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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 13 — Stock-Based Compensation and Employee Benefit Plans</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <b><i>Overview of Employee Stock-Based Compensation Plans</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of December 31, 2010, excluding our employee stock purchase plan described below, we had
equity grants outstanding under five stock-based employee compensation plans with a maximum
original term of ten years (the “Plans.”) Only one of these plans is active as of December 31,
2010 and the maximum number of shares reserved for issuance under this plan is 7.5 million, of
which approximately 3.7 million shares were available for future grants as of December 31, 2010.
The other four Plans have expired or have been terminated and thus we can no longer make equity
grants under these Plans. The maximum number of shares that were initially authorized and reserved
for issuance under the expired or terminated Plans was approximately 37.9 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The Plans permit the granting of incentive stock options, nonstatutory stock options,
stock-settled or cash-settled stock appreciation rights (“SARs”), restricted stock and restricted
stock units (“RSUs”) to employees, as well as non-employee directors and consultants. The terms of
equity-based instruments granted under the Plans are determined at the time of grant. Such
instruments generally vest ratably over one to four year periods. The Compensation Committee of
our Board of Directors and our Board of Directors have the discretion to utilize different vesting
schedules. The strike price on options and SARs may not be less than the fair market value per
share on the date of grant. Upon the exercise of stock options or SARs, the exercise of the right
to purchase shares under our employee stock purchase plan or vesting of restricted stock units, we
issue new shares of our common stock. As a California corporation, we do not have the option to
repurchase shares to provide a source for settling our equity awards.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In connection with our April 2004 acquisition of Taqua, Inc., we assumed two stock-based
compensation plans under which a total of approximately 0.5 million Tekelec shares were authorized
for issuance upon the exercise of outstanding stock options. In connection with our May 2010
acquisitions of Camiant and Blueslice, we also granted, outside of the Plans, employment inducement
awards of RSUs covering an aggregate of approximately 0.2 million shares. The RSUs vest over a
period of approximately four years. We also assumed from Camiant a stock incentive plan under
which the only awards outstanding are rights to receive cash.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Our share-based awards are designed to reward employees for their long-term contributions and
provide incentives for them to remain with us. The number and frequency of share-based awards are
based on competitive practices, our operating results and government regulations.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt">     <b><i>Stock-Based Awards — Stock Options / SARs</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table sets forth the summary of option and SAR activity under our Plans for the
year ended December 31, 2010 (shares and dollars in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Aggregate</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Exercise</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Contractual</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Intrinsic</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Number</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Price</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Life (years)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at December 31, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">5,995</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">18.19</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">188</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">16.52</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,043</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">14.57</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cancelled/forfeited/expired
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,234</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">21.83</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at December 31, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">3,906</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17.92</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.11</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">280</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested and expected to vest at December 31, 2010 <sup style="font-size: 85%; vertical-align: text-top">(1)</sup>
</div></td>
<td> </td>
<td> </td>
<td align="right">3,886</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17.93</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.10</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">280</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercisable at December 31, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">3,349</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">18.37</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.84</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">280</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td>The options expected to vest are the result of applying the pre-vesting
forfeiture rate assumptions to total outstanding options.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The aggregate intrinsic value in the table above represents the total pretax intrinsic value
(i.e. the aggregate difference between the closing price of our common stock on December 31, 2010
of $11.91 and the exercise price for in-the-money options and SARs) that would have been received
by the holders if all instruments had been exercised on December 31, 2010. As of December 31,
2010, there was $1.0 million of unrecognized compensation cost (primarily related to unvested
SARs), which is expected to be recognized over a weighted average period of 2.2 years. As
discussed above, our current practice is to issue new shares to satisfy option and SAR exercises.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Other information pertaining to stock-based awards of options and SARs for the fiscal years
ended December 31, 2010, 2009 and 2008, was as follows (in thousands, except per share data):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Years ended December 31,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2008</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average grant date fair value per share of SARs granted
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">5.67</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3.92</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">5.71</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total intrinsic value of options and SARs exercised
</div></td>
<td> </td>
<td> </td>
<td align="right">3,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,670</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,327</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">     <b><i>Stock-Based Awards — RSUs / Restricted Stock</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table sets forth a summary of RSU and Restricted Stock activity under our Plans
for the year ended December 31, 2010 (shares in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Grant Date</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding as of December 31, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">1,738</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12.99</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Awarded
</div></td>
<td> </td>
<td> </td>
<td align="right">1,081</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15.95</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(619</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">13.57</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(476</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">15.63</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding as of December 31, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">1,724</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">13.91</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">     At December 31, 2010, there was $13.2 million of unrecognized compensation cost related
to unvested RSU awards, which is expected to be recognized over a weighted average period of 2.0
years.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Other information pertaining to stock-based awards of RSUs for the fiscal years ended December
31, 2010, 2009 and 2008, was as follows (in thousands, except per share data):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Years ended December 31,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2008</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average grant date fair value per share of RSUs granted
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">15.95</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">12.55</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">13.70</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total intrinsic value of RSUs vested
</div></td>
<td> </td>
<td> </td>
<td align="right">9,772</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,287</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,842</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">     <b><i>Employee Stock Purchase Plan</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We sponsor the Amended and Restated Tekelec 2005 Employee Stock Purchase Plan (the “2005
ESPP”), under which 1.5 million shares of our common stock have been authorized for issuance. The
2005 ESPP provides for an automatic annual increase in the number of shares authorized and reserved
for issuance on each August 1 during its ten-year term. Each such increase is equal to the lesser
of (i) 500,000 shares, (ii) a number of shares equal to 1% of the number of outstanding shares of
our common stock as of the date of the increase, and (iii) an amount determined by our Board of
Directors. Under the 2005 ESPP, as amended, eligible employees may authorize payroll deductions of
up to 15% of their compensation to purchase shares of common stock at 85% of the lower of the
market price per share at the beginning of each six-month offering period.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During 2010, 2009 and 2008, approximately 121,000, 144,000, and 138,000 shares, respectively,
were purchased under the 2005 ESPP at weighted average purchase prices of $12.32, $10.73, and
$10.15, respectively. At December 31, 2010 and 2009, there were approximately 557,000 and 678,000
shares, respectively, available for future purchases.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table sets forth a summary of employee withholding and purchase activity related
to the 2005 ESPP for the year ended December 31, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000"><b>Value in</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Thousands</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">As of December 31, 2009
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">601</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Employee with holdings net of employee withdrawals or forfeitures
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,456</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Employee purchases of common stock
</div></td>
<td> </td>
<td> </td>
<td align="right">1,490</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">As of December 31, 2010
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">635</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Based upon 85% of the lower of the market price per share at the beginning of the current
offering period of $14.35 on August 1, 2010 and our stock price as of December 31, 2010 of $11.91,
approximately 63,000 shares could be purchased based upon employee withholdings as of December 31,
2010. As of December 31, 2010, there was approximately $32,000 of unrecognized compensation cost
related to our employee stock purchase plan which will be expensed in the first quarter of 2011.
The ultimate number of shares to be purchased and the expense to be recognized under our employee
stock purchase plan will vary based upon, among other factors, fluctuations in the fair market
value of our common stock and employee participation levels.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">     <b><i>Stock-Based Compensation Valuation and Expense</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We account for our employee stock-based compensation plans using the fair value method, as
prescribed by the authoritative guidance for stock compensation. The authoritative guidance for
stock compensation requires forfeitures to be estimated at the time of grant and revised, if
necessary, in subsequent periods if actual forfeitures differ from initial estimates. Forfeitures
were estimated based on historical experience and we expect forfeitures to be 4% annually.
Stock-based compensation expense was recorded net of estimated forfeitures for the years ended
December 31, 2010, 2009, and 2008 such that expense was recorded only for those stock-based awards
that are expected to vest.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The authoritative guidance for stock compensation also requires that cash flows resulting from
the gross benefit of tax deductions related to stock-based compensation in excess of the grant date
fair value of the related stock-based
awards be presented as part of cash flows from financing activities. This amount is shown as a
reduction to cash flows from operating activities and an increase to cash flows from financing
activities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Total stock-based compensation expense recognized in years ended December 31, 2010, 2009 and
2008 was as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Option and</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>SAR Grants</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>and Stock</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Restricted</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Purchase</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Stock</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Income Statement Classifications</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Rights</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>and RSUs</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>Year ended December 31, 2010</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cost of goods sold
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">278</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,048</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,326</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Research and development
</div></td>
<td> </td>
<td> </td>
<td align="right">246</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,565</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,811</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Sales and marketing
</div></td>
<td> </td>
<td> </td>
<td align="right">428</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,372</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,800</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">General and administrative
</div></td>
<td> </td>
<td> </td>
<td align="right">1,133</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,455</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,588</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,085</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10,440</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,525</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Year ended December 31, 2009</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cost of goods sold
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">386</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">664</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,050</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Research and development
</div></td>
<td> </td>
<td> </td>
<td align="right">676</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,041</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,717</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Sales and marketing
</div></td>
<td> </td>
<td> </td>
<td align="right">679</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,447</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,126</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">General and administrative
</div></td>
<td> </td>
<td> </td>
<td align="right">2,292</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,352</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,644</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,033</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,504</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">13,537</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Year ended December 31, 2008</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cost of goods sold
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">851</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">424</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,275</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Research and development
</div></td>
<td> </td>
<td> </td>
<td align="right">1,460</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">681</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,141</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Sales and marketing
</div></td>
<td> </td>
<td> </td>
<td align="right">1,305</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,545</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,850</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">General and administrative
</div></td>
<td> </td>
<td> </td>
<td align="right">2,601</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,431</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,032</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">6,217</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7,081</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">13,298</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of December 31, 2010, there was approximately $14.2 million of total unrecognized
compensation cost, adjusted for estimated forfeitures, related to our non-vested share-based
payment arrangements (i.e., stock options, SARs, RSUs, ESPP shares, etc.) Total unrecognized
compensation cost will be adjusted for future changes in estimated forfeitures. This cost is
expected to be recognized over a weighted-average period of approximately 2.0 years.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The total income tax benefit recognized in the Consolidated Statements of Operations for
share-based compensation arrangements was approximately $4.8 million, $5.1 million, and $5.1
million for 2010, 2009, and 2008, respectively. No compensation cost was capitalized as part of
inventory or fixed assets during fiscal 2010, 2009, and 2008.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">     <b><i>Determination of and Assumptions used in Valuation Model</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     To determine the grant date fair value of our stock option and SAR awards and rights of
purchase under our employee stock purchase plan, we currently use the Black-Scholes option-pricing
model. The use of this model requires us to make a number of subjective assumptions. The
following addresses each of these assumptions and describes our methodology for determining each
assumption:
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">     <i>Expected Life</i>
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td>     The expected life represents the period that the stock option awards are expected to be
outstanding. We use the simplified method of estimating the expected life as prescribed by the SEC
Materials section of the authoritative guidance for stock compensation, by taking the average
between time to vesting and the contract life of the award.
</td>
</tr>
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">
Therefore, the expected term
assumption was estimated for each individual grant using the simplified method as an average
between time to vesting and the contractual term of the award.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     For purchase rights under our employee stock purchase plan, we determine the expected life
based upon the purchase periods remaining in the applicable offering period.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">     <i>Expected Volatility</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We estimate expected volatility giving consideration to the expected life of the respective
award, our current expected growth rate, implied volatility in traded options for our common stock,
and the historical volatility of our common stock.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">     <i>Risk-Free Interest Rate</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We estimate the risk-free interest rate using the U.S. Treasury bill rate with a remaining
term equal to the expected life of the award.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">     <i>Expected Dividend Yield</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We estimate the expected dividend yield by giving consideration to our current dividend
policies as well as those anticipated in the future considering our current plans and projections.
We do not currently calculate a discount for any post-vesting restrictions to which our awards may
be subject.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The weighted average assumptions used to value option/SAR grants and purchase rights under our
2005 ESPP were as follows:
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">Weighted average assumptions used to value option and SAR grants:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Years ended December 31,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2008</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected life (in years)
</div></td>
<td> </td>
<td> </td>
<td align="right">4.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.3</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected volatility
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">39.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">38</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">38</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Risk free interest rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.9</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.7</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">3.1</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected dividend yield
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">Weighted average assumptions used to value purchase rights under ESPP:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Years ended December 31,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2008</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected life (in years)
</div></td>
<td> </td>
<td> </td>
<td align="right">0.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected volatility
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">39.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">38.0-40.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">36.7-38.0</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Risk free interest rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">0.17-0.20</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">0.28-0.39</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td nowrap="nowrap" align="right">1.88-2.15</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected dividend yield
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt">     <b><i>Employee 401(k) Plan</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We sponsor a 401(k) tax-deferred savings plan to provide retirement benefits for our
employees. In the United States, regular employees can participate in the Tekelec 401(k) Plan (the
“Plan”). Participants may generally authorize up to 50% of their compensation to be invested in
employee-elected investment funds managed by an independent trustee, subject to certain annual
contribution limitations determined by the IRS. We match a portion of employee contributions,
currently 50% of the employees’ first 12% of payroll deductions. During 2010, 2009, and 2008, our
contributions to the Plan, net of forfeitures, amounted to $2.9 million, $2.7 million, and $2.9
million, respectively.
</div>
</div>
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