NOTE 15—EMPLOYEE BENEFIT PLAN

The Company sponsors a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code covering all full-time employees (“Molecular Templates 401(k) Plan”). The Molecular Templates 401(k) Plan is intended to qualify under Section 401 of the Internal Revenue Code.

Participants meeting certain criteria, as defined in the plan document, are eligible for a matching contribution, (“Company Match”) in amounts determined at the discretion of the Company.  The matching funds become fully vested after three years of service, 25% in year one, 50% in year two, and 100% in year three. Contributions to the Molecular Templates 401(k) Plan by the Company were $0 and $43,000 for the years ended December 31, 2017 and 2016, respectively.

As part of the merger on August 1, 2017, the Company assumed Threshold Pharmaceuticals Inc. 401(k) plan, which had been setup to provide a retirement savings program for the former employees of the Threshold Pharmaceuticals, Inc. The 401(k) plan is intended to qualify under Section 401 of the Internal Revenue Code. As of December 31, 2017, the Company has not made any contributions to the 401(k) plan.