NASTECH PHARMACEUTICAL CO INC
EXHIBIT 10.25
<DOCUMENT>
<TYPE>EX-10.25
<SEQUENCE>3
<FILENAME>v88030exv10w25.txt
<DESCRIPTION>EXHIBIT 10.25
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                                                                   Exhibit 10.25

                       NASTECH PHARMACEUTICAL COMPANY INC.

                       STAND-ALONE STOCK OPTION AGREEMENT

I.    NOTICE OF STOCK OPTION GRANT

      Gregory L. Weaver
      [Address]

      You have been granted a Nonstatutory Stock Option to purchase Common Stock
of the Company, subject to the terms and conditions of this Agreement, as
follows:

      Date of Grant                     May 20, 2002

      Vesting Commencement Date         May 20, 2002

      Exercise Price per Share          $15.30

      Total Number of Shares Granted    125,000

      Total Exercise Price              $1,912,500

      Term/Expiration Date:             Ten Years/May 20, 2012

      Vesting Schedule:

      This Option shall vest and may be exercised, in whole or in part, in
accordance with the following schedule:

      One-third of the Shares subject to the Option shall vest on each
anniversary of the Vesting Commencement Date, so that the Option shall be fully
vested three (3) years from the Date of Grant, subject to the Optionee
continuing to be a Service Provider on such dates.

      Termination Period

      This Option may be exercised for three (3) months after Optionee ceases to
be a Service Provider in accordance with Section 7 of this Agreement. Upon the
death or Disability of the Optionee, this Option may be exercised for one year
after the Optionee ceases to be a Service Provider in accordance with Sections 8
and 9 of this Agreement. In no event shall this Option be exercised later that
the Term/Expiration Date provided.

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      II.   AGREEMENT

      1. Definitions. As used herein, the following definitions shall apply:

            (a) "Agreement" means this stock option agreement between the
Company and Optionee evidencing the terms and conditions of this Option.

            (b) "Applicable Laws" means the requirements relating to the
administration of stock options under U.S. state corporate laws, U.S. federal
and state securities laws, the Code, any stock exchange or quotation system on
which the Common Stock is listed or quoted and the applicable laws of any
foreign country or jurisdiction that may apply to this Option.

            (c) "Board" means the Board of Directors of the Company or any
committee of the Board that has been designated by the Board to administer this
Agreement.

            (d) "Code" means the Internal Revenue Code of 1986, as amended.

            (e) "Common Stock" means the common stock of the Company.

            (f) "Company" means Nastech Pharmaceutical Company, Inc., a Delaware
corporation.

            (g) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.

            (h) "Director" means a member of the Board.

            (i) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

            (j) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

            (k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            (l) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

                  (1) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system on
the date of determination or, if there were no sales on that date, on the last
market trading day prior to the date of determination;


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                  (2) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the date of determination or, if there were no sales on that date, on the
last market trading day prior to the date of determination; or

                  (3) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board.

            (m) "Nonstatutory Stock Option" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

            (n) "Notice of Grant" means a written notice, in Part I of this
Agreement, evidencing certain the terms and conditions of this Option grant. The
Notice of Grant is part of the Option Agreement.

            (o) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

            (p) "Option" means this stock option.

            (q) "Optioned Stock" means the Common Stock subject to this Option.

            (r) "Optionee" means the person named in the Notice of Grant or such
person's successor.

            (s) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

            (t) "Service Provider" means an Employee, Director or Consultant.

            (u) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 11 of this Agreement.

            (v) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.

      2. Grant of Option. The Board hereby grants to the Optionee named in the
Notice of Grant attached as Part I of this Agreement the Option to purchase the
number of Shares, as set forth in the Notice of Grant, at the exercise price per
share set forth in the Notice of Grant (the "Exercise Price"), subject to the
terms and conditions of this Agreement.

      3. Exercise of Option.

            (a) Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of this Agreement.


                                                                             -3-
<PAGE>


            (b) Method of Exercise. This Option is exercisable by delivery of an
exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company. The
Exercise Notice shall be completed by the Optionee and delivered to Secretary of
the Company. The Exercise Notice shall be accompanied by payment of the
aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed
to be exercised upon receipt by the Company of such fully executed Exercise
Notice accompanied by such aggregate Exercise Price.

            (c) Legal Compliance. No Shares shall be issued pursuant to the
exercise of this Option unless such issuance and exercise complies with
Applicable Laws. Assuming such compliance, for income tax purposes the Exercised
Shares shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.

            (d) Buyout Provisions. The Board may at any time offer to buy out
for a payment in cash or Shares an Option previously granted based on such terms
and conditions as the Board shall establish and communicate to the Optionee at
the time that such offer is made.

      4. Method of Payment. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee:

            (a) cash or check;

            (b) consideration received by the Company under a cashless exercise
program implemented by the Company; or

            (c) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, AND (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.

      5. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of this Agreement shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.

      6. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the terms of this Agreement.

      7. Termination of Relationship as a Service Provider. If the Optionee
ceases to be a Service Provider (other than for death or Disability), this
Option may be exercised for a period of three (3) months after the date of such
termination (but in no event later than the expiration date of this Option as
set forth in the Notice of Grant) to the extent that the Option is vested on the
date of such termination. To the extent that the Optionee does not exercise this
Option within the time specified herein, the Option shall terminate.


                                                                             -4-
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      8. Disability of Optionee. If the Optionee ceases to be a Service Provider
as a result of the Optionee's Disability, this Option may be exercised for a
period of twelve (12) months after the date of such termination (but in no event
later than the expiration date of this Option as set forth in the Notice of
Grant) to the extent that the Option is vested on the date of such termination.
To the extent that Optionee does not exercise this Option within the time
specified herein, the Option shall terminate.

      9. Death of Optionee. If the Optionee dies while a Service Provider, the
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration date of this Option as set
forth in the Notice of Grant), by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that the Optionee was entitled to exercise the Option at the date of
death. If, after death, the Optionee's estate or a person who acquired the right
to exercise the Option by bequest or inheritance does not exercise the Option
within the time specified herein, the Option shall terminate.

      10. Adjustments upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

            (a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
this Option, as well as the price per share of Common Stock covered by this
Option, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to this Option.

            (b) Dissolution or Liquidation. Except as provided by the Change In
Control Severance Agreement between the Company and Optionee dated July 31, 2002
(the "Severance Agreement"), to the extent the Option has not been previously
exercised, the Option will terminate immediately prior to the consummation of
such proposed dissolution or liquidation of the Company.

            (c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, the Option shall be assumed or an equivalent option substituted
by the successor corporation or a Parent or Subsidiary of the successor
corporation; provided, however, that such assumed or equivalent option shall be
continue to be subject to the provisions of the Severance Agreement. In the
event that the successor corporation refuses to assume or substitute for the
Option, the Optionee shall fully vest in and have the right to exercise the
Option as to all of the Optioned Stock, including Shares as to which it would
not otherwise be vested or exercisable. If the Option becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Board shall notify the Optionee in writing or electronically
that the Option shall be fully exercisable for a period of ten (10) days from
the date of such notice, and the Option shall terminate upon the expiration of
such period.

                                                                             -5-
<PAGE>

For the purposes of this paragraph, the Option shall be considered assumed if,
following the merger or sale of assets, the option confers the right to purchase
or receive, for each Share of Optioned Stock subject to the Option immediately
prior to the merger or sale of assets, the consideration (whether stock, cash,
or other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option, for each
Share of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.

      11. Notices. Any notice to be given to the Company hereunder shall be in
writing and shall be addressed to the Company. at its then current principal
executive office or to such other address as the Company may hereafter designate
to the Optionee by notice as provided in this Section. Any notice to be given to
the Optionee hereunder shall be addressed to the Optionee at the address set
forth beneath his signature hereto, or at such other address as the Optionee may
hereafter designate to the Company by notice as provided herein. A notice shall
be deemed to have been duly given when personally delivered or mailed by
registered or certified mail to the party entitled to receive it.

      12. Tax Consequences. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.

            (a) Exercising the Option. The Optionee may incur regular federal
income tax liability upon exercise of a Nonstatutory Stock Option (an "NSO").
The Optionee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Exercised Shares on the date of exercise over their aggregate Exercise
Price. If the Optionee is an Employee or a former Employee, the Company will be
required to withhold from his or her compensation or collect from Optionee and
pay to the applicable taxing authorities an amount in cash equal to a percentage
of this compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

            (b) Disposition of Shares. If the Optionee holds NSO Shares for at
least one year, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes.

      13. Entire Agreement; Governing Law. This Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee's interest except by means of a writing

                                                                             -6-
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signed by the Company and Optionee. This agreement is governed by the internal
substantive laws, but not the choice of law rules, of Washington.

      14. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUES ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

      By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of this Agreement. Optionee has reviewed this Agreement in
its entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of this Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions relating to this Agreement.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.

OPTIONEE                                 Nastech Pharmaceutical Company Inc.

/s/ Gregory L. Weaver                    /s/ Steven C. Quay
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Signature                                Steven C. Quay

 Gregory L. Weaver                       President and Chief Executive Officer
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Print Name


Date: 2/14/2003
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                                    EXHIBIT A

                       NASTECH PHARMACEUTICAL COMPANY INC.

                                 EXERCISE NOTICE

NASTECH PHARMACEUTICAL COMPANY INC.
3450 MONTE VILLA PARKWAY
BOTHELL, WA 98021

Attention: _____________

      1. Exercise of Option. Effective as of today, ________________, 200__, the
undersigned ("Purchaser") hereby elects to purchase ______________ shares (the
"Shares") of the Common Stock of Nastech Pharmaceutical Company Inc. (the
"Company") under and pursuant to the Stock Option Agreement dated _____________,
2003 (the "Option Agreement"). The purchase price for the Shares shall be
$_______, as required by the Option Agreement.

      2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.

      3. Representations of Purchaser. Purchaser acknowledges that Purchaser has
received, read and understood the Option Agreement and agrees to abide by and be
bound by their terms and conditions.

      4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 10 of the
Option Agreement.

      5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.

      6. Successors and Assigns. The Company may assign any of its rights under
this Exercise Notice to single or multiple assignees, and this Exercise Notice
shall inure to the benefit of the successors and assigns of the Company. Subject
to the restrictions on transfer herein set forth, this Exercise Notice shall be
binding upon Optionee and his or her heirs, executors, administrators,
successors and assigns.


<PAGE>


      7. Interpretation. Any dispute regarding the interpretation of this
Exercise Notice shall be submitted by Optionee or by the Company forthwith to
the Administrator which shall review such dispute at its next regular meeting.
The resolution of such a dispute by the Administrator shall be final and binding
on all parties.

      8. Entire Agreement; Governing Law. The Option Agreement is incorporated
herein by reference. This Agreement, and the Option Agreement constitute the
entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and Purchaser with respect to the subject matter hereof, and may not be modified
adversely to the Purchaser's interest except by means of a writing signed by the
Company and Purchaser. This agreement is governed by the internal substantive
laws, but not the choice of law rules, of Washington.

Submitted by:                              Accepted by:

OPTIONEE                                   NASTECH PHARMACEUTICAL COMPANY INC.


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Signature


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Print Name


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Address                                    Address

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                                           Date Received:
                                                         -----------------------


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