Threshold
Pharmaceuticals, Inc.


Stock
Option Grant Notice


(2014
Equity Incentive Plan)


 


Option
Grant


Non-Employee
Director Compensation Policy


 


Threshold Pharmaceuticals, Inc. (the “Company”),
pursuant to its 2014 Equity Incentive Plan (the “Plan”), hereby grants to Optionholder an option
to purchase the number of shares of the Company’s Common Stock set forth below. This option is subject to all of the terms
and conditions as set forth in this notice, in the Option Agreement, the Plan and the Notice of Exercise, all of which are attached
hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the
Option Agreement will have the same definitions as in the Plan or the Option Agreement. If there is any conflict between the terms
in this notice and the Plan, the terms of the Plan will control.


 


	Optionholder:	

	Date of Grant:	

	Vesting Commencement Date:	

	Number of Shares Subject to Option:	

	Exercise Price (Per Share):	

	Total Exercise Price:	

	Expiration Date:	



 


	Type of Grant:	x  Nonstatutory Stock Option
	 	 
	Exercise Schedule:	


x  Same
as Vesting Schedule

	 	 
	Vesting Schedule:	[_________________]
	 	 
	Payment:	By one or a combination of the following items (described in the Option Agreement):
	 	 	 
	 	x	By cash, check, bank draft or money order payable to the Company
	 	x	Pursuant to a Regulation T Program if the shares are publicly traded
	 	x	By delivery of already-owned shares if the shares are publicly traded
	 	x     If and only to the extent this option is a Nonstatutory Stock Option, and subject to the Company’s consent at the time of exercise, by a “net exercise” arrangement


 




    	 



    	 



    

  


Additional Terms/Acknowledgements:
Optionholder acknowledges receipt of, and understands and agrees to, this Stock Option Grant Notice, the Option Agreement and the
Plan. Optionholder acknowledges and agrees that this Stock Option Grant Notice and the Option Agreement may not be modified, amended
or revised except as provided in the Plan.  Optionholder further acknowledges that as
of the Date of Grant, this Stock Option Grant Notice, the Option Agreement, and the Plan set forth the entire understanding between
Optionholder and the Company regarding this option award and supersede all prior oral and written agreements, promises and/or representations
on that subject with the exception of (i) equity awards previously granted and delivered to Optionholder, (ii) any compensation
recovery policy that is adopted by the Company or is otherwise required by applicable law and (iii) the Threshold Pharmaceuticals,
Inc. Non-Employee Director Compensation Policy or any other arrangement with the Company that would provide for vesting acceleration
of this option upon the terms and conditions set forth therein. 


 


By accepting this option, Optionholder
acknowledges having received and read this Stock Option Grant Notice, the Option Agreement and the Plan and agrees to all of the
terms and conditions set forth in these documents. Furthermore, by accepting this option, Optionholder consents to receive such
documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained
by the Company or another third party designated by the Company.


 


	Threshold Pharmaceuticals, Inc.	 	Optionholder:
	 	 	 
	By:	     	 	   
	Signature	 	Signature
	Title: 	                            	 	Date: 	                      
	Date:	          	 	 	     


 


Attachments:
Option Agreement, 2014 Equity Incentive Plan and Notice of Exercise


 




    	 



    	 



    

  





Threshold
Pharmaceuticals, Inc.


2014
Equity Incentive Plan


 


Option
Agreement


(Incentive
Stock Option or
Nonstatutory Stock Option)


 


Pursuant to your Stock
Option Grant Notice (“Grant Notice”) and this Option Agreement, Threshold Pharmaceuticals, Inc. (the
“Company”) has granted you an option under its 2014 Equity Incentive Plan (the “Plan”)
to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice at the exercise price indicated
in your Grant Notice. The option is granted to you effective as of the date of grant set forth in the Grant Notice (the “Date
of Grant”). This Option Agreement shall be deemed to be agreed to by the Company and you upon the signing or electronically
accepting by you of the Grant Notice to which it is attached. If there is any conflict between the terms in this Option Agreement
and the Plan, the terms of the Plan will control. Capitalized terms not explicitly defined in this Option Agreement or in the Grant
Notice but defined in the Plan will have the same definitions as in the Plan.


 


The details of your
option, in addition to those set forth in the Grant Notice and the Plan, are as follows:


 


1.          Vesting.
Subject to the provisions contained herein, your option will vest as provided in your Grant Notice, subject to the potential acceleration
described below in this Section 1. Vesting will cease upon the termination of your Continuous Service.


 


(a)          Fundamental
Transaction. The provisions of this Section 1(a) and not Section 9(c) of the Plan will apply to your option. In the event of
a Fundamental Transaction while you remain a member of the Board who is not an employee of the Company or any parent or subsidiary
of the Company (a “Non-Employee Director”), the shares subject to your option at such time will become
automatically vested in full so that your option will, immediately prior to the effective date of the Fundamental Transaction,
become exercisable for all of the shares of Common Stock subject to your option and may be exercised for any or all of such vested
shares. Immediately following the consummation of the Fundamental Transaction, your option will terminate and cease to be outstanding,
except to the extent assumed by the successor corporation (or Affiliate thereof). If your option is assumed in connection with
the Fundamental Transaction it will be appropriately adjusted, immediately after such Fundamental Transaction, to apply to the
number and class of securities which would have been issuable to you in consummation of such Fundamental Transaction had your option
been exercised immediately prior to such Fundamental Transaction. Appropriate adjustments will also be made to the exercise price
payable per share under your option, provided that the aggregate exercise price payable for such securities will remain the same.
To the extent the actual holders of Common Stock receive cash consideration for their Common Stock in consummation of the Fundamental
Transaction, the successor corporation may, in connection with the assumption of your outstanding option, substitute one or more
shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in
such Fundamental Transaction.


 




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(b)          Change
in Control. In the event of a Change in Control while you remain a Non-Employee Director, the shares of Common Stock at the
time subject to your option that is outstanding, but not otherwise vested, will automatically vest in full so that your option
will, immediately prior to the effective date of the Change in Control, become exercisable for all the shares of Common Stock subject
to your option as fully vested shares and may be exercised for any or all of those vested shares. Your option will remain exercisable
for such fully vested shares until the Expiration Date indicated in your Grant Notice or sooner termination of the option term
in connection with a Change in Control.


 


2.          Number
of Shares and Exercise Price. The number of shares of Common Stock subject to your option and your exercise price per
share in your Grant Notice will be adjusted for Capitalization Adjustments.


 


3.          Exercise
Restriction for Non-Exempt Employees. If you are an Employee eligible for overtime compensation under the Fair Labor
Standards Act of 1938, as amended (that is, a “Non-Exempt Employee”), and except as otherwise provided
in the Plan, you may not exercise your option until you have completed at least six (6) months of Continuous Service measured from
the Date of Grant, even if you have already been an employee for more than six (6) months. Consistent with the provisions of the
Worker Economic Opportunity Act, you may exercise your option as to any vested portion prior to such six (6) month anniversary
in the case of (i) your death or disability, (ii) a Fundamental Transaction in which your option is not assumed, continued or substituted,
(iii) a Change in Control or (iv) your termination of Continuous Service on your “retirement” (as defined in the Company’s
benefit plans).


 


4.          Exercise
prior to Vesting (“Early Exercise”). If permitted in your Grant Notice (i.e., the “Exercise
Schedule” indicates “Early Exercise Permitted”) and subject to the provisions of your option, you may elect at
any time that is both (i) during the period of your Continuous Service and (ii) during the term of your option, to exercise all
or part of your option, including the unvested portion of your option; provided, however, that:


 


(a)          a
partial exercise of your option will be deemed to cover first vested shares of Common Stock and then the earliest vesting installment
of unvested shares of Common Stock;


 


(b)          any
shares of Common Stock so purchased from installments that have not vested as of the date of exercise will be subject to the purchase
option in favor of the Company as described in the Company’s form of Early Exercise Stock Purchase Agreement;


 


(c)          you
will enter into the Company’s form of Early Exercise Stock Purchase Agreement with a vesting schedule that will result in
the same vesting as if no early exercise had occurred; and


 


(d)          if
your option is an Incentive Stock Option, then, to the extent that the aggregate Fair Market Value (determined at the Date of Grant)
of the shares of Common Stock with respect to which your option plus all other Incentive Stock Options you hold are exercisable
for the first time by you during any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand
dollars ($100,000), your option(s) or portions thereof that exceed such limit (according to the order in which they were granted)
will be treated as Nonstatutory Stock Options.


 




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5.          Method
of Payment. You must pay the full amount of the exercise price for the shares you wish to exercise. You may pay the
exercise price in cash or by check, bank draft or money order payable to the Company or in any other manner permitted by
your Grant Notice, which may include one or more of the following:


 


(a)          Provided
that at the time of exercise the Common Stock is publicly traded, pursuant to a program developed under Regulation T as promulgated
by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the
Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds.
This manner of payment is also known as a “broker-assisted exercise”, “same day sale”, or “sell to
cover”.


 


(b)          Provided
that at the time of exercise the Common Stock is publicly traded, by delivery to the Company (either by actual delivery or attestation)
of already-owned shares of Common Stock that are owned free and clear of any liens, claims, encumbrances or security interests,
and that are valued at Fair Market Value on the date of exercise. “Delivery” for these purposes, in the sole discretion
of the Company at the time you exercise your option, will include delivery to the Company of your attestation of ownership of such
shares of Common Stock in a form approved by the Company. You may not exercise your option by delivery to the Company of Common
Stock if doing so would violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s
stock.


 


(c)          If
this option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise, by a “net exercise”
arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise of your option
by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price. You must pay
any remaining balance of the aggregate exercise price not satisfied by the “net exercise” in cash or other permitted
form of payment. Shares of Common Stock will no longer be outstanding under your option and will not be exercisable thereafter
if those shares (i) are used to pay the exercise price pursuant to the “net exercise,” (ii) are delivered to you as
a result of such exercise, and (iii) are withheld to satisfy tax withholding obligations.


 


6.          Whole
Shares. You may exercise your option only for whole shares of Common Stock.


 


7.          Securities
Law Compliance. In no event may you exercise your option unless the shares of Common Stock issuable upon such exercise
are then registered under the Securities Act or, if not registered, the Company has determined that your exercise and the issuance
of the shares would be exempt from the registration requirements of the Securities Act. The exercise of your option also must comply
with all other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines
that such exercise would not be in material compliance with such laws and regulations (including any restrictions on exercise required
for compliance with Treas. Reg. 1.401(k)-1(d)(3), if applicable).


 




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8.          Term.
You may not exercise your option before the Date of Grant or after the expiration of the option’s term. The term of your
option expires, subject to the provisions of Section 5(h) of the Plan and the provisions of Section 1(a) of this Option Agreement,
upon the earliest of the following:


 


(a)          immediately
upon the termination of your Continuous Service for Cause;


 


(b)          three
(3) months after the termination of your Continuous Service for any reason other than Cause, your Disability or your death
(except as otherwise provided in Section 8(e) below); provided, however, that if during any part of such three (3) month
period your option is not exercisable solely because of the condition set forth in the section above relating to “Securities
Law Compliance,” your option will not expire until the earlier of the Expiration Date or until it has been exercisable for
an aggregate period of three (3) months after the termination of your Continuous Service; provided further, if during any
part of such three (3) month period, the sale of any Common Stock received upon exercise of your option would violate the Company’s
insider trading policy, then your option will not expire until the earlier of the Expiration Date or until it has been exercisable
for an aggregate period of three (3) months (that need not be consecutive) after the termination of your Continuous Service during
which the sale of the Common Stock received upon exercise of your option would not be in violation of the Company’s insider
trading policy. Notwithstanding the foregoing, if (i) you are a Non-Exempt Employee, (ii) your Continuous Service terminates within
six (6) months after the Date of Grant, and (iii) you have vested in a portion of your option at the time of your termination of
Continuous Service, your option will not expire until the earlier of (x) the later of (A) the date that is seven (7) months after
the Date of Grant, and (B) the date that is three (3) months (that need not be consecutive) after the termination of your Continuous
Service, and (y) the Expiration Date;


 


(c)          three
(3) months following the beginning of your leave of absence (other than a personal or medical leave of absence approved by an authorized
representative of the Company with employment guaranteed upon return) (except as otherwise provided in Section 8(e) below);


 


(d)          twelve
(12) months after the termination of your Continuous Service due to your Disability (except as otherwise provided in Section 8(e))
below;


 


(e)          eighteen
(18) months after your death if you die either during your Continuous Service or within three (3) months after your Continuous
Service terminates for any reason other than Cause;


 


(f)          the
Expiration Date indicated in your Grant Notice; or


 


(g)          the
day before the tenth (10th) anniversary of the Date of Grant.


 




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If your option is an
Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, the Code
requires that at all times beginning on the Date of Grant and ending on the day three (3) months before the date of your option’s
exercise, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability. The Company
has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that
your option will necessarily be treated as an Incentive Stock Option if you continue to provide services to the Company or an Affiliate
as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three (3) months
after the date your employment with the Company or an Affiliate terminates.


 


9.          Exercise.


 


(a)          You
may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so permits) during
its term by delivering a Notice of Exercise (in a written or electronic form designated by the Company) or taking such other action
as the Company may require together with delivering the exercise price and any applicable withholding taxes to the Company’s
Secretary or to such other person as the Company may designate (such as any broker designated by the Company to effect option exercises)
during regular business hours, together with such additional documents as the Company may then require.


 


(b)          By
exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into
an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason
of (i) the exercise of your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common Stock are
subject at the time of exercise, or (iii) the disposition of shares of Common Stock acquired upon such exercise.


 


(c)          If
your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within
fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option
that occurs within two (2) years after the Date of Grant or within one (1) year after such shares of Common Stock are transferred
upon exercise of your option.


 


10.         Transferability.
Except as otherwise provided in this Section 10, your option is not transferable, except by will or by the laws of
descent and distribution, and is exercisable during your life only by you. 


 


(a)          Certain
Trusts. Upon receiving written permission from the Board or its duly authorized designee, you may transfer your option to
a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law)
while the option is held in the trust. You and the trustee must enter into transfer and other agreements required by the Company.


 




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(b)          Domestic
Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided that you
and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your option pursuant
to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as
permitted by Treasury Regulation 1.421-1(b)(2) that contains the information required by the Company to effectuate the transfer.
You are encouraged to discuss the proposed terms of any division of this option with the Company prior to finalizing the domestic
relations order or marital settlement agreement to help ensure the required information is contained within the domestic relations
order or marital settlement agreement. If this option is an Incentive Stock Option, this option may be deemed to be a Nonstatutory
Stock Option as a result of such transfer.


  


(c)          Beneficiary
Designation. Upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written
notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option exercises,
designate a third party who, on your death, will thereafter be entitled to exercise this option and receive the Common Stock or
other consideration resulting from such exercise. In the absence of such a designation, your executor or administrator of your
estate will be entitled to exercise this option and receive, on behalf of your estate, the Common Stock or other consideration
resulting from such exercise.


 


11.         Option
not a Service Contract. Your option is not an employment or service contract, and nothing in your option will be deemed
to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the
Company or an Affiliate to continue your employment. In addition, nothing in your option will obligate the Company or an Affiliate,
their respective stockholders, boards of directors, officers or employees to continue any relationship that you might have as a
Director or Consultant for the Company or an Affiliate.


 


12.         Withholding
Obligations.


 


(a)          At
the time you exercise your option, in whole or in part, and at any time thereafter as requested by the Company, you hereby authorize
withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by
means of a “same day sale” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or an Affiliate, if any, which arise in connection with the exercise of your option.


 


(b)          If
this option is a Nonstatutory Stock Option, then upon your request and subject to approval by the Company, and compliance with
any applicable legal conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable
to you upon the exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the
Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount
as may be necessary to avoid classification of your option as a liability for financial accounting purposes). If the date of determination
of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant
to the preceding sentence shall not be permitted unless you make a proper and timely election under Section 83(b) of the Code,
covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is
otherwise deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of your option.
Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common
Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such exercise. Any adverse consequences
to you arising in connection with such share withholding procedure shall be your sole responsibility.


 




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(c)          You
may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly,
you may not be able to exercise your option when desired even though your option is vested, and the Company will have no obligation
to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein,
if applicable, unless such obligations are satisfied.


 


13.         Tax
Consequences. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation
programs in a manner that minimizes your tax liabilities. You will not make any claim against the Company, or any of its Officers,
Directors, Employees or Affiliates related to tax liabilities arising from your option or your other compensation. In particular,
you acknowledge that this option is exempt from Section 409A of the Code only if the exercise price per share specified in the
Grant Notice is at least equal to the “fair market value” per share of the Common Stock on the Date of Grant and there
is no other impermissible deferral of compensation associated with the option.


 


14.         Notices.
Any notices provided for in your option or the Plan will be given in writing (including electronically) and will be deemed effectively
given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United
States mail, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion,
decide to deliver any documents related to participation in the Plan and this option by electronic means or to request your consent
to participate in the Plan by electronic means. By accepting this option, you consent to receive such documents by electronic delivery
and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third
party designated by the Company.


 


15.         Governing
Plan Document. Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part
of your option, and is further subject to all interpretations, amendments, rules and regulations, which may from time to time be
promulgated and adopted pursuant to the Plan. If there is any conflict between the provisions of your option and those of the Plan,
the provisions of the Plan will control. In addition, your option (and any compensation paid or shares issued under your option)
is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing
regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required by applicable
law.


 


16.         Other
Documents. You hereby acknowledge receipt of and the right to receive a document providing the information required
by Rule 428(b)(1) promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt
of the Company’s policy permitting certain individuals to sell shares only during certain “window” periods and
the Company’s insider trading policy, in effect from time to time.


 




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17.         Arbitration.
All disputes, claims, or causes of action, in law or equity, arising from or relating to the enforcement, breach, performance,
or interpretation of this Agreement and the Plan will be finally resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16,
and to the fullest extent permitted by law, by final, binding and confidential arbitration in accordance with the then existing
rules of the American Arbitration Association. The arbitration will be conducted in the county in Santa Clara County, California.
Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction over it; provided that nothing
in this Agreement shall prevent either party from applying to a court of competent jurisdiction to obtain temporary relief pending
resolution of the dispute through arbitration.


 


18.         Effect
on Other Employee Benefit Plans. The value of this option will not be included as compensation, earnings, salaries,
or other similar terms used when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate,
except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any
of the Company’s or any Affiliate’s employee benefit plans.


 


19.         Voting
Rights. You will not have voting or any other rights as a stockholder of the Company with respect to the shares to be
issued pursuant to this option until such shares are issued to you. Upon such issuance, you will obtain full voting and other rights
as a stockholder of the Company. Nothing contained in this option, and no action taken pursuant to its provisions, will create
or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.


 


20.         Severability.
If all or any part of this Option Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid,
such unlawfulness or invalidity will not invalidate any portion of this Option Agreement or the Plan not declared to be unlawful
or invalid. Any Section of this Option Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible,
be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible
while remaining lawful and valid.


 


21.         Miscellaneous.


 


(a)          The
rights and obligations of the Company under your option will be transferable to any one or more persons or entities, and all covenants
and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns.


 


(b)          You
agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company
to carry out the purposes or intent of your option.


 


(c)          You
acknowledge and agree that you have reviewed your option in its entirety, have had an opportunity to obtain the advice of counsel
prior to executing and accepting your option, and fully understand all provisions of your option.


  




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(d)          This
Option Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies
or national securities exchanges as may be required.


 


(e)          All
obligations of the Company under the Plan and this Option Agreement will be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of the Company.


 


***


 


This Option Agreement
will be deemed to be signed by you upon the signing by you of the Stock Option Grant Notice to which it is attached.


 




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