Jerry Twinde, et al. v. Threshold Pharmaceuticals, Inc., et

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                               UNITED STATES DISTRICT COURT
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                            NORTHERN DISTRICT OF CALIFORNIA
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                                      OAKLAND DIVISION
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   JERRY TWINDE, On Behalf of Himself and )       No. 4:07-cv-04972-CW
13 All Others Similarly Situated,             )
                                              )   CLASS ACTION
14                                Plaintiff,  )
                                              )   [PROPOSED] ORDER PRELIMINARILY
15         vs.                                )   APPROVING SETTLEMENT AND
                                              )   PROVIDING FOR NOTICE
16 THRESHOLD PHARMACEUTICALS, INC., )
   et al.,                                    )
17                                            )
                                  Defendants. )
18                                            )
19 [Caption continued on following page.]

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 1 RAYNOLD L. GILBERT, On Behalf of             )   No. 4:07-cv-04971-CW
   Himself and All Others Similarly Situated,   )
 2                                              )   CLASS ACTION
                               Plaintiff,       )
 3                                              )
           vs.                                  )
 4                                              )
   THRESHOLD PHARMACEUTICALS, INC.,             )
 5 et al.,                                      )
                                                )
 6                            Defendants.       )
                                                )
 7                                              )

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 1          WHEREAS, a class action is pending before the Court entitled Twinde v. Threshold

 2 Pharmaceuticals, Inc., et al., No. 4:07-cv-04972-CW, related to and consolidated with Gilbert v.

 3 Threshold Pharmaceuticals, Inc., et al., No. 4:07-cv-04971-CW (the “Litigation”);

 4          WHEREAS, the Court has received the Stipulation of Settlement dated October 30, 2009 (the

 5 “Stipulation”), that has been entered into by the Plaintiffs and Defendants, and the Court has

 6 reviewed the Stipulation and its attached Exhibits;

 7          WHEREAS, the parties having made application, pursuant to Federal Rule of Civil

 8 Procedure 23(e), for an order preliminarily approving the Settlement of this Litigation, in accordance

 9 with the Stipulation which, together with the Exhibits annexed thereto, sets forth the terms and

10 conditions for a proposed Settlement of the Litigation and for dismissal of the Litigation with

11 prejudice upon the terms and conditions set forth therein; and the Court having read and considered

12 the Stipulation and the Exhibits annexed thereto; and

13          WHEREAS, all defined terms contained herein shall have the same meanings as set forth in

14 the Stipulation;

15          NOW, THEREFORE, IT IS HEREBY ORDERED:

16          1.      The Court does hereby preliminarily approve the Stipulation and the Settlement set

17 forth therein, subject to further consideration at the Final Approval Hearing described below.

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            2.      A hearing (the “Final Approval Hearing”) shall be held before this Court on ______,
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     2010, at 2:00 p.m., at the Ronald V. Dellums Federal Building, 1301 Clay Street, Oakland
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     California, to determine whether the proposed Settlement of the Litigation on the terms and
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     conditions provided for in the Stipulation is fair, reasonable and adequate to the Settlement Class and
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23 should be approved by the Court; whether a Judgment as provided in ¶1.14 of the Stipulation should

24 be entered herein; whether the proposed Plan of Allocation should be approved; and to determine the

25 amount of fees and expenses that should be awarded to Lead Plaintiff’s Counsel. The Court may

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     adjourn the Final Approval Hearing without further notice to Members of the Settlement Class.
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 1             3.    Pursuant to Rule 23 of the Federal Rules of Civil Procedure, the Court preliminarily

 2 certifies, for purposes of effectuating this Settlement, a Settlement Class of all Persons who received,

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     purchased, or otherwise acquired Threshold securities during the period from and including February
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     4, 2005 to July 14, 2006, inclusive. Excluded from the Settlement Class are Defendants, any entity
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     in which any Defendant has or had a controlling interest or that is a parent or subsidiary or is
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     controlled by any Defendant, Defendants’ officers and directors, including any person who was an
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 8 officer or director during the Settlement Class Period, Defendants’ affiliates, legal representatives,

 9 heirs, predecessors, successors or assigns, and members of Defendants’ immediate families. Also

10 excluded from the Settlement Class are those Persons who timely and validly request exclusion from

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     the Settlement Class pursuant to the Notice of Pendency and Proposed Settlement of Class Action.
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               4.    With respect to the Settlement Class, this Court preliminarily finds for purposes of
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     effectuating this Settlement that (a) the Members of the Settlement Class are so numerous that
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15 joinder of all Settlement Class Members in the class action is impracticable; (b) there are questions

16 of law and fact common to the Settlement Class which predominate over any individual questions;

17 (c) the claims of the Plaintiffs are typical of the claims of the Settlement Class; (d) the Plaintiffs and

18 Plaintiffs’ Counsel have fairly and adequately represented and protected the interests of all of the
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     Settlement Class Members; and (e) a class action is superior to other available methods for the fair
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     and efficient adjudication of the controversy, considering: (i) the interests of the Members of the
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     Settlement Class in individually controlling the prosecution of the separate actions; (ii) the extent
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23 and nature of any litigation concerning the controversy already commenced by Members of the

24 Settlement Class; (iii) the desirability or undesirability of continuing the litigation of these claims in

25 this particular forum; and (iv) the difficulties likely to be encountered in the management of the class

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     action.
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 1          5.      The Court approves, as to form and content, the Notice of Pendency and Proposed

 2 Settlement of Class Action (the “Notice”), the Proof of Claim and Release form (the “Proof of

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     Claim”), and Summary Notice (“Summary Notice”) annexed as Exhibits A-1, A-2 and A-3 hereto,
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     and finds that the mailing and distribution of the Notice and publishing of the Summary Notice
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     substantially in the manner and form set forth in ¶¶6-7 of this Order meet the requirements of
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     Federal Rule of Civil Procedure 23 and due process, and is the best notice practicable under the
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 8 circumstances and shall constitute due and sufficient notice to all Persons entitled thereto.

 9          6.      Pursuant to Rule 53(c) of the Federal Rules of Civil Procedure, the Court appoints
10 Gilardi & Co. LLC (“Claims Administrator”) to supervise and administer the notice procedure as

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     well as the processing of claims as more fully set forth below:
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                    (a)     Not later than ________, 2009 (the “Notice Date”), Lead Plaintiff’s Counsel
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     shall cause a copy of the Notice and the Proof of Claim, substantially in the forms annexed as
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15 Exhibits A-1 and A-2 hereto, to be mailed by first class mail to all Settlement Class Members who

16 can be identified with reasonable effort;

17                  (b)     Not later than ________, 2009, Lead Plaintiff’s Counsel shall cause the
18 Summary Notice to be published once in Investor’s Business Daily;
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                    (c)     Not later than ________, 2009, Lead Plaintiff’s Counsel shall cause the
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     Stipulation and its Exhibits to be posted on the following website: www.gilardi.com; and
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                    (d)     On or before ________, 2009, Lead Plaintiff’s Counsel shall cause to be
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23 served on Defendants’ Counsel and filed with the Court proof, by affidavit or declaration, of such

24 mailing and publishing.

25          7.      Nominees who received, purchased, or otherwise acquired Threshold securities
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     between February 4, 2005 and July 14, 2006, inclusive, shall send the Notice and the Proof of Claim
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     to all beneficial owners of such Threshold securities within ten (10) days after receipt thereof, or
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 1 send a list of the names and addresses of such beneficial owners to the Claims Administrator within

 2 ten (10) days of receipt thereof, in which event the Claims Administrator shall promptly mail the

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     Notice and the Proof of Claim to such beneficial owners. Lead Plaintiff’s Counsel shall, if
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     requested, reimburse banks, brokerage houses or other nominees solely for their reasonable out-of-
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     pocket expenses incurred in providing notice to beneficial owners who are Settlement Class
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     Members out of the Settlement Fund, which expenses would not have been incurred except for the
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 8 sending of such notice, subject to further order of this Court with respect to any dispute concerning

 9 such compensation.

10          8.      All Members of the Settlement Class shall be bound by all determinations and
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     judgments in the Litigation concerning the Settlement, whether favorable or unfavorable to the
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     Settlement Class.
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            9.      Settlement Class Members who wish to participate in the Settlement shall complete
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15 and submit Proof of Claim forms in accordance with the instructions contained therein. Unless the

16 Court orders otherwise, all Proof of Claim forms must be postmarked no later than ninety (90) days

17 from the Notice Date. Any Settlement Class Member who does not timely submit a Proof of Claim

18 within the time provided for shall be barred from sharing in the distribution of the proceeds of the
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     Net Settlement Fund, unless otherwise ordered by the Court or allowed by the Stipulation.
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            10.     Any Person who desires to request exclusion from the Settlement Class shall do so
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     within the time set forth and in the manner described in the Notice. All Persons who submit valid
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23 and timely requests for exclusion in the manner set forth in the Notice shall have no rights under the

24 Stipulation, shall not share in the distribution of the Net Settlement Fund, and shall not be bound by

25 the Stipulation or the Judgment entered in the Litigation.

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 1          11.     Any Member of the Settlement Class may enter an appearance in the Litigation, at

 2 their own expense, individually or through counsel of their own choice. If they do not enter an

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     appearance, they will be represented by Lead Plaintiff’s Counsel.
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            12.     Any Settlement Class Member may appear and show cause, if he, she or it has any
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     reason, why the proposed Settlement of the Litigation should or should not be approved as fair,
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     reasonable and adequate, why a judgment should or should not be entered thereon, why the Plan of
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 8 Allocation should or should not be approved, or why attorneys’ fees and expenses should or should

 9 not be awarded to Plaintiffs’ Counsel; provided, however, that no Settlement Class Member or any

10 other Person shall be heard or entitled to contest the approval of the terms and conditions of the

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     proposed Settlement, or, if approved, the Judgment to be entered thereon approving the same, or the
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     order approving the Plan of Allocation, or the attorneys’ fees and expenses to be awarded to
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     Plaintiffs’ Counsel, unless that Person has filed said objections, papers and briefs with the Clerk of
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15 the United States District Court for the Northern District of California, on or before ___________,

16 2009 and delivered copies of any such papers to Coughlin Stoia Geller Rudman & Robbins LLP,

17 Ellen Gusikoff Stewart, 655 W. Broadway, Suite 1900, San Diego, CA 92101 and to Hogan &

18 Hartson LLP, Michael L. Charlson, 525 University Avenue, 4th Floor, Palo Alto, CA 94301, such
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     that they are received on or before the same date. Any Settlement Class Member who does not make
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     his, her or its objection in the manner provided shall be deemed to have waived such objection and
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     shall forever be foreclosed from making any objection to the fairness or adequacy of the proposed
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23 Settlement as set forth in the Stipulation, to the Plan of Allocation, or to the award of attorneys’ fees

24 and expenses to Plaintiffs’ Counsel, unless otherwise ordered by the Court.

25          13.     All funds held by the Escrow Agent shall be deemed and considered to be in custodia
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     legis of the Court, and shall remain subject to the jurisdiction of the Court, until such time as such
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     funds shall be distributed pursuant to the Stipulation and/or further order(s) of the Court.
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 1          14.     All papers in support of the Settlement, the Plan of Allocation, and the application for

 2 attorneys’ fees or expenses shall be filed and served on or before ________, 2009. Any reply papers

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     shall be filed and served on or before ________, 2009.
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            15.     Neither the Defendants nor their Related Parties shall have any responsibility for or
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     liability with respect to the Plan of Allocation or any application for attorneys’ fees or expenses
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     submitted by Lead Plaintiff’s Counsel, and such matters will be considered separately from the
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 8 fairness, reasonableness, and adequacy of the Settlement.

 9          16.     At or after the Final Approval Hearing, the Court shall determine whether the Plan of
10 Allocation proposed by Lead Plaintiff’s Counsel, and any application for an award of attorneys’ fees

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     or expenses to Plaintiffs’ Counsel shall be approved.
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            17.     All reasonable expenses incurred in identifying and notifying Settlement Class
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     Members, as well as administering the Settlement Fund, shall be paid as set forth in the Stipulation.
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15 In the event the Settlement is not approved by the Court, or otherwise fails to become effective,

16 neither the Plaintiffs nor Plaintiffs’ Counsel shall have any obligation to repay any amounts actually

17 and properly disbursed from the Settlement Fund for such expenses, as provided in the Stipulation.

18          18.     Neither the Stipulation, nor any of its terms or provisions, nor any of the negotiations
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     or proceedings connected with it, shall be construed as an admission or concession by Defendants of
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     the truth of any of the allegations in the Litigation, or of any liability, fault, or wrongdoing of any
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     kind and shall not be construed as, or deemed to be evidence of or an admission or concession that
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23 Plaintiffs or any Settlement Class Members have suffered any damages, harm, or loss.

24          19.     In the event that the Settlement does not become effective in accordance with the

25 terms of the Stipulation or the Effective Date does not occur, or in the event that the Settlement

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     Fund, or any portion thereof, is returned to the Defendants, then this Order shall be rendered null and
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     void to the extent provided by and in accordance with the Stipulation; and the Settling Parties shall
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 1 be restored to their respective positions in the Litigation as of July 31, 2009 and proceed with the

 2 Litigation as provided in the Stipulation.

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            20.     The Court retains jurisdiction to consider all further applications arising out of or
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     connected with the proposed Settlement. The Court may approve the Settlement, with such
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     modifications as may be agreed to by the Settling Parties, if appropriate, without further notice to the
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     Settlement Class.
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 8 DATED: _______________
                                              THE HONORABLE CLAUDIA WILKEN
 9                                            UNITED STATES DISTRICT JUDGE
10 Submitted by:

11 COUGHLIN STOIA GELLER
     RUDMAN & ROBBINS LLP
12 DENNIS J. HERMAN
   SHIRLEY H. HUANG
13 DANIEL J. PFEFFERBAUM
   100 Pine Street, Suite 2600
14 San Francisco, CA 94111
   Telephone: 415/288-4545
15 415/288-4534 (fax)

16 COUGHLIN STOIA GELLER
    RUDMAN & ROBBINS LLP
17 ELLEN GUSIKOFF STEWART

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               s/ Ellen Gusikoff Stewart
19          ELLEN GUSIKOFF STEWART
20 655 West Broadway, Suite 1900
   San Diego, CA 92101
21 Telephone: 619/231-1058
   619/231-7423 (fax)
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   Lead Counsel for Plaintiffs
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 1                                     CERTIFICATE OF SERVICE

 2          I hereby certify that on November 9, 2009, I electronically filed the foregoing with the Clerk

 3 of the Court using the CM/ECF system which will send notification of such filing to the e-mail

 4 addresses denoted on the attached Electronic Mail Notice List, and I hereby certify that I have

 5 mailed the foregoing document or paper via the United States Postal Service to the non-CM/ECF

 6 participants indicated on the attached Manual Notice List.

 7          I further certify that I caused this document to be forwarded to the following Designated

 8 Internet Site at: http://securities.stanford.edu.

 9          I certify under penalty of perjury under the laws of the United States of America that the

10 foregoing is true and correct. Executed on November 9, 2009.

11
                                                        s/ Ellen Gusikoff Stewart
12                                                      ELLEN GUSIKOFF STEWART
13
                                                        COUGHLIN STOIA GELLER
14                                                             RUDMAN & ROBBINS LLP
                                                        655 West Broadway, Suite 1900
15                                                      San Diego, CA 92101-3301
16                                                      Telephone: 619/231-1058
                                                        619/231-7423 (fax)
17
                                                        E-mail:elleng@csgrr.com
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 1 COUGHLIN STOIA GELLER
     RUDMAN & ROBBINS LLP
 2 DENNIS J. HERMAN (220163)
   SHIRLEY H. HUANG (206854)
 3 DANIEL J. PFEFFERBAUM (248631)
   100 Pine Street, Suite 2600
 4 San Francisco, CA 94111
   Telephone: 415/288-4545
 5 415/288-4534 (fax)
   dherman@csgrr.com
 6 shuang@csgrr.com
   dpfefferbaum@csgrr.com
 7        – and –
   ELLEN GUSIKOFF STEWART (144892)
 8 655 West Broadway, Suite 1900
   San Diego, CA 92101
 9 Telephone: 619/231-1058
   619/231-7423 (fax)
10 elleng@csgrr.com

11 Lead Counsel for Plaintiffs

12                               UNITED STATES DISTRICT COURT

13                            NORTHERN DISTRICT OF CALIFORNIA

14                                      OAKLAND DIVISION

15 JERRY TWINDE, On Behalf of Himself and      )   No. 4:07-cv-04972-CW
   All Others Similarly Situated,              )
16                                             )   CLASS ACTION
                                  Plaintiff,   )
17                                             )   NOTICE OF PENDENCY AND PROPOSED
           vs.                                 )   SETTLEMENT OF CLASS ACTION
18                                             )
   THRESHOLD PHARMACEUTICALS, INC.,            )   EXHIBIT A-1
19 et al.,                                     )
                                               )
20                               Defendants.   )
                                               )
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     [Caption continued on following page.]
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 1 RAYNOLD L. GILBERT, On Behalf of             )   No. 4:07-cv-04971-CW
   Himself and All Others Similarly Situated,   )
 2                                              )   CLASS ACTION
                               Plaintiff,       )
 3                                              )
           vs.                                  )
 4                                              )
   THRESHOLD PHARMACEUTICALS, INC.,             )
 5 et al.,                                      )
                                                )
 6                            Defendants.       )
                                                )
 7                                              )

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 1 IF YOU RECEIVED, PURCHASED OR OTHERWISE ACQUIRED THRESHOLD
   PHARMACEUTICALS, INC. (“THRESHOLD”) SECURITIES BETWEEN FEBRUARY 4, 2005
 2 AND JULY 14, 2006, YOU COULD RECEIVE A PAYMENT FROM A CLASS ACTION
   SETTLEMENT
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           A federal court authorized this Notice. This is not a solicitation from a lawyer.
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           Securities and Time Period: Threshold common stock (CUSIP No. 885807206), Threshold
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   put options, and Threshold call options received, purchased or otherwise acquired between February
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   4, 2005 and July 14, 2006.
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           Settlement Fund: $10,000,000 in cash. Your recovery will depend on the number and type
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   of Threshold securities received, purchased or otherwise acquired between February 4, 2005 and
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   July 14, 2006, and the timing of your receipt, purchases, acquisitions and any sales. If claims are
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   submitted for 100% of the eligible shares of Threshold common stock, the estimated average
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   recovery per share of common stock will be approximately $1.94 before deduction of Court-
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   approved fees and expenses.1 Available information concerning the trading of options does not
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   permit a useful estimate concerning the recovery for options.
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           Settlement Class: The Court has preliminarily certified a Settlement Class of all persons
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   who received, purchased, or acquired Threshold securities during the period from and including
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   February 4, 2005 to July 14, 2006, inclusive. Excluded from the Settlement Class are Defendants,
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   any entity in which any Defendant has or had a controlling interest or that is a parent or subsidiary or
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   is controlled by any Defendant, Defendants’ officers and directors, including any person who was an
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   officer or director during the Settlement Class Period, Defendants’ affiliates, legal representatives,
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   heirs, predecessors, successors or assigns, and members of Defendants’ immediate families. Also
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   excluded from the Settlement Class are those Persons who timely and validly request exclusion from
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   the Settlement Class pursuant to this Notice.
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           Reasons for Settlement: Avoids the costs and risks associated with continued litigation,
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   including the danger of no recovery, and provides a benefit to the Settlement Class now.
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27 2008. This figure is adjusted for the one (1) for six (6) reverse stock split that occurred in August

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     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                                 -1-
 1          If the Case Had Not Settled: The settlement must be compared to the risk of no recovery
 2 after contested motions, trial and likely appeals. The Court previously granted in part a motion by

 3 Defendants to dismiss the case with the result that Plaintiffs’ claims have been substantially

 4 narrowed. A trial is a risky proposition and, the plaintiff class might not have prevailed. The claims

 5 remaining in this case involve numerous complex legal and factual issues that would require

 6 extensive and costly expert testimony. Among the many key issues about which the two sides do not

 7 agree are: (1) whether any of the Defendants violated the securities laws or otherwise engaged in any

 8 wrongdoing; (2) whether the facts alleged by the Plaintiffs were material, false, misleading or

 9 otherwise actionable under the securities laws; (3) the extent (if any) that various facts alleged by the

10 Plaintiffs influenced the trading prices of Threshold securities during the relevant period; (4) the

11 method for determining whether Threshold securities were artificially inflated during the relevant

12 period; (5) the amount (if any) of such inflation; and (6) the amount of damages (if any) that could

13 be recovered at trial.

14          Attorneys’ Fees and Expenses: Plaintiffs’ Counsel have not received any payment for their
15 work investigating the facts, conducting this litigation and negotiating the settlement on behalf of the

16 Plaintiffs and the Settlement Class. Plaintiffs’ Counsel will ask the Court for attorneys’ fees of 25%

17 of the Settlement Fund and expenses not to exceed $200,000 to be paid from the Settlement Fund. If

18 the above amounts are requested and approved by the Court, the average cost per share of common
19 stock will be approximately $0.52, making the estimated recovery per share after fees and expenses

20 $1.42.

21          Deadlines:
22                  Submit Claim:           ________, 2010

23                  Request Exclusion:      ________, 2010

24                  File Objection:         ________, 2010

25          Court Hearing on Fairness of Settlement: ________, 2010
26          More Information: www.gilardi.com
27    Claims Administrator:                                     Lead Counsel:

28    Threshold Pharmaceuticals Securities Litigation           Rick Nelson

     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                                  -2-
 1    Claims Administrator                                    Shareholder Relations
      c/o Gilardi & Co. LLC                                   Coughlin Stoia Geller
 2    P.O. Box 8040                                            Rudman & Robbins LLP
      San Rafael, CA 94912-8040                               655 West Broadway
 3
                                                              Suite 1900
 4                                                            San Diego, CA 92101

 5         Your legal rights are affected whether you act or don’t act. Read this Notice carefully.

 6               YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT:
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     SUBMIT A CLAIM                    The only way to receive a payment.
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     OBJECT                            You may write to the Court if you do not like this settlement.
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     GO TO A HEARING                   You may ask to speak in Court about the fairness of the
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                                       settlement.
11

12 DO NOTHING                          Receive no payment.

13 EXCLUDE YOURSELF                    Receive no payment. This is the only option that would allow
14                                     you to bring a separate lawsuit against the Defendants relating
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                                       to the claims being released in this case.
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17         These rights and options — and the deadlines to exercise them — are explained in this

18          Notice.
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           The Court in charge of this case must decide whether to approve the settlement.
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            Payments will be made if the Court approves the settlement and, if there are any appeals,
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            after appeals are resolved. Please be patient.
22

23                                      BASIC INFORMATION

24          1.        Why Did I Receive This Notice Package?

25          You or someone in your family may have received, purchased or otherwise acquired

26 Threshold securities between February 4, 2005 and July 14, 2006.

27          The Court sent you this Notice because you have a right to know about a proposed settlement

28 of a class action lawsuit, and about all of your options, before the Court decides whether to approve
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                              -3-
 1 the settlement. If the Court approves it and after any objections or appeals are resolved, the Claims

 2 Administrator appointed by the Court will make the payments that the settlement allows.

 3          This package explains the lawsuit, the settlement, your legal rights, what benefits are

 4 available, who is eligible for them, and how to get them.

 5          The Court in charge of the case is the United States District Court for the Northern District of

 6 California, and the case is known as Twinde v. Threshold Pharmaceuticals, Inc., et al., No. 4:07-cv-

 7 04972-CW. The individuals and pension fund that sued are called the Plaintiffs, and the company

 8 and the individuals they sued, Threshold, Harold E. “Barry” Selick and Janet I. Swearson, are called

 9 the Defendants.

10          2.      What Is This Lawsuit About?

11          This case was brought as a class action alleging that Defendants made false and misleading
12 statements and omissions between February 4, 2005 and July 14, 2006, about liver toxicity issues

13 that had arisen during clinical trials of a drug known as TH-070, which was being tested as a

14 potential treatment for benign prostatic hyperplasia. On May 10, 2006, the Food and Drug

15 Administration notified Threshold that it was placing a partial hold on further clinical trials of TH-

16 070. Plaintiffs allege that after receiving this notification, Threshold issued a press release that

17 mentioned the completion of enrollment in certain of the trials, but did not mention the partial

18 clinical hold or the toxicity issues that had allegedly arisen. On May 11, 2006, Threshold issued a
19 press release announcing the partial clinical hold, and on the trading day following that press release

20 Threshold stock fell by 75%. On July 17, 2006, Threshold announced the cancellation of the TH-

21 070 program, and on the trading day following that press release Threshold’s stock price fell by

22 50%. Plaintiffs assert that Defendants’ statements and omissions caused damage to the Settlement

23 Class.

24          Defendants deny all of Plaintiffs’ allegations of wrongdoing. Defendants made a motion to
25 dismiss this lawsuit in its entirety, and the Court granted that motion in part, dismissing certain

26 claims while narrowing others. Among other things, the Court dismissed all claims based upon

27 statements made prior to April 5, 2006. As to the claims remaining in the case, Defendants have

28 denied and continue to deny that they did anything wrong, that the Settlement Class suffered any
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                                  -4-
 1 damages as a result of their actions or omissions, or that they have any liability whatsoever to the

 2 Settlement Class. Nonetheless, to avoid the expense and distraction of a long litigation and the

 3 related uncertainties, Defendants decided to reach an agreement with Plaintiffs to settle the case.

 4          3.      Why Is This a Class Action?

 5          In a class action, one or more people called class representatives (in this case the Court-
 6 appointed Lead Plaintiff Michael Hentosh, and plaintiffs Christopher Lee, Electrical Workers

 7 Pension Fund Local 103 I.B.E.W., Jerry Twinde and Raynold Gilbert (collectively, “Plaintiffs”)) sue

 8 on behalf of people who have similar claims. Here, all these people are called a Settlement Class or

 9 Settlement Class Members. One court resolves the issues for all Settlement Class Members, except

10 for those who timely and validly exclude themselves from the Settlement Class. The United States

11 District Court for the Northern District of California, the Honorable Claudia Wilken, is in charge of

12 this class action.

13          4.      Why Is There a Settlement?
14          The Court did not decide in favor of the Plaintiffs or Defendants. Instead, both sides agreed
15 to a settlement. That way, they avoid the cost and uncertainty of further litigation and a trial, and

16 eligible Settlement Class Members who submit valid claims will receive compensation. The

17 Plaintiffs and their attorneys think the settlement is best for all Settlement Class Members.

18                                  WHO IS IN THE SETTLEMENT
19          To see if you will receive money from this settlement, you first have to determine if you are a
20 Settlement Class Member.

21          5.      How Do I Know if I Am Part of the Settlement?
22          The Settlement Class includes all persons and entities who received, purchased or
23 otherwise acquired Threshold securities between February 4, 2005 and July 14, 2006, inclusive,

24 except those persons and entities that are excluded, as described below.

25          6.      What Are the Exceptions to Being Included?
26
            You are not a Settlement Class Member if you are a Defendant, an entity in which any
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     Defendant has or had a controlling interest or that is a parent or subsidiary or is controlled by any
28
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                                 -5-
 1 Defendant, an officer or director of Threshold, including any person who was an officer or director

 2 during the Settlement Class Period, Defendants’ affiliates, legal representatives, heirs, predecessors,

 3 successors or assigns, or a member of a Defendant’s immediate family. You are also not a

 4 Settlement Class Member if you timely and validly request exclusion from the Settlement Class

 5 pursuant to this Notice.

 6          If you sold Threshold securities between February 4, 2005 and July 14, 2006, that alone does

 7 not make you a Settlement Class Member. You are a Settlement Class Member only if you received,

 8 purchased or otherwise acquired Threshold securities between February 4, 2005 and July 14, 2006.

 9          7.      I’m Still Not Sure if I Am Included.

10          If you are still not sure whether you are included, you can ask for free help. You can call
11 Rick Nelson of Coughlin Stoia Geller Rudman & Robbins LLP at 619/231-1058 for more

12 information. Or you can fill out and return the claim form described in question 10, to see if you

13 qualify.

14                      THE SETTLEMENT BENEFITS — WHAT YOU GET
15          8.      What Does the Settlement Provide?
16          Defendants’ insurers have agreed to pay $10 million in cash. The balance of this fund after
17 payment of Court-approved attorneys’ fees and expenses and the costs of claims administration,

18 including the costs of printing and mailing this Notice and the cost of publishing newspaper notice
19 (the “Net Settlement Fund”) will be divided among all eligible Settlement Class Members who send

20 in valid claim forms.

21          9.      How Much Will My Payment Be?
22          Your share of the Net Settlement Fund will depend on the number of valid claim forms that
23 Settlement Class Members send in and the number of shares of Threshold securities you received,

24 purchased or otherwise acquired during the relevant period and when you bought and sold them. A

25 claim will be calculated as follows.

26          The allocation below is based on the following price declines as well as the statutory PSLRA
27 90-day look-back amount of $12.59:

28
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                                -6-
 1                                           CUSIP: 885807206
 2       NOTE: ALL AMOUNTS ARE ADJUSTED FOR THE COMPANY’S AUGUST 2008
                         1-FOR-6 REVERSE STOCK SPLIT
 3

 4                  Section 11 Claims for the February 2005 Initial Public Offering2
 5 Initial Public Offering Price:                       $42.00 per share
   Closing Price on the date the lawsuit was filed:3    $ 7.44 per share
 6
   1.       For shares of Threshold acquired pursuant to and traceable to Threshold’s offering
 7 prospectus dated February 3, 2005 and

 8           a)     sold prior to July 5, 2007, the claim per share is the lesser of: (i) the purchase
     price per share less the sales price per share, or (ii) $42.00 less the sales price per share.
 9
           b)      retained at the end of July 4, 2007, or sold on or after July 5, 2007, the claim per
10 share is the lesser of: (i) the purchase price per share less the sales price per share, or (ii) $42.00
   less $7.44.
11

12                 Section 11 Claims for the October 2005 Secondary Public Offering
13 Secondary Public Offering Price:                          $62.76 per share
   Closing Price on the date the lawsuit was filed:          $ 7.44 per share
14
   1.     For shares of Threshold acquired pursuant to and traceable to Threshold’s offering
15 prospectus dated October 11, 2005, and

16           a) sold prior to July 5, 2007, the claim per share is the lesser of: (i) the purchase price per
     share less the sales price per share, or (ii) $62.76 less the sales price per share.
17
            b) retained at the end of July 4, 2007, or sold on or after July 5, 2007, the claim per share
18 is the lesser of: (i) the purchase price per share less the sales price per share, or (ii) $62.76 less
   $7.44.
19
                                 Section 10(b) Claims for Common Stock
20
                            Class Period: February 4, 2005 through July 14, 2006
21
   The allocation below is based on the following price declines as well as the statutory PSLRA 90-
22 day look-back amount of $12.59:

23 May 12, 2006 Price Decline:              $63.36
   July 17, 2006 Price Decline:             $9.78
24

25   2
           The combined recovery for the Section 11 claims related to the February and October 2005
   public offerings shall be limited to 5% of the Net Settlement Fund.
26
   3
27 5, 2007. Complaint for Violations of Federal Securities Laws with Section 11 claims filed on July
           The

28
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                                    -7-
 1
     Proposed Allocation
 2
   1.    For shares of Threshold common stock received, purchased or otherwise acquired on or
 3 between February 4, 2005 and March 19, 2006, the claim per share shall be $0.

 4 2.       For shares of Threshold common stock received, purchased or otherwise acquired on or
 5 between March 20, 2006 and April 4, 2006, the claim per share shall be as follows (the
   combined claims for this sub-period shall be limited to 10% of the Net Settlement Fund):
 6
            a) If sold prior to May 12, 2006, the claim per share is $0.
 7
            b) If sold on May 12, 2006 through July 14, 2006, the claim per share shall be the lesser
 8 of: (i) $63.36 (May 12, 2006 Price Decline), or (ii) the difference between the purchase price and

 9 the sales price.

10          c) If retained at the end of July 14, 2006, and sold before October 16, 2006, the claim per
   share shall be the lesser of: (i) $73.14 (May 12, 2006 and July 17, 2006 Price Declines), or (ii)
11 the difference between the purchase price and the sales price, or (iii) the difference between the
   purchase price per share and the average closing price per share up to the date of sale as set forth
12 in the table below.

13
            d) If retained or sold on or after October 16, 2006, the claim per share shall be the lesser
14 of: (i) $73.14 (May 12, 2006 and July 17, 2006 Price Declines), or (ii) the difference between the
   purchase price per share and $12.59 per share.
15
   3.       For shares of Threshold common stock received, purchased or otherwise acquired on or
16
   between April 5, 2006 through May 11, 2006, the claim per share shall be as follows (the
17 combined claims for this sub-period shall be limited to 70% of the Net Settlement Fund):

18          a) If sold prior to May 12, 2006, the claim per share is $0.
19          b) If sold on May 12, 2006 through July 14, 2006, the claim per share shall be the lesser
   of: (i) $63.36 (May 12, 2006 Price Decline), or (ii) the difference between the purchase price and
20
   the sales price;
21
            c) If retained at the end of July 14, 2006 and sold before October 16, 2006, the claim per
22 share shall be the lesser of: (i) $73.14 (May 12, 2006 and July 17, 2006 Price Declines), or (ii)
   the difference between the purchase price and the sales price, or (iii) the difference between the
23 purchase price per share and the average closing price per share up to the date of sale as set forth

24 in the table below.

25          d) If retained or sold on or after October 16, 2006, the claim per share shall be the lesser
   of: (i) $73.14 (May 12, 2006 and July 17, 2006 Price Declines), or (ii) the difference between the
26 purchase price per share and $12.59 per share.

27

28 4.       For shares of Threshold common stock received, purchased or otherwise acquired on

     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                               -8-
 1 May 12, 2006 through July 14, 2006, the claim per share shall be as follows (the combined
   claims for this sub-period shall be limited to 15% of the Net Settlement Fund):
 2
          a) If sold prior to July 17, 2006, the claim per share is $0.
 3

 4          b) If retained at the end of July 14, 2006 and sold before October 16, 2006, the claim per
   share shall be the lesser of: (i) $9.78 (July 17, 2006 Price Decline), or (ii) the difference between
 5 the purchase price and the sales price, or (iii) the difference between the purchase price per share
   and the average closing price per share up to the date of sale as set forth in the table below.
 6
            d) If retained or sold on or after October 16, 2006, the claim per share shall be the lesser
 7
   of: (i) $9.78 (July 17, 2006 Price Decline), or (ii) the difference between the purchase price per
 8 share and $12.59 per share.

 9
                                                                          Average
10                                                   Closing              Closing
                              Date                    Price                Price
11
                           17-Jul-06                  $9.30                $9.30
12                         18-Jul-06                  $9.24                $9.27
                           19-Jul-06                  $9.12                $9.22
13                         20-Jul-06                  $9.06                $9.18
                           21-Jul-06                  $8.94                $9.13
14                         24-Jul-06                  $8.70                $9.06
                           25-Jul-06                  $9.12                $9.07
15                         26-Jul-06                  $9.36                $9.11
                           27-Jul-06                  $9.42                $9.14
16                         28-Jul-06                  $9.24                $9.15
                           31-Jul-06                  $9.72                $9.20
17                          1-Aug-06                  $9.66                $9.24
                            2-Aug-06                  $9.60                $9.27
18                          3-Aug-06                  $9.72                $9.30
                            4-Aug-06                  $9.72                $9.33
19                          7-Aug-06                  $9.66                $9.35
20                          8-Aug-06                  $9.48                $9.36
                            9-Aug-06                  $9.54                $9.37
21                         10-Aug-06                  $9.30                $9.36
                           11-Aug-06                  $9.36                $9.36
22                         14-Aug-06                  $9.18                $9.35
                           15-Aug-06                  $9.12                $9.34
23                         16-Aug-06                  $9.30                $9.34
                           17-Aug-06                  $9.54                $9.35
24                         18-Aug-06                 $11.52                $9.44
                           21-Aug-06                 $11.88                $9.53
25                         22-Aug-06                 $12.00                $9.62
                           23-Aug-06                 $11.70                $9.70
26                         24-Aug-06                 $11.34                $9.75
                           25-Aug-06                 $11.58                $9.81
27                         28-Aug-06                 $11.16                $9.86
                           29-Aug-06                 $11.70                $9.92
28
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                               -9-
 1                                                                        Average
                                                     Closing              Closing
 2                           Date                     Price                 Price
                           30-Aug-06                 $12.42                 $9.99
 3                         31-Aug-06                 $12.42                $10.06
                            1-Sep-06                 $12.00                $10.12
 4                          5-Sep-06                 $13.74                $10.22
 5                          6-Sep-06                 $13.44                $10.31
                            7-Sep-06                 $12.90                $10.37
 6                          8-Sep-06                 $13.44                $10.45
                           11-Sep-06                 $12.84                $10.51
 7                         12-Sep-06                 $13.80                $10.59
                           13-Sep-06                 $13.20                $10.65
 8                         14-Sep-06                 $16.20                $10.78
                           15-Sep-06                 $16.68                $10.92
 9                         18-Sep-06                 $16.02                $11.03
                           19-Sep-06                 $15.54                $11.13
10                         20-Sep-06                 $15.30                $11.22
                           21-Sep-06                 $14.70                $11.29
11                         22-Sep-06                 $14.58                $11.36
                           25-Sep-06                 $14.22                $11.41
12                         26-Sep-06                 $14.52                $11.48
                           27-Sep-06                 $15.00                $11.54
13
                           28-Sep-06                 $16.92                $11.64
14                         29-Sep-06                 $15.42                $11.71
                            2-Oct-06                 $15.66                $11.79
15                          3-Oct-06                 $15.30                $11.85
                            4-Oct-06                 $16.08                $11.92
16                          5-Oct-06                 $17.34                $12.02
                            6-Oct-06                 $17.34                $12.11
17                          9-Oct-06                 $17.64                $12.20
                           10-Oct-06                 $18.18                $12.30
18                         11-Oct-06                 $17.94                $12.39
                           12-Oct-06                 $18.24                $12.48
19                         13-Oct-06                 $19.20                $12.59
20          The date of purchase or sale is the “contract” or “trade” date as distinguished from the
21 “settlement” date.

22          For Settlement Class Members who held Threshold securities at the beginning of the
23 Settlement Class Period, or who received or made multiple purchases, acquisitions or sales during

24 the Settlement Class Period, the first-in, first-out (“FIFO”) method will be applied to such holdings,

25 receipts, purchases, acquisitions and sales for purposes of calculating a claim. Under the FIFO

26 method, sales of securities during the Settlement Class Period will be matched, in chronological

27 order, first against securities held at the beginning of the Settlement Class Period. The remaining

28
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                              - 10 -
 1 sales of securities during the Settlement Class Period will then be matched, in chronological order,

 2 against securities received, purchased or acquired during the Settlement Class Period.

 3          A Settlement Class Member will be eligible to receive a distribution from the Net Settlement

 4 Fund only if a Settlement Class Member had a net loss. All gains and losses (as calculated under the

 5 above plan) will be combined and thereafter netted against each other. In addition, no distribution

 6 will be made unless the amount of the check is at least $10.00.

 7            HOW YOU OBTAIN A PAYMENT — SUBMITTING A CLAIM FORM
 8          10.    How Will I Obtain a Payment?

 9          To qualify for payment, you must be an eligible Settlement Class Member, send in a valid
10 claim form, and properly document your claim as requested in the claim form. A claim form is

11 enclosed with this Notice. Read the instructions carefully, fill out the form, include all the

12 documents the form asks for, sign it, and mail it in the enclosed envelope postmarked no later than

13 ________, 2010.

14          11.    When Will I Receive My Payment?
15          The Court will hold a hearing on ____________, 2010, to decide whether to approve the
16 settlement. If the Court approves the settlement, there may be appeals. It is always uncertain

17 whether these appeals can be resolved, and resolving them can take time, perhaps several years.

18 Everyone who sends in a claim form will be informed of the determination with respect to their
19 claim. Please be patient.

20          12.    What Am I Giving Up to Receive a Payment or Stay in the Settlement Class?
21          Unless you timely and validly exclude yourself, you are staying in the Settlement Class, and
22 that means that you cannot sue, continue to sue, or be part of any other lawsuit against the

23 Defendants about the Released Claims in this case. It also means that all of the Court’s orders will

24 apply to you and legally bind you and you will release your claims in this case against the

25 Defendants. The terms of the release are included in the claim form that is enclosed.

26

27

28
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                             - 11 -
 1                      EXCLUDING YOURSELF FROM THE SETTLEMENT
 2          If you do not want a payment from this settlement, but you want to keep the right to sue the

 3 Defendants on your own for the Released Claims in this case, then you must take steps to get out of

 4 the Settlement Class. This is called excluding yourself or is sometimes referred to as opting out of

 5 the Settlement Class.

 6          13.     How Do I Get Out of the Settlement Class?

 7          To exclude yourself from the Settlement Class, you must send a letter by mail stating that
 8 you want to be excluded from Twinde v. Threshold Pharmaceuticals, Inc., et al., No. 4:07-cv-04972-

 9 CW. You must include your name, address, telephone number, your signature, and the number and

10 type of Threshold securities you received, purchased or otherwise acquired between February 4,

11 2005 and July 14, 2006, the number and type of securities sold during this time period, if any, and

12 the dates of such receipt, purchase, acquisition and sales. You must mail your exclusion request

13 postmarked no later than _______, 2010 to:

14                  Threshold Pharmaceuticals Securities Litigation
                    EXCLUSIONS
15                  Claims Administrator
                    c/o Gilardi & Co. LLC
16                  P.O. Box 8040
                    San Rafael, CA 94912-8040
17
            You cannot exclude yourself on the phone or by e-mail. If you ask to be excluded, you are
18
     not eligible to receive any settlement payment, and you cannot object to the settlement. You will not
19
     be legally bound by anything that happens in this lawsuit.
20
            14.     If I Do Not Exclude Myself, Can I Sue the Defendants for the Same Thing
21                  Later?
22          No. Unless you timely and validly exclude yourself, you give up any right to sue the
23 Defendants for the Released Claims in this settlement. Remember, the exclusion deadline is

24 ________, 2010.

25          15.     If I Exclude Myself, Can I Receive Money from This Settlement?
26
            No. If you exclude yourself, do not send in a claim form. But, you may be able to sue or be
27
     part of a different lawsuit involving the Released Claims against the Defendants.
28
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                               - 12 -
 1                              THE LAWYERS REPRESENTING YOU
 2          16.     Do I Have a Lawyer in This Case?

 3          The Court asked the law firm of Coughlin Stoia Geller Rudman & Robbins LLP to represent
 4 you and other Settlement Class Members. These lawyers are called Lead Plaintiff’s Counsel. You

 5 will not be charged for these lawyers. If you want to be represented by your own lawyer, you may

 6 hire one at your own expense.

 7          17.     How Will the Lawyers Be Paid?
 8          Plaintiffs’ Counsel will ask the Court for attorneys’ fees of 25% of the Settlement Fund and
 9 for expenses up to $200,000, which were incurred in connection with the litigation. Such sums as

10 may be approved by the Court will be paid from the Settlement Fund. Settlement Class Members

11 are not personally liable for any such fees or expenses. The expense number above includes

12 $5,000.00, which is the maximum aggregate amount of expenses that the Plaintiffs will seek as

13 reimbursement for their time and expenses incurred in representing the Settlement Class.

14          The attorneys’ fees and expenses requested will be the only payment to Plaintiffs’ Counsel
15 for their efforts in achieving this settlement and for their risk in undertaking this representation on a

16 wholly contingent basis. Plaintiffs’ Counsel, including in particular Lead Plaintiff’s Counsel, have

17 committed significant time and expenses in litigating this case for the benefit of the Settlement

18 Class. To date, Plaintiffs’ Counsel have not been paid for their services in conducting this litigation
19 on behalf of the Plaintiffs and the Settlement Class, nor for their substantial expenses. The fees

20 requested will compensate Plaintiffs’ Counsel for their work in achieving the Settlement Fund and is

21 well within the range of fees awarded to class counsel under similar circumstances in other cases of

22 this type. The Court may award less than this amount.

23                                OBJECTING TO THE SETTLEMENT
24          You can tell the Court that you do not agree with the settlement or some part of it.
25          18.     How Do I Tell the Court that I Do Not Like the Settlement?
26          If you are a Settlement Class Member, you can object to the settlement if you do not like any
27 part of it, or the Plan of Allocation or Plaintiffs’ Counsel’s request for attorneys’ fees. You can state

28
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                                 - 13 -
 1 the reasons why you think the Court should not approve it. The Court will consider your views. To

 2 object, you must send a letter saying that you object to the settlement in Twinde v. Threshold

 3 Pharmaceuticals, Inc., et al., No. 4:07-cv-04792-CW. Be sure to include your name, address,

 4 telephone number, your signature, the number and type of Threshold securities received, purchased

 5 or otherwise acquired and sold between February 4, 2005 and July 14, 2006, and the reasons you

 6 object. Any objection must be mailed or delivered such that it is received by each of the following

 7 no later than _______, 2010:

 8                  Court:

 9                  Clerk of the Court
                    UNITED STATES DISTRICT COURT
10                  NORTHERN DISTRICT OF CALIFORNIA
                    Ronald V. Dellums Federal Building
11                  1301 Clay Street
                    Oakland, CA 94612
12
                    Counsel for Plaintiffs:
13
                    Ellen Gusikoff Stewart
14                  COUGHLIN STOIA GELLER
                     RUDMAN & ROBBINS LLP
15                  655 West Broadway, Suite 1900
                    San Diego, CA 92101
16
                    Counsel for Defendants:
17
                    Michael L. Charlson
18                  HOGAN & HARTSON LLP
                    525 University Avenue, 4th Floor
19                  Palo Alto, CA 94301

20          19.     What’s the Difference Between Objecting and Excluding?

21          Objecting is simply telling the Court that you do not like something about the settlement.
22 You can object only if you stay in the Settlement Class. Excluding yourself is telling the Court that

23 you do not want to be part of the Settlement Class. If you exclude yourself, you have no basis to

24 object because the case no longer affects you.

25                              THE COURT’S FAIRNESS HEARING
26          The Court will hold a hearing to decide whether to approve the settlement. You may attend
27 and you may ask to speak, but you do not have to.

28
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                             - 14 -
 1          20.     When and Where Will the Court Decide Whether to Approve the
                    Settlement?
 2
            The Court will hold a fairness hearing at 2:00 p.m., on ____, 2010, at the Ronald V. Dellums
 3
     Federal Building, 1301 Clay Street, Oakland, California. At this hearing the Court will consider
 4
     whether the settlement is fair, reasonable, and adequate. If there are objections, the Court will
 5
     consider them. The Judge will listen to people who have asked to speak at the hearing. The Court
 6
     will also consider how much to pay to Plaintiffs’ Counsel. The Court may decide these issues at the
 7
     hearing or take them under consideration. We do not know how long these decisions will take.
 8
            21.     Do I Have to Come to the Hearing?
 9
            No. Lead Plaintiff’s Counsel will answer any questions the Judge may have. But, you are
10
     welcome to come at your own expense. If you send an objection, you do not have to come to Court
11
     to talk about it. As long as you mailed your written objection on time, the Court will consider it.
12
     You may also pay your own lawyer to attend, but it is not necessary.
13
            22.     May I Speak at the Hearing?
14

15          You may ask the Court for permission to speak at the fairness hearing. To do so, you must

16 send a letter saying that it is your intention to appear in Twinde v. Threshold Pharmaceuticals, Inc.,

17 et al., No. 4:07-cv-04972-CW. Be sure to include your name, address, telephone number, your

18 signature, and the number and type of Threshold securities received, purchased or otherwise
19 acquired between February 4, 2005 and July 14, 2006. Your notice of intention to appear must be

20 received no later than _____, 2010, by the Clerk of the Court, Plaintiffs’ Counsel, and Defendants’

21 Counsel, at the three addresses listed in question 18. You cannot speak at the hearing if you exclude

22 yourself from the Settlement Class.

23                                       IF YOU DO NOTHING

24          23.     What Happens if I Do Nothing at All?

25          If you do nothing, you will be a Settlement Class Member, but you will not receive any

26 money from this settlement because it is necessary to submit a claim form. However, unless you

27 exclude yourself, you won’t be able to start a lawsuit, or be part of any other lawsuit against the

28 Defendants about the Released Claims in this case.
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                              - 15 -
 1                                GETTING MORE INFORMATION
 2          24.     Are There More Details About the Settlement?

 3          This Notice summarizes the proposed settlement. More details are in the Stipulation of
 4 Settlement dated October 30, 2009. You can obtain a copy of the Stipulation of Settlement by

 5 writing to Rick Nelson, Shareholder Relations, Coughlin Stoia Geller Rudman & Robbins LLP, 655

 6 West Broadway, Suite 1900, San Diego, CA 92101, or from the Clerk’s office at the United States

 7 District Court for the Northern District of California, Ronald V. Dellums Federal Building, 1301

 8 Clay Street, Oakland, California, during regular business hours, or by going to www.gilardi.com.

 9          25.     How Do I Get More Information?
10          You can call 619/231-1058 or write to Rick Nelson, Shareholder Relations, Coughlin Stoia
11 Geller Rudman & Robbins LLP, 655 West Broadway, Suite 1900, San Diego, CA 92101, or visit the

12 following website: www.gilardi.com.

13                DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE
14                                SPECIAL NOTICE TO NOMINEES
15          The Court has ordered that if you held any Threshold publicly traded securities received,
16 purchased or otherwise acquired between February 4, 2005 and July 14, 2006, inclusive, as nominee

17 for a beneficial owner, then, within ten (10) days after you receive this Notice, you must either: (1)

18 send a copy of this Notice by first class mail to all such persons; or (2) provide a list of the names
19 and addresses of such persons to the Claims Administrator:

20                  Threshold Pharmaceuticals Securities Litigation
                    Claims Administrator
21                  c/o Gilardi & Co. LLC
                    P.O. Box 8040
22                  San Rafael, CA 94912-8040
23          If you choose to mail the Notice and Proof of Claim yourself, you may obtain from the
24 Claims Administrator (without cost to you) as many additional copies of these documents as you

25 will need to complete the mailing.

26          Regardless of whether you choose to complete the mailing yourself or elect to have the
27 mailing performed for you, you may obtain reimbursement for or advancement of reasonable

28 administrative costs actually incurred or expected to be incurred in connection with forwarding the
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                              - 16 -
 1 Notice and which would not have been incurred but for the obligation to forward the Notice, upon

 2 submission of appropriate documentation to the Claims Administrator.

 3 DATED: ___________________, 2009             BY ORDER OF THE COURT
                                                UNITED STATES DISTRICT COURT
 4                                              NORTHERN DISTRICT OF CALIFORNIA

 5

 6

 7

 8

 9

10

11

12

13

14

15

16

17

18
19

20

21

22

23

24

25

26

27

28
     NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION -
     4:07-cv-04972-CW                                                                        - 17 -
 1 COUGHLIN STOIA GELLER
     RUDMAN & ROBBINS LLP
 2 DENNIS J. HERMAN (220163)
   SHIRLEY H. HUANG (206854)
 3 DANIEL J. PFEFFERBAUM (248631)
   100 Pine Street, Suite 2600
 4 San Francisco, CA 94111
   Telephone: 415/288-4545
 5 415/288-4534 (fax)
   dherman@csgrr.com
 6 shuang@csgrr.com
   dpfefferbaum@csgrr.com
 7        – and –
   ELLEN GUSIKOFF STEWART (144892)
 8 655 West Broadway, Suite 1900
   San Diego, CA 92101
 9 Telephone: 619/231-1058
   619/231-7423 (fax)
10 elleng@csgrr.com

11 Lead Counsel for Plaintiffs

12                               UNITED STATES DISTRICT COURT

13                            NORTHERN DISTRICT OF CALIFORNIA

14                                      OAKLAND DIVISION

15 JERRY TWINDE, On Behalf of Himself and      )   No. 4:07-cv-04972-CW
   All Others Similarly Situated,              )
16                                             )   CLASS ACTION
                                  Plaintiff,   )
17                                             )   PROOF OF CLAIM AND RELEASE
           vs.                                 )
18                                             )   EXHIBIT A-2
   THRESHOLD PHARMACEUTICALS, INC.,            )
19 et al.,                                     )
                                               )
20                               Defendants.   )
                                               )
21
     [Caption continued on following page.]
22

23

24

25

26

27

28
 1 RAYNOLD L. GILBERT, On Behalf of             )   No. 4:07-cv-04971-CW
   Himself and All Others Similarly Situated,   )
 2                                              )   CLASS ACTION
                               Plaintiff,       )
 3                                              )
           vs.                                  )
 4                                              )
   THRESHOLD PHARMACEUTICALS, INC.,             )
 5 et al.,                                      )
                                                )
 6                            Defendants.       )
                                                )
 7                                              )

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 1 I.       GENERAL INSTRUCTIONS
 2          1.     To recover as a Member of the Settlement Class based on your claims in the action

 3 entitled Twinde v. Threshold Pharmaceuticals, Inc., et al., No. 4:07-cv-04972-CW (the “Litigation”),

 4 you must complete and, on page ___ hereof, sign this Proof of Claim and Release form. If you fail

 5 to file a properly addressed (as set forth in paragraph 3 below) Proof of Claim and Release form,

 6 your claim may be rejected and you may be precluded from any recovery from the Net Settlement

 7 Fund created in connection with the proposed settlement of the Litigation.

 8          2.     Submission of this Proof of Claim and Release form, however, does not assure that

 9 you will share in the proceeds of settlement in the Litigation.

10          3.     YOU MUST MAIL YOUR COMPLETED AND SIGNED PROOF OF CLAIM

11 AND RELEASE FORM POSTMARKED ON OR BEFORE _________, 2010, ADDRESSED AS

12 FOLLOWS:

13                         Threshold Pharmaceuticals Securities Litigation
                           Claims Administrator
14                         c/o Gilardi & Co. LLC
                           P.O. Box 8040
15                         San Rafael, CA 94912-8040

16 If you are NOT a Member of the Settlement Class, as defined in the Notice of Pendency and

17 Proposed Settlement of Class Action (“Notice”), DO NOT submit a Proof of Claim and Release

18 form.
19          4.     If you are a Member of the Settlement Class, you are bound by the terms of any

20 judgment entered in the Litigation, WHETHER OR NOT YOU SUBMIT A PROOF OF CLAIM

21 AND RELEASE FORM.

22 II.      DEFINITIONS
23          1.     “Defendants” means Threshold Pharmaceuticals, Inc. (“Threshold”) and the

24 Individual Defendants, as defined below.

25          2.     “Individual Defendants” means Harold E. “Barry” Selick and Janet I. Swearson.

26          3.     “Released Parties” means each and all of the Defendants and each and all of their

27 Related Parties (as defined below).

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     PROOF OF CLAIM AND RELEASE - 4:07-cv-04972-CW                                                -1-
 1 III.     CLAIMANT IDENTIFICATION
 2          1.      If you received, purchased or acquired Threshold securities and held the certificate(s)

 3 in your name, you are the beneficial purchaser as well as the record purchaser. If, however, the

 4 certificate(s) were registered in the name of a third party, such as a nominee or brokerage firm, you

 5 are the beneficial purchaser and the third party is the record purchaser.

 6          2.      Use Part I of this form entitled “Claimant Identification” to identify each purchaser or

 7 acquirer of record (“nominee”), if different from the beneficial purchaser or acquirer of Threshold

 8 securities which form the basis of this claim. THIS CLAIM MUST BE FILED BY THE ACTUAL

 9 BENEFICIAL PURCHASER(S) OR ACQUIRER(S), OR THE LEGAL REPRESENTATIVE OF

10 SUCH PURCHASER(S) OR ACQUIRER(S) OF THE THRESHOLD SECURITIES UPON

11 WHICH THIS CLAIM IS BASED.

12          3.      All joint purchasers or acquirers must sign this claim. Executors, administrators,

13 guardians, conservators and trustees must complete and sign this claim on behalf of Persons

14 represented by them and their authority must accompany this claim and their titles or capacities must

15 be stated. The Social Security (or taxpayer identification) number and telephone number of the

16 beneficial owner may be used in verifying the claim. Failure to provide the foregoing information

17 could delay verification of your claim or result in rejection of the claim.

18 IV.      CLAIM FORM
19          1.      Use Part II of this form entitled “Schedule of Transactions in Threshold Securities” to

20 supply all required details of your transaction(s) in Threshold securities. If you need more space or

21 additional schedules, attach separate sheets giving all of the required information in substantially the

22 same form. Sign and print or type your name on each additional sheet.

23          2.      On the schedules, provide all of the requested information with respect to all of your

24 receipts, purchases or acquisitions and all of your sales of Threshold securities which took place at

25 any time between and including February 4, 2005 and July 14, 2006 (the “Settlement Class Period”),

26 whether such transactions resulted in a profit or a loss. Failure to report all such transactions may

27 result in the rejection of your claim.

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     PROOF OF CLAIM AND RELEASE - 4:07-cv-04972-CW                                                     -2-
 1          3.     List each transaction in the Settlement Class Period separately and in chronological

 2 order, by trade date, beginning with the earliest. You must accurately provide the month, day and

 3 year of each transaction you list.

 4          4.     Broker confirmations or other documentation of your transactions in Threshold

 5 securities should be attached to your claim. Failure to provide this documentation could delay

 6 verification of your claim or result in rejection of your claim.

 7          5.     The above requests are designed to obtain the minimum amount of information

 8 necessary to process the most simple claims. The Claims Administrator may request additional

 9 information as required to efficiently and reliably calculate your losses. In some cases where the

10 Claims Administrator cannot perform the calculation accurately or at a reasonable cost to the

11 Settlement Class with the information provided, the Claims Administrator may condition acceptance

12 of the claim upon the production of additional information and/or the hiring of an accounting expert

13 at the claimant’s cost.

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     PROOF OF CLAIM AND RELEASE - 4:07-cv-04972-CW                                                -3-
 1                             UNITED STATES DISTRICT COURT

 2                           NORTHERN DISTRICT OF CALIFORNIA

 3                         Twinde v. Threshold Pharmaceuticals, Inc., et al.

 4                                     No. 4:07-cv-04972-CW

 5                              PROOF OF CLAIM AND RELEASE

 6                               Must Be Postmarked No Later Than:

 7                                         ________, 2010

 8                                       Please Type or Print

 9
     PART I:      CLAIMANT IDENTIFICATION
10

11 Beneficial Owner’s Name (First, Middle, Last)

12

13 Street Address

14 City                                 State                   Zip Code
15

16 Foreign Province                     Foreign Country

                                                                      Individual
17 Social Security Number or

18 Taxpayer Identification Number                                     Corporation/Other

19 Area Code                                                          (work)
                                        Telephone Number
20                                                                    (home)
21 Area Code                            Telephone Number

22

23 Record Owner’s Name (if different from beneficial owner listed above)

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     PROOF OF CLAIM AND RELEASE - 4:07-cv-04972-CW                                        -4-
 1 PART II:         SCHEDULE OF TRANSACTIONS IN THRESHOLD SECURITIES

 2           A.     Number and type of Threshold securities held at the close of trading on February 3,
                    2005: __________.
 3
             B.     Receipts, Purchases or Acquisitions of Threshold securities (February 4, 2005 – July
 4                  14, 2006, inclusive):

 5                                 Number of                                           Total
            Trade Date         Securities Received,                                 Purchase or
 6        Month Day Year      Purchased or Acquired      Type of Security1        Acquisition Price

 7       1. _____________     1. ______________         1. ____________        1. _______________
         2. _____________     2. ______________         2. ____________        2. _______________
 8       3. _____________     3. ______________         3. ____________        3. _______________
 9
             C.     Sales of Threshold securities (February 4, 2005 – July 14, 2006, inclusive):
10
                                     Number of
11          Trade Date               Securities                                         Total
          Month Day Year               Sold              Type of Security1           Sales Price
12
         1. __________        1. __________             1. __________          1. __________
13       2. __________        2. __________             2. __________          2. __________
         3. __________        3. __________             3. __________          3. __________
14

15           D. Number and type of Threshold securities held at the beginning of trading on July 17,
                2006: __________.
16
             E. Number of shares of Threshold common stock held at the beginning of trading on
17              October 16, 2006: ____________.
18 If you require additional space, attach extra schedules in the same format as above. Sign and print
   your name on each additional page.
19
   YOU MUST READ AND SIGN THE RELEASE ON PAGE __________.
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27   1
             A = common stock
             B = options
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     PROOF OF CLAIM AND RELEASE - 4:07-cv-04972-CW                                                 -5-
 1 V.        SUBMISSION TO JURISDICTION OF COURT AND
             ACKNOWLEDGMENTS
 2
             I (We) submit this Proof of Claim and Release under the terms of the Stipulation of
 3
     Settlement dated October 30, 2009 (“Stipulation”) described in the Notice. I (We) also submit to the
 4
     jurisdiction of the United States District Court for the Northern District of California, with respect to
 5
     my (our) claim as a Settlement Class Member (as defined in the Notice) and for purposes of
 6
     enforcing the release set forth herein. I (We) further acknowledge that I am (we are) bound by and
 7
     subject to the terms of any judgment that may be entered in the Litigation. I (We) agree to furnish
 8
     additional information to Lead Plaintiff’s Counsel to support this claim if required to do so. I (We)
 9
     have not submitted any other claim covering the same receipt, purchases, or acquisitions and sales of
10
     Threshold securities during the Settlement Class Period and know of no other person having done so
11
     on my behalf.
12
     VI.     RELEASE
13
             1.      I (We) hereby acknowledge full and complete satisfaction of, and do hereby fully,
14
     finally and forever settle, release, relinquish, and discharge, all of the Released Claims against each
15
     and all of the Defendants and each and all of their “Related Parties,” defined as each of a
16
     Defendant’s past or present directors, officers, employees, partners, insurers, co-insurers, reinsurers,
17
     principals, agents, controlling shareholders, attorneys, investment advisors, underwriters, investment
18
     banks, investment bankers, accountants, auditors, personal or legal representatives, predecessors,
19
     successors, parents, subsidiaries, divisions, joint ventures, assigns, spouses, heirs, estates, executors,
20
     administrators, related or affiliated entities, any entity in which a Defendant has a controlling
21
     interest, any members of an Individual Defendant’s immediate family, any trust of which an
22
     Individual Defendant is the settlor or which is for the benefit of an Individual Defendant and/or any
23
     member of an Individual Defendant’s immediate family, and any entity in which a Defendant and/or
24
     any member of an Individual Defendant’s immediate family has or have a controlling interest
25
     (directly or indirectly).
26
             2.      “Released Claims” shall collectively mean all claims (including Unknown Claims as
27
     defined in Section VI.3 hereof), demands, rights, liabilities, suits and causes of action of every nature
28


     PROOF OF CLAIM AND RELEASE - 4:07-cv-04972-CW                                                        -6-
 1 and description whatsoever, known or unknown, contingent or absolute, mature or immature,

 2 liquidated or un-liquidated, discoverable or undiscoverable, whether concealed or hidden, suspected

 3 or unsuspected, at law or in equity, which now exist, or heretofore have existed, that were asserted or

 4 that might have been asserted by the Plaintiffs or any Settlement Class Member against the

 5 Defendants or any of the Released Parties, in this Litigation or in any other action or forum, based

 6 upon or arising out of both the facts, allegations, transactions, events, occurrences, disclosures,

 7 statements, acts, omissions or failures to act which were or could have been alleged in the Litigation

 8 and the purchase, receipt or acquisition of Threshold publicly traded securities by the Plaintiffs or

 9 any Settlement Class Member during the Settlement Class Period.

10          3.      “Unknown Claims” means collectively any Released Claims that the Plaintiffs or any

11 of the Settlement Class Members do not know or suspect to exist in his, her or its favor at the time of

12 the release of the Released Parties which, if known by him, her or it, might have affected his, her or

13 its settlement with and release of the Released Parties, or might have affected his, her or its decision

14 not to object to this Settlement. With respect to any and all Released Claims, the Settling Parties

15 stipulate and agree that, upon the Effective Date, Plaintiffs shall expressly waive, and each of the

16 Settlement Class Members shall be deemed to have waived, and by operation of the Judgment shall

17 have waived, the provisions, rights and benefits of California Civil Code §1542, which provides:

18                 A general release does not extend to claims which the creditor does not
            know or suspect to exist in his or her favor at the time of executing the release,
19          which if known by him or her must have materially affected his or her
            settlement with the debtor.
20
     Plaintiffs shall expressly and each of the Settlement Class Members shall be deemed to have, and by
21
     operation of the Judgment shall have, expressly waived any and all provisions, rights and benefits
22
     conferred by any law of any state or territory of the United States, or principle of common law,
23
     which is similar, comparable or equivalent to California Civil Code §1542. Plaintiffs and Settlement
24
     Class Members may hereafter discover facts in addition to or different from those which he, she or it
25
     now knows or believes to be true with respect to the subject matter of the Released Claims, but
26
     Plaintiffs shall expressly fully, finally and forever settle and release, and each Settlement Class
27
     Member, upon the Effective Date, shall be deemed to have, and by operation of the Judgment shall
28


     PROOF OF CLAIM AND RELEASE - 4:07-cv-04972-CW                                                    -7-
 1 have, fully, finally, and forever settled and released, any and all Released Claims, known or

 2 unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or

 3 hidden, which now exist, or heretofore have existed, upon any theory of law or equity now existing

 4 or coming into existence in the future, including, but not limited to, conduct which is negligent,

 5 intentional, with or without malice, or a breach of any duty, law or rule, without regard to the

 6 subsequent discovery or existence of such different or additional facts. Plaintiffs acknowledge, and

 7 the Settlement Class Members shall be deemed by operation of the Judgment to have acknowledged,

 8 that the foregoing waiver was separately bargained for and a key element of the settlement of which

 9 this release is a part.

10          4.      This release shall be of no force or effect unless and until the Court grants final

11 approval to the settlement set forth in the Stipulation and the settlement becomes effective on the

12 Effective Date.

13          5.      I (We) hereby warrant and represent that I (we) have not assigned or transferred or

14 purported to assign or transfer, voluntarily or involuntarily, any matter released pursuant to this

15 release or any other part or portion thereof.

16          6.      I (We) hereby warrant and represent that I (we) have included information about all

17 of my (our) transactions in Threshold securities that occurred during the Settlement Class Period as

18 well as the number of shares of Threshold securities held by me (us) at the opening of trading on
19 February 4, 2005, and at the beginning of trading on July 17, 2006, and the number of shares of

20 Threshold common stock held at the beginning of trading on October 16, 2006.

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     PROOF OF CLAIM AND RELEASE - 4:07-cv-04972-CW                                                -8-
 1                                   SUBSTITUTE FORM W-9
                 Request for Taxpayer Identification Number (“TIN”) and Certification
 2

 3                                                PART I

 4
     NAME:
 5
     Check appropriate box:
 6
           Individual/Sole Proprietor                             Pension Plan
 7         Corporation                   Partnership             Trust
           IRA                           Other
 8
            Enter TIN on appropriate line.
 9
            o      For individuals, this is your Social Security Number (“SSN”).
10
            o      For sole proprietors, you must show your individual name, but you may also
11                 enter your business or “doing business as” name. You may enter either your
                   SSN or your Employer Identification Number (“EIN”).
12
            o      For other entities, it is your EIN.
13
   ___-__-____                     or      __-_______
14 Social Security Number                  Employer Identification Number
15
                                                         PART II
16
                                  For Payees Exempt from Backup Withholding
17
   If you are exempt from backup withholding, enter your correct TIN in Part I and write “exempt” on
18 the following line: _________________________
19                                                       PART III
20                                                  Certification
21 UNDER THE PENALTY OF PERJURY, I (WE) CERTIFY THAT:

22          1.     The number shown on this form is my correct TIN; and
23          2.     I (We) certify that I am (we are) NOT subject to backup withholding under
                   the provisions of Section 3406 (a)(1)(C) of the Internal Revenue Code
24                 because: (a) I am (we are) exempt from backup withholding; or (b) I (we)
                   have not been notified by the Internal Revenue Service that I am (we are)
25                 subject to backup withholding as a result of a failure to report all interest or
                   dividends; or (c) the Internal Revenue Service has notified me (us) that I am
26                 (we are) no longer subject to backup withholding.
27 NOTE:           If you have been notified by the Internal Revenue Service that you are subject to
                   backup withholding, you must cross out Item 2 above.
28


     PROOF OF CLAIM AND RELEASE - 4:07-cv-04972-CW                                                    -9-
 1         SEE ENCLOSED FORM W-9 INSTRUCTIONS

 2 The Internal Revenue Service does not require your consent to any provision of this document other

 3 than the certification required to avoid backup withholding.

 4         I declare under penalty of perjury under the laws of the United States of America that the

 5 foregoing information supplied by the undersigned is true and correct.

 6         Executed this ___________ day of ________________________,
                                              (Month/Year)
 7
     in _____________________, _______________________________________.
 8          (City)                   (State/Country)
 9

10                                               ________________________________
                                                 (Sign your name here)
11

12                                               ________________________________
                                                 (Type or print your name here)
13

14                                               ________________________________
                                                 (Capacity of person(s) signing, e.g.,
15                                               Beneficial Purchaser or Acquirer,
16                                               Executor or Administrator)

17                         ACCURATE CLAIMS PROCESSING TAKES A

18                               SIGNIFICANT AMOUNT OF TIME.

19                              THANK YOU FOR YOUR PATIENCE.

20 Reminder Checklist:
           1.     Please sign the above release and declaration.
21
           2.     Remember to attach supporting documentation, if available.
22
           3.     Do not send original stock certificates.
23
           4.     Keep a copy of your claim form for your records.
24
           5.     If you desire an acknowledgment of receipt of your claim form, please send it
25
   Certified Mail, Return Receipt Requested.
26
           6.     If you move, please send us your new address.
27

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     PROOF OF CLAIM AND RELEASE - 4:07-cv-04972-CW                                             - 10 -
 1 COUGHLIN STOIA GELLER
     RUDMAN & ROBBINS LLP
 2 DENNIS J. HERMAN (220163)
   SHIRLEY H. HUANG (206854)
 3 DANIEL J. PFEFFERBAUM (248631)
   100 Pine Street, Suite 2600
 4 San Francisco, CA 94111
   Telephone: 415/288-4545
 5 415/288-4534 (fax)
   dherman@csgrr.com
 6 shuang@csgrr.com
   dpfefferbaum@csgrr.com
 7        – and –
   ELLEN GUSIKOFF STEWART (144892)
 8 655 West Broadway, Suite 1900
   San Diego, CA 92101
 9 Telephone: 619/231-1058
   619/231-7423 (fax)
10 elleng@csgrr.com

11 Lead Counsel for Plaintiffs

12                               UNITED STATES DISTRICT COURT

13                            NORTHERN DISTRICT OF CALIFORNIA

14                                      OAKLAND DIVISION

15 JERRY TWINDE, On Behalf of Himself and      )   No. 4:07-cv-04972-CW
   All Others Similarly Situated,              )
16                                             )   CLASS ACTION
                                  Plaintiff,   )
17                                             )   SUMMARY NOTICE
           vs.                                 )
18                                             )   EXHIBIT A-3
   THRESHOLD PHARMACEUTICALS, INC.,            )
19 et al.,                                     )
                                               )
20                               Defendants.   )
                                               )
21
     [Caption continued on following page.]
22

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 1 RAYNOLD L. GILBERT, On Behalf of             )   No. 4:07-cv-04971-CW
   Himself and All Others Similarly Situated,   )
 2                                              )   CLASS ACTION
                               Plaintiff,       )
 3                                              )
           vs.                                  )
 4                                              )
   THRESHOLD PHARMACEUTICALS, INC.,             )
 5 et al.,                                      )
                                                )
 6                            Defendants.       )
                                                )
 7                                              )

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 1 TO:      ALL PERSONS WHO RECEIVED, PURCHASED OR OTHERWISE ACQUIRED
            THRESHOLD PHARMACEUTICALS, INC. (“THRESHOLD”) SECURITIES BETWEEN
 2          FEBRUARY 4, 2005 AND JULY 14, 2006
 3          YOU ARE HEREBY NOTIFIED, pursuant to an Order of the United States District Court
 4 for the Northern District of California, that a hearing will be held on ______, 2010, at 2:00 p.m.,

 5 before the Honorable Claudia Wilken at the Ronald V. Dellums Federal Building, 1301 Clay Street,

 6 Oakland, California, for the purpose of determining (1) whether the proposed settlement of the

 7 claims in the Litigation for the sum of $10,000,000 in cash should be approved by the Court as fair,

 8 reasonable and adequate; (2) whether a Settlement Class should be certified for purposes of the

 9 settlement; (3) whether, thereafter, this Litigation should be dismissed with prejudice pursuant to the

10 terms and conditions set forth in the Stipulation of Settlement dated October 30, 2009 (the

11 “Stipulation”); (3) whether the Plan of Allocation is fair, reasonable, and adequate and therefore

12 should be approved; and (4) whether the application of Plaintiffs’ Counsel for the payment of

13 attorneys’ fees and expenses incurred in connection with this Litigation should be approved.

14          If you received, purchased or acquired Threshold securities between February 4, 2005 and
15 July 14, 2006, inclusive, your rights may be affected by the settlement of this Litigation. If you have

16 not received a detailed Notice of Pendency and Proposed Settlement of Class Action (“Notice”) and

17 a copy of the Proof of Claim and Release form, you may obtain copies by writing to Threshold

18 Securities Litigation, Claims Administrator, c/o Gilardi & Co. LLC, P.O. Box 8040, San Rafael, CA
19 94912-8040. If you are a Settlement Class Member, in order to share in the distribution of the Net

20 Settlement Fund, you must submit a Proof of Claim and Release form postmarked no later than

21 ______, 2010, establishing that you are entitled to recovery.

22          If you desire to be excluded from the Settlement Class, you must submit a request for
23 exclusion postmarked by ________, 2009, in the manner and form explained in the detailed Notice

24 referred to above. All Members of the Settlement Class who do not timely and validly request

25 exclusion from the Settlement Class will be bound by any judgment entered in the Litigation

26 pursuant to the terms and conditions of the Stipulation.

27

28


     SUMMARY NOTICE - 4:07-cv-04972-CW                                                               -1-
 1          Any objection to the settlement must be mailed or delivered such that it is received by each

 2 of the following no later than _________, 2009:

 3                  CLERK OF THE COURT
                    UNITED STATES DISTRICT COURT
 4                  NORTHERN DISTRICT OF CALIFORNIA
                    Ronald V. Dellums Federal Building
 5
                    1301 Clay Street
 6                  Oakland, CA 94612

 7                  Counsel for Plaintiffs:

 8                  COUGHLIN STOIA GELLER
                     RUDMAN & ROBBINS LLP
 9                  ELLEN GUSIKOFF STEWART
                    655 West Broadway, Suite 1900
10
                    San Diego, CA 92101
11
                    Counsel for Defendants:
12
                    HOGAN & HARTSON LLP
13                  MICHAEL L. CHARLSON
                    525 University Avenue, 4th Floor
14                  Palo Alto, CA 94301
15
     PLEASE DO NOT CONTACT THE COURT OR THE CLERK’S OFFICE REGARDING
16
     THIS NOTICE. If you have any questions about the settlement, you may contact counsel for the
17
     Plaintiffs at the address listed above or go to the following website: www.gilardi.com.
18
19 DATED: ____________________, 2009                   BY ORDER OF THE COURT
20                                                     UNITED STATES DISTRICT COURT
                                                       NORTHERN DISTRICT OF CALIFORNIA
21

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     SUMMARY NOTICE - 4:07-cv-04972-CW                                                             -2-