Perlman Nonstatutory Stock Option Agreement



 EXHIBIT 10.5 
  
 TULARIK, INC. 
 STOCK OPTION GRANT NOTICE 
 (Nonstatutory Stock Option Outside of any Stock Plan) 
  
 Tularik, Inc. (the “Company”) hereby grants to Optionholder a nonstatutory stock
option to purchase the number of shares of the Company’s Common Stock set forth below. This option is not intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”). This option is not subject to, and is granted outside of, any equity compensation plan of the Company. This option is subject to all of the terms and conditions as set forth herein and in the Stock Option Agreement
and the Notice of Exercise, which are attached hereto and incorporated herein in their entirety. 
  

			
		
	 Optionholder:
	  	ANDREW J. PERLMAN
		
	 Date of Grant:
	  	NOVEMBER 5, 1999
		
	 Vesting Commencement Date:
	  	NOVEMBER 5,1999
		
	 Number of Shares Subject to Option:
	  	20,000 (TWENTY THOUSAND)
		
	 Exercise Price (Per Share):
	  	$3.00
		
	 Total Exercise Price:
	  	$60,000.00
		
	 Expiration Date:
	  	NOVEMBER 4, 2009

  

			
		
	 Type of Grant:
	  	Nonstatutory Stock Option
		
	 Exercise Schedule:
	  	Early Exercise Permitted
		
	 Vesting Schedule:
	  	 1/48th of the
shares vest one month after the Vesting Commencement Date.
 1/48th of the shares vest monthly thereafter subject to the terms of the Stock Option Agreement.

		
	 Payment:
	  	By one or a combination of the following items (described in the Stock Option Agreement):
		
	 	  	 By cash or check
 Pursuant to a Regulation T Program if the Shares are publicly traded
 By delivery of already-owned shares if the Shares are
publicly traded


  

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 Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges receipt of, and understands and
agrees to the terms of this Grant Notice and the Stock Option Agreement and the representations made by Optionholder in the Stock Option Agreement (e.g., subparagraph 6(b)) and herein. Optionholder further acknowledges that as of the Date of Grant,
this Grant Notice and the Stock Option Agreement set forth the entire understanding between Optionholder and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements on that subject with the
exception of (i) options previously granted and delivered to Optionholder and (ii) the following agreements only: 
  

			
	 OTHER AGREEMENTS:
	  	 
		
	 	  	 

  

									
	 TULARIK INC.
	 	 	 	 OPTIONHOLDER:

				
	By:	 	 	 	 	 	  
	 	 	Signature	 	 	 	Signature
					
	 Title:
	 	Secretary	 	 	 	 Date:
	 	 11/5/99

					
	 Date:
	 	 11/5/99
	 	 	 	 	 	 

  
 ATTACHMENTS:
Stock Option Agreement, Notice of Exercise 
  

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 TULARIK, INC. 
 (NONSTATUTORY STOCK OPTION OUTSIDE OF ANY STOCK OPTION PLAN) 
  
 STOCK OPTION AGREEMENT

 (NONSTATUTORY STOCK OPTION) 
  
 Pursuant to your Stock Option Grant Notice (“Grant Notice”) and
this Stock Option Agreement, Tularik, Inc. (the “Company”) has granted you an option to purchase the number of shares (the “Shares”) of the common stock of the Company (the “Common Stock”) indicated in your Grant Notice
at the exercise price indicated in your Grant Notice. 
  
 The
details of your option are as follows: 
  
 1.
VESTING. Subject to the limitations contained herein, your option will vest as provided in your Grant Notice, provided that vesting will cease upon the termination of your provision of all personal services,
whether as a common law employee, an independent contractor, or a director (“Continuous Service”), to the Company (including for this purpose service to an Affiliate of the Company). An “Affiliate” of the Company is any parent
corporation or subsidiary corporation, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f) respectively, of the Code. 
  
 2. NUMBER OF SHARES AND EXERCISE
PRICE. The number of shares of Common Stock subject to your option and your exercise price per share referenced in your Grant Notice may be adjusted from time to time for capitalization adjustments. 
  
 3. EXERCISE PRIOR TO
VESTING (“EARLY EXERCISE”). Subject to the provisions herein and in the Grant Notice, you may elect at any time that is both (i) during the period of your Continuous Service and (ii) during
the term of your option, to exercise all or part of your option, including the nonvested portion of your option; provided, however, that: 
  
 (a) a partial exercise of your option shall be deemed to cover first vested shares of Common Stock and then the earliest vesting
installment of unvested shares of Common Stock; 
  
 (b) any shares of Common Stock so purchased from installments that have not vested as of the date of exercise shall be subject to the purchase option in favor of the Company as described in the Company’s form of Early Exercise
Stock Purchase Agreement; and 
  
 (c) you
shall enter into the Company’s form of Early Exercise Stock Purchase Agreement with a vesting schedule that will result in the same vesting as if no early exercise had occurred. 
  
 4. METHOD OF PAYMENT. Payment of the exercise price is due in
full upon exercise of all or any part of your option. You may elect to make payment of the exercise price 

  

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in cash or by check or in any other manner permitted by your Grant Notice,which may include one or more of the following: 
  
 (a) In the Company’s sole discretion at the time
your option is exercised and provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street Journal, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. 
  
 (b) Provided that at the time of exercise the Common
Stock is publicly traded and quoted regularly in The Wall Street Journal, by delivery of already-owned shares of Common Stock either that you have held for the period required to avoid a charge to the Company’s reported earnings
(generally six months) or that you did not acquire, directly or indirectly from the Company, that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise.
“Delivery” for these purposes, in the sole discretion of the Company at the time you exercise your option, shall include delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the
Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company of Common Stock to the extent such tender would violate the provisions of any law, regulation or agreement restricting the redemption of the
Company’s stock. 
  
 5. WHOLE
SHARES. You may exercise your option only for whole shares of Common Stock. 
  
 6. SECURITIES LAW COMPLIANCE. 
  
 (a) Notwithstanding anything to the contrary
contained herein, you may not exercise your option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act of 1933 (the “Securities Act”) or, if such shares of Common Stock are not then so
registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of your option must also comply with other applicable laws and regulations governing your
option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations. 
  

(b) You warrant and represent that you have either (i) preexisting personal or business relationships, with the Company or any
of its officers, directors or controlling persons, or (ii) the capacity to protect your own interests in connection with the purchase of Shares by virtue of your business or financial expertise or that of professional advisors to you who are
unaffiliated with and who are not compensated by the Company or any of its affiliates, directly or indirectly. 
  

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 7. TERM. You may not exercise your option before the commencement of its term or
after its term expires. The term of your option commences on the Date of Grant and expires upon the earliest of the following: 
  
 (a) three (3) months after the termination of your Continuous Service for any reason other than your Disability or death, provided
that if during any part of such period of time your option is not exercisable solely because of the condition set forth in subparagraph (a) of the preceding paragraph relating to “Securities Law Compliance,” your option shall not expire
until the earlier of the Expiration Date or until it shall have been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service; 
  
 (b) twelve (12) months after the termination of your Continuous Service due to your Disability;

  
 (c) eighteen (18) months after your
death if you die either during your Continuous Service or within three (3) months after your Continuous Service terminates; 
  
 (d) the Expiration Date indicated in your Grant Notice; or 
  
 (e) the day before the tenth (10th) anniversary of the Date of Grant. 
  
 8. EXERCISE. 
  
 (a) You may exercise the vested portion of your
option (and the unvested portion of your option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require. 
  
 (b) By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter
into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of your option, (2) the lapse of any substantial risk of forfeiture to which the shares of
Common Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock acquired upon such exercise. 
  
 (c) By exercising your option you agree that the Company (or a representative of the underwriter(s)) may, in connection with the
first underwritten registration of the offering of any securities of the Company under the Securities Act, require that you not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or
similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by you, for a period of time specified by the underwriter(s) (not to exceed one hundred eighty (180) days) following the
effective date of the registration statement of the Company filed under the Securities Act. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent
with the foregoing or that are necessary to give further effect 

  

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thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common Stock until the
end of such period. 
  
 9.
TRANSFERABILITY. Your option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you. Notwithstanding the foregoing, by delivering written
notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise your option. 
  
 10. RIGHT OF FIRST REFUSAL. Shares of
Common Stock that you acquire upon exercise of your option are subject to any right of first refusal that may be described in the Company’s bylaws in effect at such time the Company elects to exercise its right. The Company’s right of
first refusal shall expire on the Listing Date (defined below). 
  
 11. RIGHT OF REPURCHASE. To the extent provided in the Company’s bylaws as amended from time to time, the Company shall have the right to repurchase all or any
part of the shares of Common Stock you acquire pursuant to the exercise of your option. 
  
 12. CAPITALIZATION ADJUSTMENTS. If any change is made in the Shares subject to this option without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other
transaction not involving the receipt of consideration by the Company), this option, if still outstanding at the time of such change, will be appropriately adjusted in the class(es) and number of shares and price per share of stock subject to the
option. Such adjustments shall be made by the Board of Directors of the Company (the “Board”), the determination of which shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be
treated as a transaction “without receipt of consideration” by the Company.) 
  
 13. EFFECT OF CERTAIN CORPORATE TRANSACTIONS. In the event of: (l)a dissolution, liquidation or sale of all or substantially all
of the assets of the Company; (2) a merger or consolidation in which the Company is not the surviving corporation; (3) a reverse merger in which the Company is the surviving corporation but the shares of the Company’s common stock outstanding
immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise; (4) after the first date upon which any security of the Company is listed (or approved for listing)
upon notice of issuance on any securities exchange, or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system if such securities exchange or interdealer quotation system has
been certified in accordance with the provisions of Section 25100(o) of the California Corporate Securities Law of 1968 (the “Listing Date”), the acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934 (the “Exchange Act”), or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the Company or any Affiliate of the Company) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the 

  

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Company representing at least fifty percent (50%) of the combined voting power entitled to vote in the election of directors; or (5) at the time individuals
who, as of the first date on which the Company has a class of equity securities which are actively traded on any established stock exchange or a national market system (including that of the National Association of Securities Dealers, Inc.),
constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to such date, whose election or nomination for election by the
Company’s stockholders was approved by a vote of at least a majority of the directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of Directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be considered as though such person were a member of the Incumbent
Board, then: (i) any surviving corporation or acquiring corporation shall assume your option or shall substitute a similar option for your option; or (ii) if any surviving corporation or acquiring corporation refuses to assume your option or to
substitute a similar option for your option, then (A) if your Continuous Service has not terminated as of immediately prior to such event, then the vesting of the Shares subject to your option shall be accelerated prior to such event and your option
shall terminate to the extent not exercised after such acceleration and at or prior to such event, and (B) if your Continuous Service has terminated as of immediately prior to such event, then no acceleration of vesting shall occur and your option
shall terminate to the extent not exercised prior to such event. 
  
 14. PURCHASE FOR INVESTMENT; RIGHTS OF HOLDER ON SUBSEQUENT REGISTRATION. Unless the Shares
to be issued upon exercise of an option granted under the Grant Notice and this Stock Option Agreement have been effectively registered under the Securities Act, the Company shall be under no obligation to issue any Shares covered by any option
unless the person who exercises such option, whether such exercise is in whole or in part, shall give a written representation and undertaking to the Company which is satisfactory in form and scope to counsel for the Company and upon which, in the
opinion of such counsel, the Company may reasonably rely, that he or she is acquiring the Shares issued to him or her pursuant to such exercise of the option for his or her own account as an investment and not with a view to, or for sale in
connection with, the distribution of any such Shares, and that he or she will make no transfer of the same except in compliance with any rules and regulations in force at the time of such transfer under the Securities Act, or any other applicable
law, and that if Shares are issued without such registration a legend to this effect may be endorsed on the securities so issued. In the event that the Company shall, nevertheless, deem it necessary or desirable to register under the Securities Act
or other applicable statutes any Shares with respect to which an option shall have been exercised, or to qualify any such Shares for exemption from the Securities Act or other applicable statutes, then the Company shall take such action at its own
expense and may require from each participant such information in writing for use in any registration statement, prospectus, preliminary prospectus or offering circular as is reasonably necessary for such purpose and may require reasonable indemnity
to the Company and its officers and directors from such holder against all losses, claims, damages and liabilities arising from such use of the information so furnished and caused by any untrue statement of any material fact 

  

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required to be stated therein or necessary to make the statement therein not misleading in light of the circumstances under which they were made. 

 
 15. OPTION NOT A
SERVICE CONTRACT. Your option is not an employment or service contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ
of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment. In addition, nothing in your option shall obligate the Company or an Affiliate, their respective stockholders, Boards of Directors, officers or employees
to continue any relationship that you might have as a director or consultant for the Company or an Affiliate. 
  
 16. WITHHOLDING OBLIGATIONS. 
  
 (a) At the time you exercise your option, in whole or in part, or at any time thereafter as requested
by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “cashless exercise” pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in
connection with your option. 
  
 (b) Upon
your request and subject to approval by the Company, in its sole discretion, and compliance with any applicable conditions or restrictions of law, the Company may withhold from vested shares of Common Stock otherwise issuable to you upon the
exercise of your option a number of whole shares of Common Stock having a fair market value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law. If the date of
determination of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant to the preceding sentence shall not be permitted unless you make a proper and timely election under
Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the
date of exercise of your option. Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable
to you upon such exercise. Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility. 
  
 (c) You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied.
Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company shall have no obligation to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any
escrow provided for herein. 
  
 17.
NOTICES. Any notices provided for in this option shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by mail by the 

  

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Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company.

  
 18. CHOICE OF
LAW. This option shall be governed by, and construed in accordance with the laws of the State of California, as such laws are applied to contracts entered into and performed in such State. 
  
 19. GOVERNING AUTHORITY. This option is
subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted by the Company. This authority shall be exercised by the Board, or by a committee of one or more members of the Board in the
event that the Board delegates its authority to a committee. The Board, in the exercise of this authority, may correct any defect, omission or inconsistency in this option in a manner and to the extent the Board shall deem necessary or desirable to
make this option folly effective. References to the Board also include any committee appointed by the Board to administer and interpret this option. Any interpretations, amendments, rules and regulations promulgated by the Board shall be final and
binding upon the Company and its successors in interest as well as you and your heirs, assigns, and other successors in interest. 
  
 Dated the      day of
                        , 1999. 
  

Very truly yours, 
  

			
	TULARIK INC.
		
	By:	 	 
	 	 	Duly authorized on behalf of the Board of Directors

  

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