Exhibit 10.1

TELIK, INC.

CHANGE OF CONTROL SEVERANCE BENEFIT PLAN

ESTABLISHED ON FEBRUARY 21, 2003

AMENDED BY THE COMPENSATION COMMITTEE OF THE

BOARD OF DIRECTORS ON DECEMBER 17, 2008

 

Section 1.  INTRODUCTION.

The purpose of the Telik, Inc. Change of Control Severance Benefit Plan (the
“Plan”) is to provide for the payment of severance benefits to certain eligible
employees of Telik, Inc. (the “Company”) whose employment with the Company is
terminated under specified circumstances following a Change of Control. Except
as provided in Section 4(b) below, this Plan shall supersede any severance
benefit plan, policy or practice previously maintained by the Company. This Plan
document is also the Summary Plan Description for the Plan.

 

Section 2.  DEFINITIONS.

For purposes of the Plan, the following terms are defined as follows:

(a) “Annual Target Bonus” means the Eligible Employee’s target cash bonus.

(b) “Base Salary” means the Eligible Employee’s annual base salary.

(c) “Board” means the Board of Directors of the Company.

(d) “Change of Control” means the occurrence in a single transaction or in a
series of related transactions of any one or more of the following events:

(i) any person (within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended) becomes the owner, directly or indirectly, of
securities of the Company representing more than 50% of the combined voting
power of the Company’s then outstanding securities other than by virtue of a
merger, consolidation or similar transaction.

(ii) there is consummated a merger, consolidation or similar transaction
involving (directly or indirectly) the Company and, immediately after the
consummation of such merger, consolidation or similar transaction, the
stockholders of the Company immediately prior thereto do not own, directly or
indirectly, outstanding voting securities representing more than 50% of the
combined outstanding voting power of the surviving entity in such merger,
consolidation or similar transaction or more than 50% of the combined
outstanding voting power of the parent of the surviving entity in such merger,
consolidation or similar transaction; or

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(iii) there is consummated a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its
subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Company and its subsidiaries
to an entity, more than 50% of the combined voting power of the voting
securities of which are owned by stockholders of the Company in substantially
the same proportions as their ownership of the Company immediately prior to such
sale, lease, license or other disposition.

Once a Change of Control has occurred, no future events will constitute a Change
of Control for purposes of the Plan.

(e) “Company” means Telik, Inc. or, following a Change of Control, the surviving
entity resulting from such transaction or the parent company of such surviving
entity.

(f) “Covered Benefit Plan” means any group health, dental, or vision, group term
life, accidental death and dismemberment, optional group term life, short term
disability and long term disability plan sponsored by the Company for the
benefit of its employees.

(g) “Covered Termination” means either an Involuntary Termination Without Cause
or a voluntary termination by an Eligible Employee for any reason or no reason,
in either case which occurs on or within 12 months following the effective date
of a Change of Control, provided that any such termination must constitute a
“separation from service” within the meaning of Treasury Regulation
Section 1.409A-1(h).

(h) “Eligible Employee” means an employee of the Company who has been designated
by the Board as a participant and whose employment with the Company terminates
due to a Covered Termination.

(i) “Involuntary Termination Without Cause” means an Eligible Employee’s
involuntary termination of employment by the Company for a reason other than
Cause. “Cause” means the occurrence of any one or more of the following:

(i) the Eligible Employee’s conviction of, or plea of no contest with respect
to, any crime involving fraud, dishonesty or moral turpitude;

(ii) the Eligible Employee’s attempted commission of or participation in a fraud
or act of dishonesty against the Company that results in (or might have
reasonably resulted in) material harm to the business of the Company;

(iii) the Eligible Employee’s intentional, material violation of any contract or
agreement between the Eligible Employee and the Company or any statutory duty
the Eligible Employee owes to the Company; or

(iv) the Eligible Employee’s conduct that constitutes gross misconduct,
insubordination, incompetence or habitual neglect of duties and that results in
(or might have reasonably resulted in) material harm to the business of the
Company.

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The conduct described under clause (iii) or (iv) above will only constitute
Cause if such conduct is not cured within 15 days after the Eligible Employee’s
receipt of written notice from the Company or the Board specifying the
particulars of the conduct that may constitute Cause.

(j) “Participation Agreement” means the agreement executed by the Company and an
Eligible Employee pursuant to which such Eligible Employee will participate in
the Plan.

 

Section 3.  ELIGIBILITY FOR BENEFITS.

Subject to the requirement set forth in this Section, the Company will provide
the severance benefits described in Section 4 to Eligible Employees who suffer a
Covered Termination. To receive benefits under this Plan, an Eligible Employee
must execute and return to the Company a release of claims in favor of the
Company, in substantially the form attached to this Plan as Exhibit A, Exhibit B
or Exhibit C (the “Release”) and allow such Release to become effective no later
than sixty (60) days following the Eligible Employee’s termination of
employment.

 

Section 4.  AMOUNT OF BENEFIT.

(a) Severance Benefits. Each Eligible Employee shall be designated as a either a
Level I, Level II or Level III Eligible Employee. The severance benefits under
the Plan shall be provided to each Eligible Employee based on his or her
designation as a Level I, Level II or Level III Eligible Employee, in the
respective amounts provided in APPENDIX A, APPENDIX B or APPENDIX C attached
hereto.

(b) Certain Reductions. The Company shall reduce an Eligible Employee’s
severance benefits under this Plan, to the greatest extent possible, by any
other severance benefits, pay in lieu of notice, or other similar benefits
payable to the Eligible Employee by the Company in connection with the Eligible
Employee’s termination of employment pursuant to (i) any applicable legal
requirement, including, without limitation, the Worker Adjustment and Retraining
Notification Act (also known as the “WARN Act”), (ii) an individually negotiated
contract or agreement by and between an Eligible Employee and the Company
relating to severance benefits that may be payable following a Change of Control
that is in effect on his or her termination date, unless the Eligible Employee
has expressly waived his or her rights under such individually negotiated
contract or agreement in the applicable Participation Agreement, or (iii) any
Company policy or practice providing for the Eligible Employee to remain on the
payroll for a limited period of time after being given notice of the termination
of the Eligible Employee’s employment. The benefits provided under the Plan are
intended to satisfy, to the greatest extent possible, any and all statutory
obligations that may arise out of an Eligible Employee’s termination of
employment, and the Plan Administrator shall so construe and implement the terms
of the Plan. Such reductions will be applied on a retroactive basis if
applicable, with severance benefits previously paid being recharacterized as
payments pursuant to the Company’s statutory obligations.

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Section 5.  LIMITATIONS ON BENEFITS.

(a) Mitigation. Except as otherwise specifically provided herein with respect to
Covered Benefit Plan coverage, an Eligible Employee shall not be required to
mitigate damages or the amount of any payment provided under the Plan by seeking
other employment or otherwise, nor shall the amount of any payment provided for
under the Plan be reduced by any compensation earned by an Eligible Employee as
a result of employment by another employer or any retirement benefits received
by such Eligible Employee after the date of the Covered Termination.

(b) Termination of Benefits. An Eligible Employee will forfeit his or her whole
right to benefits under the Plan immediately if the Eligible Employee, at any
time, violates any proprietary information or confidentiality obligation to the
Company.

(c) Non-Duplication of Benefits. No Eligible Employee is eligible to receive
benefits under the Plan more than one time.

(d) Withholding. All payments under the Plan will be subject to all applicable
withholding obligations of the Company, including, without limitation,
obligations to withhold for federal, state and local income and employment
taxes.

(e) Indebtedness of Eligible Employees. If an Eligible Employee is indebted to
the Company or an affiliate of the Company on the date of his or her Covered
Termination, the Company reserves the right to offset any severance benefits
under the Plan by the amount of such indebtedness.

 

Section 6.  TIME OF PAYMENT AND FORM OF BENEFITS.

(a) General Rules. In no event shall any payments or benefits be provided under
the Plan prior to the effective date of the Release. Except as set forth in
Section 6(b) below, all lump sum cash severance payments will be paid on the
60th day following the Eligible Employee’s termination date.

(b) Application of Section 409A. It is intended that each installment of the
payments and benefits provided under this Plan (the “Severance Benefits”) is a
separate “payment” for purposes Section 1.409A-2(b)(2)(i) of the Treasury
Regulations. It is intended that payments of the Severance Benefits satisfy, to
the greatest extent possible, the exemptions from the application of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and
the Treasury Regulations and other guidance thereunder and any state law of
similar effect (collectively “Section 409A”) provided under Sections
1.409A-1(b)(4) and 1.409A-1(b)(5) of the Treasury Regulations. However, if the
Plan Administrator determines that the Severance Benefits constitute “deferred
compensation” under Section 409A and the Eligible Employee is, on his or her
separation from service, a “specified employee” of the Company (as such term is
defined in Section 409A(a)(2)(B)(i) of the Code) then, solely to the extent
necessary to avoid the incurrence of the adverse personal tax consequences to
the Eligible Employee under Section 409A, the timing of the payment of the
Severance Benefits shall be delayed as follows: on the earlier to occur of
(i) the date that is six months and one day after the Eligible Employee’s
separation from service and (ii) the date of the Eligible Employee’s death (such
applicable date,

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the “Specified Employee Initial Payment Date”), the Company shall (A) pay to the
Eligible Employee a lump sum amount equal to the sum of the Severance Benefits
that the Eligible Employee would otherwise have received through the Specified
Employee Initial Payment Date if the commencement of the payment of the
Severance Benefits had not been so delayed pursuant to this Section 6(b) and
(B) commence paying the balance of the Severance Benefits in accordance with the
applicable payment schedules set forth in this Plan.

 

Section 7.  RIGHT TO INTERPRET PLAN; AMENDMENT AND TERMINATION; OTHER
AGREEMENTS.

(a) Exclusive Discretion. The Plan Administrator shall have the exclusive
discretion and authority to establish rules, forms, and procedures for the
administration of the Plan and to construe and interpret the Plan and to decide
any and all questions of fact, interpretation, definition, computation or
administration arising in connection with the operation of the Plan, including,
but not limited to, the eligibility to participate in the Plan and amount of
benefits paid under the Plan. The rules, interpretations, computations and other
actions of the Plan Administrator shall be binding and conclusive on all
persons.

(b) Amendment or Termination. The Company reserves the right to amend or
terminate the Plan (including the Exhibits and Appendices attached hereto) and
the benefits provided hereunder at any time.

(c) Absence of Other Agreements; Conflicts. The Plan and an Eligible Employee’s
Participation Agreement, and any subsequently adopted amendment to either of
these documents, shall constitute the entire agreement between the Company and
such Eligible Employee regarding benefits under the Plan. No oral statement
regarding the Plan may be relied upon by an Eligible Employee. If there are any
conflicts between the terms of the Plan and an Eligible Employee’s Participation
Agreement, the terms of the Plan shall control.

 

Section 8.  NO IMPLIED EMPLOYMENT CONTRACT.

The Plan shall not be deemed (i) to give any employee or other person any right
to be retained in the employ of the Company or (ii) to interfere with the right
of the Company to discharge any employee or other person at any time, with or
without cause, which right is hereby reserved.

 

Section 9.  LEGAL CONSTRUCTION.

The Plan is intended to be governed by and shall be construed in accordance with
the Employee Retirement Income Security Act of 1974 (“ERISA”) and, to the extent
not preempted by ERISA, the laws of the State of California.

 

Section 10.  CLAIMS, INQUIRIES AND APPEALS.

(a) Applications for Benefits and Inquiries. Any application for benefits,
inquiries about the Plan or inquiries about present or future rights under the
Plan must be submitted to the Plan Administrator in writing by an applicant (or
his or her authorized representative) at the following address:

Telik, Inc.

3165 Porter Drive

Palo Alto, CA 94304

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(b) Denial of Claims. In the event that any application for benefits is denied
in whole or in part, the Plan Administrator must provide the applicant with
written or electronic notice of the denial of the application, and of the
applicant’s right to review the denial. Any electronic notice will comply with
the regulations of the U.S. Department of Labor. The notice of denial will be
set forth in a manner designed to be understood by the applicant and will
include the following:

(i) the specific reason or reasons for the denial;

(ii) references to the specific Plan provisions upon which the denial is based;

(iii) a description of any additional information or material that the Plan
Administrator needs to complete the review and an explanation of why such
information or material is necessary; and

(iv) an explanation of the Plan’s review procedures and the time limits
applicable to such procedures, including a statement of the applicant’s right to
bring a civil action under Section 502(a) of ERISA following a denial on review
of the claim, as described in Section 9(d) below.

This notice of denial will be given to the applicant within 90 days after the
Plan Administrator receives the application, unless special circumstances
require an extension of time, in which case, the Plan Administrator has up to an
additional 90 days for processing the application. If an extension of time for
processing is required, written notice of the extension will be furnished to the
applicant before the end of the initial 90 day period.

This notice of extension will describe the special circumstances necessitating
the additional time and the date by which the Plan Administrator is to render
its decision on the application.

(c) Request for a Review. Any person (or that person’s authorized
representative) for whom an application for benefits is denied, in whole or in
part, may appeal the denial by submitting a request for a review to the Plan
Administrator within 60 days after the application is denied to the following
address:

Telik, Inc.

3165 Porter Drive

Palo Alto, CA 94304

A request for review must set forth all of the grounds on which it is based, all
facts in support of the request and any other matters that the applicant feels
are pertinent. The applicant (or his or her representative) shall have the
opportunity to submit (or the Plan Administrator may require the applicant to
submit) written comments, documents, records, and

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other information relating to his or her claim. The applicant (or his or her
representative) shall be provided, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant
to his or her claim. The review shall take into account all comments, documents,
records and other information submitted by the applicant (or his or her
representative) relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.

(d) Decision on Review. The Plan Administrator will act on each request for
review within 60 days after receipt of the request, unless special circumstances
require an extension of time (not to exceed an additional 60 days), for
processing the request for a review. If an extension for review is required,
written notice of the extension will be furnished to the applicant within the
initial 60 day period. This notice of extension will describe the special
circumstances necessitating the additional time and the date by which the Plan
Administrator is to render its decision on the review. The Plan Administrator
will give prompt, written or electronic notice of its decision to the applicant.
Any electronic notice will comply with the regulations of the U.S. Department of
Labor. In the event that the Plan Administrator confirms the denial of the
application for benefits in whole or in part, the notice will set forth, in a
manner calculated to be understood by the applicant, the following:

(i) the specific reason or reasons for the denial;

(ii) references to the specific Plan provisions upon which the denial is based;

(iii) a statement that the applicant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records and
other information relevant to his or her claim; and

(iv) a statement of the applicant’s right to bring a civil action under
Section 502(a) of ERISA.

(e) Rules and Procedures. The Plan Administrator will establish rules and
procedures, consistent with the Plan and with ERISA, as necessary and
appropriate in carrying out its responsibilities in reviewing benefit claims.
The Plan Administrator may require an applicant who wishes to submit additional
information in connection with an appeal from the denial of benefits to do so at
the applicant’s own expense.

(f) Exhaustion of Remedies. No legal action for benefits under the Plan may be
brought until the claimant (i) has submitted a written application for benefits
in accordance with the procedures described by Section 9(a) above, (ii) has been
notified by the Plan Administrator that the application is denied, (iii) has
filed a written request for a review of the application in accordance with the
appeal procedure described in Section 9(c) above, and (iv) has been notified
that the Plan Administrator has denied the appeal. Notwithstanding the
foregoing, if the Plan Administrator does not respond to a Participant’s claim
or appeal within the relevant time limits specified in this Section 9, the
Participant may bring legal action for benefits under the Plan pursuant to
Section 502(a) of ERISA.

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Section 11.  BASIS OF PAYMENTS TO AND FROM PLAN.

All benefits under the Plan shall be paid by the Company. The Plan shall be
unfunded, and benefits hereunder shall be paid only from the general assets of
the Company.

 

Section 12.  OTHER PLAN INFORMATION.

(a) Employer and Plan Identification Numbers. The Employer Identification Number
assigned to the Company (which is the “Plan Sponsor” as that term is used in
ERISA) by the Internal Revenue Service is 93-0987903. The Plan Number assigned
to the Plan by the Plan Sponsor pursuant to the instructions of the Internal
Revenue Service is 510.

(b) Ending Date for Plan’s Fiscal Year. The date of the end of the fiscal year
for the purpose of maintaining the Plan’s records is December 31.

(c) Agent for the Service of Legal Process. The agent for the service of legal
process with respect to the Plan is Telik, Inc., 3165 Porter Drive, Palo Alto,
CA 94304.

(d) Plan Sponsor and Administrator. The “Plan Sponsor” and the “Plan
Administrator” of the Plan is Telik, Inc., 3165 Porter Drive, Palo Alto, CA
94304. The Plan Sponsor’s and Plan Administrator’s telephone number is
(650) 845-7700. The Plan Administrator is the named fiduciary charged with the
responsibility for administering the Plan.

 

Section 13.  STATEMENT OF ERISA RIGHTS.

Participants in this Plan (which is a welfare benefit plan sponsored by the
Company) are entitled to certain rights and protections under ERISA. If you are
an Eligible Employee, you are considered a participant in the Plan and, under
ERISA, you are entitled to:

(a) Receive Information About Your Plan and Benefits.

(i) Examine, without charge, at the Plan Administrator’s office and at other
specified locations, such as worksites, all documents governing the Plan and a
copy of the latest annual report (Form 5500 Series) filed by the Plan with the
U.S. Department of Labor and available at the Public Disclosure Room of the
Employee Benefits Security Administration;

(ii) Obtain, upon written request to the Plan Administrator, copies of documents
governing the operation of the Plan and copies of the latest annual report (Form
5500 Series) and updated Summary Plan Description. The Administrator may make a
reasonable charge for the copies; and

(iii) Receive a summary of the Plan’s annual financial report. The Plan
Administrator is required by law to furnish each participant with a copy of this
summary annual report.

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(b) Prudent Actions by Plan Fiduciaries. In addition to creating rights for Plan
participants, ERISA imposes duties upon the people who are responsible for the
operation of the employee benefit plan. The people who operate the Plan, called
“fiduciaries” of the Plan, have a duty to do so prudently and in the interest of
you and other Plan participants and beneficiaries. No one, including your
employer, your union or any other person, may fire you or otherwise discriminate
against you in any way to prevent you from obtaining a Plan benefit or
exercising your rights under ERISA.

(c) Enforce Your Rights. If your claim for a Plan benefit is denied or ignored,
in whole or in part, you have a right to know why this was done, to obtain
copies of documents relating to the decision without charge, and to appeal any
denial, all within certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request a copy of Plan documents or the latest annual report
from the Plan and do not receive them within 30 days, you may file suit in a
Federal court. In such a case, the court may require the Plan Administrator to
provide the materials and pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the
control of the Administrator.

If you have a claim for benefits which is denied or ignored, in whole or in
part, you may file suit in a state or Federal court.

If you are discriminated against for asserting your rights, you may seek
assistance from the U.S. Department of Labor, or you may file suit in a Federal
court. The court will decide who should pay court costs and legal fees. If you
are successful, the court may order the person you have sued to pay these costs
and fees. If you lose, the court may order you to pay these costs and fees, for
example, if it finds your claim is frivolous.

(d) Assistance with Your Questions. If you have any questions about the Plan,
you should contact the Plan Administrator. If you have any questions about this
statement or about your rights under ERISA, or if you need assistance in
obtaining documents from the Plan Administrator, you should contact the nearest
office of the Employee Benefits Security Administration, U.S. Department of
Labor, listed in your telephone directory or the Division of Technical
Assistance and Inquiries, Employee Benefits Security Administration, U.S.
Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You
may also obtain certain publications about your rights and responsibilities
under ERISA by calling the publications hotline of the Employee Benefits
Security Administration.

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Section 14.  EXECUTION.

To record the amendment of the Plan as set forth herein, effective as of
December 17, 2008, the Board of Directors of Telik Inc. has caused its duly
authorized officer to execute the same this 17th day of December, 2008.

 

TELIK, INC. /s/ William P. Kaplan William P. Kaplan Vice President and General
Counsel

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EXHIBIT A

RELEASE AGREEMENT

(For Employees Age 40 or Older - Individual Termination)

I understand and agree completely to the terms set forth in the Telik, Inc.
Change of Control Severance Benefit Plan (the “Plan”). Certain capitalized terms
used in this Release Agreement are defined in the Plan.

I hereby confirm my obligations under the Company’s proprietary information and
inventions agreement.

I acknowledge that I have read and understand Section 1542 of the California
Civil Code which reads as follows: “A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor.” I hereby expressly waive and relinquish all rights
and benefits under that section and any law of any jurisdiction of similar
effect with respect to my release of any claims I may have against the Company.

I hereby expressly waive and relinquish all rights and benefits under that
section and any law of any jurisdiction of similar effect with respect to my
release of any claims I may have against the Company.

In exchange for the benefits I am receiving under the Plan to which I am
otherwise not entitled, I hereby generally and completely release the Company
and its directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring prior to my signing this Agreement. This
general release includes, but is not limited to: (1) all claims arising out of
or in any way related to my employment with the Company or the termination of
that employment; (2) all claims related to my compensation or benefits from the
Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company; (3) all claims for breach of contract,
wrongful termination, and breach of the implied covenant of good faith and fair
dealing; (4) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal,
state, and local statutory claims, including claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the
federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Age Discrimination in Employment Act of
1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act
(as amended).

I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under ADEA. I also acknowledge that the consideration given
under the Plan for the waiver and release in the preceding paragraph hereof is
in addition to anything of value to which I was already entitled. I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that: (A) my waiver and release do not apply to any rights or claims that

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may arise on or after the date I execute this Release Agreement; (B) I have the
right to consult with an attorney prior to executing this Release Agreement;
(C) I have 21 days to consider this Release Agreement (although I may choose to
voluntarily execute it earlier); (D) I have seven days following my execution of
this Release Agreement to revoke it; and (E) this Release Agreement shall not be
effective until the date upon which the revocation period has expired, which
shall be the eighth day after I execute this Release Agreement.

 

EMPLOYEE Name:     Date:    

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EXHIBIT B

RELEASE AGREEMENT

(For Employees Under Age 40 - Individual and Group Termination)

I understand and agree completely to the terms set forth in the Telik, Inc.
Change of Control Severance Benefit Plan (the “Plan”). Certain capitalized terms
used in this Release Agreement are defined in the Plan.

I hereby confirm my obligations under the Company’s proprietary information and
inventions agreement.

I acknowledge that I have read and understand Section 1542 of the California
Civil Code which reads as follows: “A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor.” I hereby expressly waive and relinquish all rights
and benefits under that section and any law of any jurisdiction of similar
effect with respect to my release of any claims I may have against the Company.

In exchange for the benefits I am receiving under the Plan to which I am
otherwise not entitled, I hereby generally and completely release the Company
and its directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring prior to my signing this Agreement. This
general release includes, but is not limited to: (1) all claims arising out of
or in any way related to my employment with the Company or the termination of
that employment; (2) all claims related to my compensation or benefits from the
Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company; (3) all claims for breach of contract,
wrongful termination, and breach of the implied covenant of good faith and fair
dealing; (4) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal,
state, and local statutory claims, including claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the
federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, and the California Fair Employment and Housing Act (as
amended).

I understand that I have seven days to consider this Release Agreement (although
I may voluntarily execute it earlier).

 

EMPLOYEE Name:     Date:    

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EXHIBIT C

RELEASE AGREEMENT

(For Employees Age 40 or Older - Group Termination)

I understand and agree completely to the terms set forth in the Telik, Inc.
Change of Control Severance Benefit Plan (the “Plan”). Certain capitalized terms
used in this Release Agreement are defined in the Plan.

I hereby confirm my obligations under the Company’s proprietary information and
inventions agreement.

I acknowledge that I have read and understand Section 1542 of the California
Civil Code which reads as follows: “A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor.” I hereby expressly waive and relinquish all rights
and benefits under that section and any law of any jurisdiction of similar
effect with respect to my release of any claims I may have against the Company.

In exchange for the benefits I am receiving under the Plan to which I am
otherwise not entitled, I hereby generally and completely release the Company
and its directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring prior to my signing this Agreement. This
general release includes, but is not limited to: (1) all claims arising out of
or in any way related to my employment with the Company or the termination of
that employment; (2) all claims related to my compensation or benefits from the
Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company; (3) all claims for breach of contract,
wrongful termination, and breach of the implied covenant of good faith and fair
dealing; (4) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal,
state, and local statutory claims, including claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the
federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Age Discrimination in Employment Act of
1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act
(as amended).

I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under ADEA. I also acknowledge that the consideration given
under the Plan for the waiver and release in the preceding paragraph hereof is
in addition to anything of value to which I was already entitled. I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that: (A) my waiver and release do not apply to any rights or claims that may
arise on or after the date I execute this Release Agreement; (B) I have the
right to consult with an attorney prior to executing this Release Agreement;
(C) I have 45 days to consider this Release Agreement (although I may choose to
voluntarily execute it earlier); (D) I have seven

--------------------------------------------------------------------------------

days following my execution of this Release Agreement to revoke it; (E) this
Release Agreement shall not be effective until the date upon which the
revocation period has expired, which shall be the eighth day after I execute
this Release Agreement; and (F) I have received with this Release Agreement a
detailed list of the job titles and ages of all employees who are eligible for
severance benefits under the Plan in this group termination and the ages of all
employees of the Company in the same job classification or organizational unit
who are not eligible for severance benefits under the Plan.

 

EMPLOYEE Name:     Date:    

--------------------------------------------------------------------------------

APPENDIX A

TELIK, INC.

CHANGE OF CONTROL SEVERANCE BENEFIT PLAN

LEVEL I ELIGIBLE EMPLOYEES

Severance benefits provided to Eligible Employees under the Telik, Inc. Change
of Control Severance Benefit Plan (the “Plan”) are set forth below. Capitalized
terms not explicitly defined in this APPENDIX A but defined in the Plan shall
have the same definitions as in the Plan.

Each Eligible Employee who is designated in the Participation Agreement as being
in Level I shall receive the following benefits as a result of a Covered
Termination:

 

1.

Cash Severance Benefits. The Level I Eligible Employee shall receive a lump sum
cash payment equal to two times the greater of: (i) the sum of the Eligible
Employee’s Base Salary and the greater of: (a) the annual cash bonus paid to the
Eligible Employee in the prior year; or (b) the Eligible Employee’s Annual
Target Bonus as in effect on the date of the Covered Termination; or (ii) the
sum of the Eligible Employee’s Base Salary and the greater of: (a) the annual
cash bonus paid to the Eligible Employee in the prior year; or (b) the Eligible
Employee’s Annual Target Bonus as in effect immediately prior to the Change of
Control. Such payment shall be subject to all applicable tax withholding. Except
as set forth in Section 6(b) of the Plan, all lump sum cash severance payments
will be paid on the 60th day following the Eligible Employee’s termination date.

 

2.

Employee Benefit Plans. If a Level I Eligible Employee is enrolled in a Covered
Benefit Plan on the date of his or her Covered Termination, and if the Eligible
Employee timely and accurately elects to (A) continue such coverage, to the
extent possible, under the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”), or (B) convert such coverage into an individual policy at the
time of termination (or upon the expiration of the COBRA coverage period), the
Company shall pay that dollar amount that the Company paid for the coverage of
the Eligible Employee and his or her applicable covered dependents prior to the
Covered Termination for such monthly coverage under the applicable Covered
Benefit Plan for the lesser of (i) the first 24 months following the date of the
Covered Termination or (ii) such earlier date as the earlier of (a) the date the
Eligible Employee and his or her applicable covered dependents cease to be
eligible for such coverage and (b) the date the Eligible Employee is covered by
a plan (or plans) provided by a subsequent employer providing benefits that,
taken as a whole, are substantially equivalent to the benefits under the
applicable Covered Benefit Plan. In the case of benefits provided under COBRA,
the Company will make such payments directly to the applicable Covered Benefit
Plan administrator as and when due. In the case of benefits provided outside of
COBRA, the Company will make the payment directly to the Eligible Employee, on
the 30th day of each month for which such individual policy coverage is
effective. Each Eligible Employee shall be required to notify the Company
immediately if the Eligible Employee becomes covered by a benefit plan provided
by a subsequent employer.

--------------------------------------------------------------------------------

3. COBRA Continuation Coverage. The Company will notify the Eligible Employee of
any such right to continue such coverage at the time of termination pursuant to
COBRA. No provision of this Plan will affect the continuation coverage rules
under COBRA, except that the Company’s payment, if any, of applicable insurance
premiums pursuant to Section 2 above, will be credited as payment by the
Eligible Employee for purposes of the Eligible Employee’s payment required under
COBRA. Therefore, the period during which an Eligible Employee may elect to
continue the Company’s health, dental, or vision plan coverage at his or her own
expense under COBRA, the length of time during which COBRA coverage will be made
available to the Eligible Employee, and all other rights and obligations of the
Eligible Employee under COBRA (except the obligation to pay insurance premiums
that the Company may, in its sole discretion, elect to pay pursuant to Section 2
above) will be applied in the same manner that such rules would apply in the
absence of this Plan. Upon the expiration of the 24 month period during which
the Company pays the Eligible Employee’s insurance premiums or such earlier date
that the Eligible Employee ceases to be eligible for such coverage, the Eligible
Employee will be responsible for the entire payment of premiums required under
COBRA (or under any conversion policy) for the duration of such coverage, if
any. The Eligible Employee shall be required to notify the Company immediately
if the Eligible Employee becomes eligible to be covered by a group medical,
dental or vision insurance plan of a subsequent employer. For purposes of this
Section 3, any applicable premiums that may be paid by the Company shall not
include any amounts payable by an Eligible Employee under an Internal Revenue
Code Section 125 health care reimbursement plan, which amounts, if any, are the
sole responsibility of the Eligible Employee.

 

4. Stock Option Vesting. Immediately upon a Level I Eligible Employee’s Covered
Termination, all of such Eligible Employee’s unvested stock options shall
immediately vest and become immediately exercisable.

 

5. Parachute Payments. If any payment, distribution or benefit that the Eligible
Employee would receive from the Company or otherwise, but determined without
regard to any additional payment required under this Section 5, pursuant to a
Change of Control of the Company (“Payment”), would (i) constitute a “parachute
payment” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), and (ii) be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties payable with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the “Excise Tax”), then the Eligible
Employee shall be entitled to receive from the Company an additional payment
(the “Gross-Up Payment”) in an amount that shall fund the payment by the
Eligible Employee of any Excise Tax imposed on the Payment as well as all income
and employment taxes imposed on the Gross-Up Payment, any Excise Tax imposed on
the Gross-Up Payment and any interest or penalties imposed with respect to
income and employment taxes imposed on the Gross-Up Payment.

The accounting firm engaged by the Company for general audit purposes as of the
day prior to the effective date of the Change of Control shall perform the
foregoing calculations. If the accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the Change of Control, the Company shall appoint a nationally recognized
accounting firm to make the determinations required hereunder. The Company shall
bear all expenses with respect to the determinations by such accounting firm
required to be made hereunder.

--------------------------------------------------------------------------------

The accounting firm engaged to make the determinations hereunder shall provide
its calculations, together with detailed supporting documentation, to the
Company and the Eligible Employee within fifteen (15) calendar days after the
date on which the right to a Payment is triggered (if requested at that time by
the Company or the Eligible Employee) or such other time as requested by the
Company or the Eligible Employee. If the accounting firm determines that an
Excise Tax is payable with respect to a Payment and that a Gross-Up Payment is
due to the Eligible Employee, the Company shall pay the Gross-Up Payment in a
lump sum to the Eligible Employee not later than thirty (30) days after the date
on which the Eligible Employee remits the Excise Tax to the appropriate taxing
authorities. If the accounting firm determines that no Excise Tax is payable
with respect to a Payment, it shall furnish the Company and the Eligible
Employee with a statement reasonably acceptable to the Eligible Employee that no
Excise Tax will be imposed with respect to such Payment. Any good faith
determinations of the accounting firm made hereunder shall be final, binding and
conclusive upon the Company and the Eligible Employee.

 

6. Other Employee Benefits. Except as provided in Section 2 above (and except to
the extent that a conversion privilege may be available thereunder), all
benefits provided by the Company shall terminate as of the date of the Eligible
Employee’s Covered Termination.

 

7. Reductions Pursuant to Section 4(b) of the Plan. The severance benefits set
forth in this APPENDIX A are subject to certain reductions under Section 4(b) of
the Plan.

The Plan Administrator reserves the right to amend this APPENDIX A and the
benefits provided hereunder at any time.

 

APPENDIX A Amended: December 17, 2008 TELIK, INC. By:     Title:    

--------------------------------------------------------------------------------

APPENDIX B

TELIK, INC.

CHANGE OF CONTROL SEVERANCE BENEFIT PLAN

LEVEL II ELIGIBLE EMPLOYEES

Severance benefits provided to Eligible Employees under the Telik, Inc. Change
of Control Severance Benefit Plan (the “Plan”) are set forth below. Capitalized
terms not explicitly defined in this APPENDIX B but defined in the Plan shall
have the same definitions as in the Plan.

Each Eligible Employee who is designated in the Participation Agreement as being
in Level II shall receive the following benefits as a result of a Covered
Termination:

 

1.

Cash Severance Benefits. The Level II Eligible Employee shall receive a lump sum
cash payment equal to the greater of: (i) the sum of the Eligible Employee’s
Base Salary and the greater of: (a) the annual cash bonus paid to the Eligible
Employee in the prior year; or (b) the Eligible Employee’s Annual Target Bonus
as in effect on the date of the Covered Termination; or (ii) the sum of Eligible
Employee’s Base Salary and the greater of: (a) the annual cash bonus paid to
such Eligible Employee in the prior year; or (b) the Eligible Employee’s Annual
Target Bonus as in effect immediately prior to the Change of Control. Such
payment shall be subject to all applicable tax withholding. Except as set forth
in Section 6(b) of the Plan, all lump sum cash severance payments will be paid
on the 60 th day following the Eligible Employee’s termination date.

 

2.

Employee Benefit Plans. If a Level II Eligible Employee is enrolled in a Covered
Benefit Plan on the date of his or her Covered Termination, and if the Eligible
Employee timely and accurately elects to (A) continue such coverage, to the
extent possible, under the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”), or (B) convert such coverage into an individual policy at the
time of termination, the Company shall pay that dollar amount that the Company
paid prior to the Covered Termination for such monthly coverage for the Eligible
Employee and his or her applicable covered dependents under the applicable
Covered Benefit Plan for the lesser of (i) the first 12 months following the
date of the Covered Termination or (ii) such earlier date as the earlier of
(a) the date the Eligible Employee and his or her applicable covered dependents
cease to be eligible for such coverage and (b) the date the Eligible Employee is
covered by a plan (or plans) provided by a subsequent employer which includes
benefits that, taken as a whole, are substantially equivalent to the benefits
under the applicable Covered Benefit Plan. In the case of benefits provided
under COBRA, the Company will make such payments directly to the applicable
Covered Benefit Plan administrator as and when due. In the case of benefits
provided outside of COBRA, the Company will make the payment directly to the
Eligible Employee, on the 30th day of each month for which such individual
policy coverage is effective. Each Eligible Employee shall be required to notify
the Company immediately if the Eligible Employee becomes covered by a benefit
plan provided by a subsequent employer.

--------------------------------------------------------------------------------

3. COBRA Continuation Coverage. The Company will notify the Eligible Employee of
any such right to continue such coverage at the time of termination pursuant to
COBRA. No provision of this Plan will affect the continuation coverage rules
under COBRA, except that the Company’s payment, if any, of applicable insurance
premiums pursuant to Section 2 above, will be credited as payment by the
Eligible Employee for purposes of the Eligible Employee’s payment required under
COBRA. Therefore, the period during which an Eligible Employee may elect to
continue the Company’s health, dental, or vision plan coverage at his or her own
expense under COBRA, the length of time during which COBRA coverage will be made
available to the Eligible Employee, and all other rights and obligations of the
Eligible Employee under COBRA (except the obligation to pay insurance premiums
that the Company may, in its sole discretion, elect to pay pursuant to Section 2
above) will be applied in the same manner that such rules would apply in the
absence of this Plan. Upon the expiration of the 12 month period during which
the Company pays the Eligible Employee’s insurance premiums or such earlier date
that the Eligible Employee ceases to be eligible for such coverage, the Eligible
Employee will be responsible for the entire payment of premiums required under
COBRA for the duration of the COBRA period, if any. The Eligible Employee shall
be required to notify the Company immediately if the Eligible Employee becomes
eligible to be covered by a group medical, dental or vision insurance plan of a
subsequent employer. For purposes of this Section 3, any applicable premiums
that may be paid by the Company shall not include any amounts payable by an
Eligible Employee under an Internal Revenue Code Section 125 health care
reimbursement plan, which amounts, if any, are the sole responsibility of the
Eligible Employee.

 

4. Stock Option Vesting. Immediately upon a Level II Eligible Employee’s Covered
Termination, all of such Eligible Employee’s unvested stock options shall
immediately vest and become immediately exercisable.

 

5. Parachute Payments. If any payment, distribution or benefit that the Eligible
Employee would receive from the Company or otherwise, but determined without
regard to any additional payment required under this Section 5, pursuant to a
Change of Control of the Company (“Payment”), would (i) constitute a “parachute
payment” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), and (ii) be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties payable with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the “Excise Tax”), then the Eligible
Employee shall be entitled to receive from the Company an additional payment
(the “Gross-Up Payment”) in an amount that shall fund the payment by the
Eligible Employee of any Excise Tax imposed on the Payment as well as all income
and employment taxes imposed on the Gross-Up Payment, any Excise Tax imposed on
the Gross-Up Payment and any interest or penalties imposed with respect to
income and employment taxes imposed on the Gross-Up Payment.

The accounting firm engaged by the Company for general audit purposes as of the
day prior to the effective date of the Change of Control shall perform the
foregoing calculations. If the accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the Change of Control, the Company shall appoint a nationally recognized
accounting firm to make the determinations required hereunder. The Company shall
bear all expenses with respect to the determinations by such accounting firm
required to be made hereunder.

--------------------------------------------------------------------------------

The accounting firm engaged to make the determinations hereunder shall provide
its calculations, together with detailed supporting documentation, to the
Company and the Eligible Employee within fifteen (15) calendar days after the
date on which the right to a Payment is triggered (if requested at that time by
the Company or the Eligible Employee) or such other time as requested by the
Company or the Eligible Employee. If the accounting firm determines that an
Excise Tax is payable with respect to a Payment and that a Gross-Up Payment is
due to the Eligible Employee, the Company shall pay the Gross-Up Payment in a
lump sum to the Eligible Employee not later than thirty (30) days after the date
on which the Eligible Employee remits the Excise Tax to the appropriate taxing
authorities. If the accounting firm determines that no Excise Tax is payable
with respect to a Payment, it shall furnish the Company and the Eligible
Employee with a statement reasonably acceptable to the Eligible Employee that no
Excise Tax will be imposed with respect to such Payment. Any good faith
determinations of the accounting firm made hereunder shall be final, binding and
conclusive upon the Company and the Eligible Employee.

 

6. Other Employee Benefits. Except as provided in Section 2 above (and except to
the extent that a conversion privilege may be available thereunder), all
benefits provided by the Company shall terminate as of the date of the Eligible
Employee’s Covered Termination.

 

7. Reductions Pursuant to Section 4(b) of the Plan. The severance benefits set
forth in this APPENDIX B are subject to certain reductions under Section 4(b) of
the Plan.

The Plan Administrator reserves the right to amend this APPENDIX B and the
benefits provided hereunder at any time.

 

APPENDIX B Amended: December 17, 2008 TELIK, INC. By:     Title:    

--------------------------------------------------------------------------------

APPENDIX C

TELIK, INC.

CHANGE OF CONTROL SEVERANCE BENEFIT PLAN

LEVEL III ELIGIBLE EMPLOYEES

Severance benefits provided to Eligible Employees under the Telik, Inc. Change
of Control Severance Benefit Plan (the “Plan”) are set forth below. Capitalized
terms not explicitly defined in this APPENDIX C but defined in the Plan shall
have the same definitions as in the Plan.

Each Eligible Employee who is designated in the Participation Agreement as being
in Level III shall receive the following benefits as a result of a Covered
Termination:

 

1.

Cash Severance Benefits. The Level IIII Eligible Employee shall receive a lump
sum cash payment equal to 50% (or, in the case of an Eligible Employee who has
not been continuously employed by the Company for the two years ending on the
date of the Change of Control, 25%) of the greater of: (i) the sum of the
Eligible Employee’s Base Salary and the greater of: (a) the annual cash bonus
paid to the Eligible Employee in the prior year; or (b) the Eligible Employee’s
Annual Target Bonus as in effect on the date of the Covered Termination; or
(ii) the sum of Eligible Employee’s Base Salary and the greater of: (a) the
annual cash bonus paid to such Eligible Employee in the prior year; or (b) the
Eligible Employee’s Annual Target Bonus as in effect immediately prior to the
Change of Control. Such payment shall be subject to all applicable tax
withholding. Except as set forth in Section 6(b) of the Plan, all lump sum cash
severance payments will be paid on the 60th day following the Eligible
Employee’s termination date.

 

2.

Employee Benefit Plans. If a Level III Eligible Employee is enrolled in a
Covered Benefit Plan on the date of his or her Covered Termination, and if the
Eligible Employee timely and accurately elects to (A) continue such coverage, to
the extent possible, under the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”), or (B) convert such coverage into an individual policy at the
time of termination, the Company shall pay that dollar amount that the Company
paid prior to the Covered Termination for such monthly coverage for the Eligible
Employee and his or her applicable covered dependents under the applicable
Covered Benefit Plan for the lesser of (i) the first 6 months (or, in the case
of an Eligible Employee who has not been continuously employed by the Company
for the two years ending on the date of the Change of Control, 3 months)
following the date of the Covered Termination or (ii) such earlier date as the
earlier of (a) the date the Eligible Employee and his or her applicable covered
dependents cease to be eligible for such coverage and (b) the date the Eligible
Employee is covered by a plan (or plans) provided by a subsequent employer which
includes benefits that, taken as a whole, are substantially equivalent to the
benefits under the applicable Covered Benefit Plan. In the case of benefits
provided under COBRA, the Company will make such payments directly to the
applicable Covered Benefit Plan administrator as and when due. In the case of
benefits provided outside of COBRA, the Company will make the payment directly
to the Eligible Employee, on the 30th day of each month for which such
individual policy coverage is effective. Each Eligible Employee shall be
required to notify the Company immediately if the Eligible Employee becomes
covered by a benefit plan provided by a subsequent employer.

--------------------------------------------------------------------------------

3. COBRA Continuation Coverage. The Company will notify the Eligible Employee of
any such right to continue such coverage at the time of termination pursuant to
COBRA. No provision of this Plan will affect the continuation coverage rules
under COBRA, except that the Company’s payment, if any, of applicable insurance
premiums pursuant to Section 2 above, will be credited as payment by the
Eligible Employee for purposes of the Eligible Employee’s payment required under
COBRA. Therefore, the period during which an Eligible Employee may elect to
continue the Company’s health, dental, or vision plan coverage at his or her own
expense under COBRA, the length of time during which COBRA coverage will be made
available to the Eligible Employee, and all other rights and obligations of the
Eligible Employee under COBRA (except the obligation to pay insurance premiums
that the Company may, in its sole discretion, elect to pay pursuant to Section 2
above) will be applied in the same manner that such rules would apply in the
absence of this Plan. Upon the expiration of the 6-month or 3-month period, as
applicable, during which the Company pays the Eligible Employee’s insurance
premiums or such earlier date that the Eligible Employee ceases to be eligible
for such coverage, the Eligible Employee will be responsible for the entire
payment of premiums required under COBRA for the duration of the COBRA period,
if any. The Eligible Employee shall be required to notify the Company
immediately if the Eligible Employee becomes eligible to be covered by a group
medical, dental or vision insurance plan of a subsequent employer. For purposes
of this Section 3, any applicable premiums that may be paid by the Company shall
not include any amounts payable by an Eligible Employee under an Internal
Revenue Code Section 125 health care reimbursement plan, which amounts, if any,
are the sole responsibility of the Eligible Employee.

 

4. Stock Option Vesting. Immediately upon a Level III Eligible Employee’s
Covered Termination, all of such Eligible Employee’s unvested stock options
which (without giving effect to this sentence) would normally vest within 24
months after the date of the Covered Termination, shall vest and become
immediately exercisable.

 

5.

Parachute Payments. If any payment or benefit the Level III Eligible Employee
would receive in connection with a Change of Control from the Company or
otherwise (“Payment”) would (i) constitute a “parachute payment” within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”), and (ii) but for this sentence, be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to
the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion
of the Payment that would result in no portion of the Payment being subject to
the Excise Tax or (y) the largest portion, up to and including the total, of the
Payment, whichever amount, after taking into account all applicable federal,
state and local employment taxes, income taxes, and the Excise Tax (all computed
at the highest applicable marginal rate), results in the Eligible Employee’s
receipt, on an after-tax basis, of the greater amount of the Payment
notwithstanding that all or some portion of the Payment may be subject to the
Excise Tax. If a reduction in payments or benefits constituting “parachute
payments” is necessary so that the Payment equals the Reduced Amount, reduction
shall occur in the following order: reduction of

--------------------------------------------------------------------------------

 

cash payments; cancellation of accelerated vesting of stock awards; reduction of
employee benefits. If acceleration of vesting of stock award compensation is to
be reduced, such acceleration of vesting shall be cancelled in the reverse order
of the date of grant of the Eligible Employee’s stock awards.

The accounting firm engaged by the Company for general audit purposes as of the
day prior to the effective date of the Change of Control shall perform the
foregoing calculations. If the accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the Change of Control, the Company shall appoint a nationally recognized
accounting firm to make the determinations required hereunder. The Company shall
bear all expenses with respect to the determinations by such accounting firm
required to be made hereunder.

The accounting firm engaged to make the determinations hereunder shall provide
its calculations, together with detailed supporting documentation, to the
Company and the Eligible Employee within 15 calendar days after the date on
which the Eligible Employee’s right to a Payment is triggered (if requested at
that time by the Company or the Eligible Employee) or such other time as
requested by the Company or the Eligible Employee. If the accounting firm
determines that no Excise Tax is payable with respect to a Payment, either
before or after the application of the Reduced Amount, it shall furnish the
Company and the Eligible Employee with a statement reasonably acceptable to
Executive that no Excise Tax will be imposed with respect to such Payment. Any
good faith determinations of the accounting firm made hereunder shall be final,
binding and conclusive upon the Company and the Eligible Employee.

 

6. Other Employee Benefits. Except as provided in Section 2 above (and except to
the extent that a conversion privilege may be available thereunder), all
benefits provided by the Company shall terminate as of the date of the Eligible
Employee’s Covered Termination.

 

7. Reductions Pursuant to Section 4(b) of the Plan. The severance benefits set
forth in this APPENDIX C are subject to certain reductions under Section 4(b) of
the Plan.

The Plan Administrator reserves the right to amend this APPENDIX C and the
benefits provided hereunder at any time.

 

APPENDIX C Amended: December 17, 2008 TELIK, INC. By:     Title:    

--------------------------------------------------------------------------------

SCHEDULE OF BENEFITS LEVELS

PURSUANT TO CHANGE OF CONTROL SEVERANCE BENEFITS PLAN OF TELIK, INC.

 

Level of
Benefits

  

Eligible Employee

Level I    President and Chief Executive Officer Level II   

Chief Operating Officer and Chief Financial Officer and those Senior

Vice Presidents and others, in each case, as designated by the Compensation
Committee or the Chief Executive Officer

Level III    Those Senior Vice Presidents, Vice President and others, in each
case, as designated by the Compensation Committee or the Chief Executive Officer

--------------------------------------------------------------------------------

PARTICIPATION AGREEMENT

TELIK, INC.

CHANGE OF CONTROL SEVERANCE BENEFIT PLAN

Name of Participant:                     

You have been selected to participate in the Telik, Inc. Change of Control
Severance Benefit Plan (the “Plan”). Under the terms of the Plan (a copy of
which is attached as EXHIBIT A to this Agreement) you may become entitled to
receive severance benefits in the event your employment with the Company is
terminated in a Covered Termination. A Covered Termination means you are
Involuntarily Terminated Without Cause (as defined in the Plan) or you
voluntarily terminate your employment for any reason or no reason within 12
months following the effective date of a Change of Control (as defined in the
Plan).

In accordance with Section 4(a) of the Plan, you have been designated a Level
[I] [II] [III] Eligible Employee. The schedule of benefits you may become
entitled to receive is found in APPENDIX [A] [B] [C] to the Plan.

If your employment with the Company is terminated for any reason other than a
Covered Termination, you will not be eligible for severance benefits under the
Plan.

[You have entered into an individually negotiated written agreement dated
             with the Company (the “Other Agreement”) that relates, in whole or
in part, to severance benefits payable following a Change of Control. By signing
this Participation Agreement, you agree to waive your rights under the Other
Agreement to the extent that the Other Agreement relates to severance benefits
payable following a Change of Control. If you elect not to sign this
Participation Agreement, the terms of the Other Agreement will control the
provision of severance benefits, if any, following a Change of Control, and you
will not be an Eligible Participant in the Plan.] OR [You have entered into an
individually negotiated written agreement dated              with the Company
(the “Other Agreement”) that relates, in whole or in part, to severance benefits
payable following a Change of Control. By signing this Participation Agreement,
you agree that any benefits that may become payable under the Plan shall be
offset by any benefits that may become payable under the Other Agreement. If you
elect not to sign this Participation Agreement, the terms of the Other Agreement
will control the provision of severance benefits, if any, following a Change of
Control, and you will not be an Eligible Participant in the Plan.]

To participate in the Plan, please sign and date this Participation Agreement in
the space provided below and return it to              no later than
            . The extra copy is for your file. On behalf of Telik, I am pleased
to welcome you as an Eligible Employee under the Plan.

 

Sincerely,     Michael M. Wick, M.D., Ph.D.     Chief Executive Officer         
     Participant’s Signature     Date

--------------------------------------------------------------------------------

EXHIBIT A

TELIK, INC.

CHANGE OF CONTROL SEVERANCE BENEFIT PLAN

Please see Exhibit 10.1 filed with the current report on Form 8-K dated December
17, 2008.