Document:

EX-10.5

 Exhibit 10.5 

 
 

 
 August 26, 2013 
 Mr. Michael Swanson 
 1081 Calle Anacapa 

Encinitas, CA 92024 
 Re: Offer of Employment

 Dear Mike: 
 I
am pleased to offer you a position with Vital Therapies, Inc. (“Company” or “we”) as its Chief Financial Officer. This is an exempt position with a start date of August 30, 2013. 

If you join the Company, you will report to the Company’s Chief Executive Officer, with responsibilities as defined in the job
description to be provided to you or as otherwise reasonably assigned to you by your supervisor. You also will be a member of the Executive Committee. During your employment with the Company, you will perform your duties faithfully and to the best
of your ability and will devote your full business efforts and time to the Company. You agree not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior approval of the
Company’s board of directors (the “Board”) during the term of your employment with the Company. 
 If you join
the Company, the terms and your compensation will be as follows: 
  

	 	1.	Base Salary: Your base salary will be $13,541.67 per semi-monthly pay period (equivalent to $325,000 annually), less applicable withholdings and deductions. Your
base salary will be paid periodically in accordance with the Company’s normal payroll practices and be subject to the usual, required withholdings. Your base salary will be subject to review and adjustments will be made based upon the
Company’s normal performance review practices. 

  

	 	2.	 Target Bonus: You will be eligible to earn an annual bonus of 25% of your base salary at target, based on achieving a combination of individual
goals and Company financial goal(s). Your 2013 bonus opportunity will be based on the previously-approved Company financial goal(s), and will be pro-rated based on the number of days that you are employed with the Company during 2013. Any bonus, or
any portion thereof, will be paid, less applicable withholdings and deductions, as soon as practicable after it is determined that it has been earned, but in no event shall it be paid after the later of (i) the fifteenth (15th) day of the third (3rd) month following the close of the Company’s fiscal

 15222 B Avenue of Science, San Diego, CA 92128 

Tel 858-673-6840 Fax 858-673-6843 

  Page
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 Michael Swanson 

 

	 	year in which such bonus is earned or (ii) March 15 following the calendar year in which such bonus is earned. 

 

	 	3.	 Options: At the next meeting of the Board, it will be recommended that you receive an option to purchase 90,000 shares of the Company’s
common stock (the “Option”), which Option will have an exercise price equal to the fair market value of a share of the Company’s common stock at time of grant as determined by the Board, in its sole discretion. The number of shares
subject to the Option represents approximately 0.62% of the Company’s fully diluted common stock (on an as-converted basis) as of June 26, 2013, the date of the Company’s most recent Senior Preferred Stock closing. The Option will be
subject to a four-year vesting schedule with 1/48th of the shares subject to the Option vesting on the one-month anniversary of your employment start date and 1/48th of the shares subject to such Option vesting on each monthly anniversary thereafter, in all cases, subject to your
continuing to provide services to the Company through each vesting date. The Option will be subject to the terms, definitions and provisions of the Company’s 2012 Stock Option Plan, as amended (the “Option Plan”) and the stock option
agreement by and between you and the Company (the “Option Agreement”), both of which documents are incorporated herein by reference. 

  

	 	4.	Benefits: You will be eligible to participate in all of the Company benefit plans as available, including group health insurance and paid time off, based on
policies in effect during your employment. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time. 

 

	 	5.	Severance: With the approval of the Board, you will be permitted to enter into our standard Change of Control and Severance Agreement (the “Severance
Agreement”) applicable to you based on your senior position with the Company, which agreement will become effective upon an initial public offering of the Company’s securities. The Severance Agreement will set forth the severance payments
and benefits to which you would be entitled in connection with certain terminations of employment, which would be in lieu of any other severance or other benefits you would otherwise be entitled to under any plan, program or policy that the Company
may have in effect from time to time. 

 Your employment with the Company will be “at will.” It is for
no specified term, and may be terminated by you or the Company at any time, with or without cause or advance notice. Although the Company may change the terms and conditions of your employment from time-to-time, (including, but not limited to,
changes in your position, compensation, and/or benefits), nothing will change the at-will employment relationship between you and the Company. In addition, the compensation terms described herein will not affect your at-will employment status.

  Page
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 Michael Swanson 

 

 The Company reserves the right to conduct background investigations and/or reference
checks on all of its potential employees. Your job offer, therefore, is contingent upon a clearance of such a background investigation and/or reference checks, if any. 
 For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must
be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated. 
 As an employee of the Company, you will have access to certain confidential information of the Company and you may, during the course of your employment, develop certain information or inventions that
will be the property of the Company. To protect the interests of the Company, you will be expected to sign and comply the terms of the Company’s Employee Innovations and Proprietary Rights Assignment Agreement (the “Confidentiality
Agreement”) and other compliance agreements, in each case, in the forms attached hereto as Appendix A. 
 In the
event of any dispute or claim relating to or arising out of your employment relationship with the Company, this letter, the Confidentiality Agreement, or the termination of your employment with the Company for any reason (including, but not limited
to, any claims of breach of contract, wrongful termination or age, sex, race, national origin, disability or other discrimination or harassment), you and the Company agree to be bound by the arbitration terms set forth on Appendix B attached
hereto. 
 This Agreement, along with the Confidentiality Agreement, the Severance Agreement, and the Option Plan and Option
Agreement, constitute the entire agreement between you and the Company regarding the subject matters discussed herein, and they supersede all prior negotiations, representations or agreements between you and the Company. This letter agreement may
only be modified by a written agreement signed by you and the Company’s Chief Executive Officer. 
 To accept the
Agreement, please sign in the space indicated and return it to the Company. 
  

			
	Sincerely,
	
	VITAL THERAPIES, INC.
		
	By	 	/s/ Terry Winters
		 	Terry Winters, CEO

  Page
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 Michael Swanson 

 

 I have read and understood this Agreement and Appendix B and hereby acknowledge,
accept and agree to the terms as set forth herein and in Appendix B and further acknowledge that no other commitments were made to me as part of my employment offer except as specifically set forth herein. 

					
			
	Date: August 30, 2013	 		 	/s/ Michael V. Swanson
		 		 	Michael V. Swanson

 Appendix A 

EMPLOYEE INNOVATIONS AND PROPRIETARY RIGHTS 
 ASSIGNMENT AGREEMENT 
 THIS EMPLOYEE INNOVATIONS AND PROPRIETARY RIGHTS ASSIGNMENT
AGREEMENT (this “Agreement”) is intended to formalize in writing certain understandings and procedures that have been in effect since the time I was initially employed by Vital Therapies, Inc. (“VTI”). In return for my new or
continued employment by VTI and other good and valuable consideration, the receipt and sufficiency of which I hereby acknowledge, I acknowledge and agree that: 
 1. Duties; At-Will Employment; No Conflict. I will perform for VTI such duties as may be designated by VTI from time to time. I agree that my employment with
VTI is for no specified term, and may be terminated by VTI at any time, with or without cause, and with or without notice. Similarly, I may terminate my employment with VTI at any time, with or without cause, and with or without notice. During my
period of employment by VTI, I will devote my best efforts to the interests of VTI and will not engage in other employment or in any activities determined by VTI to be detrimental to the best interests of VTI without the prior written consent of
VTI. 
 2. Prior Work. All previous work done by me for VTI relating in any way to the conception, reduction to practice,
creation, derivation, design, development, manufacture, sale or support of products or services for VTI is the property of VTI, and I hereby assign to VTI all of my right, title and interest in and to such previous work. 

3. Proprietary Information. My employment creates a relationship of confidence and trust between VTI and me with respect to any
information: 
  

	 	•	 	 Applicable to the business of VTI; or 

  

	 	•	 	 Applicable to the business of any client or customer of VTI, which may be made known to me by VTI or by any client or customer of VTI, or learned by me
in such context during the period of my employment. 

 All such information has commercial value in the business in which VTI
is engaged and is hereinafter called “Proprietary Information.” Proprietary Information shall mean all information of any kind whatsoever (including without limitation patent, copyright, trade secret and other proprietary information,
data, compilations, formulae, models, patent disclosures, procedures, processes, projections, protocols, results of experimentation and testing, specifications, strategies and techniques), and all tangible and intangible embodiments thereof of any
kind whatsoever (including without limitation, apparatus, compositions, documents, drawings, machinery, patent applications, records, reports). Proprietary Information also includes proprietary or confidential information of any third party who may
disclose such information to VTI or to me in the course of VTI’s business. 

 4. Ownership and Nondisclosure of Proprietary Information. All Proprietary
Information is the sole property of VTI, VTI’s assigns, and VTI’s customers, and VTI, VTI’s assigns, and VTI’s customers shall be the sole and exclusive owner of all patents, copyrights, mask works, trade secrets and other
intellectual property rights in and to the Proprietary Information. I hereby do and will assign to VTI all rights, title and interest I may have or acquire in the Proprietary Information. At all times, both during my employment by VTI and after
termination of such employment, I will keep in confidence and trust all Proprietary Information, and I will not use, disseminate, or disclose any Proprietary Information or anything directly relating to Proprietary Information without the written
consent of VTI, except as may be necessary in the ordinary course of performing my duties as an employee of VTI. 
 5.
Ownership and Return of Materials. All materials (including without limitation data, compilations, formulae, models, patent disclosures, procedures, processes, projections, protocols, results of experimentation and testing, specifications,
strategies and techniques, and all other tangible media of expression) furnished to me by VTI shall remain the property of VTI. Upon termination of my employment, or at any time on the request of VTI before termination, I will promptly (but no later
than five (5) days after the earlier of my employment’s termination or VTI’s request) destroy or deliver to VTI, at VTI’s option, (a) all materials furnished to me by VTI, (b) all tangible media of expression which are
in my possession and which incorporate any Proprietary Information or otherwise relate to VTI’s business, and (c) written certification of my compliance with my obligations under this sentence. 

6. Innovations. As used in this Agreement, the term “Innovations” means all processes, machines, manufactures,
compositions of matter, improvements, inventions (whether or not protectable under patent laws), works of authorship, information fixed in any tangible medium of expression (whether or not protectable under copyright laws), moral rights, mask works,
trademark, trade names, trade dress, trade secrets, know-how, ideas (whether or not protectable under trade secret laws), and all other subject matter protectable under patent, copyright, moral right, mask work, trademark, trade secret or other
laws, and includes without limitation all new or useful art, combinations, discoveries, formulae, manufacturing techniques, technical developments, discoveries, artwork, software, and designs. “Innovations” includes “Inventions,”
which is defined to mean any inventions protected under patent laws. 
 7. Disclosure of Prior Innovations. I have
identified on Exhibit A (Prior Innovations) attached hereto all Innovations, applicable to the business of VTI or relating in any way to VTI’s business or demonstrably anticipated research and development or business, which were conceived,
reduced to practice, created, derived, developed, or made by me prior to my employment with VTI (collectively, the “Prior Innovations”), and I represent that such list is complete. I represent that I have no rights in any such Innovations
other than those Prior Innovations specified in Exhibit A (Prior Innovations). If there is no such list on Exhibit A (Prior Innovations), I represent that I have neither conceived, reduced to practice, created, derived, developed nor made
any such Prior Innovations at the time of signing this Agreement. 
 8. Assignment of Innovations; License of Prior
Innovations. I hereby agree promptly to disclose and describe to VTI, and I hereby do and will assign to VTI or VTI’s 

  
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designee my entire right, title, and interest in and to, (a) each of the Innovations (including without limitation Inventions), and any associated intellectual property rights, which I may
solely or jointly conceive, reduce to practice, create, derive, develop or make during the period of my employment with VTI, which either (i) relate, at the time of conception, reduction to practice, creation, derivation, development, or making
of such Innovation, to VTI’s business or actual or demonstrably anticipated research or development, or (ii) were developed on any amount of VTI’s time or with the use of any of VTI’s equipment, supplies, facilities or trade
secret information, or (iii) resulted from any work I performed for VTI, and (b) each of the Innovations which is not an Invention (as demonstrated by me by evidence meeting the clear and convincing standard of proof), and any associated
intellectual property rights, which I may solely or jointly conceive, develop, reduce to practice, create, derive, develop, or make during the period of my employment with VTI, which are applicable to the business of VTI (collectively, the
Innovations identified in clauses (a) and (b) are hereinafter the “VTI Innovations”). To the extent any of the rights, title and interest in and to VTI Innovations cannot be assigned by me to VTI, I hereby grant to VTI an
exclusive, royalty-free, transferable, irrevocable, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to practice such non-assignable rights, title and interest. To the extent any of the rights, title and interest
in and to VTI Innovations can be neither assigned nor licensed by me to VTI, I hereby irrevocably waive and agree never to assert such non-assignable and non-licensable rights, title and interest against VTI or any of VTI’s successors in
interest to such non-assignable and non-licensable rights. I hereby grant to VTI or VTI’s designees a royalty free, irrevocable, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to practice all applicable
patent, copyright, moral right, mask work, trade secret and other intellectual property rights relating to any Prior Innovations which I incorporate, or permit to be incorporated, in any VTI Innovations. Notwithstanding the foregoing, I agree that I
will not incorporate, or permit to be incorporated, any Prior Innovations in any VTI Innovations without VTI’s prior written consent. 
 9. Future Innovations. I recognize that Innovations or Proprietary Information relating to my activities while working for VTI and conceived, reduced to practice, created, derived, developed, or
made by me, alone or with others, within three (3) months after termination of my employment may have been conceived, reduced to practice, created, derived, developed, or made, as applicable, in significant part while employed by VTI.
Accordingly, I agree that such Innovations and Proprietary Information shall be presumed to have been conceived, reduced to practice, created, derived, developed, or made, as applicable, during my employment with VTI and are to be promptly assigned
to VTI unless and until I have established the contrary by written evidence satisfying the clear and convincing standard of proof. To the extent any of the rights, title and interest in and to such Innovations and Proprietary Information cannot be
assigned by me to VTI, I hereby grant to VTI an exclusive, royalty-free, transferable, irrevocable, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to practice such non-assignable rights, title and interest. To
the extent any of the rights, title and interest in and to such Innovations and Proprietary Information can be neither assigned nor licensed by me to VTI, I hereby irrevocably waive and agree never to assert such non-assignable and non-licensable
rights, title and interest against VTI or any of VTI’s successors in interest to such non-assignable and non-licensable rights. I hereby grant to VTI or VTI’s designees a royalty free, irrevocable, worldwide license (with rights to
sublicense through multiple tiers of 

  
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sublicensees) to practice all applicable patent, copyright, moral right, mask work, trade secret and other intellectual property rights relating to any Prior Innovations which I incorporate, or
permit to be incorporated, in any such Innovations and Proprietary Information. 
 10. Cooperation in Perfecting Rights to
Proprietary Information and Innovations. 
  

	 	•	 	 I agree to perform, during and after my employment, all acts deemed necessary or desirable by VTI to permit and assist VTI, at VTI’s expense, in
obtaining and enforcing the full benefits, enjoyment, rights and title throughout the world in the Proprietary Information and Innovations assigned or licensed to, or whose rights are irrevocably waived and shall not be asserted against, VTI under
this Agreement. Such acts may include, but are not limited to, execution of documents and assistance or cooperation (i) in the filing, prosecution, registration, and memorialization of assignment of any applicable patents, copyrights, mask
work, or other applications, (ii) in the enforcement of any applicable patents, copyrights, mask work, moral rights, trade secrets, or other proprietary rights, and (iii) in other legal proceedings related to the Proprietary Information or
Innovations. 

  

	 	•	 	 In the event that VTI is unable for any reason to secure my signature to any document required to file, prosecute, register, or memorialize the
assignment of any patent, copyright, mask work or other applications or to enforce any patent, copyright, mask work, moral right, trade secret or other proprietary right under any Proprietary Information (including improvements thereof) or any
Innovations (including derivative works, improvements, renewals, extensions, continuations, divisionals, continuations in part, continuing patent applications, reissues, and reexaminations thereof), I hereby irrevocably designate and appoint VTI and
VTI’s duly authorized officers and agents as my agents and attorneys-in-fact to act for and on my behalf and instead of me, (i) to execute, file, prosecute,
register and memorialize the assignment of any such application, (ii) to execute and file any documentation required for such enforcement, and (iii) to do all other lawfully permitted acts to further the filing, prosecution, registration,
memorialization of assignment, issuance, and enforcement of patents, copyrights, mask works, moral rights, trade secrets or other rights under the Proprietary Information, or Innovations, all with the same legal force and effect as if executed by
me. 

 11. No Violation of Rights of Third Parties. My performance of all the terms of this Agreement
and as an employee of VTI does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by me prior to my employment with VTI, and I will not disclose to VTI, or induce VTI to use, any
confidential or proprietary information or material belonging to any previous employer or others. I am not a party to any other agreement that will interfere with my full compliance with this Agreement. I agree not to enter into any agreement,
whether written or oral, in conflict with the provisions of this Agreement. 
 12. Survival. This Agreement (a) shall
survive my employment by VTI; (b) does not in any way restrict my right or the right of VTI to terminate my employment at any time, for any 

  
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reason or for no reason; (c) inures to the benefit of successors and assigns of VTI; and (d) is binding upon my heirs and legal representatives. 

13. Nonassignable Inventions. This Agreement does not apply to an Invention that qualifies fully as a nonassignable invention under
the provisions of Section 2870 of the California Labor Code. I acknowledge that a condition for an Invention to qualify fully as a non-assignable invention under the provisions of Section 2870 of the California Labor Code is that the
invention must be protected under patent laws. I have reviewed the notification in Exhibit B (Limited Exclusion Notification) and agree that my signature acknowledges receipt of the notification. However, I agree to disclose promptly in writing
to VTI all Innovations (including Inventions) conceived, reduced to practice, created, derived, developed, or made by me during the term of my employment and for three (3) months thereafter, whether or not I believe such Innovations are subject
to this Agreement, to permit a determination by VTI as to whether or not the Innovations should be the property of VTI. Any such information will be received in confidence by VTI. 

14. No Solicitation. During the term of my employment with VTI and for a period of two (2) years thereafter, I will not
solicit, encourage, or cause others to solicit or encourage any employees of VTI to terminate their employment with VTI. 
 15.
Injunctive Relief. A breach of any of the promises or agreements contained herein will result in irreparable and continuing damage to VTI for which there will be no adequate remedy at law, and VTI shall be entitled to injunctive relief and/or
a decree for specific performance, and such other relief as may be proper (including monetary damages if appropriate). 
 16.
Notices. Any notice required or permitted by this Agreement shall be in writing and deemed delivered upon receipt. Notices to me shall be sent to any address in VTI’s records or such other address as I may specify in writing. Notices to
VTI shall be sent to VTI’s Human Resources Department or to such other address as VTI may specify in writing. 
 17.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of law principles thereof. 

18. Severability. If any provision of this Agreement is held by a court of law to be illegal, invalid or unenforceable,
(a) that provision shall be deemed amended to achieve as nearly as possible the same economic effect as the original provision, and (b) the legality, validity and enforceability of the remaining provisions of this Agreement shall not be
affected or impaired thereby. 
 19. Waiver. The waiver by VTI of a term or provision of this Agreement, or of a breach of
any provision of this Agreement by me, shall not be effective unless such waiver is in writing signed by VTI. No waiver by VTI of, or consent by VTI to, a breach by me, will constitute a waiver of, consent to or excuse of any other or subsequent
breach by me. 

  
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 20. Amendment and Modification. No change, modification, extension, or termination of
this Agreement, or any of the provisions herein contained, shall be valid unless made in writing and signed by VTI and me. 
 21.
Assignment. I will not assign or transfer this Agreement or any of the rights or obligations therein without the prior written consent of VTI. 
 22. Entire Agreement. This Agreement represents the entire agreement between VTI and me regarding the subject matter hereof and shall supersede all previous communications, representations,
understandings and agreements, whether oral or written, by or between VTI and me with respect to the subject matter hereof. 
 I certify and
acknowledge that I have carefully read all of the provisions of this Agreement and that I understand and will fully and faithfully comply with such provisions. 
  

			
	
	
	/s/ Michael V. Swanson
		
	Name:	 	Michael V. Swanson
		
	Dated:	 	August 30, 2013

 Agreed to and accepted: 
  

					
	VITAL THERAPIES, INC.
		
	By:	 	/s/ Terry Winters
		
	Title:	 	CEO
		
	Dated:	 	August 30, 2013

  
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 Exhibit A 

PRIOR INNOVATIONS 
  

 Exhibit B 

LIMITED EXCLUSION NOTIFICATION 

THIS IS TO NOTIFY you in accordance with Section 2872 of the California Labor Code that the foregoing Agreement between you and VTI does not require
you to assign or offer to assign to VTI any invention that you developed entirely on your own time without using VTI’s equipment, supplies, facilities or trade secret information except for those inventions that either: 

 

	 	1	Relate at the time of conception or reduction to practice of the invention to VTI’s business, or actual or demonstrably anticipated research or development of VTI;
or 

  

	 	2	Result from any work performed by you for VTI. 

To the extent a provision in the foregoing Agreement purports to require you to assign an invention otherwise excluded from the preceding paragraph, the
provision is against the public policy of this state and is unenforceable. 
 This limited exclusion does not apply to any patent or invention
covered by a contract between VTI and the United States or any of its agencies requiring full title to such patent or invention to be in the United States. 
 I ACKNOWLEDGE RECEIPT of a copy of this notification. 
  

					
		
	By:	 	/s/ Michael V. Swanson
		 		 	
	Michael V. Swanson
	(Printed Name of Employee)
		
	Date:	 	August 30, 2013

  

 Appendix B 

ARBITRATION AGREEMENT 
 (a) Arbitration. In consideration of my employment with the Company, its promise to arbitrate all employment-related disputes, and my receipt of the compensation, pay raises and other
benefits paid to me by the Company, at present and in the future, I agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, stockholder or benefit plan of the Company in their
capacity as such or otherwise) arising out of, relating to, or resulting from my employment with the Company or termination thereof, including any breach of this Agreement, will be subject to binding arbitration under the Arbitration Rules set
forth in California Code of Civil Procedure Section 1280 through 1294.2, including Section 1281.8 (the “Act”), and pursuant to California law. The Federal Arbitration Act will also apply with full force and effect,
notwithstanding the application of procedural rules set forth under the Act. 
 (b) Dispute Resolution. Disputes that
I agree to arbitrate, and thereby agrees to waive any right to a trial by jury, include any statutory claims under local, state, or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the Americans
with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Sarbanes Oxley Act, the Worker Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act,
the Family and Medical Leave Act, the California Family Rights Act, the California Labor Code, claims of harassment, discrimination, and wrongful termination, and any statutory or common law claims. I further understand that this Agreement to
arbitrate also applies to any disputes that the Company may have with me. 
 (c) Procedure. I agree that any arbitration
will be administered by the Judicial Arbitration & Mediation Services, Inc. (“JAMS”), pursuant to its Employment Arbitration Rules & Procedures (the “JAMS Rules”). The arbitrator will have the power to decide
any motions brought by any party to the arbitration, including motions for summary judgment and/or adjudication, motions to dismiss and demurrers, and motions for class certification, prior to any arbitration hearing. The arbitrator will have the
power to award any remedies available under applicable law, and the arbitrator will award attorneys’ fees and costs to the prevailing party, except as prohibited by law. The Company will pay for any administrative or hearing fees charged by the
administrator or JAMS, and all arbitrator’s fees, except that I will pay any filing fees associated with any arbitration that I initiate, but only so much of the filing fee as I would have instead paid had I filed a complaint in a court of law.
I agree that the arbitrator will administer and conduct any arbitration in accordance with California law, including the California Code of Civil Procedure and the California Evidence Code, and that the arbitrator will apply substantive and
procedural California law to any dispute or claim, without reference to the rules of conflict of law. To the extent that the JAMS Rules conflict with California law, 

 
California law will take precedence. The decision of the arbitrator will be in writing. Any arbitration under this Agreement will be conducted in San Diego County, California. 

(d) Remedy. Except as provided by the Act, arbitration will be the sole, exclusive, and final remedy for any dispute between me
and the Company. Accordingly, except as provided by the Act and this Agreement, neither I nor the Company will be permitted to pursue court action regarding claims that are subject to arbitration. Notwithstanding, the arbitrator will
not have the authority to disregard or refuse to enforce any lawful Company policy, and the arbitrator will not order or require the Company to adopt a policy not otherwise required by law which the Company has not adopted. 

(e) Administrative Relief. I am not prohibited from pursuing an administrative claim with a local, state, or federal
administrative body or government agency that is authorized to enforce or administer laws related to employment, including, but not limited to, the Department of Fair Employment and Housing, the Equal Employment Opportunity Commission, the National
Labor Relations Board, or the Workers’ Compensation Board. However, I may not pursue court action regarding any such claim, except as permitted by law. 
 (f) Voluntary Nature of Agreement. I acknowledge and agree that I is executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else. I further
acknowledge and agree that I have carefully read this Agreement and that I have asked any questions needed for me to understand the terms, consequences and binding effect of this Agreement and fully understands it, including that I AM WAIVING
MY RIGHT TO A JURY TRIAL. Finally, I agree that I have been provided an opportunity to seek the advice of an attorney of my choice before signing this Agreement.EX-10.7

 Exhibit 10.7 

 
 VITAL THERAPIES, INC. 

2013 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. 

  
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 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”). 
 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. 

  
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 (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 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. 

  
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 (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 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 2013 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. 

  
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 (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 last day
of each Fiscal Year beginning with the 2013 Fiscal Year, in an amount equal to the least of (i) 1,200,000 Shares, (ii) three percent (3%) of the outstanding Shares on the second-to-the-last day of the Fiscal Year 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 

  
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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.

 (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; 

  
 -7-

 (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. 
 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. 

  
 -8-

 (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. 
 (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,

  
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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. 

  
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 (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. 
 (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. 

  
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 (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. 
 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 

  
 -13-

 (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 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. 

  
 -14-

 (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. 

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. 

  
 -15-

 (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 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. 

  
 -16-

 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. 

  
 -17-

 (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. 

  
 -18-

 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 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). 

  
 -19-

 VITAL THERAPIES, INC. 

2013 EQUITY INCENTIVE PLAN 
 STOCK OPTION AGREEMENT 
 Unless otherwise defined herein, the terms defined
in the Vital Therapies, Inc. 2013 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:	  		 	
		  		 	
	  
	  		 	
		  		 	
			
	  
	  		 	

  
 - 2 -

 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., 15222 Avenue of Science, Suite B, 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 

  
 - 5 -

 
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. 
  

  
 - 7 -

 EXHIBIT B 

VITAL THERAPIES, INC. 
 2013 EQUITY INCENTIVE PLAN 
 EXERCISE NOTICE 

Vital Therapies, Inc. 
 15222 Avenue of Science,
Suite B 
 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. 

  
 - 1 -

 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

  
 - 2 -

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