Document:

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                                                                    EXHIBIT 10.4

                         1ST AMENDMENT TO LOAN AGREEMENT
                     DATED AS OF APRIL 23, 2002 BY AND AMONG
              PETROLEUM HELICOPTERS, INC., ACADIAN COMPOSITES, LLC,
              AIR EVAC SERVICES, INC., EVANGELINE AIRMOTIVE, INC.,
                  AND INTERNATIONAL HELICOPTER TRANSPORT, INC.
                            AND WHITNEY NATIONAL BANK

WHEREAS THERE HAS BEEN LIMITED USE OF THE CREDIT FACILITY PROVIDED FOR IN THE
CAPTIONED LOAN AGREEMENT AND THEREFORE PHI DESIRES TO AMEND AND EXTEND THE
CREDIT FACILITY IN A LESSER AMOUNT.

WHEREAS THE CURRENT AGREEMENT IS NOT EFFECTIVE AFTER JULY 31, 2004.

WHEREAS PETROLEUM HELICOPTERS HAS ARRANGED TO LEASE FOUR S-92 AIRCRAFT.

WHEREAS ACADIAN COMPOSITES, LLC HAS BEEN SOLD.

THEREFORE FOR GOOD AND ADEQUATE CONSIDERATION THE RECEIPT OF WHICH IS HEREBY
ACKNOWLEDGED, PHI, THE SUBSIDIARY GUARANTORS AND WHITNEY DO HEREBY AMEND THE
CAPTIONED LOAN AGREEMENT AS FOLLOWS:

         1.       IN PARAGRAPH A THE AMOUNT OF THE FACILITY IS REDUCED FROM
                  $50,000,000 TO $35,000,000 AND THE DATE OF JULY 31, 2004 IS
                  CHANGED TO JULY 31, 2006. A NEW PROMISSORY NOTE TO EFFECT
                  THESE CHANGES SHALL BE EXECUTED.

         2.       IN PARAGRAPH C (8) (b) FUNDED DEBT/NET WORTH SHALL BE
                  INCREASED FROM 2.50/1.00 TO 3.50/1.00.

         3.       IN PARAGRAPH G UNUSED FEES UNDER THE REVOLVING LINE OF CREDIT
                  IS REDUCED FROM 3/8 OF 1% TO 1/4 OF 1%.

         4.       ACADIAN COMPOSITES, LLC IS DELETED AS A SUBSIDIARY GUARANTOR.

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

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IN ALL OTHER ASPECTS THE LOAN AGREEMENT AS AMENDED HEREBY AND ITS PROVISIONS
SHALL REMAIN IN FULL FORCE AND EFFECT.

         EXECUTED JUNE ____________, 2004.

PETROLEUM HELICOPTERS, INC.                 WHITNEY NATIONAL BANK

BY:                                         BY:
   -------------------------------             -------------------------------
NAME: MICHAEL J. MCCANN                     NAME: HARRY C. STAHEL
TITLE: CHIEF FINANCIAL OFFICER              TITLE: SENIOR VICE PRESIDENT

SUBSIDIARY GUARANTORS:

AIR EVAC SERVICES, INC.                     EVANGELINE  AIRMOTIVE, INC.

BY:                                         BY:
   -------------------------------             -------------------------------
NAME: MICHAEL J. MCCANN                     NAME: MICHAEL J. MCCANN
TITLE: CHIEF FINANCIAL OFFICER              TITLE: CHIEF FINANCIAL OFFICER

INTERNATIONAL HELICOPTER BY:
TRANSPORT, INC.

BY:
   -------------------------------
NAME: MICHAEL J. MCCANN
TITLE: CHIEF FINANCIAL OFFICER<PAGE>
                                                                Exhibit 10.1

                                     TEKELEC

                              AMENDED AND RESTATED
                     NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

                               SECTION I. PURPOSE

      The purpose of this Tekelec Amended and Restated Non-Employee Director
Stock Option Plan (this "Plan") is to provide an incentive which will motivate
and reward "Non-Employee Directors" of the Company and promote the best
interests and long-term performance of the Company by encouraging the ownership
of the Company's stock by such "Non-Employee Directors." None of the options
granted pursuant to this Plan will qualify as an Incentive Stock Option, as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").

                        SECTION II. CERTAIN DEFINITIONS

      A. "1933 Act" shall mean the Securities Act of 1933, as amended from time
to time.

      B. "Amendment Effective Date" means May 14, 2004, provided that this Plan
is approved by the shareholders of the Company at the 2004 Annual Meeting of
Shareholders of the Company on such date. If this Plan is not so approved by the
shareholders of the Company, then this Plan will not become effective, the
Original Plan shall remain in full force and effect and the Company may continue
to make grants pursuant to the terms of the Original Plan.

      C. "Annual Meeting of Shareholders" shall mean an Annual Meeting of
Shareholders of the Company.

      D. "Board" or "Board of Directors" means the Board of Directors of the
Company.

      E. "Common Stock" means the shares of the Common Stock, without par value,
of the Company.

      F. "Committee" means the Committee appointed by the Board in accordance
with Section X.C. of the Plan, if one is appointed.

      G. "Company" means Tekelec, a California corporation, or any successor
thereto.

      H. "Fair Market Value," as of a given date, means the fair market value of
one share of Common Stock, determined as follows:

            (i) If the Common Stock is listed on any established stock exchange
or on a national market system, including without limitation the Nasdaq National
Market or the Nasdaq SmallCap Market of The Nasdaq Stock Market, the fair market
value per share shall be the closing sales price (or the closing bid price, if
no sales were reported) on such exchange or system on the

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date of grant of the option (or, if the date of grant is not a trading day, on
the last trading day preceding the date of grant), as such closing sales price
(or closing bid price) is reported in The Wall Street Journal or such other
source as the Board deems reliable;

            (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but sales prices are not reported, the fair market value per
share shall be the average of the closing bid and asked prices of the Common
Stock on the date of grant (or, if there are no such prices for such date, on
the last trading day preceding the date of grant on which there were such
reported prices) as reported in The Wall Street Journal or such other source as
the Board deems reliable; or

            (iii) If there is no public market for the Common Stock, the fair
market value per share shall be determined by the Board in good faith.

      I. "Non-Employee Director" means a person who is a member of the Board of
Directors but who is not an employee of the Company or any subsidiary of the
Company.

      J. "Original Plan" means the Tekelec Non-Employee Director Stock Option
Plan as adopted by the Board on March 19, 2002 and as in effect prior to the
amendment and restatement of such plan as evidenced by this Plan.

      K. "Participant" means a Non-Employee Director who is granted a stock
option hereunder.

      L. "Plan" means this Tekelec Amended and Restated Non-Employee Director
Stock Option Plan.

                       SECTION III. EFFECTIVENESS OF PLAN

      This Plan shall become effective as of May 14, 2004, subject to the
approval of the shareholders of the Company at the Annual Meeting of
Shareholders scheduled to be held on May 14, 2004 (the "2004 Annual Meeting").
No options will be granted under this Plan prior to obtaining approval of the
shareholders of the Company at the 2004 Annual Meeting. If this Plan is not so
approved by the shareholders of the Company at the 2004 Annual Meeting, then (i)
this Plan will not become effective for any purpose, and (ii) the Original Plan
shall remain in full force and effect and the Company may continue to make
grants pursuant to the terms and conditions of the Original Plan.

                               SECTION IV. STOCK

      The maximum aggregate number of shares of Common Stock which may be sold
under this Plan is 500,000. If an option expires or is terminated or surrendered
without having been fully exercised, the unpurchased shares of Common Stock
subject to the option shall again be available for the purposes of this Plan.

                                       2
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                             SECTION V. ELIGIBILITY

      Stock options may be granted under the Plan only to Non-Employee
Directors. All options shall be automatically granted in accordance with the
terms set forth in Section VI hereof.

                   SECTION VI. INITIAL GRANTS; ANNUAL GRANTS

      A. Initial Grants of Stock Options upon Election for the First Time as a
Non-Employee Director. Each Non-Employee Director who is elected or appointed
for the first time to the Board, whether through election by the shareholders of
the Company or through appointment by the Board, shall automatically be granted,
effective as of the date of such election or appointment, an option to purchase
that number of shares of Common Stock as is determined in accordance with this
Section VI.A.; provided, however, that a director who is an employee of the
Company and who ceases to be an employee but remains a director shall not be
granted any such options upon such initial change in status. The number of
shares subject to the options granted to a Non-Employee Director pursuant to
this Section VI.A. who is elected prior to the Amendment Effective Date shall be
10,000 shares. The number of shares subject to the options granted to a
Non-Employee Director pursuant to this Section VI.A. who is elected on or after
the Amendment Effective Date shall be equal to the sum of 25,000 plus (1)
10,000, if the Non-Employee Director is elected or appointed for the first time
on the date of an Annual Meeting of Shareholders of the Company, or (2) if the
Non-Employee Director is elected or appointed for the first time on a date other
than the date of an Annual Meeting of Shareholders, the product obtained by
multiplying 10,000 by a fraction, the numerator of which is equal to 12 minus
the number of full months that have elapsed since the most recent Annual Meeting
of Shareholders and the denominator of which is 12.

      B. Annual Grant of Options upon Re-Election as a Non-Employee Director.
Each Non-Employee Director shall automatically be granted an option to purchase
10,000 shares of Common Stock on the date of each Annual Meeting of Shareholders
at which the Non-Employee Director is re-elected to the Board of Directors;
provided, however, that prior to the Amendment Effective Date, a Non-Employee
Director shall be entitled to receive a re-election grant under this Section
VI.B. only if he or she has been a director of the Company for at least six
months preceding the grant date.

      C. Option Exercise Price. The exercise price of the Common Stock subject
to all options granted hereunder shall be 100% of the Fair Market Value of the
Common Stock on the date of the grant of such options.

      D. Term and Vesting of Options.

            (a) Each option granted prior to the Amendment Effective Date
pursuant to Subsections A or B of this Section VI shall have a term of seven
years, subject to earlier termination pursuant to Section VII.B. of this Plan.

                                       3
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            (b) Each option granted on or after the Amendment Effective Date
pursuant to Subsection A of this Section VI will vest and become exercisable in
eight equal quarterly installments commencing on the last day of the calendar
quarter in which the option is granted and continuing on the last day of each of
the seven calendar quarters thereafter as long as the optionee continues to
serve as a Non-Employee Director on such dates. An option may not be exercised
for a fraction of a share.

            (c) Each option granted on or after the Amendment Effective Date
pursuant to Subsection B of this Section VI will vest and become exercisable in
four equal quarterly installments commencing on the last day of the calendar
quarter in which the option is granted and continuing on the last day of each of
the three calendar quarters thereafter as long as the optionee continues to
serve as a Non-Employee Director on such dates; provided, however, that with
respect to options granted prior to the Amendment Effective Date and except as
provided in Subsection F(a) of this Section VI, no option may be exercised at
any time unless the Participant is then a Non-Employee Director and has been so
continuously since the granting of the option. An option may not be exercised
for a fraction of a share.

            (d) For options granted on or after the Amendment Effective Date
pursuant to Subsections A or B of this Section VI, each vested installment of
options shall expire four years after vesting, subject to earlier termination
pursuant to Section VII.B. of this Plan.

      E. Non-Transferability of Options. Each option granted under the Plan
shall by its terms be non-transferable by the Participant other than by will or
the laws of descent and distribution or pursuant to a transfer between spouses
incident to a divorce. An option may be exercised, during the lifetime of the
Participant, only by the Participant.

      F. Termination of Service.

            (a) For options granted prior to the Amendment Effective Date, if a
Participant voluntarily or involuntarily terminates his or her service as a
Non-Employee Director for any reason other than death or Disability, the
Participant may exercise the options at any time within 90 days after the date
of such termination, but only to the extent that the Participant was entitled to
exercise the options on the date of termination. In no event shall such options
be exercisable after the expiration of the term of the options, and any options
not so exercised shall expire. For options granted prior to the Amendment
Effective Date, if a Participant's service as a Non-Employee Director is
terminated by reason of death or Disability, the Participant, or the
Participant's personal representative if the Participant has died, may exercise
any or all of the Participant's unexercised options which are vested on the date
of termination, provided such exercise occurs within 12 months after the date of
the Participant's death or termination of service as a result of Disability but
not after the expiration of the term of the options.

            (b) Options granted on or after the Amendment Effective Date shall
not terminate or expire as to unexercised vested installments as a result of a
Participant's voluntary or involuntary termination of service as a Non-Employee
Director, including as a result of his or her death or Disability. In the event
of any such termination, the Participant (or his or her personal representative
if the Participant has died) may, at any time through the expiration of the
four-year

                                       4
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exercise period for any installment vested on the date of such termination,
exercise the options as to all or part of such vested installment. To the extent
that the Participant is not entitled to exercise the options at the date of such
termination, or to the extent that vested installments of options at the time of
termination of service are not exercised prior to the four-year anniversary of
the date on which such installments vested, the options shall terminate. In no
event shall any such options be exercisable as to any vested installment after
the expiration of the four-year exercise period applicable to such installment.

      G. Payment of Option Exercise Price. The exercise price is to be paid in
full upon exercise of an option, either (i) in cash, (ii) by check, (iii) by
consideration received by the Company under a cashless exercise program
acceptable to the Company in connection with the Plan, or (iv) by any
combination of the payment methods specified in the foregoing clauses (i), (ii)
and (iii).

      H. Option Agreements. Options granted prior to the Amendment Effective
Date shall be evidenced by a written option agreement in substantially the form
of the agreement attached hereto as Attachment I. Options granted on or after
the Amendment Effective Date shall be evidenced by a written option agreement in
substantially the form of the agreement attached hereto as Attachment II.

      I. Pro Rata Allocation. In the event that the options to be granted under
the Plan on a specific grant date would exceed the number of shares then
available for grant hereunder, the shares available for grant shall be allocated
on a pro rata basis among the Non-Employee Directors who are entitled to be
granted options on such grant date.

      J. Procedure for Exercise. An option shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the option agreement by the person entitled to exercise the option
and full payment for the shares with respect to which the option is exercised
has been received by the Company. Full payment may consist of any consideration
and method of payment allowable under Subsection G of this Section VI. Until the
issuance (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company) of the stock certificate
evidencing such shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the shares to be issued upon
exercise of the option, notwithstanding the exercise of the option. A share
certificate for the number of shares acquired upon exercise of an option shall
be issued as soon as administratively practicable after such exercise; provided,
however, that if the shares are covered by a registration statement under the
1933 Act or can otherwise be issued without a legend restricting their transfer,
the Participant may direct that the shares be issued and delivered by electronic
transfer to a securities account maintained in the Participant's name. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section VII of the Plan.

      Exercise of an option in any manner shall result in a decrease in the
number of shares which thereafter may be available, both for purposes of the
Plan and for sale under the option, by the number of shares as to which the
option is exercised.

                                       5
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                          SECTION VII. ADJUSTMENTS UPON
                     CHANGES IN CAPITALIZATION, DISSOLUTION,
                        LIQUIDATION, MERGER OR ASSET SALE

      A. Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares covered by each outstanding
option, or which have been authorized for issuance under the Plan but as to
which no options have yet been granted or which have been returned to the Plan
upon cancellation or expiration, as well as the exercise price per share of each
such outstanding option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, combination or reclassification or the payment of a
stock dividend (but only on the Common Stock) or any other increase or decrease
in the number of shares of Common Stock issued without receipt of consideration
by the Company; provided, however, that the conversion of any convertible
securities of the Company shall not be deemed to have been "effected without
receipt of consideration." Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into or exchangeable for shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares subject to an option or the number of
shares subject to the Plan. Without limiting the generality of the foregoing, no
adjustment shall be made to the number of shares subject to the automatic grant
provisions of Section VI of the Plan as a result of any changes in
capitalization as described in this Section VII.A.

      B. Dissolution, Liquidation, Merger or Asset Sale. In the event of the
proposed dissolution or liquidation of the Company, the proposed sale of all or
substantially all of the assets of the Company, or the merger, consolidation or
reorganization of the Company with or into another corporation as a result of
which the Company is not the surviving corporation or as a result of which the
outstanding shares of Common Stock are exchanged for or converted into cash or
property or securities not of the Company, the Board shall declare that all
options outstanding under the Plan shall terminate as of a date fixed by the
Board which is at least 30 days after notice thereof is given by the Company to
all Participants, unless such 30-day period is waived by all Participants and
shall give each Participant the right to exercise his or her option or options
granted hereunder as to all or any part of the shares subject thereto, including
shares which have not vested at such time, until the date of termination of the
options, provided, however, that no options may be exercised after their
expiration.

      C. No Fractional Shares. No fractional shares of Common Stock shall be
issuable on account of any action described in this Section VII, and the
aggregate number of shares covered by an option, when changed as the result of
such action, shall be reduced to the largest number of whole shares resulting
from such action.

                     SECTION VIII. AMENDMENT OR TERMINATION

      A. Amendment or Termination. Unless this Plan shall have been earlier
terminated as hereinafter provided, this Plan shall terminate, and no stock
option shall be granted hereunder, ten

                                       6
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years from the date of adoption of the Original Plan by the Board (i.e., on
March 19, 2012). The Board of Directors may, at any time prior to the date that
is ten years after the adoption of the Original Plan by the Board, (i) terminate
this Plan or (ii) make such amendments to or modifications of the Plan as the
Board may deem advisable; provided, however, that no amendment authorized by the
Board will be effective unless approved by the shareholders of the Company if
the amendment would (i) increase the number of shares reserved for issuance
under the Plan other than an adjustment under Section VII of the Plan; or (ii)
amend or modify the Plan in any other way if such amendment or modification
requires approval by the shareholders of the Company in order to comply with the
requirements of Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended, or any other applicable law, regulation or stock exchange or
market system rule or requirement.

      B. Effect of Amendment or Termination. Any amendment or termination of the
Plan shall not affect any options already granted under the Plan. Such options
shall remain in full force and effect as if the Plan had not been so amended or
terminated.

                            SECTION IX. WITHHOLDING

      The grant of options hereunder and the issuance of shares pursuant thereto
is conditioned upon the Company's reservation of the right to withhold, in
accordance with any applicable law and from any compensation payable to a
Non-Employee Director, any taxes the Company determines that it is required to
withhold under federal, state or local law as a result of such grants or the
issuance of shares pursuant thereto. To the extent that such compensation, if
any, is insufficient to pay any taxes required to be so withheld, the Company
may, in its sole discretion, require a Non-Employee Director, as a condition to
the issuance of such shares, to pay in cash to the Company an amount sufficient
to cover such tax liability or otherwise to make arrangements satisfactory to
the Company to enable the Company to satisfy its withholding obligations under
federal, state and local law.

                            SECTION X. MISCELLANEOUS

      A. Rights to Continued Service. Nothing in this Plan or in any option
granted pursuant to this Plan shall confer on any individual any right to
continue as a Non-Employee Director.

      B. Investment Undertakings. Until and unless the issuance of shares of
Common Stock pursuant to this Plan shall have been registered pursuant to the
1933 Act and applicable state securities laws, each Participant acquiring shares
of Common Stock under this Plan may be required, as a condition precedent to
such issuance, to execute and deliver to the Company a letter or certificate
containing such investment representations, agreements restricting sale
(including, without limitation, provision for stop transfer orders and
restrictive legends on stock certificates) and confirmation of other relevant
facts to support any exemption from the registration requirements under the 1933
Act and such state securities laws on which the Company intends to rely, all as
shall be deemed reasonably necessary by counsel for the Company and in such form
as such counsel shall determine.

                                       7
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      C. Administration of the Plan. The Plan shall be administered by the
Board. The Board may at any time appoint a Committee consisting of not less than
two persons to administer the Plan on behalf of the Board, subject to such terms
and conditions as the Board may prescribe. The Board or its Committee shall have
the authority to make all determinations deemed necessary or advisable for the
administration of the Plan; provided, however, that the Board or its Committee
shall have no discretion to determine the selection of persons to whom options
will be granted, the frequency of option grants or the number of shares subject
to option grants (except in accordance with Section VI.I. hereof), the exercise
prices of options, or any other material terms of the options. All decisions and
determinations of the Board or its Committee with respect to the Plan shall be
final and binding.

      D. Reservation of Shares. The Company, during the term of this Plan, shall
at all times reserve and keep available such number of shares as shall be
sufficient to satisfy the requirements of this Plan.

                 SECTION XI. EFFECTIVENESS OF THE ORIGINAL PLAN

      Effectiveness of the Original Plan was subject to approval by the
shareholders of the Company within 12 months after the date on which the
Original Plan was adopted by the Board of Directors; provided, however, that
options could be granted pursuant to the Original Plan subject to subsequent
approval of the Original Plan by the Company's shareholders. Such approval was
given at a regular meeting of the shareholders of the Company or at a special
meeting of the shareholders duly called and held for such purpose, or by written
consent of the shareholders in accordance with applicable law. Grants of
options, if any, made prior to shareholder approval of the Original Plan were
made subject to the obtaining of such approval and, if such approval had not
been obtained as aforesaid, any such grants would not have been effective for
any purpose.

                                      * * *

                                       8
<PAGE>

                                  ATTACHMENT I

                                     TEKELEC

                     NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT

      Tekelec, a California corporation (the "Company"), hereby grants to
______________________________________ (the "Optionee") an option (the "Option")
to purchase a total of ____________________________________ (_________) shares
of Common Stock (the "Shares") of the Company, at the price set forth herein,
and in all respects subject to the terms and provisions of the Company's
Non-Employee Director Stock Option Plan (the "Plan"), which terms and provisions
are hereby incorporated by reference herein. Unless the context herein otherwise
requires, the terms defined in the Plan shall have the same meanings herein.

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

      2. DATE OF GRANT; TERM OF OPTION. This Option is granted as of
______________, and it may not be exercised later than ______________.

      3. OPTION EXERCISE PRICE. The Option exercise price is $_________ per
Share, which price is not less than one hundred percent (100%) of the fair
market value thereof on the date this Option is granted.

      4. EXERCISE OF OPTION. This Option shall be exercisable during its term
only in accordance with the terms and provisions of the Plan and this Option as
follows:

            (a) RIGHT TO EXERCISE. This Option shall vest and become
exercisable, cumulatively, in four (4) equal quarterly installments of
_______________________ (______) Shares commencing on the last day of the
calendar quarter during which this Option is granted, with an additional
installment vesting on the last day of each of the three (3) calendar quarters
thereafter as long as the Optionee remains a Non-Employee Director.

            (b) METHOD OF EXERCISE. This Option shall be exercisable by written
notice which shall state the election to exercise this Option, the number of
Shares in respect to which this Option is being exercised, and such other
representations and agreements as to the Optionee's investment intent with
respect to such Shares as may be required by the Company hereunder or pursuant
to the provisions of the Plan. Such written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail to the Secretary
of the Company or such other person as may be designated by the Company. The
written notice shall be accompanied by payment of the purchase price and an
executed Stock Purchase Agreement if required by the Company.

                                      I-1
<PAGE>

Payment of the purchase price shall be by cash, check, the delivery of Shares
owned by the Optionee having a fair market value equal to the aggregate purchase
price of the Shares being purchased, or any combination of such consideration
and methods of payment. The purchase price may also be paid by consideration
received by the Company under any cashless exercise program acceptable to the
Company in connection with the Plan. The certificate or certificates for the
Shares as to which the Option shall be exercised shall be registered in the name
of the Optionee and shall be legended as set forth in the Plan, the Stock
Purchase Agreement, and/or as required under applicable law.

            (c) RESTRICTIONS ON EXERCISE. This Option may not be exercised if
the issuance of the Shares upon such exercise would constitute a violation of
any applicable federal or state securities laws or other laws or regulations. As
a condition to the exercise of this Option, the Company may require the Optionee
to make any representation and warranty to the Company as may be required by any
applicable law or regulation.

      5. TERMINATION OF STATUS AS A NON-EMPLOYEE DIRECTOR.

            (a) If the Optionee ceases to serve as a Non-Employee Director for
any reason other than death or Disability, the Optionee shall have the right to
exercise this Option at any time within 90 days after the date of such
termination to the extent that the Optionee was entitled to exercise this Option
at the date of such termination. To the extent that the Optionee was not
entitled to exercise the Option at the date of termination, or to the extent
this Option is not exercised within such 90 day period, this Option shall
terminate. Notwithstanding the foregoing, this Option shall not be exercisable
after the expiration of the term set forth in Section 2 hereof.

            (b) If the Optionee ceases to serve as a Non-Employee Director due
to death or Disability, the Optionee (or the personal representative of the
Optionee if the Optionee has died) shall have the right to exercise this Option
at any time within 12 months after the date of such termination to the extent
that the Optionee was entitled to exercise the Option at the date of such
termination. To the extent that the Optionee was not entitled to exercise this
Option at the date of termination, or to the extent this Option is not exercised
within such 12 month period, this Option shall terminate. Notwithstanding the
foregoing, this Option shall not be exercisable after the expiration of the term
set forth in Section 2 hereof.

      6. NONTRANSFERABILITY OF OPTION. This Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner, other
than by will or by the laws of descent or distribution or pursuant to a transfer
between spouses incident to a divorce. This Option may be exercised during the
lifetime of the Optionee only by the Optionee. Subject to the foregoing and the
terms of the Plan, the terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

      7. CONTINUATION AS A DIRECTOR. This Option shall not confer upon the
Optionee any right to continue or be nominated as a director of the Company or
any of its subsidiaries or limit in any respect the right of the Company to
remove the Optionee as a director of the Company at any time.

      8. WITHHOLDING. The Company reserves the right to withhold, in accordance
with any applicable laws, from any consideration payable to the Optionee any
taxes required to be withheld

                                      I-2
<PAGE>

by federal, state or local law as a result of the grant or exercise of this
Option or the sale or other disposition of the Shares issued upon exercise of
this Option. If the amount of any consideration payable to the Optionee is
insufficient to pay such taxes or if no consideration is payable to the
Optionee, upon the request of the Company, the Optionee shall pay to the Company
an amount sufficient for the Company to satisfy any federal, state or local tax
withholding requirements it may incur as a result of the grant or exercise of
this Option or the sale or other disposition of the Shares issued upon the
exercise of this Option.

      9. THE PLAN. This Option is subject to, and the Company and the Optionee
agree to be bound by, all of the terms and conditions of the Company's
Non-Employee Director Stock Option Plan as such Plan may be amended from time to
time in accordance with the terms thereof, provided that no such amendment shall
deprive the Optionee, without his or her consent, of this Option or any rights
hereunder.

Date:________________________          Tekelec

                                       By: _____________________________________

                                       Title: __________________________________

                                      I-3
<PAGE>

      The Optionee acknowledges receipt of a copy of the Tekelec Non-Employee
Director Stock Option Plan, a copy of which is attached hereto, and represents
that he or she has read and is familiar with the terms and provisions thereof,
and hereby accepts this Option subject to all of the terms and provisions
thereof. The Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Board of Directors or its Committee upon
any questions arising under the Plan.

Date: _________________________        _________________________________________
                                                 Signature of Optionee

                                       _________________________________________
                                                       Address

                                       _________________________________________
                                       City             State           Zip Code

                                      I-4
<PAGE>

                                  ATTACHMENT II

                                     TEKELEC

                              AMENDED AND RESTATED
                     NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT

      Tekelec, a California corporation (the "Company"), hereby grants to
______________________________________ (the "Optionee") an option (the "Option")
to purchase a total of ____________________________________ (_________) shares
of Common Stock (the "Shares") of the Company, at the price set forth herein,
and in all respects subject to the terms and provisions of the Company's Amended
and Restated Non-Employee Director Stock Option Plan (the "Plan"), which terms
and provisions are hereby incorporated by reference herein. Unless the context
herein otherwise requires, the terms defined in the Plan shall have the same
meanings herein.

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

      2. DATE OF GRANT; TERM OF OPTION. This Option is granted as of
______________. Each installment of this Option shall terminate in accordance
with Sections 4(a) and 5 below.

      3. OPTION EXERCISE PRICE. The Option exercise price is $_________ per
Share, which price is not less than one hundred percent (100%) of the fair
market value thereof on the date this Option is granted.

      4. EXERCISE OF OPTION. This Option shall be exercisable during its term
only in accordance with the terms and provisions of the Plan and this Option as
follows:

            (a) RIGHT TO EXERCISE. This Option shall vest and become
exercisable, cumulatively, in ___________ (___) equal quarterly installments of
_____________________ (______) Shares commencing on the last day of the calendar
quarter during which this Option is granted, with an additional installment
vesting on the last day of each of the ___________ (___) calendar quarters
thereafter as long as the Optionee remains a Non-Employee Director. Each vested
installment of this Option will expire on the four-year anniversary of its
vesting date (e.g., the installment vesting on _______________ will expire at
the close of business on _______________).

            (b) METHOD OF EXERCISE. This Option shall be exercisable by written
notice which shall state the election to exercise this Option, the number of
Shares in respect to which

                                      II-1
<PAGE>

this Option is being exercised, and such other representations and agreements as
to the Optionee's investment intent with respect to such Shares as may be
required by the Company hereunder or pursuant to the provisions of the Plan.
Such written notice shall be signed by the Optionee and shall be delivered in
person or by certified mail to the Secretary of the Company or such other person
as may be designated by the Company. The written notice shall be accompanied by
payment of the exercise price and an executed Stock Purchase Agreement if
required by the Company. Payment of the exercise price shall be by cash, check,
the delivery of Shares owned by the Optionee having a fair market value equal to
the aggregate exercise price of the Shares being purchased, or any combination
of such consideration and methods of payment. The exercise price may also be
paid by consideration received by the Company under any cashless exercise
program acceptable to the Company in connection with the Plan. The certificate
or certificates for the Shares as to which the Option shall be exercised shall
be registered in the name of the Optionee and shall be legended as set forth in
the Plan, the Stock Purchase Agreement, and/or as required under applicable law.

            (c) RESTRICTIONS ON EXERCISE. This Option may not be exercised if
the issuance of the Shares upon such exercise would constitute a violation of
any applicable federal or state securities laws or other laws or regulations. As
a condition to the exercise of this Option, the Company may require the Optionee
to make any representation and warranty to the Company as may be required by any
applicable law or regulation.

      5. TERMINATION OF STATUS AS A NON-EMPLOYEE DIRECTOR. If the Optionee
ceases to serve as a Non-Employee Director for any reason, the Optionee shall
have the right, as to all or part of any installment vested on the date of such
cessation of service, to exercise this Option at any time prior to the four-year
anniversary of the date on which such installment vested. To the extent that the
Optionee was not entitled to exercise the Option at the date of such
termination, or to the extent that a vested installment of this Option is not
exercised prior to the four-year anniversary of the date on which such
installment vested, this Option shall terminate.

      6. NONTRANSFERABILITY OF OPTION. This Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner, other
than by will or by the laws of descent or distribution or pursuant to a transfer
between spouses incident to a divorce. This Option may be exercised during the
lifetime of the Optionee only by the Optionee. Subject to the foregoing and the
terms of the Plan, the terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

      7. CONTINUATION AS A DIRECTOR. This Option shall not confer upon the
Optionee any right to continue or be nominated as a director of the Company or
any of its subsidiaries or limit in any respect the right of the Company to
remove the Optionee as a director of the Company at any time.

      8. WITHHOLDING. The Company reserves the right to withhold, in accordance
with any applicable laws, from any consideration payable to the Optionee any
taxes required to be withheld by federal, state or local law as a result of the
grant or exercise of this Option or the sale or other disposition of the Shares
issued upon exercise of this Option. If the amount of any consideration

                                      II-2
<PAGE>

payable to the Optionee is insufficient to pay such taxes or if no consideration
is payable to the Optionee, upon the request of the Company, the Optionee shall
pay to the Company an amount sufficient for the Company to satisfy any federal,
state or local tax withholding requirements it may incur as a result of the
grant or exercise of this Option or the sale or other disposition of the Shares
issued upon the exercise of this Option.

      9. THE PLAN. This Option is subject to, and the Company and the Optionee
agree to be bound by, all of the terms and conditions of the Company's Amended
and Restated Non-Employee Director Stock Option Plan as such Plan may be amended
from time to time in accordance with the terms thereof, provided that no such
amendment shall deprive the Optionee, without his or her consent, of this Option
or any rights hereunder.

Date: _________________________        Tekelec

                                       By:_____________________________________

                                       Title:__________________________________

                                      II-3
<PAGE>

      The Optionee acknowledges receipt of a copy of the Tekelec Amended and
Restated Non-Employee Director Stock Option Plan, a copy of which is attached
hereto, and represents that he or she has read and is familiar with the terms
and provisions thereof, and hereby accepts this Option subject to all of the
terms and provisions thereof. The Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board of Directors
or its Committee upon any questions arising under the Plan.

Date: ________________________         _________________________________________
                                                 Signature of Optionee

                                       _________________________________________
                                                       Address

                                       _________________________________________
                                       City             State           Zip Code

                                      II-4

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