Document:

<PAGE>

                                                                    Exhibit 10.2

      STOCK OPTION AGREEMENT (this "Agreement") dated as of January 30, 2006
(the "Grant Date"), between Nastech Pharmaceutical Company Inc., a Delaware
corporation (the "Company"), and Timothy M. Duffy ("Grantee"), an employee of
the Company.

      SECTION 1. Grant of Option. Pursuant to the Nastech Pharmaceutical Company
Inc. 2002 Stock Option Plan (the "Plan"), the Company hereby grants to Grantee,
as of the Grant Date, an Incentive Stock Option, to purchase an aggregate of
15,284 shares (the "Option Shares") of common stock of the Company, par value
$0.006 per share (the "Common Stock"), at an exercise price of $15.95 per share
(the "Option") subject to adjustment and the other terms and conditions set
forth herein, in the Plan.

      SECTION 2. Grantee Bound by Plan. The Plan is incorporated herein by
reference and made a part hereof. The Plan shall govern all aspects of this
Agreement except as otherwise specifically stated herein. Grantee hereby
acknowledges receipt of a copy of the Plan and agrees to be bound by all the
terms and provisions thereof. Unless otherwise defined herein, capitalized terms
used but not defined herein shall have the meanings ascribed to them in the
Plan. The Plan should be carefully examined before any decision is made to
exercise this Option.

      SECTION 3. Exercise of Option.

         (a) General. Subject to the earlier termination of the Option as
provided herein and in the Plan, the Option may be exercised by written notice
to the Company at any time and from time to time after the Grant Date; provided,
however, that the Option shall not be exercisable for more than the number of
shares which are vested in accordance herewith at the time of exercise. The
exercise of this Option and the issuance of Option Shares upon such exercise
shall be subject to compliance by the Company and Grantee with all applicable
requirements of law as set forth in the Plan. The inability of the Company to
obtain approval from any regulatory body having authority deemed by the Company
to be necessary to the lawful issuance and sale of any Common Stock pursuant to
this Option shall relieve the Company of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained.

         (b) Vesting. Subject to the earlier termination of the Option as
provided herein and in the Plan, the Option shall vest as follows:

2,746       Of the shares subject to the Option shall be vested on 1/30/2007.
6,269       Of the shares subject to the Option shall be vested on 1/30/2008.
6,269       Of the shares subject to the Option shall be vested on 1/30/2009

         (c) Early Expiration of Option. (i) Upon the termination of Grantee's
employment or consulting relationship with the Company (including any subsidiary
thereof) for any reason, including death, any portion of the Option granted
hereunder that has not been exercised on the date of such termination shall
expire in accordance with subsection (ii) or (iii) of this Section 3(c) as
applicable.
<PAGE>
            (ii) In the event that Grantee's employment or consulting
relationship with the Company (including any subsidiary thereof) is terminated
by the Company for Cause, Grantee shall automatically forfeit his right to
exercise any portion of the Option granted hereunder that has not been exercised
as of the date of such termination without regard to whether such portion of the
Option had previously vested and such unexercised portion of the Option shall
automatically be cancelled effective at the commencement of business on the date
of such termination.

            (iii) In the event that Grantee's employment or consulting
relationship with the Company (including any subsidiary thereof) is terminated
for any reason other than for Cause, death, or Disability, any unvested portion
of the Option granted hereunder shall immediately expire and any vested portion
of the Option granted hereunder that has not been exercised as of the date of
such termination shall automatically expire, if not exercised beforehand, three
months after such termination.

            (iv) In the event that Grantee's employment or consulting
relationship with the Company (including any subsidiary thereof) is terminated
due to Grantee's death or Disability, any unvested portion of the Option granted
hereunder shall immediately expire and any vested portion of the Option granted
hereunder that has not been exercised as of the date of such termination shall
automatically expire, if not exercised beforehand, three months after such
termination.

         (d) Normal Expiration of Option. This Option shall not be exercisable
after the tenth anniversary of the Grant Date (the "Expiration Date").

      SECTION 4. Exercise of Option and Conditions to Exercise. This Option may
not be exercised by Grantee unless the following conditions are met:

         (a) Notice. This Option shall be exercised by delivering written
notice, substantially in the form attached hereto as Exhibit I, to the Company
at its principal office addressed to the attention of its Secretary. Such notice
shall specify the number of Option Shares with respect to which the Option is
being exercised and shall be signed by Grantee. This Option may not be exercised
for a fraction of a share of Common Stock;

         (b) Securities Requirements. Legal counsel for the Company must be
satisfied at the time of exercise that the issuance of Option Shares upon
exercise will be in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and applicable United States federal, state, local and
foreign laws; and

         (c) Payment of Exercise Price. Grantee must pay at the time of exercise
the full purchase price for the shares of Common Stock being acquired hereunder
(i) in cash or its equivalent or (ii) pursuant to such other method as the
Committee may approve from time to time. Please refer to the Plan for a complete
description of the methods for exercise, payment and delivery of Option Shares,
including requirements for the payment of withholding taxes applicable thereto.

      SECTION 5. Transferability. This Option may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of by Grantee, except
by will or the laws of descent and distribution (in which case, the transferee
shall succeed to the rights and obligations of Grantee hereunder) and is
exercisable during Grantee's lifetime only by Grantee or his guardian or legal
representative. If Grantee or anyone claiming under or through Grantee attempts
to violate this Section 5, such attempted violation shall be null and void and
without effect, and the Company's obligation hereunder shall terminate. If at
the time of Grantee's death this Option has not been fully exercised, Grantee's
estate or any person who acquires the right to exercise this Option by bequest
or inheritance or by reason of

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<PAGE>
Grantee's death may exercise this Option in accordance with and with respect to
the number of shares set forth in Section 3 above. The applicable requirements
of Section 4 above must be satisfied in full at the time of any exercise.

      SECTION 6. Administration. Any action taken or decision made by the
Company, the Board or the Committee or its delegates arising out of or in
connection with the construction, administration, interpretation or effect of
the Plan or this Agreement shall lie within its sole and absolute discretion, as
the case may be, and shall be final, conclusive and binding on Grantee and all
persons claiming under or through Grantee. By accepting this grant or other
benefit under the Plan, Grantee and each person claiming under or through
Grantee shall be conclusively deemed to have indicated acceptance and
ratification of, and consent to, any action taken under the Plan by the Company,
the Board or the Committee or its delegates.

      SECTION 7. No Rights as Stockholder. Unless and until a certificate or
certificates representing shares of Common Stock shall have been issued to
Grantee (or any person acting under Section 5 above) pursuant to an exercise
hereunder, Grantee shall not be or have any of the rights or privileges of a
stockholder of the Company with respect to shares of Common Stock acquirable
upon exercise of the Option. No adjustment shall be made for cash dividends or
other rights for which the record date is prior to the date of such due exercise
and full payment.

      SECTION 8. Investment Representation. Grantee hereby acknowledges that the
Option Shares shall be acquired for investment without a view to distribution,
within the meaning of the Securities Act, and shall not be sold, transferred,
assigned, pledged or hypothecated in the absence of an effective registration
statement for the shares of Common Stock under the Securities Act and applicable
states securities laws or an applicable exemption from the registration
requirements of the Securities Act and any applicable state securities laws.
Grantee also agrees that the Option Shares will not be sold or otherwise
disposed of in any manner which would constitute a violation of any applicable
securities laws, whether federal or state and that the certificate representing
the shares of Common Stock shall contain a legend to such effect.

      SECTION 9. Listing and Registration of Common Stock. The Company, in its
discretion, may postpone the issuance and/or delivery of shares of Common Stock
upon any exercise of this Option until completion of such stock exchange
listing, or registration, or other qualification of such shares under any state
and/or federal law, rule or regulation as the Company may reasonably in good
faith consider appropriate.

      SECTION 10. Adjustments. (a) Anti-Dilution. In the event of any change in
the number of shares of Common Stock outstanding by reason of any stock dividend
or split, reverse stock split, capitalization, merger, consolidation or
otherwise, the Committee shall make appropriate adjustment to the number of
Option Shares granted hereunder and the exercise price thereof in order to
preserve the position of Grantee and prevent any enlargement or dilution of such
position.

         (b) Certain Transactions. In the event of the proposed dissolution or
liquidation of the Company, all Options will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Committee. The Committee may, in the exercise of its sole discretion in such
instances, declare that any Option shall terminate as of a date fixed by the
Committee and give each Grantee the right to exercise his or her Option as to
all or any of the Shares issuable pursuant to the exercise of the Option,
including Shares which would not otherwise be then issuable pursuant to the
exercise of the Option. In the event of a proposed sale of all or substantially
all of the assets of the Company, or the merger of the Company with or into
another corporation, the Option shall be assumed or

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<PAGE>
an equivalent option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Board determines,
in the exercise of its sole discretion and in lieu of such assumption or
substitution, that the Grantee shall have the right to exercise the Option in
whole or in part, including Shares which would not otherwise be then issuable
pursuant to the exercise of the Option. If the Board makes an Option exercisable
in lieu of assumption or substitution in the event of a merger or sale of
assets, the Board shall notify the Grantee that the Option shall be exercisable
for a period of not less than 15 days from the date of such notice, and the
Option will terminate upon the expiration of such period.

         SECTION 11. Notices. Any notice hereunder to the Company shall be
addressed to the Company at 3450 Monte Villa Parkway, Bothell, WA 98021,
Attention: Secretary, and any notice hereunder to Grantee shall be addressed to
Grantee at Grantee's last address on the records of the Company, subject to the
right of either party to designate at any time hereafter in writing some other
address. Any notice shall be deemed to have been duly given when delivered
personally, one day following dispatch if sent by reputable overnight courier,
fees prepaid, or three days following mailing if sent by registered mail, return
receipt requested, postage prepaid and addressed as set forth above.

      SECTION 12. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of any successors to the Company and all persons lawfully
claiming under Grantee.

      SECTION 13. Governing Law. The validity, construction, interpretation,
administration and effect of the Plan, and of its rules and regulations, and
rights relating to the Plan and to this Agreement, shall be governed by the
substantive laws, but not the choice of law rules, of the State of Delaware.

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<PAGE>
      IN WITNESS WHEREOF, the Company and Grantee have executed this Agreement
as of the date first above written.

                                        NASTECH PHARMACEUTICAL COMPANY INC.

                                        /s/ Philip C. Ranker
                                        ----------------------------------------
                                        Philip C. Ranker
                                        Chief Financial Officer

GRANTEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
OPTION IS EARNED ONLY THROUGH HIS CONTINUED AND SATISFACTORY EMPLOYMENT WITH THE
COMPANY OR ITS SUBSIDIARIES AND NOT THROUGH THE GRANT OF THIS OPTION OR THE
ACQUISITION OF SHARES HEREUNDER. GRANTEE ACKNOWLEDGES AND AGREES THAT NOTHING IN
THIS AGREEMENT, NOR IN THE COMPANY'S 2002 STOCK OPTION PLAN WHICH IS
INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON GRANTEE ANY RIGHT WITH
RESPECT TO CONTINUATION OF EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN
ANY WAY WITH HIS RIGHT OR THE COMPANY'S RIGHT TO TERMINATE HIS EMPLOYMENT AT ANY
TIME, WITH OR WITHOUT CAUSE.

Grantee acknowledges receipt of a copy of the Plan and represents that he is
familiar with the terms and provisions thereof, and hereby accepts this Option
subject to all of the terms and provisions thereof except as otherwise
specifically stated in this Option Agreement. Grantee has reviewed the Plan and
this Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Agreement and fully understands all provisions
of this Agreement. Grantee hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Board or Committee upon any
questions arising under the Plan.

                                         GRANTEE

                                         /s/ Timothy M. Duffy
                                         --------------------------------
                                         Name: Timothy M. Duffy

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<PAGE>
                                                                       EXHIBIT I

                       NOTICE OF EXERCISE OF STOCK OPTION

      Reference is hereby made to the [Stock Option Award Agreement] (the "Award
Agreement") dated as of January 30, 2006, between Timothy M. Duffy, and Nastech
Pharmaceutical Company Inc., a Delaware corporation (the "Company"). The
undersigned hereby notifies the Company that its elect to purchase _____________
shares of the Company's Common Stock (the "Purchased Shares") at the option
exercise price of $15.95 per share (the "Exercise Price") pursuant to that
certain option (the "Option") granted to the undersigned on January 30, 2006, to
purchase up to 15,284 shares of the Company's Common Stock.

      Concurrently with the delivery of this Exercise Notice to the Secretary of
the Company, the undersigned shall hereby pay to the Company the Exercise Price
for the Purchased Shares in accordance with the provisions of the Award
Agreement and shall deliver whatever additional documents may be required by the
Award Agreement as a condition for exercise.

Date: ____________________

                                         Name:
                                              -------------------------------
                                         Address:
                                                 ----------------------------

                                         ------------------------------------

                                         ------------------------------------

Print name in exact manner
it is to appear on the
stock certificate:
                  -----------------------------

Address to which certificate
is to be sent, if different
from address above:
                               -------------------------------------

                               -------------------------------------

                               -------------------------------------

Social Security Number  ________________________

                                       6<PAGE>
                                                                    EXHIBIT 10.3

                              AMENDED AND RESTATED
                       NASTECH PHARMACEUTICAL COMPANY INC.
                       2000 NONQUALIFIED STOCK OPTION PLAN

                  NONQUALIFIED STOCK OPTION GRANT AGREEMENT

       This Grant Agreement (the "Agreement") is entered into this 30th day
of January, 2006, by and between Nastech Pharmaceutical Company Inc. (the
"Corporation"), a Delaware Corporation, and Timothy M. Duffy ("Grantee").

ARTICLE 1   GRANT OF OPTION

       Section 1.1 Grant of Options. Subject to the provisions of the Agreement,
and pursuant to the provisions of the Nastech Pharmaceutical Company Inc. 2000
Nonqualified Stock Option Plan (the "Plan"), Corporation hereby grants to
Grantee, as of the Grant Date specified in Attachment A, a Nonqualified Stock
Option (the "Option") to purchase all or any part of the number and class of
shares of Common Stock set forth on Attachment A at the exercise price per share
("Option Price") set forth on Attachment A.

       Section 1.2 Term of Options. Unless the Option granted pursuant to
Section 1.1 terminates earlier pursuant to other provisions of the Agreement,
including the expiration date specified in Attachment A, the Option shall expire
on the expiration date set forth on Attachment A hereto, but in no event later
than the tenth (10th) anniversary of its Grant Date.

ARTICLE 2   VESTING

       Section 2.1 Vesting Schedule. Unless the Option has earlier terminated
pursuant to the provisions of the Agreement, Grantee shall become vested on the
dates specified on Attachment A in a portion of the Option with respect to a
percentage or number of the underlying shares in accordance with the vesting
schedule specified on Attachment A; provided that Grantee shall have been in the
continuous employ of or affiliation (as a director or consultant) with the
Corporation from the Grant Date through any such date.

ARTICLE 3   EXERCISE OF OPTION

       Section 3.1 Exercisability of Option. No portion of the Option granted to
Grantee shall be exercisable by Grantee prior to the time such portion of the
Option has vested.

       Section 3.2 Manner of Exercise. The Option may be exercised, in whole or
in part, by delivering written notice to the Committee or any designee of the
Committee in the form attached hereto as Attachment B or in such other form as
the Committee may require from time to time. Such notice shall specify the
number of shares of Common Stock subject to the Option as to which the Option is
being exercised, and shall be accompanied by full payment of the Option Price of
the shares of Common Stock as to which the Option is being exercised. Payment of
the Option Price shall be made in cash (or cash equivalents acceptable to the
Committee in the Committee's discretion). In the Committee's sole and absolute
discretion, the Committee may authorize payment of the Option Price to be made,
in whole or in part, by such other means as the Committee may prescribe. The
Option may be exercised only in multiples of whole shares and no partial shares
shall be issued. Notwithstanding anything to the contrary herein, the minimum
number of shares that may be purchased upon an exercise of the Option is the
lesser of 100 shares or the number of shares subject to the vested portion of
the Option.

       Section 3.3 Issuance of Shares and Payment of Cash upon Exercise. Upon
exercise of the Option, in whole or in part, in accordance with the terms of the
Agreement and upon payment of the Option Price for the shares of Common Stock as
to which the Option is exercised, the Corporation shall issue to Grantee
<PAGE>
or, in the event of Grantee's death, to Grantee's executor, personal
representative or the person to whom the Option shall have been transferred by
will or the laws of descent and distribution, as the case may be, the number of
shares of Common Stock so paid for, in the form of fully paid and nonassessable
Common Stock. The stock certificates for any shares of Common Stock issued
hereunder shall, unless such shares are registered or an exemption from
registration is available under applicable federal and state law, bear a legend
restricting transferability of such shares.

ARTICLE 4   TERMINATION OF EMPLOYMENT

       Section 4.1 Unvested Portion. Unless the Option has earlier terminated
pursuant to the provisions of this Agreement, the unvested portion of the Option
shall terminate upon termination of Grantee's employment or affiliation (as a
director or consultant) with the Corporation for any reason.

       Section 4.2 Termination of Employment or Affiliation for Reason Other
Than Death or Disability. Unless the Option has earlier terminated pursuant to
the provisions of this Agreement, the Option granted to Grantee shall terminate
in its entirety, regardless of whether the Option is vested in whole or in part,
ninety (90) days after the date Grantee is no longer employed by, nor affiliated
(as a director or consultant) with, the Corporation for any reason other than
Grantee's death or Disability.

       Section 4.3 Upon Grantee's Death. Unless the Option has earlier
terminated pursuant to the provisions of the Agreement, upon Grantee's death,
Grantee's executor, personal representative or the person to whom the Option
shall have been transferred by will or the laws of descent and distribution, as
the case may be, may exercise all or any part of the vested portion of the
Option, provided such exercise occurs within twelve (12) months after the date
Grantee dies, but not later than the end of the stated term of the Option.

       Section 4.4 Termination of Employment or Affiliation by Reason of
Disability. Unless the Option has earlier terminated pursuant to the provisions
of the Agreement, in the event that Grantee ceases, by reason of Disability, to
be an employee of or affiliated (as a director or consultant) with the
Corporation, the vested portion of the Option may be exercised in whole or in
part at any time within twelve (12) months after the date of Disability, but not
later than the end of the stated term of the Option. For purposes of this
Agreement, Disability shall be as defined in Code Section 22(e)(3) and shall be
determined by the Committee, with its determination on the matter being final
and binding.

ARTICLE 5   MISCELLANEOUS

       Section 5.1 Non-Guarantee of Employment. Nothing in the Plan or the
Agreement shall be construed as a contract of employment between the Corporation
(or an affiliate) and Grantee, or as a contractual right of Grantee to continue
in the employ of the Corporation or an affiliate, or as a limitation of the
right of the Corporation or an affiliate to discharge Grantee at any time.

       Section 5.2 No Rights of Stockholder. Grantee shall not have any of the
rights of a stockholder with respect to the shares of Common Stock that may be
issued upon the exercise of the Option until such shares of Common Stock have
been issued to him upon the due exercise of the Option.

       Section 5.3 Withholding of Taxes. The Corporation or any affiliate shall
have the right to deduct from any compensation or any other payment of any kind
(including withholding the issuance of shares of Common Stock) due Grantee the
amount of any federal, state or local taxes required by law to be withheld as
the result of the exercise of the Option; provided, however, that the value of
the shares of Common Stock withheld may not exceed the statutory minimum
withholding amount required by law. In lieu of such deduction, the Committee may
require Grantee to make a cash payment to the Corporation or an affiliate equal
to the amount required to be withheld. If Grantee does not make such payment
when requested, the Corporation may refuse to issue any Common Stock certificate
under the Plan until arrangements satisfactory to the Committee for such payment
have been made.
<PAGE>
       Section 5.4 Nontransferability of Option. The Option shall be
nontransferable other than by will or the laws of descent and distribution.
During the lifetime of Grantee, the Option may be exercised only by Grantee or,
during the period Grantee is under a legal disability, by Grantee's guardian or
legal representative.

       Section 5.5 Agreement Subject to Charter and Bylaws. This Agreement is
subject to the Charter and Bylaws of the Corporation, and any applicable Federal
or state laws, rules or regulations, including without limitation, the laws,
rules, and regulations of the Commonwealth of Delaware.

       Section 5.6 Gender. As used herein, the masculine shall include the
feminine as the circumstances may require.

       Section 5.7 Headings. The headings in the Agreement are for reference
purposes only and shall not affect the meaning or interpretation of the
Agreement.

       Section 5.8 Notices. All notices and other communications made or given
pursuant to the Agreement shall be in writing and shall be sufficiently made or
given if hand delivered or mailed by certified mail, addressed to Grantee at the
address contained in the records of the Corporation, or addressed to the
Committee, care of the Corporation for the attention of its Secretary at its
principal office or, if the receiving party consents in advance, transmitted and
received via telecopy or via such other electronic transmission mechanism as may
be available to the parties.

       Section 5.9 Entire Agreement; Modification. The Agreement contains the
entire agreement between the parties with respect to the subject matter
contained herein and may not be modified, except as provided in the Plan or in a
written document signed by each of the parties hereto.

       Section 5.10 Conformity with Plan. This Agreement is intended to conform
in all respects with, and is subject to all applicable provisions of, the Plan,
which is incorporated herein by reference. Unless stated otherwise herein,
capitalized terms in this Agreement shall have the same meaning as defined in
the Plan. Inconsistencies between this Agreement and the Plan shall be resolved
in accordance with the terms of the Plan. In the event of any ambiguity in the
Agreement or any matters as to which the Agreement is silent, the Plan shall
govern including, without limitation, the provisions thereof pursuant to which
the Committee has the power, among others, to (i) interpret the Plan and Grant
Agreements related thereto, (ii) prescribe, amend and rescind rules and
regulations relating to the Plan, and (iii) make all other determinations deemed
necessary or advisable for the administration of the Plan. The Grantee
acknowledges by signing this Agreement that he or she has received and reviewed
a copy of the Plan.

       IN WITNESS WHEREOF, the parties have executed the Agreement as of the
date first above written.

NASTECH PHARMACEUTICAL COMPANY INC.

By:/s/ Philip C. Ranker
-------------------------
Philip C. Ranker, Chief Financial Officer

GRANTEE:   /s/ Timothy M. Duffy
--------------------------------
               Timothy M. Duffy
<PAGE>
                       NASTECH PHARMACEUTICAL COMPANY INC.
                               STOCK OPTION GRANT
                                  ATTACHMENT A
<TABLE>

<S>                            <C>

STOCK OPTION GRANTED TO:       Timothy M. Duffy

TYPE OF OPTION:                NON QUALIFIED

GRANT DATE:                    January 30, 2006

NUMBER AND CLASS OF SHARES:    3,716 SHARES OF COMMON STOCK

EXERCISE PRICE PER SHARE:      $15.95

EXPIRATION DATE:               January 30, 2016

VESTING SCHEDULE:

</TABLE>

<Table>
<Caption>

<S>    <C>          <C>

1.     3,588        of the shares subject to the Option shall be vested on 1/30/2007

2.     64           of the shares subject to the Option shall be vested on 1/30/2008

3.     64           of the shares subject to the Option shall be vested on 1/30/2009

</Table>

                                    NASTECH PHARMACEUTICAL CO. INC.

                                    By:--------------------------------------
                                    Philip C. Ranker, Chief Financial Officer

                                    Grantee:---------------------------------
                                              Timothy M. Duffy
<PAGE>
                       NASTECH PHARMACEUTICAL COMPANY INC.
                               STOCK OPTION GRANT
                                  ATTACHMENT B
                                  EXERCISE FORM

Name and Address of Optionee:

Gentlemen:

1.         Exercise of Stock Option. I hereby exercise the Nonqualified Stock
      Option (the "Stock Option") granted to me on___________ ,200___ , by
      Nastech Pharmaceutical Company Inc. (the "Corporation"), subject to all
      the terms and provisions thereof and of the Nastech Pharmaceutical Company
      Inc. 2000 Nonqualified Stock Option Plan (the "Plan"), and notify you of
      my desire to purchase ____________ shares (the "Shares") of Common Stock
      of the Corporation at a price of $______ per share pursuant to the
      exercise of said Stock Option. I understand that the exercise date shall
      be the date that the Company receives the full payment of the exercise
      price of the Stock Option.

2.         Tax Withholding. I understand that I must submit upon demand from the
      Corporation an amount in cash or cash equivalents sufficient to satisfy
      any federal, state or local tax withholding applicable to this Stock
      Option exercise, in addition to the purchase price enclosed, or make such
      other arrangements for such tax withholding that are satisfactory to the
      Corporation, in its sole discretion, in order for this exercise to be
      effective.

3.         Investment Covenant. I represent and agree that as a condition of
      this Option, the shares of Common Stock of the Corporation that I acquire
      under this option will be purchased for investment and not with a view for
      distribution or resale, unless counsel for the Company is then of the
      opinion that such a representation is not required under the Securities
      Act of 1933, as amended, or any other applicable law, regulation or rule
      of any government agency.

      Total Amount Enclosed: $_______________ (including $______ for tax
withholding)

                                    Date _____________________________

                                    Optionee _________________________

                                    Received by Nastech Pharmaceutical
                                    Company Inc.

                                    On: ___________________,200_______

                                    By: ______________________________

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