification, supplement, termination or waiver is approved by the Board unless (A) the
explicit written consent thereto or waiver by such Eligible Officer is obtained or (B) such action
shall not become effective with respect to those officers who are Eligible Officers on the date
such action is duly approved by the Board until at least 12 months have elapsed after such Eligible
Officers have been notified in writing of the Board’s approval of such action. Any extension,
amendment or termination of this Plan by the Board shall be made by action of the Board in
accordance with the Company’s by-laws and applicable law. Except as expressly provided herein, no
course of dealing between the parties hereto and no delay in exercising any right, power or remedy
conferred hereby or now or hereafter existing at law, in equity, by statute or otherwise, shall
operate as a waiver of, or otherwise prejudice, any such right, power or remedy.

14

 

10. 409A Compliance.

     (a) Parties’ Intent. This Plan is intended to comply with or qualify for an exemption
from Code Section 409A and all provisions of this Plan shall be construed in a manner consistent
with the requirements for avoiding taxes, penalties, or interest under Code Section 409A. If any
terms of this Plan (or of any award of compensation, including equity compensation or benefits)
would cause an Eligible Officer to incur any additional taxes, penalties, or interest under Code
Section 409A, Tekelec shall, upon the specific request of Eligible Officer, use its reasonable
business efforts to in good faith reform such terms or provisions to comply with Code Section 409A;
provided, that to the maximum extent practicable, the original intent and economic benefit
to Eligible Officer and Tekelec of the applicable provision shall be maintained, and the Company
shall have no obligation to make any changes that could create any additional economic cost or loss
of benefit to Tekelec. Tekelec shall timely use its reasonable business efforts to amend any plan
or program in which Employee participates to bring it in compliance with Section 409A.
Notwithstanding the foregoing, the Company shall have no liability to any Eligible Officer or other
individuals with regard to any failure to comply with Code Section 409A so long as it has acted in
good faith with regard to compliance therewith.

     (b) Separation from Service. A termination of employment shall not be deemed to have
occurred for purposes of any provision of this Plan providing for the payment of any amounts or
benefits upon or following a termination of employment unless such termination also constitutes a
“Separation from Service” within the meaning of Code Section 409A and, for purposes of any such
provision of this Plan, references to a “termination,” “termination of employment,” “separation
from service” or like terms shall mean Separation from Service.

     (c) Separate Payments. Each installment payment required under this Plan shall be
considered a separate payment for purposes of Section 409A.

     (d) Bifurcation of Severance. In the event payment of the General Severance Allowance
or the Change in Control Allowance is deferred with respect to an Eligible Officer on account of
such Eligible Officer being a Specified Employee, then to the extent it will not cause adverse tax
consequences under Code Section 409A, the amount of the General Severance Allowance or Change in
Control Severance Allowance up to two times the lesser of (i) the sum of the Eligible Officer’s
annualized compensation based upon his or her annual rate of pay for services provided to the
Company for the prior taxable year; or (ii) the maximum amount that may be taken into account under
a qualified plan pursuant to Code Section 401(a)(17) for the year in which the Eligible Officer’s
termination of employment occurs, may be paid without regard to the six month delay.

     (e) Delayed Distribution to Key Employees. If Tekelec determines in accordance with
Sections 409A and 416(i) of the Code and the regulations promulgated thereunder, in Tekelec’s sole
discretion, that an Eligible Officer is a Specified Employee of the Company on the date the
Eligible Officer’s employment with the Company terminates and that a delay in benefits provided
under this Agreement is necessary to comply with Code Section 409A(A)(2)(B)(i), then any severance
payments and any continuation of benefits or reimbursement of benefit costs provided by this Plan,
and not

15

 

otherwise exempt from Code Section 409A, shall be delayed for a period of six (6) months
following the date of termination of Employee’s employment (the “409A Delay Period”). In such
event, any severance benefits, payments and the cost of any continuation of benefits provided under
this Plan that would otherwise be due and payable to Eligible Officer during the 409A Delay Period
shall be paid to Employee in a lump sum cash amount in the month following the end of the 409A
Delay Period unless alternative delayed payment terms are otherwise provided herein.

     (f) Certain Reimbursements. To the extent that any COBRA premium reimbursements or
benefits or any other reimbursements provided to a terminated Eligible Officer pursuant to this
Plan are taxable to the Eligible Officer, any reimbursement payment due to Eligible Officer
pursuant to any such provision shall in all cases be paid to Eligible Officer on or before the last
day of Eligible Officer’s taxable year following the taxable year in which the related expense was
incurred. The benefits and reimbursements pursuant to such provisions are not subject to
liquidation or exchange for another benefit and the amount of such benefits and reimbursements that
Executive receives in one taxable year shall not affect the amount of such benefits or
reimbursements that Executive receives in any other taxable year.

[Signature Page Follows]

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[Signature Page to Tekelec 2011 Officer Severance Plan]

	 	 	 	 	 
	 	Tekelec

 	 
	 	By:  	 	 
	 	 	Stuart H. Kupinsky 	 
	 	 	Senior Vice President, Corporate Affairs,

General Counsel & Secretary 	 
	 

Date: May 13, 2011

17

 

Exhibit 10.2

EMPLOYMENT SEPARATION AGREEMENT

     THIS EMPLOYMENT SEPARATION AGREEMENT (the “Agreement”), which includes Exhibits A, B and C
hereto which are incorporated herein by this reference, is entered into by and between TEKELEC, a
California corporation (“Tekelec”), and ____________________ (“Former Employee”), and shall become
effective when executed by both parties hereto (the “Effective Date”).

RECITALS

     A. Former Employee ceased to be an employee and officer of Tekelec on _______________, 20__
(the “Termination Date”).

     B. Former Employee desires to receive severance benefits under Tekelec’s Officer Severance
Plan dated _________ (the “Severance Plan”), which benefits are stated in the Severance Plan to be
contingent upon, among other things, Former Employee’s entering into this Agreement and undertaking
the obligations set forth herein.

     C. Tekelec and Former Employee desire to set forth their respective rights and obligations
with respect to Former Employee’s separation from Tekelec and to finally and forever settle and
resolve all matters concerning Former Employee’s past services to Tekelec.

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and
conditions set forth herein, the receipt and sufficiency of which are hereby acknowledged, Tekelec
and Former Employee hereby agree as follows:

1. DEFINITIONS

     As used herein, the following terms shall have the meanings set forth below:

     1.1. “Includes;” “Including.” Except where followed directly by the word “only,” the
terms “includes” or “including” shall mean “includes, but is not limited to,” and “including, but
not limited to,” respectively.

     1.2. “Severance Covered Period.” The term “Severance Covered Period” shall mean a
period of twenty-four (24) months with respect to the Chief Executive Officer (“CEO”) participating
as an Eligible Officer under this Plan, a period of eighteen (18) months with respect to the Chief
Financial Officer (“CFO”) or an Executive Vice President (“EVP”) participating as an Eligible
Officer under this Plan, and a period of twelve (12) months for all other officers participating as
an Eligible Officer under this Plan.

     1.3. Other Capitalized Terms. Capitalized terms (other than those specifically
defined herein) shall have the same meanings ascribed to them in the Severance Plan.

 

 

2. MUTUAL REPRESENTATIONS, WARRANTIES AND COVENANTS

     Each party hereto represents, warrants and covenants (with respect to itself/himself only) to
the other party hereto that, to its/his respective best knowledge and belief as of the date of each
party’s respective signature below:

     2.1. Full Power and Authority. It/he has full power and authority to execute, enter
into and perform it/his obligations under this Agreement; this Agreement, after execution by both
parties hereto, will be a legal, valid and binding obligation of such party enforceable against
it/him in accordance with its terms; its/he will not act or omit to act in any way which would
materially interfere with or prohibit the performance of any of its/his obligations hereunder, and
no approval or consent other than as has been obtained of any other party is necessary in
connection with the execution and performance of this Agreement.

     2.2. Effect of Agreement. The execution, delivery and performance of this Agreement
and the consummation of the transactions hereby contemplated:

          (a) will not interfere or conflict with, result in a breach of, constitute a default under or
violation of any of the terms, provisions, covenants or conditions of any contract, agreement or
understanding, whether written or oral, to which it/he is a party (including, in the case of
Tekelec, its bylaws and articles of incorporation each as amended to date) or to which it/he is
bound;

          (b) will not conflict with or violate any applicable law, rule, regulation, judgment, order or
decree of any government, governmental agency or court having jurisdiction over such party; and

          (c) has not heretofore been assigned, transferred or granted to another party, or purported to
assign, transfer or grant to another party, any rights, obligations, claims, entitlements, matters,
demands or causes of actions relating to the matters covered herein.

3. CONFIDENTIALITY OBLIGATIONS DO NOT TERMINATE

     Former Employee acknowledges that any confidentiality, proprietary rights or nondisclosure
agreement(s) in favor of Tekelec which he may have entered into in connection with his employment
(collectively, the “Nondisclosure Agreement”) with Tekelec is understood to be intended to survive,
and does survive, any termination of such employment, and accordingly nothing in this Agreement
shall be construed as terminating, limiting or otherwise affecting any such Nondisclosure Agreement
or Former Employee’s obligations thereunder. Without limiting the generality of the foregoing, no
time period set forth in this Agreement shall be construed as shortening or limiting the term of
any such Nondisclosure Agreement, which term shall continue as set forth therein.

2

 

4. BENEFITS AND PAYMENTS TO FORMER EMPLOYEE

     4.1. Employee Compensation. Tekelec has paid, and Former Employee acknowledges and
agrees that Tekelec has paid, to him any and all salary and accrued but unpaid vacation and sick
pay owed by Tekelec to Former Employee up to and including the Termination Date other than any
compensation owed to him under the Severance Plan.

     4.2. Benefits and Severance Payments. In consideration for the release by Former
Employee set forth herein (including the release of any and all claims Former Employee has or may
have under the Age Discrimination in Employment Act (“ADEA”) and Older Workers Benefit Protection
Act (“OWBPA”)) and Former Employee’s performance of Former Employee’s obligations under this
Agreement (including but not limited to Former Employee’s obligations under Section 6 hereof),
Former Employee is entitled to receive, and Tekelec shall pay to Former Employee, the applicable
benefits and payments specified in the Severance Plan.

5. STOCK OPTIONS

     Exhibit A hereto sets forth any and all outstanding stock options, warrants, stock
appreciation rights, restricted stock units and similar equity compensation awards and other rights
to purchase capital stock or other securities of Tekelec which have been previously issued to
Former Employee and which are outstanding as of the date hereof. Nothing in this Agreement shall
alter or affect any of such outstanding stock options, warrants, equity incentives or rights or
Former Employee’s rights or responsibilities with respect thereto, including but not limited to
Former Employee’s rights to exercise any of his options, warrants, equity incentives or rights
following the Termination Date.

6. NON-COMPETITION AND NON-SOLICITATION

     6.1. Subject and in addition to Former Employee’s existing fiduciary duties as a former
officer and/or employee of Tekelec to the extent such continues under applicable law after Former
Employee’s Termination Date, provided that Tekelec has not breached any of the terms of this
Agreement or any other currently existing written agreements between Tekelec and Former Employee,
Former Employee agrees until the earlier of (i) the Severance Covered Period or (ii) such date as
Tekelec may terminate this Agreement for default hereunder (the “Restricted Period”):

          (a) Not to engage, either directly or indirectly, in any Competing Business Activity (as
defined below) or be associated with a Competing Business Entity (as defined below) as an officer,
director, employee, principal, consultant, lender, creditor, investor, agent or otherwise for any
corporation, partnership, company, agency, person, association or any other entity; provided,
however, that nothing contained herein shall prevent Former Employee from owning not more than 5%
of the common equity and not more than 5% of the voting power of, or lending not more than $25,000
to, any Competing Business Entity or any business engaged in a Competing Business Activity;
provided, further, that for purposes of this Agreement, any equity ownership, voting control or
lending activity of Former Employee shall be deemed to include that of (i) any family member or
(ii) person or entity controlled by Former Employee;

3

 

          (b) Not to call upon or cause to be called upon, or solicit or assist in the solicitation of,
in connection with any Competing Business Entity or Competing Business Activity, any entity,
agency, person, firm, association, partnership or corporation that is a customer or account of
Tekelec, currently and/or during the Restricted Period, for the purpose of selling, renting,
leasing, licensing or supplying any product or service that is the same as, similar to or
competitive with the products or services then being sold or developed by Tekelec;

          (c) Not to enter into an employment or agency relationship with a Competing Business Entity or
involving a Competing Business Activity with any person who, at the time of such entry, is an
officer, director, employee, principal or agent of or with respect to Tekelec; and

          (d) Not to induce or attempt to induce any person described in Section 6.1(c) to leave his
employment, agency, directorship or office with Tekelec.

     6.2. For purposes of this Section 6, a “Competing Business Activity” shall mean any business
activity of a person or entity (other than Tekelec) involving the development, design, manufacture,
distribution, marketing, licensing, renting, leasing or selling within the Territory (as defined
below) of products and services which are the same as, similar to or competitive with products or
services of Tekelec then in existence or under development. For purposes hereof, the Territory
shall include the United States of America, Canada, Central America, South America, Europe, Japan,
Australia, Singapore and such other countries in which Tekelec then distributes, markets, licenses,
rents, leases or sells its products or services. An entity as a whole shall be deemed to be a
Competing Business Entity if it has one or more business activities involving the development,
design, manufacture, distribution, marketing, licensing, renting, leasing or selling directly or
indirectly within the Territory of products or services which are the same as, similar to or
competitive with products or services of Tekelec then being sold or under development and if and
only if the revenues derived directly or indirectly from engaging in such business activities by
such entity represent either more than 3% of the entity’s revenues or at least $5 million in
aggregate sales, or both, for the then-preceding 12-month period.

     6.3. The parties acknowledge that the provisions and obligations set forth in this Section 6
are an integral part of this Agreement and that in the event Former Employee breaches any of the
provisions or obligations of this Section 6 or any other term, provision or obligation of this
Agreement, then Tekelec, in addition to any other rights or remedy it may have at law, in equity,
by statute or otherwise, shall be excused from its payment obligations to Former Employee under the
Severance Plan and this Agreement.

     6.4. Former Employee acknowledges that any agreement prohibiting competition or solicitation
(collectively “Non-Competition Agreement”) in favor of Tekelec which Former Employee may have
entered into in connection with Former Employee’s employment with Tekelec is understood to be
intended to survive, and does survive, any termination of such employment, and accordingly nothing
in this Agreement shall be construed as terminating, limiting or otherwise affecting any such
Non-Competition Agreement or Former Employee’s obligations thereunder. Without limiting the
generality of the foregoing, no time period set forth in this Agreement shall be

4

 

construed as shortening or limiting the term of any such Non-Competition Agreement, which term
shall continue as set forth therein.

7. CONFIDENTIAL INFORMATION AND TRADE SECRETS

     7.1. Former Employee hereby recognizes, acknowledges and agrees that Tekelec is the owner of
proprietary rights in certain confidential sales and marketing information, programs, tactics,
systems, methods, processes, compilations of technical and non-technical information, records and
other business, financial, sales, marketing and other information and things of value. To the
extent that any or all of the foregoing constitute valuable trade secrets and/or confidential
and/or privileged information of Tekelec, Former Employee hereby further agrees as follows:

          (a) That, except with prior written authorization from Tekelec’s CEO, for purposes related to
Tekelec’s best interests, he will not directly or indirectly duplicate, remove, transfer, disclose
or utilize, nor knowingly allow any other person to duplicate, remove, transfer, disclose or
utilize, any property, assets, trade secrets or other things of value, including, but not limited
to, records, techniques, procedures, systems, methods, market research, new product plans and
ideas, distribution arrangements, advertising and promotional materials, forms, patterns, lists of
past, present or prospective customers, and data prepared for, stored in, processed by or obtained
from, an automated information system belonging to or in the possession of Tekelec which are not
intended for and have not been the subject of public disclosure. Former Employee agrees to
safeguard all Tekelec trade secrets in his possession or known to him at all times so that they are
not exposed to, or taken by, unauthorized persons and to exercise his reasonable efforts to assure
their safekeeping. This subsection shall not apply to information that as of the date hereof is,
or as of the date of such duplication, removal, transfer, disclosure or utilization (or the knowing
allowing thereof) by Former Employee has (i) become generally known to the public or competitors of
Tekelec (other than as a result of a breach of this Agreement); (ii) been lawfully obtained by
Former Employee from any third party who has lawfully obtained such information without breaching
any obligation of confidentiality; or (iii) been published or generally disclosed to the public by
Tekelec. Former Employee shall bear the burden of showing that any of the foregoing exclusions
applies to any information or materials.

          (b) That all improvements, discoveries, systems, techniques, ideas, processes, programs and
other things of value made or conceived in whole or in part by Former Employee with respect to any
aspects of Tekelec’s current or anticipated business while an employee of Tekelec are and remain
the sole and exclusive property of Tekelec, and Former Employee has disclosed all such things of
value to Tekelec and will cooperate with Tekelec to insure that the ownership by Tekelec of such
property is protected. All of such property of Tekelec in Former Employee’s possession or control,
including, but not limited to, all personal notes, documents and reproductions thereof, relating to
the business and the trade secrets or confidential or privileged information of Tekelec has already
been, or shall be immediately, delivered to Tekelec.

     7.2. Former Employee further acknowledges that as the result of his prior service as an
officer and employee of Tekelec, he has had access to, and is in possession of, information and
documents protected by the attorney-client privilege and by the attorney work product doctrine.

5

 

Former Employee understands that the privilege to hold such information and documents
confidential is Tekelec’s, not his personally, and that he will not disclose the information or
documents to any person or entity without the express prior written consent of the CEO or Board of
Tekelec unless he is required to do so by law.

     7.3. Former Employee’s obligations set forth in this Section 7 shall be in addition to, and
not instead of, Former Employee’s obligations under any written Nondisclosure Agreement.

8. ENFORCEMENT OF SECTIONS 6 AND 7

     Former Employee hereby acknowledges and agrees that the services rendered by him to Tekelec in
the course of his prior employment were of a special and unique character, and that breach by him
of any provision of the covenants set forth in Sections 6 and 7 of this Agreement will cause
Tekelec irreparable injury and damages. Former Employee expressly agrees that Tekelec shall be
entitled, in addition to all other remedies available to it whether at law or in equity, to
injunctive or other equitable relief to secure their enforcement.

     The parties hereto expressly agree that the covenants contained in Sections 6 and 7 hereof are
reasonable in scope, duration and otherwise; however, if any of the restraints provided in said
covenants are adjudicated to be excessively broad as to geographic area or time or otherwise, said
restraint shall be reduced to whatever extent is reasonable and the restraint shall be fully
enforced in such modified form. Any provisions of said covenants not so reduced shall remain in
full force and effect.

9. PROHIBITION AGAINST DISPARAGEMENT

     9.1. Former Employee agrees that for a period of two years following the Effective Date any
communication, whether oral or written, occurring on or off the premises of Tekelec, made by him or
on his behalf to any person or entity (including, without limitation, any Tekelec employee,
customer, vendor, supplier, any competitor, any media entity and any person associated with any
media) which in any way relates to Tekelec (or any of its subsidiaries) or to Tekelec’s or any of
its subsidiaries’ directors, officers, management or employees: (a) will be truthful; and (b) will
not, directly or indirectly, criticize, disparage, or in any manner undermine the reputation or
business practices of Tekelec or its directors, officers, management or employees.

     9.2. The only exceptions to Section 9.1 shall be: (a) truthful statements privately made to
(i) the CEO of Tekelec, (ii) any member of Tekelec’s Board, (iii) Tekelec’s auditors, (iv) inside
or outside counsel of Tekelec, (v) Former Employee’s counsel or (vi) Former Employee’s spouse; (b)
truthful statements lawfully compelled and made under oath in connection with a court or government
administrative proceeding; and (c) truthful statements made to specified persons upon and in
compliance with prior written authorization from Tekelec’s CEO or Board to Former Employee
directing him to respond to inquiries from such specified persons.

6

 

10. COOPERATION

     Former Employee agrees that for a period of five years commencing with the Effective Date he
will cooperate fully and reasonably with Tekelec in connection with any future or currently pending
matter, proceeding, litigation or threatened litigation: (1) directly or indirectly involving
Tekelec (which, for purposes of this section, shall include Tekelec and each of its current and
future subsidiaries, successors or permitted assigns); or (2) directly or indirectly involving any
director, officer or employee of Tekelec (with regard to matters relating to such person(s) acting
in such capacities with regard to Tekelec business). Such cooperation shall include making himself
available upon reasonable notice at reasonable times and places for consultation and to testify
truthfully (at Tekelec’s expense for reasonable, pre-approved out-of-pocket travel costs plus a
daily fee equal to one-twentieth of his Base Salary as calculated on a monthly basis for each full
or partial day during which Former Employee makes himself so available) in any action as reasonably
requested by the CEO or the Board of Directors. Former Employee further agrees to immediately
notify Tekelec’s CEO in writing in the event that he receives any legal process or other
communication purporting to require or request him to produce testimony, documents, information or
things in any manner related to Tekelec, its directors, officers or employees, and that he will not
produce testimony, documents, information or other things with regard to any pending or threatened
lawsuit or proceeding regarding Tekelec without giving Tekelec prior written notice of the same and
reasonable time to protect its interests with respect thereto. Former Employee further promises
that when so directed by the CEO or the Board of Directors, he will make himself available to
attend any such legal proceeding and will truthfully respond to any questions in any manner
concerning or relating to Tekelec and will produce all documents and things in his possession or
under his control which in any manner concern or relate to Tekelec. Former Employee covenants and
agrees that he will immediately notify Tekelec’s CEO in writing in the event that he breaches any
of the provisions of Sections 6, 7, 9 or 10 hereof.

11. SOLE ENTITLEMENT

     Former Employee acknowledges and agrees that his sole entitlement to compensation, payments of
any kind, monetary and nonmonetary benefits and perquisites with respect to his prior Tekelec
relationship (as an officer and employee) is as set forth in the Severance Plan, this Agreement,
the Company’s bonus plan for officers as in effect from time to time, stock option and warrant
agreements, COBRA, and such other written agreements and securities between Tekelec and Former
Employee as may exist or as may be set forth on Exhibit B hereto.

12. RELEASE OF CLAIMS

     12.1. General. Former Employee does hereby and forever release and discharge Tekelec
and the predecessor corporation of Tekelec as well as the successors, current, prior or future
shareholders of record, officers, directors, heirs, predecessors, assigns, agents, employees,
attorneys, insurers and representatives of each of them, past, present or future, from any and all
cause or causes of action, actions, judgments, liens, indebtedness, damages, losses, claims,
liabilities and demands of any kind or character whatsoever, whether known or unknown, suspected to
exist or not suspected to exist, anticipated or not anticipated, whether or not heretofore brought
before any

7

 

state or federal agency, court or other governmental entity which are existing on or arising
prior to the date of this Agreement and which, directly or indirectly, in whole or in part, relate
or are attributable to, connected with, or incidental to the previous employment of Former Employee
by Tekelec, the separation of that employment, and any dealings between the parties concerning
Former Employee’s employment existing prior to the date of execution of this Agreement, excepting
only those obligations expressly recited herein or to be performed hereunder. Nothing contained in
this Section 12 shall affect any rights, claims or causes of action which Former Employee may have
(1) with respect to his outstanding stock options, stock appreciation rights, restricted stock
units, warrants or other stock subscription rights to purchase Tekelec Common Stock or other
securities under the terms and conditions thereof; (2) as a shareholder of Tekelec; (3) to
indemnification by Tekelec, to the extent required under the provisions of Tekelec’s Articles of
Incorporation, Tekelec’s Bylaws, the California General Corporation Law, insurance or contracts,
with respect to matters relating to Former Employee’s prior service as a director, an officer,
employee and/or agent of Tekelec; (4) with respect to his eligibility for severance payments under
the Severance Plan or any other written agreement listed on Exhibit B hereto; and (5) to make
claims against or seek indemnification or contribution from anyone not released by the first
sentence of this Section 12 with respect to any matter or anyone released by the first sentence of
this Section 12 with respect to any matter not released thereby; or (6) with respect to Tekelec’s
performance of this Agreement; or (7) with respect to claims for (a) workers’ compensation benefits
or unemployment benefits filed with the applicable state agencies, (b) vested retirement benefits,
or (c) claims described in Sections 12.3 and 12.4 below. Further, Former Employee waives
specifically any and all rights or claims Former Employee has or may have under the ADEA and
acknowledges that such waiver is given voluntarily in exchange for certain consideration included
in the severance benefits being paid pursuant to this Agreement.

     12.2. Waiver of Unknown Claims. Former Employee acknowledges that he is aware that he
may hereafter discover claims or facts different from or in addition to those he now knows or
believes to be true with respect to the matters herein released, and he agrees that this release
shall be and remain in effect in all respects a complete general release as to the matters released
and all claims relative thereto which may exist or may heretofore have existed, notwithstanding any
such different or additional facts. Former Employee acknowledges that he has been informed of
Section 1542 of the Civil Code of the State of California, and does hereby expressly waive and
relinquish all rights and benefits which he has or may have under said Section (or any similar
state statute), which reads as follows:

“A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his
settlement with the debtor.”

     12.3. Covenant Not to Sue on Matters Released. Former Employee covenants that he will
not make, assert or maintain against any person or entity that Former Employee has released in this
Agreement, any claim, demand, action, cause of action, suit or proceeding arising out of or in
connection with the matters herein released, including but not limited to any claim or right under
the ADEA; provided, however, this Section 12.3 shall not bar a challenge under the OWBPA to the

8

 

enforceability of the waiver and release of ADEA claims set forth in this Agreement or claims
for workers’ compensation, unemployment benefits or vested retirement benefits referenced above.
Former Employee represents and warrants that he has not assigned or transferred, purported to
assign or transfer, and will not assign or transfer, any matter or claim herein released. Former
Employee represents and warrants that he knows of no other person or entity which claims an
interest in the matters or claims herein released. Former Employee agrees to, and shall at all
times, indemnify and hold harmless each person and entity that Former Employee has released in this
Agreement against any claim, demand, damage, debt, liability, account, action or cause of action,
or cost or expense, including attorneys’ fees, resulting or arising from any breach of the
representations, warranties and covenants made herein.

     12.4. Agency Charges/Investigations. Nothing in this Agreement shall prohibit Former
Employee from filing a charge or participating in an investigation or proceeding conducted by the
U.S. Equal Employment Opportunity Commission or other governmental agency with jurisdiction
concerning the terms, conditions and privileges of his employment; provided however, that by
signing this Agreement, former Employee waives his right to, and shall not seek or accept, any
monetary or other relief of any nature whatsoever in connection with any such changes,
investigations or proceedings.

13. ASSIGNMENT

     Former Employee represents and warrants that he has not heretofore assigned, transferred or
granted or purported to assign, transfer or grant any claims, entitlement, matters, demands or
causes of action herein released, disclaimed, discharged or terminated, and agrees to indemnify and
hold harmless Tekelec from and against any and all costs, expense, loss or liability incurred by
Tekelec as a consequence of any such assignment, transfer or grant.

14. FORMER EMPLOYEE REPRESENTATIONS

     Notwithstanding that this Agreement is being entered into subsequent to the Termination Date,
except as listed by Former Employee on Exhibit C, from the period beginning on the Termination Date
to the Effective Date, Former Employee represents and warrants that he has not acted or omitted to
act in any respect which directly or indirectly would have constituted a violation of Sections 6,
7, 9 or 10 herein had this Agreement then been in effect.

15. MISCELLANEOUS

     15.1. Notices. All notices and demands referred to or required herein or pursuant
hereto shall be in writing, shall specifically reference this Agreement and shall be deemed to be
duly sent and given upon actual delivery to and receipt by the relevant party (which notice, in the
case of Tekelec, must be from an officer of Tekelec) or five days after deposit in the U.S. mail by
certified or registered mail, return receipt requested, with postage prepaid, addressed as follows
(if, however, a party has given the other party due notice of another address for the sending of
notices, then future notices shall be sent to such new address):

9

 

	 	 	 	 	 	 	 	 	 

	 

	 	(a)
	 	If to Tekelec:
	 	Tekelec	 	 
	 

	 	 	 	 	 	5200 Paramount Parkway	 	 
	 

	 	 	 	 	 	Morrisville, North Carolina 27560	 	 
	 

	 	 	 	 	 	Attn: Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	With a copy to:
	 	General Counsel Tekelec	 	 
	 

	 	 	 	 	 	5200 Paramount Parkway	 	 
	 

	 	 	 	 	 	Morrisville, North Carolina 27560	 	 
	 

	 	(b)
	 	If to Former Employee:
	 	 
 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
 

	 	 

     15.2. Legal Advice and Construction of Agreement. Both Tekelec and Former Employee
have received (or have voluntarily and knowingly elected not to receive) independent legal advice
with respect to the advisability of entering into this Agreement and with respect to all matters
covered by this Agreement and neither has been entitled to rely upon or has in fact relied upon the
legal or other advice of the other party or such other party’s counsel (or employees) in entering
into this Agreement.

     15.3. Parties’ Understanding. Tekelec and Former Employee state that each has
carefully read this Agreement, that it has been fully explained to it/him by its/his attorney (or
that it/he has voluntarily and knowingly elected not to receive such explanation), that it/he fully
understands its final and binding effect, that the only promises made to it/him to sign the
Agreement are those stated herein, and that it/he is signing this Agreement voluntarily.

     15.4. Recitals and Section Headings. Each term of this Agreement is contractual and
not merely a recital. All recitals are incorporated by reference into this Agreement. Captions
and section headings are used herein for convenience only, are not part of this Agreement and shall
not be used in interpreting or construing it.

     15.5. Entire Agreement. This Agreement constitutes a single integrated contract
expressing the entire agreement of the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous oral and written agreements and discussions with respect
to the subject matter hereof. Notwithstanding the foregoing, the parties understand and agree that
any Nondisclosure Agreement and all other written agreements between Former Employee and Tekelec
are separate from this Agreement and, subject to the terms and conditions of each such agreement,
shall survive the execution of this Agreement, and nothing contained in this Agreement shall be
construed as affecting the rights or obligations of either party set forth in such agreements.

     15.6. Severability. In the event any provision of this Agreement or the application
thereof to any circumstance shall be determined by arbitration pursuant to Section 15.10 of this
Agreement or held by a court of competent jurisdiction to be invalid, illegal or unenforceable, or
to be excessively broad as to time, duration, geographical scope, activity, subject or otherwise,
it shall be construed to be limited or reduced so as to be enforceable to the maximum extent
allowed by

10

 

applicable law as it shall then be in force, and if such construction shall not be feasible,
then such provision shall be deemed to be deleted herefrom in any action before that court, and all
other provisions of this Agreement shall remain in full force and effect.

     15.7. Amendment and Waiver. This Agreement and each provision hereof may be amended,
modified, supplemented or waived only by a written document specifically identifying this Agreement
and signed by each party hereto. Except as expressly provided in this Agreement, no course of
dealing between the parties hereto and no delay in exercising any right, power or remedy conferred
hereby or now or hereafter existing at law, in equity, by statute or otherwise, shall operate as a
waiver of, or otherwise prejudice, any such rights, power or remedy.

     15.8. Cumulative Remedies. None of the rights, powers or remedies conferred herein
shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in
addition to every other right, power or remedy, whether conferred herein or now or hereafter
available at law, in equity, by statute or otherwise.

     15.9. Specific Performance. Each party hereto may obtain specific performance to
enforce its/his rights hereunder and each party acknowledges that failure to fulfill its/his
obligations to the other party hereto would result in irreparable harm.

     15.10. Arbitration. Except for the right of either party to apply to a court of
competent jurisdiction for a Temporary Restraining Order to preserve the status quo or prevent
irreparable harm, any dispute or controversy between Tekelec and Former Employee under this
Agreement involving its interpretation or the obligations of a party hereto shall be determined by
binding arbitration in accordance with the commercial arbitration rules of the American Arbitration
Association, in the County of Wake, State of North Carolina.

     Arbitration may be conducted by one impartial arbitrator by mutual agreement. In the event
that the parties are unable to agree on a single arbitrator within 30 days of first demand for
arbitration, the arbitration shall proceed before a panel of three arbitrators, one of whom shall
be selected by Tekelec and one of whom shall be selected by Former Employee, and the third of whom
shall be selected by the two arbitrators selected. All arbitrators are to be selected from a panel
provided by the American Arbitration Association. The arbitrators shall have the authority to
permit discovery, to the extent deemed appropriate by the arbitrators, upon request of a party.
The arbitrators shall have no power or authority to add to or, except as otherwise provided by
Section 15.6 hereof, to detract from the agreements of the parties, and the prevailing party shall
recover costs and attorneys’ fees incurred in arbitration. The arbitrators shall have the
authority to grant injunctive relief in a form substantially similar to that which would otherwise
be granted by a court of law. The arbitrators shall have no authority to award punitive or
consequential damages. The resulting arbitration award may be enforced, or injunctive relief may
be sought, in any court of competent jurisdiction. Any action arising out of or relating to this
Agreement may be filed only in the Superior Court of the County of Wake, North Carolina or the
United States District Court for the Eastern District of North Carolina.

     15.11. North Carolina Law and Location. This Agreement was negotiated, executed and
delivered within the State of North Carolina, and the rights and obligations of the parties hereto

11

 

shall be construed and enforced in accordance with and governed by the internal (and not the
conflict of laws) laws of the State of North Carolina applicable to the construction and
enforcement of contracts between parties resident in North Carolina which are entered into and
fully performed in North Carolina. Any action or proceeding arising out of, relating to or
concerning this Agreement that is not subject to the arbitration provisions set forth in Section
15.10 above shall be filed in the state courts of the County of Wake, State of North Carolina or in
a United States District Court for the Eastern District of North Carolina and in no other location.
The parties hereby waive the right to object to such location on the basis of venue.

     15.12. Attorneys’ Fees. In the event a lawsuit is instituted by either party
concerning a dispute under this Agreement, the prevailing party in such lawsuit shall be entitled
to recover from the losing party all reasonable attorneys’ fees, costs of suit and expenses
(including the reasonable fees, costs and expenses of appeals), in addition to whatever damages or
other relief the injured party is otherwise entitled to under law or equity in connection with such
dispute.

     15.13. Force Majeure. Neither Tekelec nor Former Employee shall be deemed in default
if its/his performance of obligations hereunder is delayed or become impossible or impracticable by
reason of any act of God, war, fire, earthquake, strike, civil commotion, epidemic, or any other
cause beyond such party’s reasonable control.

     15.14. Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

     15.15. Successors and Assigns. Neither party may assign this Agreement or any of its
rights or obligations hereunder (including, without limitation, rights and duties of performance)
to any third party or entity, and this Agreement may not be involuntarily assigned or assigned by
operation of law, without the prior written consent of the non-assigning party, which consent may
be given or withheld by such non-assigning party in the sole exercise of its discretion, except
that Tekelec may assign this Agreement to a corporation acquiring: (1) 50% or more of Tekelec’s
capital stock in a merger or acquisition; or (2) all or substantially all of the assets of Tekelec
in a single transaction; and except that Former Employee may transfer or assign his rights under
this Agreement voluntarily, involuntarily or by operation of law upon or as a result of his death
to his heirs, estate and/or personal representative(s). Any prohibited assignment shall be null
and void, and any attempted assignment of this Agreement in violation of this section shall
constitute a material breach of this Agreement and cause for its termination by and at the election
of the other party hereto by notice. This Agreement shall be binding upon and inure to the benefit
of each of the parties hereto and each person or entity released pursuant to Section 12 hereof and,
except as otherwise provided herein, their respective legal successors and permitted assigns.

     15.16. Payment Procedure. Except as otherwise explicitly provided herein or in the
Severance Plan, all payments by Tekelec to Former Employee or by Former Employee to Tekelec due
hereunder may be by, at the paying party’s election, cash, wire transfer or check. Except as
explicitly provided herein or in the Severance Plan, neither party may reduce any payment or

12

 

obligation due hereunder by any amount owed or believed owed to the other party under any
other agreement, whether oral or written, now in effect or hereafter entered into.

     15.17. Survival. The definitions, representations and warranties herein as well as
obligations set forth in Sections 6, 7 and 9-15 shall survive any termination of this Agreement for
any reason whatsoever.

     15.18. No Admission. Neither the entry into this Agreement nor the giving of
consideration hereunder shall constitute an admission of any wrongdoing by Tekelec or Former
Employee.

     15.19. Limitation of Damages. Except as expressly set forth herein, in any action or
proceeding arising out of, relating to or concerning this Agreement, including any claim of breach
of contract, liability shall be limited to compensatory damages proximately caused by the breach
and neither party shall, under any circumstances, be liable to the other party for consequential,
incidental, indirect or special damages, including but not limited to lost profits or income, even
if such party has been apprised of the likelihood of such damages occurring.

     15.20. Pronouns. As used herein, the words “he”, “him”, “his” and “himself” shall be
deemed to refer to the feminine as the identity of the person referred to and the context may
require.

     15.21. Effectiveness. This Agreement shall become effective upon execution by both
parties hereto and after expiration of the revocation period set forth in Section 16 below.

16. 21 DAY REVIEW PERIOD; RIGHT TO REVOKE

     Former Employee acknowledges that he was advised in writing to consult with an attorney prior
to executing this Agreement and represents and warrants to Tekelec that he has done so, and further
acknowledges that he has been given a period of 21 days within which to consider the terms and
provisions of this Agreement with his attorney. If Former Employee has executed and delivered to
Tekelec this Agreement prior to the expiration of such 21-day period, then in doing so, Former
Employee acknowledges that he has unconditionally and irrevocably waived his right to that
unexpired portion of such 21-day period. In addition, Former Employee shall have the right to
revoke this Agreement for a period of seven days following the date on which this Agreement is
signed by sending written notification of such revocation directly to Tekelec, General Counsel of
Tekelec at the address specified in Section 15.1, supra, via hand delivery.

17. CODE SECTION 409A COMPLIANCE

     If the Company determines, in accordance with Code Sections 409A and 416(i) and the
regulations promulgated thereunder, in the Company’s sole discretion that Former Employee is a
Specified Employee, as defined in the Severance Plan, on the Termination Date and that a delay in
severance pay and benefits provided under this Agreement is necessary for compliance with Code
Section 409A(a)(2)(B)(i), then any severance payment and any continuation of benefits or
reimbursement of benefit costs provided under this Agreement and not otherwise exempt from

13

 

Code Section 409A shall be delayed for a period of six (6) months (the “409A Delay Period”).
In such event, such severance payment and the cost of any such continuation of benefits provided
under this Agreement that would otherwise be due and payable to Employee during 409A Delay Period
shall be paid to Employee in a lump sum cash amount, with interest accruing at a reasonable rate
from the Termination Date, on the first day of the seventh month immediately following the
Termination Date.

	 	 	 	 	 	 	 	 	 	 	 

	TEKELEC	 	 	 	[Insert Former Employee’s Name]	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 
	 	 	 	Signature:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Print Name:

	 	 
 

	 	 	 	 	 	 	 	 
	Print Title:

	 	 
 

	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	Date:       
                                                             , 20           

	 	Date:       
                                                             , 20           

14

 

EXHIBIT A

OUTSTANDING STOCK PURCHASE RIGHTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Maximum	 	 	 	 
	 	 	 	 	Number of	 	 	 	 
	 	 	 	 	Shares	 	 	 	 
	Type of Security 	 	 	 	Currently	 	Purchase	 	 
	[e.g., stock option, SAR,	 	 	 	Purchasable	 	Price Per	 	Termination
	RSU warrant, etc.]	 	Date Issued	 	or Issuable	 	Share	 	Date
	 
	 	 	 	 	 	 	 	 

15

 

EXHIBIT B

LIST OF OTHER AGREEMENTS (Pursuant to §§12 and 13)

16

 

EXHIBIT C

EXCEPTIONS (Pursuant to §15)

17exv10w1

Exhibit 10.1

AMENDMENT NO. 7 TO

AMENDED AND RESTATED CREDIT AGREEMENT

     THIS AMENDMENT NO. 7 TO AMENDED AND RESTATED CREDIT AGREEMENT (“Amendment No. 7”), dated as
of May 25, 2011, amends and supplements the Amended and Restated Credit Agreement dated as of June
9, 2008, as amended (as so amended, the “Credit Agreement”) among ANCHOR BANCORP WISCONSIN INC., a
Wisconsin corporation (the “Borrower”), the financial institutions from time to time party thereto
(individually a “Lender” and collectively the “Lenders”) and U.S. BANK NATIONAL ASSOCIATION, a
national banking association, as administrative agent for the Lenders (in such capacity, the
“Agent”).

RECITALS

     A. The term of the Credit Agreement matures on May 31, 2011.

     B. Borrower has requested Agent and Lenders extend the maturity of the Credit Agreement and
make certain modifications thereto.

     C. As an accommodation to Borrower, Agent and Lenders have agreed to the foregoing request,
subject in all respects to the terms and conditions of this Amendment.

AGREEMENTS

     NOW THEREFORE, in consideration of the promises and agreements set forth in the Credit
Agreement, as amended and supplemented hereby, the Borrower, Agent and the Lenders agree as
follows:

     1. Each of the foregoing Recitals are hereby incorporated herein by reference. All
capitalized terms used herein which are defined in the Credit Agreement, unless otherwise defined
herein, shall have the meanings given to such terms in the Credit Agreement.

     2. Upon the execution and delivery of this Amendment No. 7 by the Borrower, the Lenders and
the Agent and the satisfaction of the conditions listed in Section 3 below, the Credit Agreement is
hereby amended as follows:

     2.1. The definition of the defined term “Maturity Date” in Section 1.1 of the Credit
Agreement is hereby amended by deleting the date “May 31, 2011” where it appears therein and
replacing it with the date “November 30, 2011”.

     2.2. Section 4.15 of the Credit Agreement is amended in its entirety to read as
follows:

     “4.15 Financial Covenants.

     (a) The Subsidiary Bank shall maintain a Tier 1 Leverage
Ratio of not less than 3.95% at all times.

 

     (b) The Subsidiary Bank shall maintain a Total Risk Based
Capital Ratio of not less than 7.65% at all times.

     (c) The ratio of Non-Performing Loans to Gross Loans shall not
exceed 12.00% at any time.”

     2.3. Borrower, Agent and Lenders hereby confirm that from and after the date of this
Amendment No. 7, the entire outstanding principal balance of the Loans outstanding from time
to time shall bear interest at the rate of fifteen percent (15%) per annum, and that all
accrued and unpaid interest as of the date of this Amendment No. 7 and all interest accruing
after the date of this Amendment No. 7, shall be due and payable upon the earlier of (i) the
Maturity Date, or (ii) acceleration of the obligations and indebtedness of Borrower to Agent
and Lenders upon the occurrence of an Event of Default.

     2.4. Schedule 4.3 to the Credit Agreement is hereby deleted and replaced in its
entirety with Schedule 4.3 attached hereto.

     3. Closing Conditions. This Amendment No. 7 shall become effective upon the
execution and delivery of this Amendment No. 7 by the Borrower, the Lenders and the Agent, and the
following:

     (a) the receipt by the Agent of a resolution of the Board of Directors of the Borrower
authorizing the execution and delivery of this Amendment No. 7, certified to be accurate and
complete by the Secretary or Assistant Secretary of the Borrower; and

     (b) the receipt by the Agent of an executed copy of this Amendment No. 7 and such other
documents and instruments relating hereto as the Agent shall reasonably request.

     4. Representations and Warranties; No Default.

          Borrower hereby represents and warrants to Agent and Lenders as follows: (i) it is duly
organized, validly existing and in good standing under the laws of its jurisdiction of
organization; (ii) the execution, delivery and performance by it of this Amendment No. 7 are
within its corporate powers, have been duly authorized, and do not contravene (A) its articles of
incorporation, bylaws or other organizational documents, or (B) any applicable law, statute,
regulation, ordinance, tariff or order; (iii) no consent, license, permit, approval or
authorization of; or registration, filing or declaration with any Regulatory Authority or other
Person is required in connection with the execution, delivery, performance, validity or
enforceability of this Amendment No. 7 by or against it; (iv) this Amendment No. 7 has been duly
executed and delivered by it; (v) this Amendment No. 7 constitutes its legal, valid and binding
obligations enforceable against it in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally or by general principles of equity; (vi) it is in
compliance with all covenants and agreements in the Loan Documents as modified by Amendments No. 1
through 7 and it is not in default under the Credit Agreement or any other Loan Document as so
modified and no Event of Default exists, has occurred and is continuing or

2

 

would result by the execution, delivery or performance of this Amendment No. 7; and (vii) the
representations and warranties contained in the Loan Documents are true and correct in all
material respects as of the date hereof as if made on the date hereof.

     5. Amendment Fees. The Agent, the Lenders and the Borrower acknowledge that the
Borrower has previously agreed to pay to the Agent, for the ratable account of the Lenders, an
amendment fee of $1,163,000 (the “Fifth Amendment Fee”), which Fifth Amendment Fee was fully earned
by the Lenders upon execution by Borrower, Agent and Lenders of Amendment No. 5 to Amended and
Restated Credit Agreement dated as of December 22, 2009 (“Amendment No. 5”).
Notwithstanding anything to the contrary in Amendment No. 5, the Fifth Amendment Fee shall be due
and payable on the earlier to occur of (i) the date on which the Borrower’s obligations and
liabilities to Agent and Lenders are due or declared due or (ii) the Maturity Date. The Fifth
Amendment Fee shall be in addition to any other amendment fee or other fee payable pursuant to any
other agreement or other Loan Document.

     6. Waiver, Release of Claims, and Indemnification. The Borrower, for itself and each
and all of its officers, employees, agents, shareholders, directors, affiliates, successors, and
assigns, does hereby fully, unconditionally, and irrevocably waive and release the Agent and the
Lenders and their respective officers, employees, agents, directors, shareholders, affiliates,
attorneys, successors, and assigns (each a “Released Party”), of and from any and all claims,
liabilities, obligations, causes of action, defenses, counterclaims, and setoffs, of any kind,
whether known or unknown and whether in contract, tort, statute, or under any other legal theory,
arising out of or relating to any act or omission by the Agent, any Lender or any other Released
Party, on or before the date of this Amendment No. 7. The Borrower agrees to defend, indemnify,
and hold the Agent, each Lender and each other Released Party harmless from and against any and all
losses, costs, expenses, damages, or liabilities (including reasonable attorneys’ fees) incurred in
connection with any demand, claim, counterclaim, cause of action, or proceeding brought as a result
of, or arising out of, or in any way related to any of the Loan Documents, this Amendment No. 7,
any documents executed in connection with or related to any of the Loan Documents, the performance
by the Agent and each Lender under any of the Loan Documents or any documents executed in
connection with or related to this Amendment No. 7 or any of the other Loan Documents, or any
transaction financed or to be financed, in whole or in part, directly or indirectly, with the
proceeds of any Loans. Notwithstanding the foregoing, the Borrower shall not have any obligation to
defend, indemnify, or hold the Agent, any Lender or any other Released Party harmless with respect
to any loss, cost, expense, damage, or liability resulting solely from willful misconduct on the
part of the Agent, such Lender or such other Released Party.

     7. Costs and Expenses. The Borrower agrees to pay to the Agent and each Lender all
costs and expenses (including reasonable attorneys’ fees) paid or incurred by the Agent or such
Lender in connection with the negotiation, execution and delivery of this Amendment No. 7.

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     8. Miscellaneous.

     8.1. The execution, delivery and effectiveness of this Amendment No. 7 shall not, except as
expressly provided herein, be deemed to be an amendment or modification of, or operate as a waiver
of, any provision of the Credit Agreement or any other Loan Document or any right, power or remedy
of Agent or Lenders, nor constitute a waiver of any provision of the Credit Agreement or any other
Loan Document, or any other document, instrument and/or agreement executed or delivered in
connection therewith or a waiver of any Event of Default under any of the foregoing, in each case
whether arising before or after the date hereof or as a result of performance hereunder or
thereunder. This Amendment No. 7 shall not preclude the future exercise of any right, remedy, power
or privilege available to Agent or Lenders whether under the Credit Agreement, other Loan
Documents, at law or otherwise.

     8.2. This Amendment No. 7 may be executed in any number of counterparts (including by
facsimile), and by the different parties hereto or thereto on the same or separate counterparts,
each of which shall be deemed to be an original instrument but all of which together shall
constitute one and the same agreement. Each party agrees that it will be bound by its own facsimile
signature and that it accepts the facsimile signature of each other party. The descriptive
headings of the various sections of this Amendment No. 7 are inserted for convenience of reference
only and shall not be deemed to affect the meaning or construction of any of the provisions hereof
or thereof. Whenever the context and construction so require, all words herein in the singular
number herein shall be deemed to have been used in the plural, and vice versa, and the masculine
gender shall include the feminine and neuter and the neuter shall include the masculine and
feminine.

     8.3. This Amendment No. 7 may not be changed, amended, restated, waived, supplemented,
discharged, canceled, terminated or otherwise modified orally or by any course of dealing or in any
manner other than as provided in the Credit Agreement or the applicable Loan Document. This
Amendment No. 7 shall be considered part of the Credit Agreement and shall be a Loan Document for
all purposes under the Credit Agreement and other Loan Documents. In the event of any
inconsistency between this Amendment No. 7 and the Credit Agreement, any amendments thereto or any
other Loan Document, the terms of this Amendment No. 7 shall control.

     8.4. This Amendment No. 7, the Credit Agreement and the Loan Documents constitute the final,
entire agreement and understanding between the parties with respect to the subject matter hereof
and thereof and may not be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements between the parties, and shall be binding upon and inure to the benefit of the
successors and assigns of the parties hereto and thereto. There are no unwritten oral agreements
between the parties with respect to the subject matter hereof and thereof. If any provision of
this Amendment No. 7 is adjudicated to be invalid under applicable laws or regulations, such
provision shall be inapplicable to the extent of such invalidity without affecting the
validity or enforceability of the remainder of this Amendment No. 7 which shall be given effect
so far as possible.

4

 

     8.5. THIS AMENDMENT NO. 7 AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE CHOICE OF
LAW PROVISIONS SET FORTH IN THE CREDIT AGREEMENT, AS AMENDED BY THIS AMENDMENT AND SHALL BE
SUBJECT TO THE WAIVER OF JURY TRIAL AND NOTICE PROVISIONS OF THE CREDIT AGREEMENT. NEITHER
AGENT, LENDERS, NOR ANY AGENT OR ATTORNEY OF AGENT OR LENDERS, SHALL BE
LIABLE TO ANY CREDIT PARTY OR ANY OTHER PERSON ON ANY THEORY OF LIABILITY FOR ANY SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.

     8.6. Borrower hereby: (i) agrees that this Amendment No. 7 shall not limit or diminish
the obligations of Borrower under the Loan Documents except as modified by the terms hereof,
(ii) reaffirms its obligations under each of the Loan Documents to which it is a party, and
(iii) agrees that each of such Loan Documents as modified by this Amendment No. 7 remain in
full force and effect and are hereby ratified and confirmed. All representations and
warranties made in this Amendment No. 7 and shall survive the execution and delivery of this
Amendment No. 7 and no investigation by Agent or Lenders shall affect such representations
or warranties or the right of Agent or Lenders to rely upon them.

     8.7. Borrower shall execute and deliver such other documents, certificates and/or
instruments and take such other actions as Agent or Lenders may reasonably request in order
more effectively to consummate the transactions contemplated hereby.

     9. Relief from the Automatic Stay. As a material inducement to the Agent and the
Lenders to enter into this Amendment No. 7, the Borrower hereby stipulates and agrees that the
Agent and the Lenders shall be entitled to relief from the automatic stay imposed by 11 U.S.C. §
362 or any similar stay or suspension of remedies under any other federal or state law in the event
the Borrower becomes subject to a bankruptcy or other insolvency proceeding, to allow the Agent and
the Lenders to exercise their rights and remedies under the Loan Documents.

Signature Page Follows

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     IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 7 as of the date first
set: forth above.

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	ANCHOR BANCORP WISCONSIN INC.	 
	 
	 	 	 	 	 	 	 
	 

	 	BY:	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 
	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as the Agent and a Lender	 
	 
	 	 	 	 	 	 	 
	 

	 	BY:	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 
	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 	 	ASSOCIATED. BANK, NATIONAL ASSOCIATION	 
	 
	 	 	 	 	 	 	 
	 

	 	BY:	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 
	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.	 
	 
	 	 	 	 	 	 	 
	 

	 	BY:	 	 	 	 	 
	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 
	 

	 	 	 	 	 	 	 
	 

	 	 	 	Title:

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