Document:

exv10w25

EXHIBIT 10.25

	 	 	 

	

	 	Agreement No.                     

CONSULTING AGREEMENT

     THIS CONSULTING AGREEMENT (the “Agreement”) is entered into by and between Tekelec, a
California corporation with its principal place of business located at 5200 Paramount Parkway,
Morrisville, NC 27560 (“Tekelec”), and Frank Plastina, residing at 306 Pond Bluff Way, Cary, NC
27513 (“Consultant”), and shall be effective as of January 4, 2011 (the “Effective Date”).

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Tekelec and Consultant agree as follows:

     1. CONSULTANCY. Tekelec hereby retains Consultant, and Consultant hereby accepts such
retention, to perform services to facilitate Tekelec’s transition to an interim President and CEO
(the “Services”). Tekelec’s interim CEO shall determine, in his sole discretion, which Services
are requested of Consultant, and Consultant shall confirm his availability, if any, in his sole
discretion, to perform such services.

     2. COMPENSATION

     2.1 For Services. In consideration for Consultant’s performance of the Services,
Tekelec agrees to compensate Consultant at the rate of $2,500 per day, for those days for which
Services are requested. Tekelec shall reimburse Consultant for such actual and reasonable
out-of-pocket expenses (e.g., transportation, lodging. meals and telecom expenses) that are
directly incurred by Consultant in rendering Services hereunder. All claims for expenses shall be
accompanied by receipts and documented in writing and subject to approval in accordance with
Tekelec’s standard procedures as such exist from time to time. Tekelec agrees to reimburse
Consultant for such expenses no later than sixty (30) days after Tekelec’s receipt of an invoice
together with reasonable documentation evidencing such expenses.

     2.2 Invoicing. Except as otherwise provided for in Exhibit A, all invoices shall be
payable within thirty (30) days after Tekelec’s receipt of an undisputed invoice from Consultant
for Services performed, which invoices shall be provided on a monthly basis and shall set forth the
Days of Services performed during the preceding month and a description in reasonable detail of the
Services performed.

     3. TERMINATION.

          3.1 Term. This Agreement shall commence as of the Effective Date and terminate on
February 28, 2011 (the “Term”).

          3.2 Termination. Either party may terminate this Agreement immediately if the other
party materially breaches any provision of this Agreement, and the breaching party has not cured
such breach within thirty (30) days of written notice of such breach.

     4. LIMITATION OF LIABILITY.

          4.1 Limitation of Liabilities. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH
HEREIN, UNDER NO CIRCUMSTANCES WILL EITHER PARTY (INCLUDING ITS DIRECTORS, OFFICERS, EMPLOYEES OR
AFFILIATES) BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE

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DAMAGES, LOST PROFITS, BUSINESS, REVENUE, GOODWILL, OR ANTICIPATED SAVINGS, OR THIRD PARTY CLAIMS,
EVEN IF SUCH PARTY HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES OR CLAIMS OCCURRING.

          4.2 Limitation of Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREIN,
UNDER NO CIRCUMSTANCES WILL THE TOTAL LIABILITY OF EITHER PARTY (INCLUDING ITS DIRECTORS, OFFICERS,
EMPLOYEES AND AFFILIATES), WHETHER BASED ON AN ACTION OR CLAIM IN CONTRACT, TORT (INCLUDING WITHOUT
LIMITATION, NEGLIGENCE) OR OTHERWISE, ARISING OUT OF OR RELATED IN ANY WAY TO THIS AGREEMENT EXCEED
THE AMOUNT PAID OR PAYABLE BY TEKELEC TO CONSULTANT UNDER THIS AGREEMENT.

     5. INDEMNITY. Consultant agrees to defend and indemnify Tekelec and hold Tekelec harmless
against all claims, lawsuits, liabilities, losses and damages, as a result of claims in any form by
any third party, arising directly out of Consultant’s acts, omissions, representations, or
misrepresentations that are grossly negligent or constitute willful misconduct in connection with
Consultant’s provision of Services. Tekelec agrees to defend and indemnify Consultant and hold
Consultant harmless against all claims, lawsuits, liabilities, losses, damages, costs and expenses
(including reasonable attorney and expert witness fees) (collectively “Claims”) as a result of
claims in any form by any third party, arising directly out of Tekelec’s acts, omissions,
representations, or misrepresentations (including Consultant’s acts on behalf of Tekelec within
the scope of the Agreement and at the direction of Tekelec that are not negligent, grossly
negligent, or that constitute willful misconduct) in connection with Consultant’s provision of
Services.

     6. INDEPENDENT CONTRACTOR. Consultant is not an agent or employee of Tekelec and is not
authorized to act on behalf of Tekelec, or to assume or to create any obligation or responsibility,
express or implied, on behalf of or in the name of Tekelec or to bind Tekelec in any manner. This
is a contract for services and does not give rise to a contract of employment. This business
relationship is not one of master and servant. Consultant is responsible for its own tax matters,
tax reference number and annual accounts. Nothing contained herein shall be deemed or construed as
creating a joint venture or partnership between Tekelec and Consultant. Further, it is not the
intention of this Agreement or of the parties hereto to confer a third party beneficiary right of
action upon any third party or entity whatsoever (including, without limitation, upon any
customer), and nothing set forth in this Agreement shall be construed so as to confer upon any
third party or entity other than the parties hereto a right of action either under this Agreement
or in any manner whatsoever.

     7. MISCELLANEOUS.

          7.1 Notices. All notices or communications required or permitted hereunder shall be
in writing:

			
	          If to Tekelec:	 	Tekelec

Attention: General Counsel

5200 Paramount Parkway

Morrisville, NC 27560 USA

Fax: (919) 388-1416
	 
	          If to Consultant:	 	Frank Plastina

306 Pond Bluff Way

Cary, NC 27513

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          7.2 Taxes. Consultant is solely responsible for paying when due all federal, state,
and local income, withholding and other taxes payable or incurred as a result of the compensation
paid by Tekelec to Consultant under this Agreement.

          7.3 Legal Advice and Construction of Agreement. Both parties hereto have received
independent legal advice with respect to, and neither has relied upon the other (or its advisors)
in, entering into this Agreement.

          7.4 Entire Agreement. This Agreement constitutes the entire understanding and
agreement between Tekelec and Consultant and supersedes any and all prior or contemporaneous oral
or written communications with respect to the subject matter hereof.

          7.5 Amendment and Waiver. This Agreement and each provision hereof may be amended,
modified, supplemented or waived only by a written agreement executed by an authorized
representative of both parties hereto. No waiver of any provision of this Agreement or any rights
or obligations of either party hereunder shall be effective, except pursuant to a written
instrument signed by the party or parties waiving compliance, and any such waiver shall be
effective only in the specific instance and for the specific purpose stated in such writing.

          7.6 Governing Law; Venue. This Agreement and the rights and obligations of the
parties hereto shall be construed and enforced in accordance with and governed by the laws of the
state of North Carolina without regard to its rules on choice of law. Any action or proceeding
arising out of, relating to or concerning this Agreement shall be filed in the state courts of Wake
County, North Carolina or in the U.S. District Court for the Eastern District of North Carolina.
The parties hereby waive the right to object to such location on the basis of venue.

          7.7 Compliance with Applicable Law. Notwithstanding anything herein to the contrary,
Consultant shall comply with all applicable international, national, state, regional and local laws
and regulations.

          7.8 Force Majeure. Neither party hereto shall be deemed to be in default of or to
have breached any provision of this Agreement as a result of any delay, failure in performance or
interruption of service resulting directly or indirectly from any occurrence beyond such party’s
reasonable control and not caused by the negligence of the non-performing party, including without
limitation, acts of God, acts or orders of civil or military authorities, civil disturbances, wars,
strikes or other labor disputes, shortages of labor or materials, fires, floods, earthquakes,
epidemics, other natural catastrophes, transportation contingencies, or shipper or supplier delay
(a “Force Majeure Event”), provided that the non-performing party gives prompt notice of such Force
Majeure Event to the other party and uses all commercially reasonable efforts to minimize the
consequences of such Force Majeure Event, and further provided that, in the event any such delay,
failure in performance or interruption of service continues for a period of thirty (30) days, the
party other than the non-performing party shall be entitled to terminate this Agreement upon
written notice to the non-performing party.

          7.9 Successors and Assigns. Neither party shall assign or transfer this Agreement or
any interest herein (including, without limitation, rights and duties of performance) and this
Agreement may not be involuntarily assigned or assigned by operation of law, without the prior
written consent of the other party., Any prohibited assignment or attempted assignment shall be
null and void. This Agreement shall be binding upon and inure to the benefit of each of the
parties hereto and their respective lawful successors and permitted assigns.

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          7.10 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original and which together shall constitute one and the same instrument and
each party intends that a facsimile of its signature printed by a receiving fax machine or
electronically scanned and transmitted shall be regarded as an original signature.

          7.11 Severability. In the event that any provision hereof is found invalid or
unenforceable pursuant to judicial decree or decision, the remainder of this Agreement shall remain
valid and enforceable according to its terms.

[THE NEXT PAGE IS THE SIGNATURE PAGE]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the Effective Date.

	 	 	 	 	 	 	 

	 	 	TEKELEC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Krish A. Prabhu	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Krish Prabhu	 	 
	 	 	Title: President & CEO	 	 
	 	 	Date: January 4, 2011	 	 
	 
	 	 	 	 	 	 
	 	 	CONSULTANT	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Frank Plastina	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Frank Plastina	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Date:
	 	January 4, 2011	 	 

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CONFIDENTIAL INFORMATIONexv10w26

EXHIBIT 10.26

2010 SALES COMPENSATION POLICY PROVISIONS APPLICABLE TO SVP, GLOBAL SALES*

*Excerpted from Company-wide 2010 Sales Compensation Policy

	 	 	 	 	 
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INTRODUCTION

The purpose of this policy is to outline the Sales organization and administration of the Sales
compensation program. The compensation program is designed to recognize and compensate the efforts
and achievements of individual sales professionals and to provide incentives to meet Tekelec’s
overall business objectives.

Sales Philosophy

Tekelec’s incentive plan is designed to reward individuals that meet and exceed their sales goals
in support of Tekelec’s strategic objectives with uncapped cash incentives and President’s Club
recognition.

Plan Period

This plan is in effect as of January 1, 2010 and will remain in effect until replaced or amended.

Plan Administration

This plan will be administered by the SVP of Global Sales with approval of the President and CEO or
delegate and with oversight provided by the Sales Compensation Committee. Decisions on any
questions regarding content, interpretation, or administration of the plan will be final and
binding. The President and CEO reserves the right to apply, modify or waive application of any
provision of this plan to any contracts that contain modified or special products or special
pricing considerations of non-standard terms and conditions.

No changes to the policy and no exceptions to sales plan provisions will be authorized without the
approval of the Sales Compensation Committee. Written requests to the Sales Compensation Committee
for exceptions should be made by the SVP Global Sales. Any approved sales plan policy deviation or
exception must be confirmed in writing and unless otherwise stated will only apply to the
transaction being excepted. The President and CEO has final approval and authority over all
decisions, rulings, and alterations of this policy. All changes will be made in writing and will be
effective within thirty (30) days of notice.

	 	 	 	 	 
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Ethical and Legal Standards

It is the policy of Tekelec to conduct business in a highly ethical manner. The employee may not
offer, provide, solicit or receive any payment, goods, or services that are or appear to be a
bribe, kickback, or other type of improper or illegal payment from anyone involved in an actual or
potential business transaction. Tekelec Sales employees may provide gifts, favors, and
entertainment to customers when they are consistent with Tekelec business practices and policies.
All gifts and entertainment are to be of a nominal value and in good taste. Any violation of this
policy will subject the employee to possible revocation of any incentive compensation provided by
this Plan as well as possible disciplinary action up to and including termination and legal
recourse.

Any fraud, misrepresentation or other malfeasance committed or aided by an employee in connection
with a transaction will be considered a serious violation of an employee’s professional duties, and
will result in the forfeiture of any commission the employee would otherwise have earned with
respect to such transaction and will be considered grounds for immediate termination of employment.
Such unethical acts include but are not limited to the following: proposing or entering into any
unauthorized “side letter” or into any other understanding with the customer that is not reflected
in a written contract signed by an authorized Tekelec representative; making false statements or
claims (e.g., knowingly misrepresenting facts to Tekelec employees, customers or third parties with
the intent to induce action or reliance on the deception); offering or providing bribes or
kickbacks; misusing Tekelec’s or the customer’s confidential information; falsifying or withholding
records or documents; failure to follow the Sales Policy issued by Tekelec from time to time; and
intentionally delaying a contract or order to maximize commissions. Additional commitments and/or
terms outside a customer contract, commonly referred to as “side letters,” may come in many forms
and include (i) memos or letters to the customer, (ii) emails confirming additional terms or
commitments, (iii) oral communications, (iv) new terms that will be reflected in an amended
contract, or (v) any other forms of understanding with the customer that conflict with the terms of
the customer contract.

Please refer to Tekelec’s Code of Business Conduct for Employees, Directors, and Officers for
additional information.

	 	 	 	 	 
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SALES OBJECTIVES AND ORGANIZATION

The key objective of the compensation plan is to provide a means of reward for outstanding field
sales achievement. The level of compensation is based on the attainment of assigned sales quotas
or objectives. The plan is also intended to attract, motivate, and retain the highest performing
sales professionals.

The Sales organization is responsible for seeking out and successfully closing high-quality orders
that meet Tekelec’s financial objectives. The Sales organization is also responsible for building
and maintaining positive, long-term relationships with current and potential customers.

Eligibility

Participation in the Sales Compensation Plan is limited to individuals who are an integral part of
the Tekelec selling process, influence and impact the customer’s buying decision, and are
responsible for retiring a quota. Only the following Tekelec positions are included in the Plan:

Sales
Positions

 

SVP Global Sales

 

[additional non-officer positions omitted]

	 	 	 	 	 
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Quota

Quota is a sales target assigned to sales professionals measured in total dollars sold on a quarter
and/or annual basis. This compensation plan provides for three types of quotas:

	 	1.	 	Direct Quota — The sales objective assigned directly to a sales
professional. The sum of all direct quotas equals the GPS’s objective for order
input.
	 
	 	2.	 	Managed Quota — A rollup of the direct quotas assigned to individuals
who report to a Sales Director or above.
	 
	 	3.	 	Tracking Quota — A sales objective assigned to a Sales Manager or
product team that tracks a direct quota specific to a product or group of products.

For 2010, each Sales Employee may receive a specific quota for “Established” and “Emerging”
products. ”Emerging” products are defined as performance monitoring and Mobile Messaging products
along with Eagle XG and its associated applications and Services (PS, TekelecCare). ”Established”
products are defined as Eagle plus Eagle based applications, Global Number Portability, and
associated Services (PS, TekelecCare).

Quotas may be adjusted at any time in the event circumstances warrant modification. When possible,
written notification will be provided thirty (30) days prior to the effective date. The SVP Sales
and the Sales Compensation Committee must approve quota adjustments.

Quotes

Record of Discounts and Special Terms 

It is a requirement that every quote presented to a customer, distributor, representative, or end
user is prepared by the Tekelec quoting function. If discounts or special terms apply, then a
document such as a letter or quote review form must be attached, clearly describing the nature of
the discount or special terms. It must also contain the proper approval signatures. If there are
cases in which this procedure is violated either willfully or through neglect, the employee may be
subject to termination and the President and CEO may reduce or deny commission for the order in
question.

	 	 	 	 	 
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Quotes, Tools, and Forecasting

It is the responsibility of each sales employee to use the proper tools and procedures for quoting
products and/or services to customers. This includes, but is not limited to, using the automated
quote tools for Generally Available (GA) products, obtaining pre-GA quotes directly from the Quote
and/or Product Management functions as appropriate, and entering these business opportunities in
the Sales Forecasting tools with a high degree of completeness and accuracy. This information is
vital to Tekelec’s successful operation from a manufacturing, as well as financial, perspective.

ORDERS

Definition of Orders

An order may be booked on the basis of a Purchase Order, a Contract, or any other document that
satisfies the requirements of the Corporate Order Policy. Additionally, an order must be approved
based on Tekelec’s Approval Authority Matrix, also available from Tekelec’s Finance team. The
Corporate Order Policy and the Approval Authority Matrix are incorporated by reference into the
2010 Sales Compensation Policy — Please refer to Signal’s Finance link for Tekelec’s Corporate
Order Policy. Note that there may be differences between what Tekelec is required to book as
an order based on the Corporate Order Policy and the treatment of that order booking for commission
purposes under this Sales Compensation Policy. 

Windfall Provision

If a single order or collection of orders exceeds 200% of the quota for the sales employee’s annual
quota period, or if delivery is scheduled over an extended period of time, a “windfall” may be
declared. In such a situation the Compensation Committee will review the order. They may elect
to:

	 	a.	 	Make a payment
	 
	 	b.	 	Schedule the payment over time
	 
	 	c.	 	Reduce the payment
	 
	 	d.	 	Split the payment with other parties
	 
	 	e.	 	Make payments as revenue is taken

Debookings/Chargebacks

For product-related orders, debookings due to Tekelec’s inability to deliver the requested product
on time will not reduce the sales employee’s approved

	 	 	 	 	 
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commissions. Debookings that are the result of changes in the booked order due to customer
requested changes will be charged back to the sales employee of record immediately. To minimize
any hardship to the employee, Tekelec will consider repayment of approved commissions that had
previously been paid on a debooked order over time, depending on the timing of the original
payment. However, all chargebacks must be recovered within a twelve (12) month period and in
accordance with the appropriate state, federal and country laws.

Any debooking on which commissions are charged back will also restore quota previously retired
within the same calendar year. For significant amounts, the impact to quota retirement may be
recognized over time, but in no case over a period longer than twelve (12) months. Any negative
quota not reconciled within the same calendar year will be taken into consideration in the
following year’s quota setting. Negative quotas will have an impact on accelerator qualification.

In the event the sales employee terminates employment with Tekelec prior to Tekelec recovering
debooked commissions, these monies will be deducted from the sales employee’s final paycheck
subject to the approval of Human Resources, the President and CEO and the Senior Vice President
Global Sales.

Corporate Order Policy and Sales Compensation Policy Differences

There may be differences between what Tekelec is required to book as an order based on the
Corporate Order Policy and the treatment of that order booking for commission purposes under this
Sales Compensation Policy. Examples of those differences are highlighted below:

	 	•	 	Offers made without the full binding commitment of the corporation as evidenced by
the proper application of the Authority Approval Matrix and/or offers that knowingly and
intentionally misrepresent the capabilities of the product are not eligible for
commissions even though they may result in a financial obligation to Tekelec. Examples
of these differences include orders agreed to outside of the defined approval process
that Tekelec agrees to accept or offers that state transaction volume capabilities that
are beyond Tekelec’s standard specifications.
	 
	 	•	 	In the event an order is renegotiated or cancelled, a full adjustment may result for
financial reporting purposes. For commission purposes, whether the commission will be
recovered using the Debooking approach indicated above will depend on whether: 1) the
change in the order is due to changes in customer requests — commissions will be
recovered for changes in customer requests (i.e. delivery timing) or 2) the change in
the order is due to company performance delays — commissions will not be recovered due
to a Company delay in meeting shipment dates. Changes in quality scoring as discussed
in the next section on Compensation Plan Components may result from order

	 	 	 	 	 
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	 	 	 	changes and, if applicable to commissions, may result in debookings and the return of
commissions without time limitation (i.e. unlimited “clawback” provisions).
	 
	 	•	 	Credit reductions may be required under the Corporate Order Policy after the order is
booked due to a decline in the customer’s credit position. For commission purposes,
provided Tekelec’s Credit department approved the customer at the time of the order,
there will be no commission reduction for a subsequent change in the credit rating of
the customer that may require a financial reporting adjustment. Every new customer
must be approved by Credit without exception — refer to the Approval Authority
Matrix.
	 
	 	•	 	Penalties due to performance criteria within the order (delivery dates, KPI’s) after
the order was accepted by Tekelec will impact the order for financial reporting, but
will not impact or reduce commissions approved for payment. As an example, an accepted
order with a 12-week delivery lead-time that is not delivered for 20-weeks due to
non-performance by Tekelec and results in a financial penalty to Tekelec would reduce
the financial reporting value of the order, but would not reduce approved commissions.

The examples above are not intended to be all-inclusive. Cash collections often dictate the
true intent of the customer arrangements. Any potential difference between the Corporate
Order Policy and this Sales Compensation Policy will be subject to review and confirmation as
to equitable treatment by the Sales Compensation Committee to ensure the intent of rewarding
sales employees for performance is met while meeting Tekelec’s strategic and tactical
objectives.

	 	 	 	 	 
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COMPENSATION PLAN COMPONENTS

At the beginning of the year each commissioned sales professional will be provided with a specific
compensation plan. This plan will consist of the approved compensation policy, specific sales
assignment (e.g. territory, major account or product team), and quota by period measured, base
salary and commission rate. While there may be some changes to individual plans during the year,
the total compensation value for each individual generally will not change. There is also
opportunity for each individual to exceed the total compensation value by exceeding quota. There
is no cap on sales compensation.

Each sales professional must sign his/her specific compensation plan in the form of an executed
quota sheet and return the plan to his/her manager. The manager is responsible for forwarding the
compensation plan to the Director, Compensation & Benefits with the appropriate signatures. No
commissions for the year will be paid before the signed quota sheets are returned to the Director,
Compensation & Benefits.

The Sales Plan includes the following major compensation elements for all sales employees as
follows:

Base Compensation (Salary)

Base Compensation is a specific amount paid to each sales professional on a bi-weekly or monthly
basis, depending on the region. The base compensation for each sales professional is specified in
his/her respective sales compensation packages.

Commissions

Commissions are paid in accordance with this plan only on the approval of the commission
calculations by the Sales Compensation Committee. Generally, a commission rate will be
established by dividing targeted commissions by the assigned quota. Each employee should refer to
their individual Quota Sheets for their specific commission targets and commission rates.
Additional information concerning Commissions follows in the next section of this Policy.

The Sales Commission Plan is a performance-based plan designed to place special emphasis on
strategic products and accounts. Specific commission base rates are reflected in each sales
professional’s assigned quota sheet, labeled “2010 Sales Commission Plan” and may change from time
to time by product for strategic reasons. The base rate is calculated as your individual targeted
commission divided by your total annual quota. As per the Quota section of this document,
specific quota will be provided for each product line, “Emerging” and

	 	 	 	 	 
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“Established”. In addition, product line targeted commission amounts will be provided.

Commissions for employees with direct and managed quota are calculated based on the quarter-end
reports showing the sales employee’s booking totals where commissions are paid. The sales
employee’s commission will be paid following approval by the Sales Compensation Committee.

	 	•	 	Sales of ”Established” products, defined as Eagle plus Eagle based applications, Global
Number Portability, and associated Services (PS, TekelecCare), will be compensated at a
base commission rate of 80% of your base rate.
	 
	 	•	 	Sales of ”Emerging” products, defined as performance monitoring and Mobile Messaging
products along with Eagle XG and its associated applications and Services (PS,
TekelecCare) will be compensated at a multiplier of your base rate such that commissions
will be earned at target when your quota plan is achieved.

For example: A sales professional’s quota sheet would be structured as follows:

	 	 	 	 	 	 	 
	Product Line 

Total (Base Rate) 

Established 

Emerging

	 	Quota Assigned

$10,000,000

$7,000,000

$3,000,000
	 	Commission Target

$101,000

$56,000

$45,000
	 	Rate

1%

0.8%

1.5%

The above commission rates are subject to the following multipliers:

Established and Emerging Product Solutions to New Customers

	 	 	 	New customers are limited to those customers which are nominated by the SVP of Sales and
confirmed by the President and CEO and will generally only include those initial orders
(and associated expansion orders placed in 2010) that exceed $250,000.
	 
	 	 	 	Tekelec will multiply the commission rate paid for orders of Established and Emerging
product solutions into new customers by a factor of 125% of the Established or Emerging
product line commission rate.
	 
	 	 	 	For example, given that a sales professional sells $7,000,000 of Established products to a
New Customer; then his rate would be calculated as follows:
	 
	 	 	 	0.8% x 125% = 1% rate as extended (7,000,000 x 1% = $70,000)
	 
	 	 	 	If a sales professional sells $3,000,000 of Emerging products to a New Customer, then her
rate would be calculated as follows:

	 	 	 	 	 
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	 	 	 	1.5% x 125% = 1.875% rate as extended (3,000,000 x 1.875% = $56,250)

Order Quality Adjustment Factor

For sales of Established product solutions into existing customers in 2010 valued at $500,000 or
more, the “Order Quality Adjustment Factors” as described below will apply:

	 	 	 	For orders received where all products are Generally Available in the quarter of order
booking AND the quoted margin of the Established product portion is greater than 90%,
Tekelec will award an “Order Quality Adjustment Factor Multiplier” of 125% against the
Established portion of the solution. This provides a similar outcome to the New Customer
adjustment described above.
	 
	 	 	 	For orders received where all products are NOT Generally Available in the quarter of order
booking AND the quoted margin of the Established product portion is less than 40%, Tekelec
will apply an “Order Quality Adjustment Factor Multiplier” of 80% against the Established
portion of the solution.
	 
	 	 	 	For example, given that a sales professional sells $7,000,000 of Established products to an
existing Customer at 39% margin and includes future functionality available 2 quarters
after the order booking quarter; then his rate would be calculated as follows:
	 
	 	 	 	0.8% x 80% = 0.64% rate as extended (7,000,000 x 0.64% = $44,800)

	 	 	 	All employees in Pre-Sales and former mBalance product sales positions will have their
commissions calculated against a base rate of 100%

The “Order Quality Adjustment Factor Multiplier” may be adjusted at Tekelec’s sole discretion:

To assist sales employees in determining the potential commission for a particular quote, the
quoting function will calculate the estimated scoring quality for a particular transaction as part
of the transaction review process.

Commission Payments

Commissions will be calculated for every fiscal quarter and will be paid following approval with
the employee’s regular paycheck in the second month following the end of the fiscal quarter or as
soon as administratively feasible thereafter.

	 	 	 	 	 
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Tekelec will pay 50% of total commission earned for all orders as adjusted by Quality and New
Customer adjustments at the end of the fiscal quarter in which the order was booked with the
remaining 50% for that order payable following the end of the next fiscal quarter provided the
sales employee is still employed with Tekelec at the time of the second payment.

Tekelec will pay 100% of total commission earned for all SPIFs and Commissions on Revenue from
prior sales compensation policies at the end of the fiscal quarter in which the event giving rise
to the SPIFs or Revenue Recognition occurs.

Product orders subject to the Order Quality Adjustment Factor and/or the New Customer premiums that
are subsequently debooked due to a change in the terms of the order will be re-scored and any
adjustment to commissions will be deducted from the remaining commission payable upon the
completion of the next quarter following the initial determination of a potential commission
payment and will be subject to commission reductions from future commission calculations (“clawback
provisions”).

In order to provide the highest order quality scoring, a VPA will initially be evaluated based on
the anticipated order dates within the VPA. If no dates are specified, the scoring will be based
on an assumed ratable order flow over the VPA term. VPA’s will be initially booked and
commissioned at the Established Commission rate. Quality, New Customer or Emerging rates will be
applied to the actual order and rates will be adjusted accordingly. SPIF’s will be added to the
total commission earned.

Discounts

All discounts should be reflected on an official Tekelec quote. Discounting beyond a published
discount schedule without approvals as defined in the Tekelec Authority Approval Matrix may make
the employee subject to termination and the President and CEO may reduce or deny commission for the
order in question.

Allocation of Discounts between Emerging and Established product lines will be in accordance with
the customer’s purchase order. When discount allocation is not specified by the customer; such
discount will be allocated ratably to each product solution based on the net pricing.

Other Adjustments

Commission payments will be calculated on the booked value of the order with the following
modifications:

	•	 	Commissions will not be paid on re-stocking charges.

	 	 	 	 	 
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	•	 	Commissions will not be paid on out-of-warranty technical support (TAC) services.

Commissions on Revenue — From Prior Sales Compensation Policies

Prior to 2007, Tekelec’s Sales Compensation Policies paid 50% on booked orders and 50% on revenue
with revenue paid when recognized to the sales employee with that customer responsibility at the
time of revenue recognition (not necessarily the sales employee who received the order component of
the commission). To the extent there are outstanding commissions not yet paid pending revenue
recognition from prior years, Tekelec will pay in 2010 the run out of those commissions based on
the following approach to active sales employees:

	 	•	 	Tekelec has taken a snapshot of the organizational structure as of 12/31/06 (“frozen
structure”) and will approve through the Sales Compensation Committee and provide
commissions on pending revenue when recognized to the sales person and sales team in place
as of the end of 2006 to the extent possible by Tekelec’s new financial incentive
compensation module.
	 
	 	•	 	To the extent the frozen structure cannot be tracked by Tekelec’s new financial
incentive compensation module, Tekelec will pay the run out of recognized revenue based on
the current organizational structure, adjusted by recommendations of the SVP Global Sales.

Terminated sales employees are not eligible for further approved commissions from this 2010 Sales
Compensation Policy or any prior Tekelec Sales Compensation Policy.

Commissions on Termination

In the event a sales employee terminates Tekelec employment, whether on a voluntary or involuntary
basis, commissions not yet approved by the Sales Compensation Committee from the order
booking after the separation date will be forfeited, including the 50% of commissions held for
payment in the subsequent fiscal quarter.

	 	 	 	 	 
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TekelecCare Commissions

TekelecCare orders will retire quota and commissions and will be paid at the associated Established
or Emerging product set base commission rate.

Extensions to TekelecCare orders will retire quota and commissions and will be paid at the
associated Established or Emerging base commission rate only to the extent the customer prepays
beyond the initial 12-month order. Multi-year TekelecCare orders that are not prepaid will be paid
under future commission policies to the sales person of record for that account (which may not be
the original sales person) as of the subsequent year’s cash recognition for the extension.

Accelerator Incentives

All employees under this 2010 Sales Compensation Policy, except as noted below, are eligible for
accelerators for exceeding annual total quota target as indicated below:

	 	•	 	150% multiplier for exceeding total quota.
	 
	 	•	 	200% multiplier for exceeding both the separately assigned quotas for Emerging and
Established products.

Accelerators only apply to commissions earned on the portion of excess quota attainment.

	 	 	 	 	 
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Addendum to the Tekelec 2010 Sales Compensation Policy

As provided for in the Tekelec 2010 Sales Compensation Policy, Tekelec reserves the right to make
changes to the sales compensation policy during the year and will confirm all changes in writing to
covered participants.

Effective for all sales made on or after July 5th, 2010 (2H2010), the “Order Quality
Adjustment Factor” section (beginning on page 17) of the 2010 Tekelec Sales Compensation Policy has
been amended as follows:

 

Order Quality Adjustment Factor 

For all sales, excluding TekelecCare renewal orders, valued at $250,000 or more, the “Order Quality
Adjustment Factors” as described below will apply:

	1.	 	For orders received where the quoted margin is greater than 85%, Tekelec will award an “Order
Quality Adjustment Factor Multiplier” of 125% against the commission rate in effect.
	 
	2.	 	For orders received where the quoted margin is less than 45%, Tekelec will apply an “Order
Quality Adjustment Factor Multiplier” of 80% against the commission rate in effect.

For example, given that a sales professional with a commission rate of 0.8% sells $7,000,000 of
products to at 39% margin; then his rate would be calculated as follows:

	 	 	 	0.8% x 80% = 0.64% rate as extended (7,000,000 x 0.64% = $44,800)

For TekelecCare renewal orders, credits for product performance, failure to meet committed service
level agreements, or concessions provided to customers for product or service quality below
Tekelec’s standard will no longer be included in the quote for TekelecCare and thus will not reduce
the order value or be considered in the determination of the Order Quality Adjustment Factor
Multiplier as described below:

	1.	 	For orders received that (a) maintain the price (i.e., (i) no “effective” reduction in price
relative to the current installed base and/or (ii) not charging the full value for the quoted
renewal rate) and (b) provide for annual billing and payment in advance, Tekelec will award an
“Order Quality Adjustment Factor Multiplier” of 125% against the commission rate in effect.
	 
	2.	 	For orders received that result in a reduction in price of more than 5% either through (a) a
reduction in price relative to the current installed base or (b) not charging the full value
for the quoted renewal rate, Tekelec will apply an “Order Quality Adjustment Factor
Multiplier” of 80% against the commission rate in effect.

Equipment taken out of service by the customer and therefore excluded from the current year’s offer
will not be considered in determining the “Order Quality Adjustment Factor Multiplier”.

	 	 	 	 	 
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	 	2010 Tekelec Commission Plan
	 	Effective: July 3, 2010
	 	 
	 
	 	 	 	 	 	 
	   Name:

	 	Claudy, Wolrad	 	 	 	 

Region

GPS ALL

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	1Q	 	 	 	2Q	 	 	 	3Q	 	 	 	4Q	 	 	 	TOTAL	 	 	 	 	 	 	 	 	 	 	 	 
	 	Total Quota
	 	 	 	73,600,000	 	 	 	 	115,000,000	 	 	 	 	117,845,000	 	 	 	 	181,555,000	 	 	 	 	488,000,000	 	 	 	 	 	 	 	 	 	 	 	 
	 	Quota — Established
	 	 	 	49,280,000	 	 	 	 	77,000,000	 	 	 	 	70,840,000	 	 	 	 	110,880,000	 	 	 	 	308,000,000	 	 	 	 	 	 	 	 	 	 	 	 
	 	Quota — Emerging
	 	 	 	24,320,000	 	 	 	 	38,000,000	 	 	 	 	47,005,000	 	 	 	 	70,675,000	 	 	 	 	180,000,000	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Base Commission Rate
	 	 	 	0.05543478	%	 	 	 	0.05543478	%	 	 	 	0.05225410	%	 	 	 	0.05225410	%	 	 	 	 	 	 	 	Commissions Targets	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Established Rate
	 	 	 	0.04434783	%	 	 	 	0.04434783	%	 	 	 	0.04180328	%	 	 	 	0.04180328	%	 	 	 	 	 	 	 	     131,967 Established	 
	 	Emerging Rate
	 	 	 	0.07790046	%	 	 	 	0.07790046	%	 	 	 	0.06329460	%	 	 	 	0.06329460	%	 	 	 	 	 	 	 	     123,033 Emerging	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	                	 	 	 	 	 	 	 
	 	Commission rate >100%
of annual quota (in one
product group)
           1.5 x rate
	 	 	 	 	 	 	 	 	 	 	   255,000	 	 	 	 	 	 	 
	 	Commission rate >100%
of annual quota (in both
product groups)
        2.0 x rate
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Note: The commission amount
in local currency is equal to:      Commission Rate      X      Quota Value
in $US
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 
	 	 	At
100%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Base Salary
	 	 	€	195,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Annual Commissions
	 	 	€	255,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Total Compensation
	 	 	€	450,000	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 
	 	 	Approved by:	 	Date	 	 
	 
	 	 	 	 	 	 
	V.P.

	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	Participant
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	H.R.

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