THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Threshold Pharmaceuticals, Inc. (THLD)

4/11/2006 Proxy Information

Participation in the Company’s Public Offerings

Certain of the Company’s existing stockholders, including entities affiliated with Morganthaler Management Partners VII, LLC, Pequot Capital Management, Inc., ProQuest Investments, Sofinnova Ventures, Inc., Three Arch Partners and Sutter Hill Ventures purchased a total of 1,500,003 shares of the Company’s common stock in the Company’s initial public offering of shares of its common stock on February 3, 2005. At an offering price of $7.00 per share, these stockholders purchased $10.5 million of the Company’s common stock in the initial public offering.

Certain of the Company’s existing stockholders, including entities affiliated with Morganthaler Management Partners VII, LLC, Pequot Capital Management, Inc. and ProQuest Investments, sold a total of 149,222 shares of the Company’s common stock at an offering price of $10.46 per share in connection with the Company’s public offering of a total of 6,399,222 shares of the Company’s common stock completed in October 2005.

Other Related Party Transactions and Business Relationships

Dr. Harold E. Selick, the Company’s Chief Executive Officer, has served as a venture partner of Sofinnova Ventures, Inc., a holder of more than 5% of the Company’s common stock, since June 2002. In 2003 and 2004, Dr. Selick received $152,083 and $84,000, respectively, in compensation from Sofinnova Ventures, Inc. Dr. Selick did not receive any compensation from Sofinnova Ventures, Inc. in 2005. Dr. Selick has a carried interest in a company in which Sofinnova Ventures, Inc. is an investor. In November 2004, the Company entered into a Development Agreement with MediBIC Co. Ltd. The Chief Operating Officer and a director of Anexus Pharmaceuticals, Inc., a subsidiary of MediBIC, is the wife of Dr. Harold E. Selick, the Company’s Chief Executive Officer. The Company’s Senior Director of Investor Relations, Denise Powell, an employee of the Company, is the sister of Dr. Michael F. Powell, a member of the Board and a member of the audit committee and the nominating committee. Ms. Powell’s annual salary is $150,000. In addition, in January 2005, Ms. Powell was granted an option to purchase 45,540 shares of the Company’s common stock and in March 2006 she received additional options to purchase 50,000 shares. The January 2005 options vested twenty-five percent on January 13, 2006, and the remaining shares vest monthly over the subsequent three years. The March 2006 options vest monthly over four years beginning January 1, 2006. In February 2005, Ms. Powell received a bonus of $24,000 and in February 2006 she received a bonus of $12,000. Prior to becoming an employee of the Company in January 2005, Ms. Powell was an independent investor relations consultant. From 1992 to 1998, Ms. Powell held a variety of positions at Amgen, including Associate Director of Investor Relations from 1995 to 1998. The Company’s Amended and Restated Certificate of Incorporation and Bylaws provide that the Company will indemnify each of the Company’s directors and officers to the fullest extent permitted by Delaware law. Further, the Company has entered into separate indemnification agreements with each of the Company’s directors and executive officers.