EX-10.11



 Exhibit 10.11 
  

VITAL THERAPIES, INC. 

2014 EQUITY INCENTIVE PLAN 

1.          Purposes of the Plan. The purposes of this Plan are: 

 

	 	—	 	to attract and retain the best available personnel for positions of substantial responsibility, 

  

	 	—	 	to provide additional incentive to Employees, Directors and Consultants, and 

  

	 	—	 	to promote the success of the Company’s business. 

 The Plan permits the
grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units and Performance Shares. 

2.           Definitions. As used herein, the following
definitions will apply: 
 (a)        “Administrator” means the
Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan. 

(b)        “Applicable Laws” means the requirements relating to the
administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted the applicable laws of any foreign country
or jurisdiction where Awards are, or will be, granted under the Plan, and the requirements imposed by all applicable Company policies. 

(c)        “Award” means, individually or collectively, a grant
under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares. 

(d)        “Award Agreement” means the written or electronic
agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan. 

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

(f)        “Change in Control” means the occurrence of any of the
following events: 
 (i)      A change in the ownership of the Company which occurs on the
date that any one Person, or more than one Person acting as a group (collectively, a “Person” for purposes of this definition), acquires ownership of the stock of the Company that, together with the stock held by such Person,
constitutes more than fifty percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection, (a) the acquisition of additional stock by any one Person, who is considered to own
more than fifty percent (50%) of the total voting power of the stock of the Company, will not be considered a Change in Control and (b) the acquisition of additional stock of the Company by a Permitted Holder that, together with the stock
held by such Person and its Affiliates and/or Associates, constitutes more than fifty percent (50%) of the total voting power of the stock of the 







 
Company, will not be considered a Change in Control so long as such acquisition is not in connection with a transaction that results in the Company ceasing to have any class of securities
registered under the Exchange Act (i.e., a “going-private” transaction); or 

(ii)      A change in the effective control of the Company which occurs on the date that a
majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes
of this clause (ii), (a) if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control and (b) any member of the
Board that is nominated by any Permitted Holder shall be considered endorsed by a majority of the members of the Board; or 

(iii)      A change in the ownership of a substantial portion of the Company’s assets
which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such Person or Persons) assets from the Company that have a total gross fair market
value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the
following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer, or (B) a
transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, fifty percent (50%) or more of the total
value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company,
or (4) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3). For purposes of this subsection (iii), gross fair market
value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. 

For purposes of this definition, Persons will be considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company. 

Notwithstanding the foregoing, with respect to any Award that is characterized as “nonqualified deferred
compensation” within the meaning of Code Section 409A, an event shall not be considered to be a Change in Control under the Plan for purposes of payment of such Award unless such event is also a “change in ownership,” a
“change in effective control” or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of Code Section 409A. 

For purposes of this definition, a “Permitted Holder” shall mean any Person that, individually or together
with all of such Person’s Affiliates and/or Associates, is the Owner of fifteen percent (15%) or more of the outstanding Voting Stock of the Corporation at the time of the Company’s Initial Public Offering or any of such Person’s
Affiliates or Associates. All capitalized terms in the immediately preceding sentence that are not otherwise defined in this Plan shall have the meanings given to such terms in the Company’s Amended and Restated Certificate of Incorporation as
in effect immediately following the Company’s initial public offering of its Common Stock pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Initial Public Offering”). 

  
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 Further and for the avoidance of doubt, a transaction will not constitute a
Change in Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the Persons who held
the Company’s securities immediately before such transaction. 

(g)        “Code” means the Internal Revenue Code of 1986, as
amended. Reference to a specific section of the Code or regulation thereunder shall include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation. 

(h)        “Committee” means a committee of Directors or of other
individuals satisfying Applicable Laws appointed by the Board, or a duly authorized committee of the Board, in accordance with Section 4 hereof. 

(i)        “Common Stock” means the common stock of the Company.

 (j)        “Company” means Vital Therapies, Inc., a Delaware
corporation, or any successor thereto. 
 (k)        “Consultant”
means any natural person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity. 

(l)          “Director” means a member of the Board. 

(m)        “Disability” means total and permanent disability as
defined in Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform
and non-discriminatory standards adopted by the Administrator from time to time. 

(n)        “Employee” means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company. 

(o)        “Exchange Act” means the Securities Exchange Act of 1934,
as amended. 
 (p)        “Exchange Program” means a program under
which (i) outstanding Awards are surrendered or cancelled in exchange for awards of the same type (which may have higher or lower exercise prices and different terms), awards of a different type, and/or cash, (ii) Participants would have
the opportunity to transfer any outstanding Awards to a financial institution or other Person selected by the Administrator, and/or (iii) the exercise price of an outstanding Award is increased or reduced. The Administrator will determine the
terms and conditions of any Exchange Program in its sole discretion. 

(q)        “Fair Market Value” means, as of any date, the value of
Common Stock determined as follows: 
 (i)      If the Common Stock is listed on any
established stock exchange or a national market system, including without limitation the New York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market of The NASDAQ Stock Market, its Fair Market
Value will be the closing sales price for such stock (or the closing bid, if no 

  
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sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

 (ii)      If the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids and asks were reported on that date, as applicable, on the
last trading date such bids and asks were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 

(iii)      For purposes of any Awards granted on the Registration Date, the Fair Market Value
will be the initial price to the public as set forth in the final prospectus included within the registration statement on Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Company’s Common Stock;
or 
 (iv)      In the absence of an established market for the Common Stock, the Fair Market
Value will be determined in good faith by the Administrator. 

(r)        “Fiscal Year” means the fiscal year of the Company. 

(s)        “Incentive Stock Option” means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 

(t)        “Inside Director” means a Director who is an Employee.

 (u)        “Nonstatutory Stock Option” means an Option that by
its terms does not qualify or is not intended to qualify as an Incentive Stock Option. 

(v)        “Officer” means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 

(w)        “Option” means a stock option granted pursuant to the
Plan. 
 (x)        “Outside Director” means a Director who is not
an Employee. 
 (y)        “Parent” means a “parent
corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. 

(z)        “Participant” means the holder of an outstanding Award.

 (aa)       “Performance Share” means an Award denominated in Shares
which may be earned in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine pursuant to Section 10. 

(bb)       “Performance Unit” means an Award which may be earned in whole
or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section 10. 

(cc)       “Period of Restriction” means the period during which the
transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of 

  
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forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator. 

(dd)      “Person” means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a foundation, a joint venture, an unincorporated organization or a governmental or other entity. 

(ee)        “Plan” means this 2014 Equity Incentive Plan. 

(ff)        “Registration Date” means the effective date of the
first registration statement that is filed by the Company and declared effective pursuant to Section 12(g) of the Exchange Act, with respect to any class of the Company’s securities. 

(gg)      “Restricted Stock” means Shares issued pursuant to a Restricted
Stock award under Section 7 of the Plan, or issued pursuant to the early exercise of an Option. 

(hh)      “Restricted Stock Unit” means a bookkeeping entry representing an
amount equal to the Fair Market Value of one Share, granted pursuant to Section 8. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company. 

(ii)        “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. 

(jj)        “Section 16(b)” means Section 16(b) of
the Exchange Act. 
 (kk)      “Service Provider” means an Employee,
Director or Consultant. 
 (ll)        “Share” means a share of
the Common Stock, as adjusted in accordance with Section 14 of the Plan. 
 (mm)    “Stock
Appreciation Right” means an Award, granted alone or in connection with an Option, that pursuant to Section 9 is designated as a Stock Appreciation Right. 

(nn)      “Subsidiary” means a “subsidiary corporation,” whether now
or hereafter existing, as defined in Section 424(f) of the Code. 

3.          Stock Subject to the Plan. 

(a)         Stock Subject to the Plan. Subject to the
provisions of Section 14 of the Plan, the maximum aggregate number of Shares that may be issued under the Plan equals the sum of: (i) any Shares that, as of the Registration Date, have been reserved but not issued pursuant to any awards
granted under the Company’s 2012 Stock Option Plan, as amended (the “Existing Plan”) and are not subject to any awards granted thereunder, and (ii) any Shares subject to stock options or similar awards granted under the Existing
Plan that expire or otherwise terminate without having been exercised in full and Shares issued pursuant to awards granted under the Existing Plan that are forfeited to or repurchased by the Company, with the maximum number of Shares available for
issuance under the Plan pursuant to clauses (i) and (ii) equal to 3,200,000. The Shares may be authorized, but unissued, or reacquired Common Stock. 

(b)        Automatic Share Reserve Increase. The number of Shares available
for issuance under the Plan will be increased on the Registration Date, and in each Fiscal Year thereafter on the same 

  
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day of the year as the Registration Date (the “Refresh Date”), in an amount equal to the least of (i) 1,200,000 Shares, (ii) three percent (3%) of the outstanding
Shares at the close of business two days before the applicable Refresh Date, or (iii) such number of Shares determined by the Board. 

(c)        Lapsed Awards. If an Award expires or becomes unexercisable without
having been exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares, is forfeited to or repurchased by the Company due to failure to
vest, the unpurchased Shares (or for Awards other than Options or Stock Appreciation Rights the forfeited or repurchased Shares), which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has
terminated). With respect to Stock Appreciation Rights, only Shares actually issued (i.e., the net Shares issued) pursuant to a Stock Appreciation Right will cease to be available under the Plan; all remaining Shares under Stock Appreciation
Rights will remain available for future grant or sale under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become available for future
distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units are repurchased by the Company or are forfeited to the Company, such Shares
will become available for future grant under the Plan. Shares used to pay the exercise price of an Award or to satisfy the tax withholding obligations related to an Award will become available for future grant or sale under the Plan. To the extent
an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding the foregoing and, subject to adjustment as provided in
Section 14, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under Section 422 of the Code and the
Treasury Regulations promulgated thereunder, any Shares that become available for issuance under the Plan pursuant to Sections 3(b) and 3(c). 

(d)        Share Reserve. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of the Plan. 

4.          Administration of the Plan. 

(a)         Procedure. 

(i)       Multiple Administrative Bodies. Different Committees with respect to
different groups of Service Providers may administer the Plan. 

(ii)      Section 162(m). To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two (2) or more “outside
directors” within the meaning of Section 162(m) of the Code. 

(iii)      Rule 16b-3. To the extent desirable to qualify transactions hereunder as
exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3. 

(iv)      Other Administration. Other than as provided above, the Plan will be
administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy Applicable Laws. 

  
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 (b)        Powers of the
Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion: 

(i)       to determine the Fair Market Value; 

(ii)      to select the Service Providers to whom Awards may be granted hereunder; 

(iii)     to determine the number of Shares to be covered by each Award granted hereunder; 

(iv)     to approve forms of Award Agreements for use under the Plan; 

(v)      to determine the terms and conditions, not inconsistent with the terms of the Plan, of
any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine; 

(vi)     to institute and determine the terms and conditions of an Exchange Program; 

(vii)    to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan; 

(viii)   to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and
regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws; 

(ix)     to modify or amend each Award (subject to Section 19 of the Plan), including but not
limited to the discretionary authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to Section 6(b) of the Plan regarding Incentive Stock Options); 

(x)      to allow Participants to satisfy withholding tax obligations in such manner as
prescribed in Section 15 of the Plan; 
 (xi)     to authorize any person to execute on
behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator; 

(xii)    to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares
that would otherwise be due to such Participant under an Award; and 
 (xiii)   to make all other
determinations deemed necessary or advisable for administering the Plan. 

(c)        Effect of Administrator’s Decision. The
Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards. 

  
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 5.          Eligibility.
Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units may be granted to Service Providers. Incentive Stock Options may be granted only to Employees. 

6.          Stock Options. 

(a)        Limitations. Each Option will be designated in the Award Agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of
this Section 6(a), Incentive Stock Options will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted. 

(b)        Term of Option. The term of each Option will be stated in the Award
Agreement. In the case of an Incentive Stock Option, the term will be ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a
Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement. 

(c)        Option Exercise Price and Consideration. 

(i)      Exercise Price. The per share exercise price for the Shares to be issued
pursuant to exercise of an Option will be determined by the Administrator, subject to the following: 

(1)         In the case of an Incentive Stock Option 

     (A)        granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than one hundred ten
percent (110%) of the Fair Market Value per Share on the date of grant. 

     (B)        granted to any Employee other than an
Employee described in paragraph (A) immediately above, the per Share exercise price will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. 

(2)        In the case of a Nonstatutory Stock Option, the per Share exercise price
will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. 

(3)        Notwithstanding the foregoing, Options may be granted with a per Share
exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code. 

(ii)      Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised. 

  
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 (iii)       Form of Consideration. The
Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time
of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which such Option will be exercised and provided that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in
its sole discretion; (5) consideration received by the Company under a broker-assisted (or other) cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with the Plan; (6) by
net exercise; (7) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws; or (8) any combination of the foregoing methods of payment. 

(d)        Exercise of Option. 

(i)        Procedure for Exercise; Rights as a Stockholder. Any Option granted
hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share. 

An Option will be deemed exercised when the Company receives: (i) a notice of exercise (in such form as the
Administrator may specify from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with applicable withholding taxes). Full payment may
consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the
Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 14 of the Plan. 

Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and
for sale under the Option, by the number of Shares as to which the Option is exercised. 

(ii)        Termination of Relationship as a Service Provider. If a
Participant ceases to be a Service Provider, other than upon the Participant’s termination as the result of the Participant’s death or Disability, the Participant may exercise his or her Option within such period of time as is specified in
the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for three (3) months following the Participant’s termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). Unless otherwise
provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does
not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan. 

  
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 (iii)       Disability of Participant.
If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on
the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve
(12) months following the Participant’s termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). Unless otherwise provided by the Administrator, if on the date of termination
the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified
herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan. 

(iv)       Death of Participant. If a Participant dies while a Service Provider,
the Option may be exercised following the Participant’s death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in no event may the option be exercised later than
the expiration of the term of such Option as set forth in the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to Participant’s death in a form acceptable to the
Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to
the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following Participant’s death (but
in no event later than the expiration of the term of such Option as set forth in the Award Agreement). Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the Shares
covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan. 

(v)       Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if
the exercise of an Option within the applicable time periods set forth in Section 7(d) is prevented by the provisions of Section 20 below, the Option shall remain exercisable until thirty (30) days (or such longer period of time as
determined by the Administrator, in its discretion) after the date the Participant is notified by the Company that the Option is exercisable (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement).

 7.          Restricted Stock. 

(a)        Grant of Restricted Stock. Subject to the terms and provisions of
the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine. 

(b)        Restricted Stock Agreement. Each Award of Restricted Stock will be
evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines
otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed. 

(c)        Transferability. Except as provided in this Section 7 or the
Award Agreement, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction. 

  
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 (d)        Other Restrictions.
The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate. 

(e)        Removal of Restrictions. Except as otherwise provided in this
Section 7, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may
determine. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed. 

(f)        Voting Rights. During the Period of Restriction, Service Providers
holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise. 

(g)        Dividends and Other Distributions. During the Period of
Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the Administrator provides otherwise. If any such dividends or distributions
are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid. 

(h)        Return of Restricted Stock to Company. On the date set forth in the
Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan. 

8.          Restricted Stock Units. 

(a)        Grant. Restricted Stock Units may be granted at any time and from
time to time as determined by the Administrator. After the Administrator determines that it will grant Restricted Stock Units under the Plan, it will advise the Participant in an Award Agreement of the terms, conditions, and restrictions related to
the grant, including the number of Restricted Stock Units. 
 (b)        Vesting
Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant.
The Administrator may set vesting criteria based upon the achievement of Company-wide, divisional, business unit, or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws or
any other basis determined by the Administrator in its discretion. 

(c)        Earning Restricted Stock Units. Upon meeting the applicable vesting
criteria, the Participant will be entitled to receive a payout as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive
any vesting criteria that must be met to receive a payout. 
 (d)        Form
and Timing of Payment. Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) determined by the Administrator and set forth in the Award Agreement. The Administrator, in its sole discretion, may only
settle earned Restricted Stock Units in cash, Shares, or a combination of both. 

(e)        Cancellation. On the date set forth in the Award Agreement, all
unearned Restricted Stock Units will be forfeited to the Company. 

  
 -11- 








 9.          Stock
Appreciation Rights. 
 (a)        Grant of Stock Appreciation Rights.
Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion. 

(b)        Number of Shares. The Administrator will have complete discretion
to determine the number of Stock Appreciation Rights granted to any Service Provider. 

(c)        Exercise Price and Other Terms. The per share exercise price for
the Shares to be issued pursuant to exercise of a Stock Appreciation Right will be determined by the Administrator and will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. Otherwise, the
Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan. 

(d)        Stock Appreciation Right Agreement. Each Stock Appreciation Right
grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will
determine. 
 (e)        Expiration of Stock Appreciation Rights. A Stock
Appreciation Right granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(b) relating to the
maximum term and Section 6(d) relating to exercise also will apply to Stock Appreciation Rights. 

(f)        Payment of Stock Appreciation Right Amount. Upon exercise of a
Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying: 

(i)      The difference between the Fair Market Value of a Share on the date of exercise over
the exercise price; times 
 (ii)      The number of Shares with respect to which the Stock
Appreciation Right is exercised. 
 At the discretion of the Administrator, the payment upon Stock Appreciation Right
exercise may be in cash, in Shares of equivalent value, or in some combination thereof. 

10.          Performance Units and Performance Shares. 

(a)        Grant of Performance Units/Shares. Performance Units and
Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. The Administrator will have complete discretion in determining the number of Performance
Units and Performance Shares granted to each Participant. 
 (b)        Value of
Performance Units/Shares. Each Performance Unit will have an initial value that is established by the Administrator on or before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on
the date of grant. 
 (c)        Performance Objectives and Other Terms. The
Administrator will set performance objectives or other vesting provisions (including, without limitation, continued status as a 

  
 -12- 








 
Service Provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the Service
Providers. The time period during which the performance objectives or other vesting provisions must be met will be called the “Performance Period.” Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will
specify the Performance Period, and such other terms and conditions as the Administrator, in its sole discretion, will determine. The Administrator may set performance objectives based upon the achievement of Company-wide, divisional, business unit
or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws, or any other basis determined by the Administrator in its discretion. 

(d)        Earning of Performance Units/Shares.   After the
applicable Performance Period has ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of
the extent to which the corresponding performance objectives or other vesting provisions have been achieved. After the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce or waive any performance objectives or
other vesting provisions for such Performance Unit/Share. 
 (e)        Form and
Timing of Payment of Performance Units/Shares.  Payment of earned Performance Units/Shares will be made as soon as practicable after the expiration of the applicable Performance Period. The Administrator, in its sole discretion, may
pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination
thereof. 
 (f)        Cancellation of Performance
Units/Shares.   On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan. 

11.        Outside Director Limitations.  No Outside Director may be
granted, in any Fiscal Year, Awards covering more than 100,000 Shares, increased to 150,000 Shares in the Fiscal Year of his or her initial service as an Outside Director. Any Awards granted to an individual while he or she was an Employee, or while
he or she was a Consultant but not an Outside Director, shall not count for purposes of this limitation. 

12.        Leaves of Absence/Transfer Between
Locations.    Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of absence. A Participant will not cease to be an Employee in the case of
(i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed three
(3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then six (6) months following the first
(1st) day of such leave any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option. 

13.        Transferability of Awards.  Unless determined otherwise by
the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only
by the Participant. If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate. 

  
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 14.        Adjustments; Dissolution or
Liquidation; Merger or Change in Control. 
 (a)        
Adjustments.   In the event that any recapitalization, stock split, reverse stock split, stock dividend, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other
securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available
under the Plan, will adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award, and the numerical Share limits in Section 3 of the Plan. 

(b)         Dissolution or Liquidation.     In the
event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an
Award will terminate immediately prior to the consummation of such proposed action. 

(c)         Change in Control.  In the event of a merger of the
Company with or into another corporation or other entity or a Change in Control, each outstanding Award will be treated as the Administrator determines, including, without limitation, that (i) Awards may be assumed, or substantially equivalent
Awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices; (ii) upon written notice to a Participant, that the Participant’s
Awards will terminate upon or immediately prior to the consummation of such merger or Change in Control; (iii) outstanding Awards will vest and become exercisable, realizable, or payable, or restrictions applicable to an Award will lapse, in
whole or in part prior to or upon consummation of such merger or Change in Control, and, to the extent the Administrator determines, terminate upon or immediately prior to the effectiveness of such merger or Change in Control; (iv) (A) the
termination of an Award in exchange for an amount of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights as of the date of the occurrence of
the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the
Participant’s rights, then such Award may be terminated by the Company without payment), or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion; or (v) any combination
of the foregoing. In taking any of the actions permitted under this subsection 14(c), the Administrator will not be required to treat all Awards similarly in the transaction. 

In the event that the successor corporation does not assume or substitute for the Award, the Participant will fully vest in
and have the right to exercise all of his or her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock
Units will lapse, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met. In
addition, if an Option or Stock Appreciation Right is not assumed or substituted in the event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be
exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period. 

For the purposes of this subsection (c), an Award will be considered assumed if, following the Change in Control, the Award
confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of
Common Stock for each 

  
 -14- 








 
Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit, Performance Unit or Performance Share, for each Share subject to such Award, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control. 

Notwithstanding anything in this Section 14(c) to the contrary, an Award that vests, is earned or paid-out upon the
satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent; provided, however, a modification to such performance goals
only to reflect the successor corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption. 

The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or the
stockholders of the Company to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, (ii) any merger or consolidation of the Company or any
affiliate, (iii) any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock, (iv) the dissolution or liquidation of the Company or any affiliate, (v) any sale or transfer of all or
part of the assets or business of the Company or any affiliate or (vi) any other corporate act or proceeding. 

(d)         Outside Director Awards.     With respect
to Awards granted to an Outside Director, in the event of a Change in Control, the Participant will fully vest in and have the right to exercise Options and/or Stock Appreciation Rights as to all of the Shares underlying such Award, including those
Shares which would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will
be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met. 

15.         Tax. 

(a)        Withholding Requirements.  Prior to the delivery of any
Shares or cash pursuant to an Award (or exercise thereof) or such earlier time as any tax withholding obligations are due, the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an
amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof). 

(b)        Withholding Arrangements.     The
Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (a) paying cash,
(b) electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the minimum statutory amount required to be withheld, or (c) delivering to the Company already-owned Shares having a Fair
Market Value equal to the minimum statutory amount required to be withheld. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld. 

  
 -15- 








 (c)        Compliance With Code
Section 409A.  Awards will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Code Section 409A such that the grant, payment, settlement or
deferral will not be subject to the additional tax or interest applicable under Code Section 409A, except as otherwise determined in the sole discretion of the Administrator. The Plan and each Award Agreement under the Plan is intended to meet
the requirements of Code Section 409A and will be construed and interpreted in accordance with such intent, except as otherwise determined in the sole discretion of the Administrator. To the extent that an Award or payment, or the
settlement or deferral thereof, is subject to Code Section 409A the Award will be granted, paid, settled or deferred in a manner that will meet the requirements of Code Section 409A, such that the grant, payment, settlement or deferral
will not be subject to the additional tax or interest applicable under Code Section 409A. Each Participant acknowledges and agrees that the Company and its respective Subsidiaries make no representations with respect to the application of Code
Section 409A to any Award and other tax consequences to any payments under the Plan and, by the acceptance of any Award or any such payments, the Participant agrees to accept the potential application of Code Section 409A and the other tax
consequences of any payments made pursuant to the Plan. 
 16.        No Effect
on Employment or Service.  Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor will they interfere in any
way with the Participant’s right or the Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws. 

17.        Date of Grant.  The date of grant of an Award will be, for
all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time
after the date of such grant. 
 18.        Term of Plan.  Subject
to Section 23 of the Plan, the Plan will become effective upon the later to occur of (i) its adoption by the Board or (ii) the business day immediately prior to the Registration Date. It will continue in effect for a term of ten
(10) years from the date adopted by the Board, unless terminated earlier under Section 19 of the Plan. 

19.        Amendment and Termination of the Plan. 

(a)        Amendment and Termination.  The Administrator may at any
time amend, alter, suspend or terminate the Plan. 
 (b)        Stockholder
Approval.   The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. 

(c)        Effect of Amendment or Termination.  No amendment,
alteration, suspension or termination of the Plan will materially and adversely impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by
the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination. 

20.        Conditions Upon Issuance of Shares. 

(a)        Legal Compliance.    Shares will not be issued
pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with 

  
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Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance. 

(b)        Investment Representations.   As a condition to the
exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute
such Shares if, in the opinion of counsel for the Company, such a representation is required. 

21.        Inability to Obtain Authority.  The inability of the
Company to obtain authority from any regulatory body having jurisdiction or to complete or comply with the requirements of any registration or other qualification of the Shares under any state, federal or foreign law or under the rules and
regulations of the Securities and Exchange Commission, the stock exchange on which Shares of the same class are then listed, or any other governmental or regulatory body, which authority, registration, qualification or rule compliance is deemed by
the Company’s counsel to be necessary or advisable for the issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority,
registration, qualification or rule compliance will not have been obtained. 

22.        Recoupment of Awards.  A Participant’s rights with
respect to any Award hereunder shall in all events be subject to (i) any right that the Company may have under any Company recoupment policy or other agreement or arrangement with the Participant, or (ii) any right or obligation that the
Company may have regarding the clawback of “incentive-based compensation” under Section 10D of the Exchange Act and any applicable rules and regulations promulgated thereunder from time to time by the Securities and Exchange
Commission. 
 23.        Stockholder Approval.   The Plan
will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.

 24.        Governing Law.   The Plan and actions taken in
connection herewith shall be governed and construed in accordance with the laws of the State of Delaware (regardless of the law that might otherwise govern under applicable Delaware principles of conflict of laws). 

  
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 VITAL THERAPIES, INC. 

2014 EQUITY INCENTIVE PLAN 

STOCK OPTION AGREEMENT 

Unless otherwise defined herein, the terms defined in the Vital Therapies, Inc. 2014 Equity Incentive Plan (the “Plan”) will have
the same defined meanings in this Stock Option Agreement (the “Agreement”), including the Notice of Stock Option Grant (the “Notice of Grant”) and Terms and Conditions of Stock Option Grant, attached hereto as Exhibit A.

 NOTICE OF STOCK OPTION GRANT 
  

					
	Participant:	  	                                     
                                         
        	  	
			
	Address:	  	                                      
                                         
       	  	
			
		  	                                      
                                         
       	  	

 Participant has been granted an Option to purchase Common Stock of Vital Therapies, Inc. (the
“Company”), subject to the terms and conditions of the Plan and this Agreement, as follows: 
  

					
	Grant Number	  	                                     
                                         
               	  	
			
	Date of Grant	  	                                     
                                         
               	  	
			
	Vesting Commencement Date	  	                                     
                                         
               	  	
			
	Number of Shares Granted	  	                                     
                                         
               	  	
			
	Exercise Price per Share	  	$
                                         
                                         
       	  	
			
	Total Exercise Price	  	$
                                         
                                         
       	  	
			
	Type of Option	  	         Incentive Stock Option	  	
			
		  	         Nonstatutory Stock Option	  	
			
	Term/Expiration Date	  	                                     
                                        
               	  	

 Vesting Schedule: 

Subject to accelerated vesting as set forth below or in the Plan, this Option will be exercisable, in whole or in part, in accordance with the
following schedule: 
 Twenty-five percent (25%) of the Shares subject to the Option shall vest on the one (1) year anniversary of
the Vesting Commencement Date, and one forty-eighth (1/48th) of the Shares subject 

  
 - 1 - 








 
to the Option shall vest each month thereafter on the same day of the month as the Vesting Commencement Date (and if there is no corresponding day, on the last day of the month), subject to
Participant continuing to be a Service Provider through each such date. 
 Termination Period: 

This Option will be exercisable for three (3) months after Participant ceases to be a Service Provider, unless such termination is due to
Participant’s death or Disability, in which case this Option will be exercisable for twelve (12) months after Participant ceases to be a Service Provider. Notwithstanding the foregoing sentence, in no event may this Option be exercised
after the Term/Expiration Date as provided above and may be subject to earlier termination as provided in Section 14(c) of the Plan. 

By Participant’s signature and the signature of the Company’s representative below, Participant and the Company agree that this
Option is granted under and governed by the terms and conditions of the Plan and this Agreement, including exhibits hereto, all of which are made a part of this document. Participant has reviewed the Plan and this Agreement in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of the Plan and Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator upon any questions relating to the Plan and Agreement. Participant further agrees to notify the Company upon any change in the residence address indicated below. 

 

					
	PARTICIPANT	  		 	VITAL THERAPIES, INC.
		  		 	
	  
	  		 	  

	Signature	  		 	By
		  		 	
	  
	  		 	  

	Print Name	  		 	Title
		  		 	
	Address:	  		 	
		  		 	
	  
	  		 	
		  		 	
			
	  
	  		 	


  
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 EXHIBIT A 

TERMS AND CONDITIONS OF STOCK OPTION GRANT 

1. Grant of Option. The Company hereby grants to the Participant named in the Notice of Grant (the “Participant”) an option
(the “Option”) to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise Price”), subject to all of the terms and conditions in this
Agreement and the Plan, which is incorporated herein by reference. Subject to Section 19(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and
conditions of the Plan will prevail. 
 If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option is
intended to qualify as an ISO under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). However, if this Option is intended to be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule of
Code Section 422(d) it will be treated as a Nonstatutory Stock Option (“NSO”). Further, if for any reason this Option (or portion thereof) will not qualify as an ISO, then, to the extent of such nonqualification, such Option (or
portion thereof) shall be regarded as a NSO granted under the Plan. In no event will the Administrator, the Company or any Parent or Subsidiary or any of their respective employees or directors have any liability to Participant (or any other person)
due to the failure of the Option to qualify for any reason as an ISO. 
 2. Vesting Schedule. Except as provided in Section 3,
the Option awarded by this Agreement will vest in accordance with the vesting provisions set forth in the Notice of Grant. Shares scheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in Participant in
accordance with any of the provisions of this Agreement, unless Participant will have been continuously a Service Provider from the Date of Grant until the date such vesting occurs. 

3. Administrator Discretion. The Administrator, in its discretion, may accelerate the vesting of the balance, or some lesser portion of
the balance, of the unvested Option at any time, subject to the terms of the Plan. If so accelerated, such Option will be considered as having vested as of the date specified by the Administrator. 

4. Exercise of Option. 

(a) Right to Exercise. This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during
such term only in accordance with the Plan and the terms of this Agreement. 
 (b) Method of Exercise. This Option is exercisable by
delivery of an exercise notice, in the form attached as Exhibit B (the “Exercise Notice”) or in a manner and pursuant to such procedures as the Administrator may determine, which will state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice will
be completed by Participant and delivered to the Company. The Exercise Notice will be accompanied by payment of the aggregate Exercise Price as 

  
 - 3 - 








 
to all Exercised Shares together with any applicable tax withholding. This Option will be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by
the aggregate Exercise Price. 
 5. Method of Payment. Payment of the aggregate Exercise Price will be by any of the following, or a
combination thereof, at the election of Participant: 
 (a) cash; 

(b) check; 
 (c) consideration
received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan; or 
 (d) surrender of
other Shares which have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares, provided that accepting such Shares, in the sole discretion of the Administrator, will not result in any adverse
accounting consequences to the Company. 
 6. Tax Obligations. 

(a) Withholding of Taxes. Notwithstanding any contrary provision of this Agreement, no certificate representing the Shares will be
issued to Participant, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of income, employment, social insurance, payroll and other taxes which the Company
determines must be withheld with respect to such Shares. To the extent determined appropriate by the Company in its discretion, it will have the right (but not the obligation) to satisfy any tax withholding obligations by reducing the number of
Shares otherwise deliverable to Participant. If Participant fails to make satisfactory arrangements for the payment of any required tax withholding obligations hereunder at the time of the Option exercise, Participant acknowledges and agrees that
the Company may refuse to honor the exercise and refuse to deliver the Shares if such withholding amounts are not delivered at the time of exercise. 

(b) Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Participant herein is an ISO, and if Participant sells
or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Date of Grant, or (ii) the date one (1) year after the date of exercise, Participant will
immediately notify the Company in writing of such disposition. Participant agrees that Participant may be subject to income tax withholding by the Company on the compensation income recognized by Participant. 

(c) Code Section 409A. Under Code Section 409A, an option that vests after December 31, 2004 (or that vested on or prior
to such date but which was materially modified after October 3, 2004) that was granted with a per Share exercise price that is determined by the Internal Revenue Service (the “IRS”) to be less than the Fair Market Value of a Share on
the date of grant (a “Discount Option”) may be considered “deferred compensation.” A Discount Option may result in (i) income recognition by Participant prior to the exercise of the option, (ii) an additional twenty
percent (20%) federal income tax, and (iii) potential penalty and interest charges. The Discount 

  
 - 4 - 








 
Option may also result in additional state income, penalty and interest charges to the Participant. Participant acknowledges that the Company cannot and has not guaranteed that the IRS will agree
that the per Share Exercise Price of this Option equals or exceeds the Fair Market Value of a Share on the Date of Grant in a later examination. Participant agrees that if the IRS determines that the Option was granted with a per Share Exercise
Price that was less than the Fair Market Value of a Share on the Date of Grant, Participant will be solely responsible for Participant’s costs related to such a determination. 

7. Rights as Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or
privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and
delivered to Participant. After such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares. 

8. No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE
HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER.
PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE
VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A
SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE. 
 9. Address for Notices. Any notice to be given to the Company under the terms
of this Agreement will be addressed to the Company at Vital Therapies, Inc., 15010 Avenue of Science, Suite 200, San Diego, CA 92128, or at such other address as the Company may hereafter designate in writing. 

10. Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Participant only by Participant. 
 11. Binding Agreement. Subject to the
limitation on the transferability of this grant contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto. 

12. Additional Conditions to Issuance of Stock. If at any time the Company will determine, in its discretion, that the listing,
registration, qualification or rule compliance of the Shares upon any 

  
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securities exchange or under any state, federal or foreign law, the tax code and related regulations or the consent or approval of any governmental regulatory authority is necessary or desirable
as a condition to the purchase by, or issuance of Shares to, Participant (or his or her estate) hereunder, such purchase or issuance will not occur unless and until such listing, registration, qualification, rule compliance, consent or approval will
have been completed, effected or obtained free of any conditions not acceptable to the Company. The Company will make all reasonable efforts to meet the requirements of any such state, federal or foreign law or securities exchange and to obtain any
such consent or approval of any such governmental authority or securities exchange. Assuming such compliance, for income tax purposes the Exercised Shares will be considered transferred to Participant on the date the Option is exercised with respect
to such Exercised Shares. 
 13. Plan Governs. This Agreement is subject to all terms and provisions of the Plan. In the event of a
conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern. Capitalized terms used and not defined in this Agreement will have the meaning set forth in the Plan. 

14. Administrator Authority. The Administrator will have the power to interpret the Plan and this Agreement and to adopt such rules for
the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Shares subject to the Option have vested).
All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons. No member of the Administrator will be personally liable
for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement. 
 15. Electronic
Delivery. The Company may, in its sole discretion, decide to deliver any documents related to Options awarded under the Plan or future options that may be awarded under the Plan by electronic means or request Participant’s consent to
participate in the Plan by electronic means. Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or a
third party designated by the Company. 
 16. Captions. Captions provided herein are for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement. 
 17. Agreement Severable. In the event that any provision in this
Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement. 

18. Modifications to the Agreement. This Agreement constitutes the entire understanding of the parties on the subjects covered.
Participant expressly warrants that he or she is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Agreement or the Plan can be made only in an express
written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise this Agreement as it deems


  
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necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Code Section 409A or to otherwise avoid imposition of any additional tax or income
recognition under Section 409A of the Code in connection with the Option. 
 19. Amendment, Suspension or Termination of the
Plan. By accepting this Award, Participant expressly warrants that he or she has received an Option under the Plan, and has received, read and understood a description of the Plan. Participant understands that the Plan is discretionary in nature
and may be amended, suspended or terminated by the Company at any time. 
 20. Governing Law. This Agreement will be governed by the
laws of Delaware, without giving effect to the conflict of law principles thereof. For purposes of litigating any dispute that arises under this Option or this Agreement, the parties hereby submit to and consent to the jurisdiction of the State of
California, and agree that such litigation will be conducted in the courts of San Diego County, California, or the federal courts for the United States for the Southern District of California, and no other courts, where this Option is made
and/or to be performed. 
  

  
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 EXHIBIT B 

VITAL THERAPIES, INC. 

2014 EQUITY INCENTIVE PLAN 

EXERCISE NOTICE 
 Vital Therapies, Inc.

 15010 Avenue of Science, Suite 200 
 San Diego, CA 92128 

Attention: Stock Administration 
 1. Exercise
of Option. Effective as of today,             ,         , the undersigned (“Purchaser”) hereby elects to purchase
                 shares (the “Shares”) of the Common Stock of Vital Therapies, Inc. (the “Company”) under and pursuant to the 2013 Equity Incentive
Plan (the “Plan”) and the Stock Option Agreement dated                      (the “Agreement”). The purchase price for the Shares
will be $        , as required by the Agreement. 
 2. Delivery of Payment. Purchaser
herewith delivers to the Company the full purchase price of the Shares and any required tax withholding to be paid in connection with the exercise of the Option. 

3. Representations of Purchaser. Purchaser acknowledges that Purchaser has received, read and understood the Plan and the Agreement and
agrees to abide by and be bound by their terms and conditions. 
 4. Rights as Stockholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to the
Option, notwithstanding the exercise of the Option. The Shares so acquired will be issued to Purchaser as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior
to the date of issuance, except as provided in Section 14 of the Plan. 
 5. Tax Consultation. Purchaser understands that
Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase
or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice. 

  
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 6. Entire Agreement; Governing Law. The Plan and Agreement are incorporated herein by
reference. This Exercise Notice, the Plan and the Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser
with respect to the subject matter hereof, and may not be modified adversely to the Purchaser’s interest except by means of a writing signed by the Company and Purchaser. This agreement is governed by the internal substantive laws, but not the
choice of law rules, of Delaware. 
  

					
	Submitted by:	 		 	Accepted by:
			
	PURCHASER	 		 	VITAL THERAPIES, INC.
			
	  
	 		 	  

	Signature	 		 	By
			
	  
	 		 	  

	Print Name	 		 	Its
			
	Address:	 		 	
			
	  
	 		 	
			
	  
	 		 	
			
		 		 	  

		 		 	Date Received


  
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