Document:

<PAGE>
                                                                   EXHIBIT 10.21

                                 April 19, 2001

Mr. Daniel T. Tacone
119 Setters Drive
Naperville, IL  60565

Dear Dan:

   We are pleased to provide you with a relocation package, whereby the Company
will agree (i) to reimburse you up to $15,000 for certain actual incurred moving
expenses, identified below, to help you with your move to Los Angeles and (ii)
to reimburse you for certain expenses associated with the sale of your home
which you have already incurred. The following expenses are considered
reimbursable moving expenses, with valid receipts:

        -  Temporary housing accommodations

        -  Packing and shipping of household items

        -  Shipping of automobiles

Moving expenses incurred prior to December 31, 2002, are reimbursable provided
that receipts for such expenses are submitted no later than February 29, 2003.

   Immediately upon your execution of this letter, and execution of the
promissory note attached hereto (the "Note"), the Company will pay you
$44,500.00 as reimbursement for expenses, which you have already incurred, for
the sale of your home. Each year on April 19, beginning April 19, 2002, the
Company will reduce the principal amount due under the Note by twenty percent
provided that you have not voluntarily terminated your employment with the
Company as of such date. Should you decide to terminate your employment with the
Company prior to April 19, 2006, the principal amount remaining due under the
Note as of such time shall become immediately due and payable. You agree that
such remaining principal amount may be deducted from any wages, vacation pay,
bonuses or commissions due to you at the time you terminate your employment. If
the Company terminates your employment at any time the Note shall become null
and void. The Company agrees that it will not make demand for payment of the
Note so long as you do not terminate your employment with the Company. If you
have not voluntarily terminated your employment as of April 19, 2006, the
Company will void the Note.

   If you are in agreement with the foregoing, please sign this letter in the
space provided below and sign the attached Note.

                                          Best regards,

                                          Christopher K. Poole
                                          Chairman and Chief Executive Officer

________________________
Daniel E. Tacone

<PAGE>
                                 PROMISSORY NOTE

$44,500.00                                      Los Angeles, California
                                                April 19, 2001

      FOR VALUE RECEIVED, the receipt of which is hereby acknowledged, DAN
TACONE (the "Maker") promises to pay on demand to the order of ELITE INFORMATION
SYSTEMS, INC. (the "Payee"), its successors and assigns, the principal sum of
Forty Four Thousand Five Hundred Dollars ($44,500.00), without interest.

      Payment under this Note is due and payable in Los Angeles, California, at
such location, as Payee shall determine.

      The Maker waives protest, presentment, notice of dishonor and notice of
acceleration or maturity and agrees to continue to remain bound for the payment
of principal and all other sums due under this Note not withstanding any change
or changes by way of any extension or extensions of time for the payment of
principal.

      This Note may not be modified, amended, extended, renewed, released or
terminated orally.

      This Note has been executed and delivered within the State of California
and shall be governed by and construed in accordance with the internal laws and
judicial decisions of California.

      The Maker agrees that the Payee may enforce its rights hereunder in any
court of competent jurisdiction in Los Angeles County, California. The Maker
does not hereby waive its right to remove any such claim to federal court.

      IN WITNESS WHEREOF, the Maker has caused their Note to be executed as of
the date hereof.

                                          ______________________________________
                                          Daniel E. Tacone                  Date<PAGE>

                                                                    EXHIBIT 10.4

                                     TEKELEC

                   AMENDED AND RESTATED 1994 STOCK OPTION PLAN

        1.      ESTABLISHMENT AND PURPOSES OF THE PLAN.

                Tekelec hereby establishes this Amended and Restated 1994 Stock
Option Plan to promote the interests of the Company and its shareholders by (i)
helping to attract and retain the services of selected key employees of the
Company who are in a position to make a material contribution to the successful
operation of the Company's business, (ii) motivating such persons, by means of
performance-related incentives, to achieve the Company's business goals and
(iii) enabling such persons to participate in the long-term growth and financial
success of the Company by providing them with an opportunity to purchase stock
of the Company.

        2.      DEFINITIONS.

                The following definitions shall apply throughout the Plan:

                a. "AFFILIATE" shall mean any entity that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, the Company.

                b. "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company.

                c. "CODE" shall mean the Internal Revenue Code of 1986, as
amended. References in the Plan to any section of the Code shall be deemed to
include any amendment or successor provisions to such section and any
regulations issued under such section.

                d. "COMMON STOCK" shall mean the common stock, without par
value, of the Company.

                e. "COMPANY" shall mean Tekelec, a California corporation and
any "subsidiary" corporation, whether now or hereafter existing, as defined in
Sections 424(f) and (g) of the Code.

                f. "COMMITTEE" shall mean the committee of the Board of
Directors appointed in accordance with Section 4(a) of the Plan or, if no such
committee shall be appointed or in office, the Board of Directors.

                g. "CONTINUOUS EMPLOYMENT" shall mean the absence of any
interruption or termination of employment by the Company. Continuous Employment
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Committee or in the case of transfers
between locations of the Company.

                h. "EMPLOYEE" shall mean any employee of the Company, including
officers and directors who are also employees.

                i. "FAIR MARKET VALUE" shall mean, with respect to Shares, the
fair market value per Share on the date an option is granted and, so long as the
Shares are quoted on the National Association of Securities Dealers Automated
Quotations ("NASDAQ") System, the Fair Market Value per Share shall be the
closing price on the NASDAQ National Market System as of

<PAGE>
                                                                    EXHIBIT 10.4

the date of grant of the Option, as reported in The Wall Street Journal or such
other source as the Board deems reliable or, if there are no sales on such date,
on the immediately preceding day on which there were reported sales.

                j. "INCENTIVE STOCK OPTION" shall mean an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.

                k. "NON-STATUTORY STOCK OPTION" shall mean an Option which is
not an Incentive Stock Option.

                l. "OPTION" shall mean a stock option to purchase Common Stock
granted to an Optionee pursuant to the Plan.

                m. "OPTION AGREEMENT" means a written agreement substantially in
the form attached hereto as Exhibit A, or such other form or forms as the
Committee (subject to the terms and conditions of the Plan) may from time to
time approve, evidencing and reflecting the terms of an Option.

                n. "OPTIONED STOCK" shall mean the Common Stock subject to an
Option granted pursuant to the Plan.

                o. "OPTIONEE" shall mean any Employee who is granted an Option.

                p. "PLAN" shall mean this Tekelec Amended and Restated 1994
Stock Option Plan.

                q. "SHARES" shall mean shares of the Common Stock or any shares
into which such Shares may be converted in accordance with Section 10 of the
Plan.

        3.      SHARES RESERVED.

                The maximum aggregate number of Shares reserved for issuance
pursuant to the Plan shall be Twenty Seven Million Seven Hundred Thousand
(27,700,000) Shares or the number of shares of stock to which such Shares shall
be adjusted as provided in Section 10 of the Plan. Such number of Shares may be
set aside out of authorized but unissued Shares not reserved for any other
purpose, or out of issued Shares acquired for and held in the treasury of the
Company from time to time.

                Shares subject to, but not sold or issued under, any Option
terminating, expiring or canceled for any reason prior to its exercise in full,
shall again become available for Options thereafter granted under the Plan, and
the same shall not be deemed an increase in the number of Shares reserved for
issuance under the Plan.

        4.      ADMINISTRATION OF THE PLAN.

                a. The Plan shall be administered by a Committee designated by
the Board of Directors to administer the Plan and comprised of not less than two
directors, each of whom shall be an "outside director" as defined in the
Treasury regulations issued pursuant to Section 162(m) of the Code. Members of
the Committee shall serve for such period of time as the Board of Directors may
determine or until their resignation, retirement, removal or death, if sooner.
From time to time the Board of Directors may increase the size of the Committee
and appoint additional members thereto, remove members (with or without cause)
and appoint new members in substitution therefor or fill vacancies however
caused.

                b. Subject to the provisions of the Plan, the Committee shall
have the authority, in its discretion: (i) to grant Incentive Stock Options, in
accordance with Section 422

<PAGE>
                                                                    EXHIBIT 10.4

of the Code, or Non-Statutory Stock Options; (ii) to determine, upon review of
relevant information, the Fair Market Value per Share; (iii) to determine the
exercise price of the Options to be granted to Employees in accordance with
Section 6(c) of the Plan; (iv) to determine the Employees to whom, and the time
or times at which, Options shall be granted, and the number of Shares subject to
each Option; (v) to prescribe, amend and rescind rules and regulations relating
to the Plan subject to the limitations set forth in Section 12 of the Plan; (vi)
to determine the terms and provisions of each Option granted to Optionees under
the Plan and each Option Agreement (which need not be identical with the terms
of other Options and Option Agreements) and, with the consent of the Optionee,
to modify or amend an outstanding Option or Option Agreement, provided, however,
that the Committee shall not have the authority to amend or adjust the exercise
price of any Options previously granted to an Optionee under the Plan, whether
through amendment, cancellation, replacement grant or otherwise; (vii) to
accelerate the exercise date of any Option; (viii) to determine whether any
Optionee will be required to execute a stock repurchase agreement or other
agreement as a condition to the exercise of an Option, and to determine the
terms and provisions of any such agreement (which need not be identical with the
terms of any other such agreement) and, with the consent of the Optionee, to
amend any such agreement; (ix) to interpret the Plan or any agreement entered
into with respect to the grant or exercise of Options, to determine the
eligibility of an Employee for benefits hereunder and the amount thereof; (x) to
authorize any person to execute on behalf of the Company any instrument required
to effectuate the grant of an Option previously granted or to take such other
actions as may be necessary or appropriate with respect to the Company's rights
pursuant to Options or agreements relating to the grant or exercise thereof; and
(xi) to make such other determinations and establish such other procedures as it
deems necessary or advisable for the administration of the Plan.

                c. The Committee shall keep minutes of its meetings and of the
actions taken by it without a meeting. A majority of the Committee shall
constitute a quorum, and the actions of a majority at a meeting, including a
telephone meeting, at which a quorum is present, or acts approved in writing by
a majority of the members of the Committee without a meeting, shall constitute
acts of the Committee.

                d. All decisions, determinations and interpretations of the
Committee shall be final and binding on all Optionees and any other holders of
any Options granted under the Plan.

                e. The Company shall pay all original issue and transfer taxes
with respect to the grant of Options and/or the issue and transfer of Shares
pursuant to the exercise thereof, and all other fees and expenses necessarily
incurred by the Company in connection therewith; provided, however, that the
person exercising an Option shall be responsible for all payroll, withholding,
income and other taxes incurred by such person on the date of exercise of an
Option or transfer of Shares.

        5.      ELIGIBILITY.

                Options may be granted under the Plan only to Employees. An
Employee who has been granted an Option may, if he or she is otherwise eligible,
be granted additional Options.

        6.      TERMS AND CONDITIONS OF OPTIONS.

                Options granted pursuant to the Plan by the Committee shall be
either Incentive Stock Options or Non-Statutory Stock Options and shall be
evidenced by an Option Agreement providing, in addition to such other terms as
the Committee may deem advisable, the following terms and conditions:

<PAGE>
                                                                    EXHIBIT 10.4

                a. Time of Granting Options. The date of grant of an Option
shall for all purposes, be the date on which the Committee makes the
determination granting such Option. Notice of the determination shall be given
to each Optionee within a reasonable time after the date of such grant.

                b. Number of Shares. Each Option Agreement shall state the
number of Shares to which it pertains and whether such Option is intended to
constitute an Incentive Stock Option or a Non-Statutory Stock Option. The
maximum number of Shares which may be awarded as Options under the Plan during
any calendar year to any Optionee is Eight Hundred Thousand (800,000) Shares. If
an Option held by an Employee of the Company is canceled, the canceled Option
shall continue to be counted against the maximum number of Shares for which
Options may be granted to such Employee and any replacement Option granted to
such Employee shall also count against such limit.

                c. Exercise Price. The exercise price per Share for the Shares
to be issued pursuant to the exercise of an Option, shall be such price as is
determined by the Committee; provided, however, such price shall in no event be
less than one-hundred percent (100%) with respect to Non-Statutory Stock
Options, and one hundred percent (100%) with respect to Incentive Stock Options,
of the Fair Market Value per Share on the date of grant.

                In the case of an Incentive Stock Option granted to an Employee
who, at the time the Incentive Stock Option is granted, owns or is deemed to own
(by reason of the attribution rules applicable under Section 424(d) of the Code)
stock possessing more than ten percent (10%) of the combined voting power of all
classes of stock of the Company, the exercise price per Share shall be no less
than one-hundred-ten percent (110%) of the Fair Market Value per Share on the
date of grant.

                d. Medium and Time of Payment. The consideration to be paid for
the Shares to be issued upon exercise of an Option, including the method of
payment, shall be determined by the Committee and may consist entirely of cash,
check or Shares having a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option shall be
exercised, or any combination of such methods of payment, or such other
consideration and method of payment permitted under any laws to which the
Company is subject which is approved by the Committee; provided, however, that
the Optionee shall be required to pay in cash an amount necessary to satisfy the
Company's withholding obligations. In the case of an Incentive Stock Option,
such provision shall be determined on the date of the grant.

                If the consideration for the exercise of an Option is the
surrender of previously acquired and owned Shares, the Optionee will be required
to make representations and warranties satisfactory to the Company regarding his
or her title to the Shares used to effect the purchase, including without
limitation representations and warranties that the Optionee has good and
marketable title to such Shares free and clear of any and all liens,
encumbrances, charges, equities, claims, security interests, options or
restrictions, and has full power to deliver such Shares without obtaining the
consent or approval of any person or governmental authority other than those
which have already given consent or approval in a manner satisfactory to the
Company. The value of the Shares used to effect the purchase shall be the Fair
Market Value of such Shares on the date of exercise as determined by the
Committee in its sole discretion, exercised in good faith.

                e. Term of Options. The term of an Incentive Stock Option may be
up to ten (10) years from the date of grant thereof; provided, however, that the
term of an Incentive Stock

<PAGE>
                                                                    EXHIBIT 10.4

Option granted to an Employee who, at the time the Incentive Stock Option is
granted, owns or is deemed to own (by reason of the attribution rules of Section
424(d) of the Code) stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company, shall be five (5)
years from the date of grant thereof or such shorter term as may be provided in
the Option.

                The term of a Non-Statutory Stock Option may be up to ten (10)
years from the date such Employee first becomes vested in any portion of an
Option award.

                The term of any Option may be less than the maximum term
provided for herein as specified by the Committee upon grant of the Option and
as set forth therein.

                f. Maximum Amount of Incentive Stock Options. To the extent that
the aggregate Fair Market Value (determined at the time an Incentive Stock
Option is granted) of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by an Optionee during any calendar year under
all incentive stock option plans of the Company exceeds One Hundred Thousand
Dollars ($100,000), the Options in excess of such limit shall be treated as
Non-Statutory Stock Options.

        7.      EXERCISE OF OPTION.

                a. In General. Any Option granted hereunder to an Employee shall
be exercisable at such times and under such conditions as may be determined by
the Committee and as shall be permissible under the terms of the Plan, including
any performance criteria with respect to the Company and/or the Optionee as may
be determined by the Committee.

                An Option may be exercised in accordance with the provisions of
the Plan as to all or any portion of the Shares then exercisable under an Option
from time to time during the term of the Option. However, an Option may not be
exercised for a fraction of a Share.

<PAGE>
                                                                    EXHIBIT 10.4

                b. Procedure. An Option shall be deemed to be exercised when
written notice of such exercise has been given to the Company at its principal
business office 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,
accompanied by any other agreements required by the terms of the Plan and/or
Option Agreement or as required by the Committee and payment by the Optionee of
all payroll, withholding or income taxes incurred in connection with such Option
exercise (or arrangements for the collection or payment of such tax satisfactory
to the Committee are made). Full payment may consist of such consideration and
method of payment allowable under Section 6(d) of the Plan.

                c. Decrease in Available Shares. 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.

                d. Exercise of Shareholder Rights. Until the Option is properly
exercised in accordance with the terms of this section, no right to vote or
receive dividends or any other rights as a shareholder shall exist with respect
to the Optioned Stock. No adjustment shall be made for a dividend or other right
for which the record date is prior to the date the Option is exercised, except
as provided in Section 10 of the Plan.

                e. Termination of Eligibility. If an Optionee ceases to serve as
an Employee for any reason other than death or permanent and total disability
(within the meaning of Section 22(e)(3) of the Code) and thereby terminates his
or her Continuous Employment he or she may, but only within three (3) months
following the date he or she ceases his or her Continuous Employment (subject to
any earlier termination of the Option as provided by its terms), exercise his or
her Option to the extent that he or she was entitled to exercise it at the date
of such termination. To the extent that he or she was not entitled to exercise
the Option at the date of such termination, or if he or she does not exercise
such Option (which he or she was entitled to exercise) within the time specified
herein, the Option shall terminate.

                Notwithstanding anything to the contrary herein, the Committee
may at any time and from time to time prior to the termination of a
Non-Statutory Stock Option, with the consent of the Optionee, extend the period
of time during which the Optionee may exercise his or her Non-Statutory Stock
Option following the date he or she ceases his or her Continuous Employment;
provided, however, that the maximum period of time during which a Non-Statutory
Stock Option shall be exercisable following the date on which an Optionee
terminates his or her Continuous Employment shall not exceed an aggregate of six
(6) months, that the Non-Statutory Stock Option shall not be, or as a result of
such extension become, exercisable after the expiration of the term of such
Option as set forth in the Option Agreement and, notwithstanding any extension
of time during which the Non-Statutory Stock Option may be exercised, that such
Option, unless otherwise amended by the Committee, shall only be exercisable to
the extent the Optionee was entitled to exercise it on the date he or she ceased
his or her Continuous Employment.

                Notwithstanding anything to the contrary herein, the Committee
may at the time of granting an Option and at any time prior to the termination
of such Option, with the consent of the Optionee and subject to such terms and
conditions as the Committee in its discretion deems advisable or appropriate,
extend the period of time during which the Optionee may exercise his or her
Option following the date he or she ceases his or her Continuous Employment due
to retirement after having reached the age of 55 and having engaged in
Continuous Employment for at least five years prior to such retirement
(hereafter referred to as a "Qualifying Retirement");

<PAGE>
                                                                    EXHIBIT 10.4

provided, however, that (i) the maximum period of time during which such Option
shall be exercisable following such Qualifying Retirement shall not extend
beyond the term of such Option as set forth in the Option Agreement; and (ii)
notwithstanding any extension of time during which such Option may be exercised
following a Qualifying Retirement, such Option, unless otherwise granted or
amended by the Committee, shall only be exercisable following Qualifying
Retirement to the extent the Optionee was entitled to exercise such option on
the date he or she ceased his or her Continuous Employment.

                f. Death or Disability of Optionee. If an Optionee's Continuous
Employment ceases due to death or permanent and total disability (within the
meaning of Section 22(e)(3) of the Code) of the Optionee, the Option may be
exercised within six (6) months (or such other period of time not exceeding one
(1) year as is determined by the Committee at the time of granting the Option)
following the date of death or termination of employment due to permanent or
total disability (subject to any earlier termination of the Option as provided
by its terms), by the Optionee in the case of permanent or total disability, or
in the case of death by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but in any case (unless
otherwise determined by the Committee at the time of granting the Option) only
to the extent the Optionee was entitled to exercise the Option at the date of
his or her termination of employment by death or permanent and total disability.
To the extent that he or she was not entitled to exercise such Option at the
date of his or her termination of employment by death or permanent and total
disability, or if he or she does not exercise such Option (which he or she was
entitled to exercise) within the time specified herein, the Option shall
terminate.

                g. Expiration of Option. Notwithstanding any provision in the
Plan, including but not limited to the provisions set forth in Sections 7(e) and
7(f), an Option may not be exercised, under any circumstances, after the
expiration of its term.

                h. Conditions on Exercise and Issuance. As soon as practicable
after any proper exercise of an Option in accordance with the provisions of the
Plan, the Company shall deliver to the Optionee at the principal executive
office of the Company or such other place as shall be mutually agreed upon
between the Company and the Optionee, a certificate or certificates representing
the Shares for which the Option shall have been exercised. The time of issuance
and delivery of the certificate or certificates representing the Shares for
which the Option shall have been exercised may be postponed by the Company for
such period as may be required by the Company, with reasonable diligence, to
comply with any law or regulation applicable to the issuance or delivery of such
Shares.

                Options granted under the Plan are conditioned upon the Company
obtaining any required permit or order from appropriate governmental agencies,
authorizing the Company to issue such Options and Shares issuable upon exercise
thereof. Shares shall not be issued pursuant to the exercise of an Option unless
the exercise of such Option and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, applicable state law, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed, and may be further subject to the
approval of counsel for the Company with respect to such compliance.

                i. Withholding or Deduction for Taxes. The grant of Options
hereunder and the issuance of Shares pursuant to the exercise thereof is
conditioned upon the Company's reservation of the right to withhold, in
accordance with any applicable law, from any compensation or other amounts
payable to the Optionee any taxes required to be withheld under Federal, state
or local law as a result of the grant or exercise of such Option or the sale of
the

<PAGE>
                                                                    EXHIBIT 10.4

Shares issued upon exercise thereof. To the extent that compensation and other
amounts, if any, payable to the Optionee are insufficient to pay any taxes
required to be so withheld, the Company may, in its sole discretion, require the
Optionee, as a condition of the exercise of an Option, to pay in cash to the
Company an amount sufficient to cover such tax liability or otherwise to make
adequate provision for the delivery to the Company of cash necessary to satisfy
the Company's withholding obligations under Federal and state law.

        8.      NONTRANSFERABILITY OF OPTIONS.

                Options granted under the Plan may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner, either
voluntarily or involuntarily by operation of law, other than by will or by the
laws of descent or distribution or transfers between spouses incident to a
divorce.

        9.      HOLDING PERIOD.

                In the case of officers and directors of the Company, at least
six (6) months must elapse from the date of grant of the Option to the date of
disposition of the underlying Shares.

        10.     ADJUSTMENT UPON CHANGE IN CORPORATE STRUCTURE.

                a. Subject to any required action by the shareholders of the
Company, the number of Shares covered by each outstanding Option, and the number
of Shares 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 of an Option, as well as the exercise or purchase
price per Share covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a stock split or combination or the payment of a stock
dividend (but only on the Common Stock) or any other increase or decrease in the
number of issued Shares effected without receipt of consideration by the Company
(other than stock awards to Employees); provided, however, that the conversion
of any convertible securities of the Company shall not be deemed to have been
effected without the receipt of consideration. Such adjustment shall be made by
the Committee, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares subject to the Plan or an Option.

                b. In the event of the proposed dissolution or liquidation of
the Company, or in the event of a proposed sale of all or substantially all of
the assets of the Company (other than in the ordinary course of business), or
the merger or consolidation of the Company with or into another corporation, as
a result of which the Company is not the surviving and controlling corporation,
the Board of Directors shall (i) make provision for the assumption of all
outstanding options by the successor corporation or (ii) declare that any Option
shall terminate as of a date fixed by the Board of Directors which is at least
thirty (30) days after the notice thereof to the Optionee and shall give each
Optionee the right to exercise his or her Option as to all or any part of the
Optioned Stock, including Shares as to which the Option would not otherwise be
exercisable provided such exercise does not violate Section 7(e) of the Plan.

                c. No fractional shares of Common Stock shall be issuable on
account of any action aforesaid, and the aggregate number of shares into which
Shares then covered by the Option, when changed as the result of such action,
shall be reduced to the largest number of whole shares resulting from such
action, unless the Board of Directors, in its sole discretion, shall

<PAGE>
                                                                    EXHIBIT 10.4

determine to issue scrip certificates in respect to any fractional shares, which
scrip certificates, in such event shall be in a form and have such terms and
conditions as the Board of Directors in its discretion shall prescribe.

        11.     SHAREHOLDER APPROVAL.

                Effectiveness of the Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months before or after the date
the Plan is adopted; provided, however, that Options may be granted pursuant to
the Plan subject to subsequent approval of the Plan by such shareholders.
Shareholder approval shall be obtained by the affirmative votes of the holders
of a majority of voting Shares present or represented and entitled to vote at a
meeting of shareholders duly held in accordance with the laws of the State of
California.

        12.     AMENDMENT AND TERMINATION OF THE PLAN.

                a. Amendment and Termination. The Committee may amend or
terminate the Plan from time to time in such respects as the Committee may deem
advisable and shall make any amendments which may be required so that Options
intended to be Incentive Stock Options shall at all times continue to be
Incentive Stock Options for the purpose of Section 422 of the Code; provided,
however, that without approval of the holders of a majority of the voting Shares
represented or present and entitled to vote at a valid meeting of shareholders,
no such revision or amendment shall (i) materially increase the benefits
accruing to participants under the Plan; (ii) materially increase the number of
Shares which may be issued under the Plan, other than in connection with an
adjustment under Section 10 of the Plan; (iii) materially modify the
requirements as to eligibility for participation in the Plan; (iv) materially
change the designation of the class of Employees eligible to be granted Options;
(v) remove the administration of the Plan from the Board of Directors or its
Committee; or (vi) extend the term of the Plan beyond the maximum term set forth
in Section 15 hereunder.

                b. Effect of Amendment or Termination. Except as otherwise
provided in Section 10 of the Plan, any amendment or termination of the Plan
shall not affect Options already granted and such Options shall remain in full
force and effect as if the Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Company, which agreement
must be in writing and signed by the Optionee and the Company. Notwithstanding
anything to the contrary herein, this Amended and Restated 1994 Stock Option
Plan shall not adversely affect, unless mutually agreed in writing by the
Company and an Optionee, the terms and provisions of any Option granted prior to
the date the Plan was approved by shareholders as provided in Section 11 of the
Plan.

        13.     INDEMNIFICATION.

                No member of the Committee or of the Board of Directors shall be
liable for any act or action taken, whether of commission or omission, except in
circumstances involving willful misconduct, or for any act or action taken,
whether of commission or omission, by any other member or by any officer, agent,
or Employee. In addition to such other rights of indemnification they may have
as members of the Board of Directors, or as members of the Committee, the
Committee shall be indemnified by the Company against reasonable expenses,
including attorneys' fees actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken, by commission or omission, in connection with the Plan or any Option
taken thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or

<PAGE>
                                                                    EXHIBIT 10.4

paid by them in satisfaction of a judgment in any action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that such Committee member is liable for willful misconduct
in the performance of his or her duties; provided that within sixty (60) days
after institution of any such action, suit or proceeding, a Committee member
shall in writing offer the Company the opportunity, at its own expense, to
handle and defend the same.

        14.     GENERAL PROVISIONS.

                a. Other Plans. Nothing contained in the Plan shall prohibit the
Company from establishing additional incentive compensation arrangements.

                b. No Enlargement of Rights. Neither the Plan, nor the granting
of Shares, nor any other action taken pursuant to the Plan shall constitute or
be evidence of any agreement or understanding, express or implied, that the
Company will retain an Employee for any period of time, or at any particular
rate of compensation. Nothing in the Plan shall be deemed to limit or affect the
right of the Company or any such corporations to discharge any Employee thereof
at any time for any reason or no reason.

                No Employee shall have any right to or interest in Options
authorized hereunder prior to the grant thereof to such eligible person, and
upon such grant he or she shall have only such rights and interests as are
expressly provided herein and in the related Option Agreement, subject, however,
to all applicable provisions of the Company's Certificate of Incorporation, as
the same may be amended from time to time.

<PAGE>
                                                                    EXHIBIT 10.4

                c. Notice. Any notice to be given to the Company pursuant to the
provisions of the Plan shall be addressed to the Company in care of its
Secretary (or such other person as the Company may designate from time to time)
at its principal office, and any notice to be given to an Optionee whom an
Option is granted hereunder shall be delivered personally or addressed to him or
her at the address given beneath his or her signature on his or her Stock Option
Agreement, or at such other address as such Optionee or his or her transferee
(upon the transfer of the Optioned Stock) may hereafter designate in writing to
the Company. Any such notice shall be deemed duly given when enclosed in a
properly sealed envelope or wrapper addressed as aforesaid, registered or
certified, and deposited, postage and registry or certification fee prepaid, in
a post office or branch post office regularly maintained by the United States
Postal Service. It shall be the obligation of each Optionee holding Shares
purchased upon exercise of an Option to provide the Secretary of the Company, by
letter mailed as provided hereinabove, with written notice of his or her direct
mailing address.

                d. Applicable Law. To the extent that Federal laws do not
otherwise control, the Plan shall be governed by and construed in accordance
with the laws of the state of California, without regard to the conflict of laws
rules thereof.

                e. Incentive Stock Options. The Company shall not be liable to
an Optionee or other person if it is determined for any reason by the Internal
Revenue Service or any court having jurisdiction that any Incentive Stock
Options are not incentive stock options as defined in Section 422 of the Code.

                f. Information to Optionees. The Company shall provide without
charge to each Optionee copies of such annual and periodic reports as are
provided by the Company to its shareholders generally.

                g. Availability of Plan. A copy of the Plan shall be delivered
to the Secretary of the Company and shall be shown by him or her to any eligible
person making reasonable inquiry concerning it.

                h. Severability. In the event that any provision of the Plan is
found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein as invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid or unenforceable provision was not contained herein.

        15.     EFFECTIVE DATE AND TERM OF PLAN.

                The Plan shall become effective upon shareholder approval as
provided in Section 11 of the Plan. The Plan shall continue in effect for a term
of ten (10) years unless sooner terminated under Section 12 of the Plan.

<PAGE>
                                                                    EXHIBIT 10.4

================================================================================

[TEKELEC LOGO]

                   AMENDED AND RESTATED 1994 STOCK OPTION PLAN
                             STOCK OPTION AGREEMENT

Tekelec hereby grants to you an Option under the Tekelec Amended and Restated
1994 Stock Option Plan (the "Plan"), to purchase the number of shares of Tekelec
Common Stock set forth below.

NAME:

EMPLOYEE ID #:

DATE OF GRANT:

TYPE OF OPTION:

NUMBER OF SHARES:

EXERCISE PRICE:

PAYMENT:                Payment of the exercise price and applicable taxes may
                        be made (i) by cash or check and/or (ii) pursuant to a
                        "Cashless" exercise (see Option Terms and Conditions
                        attached hereto).

VESTING SCHEDULE:       16 equal quarterly installments; the first installment
                        will vest on M/D/Y, and one additional installment will
                        vest on the last day of each calendar quarter
                        thereafter, as long as you remain an employee of the
                        Company.

EXPIRATION DATE:        M/D/Y; provided, however, that in the event of your
                        termination of employment with the Company or your
                        disability or death, the provisions of Sections 6 and 7
                        of the Option Terms and Conditions attached hereto shall
                        apply to your right to exercise the Option.

This Stock Option Agreement consists of this page and the Option Terms and
Conditions and the Notice of Exercise of Stock Option attached hereto. By
signing below, you accept the grant of this Option and agree that this Option is
subject in all respects to the terms and conditions of the Plan located on
Tekelec's internal website at Teksource. Copies of the Plan and Prospectus
containing information concerning the Plan are available upon request to
_____________________ at _________________ or ____________________@tekelec.com.

You further acknowledge and agree that (i) you have carefully reviewed this
Stock Option Agreement (including the Option Terms and Conditions attached
hereto) and the Plan and (ii) this Stock Option Agreement and the Plan set forth
the entire understanding between you and the Company regarding this Option and
supersede all prior oral and written agreements with respect thereto.

TEKELEC

BY:
   ----------------------------          --------------
PRINT NAME:                              DATE
           --------------------
TITLE:

-------------------------------          --------------
               OPTIONEE                  DATE

================================================================================
<PAGE>
                                                                    EXHIBIT 10.4

               TEKELEC AMENDED AND RESTATED 1994 STOCK OPTION PLAN
              STOCK OPTION AGREEMENT - OPTION TERMS AND CONDITIONS

The following Terms and Conditions apply to the nonstatutory stock option
granted by Tekelec to the Optionee whose name appears on the Stock Option
Agreement to which these Terms and Conditions are attached.

1.      AMENDED AND RESTATED 1994 STOCK OPTION PLAN. This Option is in all
        respects subject to the terms, definitions and provisions of the Tekelec
        Amended and Restated 1994 Stock Option Plan (the "Plan") adopted by the
        Company and incorporated herein by reference. The terms defined in the
        Plan shall have the same meanings herein.

2.      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.

3.      METHOD OF PAYMENT. The aggregate exercise price of the Shares purchased
        upon an exercise, in whole or in part, of the Option may be paid in one
        or both of the following forms:

        (a)     Check made payable to the Company or its designated agent;
                and/or

        (b)     Through a special sale and remittance procedure commonly
                referred to as a "cashless exercise" pursuant to which the
                Optionee (or any other person(s) entitled to exercise the
                Option) shall concurrently provide irrevocable written
                instructions:

                (i)     to a brokerage firm to effect the immediate sale of a
                        sufficient number of the Shares purchased upon the
                        exercise of the Option to enable such brokerage firm to
                        remit out of the sales proceeds available upon the
                        settlement date, sufficient funds to Tekelec to cover
                        the aggregate exercise price payable for the purchased
                        Shares plus all applicable Federal, state and local
                        income and employment taxes required to be withheld by
                        Tekelec by reason of such exercise and/or sale; and

                (ii)    to Tekelec to deliver the certificate(s) for the
                        purchased Shares directly to such brokerage firm in
                        order to complete the sale transaction.

                Except to the extent the sale and remittance procedure is
                utilized in connection with the Option exercise, payment of the
                aggregate exercise price must accompany the Notice of Exercise
                delivered by the Optionee to Tekelec in connection with the
                Option exercise.

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)     This Option shall vest and be exercisable cumulatively as set
                forth on the first page of the Stock Option Agreement. An
                Optionee who has been in continuous employment with the Company
                since the grant of this Option may exercise the exercisable
                portion of his or her Option in whole or in part at any time
                during his or her employment; provided, however, that an Option
                may not be exercised for a fraction of a Share. In the event of
                the Optionee's termination of employment with the Company or
                Optionee's disability or death, the provisions of Sections 6 or
                7 below shall apply to the right of the Optionee to exercise the
                Option.

        (b)     This Option shall be exercisable by written notice (in the form
                of the Notice of Exercise of Stock Option attached hereto, as
                amended from time to time) which shall state the Optionee's
                election to exercise this Option and the number of Shares being
                purchased and set forth such other information as may be
                required by the Company in connection with the exercise of the
                Option. Such written notice shall be signed by the Optionee and
                shall be delivered in person or by facsimile (818.880.0176) or
                certified mail to the Secretary of the Company or such other
                person as may be designated by the Company. The written notice
                shall specify the method of payment of the aggregate exercise
                price in accordance with Section 3 above. The certificate or
                certificates for the purchased Shares shall be registered in the
                name of the Optionee unless otherwise specified by the Optionee
                in the Notice of Exercise.

<PAGE>
                                                                    EXHIBIT 10.4

        (c)     No rights of a shareholder shall exist with respect to the
                Shares under this Option as a result of the mere grant of this
                Option or the exercise of this Option. Such rights shall exist
                only after issuance of a stock certificate in accordance with
                Section 7(h) of the Plan.

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

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

7.      DEATH OR DISABILITY. If the Optionee ceases to serve as an Employee due
        to death or permanent and total disability (within the meaning of
        Section 22(e)(3) of the Code), this Option may be exercised at any time
        within six (6) months after the date of death or termination of
        employment due to disability, in the case of death, by the Optionee's
        estate or by a person who acquired the right to exercise this Option by
        bequest or inheritance, or, in the case of disability, by the Optionee,
        but in any case only to the extent the Optionee was entitled to exercise
        this Option at the date of such termination. To the extent that the
        Optionee was not entitled to exercise this Option at the date of
        termination, or to the extent this Option is not exercised within the
        time specified herein, this Option shall terminate. Notwithstanding the
        foregoing, this Option shall not be exercisable after the expiration of
        the term set forth in Section 8 hereof.

8.      TERM OF OPTION. This Option may not be exercised more than ten (10)
        years from the date of grant of this Option and may be exercised during
        such term only in accordance with the Plan and the terms of this Option
        Agreement. Notwithstanding any provision in the Plan with respect to the
        post-employment exercise of an Option, an Option may not be exercised
        after the expiration of its term.

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

10.     NONTRANSFERABILITY OF OPTION. This Option may not be sold, pledged,
        assigned, hypothecated, gifted, transferred or disposed of in any manner
        either voluntarily or involuntarily by operation of law, other than by
        will or by the laws of descent or distribution or transfer between
        spouses incident to a divorce. Subject to the foregoing 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.

11.     NO RIGHT OF EMPLOYMENT. Neither the Plan nor this Option shall confer
        upon the Optionee any right to continue in the employment of the Company
        or limit in any respect the right of the Company to discharge the
        Optionee at any time, with or without cause and with or without notice.

12.     MISCELLANEOUS.

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

        (b)     No Third-Party Beneficiaries. Nothing in this Option Agreement
                is intended to confer any rights or remedies on any persons
                other than the Parties and their respective successors or
                assigns.

<PAGE>
                                                                    EXHIBIT 10.4

                Nothing in this Option Agreement is intended to relieve or
                discharge the obligation or liability of third persons to any
                Party. No provision of this Option Agreement shall give any
                third person any right of subrogation or action over or against
                any Party.

        (c)     Amendments.

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

                (ii)    Except as specifically provided in subsection (i) above,
                        this Option Agreement shall not be changed or modified,
                        in whole or in part, except by supplemental agreement
                        signed by the Parties. Either Party may waive compliance
                        by the other Party with any of the covenants or
                        conditions of this Option Agreement, but no waiver shall
                        be binding unless executed in writing by the Party
                        making the waiver. No waiver or any provision of this
                        Option Agreement shall be deemed, or shall constitute, a
                        waiver of any other provision, whether or not similar,
                        nor shall any waiver constitute a continuing waiver. Any
                        consent under this Option Agreement shall be in writing
                        and shall be effective only to the extent specifically
                        set forth in such writing.

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

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

                                     * * * *

<PAGE>
                                                                    EXHIBIT 10.4

TEKELEC                NOTICE OF EXERCISE OF STOCK OPTION

I hereby notify Tekelec that I elect to exercise the options listed below to
purchase the number of shares of Tekelec Common Stock indicated below. In
connection with the exercise of my options and the purchase of such shares, I
have received and carefully reviewed a copy of the Company's Prospectus
containing information about the Amended and Restated 1994 Stock Option Plan and
the shares of Tekelec Common Stock issuable thereunder.

================================================================================
Section I: Personal Data  (Please print legibly)
================================================================================

Name: __________________________________  Employee ID #:_________________
Address: _______________________________  SSN: __ __ __ - __ __ - __ __ __ __
City, State, Zip: ______________________  Phone: (____ )_________________

================================================================================
Section II:  Statement of Intent to Exercise
================================================================================

<TABLE>
<S>                          <C>                                <C>
Type of Option: (check one)  [ ] Incentive Stock Option (ISO)   [ ] Nonstatutory Stock Option (NSO)
</TABLE>

<TABLE>
<CAPTION>
                                                                                            Total
               Option Grant      # Shares          Exercise Price       Taxes (NSO         Exercise
Option #           Date          Exercise            per Share             only)            Price
<S>            <C>              <C>                <C>                  <C>              <C>
_______         __________      __________    X     $__________     +      TBD       =   $__________
_______         __________      __________    X     $__________     +      TBD       =   $__________
_______         __________      __________    X     $__________     +      TBD       =   $__________
                                                           Total amount due to TEKELEC:  $__________
</TABLE>

NSO EXERCISES ONLY: I understand that for NSO exercises I am required to pay
Federal and state income and employment taxes on the gain, as measured, as of
the date of exercise, by the difference between the option exercise price and
the fair market value of the shares purchased. Tax calculations will be provided
by the Stock Plan Administrator.

ISO EXERCISES ONLY: I will promptly notify Tekelec if I sell, transfer, gift or
otherwise dispose of any or all of the shares acquired upon the exercise of an
ISO at any time (a) within one year after the date hereof; or (b) within two
years after the ISO grant date.

================================================================================
Section III:  Method of Exercise  (Please check one)
================================================================================

[ ] Exercise and hold  [ ] Same day sale of all shares exercised
[ ] Same day sale of __________ shares exercised

================================================================================
Section IV:  Method of Payment  (Please check one)
================================================================================

[ ] Cashless Exercise -- proceeds from sale of stock  [ ] Check made payable to
                                                          Tekelec

================================================================================
Section V:  Broker Information
================================================================================

Name of Broker:____________________________________   Address:  ________________
Contact Name:  ____________________________________   Fax No.:  ________________
Account No.:   ____________________________________   Phone No.:________________

================================================================================
Section VI:  Certificate Registration  (Please check one)
================================================================================

[ ] Issue stock in my name individually and mail stock certificate to the above
address.

[ ] Issue stock in street name and send directly to my Broker at the above
address.

================================================================================
Employee signature: ________________  Date: _________, 200___
================================================================================

Please return your completed Notice of Exercise to _________________________,
Tekelec Stock Plan Administrator.

Received by _________________ on behalf of Tekelec on _______________, 200___.
                              Signature

<PAGE>
                                                                    EXHIBIT 10.4

                                     TEKELEC

                            CERTIFICATE OF SECRETARY

I, Ronald W. Buckly, hereby certify that I am the duly elected, qualified and
acting Secretary of Tekelec, a California corporation (the "Company"), and that
the foregoing plan is a true and correct copy of the Company's Amended and
Restated 1994 Stock Option Plan, duly authorized, adopted and approved by the
Board of Directors of the Company, and that the same has not been repealed or
amended, and remains in full force and effect.

                IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
corporate seal this 14th day of February 2003.

                                            /S/
                                            -----------------------------
                                            Ronald W. Buckly

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