Exhibit 10.28

August 8, 2006

Cathleen P. Davis

Re: Amended Employment Terms

Dear Cathy,

This letter confirms that Threshold Pharmaceuticals, Inc. (the “Company”) has
offered you the position of Vice President, Finance and Controller beginning on
August 8, 2006 on the following terms:

You will report to Michael S. Ostrach, our Chief Operating Officer and General
Counsel and will continue to work at our facility located at 1300 Seaport Blvd.,
5th Floor, Redwood City, CA 94063. Of course, the Company may change your
position, duties and work location from time to time as it deems necessary.

Beginning August 15, 2006, your compensation will be $17,500 per month, less
payroll deductions and all required withholdings. You will be paid semi-monthly
and will be eligible for standard Company benefits as outlined on the attached
Employee Benefits Program summary. The Company may modify compensation and
benefits from time to time as it deems necessary.

Your existing stock option to purchase 40,000 shares of the Company’s common
stock, par value $0.001 per share, at a price of $12.45 per share, issued upon
the commencement of your employment on July 22, 2005, vested as to 1/4th of the
shares on July 22, 2006, and will continue to vest as to 1/48th of the shares
per month for the remaining three years, provided you continue to be employed by
the Company. Your existing stock option to purchase 25,000 shares of the
Company’s common stock, par value $0.001 per share, at a price of $14.04 per
share, which began to vest on January 1, 2006, will continue to vest as to
1/48th of the shares per month for four years, provided you continue to be
employed the Company. The terms and conditions of such incentive stock options
will remain unchanged as a result of this letter.

You will be expected to continue to abide by the Company’s policies regarding
the use or disclosure any confidential information, including trade secrets, of
any former employer or other person to whom you have an obligation of
confidentiality. You will be expected to continue to use only that information
which is generally known and used by persons with training and experience
comparable to your own, which is common knowledge in the industry or otherwise
legally in the public domain, or which is otherwise provided or developed by the
Company. During our discussions about your proposed job duties, you assured us
that you would be able to perform those duties within the guidelines just
described.

You continue to agree that you will not bring onto Company premises any
unpublished documents or property belonging to any former employer or other
person to whom you have an obligation of confidentiality.

You may terminate your employment with the Company at any time and for any
reason whatsoever simply by notifying the Company. Likewise, the Company may
terminate your employment at any time and for any reason whatsoever, with or
without cause or advance notice.

This letter, together with your existing Proprietary Information and Inventions
Agreement, forms the complete and exclusive statement of your employment
agreement with the Company. The employment terms in this letter supersede any
other agreements, offer letters or promises made to you by anyone, whether oral
or written, including your prior Offer Letter dated July 22, 2005. This letter
agreement cannot be changed except in writing signed by you and a duly
authorized officer of the Company.

Please indicate your acceptance of our offer by signing below and returning the
original copy of this letter of employment from Threshold Pharmaceuticals, Inc.
under the terms described above. Should you have any questions, please contact
me at 650.474.8200.

We look forward to continuing our productive and enjoyable work relationship.

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

Sincerely,

 

/s/ Harold E. Selick

     Harold E. Selick      Chief Executive Officer     

Accepted:

    

/s/ Cathleen P Davis

    

August 8, 2006

Cathleen P. Davis      Date