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Exhibit 10.35



        1.    Purpose.    Titan Pharmaceuticals, Inc., a Delaware corporation ("Titan"), desires to attract and retain the best available talent and to encourage the highest level of performance. The Titan Pharmaceuticals, Inc. 2001 Non-Qualified Employee Stock Option Plan (the "Plan") is intended to contribute significantly to the attainment of these objectives by affording eligible employees and independent contractors of Titan and its Affiliates (as hereinafter defined) (collectively, with Titan, the "Company") the opportunity to acquire a proprietary interest in Titan through the grant of stock options ("Options") to purchase shares of common stock, $.001 par value per share, of Titan (the "Common Stock").

        2.    Administration.    

        3.    Type of Options.    Options granted under the Plan shall be nonqualified stock options ("NSOs") which are not intended to meet the requirements of Code Section 422.

        4.    Eligible Persons.    Options may be awarded only to (i) employees of the Company who do not serve as executive officers or members of the Board and (ii) independent contractors of the Company. For purposes hereof, independent contractors shall include consultants and advisors of the Company who do not serve in any executive capacity with the Company and are not members of the Board. In determining the persons to whom awards shall be made and the number of shares to be covered by each Option, the Board shall take into account the duties of the respective persons, their present and potential contributions to the success of the Company and such other factors as the Board, in its discretion, shall deem relevant in connection with accomplishing the purposes of the Plan.

        5.    Shares Subject to the Plan.    No more than one million (1,000,000) shares of Common Stock shall be issued pursuant to the exercise of Options granted under the Plan. Such aggregate numbers shall be subject to adjustment as provided in Section 16. If an Option is forfeited or expires without being exercised, the shares of Common Stock subject to the Option shall be available for additional Option grants under the Plan. If an Option is exercised in whole or in part by an Optionee by tendering previously owned shares of Common Stock, or if any shares are withheld in connection with the exercise of its Option to satisfy the Optionee's tax liability, the full number of shares in respect of which the Option has been exercised shall be applied against the limit set forth in this Section 5.

        6.    Term of Options.    The term of each Option shall be fixed by the Board and specified in the applicable Option Agreement, but in no event shall it be more than ten years from the date of grant, subject to earlier termination as provided in Section 8. The term of an Option may be extended from time to time by the Board, provided that no such extension shall extend the term beyond ten years from the date of grant.

        7.    Vesting.    The Board shall determine the vesting schedule applicable to a particular Option grant and specify the vesting schedule in the applicable Option Agreement. Notwithstanding the foregoing the Board may accelerate the vesting of an Option at any time.

        8.    Termination of Relationship to the Company.    


        9.    Option Exercise Price.    The Option exercise price per share of Common Stock covered by an Option shall be established by the Board.

        10.    Exercise of Options.    


        11.    Option Agreement.    The terms and conditions of each Option shall be set forth in an Option Agreement in the form approved by the Board. Each Option Agreement shall be executed by Titan and the Optionee. Each Option Agreement shall, at a minimum, specify (i) the number of shares of Common Stock subject to the Option, (ii) the provisions related to vesting and exercisability of the Option, including the Option exercise price, and (iii) that the Option is subject to the terms and provisions of the Plan and that in the event of any conflict between the Option Agreement and the Plan, the Plan shall control. The Option Agreement may also contain such other terms and conditions as the Board determines to be necessary or advisable. Option Agreements may vary from one another.


        12.    No Stockholder Rights.    No Optionee shall have the rights of a stockholder with respect to shares covered by an Option until such person becomes the holder of record of such shares.

        13.    Nontransferability.    

        14.    Compliance with Law; Registration of Shares.    

        15.    No Restriction on the Right of Titan to Effect Corporate Changes.    The Plan and the Options granted hereunder shall not affect in any way the right or power of Titan or its stockholders to make or authorize any or all adjustments, recapitalization, reorganizations or other changes in Titan's (or a Titan Affiliate's) capital structure or its business, or any merger or consolidation of Titan (or a Titan Affiliate), or any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common


Stock or the rights of holders thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of Titan (or a Titan Affiliate), or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

        16.    Certain Adjustments.    

        17.    No Right to Continued Employment.    Neither the Plan nor any action taken hereunder shall be construed as giving any employee or any independent contractor any right to continue in the employ of or to be engaged as an independent contractor by the Company or affect the right of the Company to terminate such person's employment or other relationship with the Company at any time.

        18.    Amendment; Early Termination.    The Board may at any time and from time to time alter, amend, suspend or terminate the Plan in whole or in part; provided, however, that no amendment requiring stockholder approval by law or by the rules of any stock exchange, inter-dealer quotation system, or other market in which shares of Common Stock are traded, shall be effective unless and until such stockholder approval has been obtained in compliance with such rule or law; and provided, further, that no such amendment shall materially adversely affect the rights of an Optionee in any Option previously granted under the Plan without the Optionee's written consent.

        19.    Effective Date.    The Plan shall be effective as of the date of its adoption by the Board (the "Effective Date").


        20.    Termination of Plan.    Unless terminated earlier by the Board in accordance with Section 18 above, the Plan shall terminate on, and no further Options may be granted after, the tenth anniversary of the Effective Date.

        21.    Severability.    In the event that any one or more provisions of the Plan or an Option Agreement, or any action taken pursuant to the Plan or an Option Agreement, should, for any reason, be unenforceable or invalid in any respect under the laws of the United States, any state of the United States or any other jurisdiction, such unenforceability or invalidity shall not affect any other provision of the Plan or Option Agreement, but in such particular jurisdiction and instance the Plan and/or Option Agreement, as applicable, shall be construed as if such unenforceable or invalid provision had not been contained therein or if the action in question had not been taken thereunder.

        22.    Definitions.    


        23.    Transfers to and from Affiliates.    For all Plan purposes, a transfer of an employee from Titan to a Titan Affiliate or visa versa, or a transfer from one Titan Affiliate to another, will not be treated as a termination of employment.

        24.    Headings.    The headings of sections and subsections herein are included solely for convenience of reference and shall not affect the meaning of any of the provisions of the Plan.

        25.    Governing Law.    This Plan and all rights hereunder shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to its conflicts of law principles.

        Adopted by the Board of Directors on July 27, 2001.