UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement

Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrantx [X]

Filed by a Party other than the Registrant ¨[ ]

Check the appropriate box:

THRESHOLDMolecular Templates, Inc.

PHARMACEUTICALS, INC.

(Name of the Registrant as Specified in itsIn Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

MOLECULAR TEMPLATES, INC.

THRESHOLD PHARMACEUTICALS, INC.April 26, 2019

Notice of 2016 Annual Meeting of StockholdersTo Our Stockholders:

To Be Held June 24, 2016

The 2016 annual meeting of stockholders of Threshold Pharmaceuticals, Inc. will be held on June 24, 2016, at 3: 00 p.m., Pacific Time, at our principal executive offices located at 170 Harbor Way, Suite 300, South San Francisco, CA 94080, for the following purposes, as more fully described in the accompanying proxy statement:

1. To elect the three nominees for Class III director named in the accompanying proxy statementYou are cordially invited to serve untilattend the 2019 annual meeting of stockholders of Molecular Templates, Inc. to be held at 8:30 a.m. ET on Wednesday, May 29, 2019 at Harborside 5, 185 Hudson Street, Suite 1510, Jersey City, NJ 07311.

Details regarding the meeting, the business to be conducted at the meeting, and until their successors have been dulyinformation about Molecular Templates, Inc. that you should consider when you vote your shares are described in this proxy statement.

At the annual meeting, three persons will be elected and qualified.

2. Toto our Board of Directors. In addition, we will ask stockholders to ratify the appointmentselection of Ernst & Young LLP as our independent registered public accounting firm for theour fiscal year ending December 31, 2016.

3. To2019, to approve onby an advisory basis,vote the compensation of our Named Executive Officersnamed executive officers, as disclosed in this proxy statement, and to vote on the accompanyingfrequency of the advisory vote on the compensation of our named executive officers. The Board of Directors recommends the approval of each of these proposals as set forth in this proxy statement.

4. To transact such Such other business will be transacted as may properly come before the annual meeting.

We hope you will be able to attend the annual meeting. Whether you plan to attend the annual meeting or any adjournmentsnot, it is important that you cast your vote either in person or postponements thereof.by proxy. You may vote over the Internet as well as by telephone or by mail. When you have finished reading this proxy statement, you are urged to vote in accordance with the instructions set forth in this proxy statement. We encourage you to vote by proxy so that your shares will be represented and voted at the meeting, whether or not you can attend.

Only stockholdersThank you for your continued support of Molecular Templates, Inc. We look forward to seeing you at the annual meeting.

MOLECULAR TEMPLATES, INC.

9301 Amberglen Blvd., Suite 100

Austin, TX 78729

(512) 869-1555

April 26, 2019

NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS

TIME: 8:30 a.m. ET

DATE: Wednesday, May 29, 2019

PLACE: Harborside 5, 185 Hudson Street, Suite 1510, Jersey City, NJ 07311

PURPOSES:

WHO MAY VOTE:

You may vote if you were the record owner of Molecular Templates, Inc. common stock at the close of business on April 25, 20168, 2019.

A list of stockholders of record will be entitledavailable at the annual meeting and, during the 10 days prior to notice of, andthe annual meeting, at our principal executive offices located at 9301 Amberglen Blvd., Suite 100, Austin, TX 78729.

All stockholders are cordially invited to attend the annual meeting.Whether you plan to attend the annual meeting or not, we urge you to vote and submit your proxy by the Internet, telephone or mail in order to ensure the presence of a quorum.You may change or revoke your proxy at such meeting or any adjournments or postponements thereof.time before it is voted at the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Dr. Harold E. Selick Adam Cutler

Chief ExecutiveFinancial Officer, Treasurer and Secretary

South San Francisco, California

April 29, 2016

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON JUNE 24, 2016

The proxy statement and annual report to stockholders are available at www.proxyvote.com.

YOUR VOTE IS IMPORTANT!

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE YOUR SHARES ON THE INTERNET OR BY TELEPHONE OR, IF YOU RECEIVED A PAPER PROXY CARD OR VOTING INSTRUCTION FORM VIA MAIL, BY COMPLETING, SIGNING, DATING AND MAILING PROMPTLY THE PROXY CARD OR VOTING INSTRUCTION FORM IN THE RETURN ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. THIS WILL ENSURE THE PRESENCE OF A QUORUM AT THE MEETING. INSTRUCTIONS ON HOW TO ACCESS THE PROXY MATERIALS OVER THE INTERNET OR TO REQUEST A PAPER OR ELECTRONIC COPY OF THE FULL SET OF PROXY MATERIALS MAY BE FOUND IN THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS OR THE FULL SET OF PROXY MATERIALS, AS APPLICABLE, MAILED TO STOCKHOLDERS. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH TO DO SO EVEN IF YOU HAVE PREVIOUSLY VOTED OR SENT IN YOUR PROXY CARD.

TABLE OF CONTENTS

THRESHOLD PHARMACEUTICALS,MOLECULAR TEMPLATES, INC.

170 Harbor Way,9301 Amberglen Blvd., Suite 300100

South San Francisco, CA 94080Austin, Texas 78729

(650) 474-8200(512) 869-1555

PROXY STATEMENT FOR MOLECULAR TEMPLATES, INC.

20162019 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 29, 2019

This proxy statement, along with the accompanying notice of the 2019 annual meeting of stockholders, contains information about the 2019 annual meeting of stockholders of Molecular Templates, Inc., including any adjournments or postponements of the annual meeting. We are furnishingholding the annual meeting at 8:30 a.m. ET on Wednesday, May 29, 2019, at Harborside 5, 185 Hudson Street, Suite 1510, Jersey City, NJ 07311.

In this proxy statement, in connection withwe refer to Molecular Templates, Inc. as “MTEM,” “the Company,” “we” and “us.”

This proxy statement relates to the solicitation of proxies by our boardBoard of directorsDirectors (the “Board” or “the Board of Directors”) for use at the 2016annual meeting.

On or about May 1, 2019, we began sending this proxy statement, the attached Notice of Annual Meeting of Stockholders and the enclosed proxy card to all stockholders entitled to vote at the annual meeting.

Although not part of this proxy statement, we are also sending, along with this proxy statement, our Annual Report on Form10-K for the fiscal year ended December 31, 2018, which includes our financial statements for the fiscal year ended December 31, 2018.

EXPLANATORY NOTE

On August 1, 2017, Molecular Templates, Inc., formerly known as Threshold Pharmaceuticals, Inc. (“Threshold”), completed its business combination with Molecular Templates OpCo, Inc., or what was then known as “Molecular Templates, Inc.” (“Private Molecular”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of March 16, 2017, by and among Molecular, Trojan Merger Sub, Inc. (“Merger Sub”), our wholly owned subsidiary, and Private Molecular, pursuant to which Merger Sub merged with and into Private Molecular, with Private Molecular surviving as our wholly owned subsidiary, now “Molecular Templates OpCo, Inc.” (the “Merger”).

In this proxy statement, unless the context specifically indicates otherwise, “the Company”, “we”, “us”, “our” and “Molecular” refer to Public Molecular and its subsidiaries following the Merger, effective on August 1, 2017, and to Private Molecular and its subsidiaries prior to the Merger. References to“Pre-Merger Threshold” means Threshold prior to the Merger effective on August 1, 2017.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

STOCKHOLDER MEETING TO BE HELD ON WEDNESDAY, MAY 29, 2019 AT 8:30 A.M. ET

This proxy statement and our 2018 annual report to stockholders are available electronically for viewing, printing and downloading atwww.proxydocs.com/mtem. To view these materials please have your12-digit control number(s) available that appears on your proxy card. On this website, you can also elect to receive future distributions of our proxy statements and annual reports to stockholders by electronic delivery.

Additionally, you can find a copy of our Annual Report on Form10-K, which includes our financial statements, for the fiscal year ended December 31, 2018 on the website of the Securities and Exchange Commission, or the SEC, atwww.sec.gov, or in the “SEC Filings” section of the “Investors” section of our website atwww.mtem.com. You may also obtain a printed copy of our Annual Report on Form10-K, including our financial statements, free of charge, from us by sending a written request to: Secretary, Molecular Templates, Inc., 9301 Amberglen Blvd., Suite 100, Austin, Texas 78729. Exhibits will be provided upon written request and payment of an appropriate processing fee.

IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

Why is the Company Soliciting My Proxy?

The Board is soliciting your proxy to vote at the 2019 annual meeting of stockholders of Threshold Pharmaceuticals, Inc., or the Company, to be held at Harborside 5, 185 Hudson Street, Suite 1510, Jersey City, NJ 07311, on June 24, 2016,Wednesday, May 29, 2019, at 3: 00 p.m., Pacific time, at our principal executive offices located at 170 Harbor Way, Suite 300, South San Francisco, CA 940808:30 a.m. ET and at any adjournments or postponements thereof. Theseof the meeting, which we refer to as the annual meeting. The proxy statement along with the accompanying Notice of Annual Meeting of Stockholders summarizes the purposes of the meeting and the information you need to know to vote at the Annual Meeting.

We have sent you this proxy statement, the Notice of Annual Meeting of Stockholders, the proxy card and a copy of our Annual Report on Form10-K for the fiscal year ended 2018because you owned shares of Molecular Templates, Inc. common stock on the record date. The Company intends to commence distribution of the proxy materials are first being mailed or made available to stockholders on or about April 29, 2016.May 1, 2019.

Who Can Vote?

Only holders ofstockholders who owned our common stock as ofat the close of business on April 25, 2016, the record date,8, 2019 are entitled to vote at the 2016 annual meeting. Stockholders who hold shares in “street name” may vote at the 2016 annual meeting only if they hold a valid proxy from their broker. As of theOn this record date, there were 71,511,42536,761,651 shares of our common stock outstanding and entitled to vote at the 2016 annual meeting. There are no statutory or contractual rights of appraisal or similar remedies available to stockholders in connection with any matter to be acted on at the 2016 annual meeting.

A majority of the outstanding shares ofvote. Our common stock entitledis our only class of voting stock.

You do not need to attend the annual meeting to vote atyour shares. Shares represented by valid proxies, received in time for the 2016 annual meeting must be present in person or represented by proxy in order for thereand not revoked prior to be a quorum at the meeting. Stockholders of record who are present at the meeting in person or represented by proxy and who abstain from voting, including brokers holding customers’ shares of record who cause abstentions to be recorded at theannual meeting, will be included in the number of stockholders presentvoted at the meeting for purposes of determining whether a quorum is present.annual meeting. For instructions on how to change or revoke your proxy, see “May I Change or Revoke My Proxy?” below.

How Many Votes Do I Have?

Each stockholdershare of record is entitledourcommon stock that you own entitles you to one vote atvote.

How Do I Vote?

Whether you plan to attend the 2016 annual meeting for each share of common stock heldor not, we urge you to vote by such stockholderproxy. All shares represented by valid proxies that we receive through this solicitation, and that are not revoked, will be voted in accordance with your instructions on the record date. Stockholders do not have cumulative voting rights. Stockholders may vote their shares via the Internet, over the telephone or, if they received a paper proxy card or voting instruction form by mail, by marking, dating, signing and returning the proxy card or as instructed via Internet or telephone. You may specify whether your shares should be voted for, against or abstain for each nominee for director, whether your shares should be voted for, against or abstain with respect to each of the other proposals and whether your shares should be voted for one year, two years, three years or abstain with respect to the frequency of voting instruction form. Shareson the compensation of our named executive officers. If you properly voted bysubmit a proxy without giving specific voting instructions, your shares will be voted in accordance with the instructions specified.Board’s recommendations as noted below. Voting by proxy will not affect your right to attend the annual meeting. If your shares are registered directly in your name through our stock transfer agent, Computershare Trust Company, N.A., or you are a stockholder of record andhave stock certificates registered in your name, you do not specify your vote on each proposal individually when voting on themay vote:

Important Information About the Annual Meeting and Voting

Telephone and Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. Eastern Time on May 28, 2019.

If your shares are held in “street name” (held in the name of a bank, broker or other holder of record), you will receive instructions from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted. Telephone and Internet voting also will be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you plan to vote your shares in person at the annual meeting, you should contact your broker or agent to obtain a legal proxy or broker’s proxy card and bring it to the annual meeting in order to vote.

How Does the Board of Directors Recommend That I Vote on the Proposals?

The Board of Directors recommends that you vote as follows:

If any other matter is presented at the date hereof,annual meeting, your proxy provides that your shares will be voted by the proxy holder listed in the proxy in accordance with his best judgment. At the time this proxy statement was first made available, we knew of anyno matters that needed to be voted uponacted on at the 2016 annual meeting, other than those stateddiscussed in this proxy statement.

May I Change or Revoke My Proxy?

If you give us your proxy, you may change or revoke it at any other matters are properly broughttime before the 2016 annual meeting,meeting. You may change or revoke your proxy in any one of the proxy card gives discretionary authority to the persons named as proxies to vote the shares represented by the proxy card in their discretion.

Under Delaware law, our Amended and Restated Certificate of Incorporation (which, as amended, we refer to as our Certificate of Incorporation) and our bylaws, if a quorum exists at the annual meeting:following ways:

Your most current vote, whether by telephone, Internet or proxy card is the one that will be requiredcounted.

What if I Receive More Than One Proxy Card?

You may receive more than one proxy card if you hold shares of our common stock in more than one account, which may be in registered form or held in street name. Please vote in the manner described above under “How Do I Vote?” for each account to approveensure that all of your shares are voted.

Important Information About the proposalAnnual Meeting and Voting

Will My Shares be Voted if I Do Not Vote?

If your shares are registered in your name or if you have stock certificates, they will not be counted if you do not vote as described above under “How Do I Vote?” If your shares are held in street name and you do not provide voting instructions to ratifythe bank, broker or other nominee that holds your shares as described above, the bank, broker or other nominee that holds your shares has the authority to vote your unvoted shares only on the ratification of the appointment of Ernst & Young LLP asif our independent registered public accounting firm for the fiscal year ending December 31, 2016; and

Important Information About the Annual Meeting and Voting

Proposal 2 (Ratify Independent Registered Public Accounting Firm).Is Voting Confidential?

We will keep all the proxies, ballots and voting tabulations private. We only let our Inspectors of Election, a representative of Mediant Communications, Inc.,examine these documents. Management will not know how you voted on a specific proposal unless it is necessary to meet legal requirements. We will, however, forward to management any written comments you make, on the proxy card or otherwise provide.

Where Can I Find the Voting Results of the Annual Meeting?

The affirmativepreliminary voting results will be announced at the annual meeting, and we will publish preliminary, or final results if available, in a Current Report on Form8-K within four business days of the annual meeting. If final results are unavailable at the time we file the Form8-K, then we will file an amended report on Form8-K to disclose the final voting results within four business days after the final voting results are known.In addition, we are required to file on a Current Report on Form8-K no later than the earlier of one hundred fifty calendar days after the annual meeting or sixty calendar days prior to the

Important Information About the Annual Meeting and Voting

deadline for submission of stockholder proposals set forth on page 39 of this proxy statement under the heading “Stockholder Proposals and Nominations for Director” our decision on how frequently we will include a stockholder vote on the compensation of our named executive officers in our proxy materials.

What Are the Costs of Soliciting these Proxies?

We will pay all of the costs of soliciting these proxies. Our directors and employees may solicit proxies in person or by telephone, fax or email. We will pay these employees and directors no additional compensation for these services. We will ask banks, brokers and other institutions, nominees and fiduciaries to forward these proxy materials to their principals and to obtain authority to execute proxies. We will then reimburse them for their expenses.

What Constitutes a Quorum for the Annual Meeting?

The presence, in person or by proxy, of the holders of a majority of the votes castvoting power of all outstanding shares of our common stock entitled to vote at the annual meeting is necessary to constitute a quorum at the annual meeting. Votes of stockholders of record who are present at the annual meeting in person or by proxy, atabstentions, and brokernon-votes are counted for purposes of determining whether a quorum exists.

Attending the Annual Meeting

The annual meeting is requiredwill be held at 8:30 a.m. ET on Wednesday, May 29, 2019 at our offices at Harborside 5, 185 Hudson Street, Suite 1510, Jersey City, NJ 07311. When you arrive at our offices, signs will direct you to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016.

Proposal 3 (Advisory Vote on Executive Compensation). The approval, on an advisory basis, of the compensation of our Named Executive Officers must receive the affirmative vote of a majority of the votes cast in person or by proxy atappropriate meeting rooms. You need not attend the annual meeting in order to vote.

Householding of Annual Disclosure Documents

SEC rules concerning the delivery of annual disclosure documents allow us or your broker to send a single Notice or, if applicable, a single set of our proxy materials to any household at which two or more of our stockholders reside, if we or your broker believe that the stockholders are members of the same family. This practice, referred to as “householding,” benefits both you and us. It reduces the volume of duplicate information received at your household and helps to reduce our expenses. The rule applies to our Notices, annual reports, proxy statements and information statements. Once you receive notice from your broker or from us that communications to your address will be approved, although such vote“householded,” the practice will continue until you are otherwise notified or until you revoke your consent to the practice. Stockholders who participate in householding will continue to have access to and utilize separate proxy voting instructions.

If your household received a single Notice or, if applicable, a single set of proxy materials this year, but you would prefer to receive your own copy, please contact our transfer agent, Computershare Trust Company, N.A., by calling their toll free number,1-888-451-0183.

If you do not be binding on us.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of April 8, 2019 for:

Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. We deem shares of common stock that may be acquired by an individual or group within 60 days of April 8, 2019 pursuant to the exercise of options or warrants to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. Except as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them based on information provided to us by these stockholders. Percentage of ownership is based on 36,761,651 shares of common stock outstanding on April 8, 2019.

Security Ownership of Certain Beneficial Owners and Management

Security Ownership of Certain Beneficial Owners and Management

options to purchase common stock held by Dr. Poma exercisable within 60 days of April 8, 2019.

Security Ownership of Certain Beneficial Owners and Management

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Our records reflect that all reports which were required to be filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, were filed on a timely basis, except that (i) two reports covering an aggregate of three transactions, were filed late by Eric E. Poma, (ii) one Form 4 report covering one transaction, was filed late by Jason Kim and (iii) one Form 3 initial report of ownership was filed late by Jonathan Lanfear.

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BOARD OF DIRECTORS, MANAGEMENT AND CORPORATE GOVERNANCE

The name, age and year in whichBoard of Directors

Our certificate of incorporation, as amended, provides that our business is to be managed by or under the term expiresdirection of each membera classified board of directors. The means our board of directors (our “Board” or “Board of Directors”) is set forth belowdivided into three classes for purposes of election, with each class having as nearly as possible an equal number of April 1, 2016:directors. One class is elected at each annual meeting of stockholders to serve for a three-year term. The term of service of each class of directors is staggered so that the term of one class expires at each annual meeting of stockholders.

Our Board currently consists of seven (7) members, classified into three classes as follows:

Our Certificatecertificate of Incorporation dividesincorporation and bylaws, each as amended, provide that the authorized number of directors may be changed only by resolution of a majority of the Board of Directors. The Board of Directors make an effort to distribute additional directorships resulting from an increase in the number of directors among the three classes so that, as nearly as possible, each class will consist ofone-third of the directors. The division of our boardBoard of directorsDirectors into three classes with staggered three-year terms. The Class Iterms may delay or prevent a change of our management or a change in control of our Company. Our directors whose terms expiremay be removed only for cause by the affirmative vote of the holders of at leasttwo-thirds of our outstanding voting stock entitled to vote in the 2017 annual meeting, are Jeffrey W. Birdelection of directors. Any vacancy on our Board of Directors, including a vacancy resulting from an enlargement of our Board of Directors, may be filled only by vote of a majority of our directors then in office.

In selecting Board members, our Board may consider many factors, such as personal and Harold E. Selick. The Class II directors, whose term expires atprofessional integrity; ethics and values; experience in corporate management, such as serving as an officer or former officer of a publicly held company; experience as a Board member or executive officer of another publicly held company; diversity of expertise and experience in substantive matters pertaining to our business relative to other Board members; and diversity of background and perspective, including, but not limited to, with respect to age, gender, race, place of residence and specialized experience.

On March 22, our Board accepted the 2018 annual meeting, are Wilfred E. Jaegerrecommendation of the Nominating and Corporate Governance Committee and voted to nominate David R. Parkinson. The Class III directors, whose terms expire at the 2016 annual meeting, are Bruce C. Cozadd,Hirsch, M.D., Ph.D. David R. Hoffmann and George G.C. Parker. Only one classKevin Lalande, for election at the annual meeting for a term of directors is elected at each annual meeting. The directors in the other classes continuethree years to serve foruntil the remainder2022 annual meeting of such class’ three-year term. Dr. Cozadd, Dr. Hoffmannstockholders, and Dr. Parker, whountil their respective successors have been elected and qualified.

Set forth below are Class III directors previously elected by our stockholders, are nominees for re-election at the 2016 annual meeting. The nominating and governance committee has recommended to our boardnames of directors that Dr. Cozadd, Dr. Hoffmann and Dr. Parker bethe persons nominated for election to as Class III directors eachand directors whose terms do not expire this year, their ages, their offices in the Company, if any, their principal occupations or employment for a three-year term ending on the date of the 2019 annual meeting and until his successor is duly elected or appointed. Each nominee has consented to being named as a nominee in this proxy statement and has agreed to serve if elected, and our board of directors has no reason to believe that any such nominee will be unable to serve.

DIRECTOR QUALIFICATIONS

The following paragraphs below under the section captioned “Nominees and Continuing Directors” provide information as of the date of this proxy statement about each individual nominated for election to our board of directors at the 2016 annual meeting and each continuing member of our board of directors. The information presented includes information each director has given us about his age, all positions he holds, his principal occupation and business experience forleast the past five years, the length of their tenure as directors and the names of other publicly-heldpublic companies ofin which he currently serves as a directorsuch persons hold or has served as a directorhave held directorships during the past five

Board of Directors, Management and Corporate Governance

years. In addition toAdditionally, information about the information presented below regarding each nominee’s and each continuing director’s specific experience, qualifications, attributes andor skills that led to our boardBoard’s conclusion at the time of directors to the conclusionfiling of this proxy statement that heeach person listed below should serve as a director our board of directors also believes that all of our directors have demonstrated a depth and breadth of experience, integrity, ability to make independent analytical inquiries, understanding of our business environment and willingness to devote adequate time to their board duties.

Information about the number of shares of common stock beneficially owned by each director appears below under the heading “Security Ownership by Certain Beneficial Owners and Management.” There are no family relationships among any of our directors or executive officers.

- 8 -

NOMINEES AND CONTINUING DIRECTORS

The following individuals have been nominatedNominees for election to our board of directors as Class III directors atDirectors

David Hirsch, M.D., Ph.D., age 48, has been a director of the 2016 annual meeting:

Bruce C. CozaddCompany since August 2017, effective as of the Merger. Since 2007, Dr. Hirsch has served as a memberFounder and Managing Director at Longitude Capital, where he focuses on investments in biotechnology. From 2005 to 2006, Dr. Hirsch was Vice President of our board of directors since December 2005. Mr. Cozadd is a co-founder of Jazz Pharmaceuticals, Inc. and has served as its Chairman and Chief Executive Officer since April 2009. In January 2012, Mr. Cozadd becamePequot Capital Management, where he worked in the Chairman and Chief Executive Officer of Jazz Pharmaceuticals plc, the successor to Jazz Pharmaceuticals, Inc. From 2003 until April 2009, he served as Executive Chairman of Jazz Pharmaceuticals, Inc.life sciences practice. Prior to co-founding Jazz Pharmaceuticals, Inc., Mr. Cozadd served in various executive management positions with ALZA Corporation from 1991 until its acquisition by Johnson & Johnson in 2001. At the time of the merger, Mr. CozaddPequot Capital Management, Dr. Hirsch was serving as Executive Vice President and Chief Operating Officer of ALZA, with responsibility for research and development, manufacturing, and sales and marketing. Prior to joining ALZA, he wasan Engagement Manager in the Corporate Finance Health Care grouppharmaceutical practice of McKinsey & Company. While at Smith Barney, Harris UphamMcKinsey & Co. Inc. HeCompany, he worked with many large pharmaceutical companies across a range of projects including clinical and commercial strategies, M&A evaluations, portfolio prioritization and managed care strategy. Dr. Hirsch currently serves on the board of directors of Jazz Pharmaceuticals plc, Cerus CorporationCollegium Pharmaceutical, Inflazome, Poseida Therapeutics, Rapid Micro Biosystems, Inc., Tricida, Inc., and The Nueva School. He received his B.S. from Yale UniversityVelicept Therapeutics, Inc., and his M.B.A. from Stanford University. Ourpreviously served on the board of directors believesof Civitas Therapeutics, Inc., Precision Therapeutics, Inc. and Zavante Therapeutics, Inc. Dr. Hirsch holds a Ph.D. in Biology from the Massachusetts Institute of Technology, an M.D. from Harvard Medical School and a B.A. in Biology from The Johns Hopkins University. Our Board has concluded that Mr. Cozadd’s leadershipDr. Hirsch should serve as a director of the Company based on Dr. Hirsch’s perspective and experience at otheras an investor and board member in the life sciences companies gives him a breadth of knowledgeindustry, as well as his strong medical and a unique perspective on the industry.scientific background.

David R. Hoffmann, age 74, has been a director of the Company since August 2017, effective as of the Merger, and served as a memberPre-Merger director of our board of directorsThreshold since April 2007. Mr. Hoffmann is retired from ALZA Corporation (now a Johnson & Johnson company) where he held the positions of Vice President and Treasurer from 1992 to until his retirement in October 2002, Vice President of Finance from 1982 to 1992 and Director of Accounting/Finance from 1976 to 1982. Since 2003, Mr. Hoffmann is currentlyhas served as the Chief Executive Officer of Hoffmann Associates, a multi-group company specializing in cruise travel and financial and benefit consulting. He serves onas Chairman of the board of directors of DURECT Corporation. Mr. Hoffmann holds a B.S. in Business Administration from the University of Colorado. Our boardBoard has concluded that Mr. Hoffmann should serve as a director of directors believes thatthe Company based on Mr. Hoffmann’s financial knowledgeexpertise and industry experience are valuable to the board, particularly with respect to his service on the audit committee.experience. Our board of directorsBoard has determined that Mr. Hoffmann qualifies as an “audit committee financial expert” as defined by the rules of the SecuritiesSEC.

Board of Directors, Management and Exchange Commission.Corporate Governance

George G.C. Parker, Ph.D.

Kevin M. Lalande, age 46, has served asbeen a member of our board of directors since October 2004. Dr. Parker is the Dean Witter Distinguished Professor of Finance (Emeritus) and previously Senior Associate Dean for Academic Affairs and Directordirector of the MBA Program, Graduate SchoolCompany since August 2017, effective as of Business, Stanford University. Dr. Parker joined the faculty at Stanford University in 1973. He servesMerger. Mr. Lalande served on the board of directors of Colony Financial, Inc.Private Molecular since 2009. Mr. Lalande is a founder and First Republic BankManaging Director of Santé Ventures, a venture capital firm. Prior to founding Santé Ventures in 2006, Mr. Lalande spent seven years with Austin Ventures. Before joining Austin Ventures, Mr. Lalande was a management consultant with McKinsey & Company. Mr. Lalande holds a B.S. in Electrical and Computer Engineering from Brigham Young University and an M.B.A. with Highest Distinction from the Harvard Business School. Our Board has concluded that Mr. Lalande should serve as a director of the Company based on his substantial experience as a venture capitalist and as a director of a number of private companies, and was formerlyprivately-held companies.

Directors Continuing in Office

Class I Directors

Eric E. Poma, Ph.D., age 47, has been a director of Continental Airlines, Inc., Netgear, Inc., Tejon Ranch,the Company since August 2017, effective as of the Merger. Dr. Poma is the Chief Executive Officer and former ChairmanChief Scientific Officer of iShares Mutual Funds. Dr. Parker received his B.A. from Haverford Collegethe Company and his M.B.A. and Ph.D. from Stanford University. Our board of directors believes it is well served by Dr. Parker’s extensive financial and leadership experience, including his compensation committee experience.

The following individuals will continue to servefounded Private Molecular in February 2009, serving on our board of directors after the 2016 annual meeting:

Jeffrey W. Bird ,M.D., Ph.D. has served as a member of ourits board of directors since November 2008.its inception. From March 2005 until September 2008, Dr. Bird is a Managing Director of Sutter Hill Ventures, a venture capital firm based in Palo Alto, California. Dr. BirdPoma was previously Senior Vice President of Business OperationsDevelopment of Innovive Pharmaceuticals (acquired by Cytrx Corporation), a biotechnology company. From 2001 to 2005, he served as the Associate Vice President of Business Development at Gilead Sciences, whereImClone Systems, Inc. (now Eli Lilly and Company), a biotechnology company focused on antibody therapeutics. As the founder of Private Molecular and in his role as Chief Scientific Officer, he oversaw business developmentled the invention of technology underlying the Company’s platform technology and commercial activities.what constitutes the whole of the Company’s current lead and preclinical pipeline candidates. Dr. BirdPoma received a degree in Biological Sciences from Stanford in 1982, ahis Ph.D. in CancerMicrobiology and Immunology and B.A. in Biology from the University of North Carolina at Chapel Hill and his M.B.A. from New York University. Our Board has concluded that Dr. Poma should serve as a director of the Company based on Dr. Poma’s direct involvement in 1988the creation of, and a M.D.knowledge of, our technology platform and extensive experience in 1992 from Stanford Medical School. Dr. Bird is currently a board member of Portola Pharmaceuticals, Inc., a public company,the industry, which provides invaluable insight to our Board on matters involving the Company and a number of private biotechnology companies. Dr. Bird was formerly a board member of Horizon Pharma, Inc., a public company.its future goals. Our board of directors believes it benefits from Dr. Bird’s financial and medical knowledge and experience, which are valuable toBoard has concluded that having the board.

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Harold E. Selick, Ph.D. joined us as Chief Executive Officer in June 2002as a director is an optimal way of ensuring the most efficient execution and development of the Company’s business goals and strategies.

Harold E. “Barry” Selick, Ph.D., age 64, is chairman of the Company’s Board, and has served as a memberdirector of our boardthe Company since August 2017, effective as of directorsthe Merger, and served as aPre-Merger director of Threshold since joiningJune 2002. He is currently the company.Vice Chancellor of Business Development, Innovation and Partnerships at the University of California, San Francisco, a position that he has held since April 2017. Previously, Dr. Selick served asPre-Merger Threshold’s Chief Executive Officer from June 2002 until March 2017. From June 2002 until July 2007, Dr. Selick was also a Venture Partner of Sofinnova Ventures, Inc., a venture capital firm. From January 1999 to April 2002, he was Chief Executive Officer of Camitro Corporation aand its wholly-owned subsidiary, Camitro UK, Ltd, biotechnology company.companies. From 1992 to 1999, he was at Affymax Research Institute, the drug discovery technology development center for Glaxo Wellcome plc, most recently as Vice President of Research. Prior to working at Affymax he held scientific positions at Protein Design Labs, Inc. and Anergen, Inc. As a staff scientist at Protein Design Labs, Inc. (now PDL BioPharma, Inc., or PDL) heco-invented the technology underlying the creation of fully humanized antibody therapeutics and applied that to PDL’s first product, Zenapax (daclizumab), which was initially developed and commercialized by Roche for preventingthe prevention of kidney transplant rejection.rejection and more recently developed by Biogen and AbbVie and approved as Zinbryta for treatment of adults with relapsing forms of multiple sclerosis. Dr. Selick serves as Lead Directorlead director of PDL, a public company, serves as Chairmanand is chairman of the board of directors of Catalyst Biosciences aand Protagonist Therapeutics, both public drug discovery and development company, and also serves as Chairman of the board of directors of Protagonist Therapeutics, a privately-held biotechnology company.companies. Dr. Selick received his B.A. in Biophysics and Ph.D. in Biology from the University of Pennsylvania and was a Damon Runyon-Walter Winchell Cancer Fund Fellow and an American Cancer Society Senior Fellow at the

Board of Directors, Management and Corporate Governance

University of California, San Francisco. Our boardBoard has concluded that Dr. Selick should serve as a director of directors believes thatthe Company based on Dr. Selick’s extensive experience with the Company and industry knowledge provides an invaluable insight to the board of directors on issues involving the Company and its goals. Further, the board of directors believes that including the CEO as a director is an efficient way of ensuring continuity between the development and execution of the Company’s business strategies.knowledge.

Wilfred E. Jaeger, M.D. has served as a member of our board of directors since 2001. HeClass II Directors

Jonathan Lanfear, age 50, has been a Partnerdirector of Three Arch Partners,the Company since May 2018. Mr. Lanfear is the Vice President and Global Head of Oncology & Neuroscience Business Development at Takeda Pharmaceuticals International. Prior to joining Takeda in December 2011, Mr. Lanfear spent approximately 8 years at Pfizer Inc. as a venture capital firm, since 1993. Dr. JaegerSenior Director and Transactions Lead in the Worldwide Business Development, Strategy, & Innovation group. Mr. Lanfear previously served in a biotechnology equity research position at AG Edwards/Wachovia and in a business development position at Searle/Pharmacia where he worked on several significant licensing transactions prior to the company’s acquisition. Mr. Lanfear holds a B.S. in Chemical Engineering and a Master’s degree in Bioengineering, both from the University of Michigan (Ann Arbor), and an MBA from Washington University (St. Louis). Mr. Lanfear currently serves on the board of directors of Aquinnah Pharmaceuticals, a numberprivately-held neurodegeneration-focused company. Our Board has concluded that Mr. Lanfear should serve as a director of private companies,the Company based on Mr. Lanfear’s industry perspective and experience.

Scott Morenstein, age 43, has been a director of the Company since August 2017, effective as wellof the Merger. Mr. Morenstein serves as Concert Pharmaceutical, Inc.,Managing Director of CAM Capital, where he leads healthcare investing. CAM Capital was established in 2012 by Bruce Kovner following his retirement from Caxton Associates, the macro hedge fund he founded and managed from 1983 to 2011. Prior to joining CAM Capital in 2013, Mr. Morenstein served as Managing Director at Valence Life Sciences and before that Principal at Caxton Advantage Venture Partners, which he joined in 2007. Prior to joining Caxton Advantage, Mr. Morenstein served as an investment banking associate and founding member of Seaview Securities. Mr. Morenstein began his career at Lehman Brothers as a public pharmaceutical company. Dr. Jaeger received his B.S. fromhealthcare investment banker and equity research analyst. Mr. Morenstein has more than 15 years’ experience in biopharmaceutical investing, equity research and investment banking. Mr. Morenstein led CAM’s investment in and served as a director of Celator Pharmaceuticals until its acquisition by Jazz Pharmaceuticals in July 2016. He was nominated a director of Synta Pharmaceuticals to advise the University of British Columbia, his M.D. from the University of British Columbia, School of Medicine and his M.B.A. from Stanford University. Our board of directors believes that Dr. Jaeger’s financial and medical knowledge and experience are valuablecompany as it explored strategic alternatives ultimately leading to the board, particularlya merger with respect to his service on the audit and compensation committees.

David R. Parkinson, M.D. hasMadrigal Pharmaceuticals. He served as a member of ourGemin X’s board of directors since 2010. Dr. Parkinson is the Chief Executive Officer of ESSA Pharma and Venture Advisor to New Enterprise Associates (NEA). From 2007 until 2012, Dr. Parkinson served as President and Chief Executive Officer of Nodality, a South San Francisco-based biotechnology company focused on the biological characterization of signaling pathways in patients with malignancy to enable more effective therapeutics development and clinical decision making. Until October 2007, Dr. Parkinson was Senior Vice President, Oncology Research and Development, at Biogen, Idec., where he oversaw all oncology discovery research efforts and the development of the oncology pipeline. Previously he had served as Vice President, Oncology Development, at Amgen and Vice President, Global Clinical Oncology Development, at Novartis. During his tenures at Amgen, a public biotechnology company, and Novartis, a public biotechnology company, Dr. Parkinson was responsible for clinical development activities leading to a series of successful global drug registrations for important cancer therapeutics, including Gleevec, Femara, Zometa, Kepivance, and Vectibix. Prior to working in the biotechnology industry, Dr. Parkinson worked at the National Cancer Institute from 1990 to 1997, serving as Chief of the Investigational Drug Branch, then as acting associate director of the Cancer Therapy Evaluation Program. Dr. Parkinson is a past Chairman of the Food & Drug Administration (FDA) Biologics Advisory Committee and is a recipient of the FDA’s Cody Medal. He is a past president of the International Society of Biological Therapy, and a past editor of the Journal of Immunotherapy. He has served on the National Cancer Policy Forum of the Institute of Medicine and is a past co-chair of the Cancer Steering Committee of the NIH Foundation Biomarkers Consortium. He has also served as a member of the FDA’s Science Board, as an elected director on the board of directors of the American Association of Cancer Research, and as a director on the board of the Ontario Institute for Cancer Research.its acquisition by Cephalon. He currently serves as a director of Velicept Therapeutics and Antios Therapeutics. Mr. Morenstein received an M.B.A. from Harvard Business School and a B.A. from the University of Pennsylvania with a degree in the Biological Basis of Behavior with a Concentration in the Physiology of Neural Systems. Our Board Director for the Multiple Myeloma Research Foundation and as the Chairperson of the American Association of Cancer Research (AACR) Finance and Audit Committee. Dr. Parkinson was formerly a Director of Facet Biotech, Inc., a public biopharma company which was acquired by Abbott

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Pharmaceuticals as wellhas concluded that Mr. Morenstein should serve as a director of Ambit Biosciences, a public biopharma company recently acquired by Daiichi Sankyo. He currently serves as directorthe Company based on the board of directors of Cerulean Pharma, Inc., a public biopharma company focused on the discoveryMr. Morenstein’s industry and development of anti-cancer drugs. Dr. Parkinson received his medical degree as gold medalist from the University of Toronto Faculty of Medicine in 1977. He completed a Hematology Fellowship at Royal Victoria Hospital at McGill University in Montrealfinancial expertise and was a Research Fellow at the New England Medical Center at Tufts University in Boston. He has held academic positions both at Tufts and the University of Texas MD Anderson Cancer Center, and has authored over 100 peer-reviewed publications in the fields of cancer immunobiology and immune oncology as well as therapeutics and diagnostic development. Our board of directors believes that Dr. Parkinson’s medical, regulatory and industry knowledge and experience are valuable to the board.

Director Independence

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DIRECTOR NOMINATIONS

Criteria for Board Membership. In selecting candidates for appointment or re-election to our board of directors, the nominating and governance committee considers the appropriate balance of specific experience, qualifications, attributes and skills required of our board of directors, and seeks to insure that at least a majorityRule 5605 of the directors are independent under the NASDAQ Stock Market LLC listing standards, or the NASDAQ listing standards, and that members of our audit committee meet the financial literacy and sophistication requirements under the NASDAQ listing standards and at least one of them qualifies as an “audit committee financial expert” as defined under the rules of the Securities and Exchange Commission, or the SEC. To date, the nominating and governance committee has not adoptedNasdaq Listing Rules requires a formal policy with respect to a fixed set of specific minimum qualifications for candidates for membership on our board of directors. Instead, nominees for director are selected on the basis of their depth and breadth of experience, integrity, ability to make independent analytical inquiries, understanding of our business environment, and willingness to devote adequate time to their board duties. While we do not have a formal policy on board diversity, the nominating and governance committee takes into account a broad range of diversity considerations when assessing director candidates, including individual backgrounds and skill sets, professional experience and other factors that contribute to our board of directors having an appropriate range of expertise, talents, experiences and viewpoints, and considers those diversity considerations, in view of the needs of the board of directors as a whole, when making decisions on director nominations.

Stockholder Nominees. The nominating and governance committee will consider written proposals from stockholders for nominees for director. Any such nominations should be submitted to the nominating and governance committee c/o our Secretary and should include the following information: (a) all information relating to such nominee that is required to be disclosed pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, or the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) the names and addresses of the stockholders making the nomination and the number of shares of our common stock which are owned beneficially and of record by such stockholders; and (c) appropriate biographical information and a statement as to the qualification of the nominee, and should be submitted in the time frame described in our bylaws and under the caption “Stockholder Proposals for 2016 Annual Meeting” below.

Process for Identifying and Evaluating Nominees. The nominating and governance committee believes we are well-served by our current directors. If an incumbent director is not standing for re-election, or if a vacancy on our board of directors occurs between annual stockholder meetings, or if our board of directors desires to increase its size, the nominating and governance committee will seek out potential candidates for appointment to our board of directors who meet the criteria for selection as a nominee and have the specific qualities or skills being sought. Director candidates will be selected based on input from members of our board of directors and, if the nominating and governance committee deems appropriate, a third-party search firm. To date, we have not engaged third parties to identify or evaluate or assist in identifying potential nominees, although we may in the future decide to retain a third-party search firm. The nominating and governance committee will evaluate each candidate’s qualifications and check relevant references; in addition, such candidates will be interviewed by at least one member of the nominating and governance committee. Candidates meriting serious consideration will meet with additional members of our board of directors. Based on this input, the nominating and governance committee will evaluate whether the committee should recommend to our board of directors that this candidate be elected to fill a vacancy on our board of directors, or presented for the approval of the stockholders, as appropriate.

We have never received a proposal from a stockholder to nominate a director. Although the nominating and governance committee has not adopted a formal policy with respect to stockholder nominees, the committee expects that the evaluation process for a stockholder nominee would be similar to the process outlined above.

Board Nominees for the 2016 Annual Meeting. Bruce C. Cozadd, David R. Hoffmann and George G.C. Parker are nominees standing for re-election at the annual meeting.

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Directors are elected by a plurality of the votes of the holders of shares present in person or represented by proxy at the meeting. The two nominees receiving the highest number of “FOR” votes properly cast in person or by proxy at the meeting will be elected as a Class III director of Threshold. The election of directors is anon-routine matter on which a broker or other nominee is not empowered to vote. Accordingly, if the beneficial owner does not give a broker specific instructions, the beneficially owned shares may not be voted on this proposal and will not be counted in determining the number of shares necessary for election. Broker non-votes will not have any effect on the outcome of this proposal. In tabulating the voting results for the election of directors, only “FOR” and “WITHHOLD” votes are counted. In the event that any nominee should be unavailable for election as a result of an unexpected occurrence, such shares will be voted for the election of such substitute nominee as our nominating and governance committee and Board may propose.

Although the election of directors at the Annual Meeting is uncontested and directors are elected by a plurality of votes cast, and we therefore expect that each of the named nominees for director will be elected at the Annual Meeting, under our Corporate Governance Guidelines, any nominee for director is required to submit an offer of resignation for consideration by the nominating and governance committee if such nominee for director (in an uncontested election) receives a greater number of “WITHHOLD” votes from his or her election than votes “FOR” such election. In such case, the nominating and governance committee will then consider all of the relevant facts and circumstances and recommend to the Board the action to be taken with respect to such offer of resignation. For more information on this policy see the section entitled “Other Corporate Governance Matters—Corporate Governance Page; Code of Ethics; Corporate Governance Guidelines”.

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BOARD MEETINGS AND COMMITTEES; DIRECTOR INDEPENDENCE

During 2015, our board of directors met nine times. The audit committee met five times, the compensation committee met five times and the nominating and governance committee met three times. Each member of our board of directors attended at least 75% or more of the board meetings and meetings of committees of the board that each such director served on in fiscal 2015. Although the board has not adopted a formal policy, all directors are expected to attend annual meetings of stockholders if possible. All of our directors attended the 2015 annual meeting of stockholders.

As required under the NASDAQ listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the boardto be comprised of directors. Consistent with the requirements under the NASDAQ listing standards, after review of all relevant transactions or relationships between each director, or any of his or her family members, and our company, its senior management and its independent registered public accounting firm, our board of directors affirmatively determined that all of our current directors are independent directors within the meaning of the applicable NASDAQ listing standards, except that Dr. Selick, our Chief Executive Officer, is not an independent director by virtue of his employment with our company.directors. In addition, our board of directors has determinedthe Nasdaq Listing Rules require that, subject to specified exceptions, each member of thea listed company’s audit, committee, compensation committee and nominating and corporate governance committee meetscommittees be independent under the applicable NASDAQSecurities and SEC rules and regulations regarding “independence” andExchange Act of 1934, as amended (the “Exchange Act”). Under Rule 5605(a)(2), a director will only qualify as an “independent director” if, in the opinion of our Board of Directors, that each member is free of anyperson does not have a relationship that would impair his or her individual exercise of independent judgment with regard to Threshold Pharmaceuticals. In determining that Dr. Bird and Dr. Parkinson are independent within the meaning of the applicable NASDAQ listing standards and SEC rules, our board of directors considered Dr. Bird’s affiliation with one of our significant stockholders and Dr. Parkinson’s consulting arrangement with us, and in each case determined that such relationships would not interfere with either Dr. Bird’s or Dr. Parkinson’sthe exercise of independent judgment in carrying out the responsibilities of a director.

Audit committee members must also satisfy the independence criteria set forth in RuleOur10A-3 under the Exchange Act. In order to be considered independent for purposes of Rule10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit

Board of Directors, Management and Corporate Governance

committee, the board of directors, has standing (i) audit, (ii) compensation and (iii) nominating and governance committees, eachor any other board committee: (1) accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of which has a written charter, copies of which canits subsidiaries; or (2) be found atwww.thresholdpharm.com.

Audit Committee. The audit committee currently consists of Mr. Hoffmann (chair), Dr. Bird and Dr. Jaeger. Our board of directors has determined that all membersan affiliated person of the auditlisted company or any of its subsidiaries.

Compensation committee are independent directorsmembers must also satisfy the independence criteria set forth inRule 10C-1 under the NASDAQ listing standards and each of them is able to read and understand fundamental financial statements. Our board of directors has determined that Mr. Hoffmann qualifies as an “audit committee financial expert” as defined by the rules of the SEC.

The purpose of the audit committee is to oversee our accounting and financial reporting processes and audits of our financial statements. Although management has primary responsibility for the system of internal controls and the financial reporting process, the responsibilities of the audit committee include appointing and approving the compensation of the independent registered public accounting firm to conduct the annual audit of our financial statements, reviewing and evaluating the scope and results of the annual audit, approving all professional servicesExchange Act. In order to be provided to us by ourconsidered independent registered public accounting firm, meeting with management and the independent registered public accounting firm to discuss our financial statements and matters that may affect our financial statements, and reviewing, overseeing and approving transactions between our company and any related persons.

for purposes of RuleCompensation Committee. The10C-1, a board must consider, for each member of a compensation committee currently consists of Dr. Jaeger (chair), Mr. Cozadd and Dr. Parker. Our board of directors has determined thata listed company, all members of the compensation committee are independent directors under the rules of the NASDAQ listing standards. In determining whether Dr. Jaeger, Mr. Cozadd and Dr. Parker are independent within the meaning of the NASDAQ listing standards rules pertaining to membership of the compensation committee, our board of directors determined, based on its consideration of factors specifically relevant to determining whether any sucha director has a relationship to us thatsuch company which is material to that director’s ability to be independent from management in connection with the duties of a

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compensation committee member, including, but not limited to: the source of compensation of the director, including any consulting advisory or other compensatory fee paid by such company to the director; and whether the director is affiliated with the company or any of its subsidiaries or affiliates.

Our Board has reviewed the composition of our Board and its committees and the independence of each director. Based upon information requested from and provided by each director concerning his background, employment and affiliations, including family relationships, our Board of Directors has determined that noeach of our directors, with the exception of Eric E. Poma, Ph.D., is an “independent director” as defined under Rule 5606(a)(2) of the Nasdaq Listing Rules. Our Board of Directors determined that David R. Hoffmann, David Hirsch, M.D., Ph.D. and Scott Morenstein, who comprise our Audit Committee, and Kevin Lalande and David Hirsch, M.D, Ph.D., who comprise our Compensation Committee, satisfy the independence standards for such committees established by the SEC and the Nasdaq Listing Rules, as applicable. In making such determinations, our Board of Directors considered the relationships that each suchnon-employee director has with our Company and all other facts and circumstances our Board of Directors deemed relevant in determining independence, including the beneficial ownership of our capital stock by eachnon-employee director. Specifically, with respect to determination of audit committee independence, the Board has determined that Dr. Hirsch, M.D., Ph.D., is independent even though he falls outside the “safe harbor” definition set forth in Rule10A-3(e)(1)(ii) under the Exchange Act because Longitude Venture Partners III, L.P. and its affiliates own in excess of 10% of our common stock. Among other things, the board considered Dr. Hirsch’s history of service and the percentage of common stock held by others, and it determined that he is not an “affiliated person” of our Company who would be ineligible to serve on the Audit Committee.

Committees of the Board of Directors and Meetings

During the fiscal year endedDecember 31, 2018, there were five meetings of our Board, and the various committees of the Board met a total of fourteen times. None of our directors attended fewer than 75% of the total number of meetings of the Board and of committees of the Board on which he or she served during fiscal 2018, except for Mr. Lanfear, who attended two of the four applicable meetings of the Board and committees of the Board on which Mr. Lanfear served that were held during the 2018 period after which Mr. Lanfear was appointed as a director. The Board has adopted a policy under which each member of the compensationBoard is strongly encouraged to attend each annual meeting of our stockholders. Seven directors attended our annual meeting of stockholders held in 2018.

We have established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each of these committees operates under a charter that has been approved by our Board of Directors and satisfies the applicable rules and regulations of the SEC and the applicable listing standards of the Nasdaq Stock Market. Members will serve on these committees until their resignation or as otherwise determined by our Board of Directors.

Board of Directors, Management and Corporate Governance

Audit Committee. Our Audit Committee met six times during fiscal 2018. This committee currently has a relationshipthree members, David R. Hoffmann (Chairman), David Hirsch, M.D., Ph.D., and Scott Morenstein. The board has determined that would impairMr. Hoffmann is an “audit committee financial expert,” as the SEC has defined that member’s abilityterm in Item 407 of RegulationS-K. Please also see the report of the Audit Committee set forth elsewhere in this proxy statement. Our Audit Committee’s role and responsibilities are set forth in the Audit Committee’s written charter and include, among others:

A copy of the Audit Committee’s written charter is publicly available on our website atwww.mtem.com.

The compensationPlease also see the Report of Audit Committee set forth elsewhere in this proxy statement.

Compensation Committee. Our Compensation Committee met six times during fiscal 2018. This committee developscurrently has two members, Kevin Lalande (Chairman) and reviewsDavid Hirsch, M.D., Ph.D. Our Compensation Committee’s role and responsibilities are set forth in the Compensation Committee’s written charter and include:

Board of Directors, Management and Corporate Governance

As noted above, the advice of) any compensation consultant, legal counsel or other adviser to assist it in the performance of its duties. The compensation committee also has the direct responsibility for the appointment, compensation and oversight of the work of any advisers retained or engaged by the compensation committee. Under its charter, the compensation committee alsoCompensation Committee has the authority to delegatedirectly retain the services of independent consultants and other experts to assist in fulfilling its authorityresponsibilities. The Compensation Committee has engaged the services of Haigh & Company, a national executive compensation consulting firm, to review and responsibilities to membersprovide recommendations concerning all of the committee or a subcommittee. Finally, the compensation committee has the sole authority to approve the fees and the other terms and conditionscomponents of the engagementCompany’s executive compensation program. Haigh & Company performs services solely on behalf of the Compensation Committee and has no relationship with the Company or management except as it may relate to performing such services. Haigh & Company assists the Committee in defining the appropriate market of the Company’s peer companies for executive compensation and practices and in benchmarking our executive compensation program against the peer group each year. Haigh & Company also assists the Committee in benchmarking our director compensation program and practices against those of our peers.

The Compensation Committee has authorized Haigh & Company to interact with management on behalf of the Compensation Committee, as needed in connection with advising the Compensation Committee, and Haigh & Company is included in discussions with management and, when applicable, the Compensation Committee’s outside legal counsel on matters being brought to the Compensation Committee for consideration.

It is the Compensation Committee’s policy that the Chair of the Compensation Committee or the full Compensation Committeepre-approveany such advisor. We must provide for appropriate funding, as determinedadditional services provided to management by theour independent compensation committee,consultant. In fiscal year 2018, Haigh & Company only did work for the payment of reasonable compensation to any such adviser retained by the compensation committee.

For information regarding our processes and procedures for the consideration and determination of executive and director compensation, please see “Executive Compensation—Compensation Discussion and Analysis” and “Director Compensation,” respectively.

Nominating and Governance Committee. The nominating and governance committee currently consists of Mr. Hoffmann (chair), Dr. Bird and Dr. Parkinson. Our board of directors has determined that all members of the nominating and governance committee are independent directors under the NASDAQ listing standards. The nominating and governance committee’s responsibilities include recommending to our board of directors nominees for possible election to our board of directors. Nominees for the 2015 annual meeting were recommended to our board of directors for nomination by the nominating and governance committee and our board of directors subsequently approved these nominees at a meeting of our board of directors.

OTHER CORPORATE GOVERNANCE MATTERS

Board Leadership and Risk Oversight. Our board of directors has not designated a chairman or lead independent director, nor does our board of directors have a formal leadership structure that would allow one director to entirely shape the work of the board of directors. Instead, from time to time, one or more of the independent directors works with Dr. Selick to perform a variety of functions related to our corporate governance, including coordinating board of directors activities, setting the agenda for meetings (in consultation with Dr. Selick, as necessary or appropriate) and ensuring adequate communication between the board of directors and management. We believe that this structure of the board is adequate and appropriate for governance given the existing scope and nature of our operations. To facilitate the board’s responsibility for oversight of company risks, the board delegates specific areas of risk management oversight to applicable board committees. The audit committee oversees our risk policies and processes relating to financial statements and financial reporting, including our system of internal control over financial reporting. The compensation committee oversees risks associated with our compensation plans and the effect that our compensation structure may have on business decisions and on the attraction and retention of a qualified management team. The nominating and governance committee oversees risks related to our governance structure and the evaluation of individual board members and committees.

Corporate Governance Page; Code of Ethics; Corporate Governance Guidelines. We maintain a corporate governance page on our website which includes key information about our corporate governance matters, including our Corporate Governance Guidelines, Code of Ethics and charters for each committee of our board of directors. The corporate governance page can be found atwww.thresholdpharm.com, by clicking first on

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“Investors” then clicking on “Corporate Governance.” We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Code of Ethics by posting such information on our website at the website address specified above.

Our policies and practices reflect corporate governance initiatives that we believe are compliant In compliance with the NASDAQ listing standardsSEC and the corporate governance requirementsrules of The Nasdaq Stock Market, Haigh & Company provided the Compensation Committee with a letter addressing each of the Sarbanes-Oxley Actsix independence factors. Their responses affirm the independence of 2002, including:Haigh & Company and the partners, consultants, and employees who service the Compensation Committee on executive compensation matters and governance issues.

A copy of the Compensation Committee’s written charter is publicly available on our website atwww.mtem.com.

Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee met two times during fiscal 2018. The committee currently has two members, Kevin Lalande (Chairman) and David Hirsch. The Nominating and Corporate Governance Committee’s responsibilities are set forth in the Nominating and Corporate Governance Committee’s written charter and include:

Generally, our Nominating and Corporate Governance Committee considers candidates recommended by stockholders as well as from other sources such as other directors or officers, third party

Board of Directors, Management and Corporate Governance

search firms or other appropriate sources. Once identified, the Nominating and Corporate Governance Committee will evaluate a candidate’s qualifications in accordance with the criteria set forth in our Corporate Governance Guidelines. Our Corporate Governance Guidelines provide that the background and qualifications of the members of our Board of Directors considered as a group should provide a significant breadth of experience, knowledge, and ability to assist our Board of Directors in fulfilling its responsibilities. In considering whether to recommend any particular candidate for inclusion in our Board’s slate of recommended director nominees, our Nominating and Corporate Governance Committee applies the criteria set forth in our corporate governance guidelines. Consistent with these criteria, our Nominating and Corporate Governance Committee expects every nominee to have the following attributes or characteristics: integrity, business acumen, good judgment, and a commitment to understand our business and industry. We also value experience on other public company boards of directors and board committees.

The biography for each of the director nominees included herein indicates each nominee’s experience, qualifications, attributes and skills that led our Nominating and Corporate Governance Committee and our Board of Directors to conclude each such director should continue to serve as a director of our Company. Our Nominating and Corporate Governance Committee and our Board believe that each of the nominees has the individual attributes and characteristics required of each of our directors, and the nominees as a group possess the skill sets and specific experience desired of our Board as a whole.

Our Nominating and Corporate Governance Committee does not have a policy (formal or informal) with respect to diversity, but believes that our Board, taken as a whole, should embody a diverse set of skills, experiences and backgrounds. In this regard, the committee also takes into consideration the value of diversity (with respect to gender, race, national origin and other factors) of our Board members. The committee does not make any particular weighting of diversity or any other characteristic in evaluating nominees and directors.

Stockholders may recommend individuals to our Nominating and Corporate Governance Committee for consideration as potential director candidates by following the procedures described in our Bylaws and in “Stockholder Proposals and Nominations For Director” at the end of this proxy statement. In general, persons recommended by stockholders will be considered in accordance with our Corporate Governance Guidelines. Any such recommendation should be made in writing to the Nominating and Corporate Governance Committee, care of our Corporate Secretary at our principal office and should be accompanied by the following information concerning each recommending stockholder and the beneficial owner, if any, on whose behalf the nomination is made:

The recommendation must also be accompanied by the following information concerning the proposed nominee:

Board of employee complaints on accounting, internal controls or auditing matters.Directors, Management and Corporate Governance

Board of Directors, Management and Corporate Governance

business directly with the Board, or any individual director, in an uncontested election receives a greater number of “WITHHOLD” votes fromshould direct his or her election than votes “FOR” such election. The nominating and governance committee would then consider allquestions in writing to the Chairman of the relevantBoard at 9301 Amberglen Blvd., Suite 100, Austin, Texas 78729. Communications will be distributed to the Board, or to any individual director or directors as appropriate, depending on the facts and circumstances and recommendoutlined in the communications. Items that are unrelated to the Board the action to be taken with respect to such offer of resignation. Promptly following the Board’s decision, we would disclose that decisionduties and an explanation of such decision in a filing with the SEC and a press release. The current formresponsibilities of the Corporate Governance Guidelines canBoard may be found on the Corporate Governance page under the Investor Relations sectionexcluded, such as junk mail and mass mailings, resumes and other forms of our website at www.thresholdpharm.com. job inquiries, surveys, and solicitations or advertisements.

In addition, these guidelines areany material that is unduly hostile, threatening, or illegal in nature may be excluded, provided that any communication that is filtered out will be made available in print to any stockholder who requests a copy. Please direct all requests to our Corporate Secretary, Threshold Pharmaceuticals, Inc., 170 Harbor Way, Suite 300, South San Francisco, CA 94080.outside director upon request.

Communications with the Board of Directors. Stockholders or other interested parties may communicate with any director or committee of our board of directors by writing to them c/o Secretary, Threshold Pharmaceuticals, Inc., 170 Harbor Way, Suite 300, South San Francisco, CA 94080. Comments or questions regarding our accounting, internal controls or auditing matters will be referred to members of the audit committee. Comments or questions regarding the nomination of directors and other corporate governance matters will be referred to members of the nominating and governance committee.

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SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENTExecutive Officers

The following table sets forth certain information regarding ownershipour executive officers who are not also directors. We have employment agreements with all of our executive officers, and all of our executive officers areat-will employees.

Dr. Poma is a member of our Board of Directors. See “Management and Corporate Governance – The Board of Directors” for more information about Dr. Poma.

Jason S. Kim

Jason S. Kim, 44, is President and Chief Operating Officer of the Company. Mr. Kim joined Private Molecular in February 2010 and served as its President and Chief Financial Officer until the completion of the Merger. From 2009 to 2011, Mr. Kim served as Director, Business and Corporate Development for OSI Pharmaceuticals (now Astellas Pharma US, Inc.), an oncology focused biotechnology company. Prior to 2009, Mr. Kim served as an Investment Associate for Domain Associates, LLC, a venture capital firm focused on investments in the biotechnology industry. From 2003 to 2006, Mr. Kim also served as Director, Business Development for ImClone Systems Incorporated (now Eli Lilly and Company), a biotechnology company focused on antibody therapeutics. Mr. Kim received his B.A. in neuroscience and behavior from Wesleyan University and an M.B.A. from the Wharton School, University of Pennsylvania.

Adam D. Cutler

Adam D. Cutler, 44, is the Chief Financial Officer, Treasurer and Secretary of the Company since his appointment in November 2017. From March 2015 to November 2017, Mr. Cutler was Senior Vice President of Corporate Affairs for Arbutus Biopharma, where he was responsible for investor relations and contributed to the company’s business development and corporate finance efforts. From June 2012 to February 2015, Mr. Cutler was a Managing Director for The Trout Group LLC and Trout Capital LLC, where he executed financings and advised public and private life science companies on investor relations and capital raising strategies. From 2000 to 2012, Mr. Cutler worked as a biotechnology equity research analyst for Credit Suisse, Canaccord Genuity, JMP Securities, and Bank of America Securities. Mr. Cutler also worked in healthcare consulting as an Analyst at The Frankel Group and a Consultant for Ernst & Young LLP. Mr. Cutler currently serves on the Board of Directors for InMed Pharmaceuticals and Navidea Biopharmaceuticals. Mr. Cutler earned his Bachelor of Arts degree in Economics from Brandeis University.

EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

Summary Compensation Table

The following table shows the total compensation paid or accrued during the last three fiscal years ended December 31, 2018,2017and 2016 to (1) our Chief Executive Officer, and (2) our two next most highly compensated executive officers who earned more than $100,000 during the fiscal year ended 2018.

Narrative Disclosure to Summary Compensation Table

Eric E. Poma, Ph.D.

Effective as of the effective time of the Merger, the Company’s Board appointed Dr. Poma as Chief Executive Officer and Chief Scientific Officer of the Company. Prior to the completion of the Merger, Dr. Poma was Chief Executive Officer and Chief Scientific Officer of Private Molecular. Private Molecular entered into an employment agreement with Dr. Poma on April 22, 2016. The agreement provided for a base salary of $412,000 and an annual cash incentive bonus targeted at between 35% to 50% of his base salary awarded at the discretion of the Company’s Board. In October 2017, Dr. Poma’s base salary was increased to $500,000 effective as of August 1, 2017 and his annual cash incentive bonus target for October 1, 2017 through December 31, 2017 was changed to 50% of his new base salary. On January 31, 2018, the Company

Executive Officer and Director Compensation

awarded a cash bonus of $230,583 to Dr. Poma, which represented 103% of his target bonus. No changes were made to Dr. Poma’s base salary or cash incentive bonus target in 2018. On February 6, 2019, the Company awarded a cash bonus of $200,000 to Dr. Poma, which represents 80% of his target bonus. Dr. Poma is also eligible to participate in the employee benefit plans available to the Company’s employees, subject to the terms of those plans.

The Company granted an option to purchase 275,000 shares of common stock on October 9, 2017 to Dr. Poma. This grant vests 25% on October 9, 2018, then in equal installments over the 36 following months, fully vesting on October 9, 2021. The Company granted an option to purchase 585,126 shares of common stock on May 31, 2018 to Dr. Poma. This grant vests 25% on May 31, 2019, then in equal installments over the 36 following months, fully vesting on May 31, 2022.

Dr. Poma is entitled to certain benefits in connection with a termination of his employment or a change of control as discussed below under “—Potential Payments upon Termination or Change of Control.”

Jason S. Kim

Mr. Kim joined Private Molecular in February 2010 and served as its President and Chief Financial Officer until the completion of the Merger. Following the Merger, he became President and Chief Operating Officer of the Company. Private Molecular entered into an employment agreement with Mr. Kim on April 22, 2016. The agreement provided for a base salary of $334,750 in 2017 and an annual cash incentive bonus targeted at 35% of his base salary awarded at the discretion of the Company’s Board. In October 2017, Mr. Kim’s base salary was increased to $390,000 effective as of August 1, 2017 and his annual cash incentive bonus target for October 1, 2017 through December 31, 2017 was increased to 40% of his new base salary. On January 31, 2018, the Company awarded a cash bonus of $143,884 to Mr. Kim, which represented 101% of his target bonus. No changes were made to Mr. Kim’s base salary or cash incentive bonus target in 2018. On February 6, 2019, the Company awarded a cash bonus of $127,920 to Mr. Kim, which represents 82% of his target bonus. Mr. Kim is also eligible to participate in the employee benefit plans available to the Company’s employees, subject to the terms of those plans.

The Company granted an option to purchase 137,500 shares of common stock on October 9, 2017 to Mr. Kim. This grant vests 25% on October 9, 2018, then in equal installments over the 36 following months, fully vesting on October 9, 2021. The Company granted an option to purchase 196,161 shares of common stock on May 31, 2018 to Mr. Kim. These grants vest 25% on May 31, 2019, then in equal installments over the 36 following months, fully vesting on May 31, 2022.

Mr. Kim is entitled to certain benefits in connection with a termination of his employment or a change of control as discussed below under “—Potential Payments upon Termination or Change of Control.”

Adam D. Cutler

The Company entered into an employment agreement with Mr. Cutler on November 13, 2017. The agreement provides for an initial base salary of $380,000, and Mr. Cutler is eligible to receive a target discretionary annual bonus of 35% of his base salary, which was prorated for 2017. On November 30, 2017, the Company awarded a cash bonus of $50,000 to Mr. Cutler, as part of a $100,000 signing bonus, 50% of which was due and paid in fiscal year 2017. The remaining 50%, or $50,000 was awarded to Mr. Cutler on May 31, 2018. On January 31, 2018, the Company awarded a cash bonus of $22,167 to Mr. Cutler, which represents 133% of his target bonus. On February 6, 2019, the Company awarded a cash bonus of $109,060 to Mr. Cutler, which represents 82% of his target bonus. Mr. Cutler is also eligible to participate in the employee benefit plans available to the Company’s employees, subject to the terms of those plans.

Executive Officer and Director Compensation

In connection with the commencement of his employment, the Company granted an option to purchase 225,000 shares of common stock on November 13, 2017 to Mr. Cutler. This grant vests 25% on November 13, 2018, then in equal installments over the 36 following months, fully vesting on November 13, 2021. The Company granted an option to purchase 100,000 shares of common stock on May 31, 2018 to Mr. Cutler. This grant vests 25% on May 31, 2019, then equally over the 36 following months, fully vesting on May 31, 2022.

Mr. Cutler is entitled to certain benefits in connection with a termination of his employment or a change of control as discussed below under “—Potential Payments upon Termination or Change of Control.”

Outstanding Equity Awards at 2018 FiscalYear-End

The following table shows grants of stock options outstanding on the last day of the fiscal year ended December 31, 2018, to each of the executive officers named in the Summary Compensation Table.

Executive Officer and Director Compensation

Option Exercises in 2018

The following table shows information regarding exercises of options to purchase our common stock held by each executive officer named in the Summary Compensation Table during the fiscal year ended December 31, 2018.

Executive Officer and Director Compensation

Potential Payments upon Termination orChange-In-Control

Eric E. Poma, Ph.D.

Pursuant to Dr. Poma’s employment agreement, if Dr. Poma’s employment is terminated for Cause, death, Disability, ornon-renewal or expiration of the employment term, or if Dr. Poma voluntarily resigns without Good Reason, he shall be entitled to: (i) his base salary through the effective date of termination; (ii) the right to continue health care benefits under COBRA, at his cost, to the extent required and available by law; (iii) reimbursement of expenses for which he is entitled to be reimbursed, but for which he has not yet been reimbursed; and (iv) no other severance or benefits of any kind, unless required by law or pursuant to any other Company plans or policies, as then in effect. “Disability” means that Dr. Poma, at the time notice is given, has been unable to substantially perform his duties under the employment agreement for not less than 120 work days within a 12 consecutive month period as a result of April 25, 2016his incapacity due to a physical or earliermental condition and, if reasonable accommodation is required by law, after any reasonable accommodation.

If Dr. Poma is terminated by the Company involuntarily without Cause (excluding any termination due to death or Disability) or if Dr. Poma resigns with Good Reason, then he shall be entitled to receive: (A) his base salary through the date of termination; (B) continuing severance pay at a rate equal to 100% of his base salary, as then in effect (less applicable withholding), for information based on filingsa period of nine months from the date of such termination, to be paid periodically in accordance with the SECCompany’s normal payroll practices; (C) reimbursement of all expenses for which he is entitled to be reimbursed, but for which he has not yet been reimbursed; (D) the right to continue health care benefits under COBRA, at his cost, to the extent required and available by (a) each person knownlaw; and (E) no other severance or benefits of any kind, unless required by law or pursuant to usany written Company plans or policies, as then in effect.

As defined in Dr. Poma’s employment agreement, “Cause” means (i) Dr. Poma’s continued failure to own moresubstantially perform the duties and obligations under the employment agreement (for reasons other than 5%death or Disability); (ii) the commission by Dr. Poma of (x) an act of dishonesty or act constituting common law fraud, embezzlement or a felony, or (y) any violation of federal or state law, tortious act, unlawful act or malfeasance which causes or reasonably could cause material harm to the Company’s standing, condition or reputation; (iii) the Executive’s violation of, or a plea of nolo contendere or guilty to, a felony under the laws of the United States or any state; or (iv) the Executive’s material breach of the terms of this Agreement or the EPIA. With respect to subsection (i) above, before the Company can terminate Executive for Cause for the continued failure to substantially perform his duties, the Company must provide Executive with written notice of the grounds for Cause and provide Executive no less than thirty (30) days from the date of the notice (the “Cure Period”) to cure the deficiencies in his performance and avoid termination. If Executive cures the conditions giving rise to Cause for termination within the Cure Period but the Company terminates Executive’s employment during or at the end of the Cure Period, Executive will be entitled to the severance payments and/or benefits contemplated by his employment agreement.

As defined in Dr. Poma’s employment agreement, “Good Reason” means, without Dr. Poma’s written consent: (i) there is a material reduction in his base salary (except where there is a general reduction applicable to the management team generally), (ii) there is a material reduction in his overall responsibilities or

Executive Officer and Director Compensation

authority, title, or scope of duties; (iii) a requirement by the Company that he perform an act or not perform an act that he reasonably believes violates a law, rule or regulation or constitutes fraud or violates a clear mandate of public policy or clear principle of professional ethics or (iv) a material change in the geographic location at which he must perform his services; provided, that in no instance will the relocation of Dr. Poma to a facility or a location of 50 miles or less from his then current office location be deemed material for purposes of the employment agreement.

Jason S. Kim

Pursuant to Mr. Kim’s employment agreement, if Mr. Kim’s employment is terminated for Cause, death, Disability, ornon-renewal or expiration of the employment term, or if Mr. Kim voluntarily resigns without Good Reason, he shall be entitled to: (i) his base salary through the effective date of termination; (ii) the right to continue health care benefits under COBRA, at his cost, to the extent required and available by law; (iii) reimbursement of expenses for which he is entitled to be reimbursed, but for which he has not yet been reimbursed; and (iv) no other severance or benefits of any kind, unless required by law or pursuant to any other Company plans or policies, as then in effect. “Disability” means that Mr. Kim, at the time notice is given, has been unable to substantially perform his duties under the employment agreement for not less than 120 work days within a 12 consecutive month period as a result of his incapacity due to a physical or mental condition and, if reasonable accommodation is required by law, after any reasonable accommodation.

If Mr. Kim is terminated by the Company involuntarily without Cause (excluding any termination due to death or Disability) or if Mr. Kim resigns with Good Reason, then he shall be entitled to receive: (A) his base salary through the date of termination; (B) continuing severance pay at a rate equal to 100% of his base salary, as then in effect (less applicable withholding), for a period of nine months from the date of such termination, to be paid periodically in accordance with the Company’s normal payroll practices; (C) reimbursement of all expenses for which he is entitled to be reimbursed, but for which he has not yet been reimbursed; (D) the right to continue health care benefits under COBRA, at his cost, to the extent required and available by law; and (E) no other severance or benefits of any kind, unless required by law or pursuant to any written Company plans or policies, as then in effect.

As defined in Mr. Kim’s employment agreement, “Cause” means (i) Mr. Kim’s continued failure to substantially perform the duties and obligations under the employment agreement (for reasons other than death or Disability); (ii) the commission by Mr. Kim of (x) an act of dishonesty or act constituting common law fraud, embezzlement or a felony, or (y) any violation of federal or state law, tortious act, unlawful act or malfeasance which causes or reasonably could cause material harm to the Company’s standing, condition or reputation; (iii) the Executive’s violation of, or a plea of nolo contendere or guilty to, a felony under the laws of the United States or any state; or (iv) the Executive’s material breach of the terms of this Agreement or the EPIA. With respect to subsection (i) above, before the Company can terminate Executive for Cause for the continued failure to substantially perform his duties, the Company must provide Executive with written notice of the grounds for Cause and provide Executive no less than 30 days from the date of the notice (the “Cure Period”) to cure the deficiencies in his performance and avoid termination. If Executive cures the conditions giving rise to Cause for termination within the Cure Period but the Company terminates Executive’s employment during or at the end of the Cure Period, Executive will be entitled to the severance payments and/or benefits contemplated by his employment agreement.

As defined in Mr. Kim’s employment agreement, “Good Reason” means, without Mr. Kim’s written consent: (i) there is a material reduction in his base salary (except where there is a general reduction applicable to the management team generally), (ii) there is a material reduction in his overall responsibilities or authority, title, or scope of duties; (iii) a requirement by the Company that he perform an act or not perform an act that he reasonably believes violates a law, rule or regulation or constitutes fraud or violates a

Executive Officer and Director Compensation

clear mandate of public policy or clear principle of professional ethics or (iv) a material change in the geographic location at which he must perform his services; provided, that in no instance will the relocation of Mr. Kim to a facility or a location of 50 miles or less from his then current office location be deemed material for purposes of the employment agreement.

Adam D. Cutler

Pursuant to Mr. Cutler’s employment agreement, if Mr. Cutler’s employment is terminated by the Company for any reason other than for “cause” (as defined in the Company’s 2014 Equity Incentive Plan) or by Mr. Cutler for “good reason” (as defined in his employment agreement), he will be entitled to receive as severance (i) 100% of his base salary, as then in effect, for a period of nine months from the date of such termination, to be paid periodically in accordance with the Company’s normal payroll practices, (ii) a prorated annual target bonus for the year of termination, (iii) nine months payment of COBRA for continued health care benefits, and (iv) full acceleration of the vesting of all then outstanding equity awards. In the event that Mr. Cutler’s employment is terminated by the Company for any reason other than for “cause” or by Mr. Cutler for “good reason” three months prior or twelve months following a change in control (as defined in his employment agreement), he will be entitled to receive as severance (i) a lump sum payment equal to his base salary, as then in effect, (ii) an annual target bonus for the year of termination, and (iii) full acceleration of the vesting of all time-based outstanding equity awards.

As defined in Mr. Cutler’s employment agreement, “good reason” means, without Mr. Cutler’s written consent: (i) there is a material reduction in his Base Salary (except where there is a general reduction applicable to the management team generally); (ii) there is a material reduction in his overall responsibilities or authority, title, reporting relationships, or scope of duties; (iii) there is a requirement by the Company that he perform an act or not perform an act that he reasonably believes violates a law, rule or regulation or constitutes fraud or violates a clear mandate of public policy or clear principle of professional ethics; (iv) there is a failure by the Company to comply with any of the provisions of this letter or to pay or award any sums or awards due under this letter; or (v) there is a material change in the geographic location at which he must perform his services; provided, that in no instance will the relocation of Mr. Cutler to a facility or a location of 30 miles or less from his then current office location be deemed material for purposes of the employment agreement.

Director Compensation

The following table shows the total compensation paid or accrued during the fiscal year ended December 31, 2018to each ofnon-employee director of the Company. Directors who are employed by us are not compensated for their service on our Board.

Executive Officer and Director Compensation

Director Compensation Policy

The following is a description of the standard compensation arrangements under which ournon-employee directors are compensated for their service as directors, including as members of the various committees of our Board.

The Company generally providesits non-employee directors with cash and equity compensation for their service on the Board. The Board is responsible for considering and approving the compensation paid to theCompany’s non-employee directors, upon recommendation from the Compensation Committee. The Compensation Committee reviews the compensation paid to theCompany’s non-employee directors with input and market data provided by the Compensation Committee’s outside compensation consultant. In this regard, in March 2015, the Board ofPre-Merger Threshold approveda non-employee director compensation policy, or the director compensation policy, that set forth the terms of the cash and equity compensation to be paid to theCompany’s non-employee directors beginning in 2015. In October 2017 and in May 2018, the Board amended and restated the director compensation policy. Directors who are also our employees, such as Dr. Poma, will not receive additional compensation for their services as directors.

Executive Officer and Director Compensation

On October 9, 2017 and reaffirmed on May 31, 2018, our director compensation policy was amended to establish the annual cash retainers as follows: eachnon-employee director is paid an annual cash retainer of $30,000 or $40,000 in the case of the chairman, for their services. Committee members receive additional annual cash retainers as follows:

Pursuant to our director compensation policy in effect since October 9, 2017 and affirmed on May 31, 2018, in each year of anon-employee director’s tenure, the director is granted a nonstatutory stock option to purchase 15,000 shares of our common stock (b) each Named Executive Officer identified inon the compensation tables appearing later in this proxy statement, (c)date of our annual meeting of stockholders, provided that such individual has served as anon-employee director for at least six months prior to the date of such annual meeting. Upon the initial election or appointment to the Board, newnon-employee directors are granted a nonstatutory stock option to purchase 25,000 shares of our common stock. Each initial option grant will vest and become exercisable as to 50% of the shares of common stock subject to the option on each of the first and second anniversaries of the date of grant, subject to thenon-employee director’s continuous service (as defined in our director compensation policy) through such dates. Each annual option grant will vest and become exercisable on the first anniversary of the date of grant, subject to thenon-employee director’s continuous service through such dates. All annual and initial stock option grants to ournon-employeedirectors under the director compensation policy fully vest immediately prior to a fundamental transaction or change in control, as such terms are defined in our director compensation policy.

Eachnon-employee director is entitled to reimbursement from the Company for all reasonableout-of-pocket expenses incurred by thenon-employee director in connection with his or her attendance at Board and (d) all directors and executive officers as a group. The information in this table is based solely on statements in filings with the SEC or other information we believe to be reliable.Committee meetings.

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EQUITY COMPENSATION PLAN INFORMATION

The following table provides certain aggregate information with respect to all of ourthe Company’s equity compensation plans in effect as of December 31, 2015:2018.

1%REPORT OF AUDIT COMMITTEE

The Audit Committee of the numberBoard, which consists entirely of directors who meet the independence and experience requirements of The Nasdaq Stock Market, has furnished the following report:

The Audit Committee assists the Board in overseeing and monitoring the integrity of our shares issuedfinancial reporting process, compliance with legal and outstandingregulatory requirements and the quality of internal and external audit processes. This committee’s role and responsibilities are set forth in our charter adopted by the Board, which is available on such date;

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

The following describes transactions since January 1, 2017 to which we have been a party and in which certain categorieswhich:

We believe the terms ofobtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the availability of other sourcesamounts that would be paid or received, as applicable, from unrelated third parties. Compensation arrangements for comparable services or products,our directors and if applicable, the impact on director independence.named executive officers are described in “Executive Officer and Director Compensation.”

Related Party Transactions and Business Relationships

Participation inUnderwritten Public Offering

On February 18, 2015,September 25, 2018, we completed anclosed its underwritten public offering (the “Public Offering”) of 8,300,0009,430,000 shares of our common stock, and warrantswhich included the exercise in full by the underwriters of their option to purchase 8,300,0001,230,000 additional shares of our common stock. The combined purchasestock, at a price to the public forof $5.50 per share, in which Longitude Venture Partners III, L.P. and CDK Associates, L.L.C., current stockholders of the Company, purchased 365,000 and 545,454 shares of common stock, respectively, at the public offering price. Scott Morenstein, a director of the Company is a Managing Director of Caxton Alternative Management LP, the investment manager of CDK Associates, L.L.C., David Hirsch, M.D., Ph.D., a director of the Company, is a member of Longitude Capital Partners III, LLC, the general partner of Longitude Venture Partners III, L.P.

Concurrent Financing

On August 1, 2017, the Company entered into a Securities Purchase Agreement with Longitude Venture Partners III, L.P., Sante Health Ventures I, L.P., Sante Health Ventures Annex Fund, L.P., Excel Venture Fund II, L.P., CDK Associates, L.L.C. and certain other accredited investors following the completion of the Merger, pursuant to which the Company sold an aggregate of 5,793,063 units having an aggregate purchase price of $40.0 million, each such unit consisting of (i) one share of common stock of the Company and accompanying(ii) a warrant to purchase 0.50 shares of common stock of the Company. The financing was $3.62. However, onepursuant to equity commitment letter agreements entered into by and between the Company and each of the investors in March and June of 2017, and was approved by our directors who participatedstockholders at the annual meeting of stockholders held on July 31, 2017. The purchase price per unit was $6.9048 (giving effect to the Reverse Split). The warrants are exercisable for a period of seven years from the date of their issuance at aper-share exercise price of $6.8423 (which exercise price shall be payable in cash or through a “cashless” exercise mechanic), subject to certain adjustments as specified in the offering, Wilfred E. Jaeger, paidwarrants. David Hirsch, a director of the Company, is a member of Longitude Capital Partners III, LLC, the general partner of Longitude Venture Partners III, L.P., Kevin Lalande, a director of the Company is affiliated with Sante Health Ventures I, L.P. and Sante Health Ventures Annex Fund, L.P., and Scott Morenstein, a director of the Company is a Managing Director of Caxton Alternative Management LP, the investment manager of CDK Associates, L.L.C.

Certain Relationships and Related Person Transactions

Convertible Notes

As of December 31, 2017, the Company had received an additional $0.125aggregate of approximately $10.0 million from stockholders under secured convertible promissory notes (the “Notes”). All of the Notes were issued in 2017 and 2016 and had the same terms. The Notes were subordinate to the long-term debt due to Silicon Valley Bank and accrued interest at a rate of 5.0% per annum, which was due with all unpaid principal on the maturity date of September 7, 2017. In connection with the Merger, the holders of the Notes agreed to convert the Notes based on an agreed upon price of $3.36 per share and no Notes remain outstanding at December 31, 2017. The principal of $10.0 million and accrued interest $486,900 was converted to 3,121,098 shares, which converted to 2,208,716 post-split shares in the merged entity. As a result, the Company recorded a loss on conversion of notes of $4.6 million during the year ended December 31, 2017, since the agreed upon price was below the fair value of the Notes at the time of the Merger.

Takeda Equity Financing

In connection with the execution of a collaboration and license agreement between Private Molecular and Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda Pharmaceutical Company Ltd., on June 23, 2017, Takeda entered into a stock purchase agreement withPre-Merger Threshold and Private Molecular, pursuant to which Takeda agreed to purchase shares of common stock to occur following the consummation of the Merger and the Concurrent Financing. Pursuant to the Takeda Securities Purchase Agreement, on August 1, 2017, following the consummation of the Merger and the Concurrent Financing, the Company sold 2,922,993 shares of common stock to Takeda at a price per share of common stock$6.8423. Michael Broxson, was a director of the Company at the time and accompanying warrantwas the Vice President and Head of R&D Business Development for Takeda. Jonathan Lanfear, a director of the Company is the Vice President and Global Head of Oncology & Neuroscience Business Development at Takeda.

Takeda Research and Development Agreements

On September 18, 2018, the Company entered into a Development and License Agreement with Takeda (“Takeda Development and License Agreement”) for the development and commercialization of products incorporating or comprised of one or more CD38SLT-A fusion proteins (“Licensed Products”) for the treatment of patients with diseases such as multiple myeloma. Pursuant the Takeda Development and License Agreement Takeda made an upfront payment of $30.0 million to the Company in accordanceOctober 2018.

In addition to the upfront fee, if the Company exercises itsco-development option and funds its share of development costs, it is eligible to receivepre-clinical and clinical development milestone payments of up to $307.5 million, upon the achievement of certain development milestones and regulatory approvals; and sales milestone payments of up to $325.0 million, upon the achievement of certain sales milestone events. If the Company does not exercise itsco-development option, it is eligible to receive development milestone payments of up to $162.5 million upon the achievement of certain development milestones and regulatory approvals; and sales milestone payments of up to $175.0 million upon the achievement of certain sales milestone events. The Company will also be entitled to receive tiered royalties, subject to certain reductions, as percentages of annual aggregate net sales, if any, of Licensed Products. The royalty percentages would range from low double-digits to low twenties if the Company exercises its option toco-develop, and from high-single digits to low teens if the Company does not exercise its option toco-develop.

In June 2017, Private Molecular entered into a Multi-Target Collaboration and License Agreement with Takeda (“Takeda Multi-Target Agreement”) in which Molecular agreed to collaborate with Takeda to identify and generate ETBs, against two targets designated by Takeda. Takeda designated certain targets of

Certain Relationships and Related Person Transactions

interest as the focus of the research. Each party granted to the other nonexclusive rights in its intellectual property for purposes of the conduct of the research, and Private Molecular agreed to work exclusively with Takeda with respect to the designated targets.

Under the Takeda Multi-Target Agreement, Takeda has an option during an option period to obtain an exclusive license under the Company’s intellectual property to develop, manufacture, commercialize and otherwise exploit ETBs against the designated targets. The option period for each target ends three months after the completion of the evaluation of such designated target. Under the Takeda Multi-Target Agreement, both parties have the right to terminate the agreement, with a specified notice period.

In October 2016, Private Molecular entered into a collaboration and option agreement (the “Takeda Collaboration Agreement”) with Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda, to discover and develop CD38-targeting engineered toxin bodies (“ETBs”), which includesMT-4019 for evaluation by Takeda. Under the terms of the Takeda Collaboration Agreement, Molecular is responsible for providing to Takeda (i) new ETBs generated using Takeda’s proprietary fully human antibodies targeting CD38 and(ii) MT-4019 for in vitro and in vivo pharmacological and anti-tumor efficacy evaluations. Molecular granted Takeda (1) a background IP license during the term of the Takeda Collaboration Agreement, and (2) an exclusive option during the term of the Takeda Collaboration Agreement and for a period of thirty days thereafter, to negotiate and obtain an exclusive worldwide license to develop and commercialize any ETB that may result from this collaboration, includingMT-4019.

In connection with the rulesTakeda Collaboration Agreement, the Company entered into an Individual Project Agreement (the “Takeda Individual Project Agreement”) with Takeda in June 2018, that was subsequently amended in July 2018. Under the Takeda Individual Project Agreement, the Company is responsible to perform certain research and development services relating to Chemistry, Manufacturing, and Controls (“CMC”) work for three potential lead ETBs targeting CD38.

Michael Broxson, was a director of the NASDAQ Stock Market. Net cash proceeds fromCompany at the public offering were approximately $28.2 million, after deductingtime of entering into these research and development agreements, and was the underwriting discountsVice President and commissionsHead of R&D Business Development for Takeda. Jonathan Lanfear, a director of the Company is the Vice President and offering expenses payable by us. The warrantsGlobal Head of Oncology & Neuroscience Business Development at Takeda.

Registration Rights Agreement

In connection with the Concurrent Financing and the subsequent consummation of the Takeda Equity Financing, the Company entered into a Registration Rights Agreement with each investor in the Concurrent Financing and Takeda, pursuant to which the Company is obligated, among other things, (i) to file a registration statement with the SEC within 45 days following the closing of the Concurrent Financing and the Takeda Equity Financing for purposes of registering the shares of common stock issued in the offering carried an initialConcurrent Financing and the Takeda Financing and the shares of Common Stock issuable upon exercise price of $10.86 per sharethe warrants for resale by the Investors, (ii) use its commercially reasonable efforts to have the registration statement declared effective as soon as practicable after filing, and were exercisable atin any timeevent no later than 120 days after the closing of the Concurrent Financing and from time to time commencing withTakeda Equity Financing, and (iii) maintain the date six months following the issuance date and continuing through the date that is five years from the issuance date. Pursuant to adjustment provided in the Warrant, effective January 21, 2016, the exercise price was adjusted toregistration until all registrable securities may be the floor price of $3.62 per share. The adjustment described was madesold pursuant to Rule 144 under the Warrant basedSecurities Act, without restriction as to volume. The Registration Rights Agreement contains customary terms and conditions for a transaction of this type, including certain customary cash penalties on the arithmetic average of the volume-weighted average price (VWAP)Registrant for the Company’s common stock on each of the 20 Trading Days immediately preceding the 30th Trading Day following the Company’s issuance of a press release on December 6, 2015 first publicly announcing (a) top-line efficacy data from the Company’s TH-CR-406 Phase 3 clinical trial of evofosfamide plus doxorubicin versus doxorubicin alone in patients with locally advanced unresectable or metastatic soft tissue sarcomaits failure to satisfy specified filing and (b) top-line efficacy data from Merck KGaA’s Phase 3 MAESTRO clinical trial of evofosfamide in combination with gemcitabine in patients with previously untreated, locally advanced unresectable or metastatic pancreatic adenocarcinoma. The investors in this offering included following related parties listed in the table below.effectiveness time periods.

Certain Relationships and Related Person Transactions

Threshold Promissory Note

On March 24, 2017, the price to the publicCompany received $2.0 million from Threshold in the offering determined inform of a promissory note at an interest rate of 1% per annum. The Company received an additional $2.0 million on June 1, 2017. The note was settled as part by a book building process withof the underwriters and in part by negotiation at arms-length with parties that were not, prior to the offering, related parties, the offering was not specifically reviewed in advanceMerger as a related-party transaction. However, the offering was approved in advance by our board of directors and by a pricing committee

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of our board of directors. Our nominating and governance committee, which served as the independent review and oversight body due to the participation of Dr. Jaeger (who serves on the audit committee) in the offering, subsequently reviewed the offering.

Indemnification Arrangements

Our Certificate of Incorporation and bylawsBylaws provide that we will indemnify each of our directors and officers to the fullest extent permitted by Delaware law. Further, we have entered into separate indemnification agreements with each of our directors and executive officers. Such agreements require us, among other things, to indemnify our directors and officers, other than for liabilities arising from willful misconduct of a culpable nature, and to advance their expenses incurred as a result of any proceedings against them as to which they could be indemnified.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEPolicies and Procedures for Related Party Transactions

Under Section 16(a)We have adopted a written policy that requires all future transactions between us and any director, executive officer, holder of the Exchange Act, and the rules promulgated by the SEC, our directors, executive officers and beneficial owners of5% or more than 10% of any class of equity security are required to file periodic reports of their ownership of our equity securities, and changes in that ownership, with the SEC. To our knowledge, based solely on our reviewcapital stock or any member of the copiesimmediate family of, or entities affiliated with, any of them, or any other related persons, as defined in Item 404 of RegulationS-K, or their affiliates, in which the amount involved is equal to or greater than $120,000, be approved in advance by our Audit Committee. Any request for such reports receiveda transaction must first be presented to our Audit Committee for review, consideration and approval. In approving or written representationsrejecting any such proposal, our Audit Committee is to consider the relevant facts and circumstances available and deemed relevant to the Audit Committee, including, but not limited to, the extent of the related party’s interest in the transaction, and whether the transaction is on terms no less favorable to us than terms we could have generally obtained from such persons that no other reports were required, we believe that our directors, executive officersan unaffiliated third party under the same or similar circumstances.

Our Audit Committee reviews and beneficial owners of more than 10% of our equity securities complied withapproves in advance all applicable filing requirements during 2015 except that one report covering one transaction was filed late by each of Jeffrey W. Bird, M.D., Ph.D.; Bruce C. Cozadd, David R. Hoffmann and Joel Fernandes and two reports each covering one transaction were filed late by each of Wilfred E. Jaeger and George Parker.

CERTAIN INFORMATION WITH RESPECT TO EXECUTIVE OFFICERS

The following table sets forth, as of April 1, 2016, information about our current executive officers.related-party transactions.

Biographical information for Dr. Selick is included above under the heading “Nominees and Continuing Directors.”

Joel A. Fernandes joined us in April 2006 and has served as our Senior Vice President, Finance and Controller since March 2016. Prior to March 2016, Mr. Fernandes served as our Senior Director, Finance and Controller. Prior to May 2011, Mr. Fernandes had served as our Vice President, Finance and Controller. Mr. Fernandes served as Associate Director of Finance at Theravance, Inc. from January 2005 to March 2006, Senior Manager of Corporate Finance at KLA-Tencor from August 2002 to January 2005 and Assistant Controller of ALZA Corporation from 1999 to 2002. Mr. Fernandes has been a Certified Public Accountant since 1996 and has a Masters in Accountancy from Manchester College, Indiana.

Tillman Pearce, M.D. joined us in February 2012 as Chief Medical Officer. Dr. Pearce served as Chief Medical Officer of KaloBios Pharmaceuticals, Inc., from 2007 through 2011, where he where he oversaw the design and execution of clinical programs for three antibody therapeutics in the fields of infectious disease,

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inflammation (asthma and rheumatoid arthritis and hematologic malignancies, and since 2011 and prior to joining us, he had been an oncology consultant. Prior to KaloBios, Dr. Pearce was a Senior Director at PDL BioPharma, Inc. from 2002 to 2007 and a Medical Director in the Oncology Business Unit at Sanofi-Synthelabo from 1997 to 2002. He has also held research positions in oncology at Sandoz and Novartis. Dr. Pearce holds a B.A. in philosophy from Tulane University and an M.D. from the Medical College of Georgia.

Stewart M. Kroll joined us in January 2005 and has served as our Chief Operating Officer since March 11, 2016. From May 2011, Mr. Kroll had served as our Senior Vice President of Clinical Development. Prior to May 2011, Mr. Kroll served as our Vice President of Biostatistics and Clinical Operations and then Senior Vice President of Clinical Development. Mr. Kroll served as the Senior Director of Biostatistics of Corixa Corporation from December 2000 to January 2005, and served in positions of increasing responsibility, most recently as Director of Biostatistics of Coulter Pharmaceuticals, Inc. from January 1997 to December 2000. Mr. Kroll received his B.A. and M.A. in statistics from the University of California, Berkeley.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview

The following Compensation Discussion and Analysis describes the material elements of compensation for our principal executive officer, principal financial officer and our four other most highly compensated executive officers who were either serving as executive officers at December 31, 2015 or whose service as executive officers terminated on December 31, 2015, each of whom are listed below and who are collectively referred to in this proxy statement as our “Named Executive Officers.”

Executive Summary

Business Overview. We are a clinical-stage biopharmaceutical company using our expertise in the tumor microenvironment to discover and develop therapeutic and diagnostic agents that selectively target tumor cells for the treatment of patients living with cancer. We are developing two therapeutic product candidates based on hypoxia-activated prodrug technology: evofosfamide and tarloxotinib. In December 2015, we announced topline results from two pivotal Phase 3 clinical trials of evofosfamide: TH-CR-406 conducted by Threshold in patients with soft tissue sarcoma and MAESTRO conducted by Merck KGaA, Darmstadt, Germany (or “Merck KGaA”), in patients with advanced pancreatic cancer. Based on our analysis of the TH-CR-406 study and Merck KGaA’s analysis of the MAESTRO study, we reported that neither trial met its primary endpoint of demonstrating a statistically significant improvement in overall survival. As a result, and following Merck KGaA’s and our decision to discontinue joint development of evofosfamide under our former collaboration with Merck KGaA, in December 2015 we adopted a plan to reduce our operating expenses. The plan included an immediate reduction of approximately 40 full-time employees in both research and development and general and administrative areas. In addition, we have discontinued enrollment in all company-sponsored clinical trials of evofosfamide as we conduct our analyses of the data from the clinical trials, including our own analyses of the MAESTRO trial, and evaluate potential next steps for the development of evofosfamide and tarloxotinib.

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In January 2016, we announced that a previously unplanned sponsor-initiated interim futility analysis of the randomized, controlled Phase 2 trial of evofosfamide in patients living with non-small cell lung cancer, (or “the 415 trial”), was conducted by an independent Data Safety Monitoring Board who concluded that, in spite of having achieved statistically significant improvements in progression-free survival and objective response rates, the trial was unlikely to reach its primary endpoint of improving overall survival with statistical significance and was therefore terminated. In January 2016 at the American Society of Clinical Oncology 2016 Gastrointestinal Cancers Symposium (ASCO GI), Merck KGaA’s analyses of the results from the Phase 3 MAESTRO trial were presented. While the primary efficacy endpoint of overall survival narrowly missed statistical significance, efficacy endpoints of progression-free survival and confirmed overall response rates demonstrated significant improvements for patients treated with the combination of evofosfamide and gemcitabine (the “treatment arm”) compared to gemcitabine plus placebo (the “control arm”). Of particular note, a meaningful improvement in overall survival was reported for a subgroup of 116 Asian patients who were enrolled in Japan and for whom the median overall survival for the treatment arm was a statistically significant 13.6 months compared to 9.1 months in the control arm. Progression-free survival, objective response rate, and reductions in the pancreatic cancer serum biomarker, CA19-9, were similarly improved with high statistical significance in the Japanese patients who were in the treatment arm compared to those in the control arm of the trial. No new safety findings were identified in the MAESTRO study and the safety profile was consistent with that previously reported in other studies of evofosfamide plus gemcitabine. In March 2016, we and Merck KGaA agreed to terminate our former collaboration with Merck KGaA, and all rights to evofosfamide were returned to us. We are currently conducting additional analyses of data from the MAESTRO trial in pancreatic cancer. Pending the results of our analyses, we intend to discuss potential registration pathways with health regulatory authorities.

Our second product candidate, tarloxotinib, is a prodrug designed to selectively release a covalent (irreversible) EGFR tyrosine kinase inhibitor under hypoxic conditions and has the potential to effectively shut down aberrant EGFR signaling in a tumor-selective manner, thus avoiding or reducing the skin and gastrointestinal toxicities associated with currently available EGFR tyrosine kinase inhibitors. Tarloxotinib is currently being evaluated in two Phase 2 proof-of-concept trials: one for the treatment of patients with mutant EGFR-positive, T790M-negative advanced non-small cell lung cancer progressing on an EGFR tyrosine kinase inhibitor, and the other for patients with recurrent or metastatic squamous cell carcinomas of the head and neck or skin. Threshold licensed exclusive worldwide rights to tarloxotinib from Auckland Uniservices Ltd in September 2014.

Company Performance Highlights. The highlights of our Company performance for the year ended December 31, 2015 include:

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Compensation Highlights. The highlights of our Named Executive Officer compensation program include:

Philosophy

We have adopted a performance-based compensation strategy that is intended to focus our Named Executive Officers on the achievement of near-term corporate goals as well as long-term strategic objectives. Our compensation programs for our Named Executive Officers are designed to achieve the following objectives:

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The compensation committee of our board of directors, or the Committee, believes that our executive compensation program is appropriately designed, reasonable and responsible in that it both encourages our Named Executive Officers to work for our long-term prosperity and reflects a pay-for-performance philosophy, without encouraging our employees to assume excessive risks.

Our Named Executive Officer compensation programs include both long- and short-term compensation, with a goal of aligning officer compensation with long-term success of the Company. We do not have specific guidelines for allocating between cash and non-cash forms of compensation or between long- and short-term compensation. Instead, the Committee uses its judgment to establish for each Named Executive Officer a mix of current, short-term and long-term incentive compensation, and cash and non-cash compensation, that it believes appropriate to achieve the goals of our compensation program and our Company objectives. However, because we believe it is important to our success to aggressively pursue long-term corporate goals, to avoid excessive risk taking, and to preserve our cash resources, a significant portion of the Named Executive Officers’ total compensation is comprised of performance-based bonus opportunities and long-term equity awards, which align the officers’ incentives with the interests of our stockholders.

Role of the Committee and Executive Officers in Setting Executive Compensation

The Committee is responsible for evaluating and administering our compensation programs and practices to ensure that they properly incentivize our work force and appropriately drive corporate performance while remaining competitive with comparable life sciences companies competing in our labor market. The Committee reviews our compensation policies, plans and programs and the compensation paid to our Named Executive Officers, and either approves such compensation or recommends such compensation for approval by our board of directors.

The board of directors is responsible for reviewing and setting our annual Company goals and objectives, which it generally approves shortly prior to, or at the beginning of each fiscal year to which the goals and objectives relate. The Committee then categorizes the objectives into the narrower categories of Company goals for the year that form the basis for evaluating the performance-based component of Named Executive Officer compensation for the following year. The goals approved by the Committee are generally given explicit weighting as to relative importance and the Committee determines the relative importance of each individual goal within the relevant category.

In the first quarter of the fiscal year, the Committee meets to review Company performance against the goals that had been established for the fiscal year that just ended and to review and evaluate the compensation of each of our Named Executive Officers, as well as other matters brought before the Committee. At this meeting, after due consideration, the Committee:

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In reviewing and evaluating the performance and compensation of our Named Executive Officers other than our Chief Executive Officer, the Committee receives a written report from our Chief Executive Officer evaluating each Named Executive Officer’s performance in the prior fiscal year and recommending base salary, performance-based compensation and equity award grants for those Named Executive Officers. Our Chief Executive Officer also provides a written assessment of Company achievement of the Company goals set for the prior fiscal year. None of our Named Executive Officers other than our Chief Executive Officer is present for the discussion or deliberation of their performance or compensation. Our Chief Executive Officer is not present for the discussion or deliberation of his performance or compensation. The Committee retains discretion to adjust the recommendations of our Chief Executive Officer based on its own independent determination of corporate and individual performance and other factors as described below.

The Committee is (and was at all times during 2015) composed entirely of independent directors, as defined in the NASDAQ listing standards. Our Committee meets as often as it determines necessary to carry out its duties and responsibilities through regularly scheduled meetings and, if necessary, special meetings. Our Committee also has the authority to take certain actions by written consent of all members. The Committee met five times during 2015. As of the date of the filing of this proxy statement, in 2016, the Committee had met one time.

Role of our Compensation Consultant in the Compensation Process

To assist the Committee in determining compensation of our Named Executive Officers, the Committee generally engages an independent compensation consultant to provide a competitive assessment with respect to the Company’s Named Executive Officers to assist the Committee in making annual compensation recommendations to the board of directors.

The Committee’s compensation consultant reports directly to the Committee, which maintains the authority to direct its work and engagement, and advises the Committee. The consultant interacts with management to gain access to Company information that is required to perform services, to understand the culture and policies of the organization, and to solicit recommendations from the Chief Executive Officer on the performance of the members of the executive team. The Committee and the compensation consultant meet, as needed, in executive session, with no members of management present, to address various compensation matters. Final recommendations from the compensation consultant are made directly to the Committee, who then conveys those to the board of directors for final approval of matters that were not approved by the Committee.

The Committee has engaged Radford, an AON Hewitt company, as its independent compensation consultant for assisting with 2015 and 2016 compensation decisions, including compensation decisions for our Named Executive Officers. For 2015, Radford’s services included a competitive assessment of the compensation of our Named Executive Officers as described below that assisted the Committee in making compensation recommendations for our Named Executive Officers to the board of directors. Radford also reviewed our compensation philosophy and provided detailed assessments with respect to our executive officer compensation, including total direct compensation, base salary, target incentive opportunities, equity ownership, and provided an analysis of market equity practices generally.

In 2015 and 2016 the Committee analyzed whether the work of Radford as a compensation consultant raised any conflict of interest, taking into consideration the following factors: (i) the provision of other services to our Company by Radford; (ii) the amount of fees from our Company paid to Radford as a percentage of the firm’s total revenue; (iii) Radford’s policies and procedures that are designed to prevent conflicts of interest; (iv) any business or personal relationship of Radford or the individual compensation advisors employed by Radford with an executive officer of our Company; (v) any business or personal relationship of the individual compensation advisors of Radford with any member of the Committee; and (vi) any stock of our Company owned by Radford or the individual compensation advisors employed by Radford. The Committee determined, based on its analysis of the above factors, that the work of Radford and the individual compensation advisors employed by Radford as compensation consultants to our Company has not created any conflict of interest.

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Peer Group and Benchmarking

Competitive Analysis. The Committee believes that the salary, annual target performance-based bonus levels and long-term equity incentive award values for each of our officers should be set in part by reference to the competitive practices of companies that are comparable to us and also the broader life sciences industry, based upon available market data. Primary emphasis is placed on the data from a comparable group of companies, with broader survey data serving as additional validation of the accuracy of this information, especially where comparator group data is unavailable for a particular individual. The Committee assesses the compensation practices of the companies in this group of data because it reflects the primary talent market for our officer positions, as well as cost of living factors that influence compensation levels in our life sciences market generally.

2015 Process. At the end of 2014, Radford reexamined our compensation philosophy and the comparator group of companies approved in January 2014, in preparation for making compensation decisions for 2015. Radford provided compensation data to the Committee that consisted of survey data from the 2015 Radford Global Technology Survey, which we refer to in this proxy statement as the “Survey Data” and information available from definitive proxy statements of a specific group of comparator companies, which we refer to in this proxy statement as the “Peer Data”.

Where definitive proxy statements did not provide sufficient information with respect to an element of compensation for a particular officer, the Committee relied on Survey Data, with special focus on the data available within the survey for the comparator companies in the Peer Group. When both Survey Data and Peer Data were available, they were equally weighted to create a final market data reference, and are referred to in this proxy statement as the “Market Data”. With the assistance from Radford, the Committee reviewed and considered the Market Data in recommending 2015 base salary, target annual performance-based bonus and stock option grants for our Named Executive Officers.

2015 Survey Data. The Survey Data consisted of executive compensation data from approximately 66 U.S. pre-commercial biopharmaceutical companies with fewer than 200 employees (including the comparator companies making up the Peer Data) and was modestly aged with a three percent annual update factor to reflect a common effective date.

2015 Peer Data. The Peer Data consisted of publicly available data from the following group of comparator companies: Agenus Inc., Amicus Therapeutics, Inc., ChemoCentryx, Inc., Cytokinetics, Incorporated, Dynavax Technologies Corporation, Endocyte, Inc., Five Prime Therapeutics, Inc., Geron Corporation, Immunomedics, Inc., Infinity Pharmaceuticals, Inc., Omeros Corporation, OncoGenex Pharmaceuticals, Inc., Oncothyreon Inc., Progenics Pharmaceuticals, Inc., Rigel Pharmaceuticals, Inc., Sangamo BioSciences, Inc., Sorrento Therapeutics, Inc., Sunesis Pharmaceuticals, Inc., Synta Pharmaceuticals Corp., Vical Incorporated, XOMA Corporation, and ZIOPHARM Oncology, Inc. These comparator companies were selected based on their business (oncology focused biopharmaceutical companies) and market capitalization ranging from approximately $1.5 million to $60 million, with our market capitalization at the 33^rd percentile.

Benchmarking Targets. For 2015, the Committee reviewed base salary, target annual performance-based bonus and stock option grants of our Named Executive Officers compared to the Market Data primarily to ensure that our Named Executive Officer compensation program as a whole was competitive to attract and retain the highest caliber officers. The Committee’s general philosophy was to target each element of compensation at the 50^th percentile of the Market Data for each Named Executive Officer’s position, taking into account the individual performance and qualifications of each Named Executive Officer. The Committee determined that this level of targeting was reasonable and appropriate to achieve the objectives of our compensation program and applied its professional experience and judgment when interpreting benchmarking data and making decisions. An individual Named Executive Officer may receive compensation above or below this targeted percentile based on experience, scope and criticality of position, performance, or other factors as determined by the Committee or the

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board of directors as appropriate. In making executive compensation decisions for 2015, the Compensation Committee considered the Market Data, the recent individual performance of each Named Executive Officer in 2014, breadth and length of service, and the anticipated level of difficulty in replacing an executive officer with someone of comparable experience and skill, especially given significant uncertainty relating to our future to further develop, manufacture and commercialize evofosfamide and tarloxotinib, which are our sole product candidates, and the unknown outcome of our efforts to identify and acquire and/or in-license other oncology products, product candidates, programs or companies to grow and diversify our business. The Compensation Committee determined that the general targeting of each element of compensation at the 50^th percentile of the Market Data was appropriate due to the significant business changes at the Company in 2015, including our corporate restructuring in 2015, and in recognition of the additional and broader range of responsibilities required of our executive officers to achieve our corporate objectives. The Compensation Committee also believes this strategy was necessary and appropriate in 2015 in order to retain top executive talent in the competitive environment in which we operate.

2016 Peer Group. In preparation for making executive compensation decisions for 2016, Radford reexamined our compensation philosophy and comparator group. Based on Radford’s recommendations, we approved the following comparator group of companies for 2016: Agenus, Inc., Anthera Pharmaceuticals, ArQule, Array BioPharma, ChemoCentryx, Inc., Curis, Cytokinetics, Inc., Dynavax Technologies, Endocyte, Inc., Epizyme, Five Prime Therapeutics, Geron Corp., Immunomedics, Inc., Infinity Pharmaceuticals, Mirati Therapeutics, Omeros Corp., OncoMed Pharmaceuticals, Oncothyreon, Inc., Progenics Pharmaceuticals, Regulus Therapeutics, Rigel Pharmaceuticals, Sangamo BioSciences, Sorrento Therapeutics, and Stemline Therapeutics.

Advisory Vote on Executive Compensation

At our 2015 annual stockholder meeting, our stockholders approved, on an advisory basis, the compensation of the 2014 named executive officers, as disclosed in the proxy statement for that meeting pursuant to the compensation disclosure rules of the SEC. The Committee considers the results of the advisory vote as it completes its annual review of each pay element and the compensation packages provided to our Named Executive Officers and other key employees. Given the significant level of stockholder support (with over 97% of the votes cast voting in favor of our say-on-pay proposal), the Committee concluded that our compensation program continues to provide a competitive pay-for-performance package that effectively incentivizes our Named Executive Officers and other executives to maximize stockholder value and encourages retention of talented Named Executive Officers and other key employees. Accordingly, the Committee determined not to make any significant changes as a result of the vote. The Committee will continue to consider the outcome of our say-on-pay votes and our stockholder views when making future compensation decisions for our Named Executive Officers and our other key employees.

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Elements of Compensation

The following table summarizes the principal components of our executive compensation program in 2014 and explains how each element accomplishes the goals and objectives of our program.

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2015 Compensation Decisions

Base Salary. For 2015, the Committee reviewed the 2014 base salaries of each of our Named Executive Officers compared to the Market Data and concluded that our Named Executive Officers’ base salaries generally fell at or above the 50th percentile of the relevant Market Data, (with variances reflecting individual performance) except for Dr. Pearce, whose base salary was at approximately the 25^th percentile of the Market Data and Dr. Selick, whose base salary was at approximately 75^th percentile of the Market Data. For the following reasons, the Committee recommended, and the board of directors approved, 2015 annual base salaries as follows and as listed in the “Salary” column of the Summary Compensation Table for 2015 below:

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