EXHIBIT 10.4
TEKELEC
STOCK AWARD AGREEMENT
This Stock Award Agreement (this "Agreement") is made as of February 1,
2001 (the "Effective Date") by and between Tekelec, a California corporation
(the "Company"), and Frederick M. Lax ("Fred").
WHEREAS, in consideration of Fred's acceptance of employment as the
Executive Vice President and Chief Operating Officer of the Company and his
future service as an employee of the Company and as incentive to motivate and
retain Fred as an employee of the Company, the Company's Board of Directors has
awarded to Fred as of the Effective Date 30,000 shares (the "Shares") of the
Company's Common Stock, subject to the terms and conditions set forth herein and
on the condition that Fred enter into this Agreement with the Company;
NOW, THEREFORE, IT IS AGREED between the parties as follows:
1. Acceptance and Value of Shares. Fred hereby accepts the Shares effective
as of the Effective Date as additional consideration for his acceptance of
employment as the Executive Vice President and Chief Operating Officer of the
Company and his future service to the Company and as an incentive to motivate
and retain him as an employee of the Company. The value of the Shares on the
Effective Date for tax, accounting and all other purposes shall be $27.56 per
Share (i.e., the closing sales price of the Company's Common Stock on The Nasdaq
Stock Market on February 1, 2001).
2. Vesting of Shares. Subject to Section 3 hereof, the Shares shall vest
cumulatively as to 7,500 Shares on each of the vesting dates specified below so
long as Fred continues to serve as an employee of the Company:
Number of
Vesting Date Shares Vesting
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02/01/02 7,500
02/01/03 7,500
02/01/04 7,500
02/01/05 7,500
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30,000
3. Forfeiture of Shares. If at any time prior to February 1, 2005, Fred
ceases to serve as an employee of the Company under any circumstances, Fred
shall forfeit any Shares which are not then vested, which forfeiture shall be
effective on the date on which Fred ceases to be an employee of the Company.
Upon any forfeiture of any of the Shares in accordance with this Section 3, Fred
shall assign and transfer such forfeited Shares to the Company or its assignee.
4. Issuance and Escrow of Shares. The Shares shall be evidenced by four
stock certificates (the "Stock Certificates"), each of which shall represent
7,500 Shares. The Stock
EXHIBIT 10.4
Certificates shall be issued in the name of Fred as soon as administratively
practicable following the Effective Date and shall be delivered by the Company's
transfer agent directly to the Secretary of the Company (the "Secretary"). As
security for Fred's faithful performance of the terms of this Agreement and to
ensure the availability for delivery of the Shares upon any forfeiture of any of
the Shares pursuant to Section 3 hereof, Fred also agrees upon execution of this
Agreement to deliver to and deposit with the Secretary four Assignments Separate
from Certificate (the "Assignments") duly endorsed (with date left blank) in the
form attached hereto as Attachment A. The Secretary shall hold the Shares and
the Assignments in an escrow and, within seven days after the date on which any
of the Shares vest hereunder, the Secretary shall release from escrow and
deliver to Fred the Stock Certificate(s) evidencing such Shares. The escrow
shall terminate upon the first to occur of (i) Fred's forfeiture of any Shares
not then vested pursuant to Section 3 hereof or (ii) the date on which all of
the Shares are vested (i.e., February 1, 2005). If the escrow terminates upon
any forfeiture of Shares pursuant to Section 3 hereof, the Secretary shall
within seven days thereafter release from escrow and deliver to the Company all
Stock Certificates representing the forfeited Shares and all Assignments then
held in escrow.
5. Rights as Shareholder. Subject to the provisions of this Agreement, Fred
shall be entitled to exercise all rights and privileges of a shareholder of the
Company (including voting rights) with respect to the Shares.
6. Continuation as an Employee or Officer. Neither the award of the Shares
to Fred nor this Agreement shall confer upon Fred any right to continue as an
employee or officer of the Company or any of its subsidiaries or limit in any
respect the right of the Company to terminate Fred's employment with the Company
at any time for any reason.
7. Withholding. The Company reserves the right to withhold, in accordance
with any applicable laws, from any consideration payable to Fred any taxes
required to be withheld by federal, state or local law as a result of the
issuance of the Shares to Fred.
8. Nontransferability Prior to Vesting. Fred may not at any time transfer
any Shares which are not then vested or any interest therein by sale,
assignment, hypothecation, pledge, donation, operation of law or otherwise,
including without limitation pursuant to the laws of descent and distribution.
9. Miscellaneous.
(a) This Agreement shall inure to the benefit of the successors and
assigns of the Company.
(b) This Agreement shall be governed by and construed under the laws
of the State of California and constitutes the entire agreement of the parties
with respect to the subject matter hereof. This Agreement may only be amended by
a writing signed by the parties hereto.
(c) If any provision of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
shall nevertheless continue in full force and effect without being impaired or
invalidated in any way.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Effective Date.
COMPANY: TEKELEC
By: /s/ Michael L. Margolis
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Michael L. Margolis
Chief Executive Officer
FRED: /s/ Frederick M. Lax
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Frederick M. Lax
EXHIBIT 10.4
ATTACHMENT A
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
______________________________________ _________________________________
_____________________(____________) shares of the Common Stock of Tekelec, a
California corporation (the "Company"), standing in the name of the undersigned
on the books of the Company represented by Certificate No. ______ herewith and
does hereby irrevocably constitute and appoint
___________________________________________ attorney to transfer said stock on
the books of the Company with full power of substitution in the premises.
Signature:
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Printed Name: Frederick M. Lax
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Dated:
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