<PAGE>
EXHIBIT 10.3
GENECRAFT, INC.
2002 STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the 2002
Stock Plan
shall have the same defined meanings in this Stock Option
Agreement.
I. NOTICE OF
STOCK OPTION GRANT
NAME: ___________________________________________
ADDRESS: ________________________________________
The
undersigned Optionee has been granted an Option to purchase
Common
Stock of the Company, subject to the terms and conditions of the
Plan and this
Option Agreement, as follows:
Date
of Grant
__________________________________________
Vesting Commencement Date
__________________________________________
Exercise Price per Share
$_________________________________________
Total Number of Shares Granted
__________________________________________
Total Exercise Price
$_________________________________________
Type
of Option:
___ Incentive Stock Option
___ Nonstatutory Stock Option
Term/Expiration Date:
__________________________________________
Vesting Schedule:
This
Option shall be exercisable, in whole or in part, according to
the
following vesting schedule:
25%
of the Shares subject to the Option shall vest on the one (1)
year
anniversary of the Vesting Commencement Date, and 1/48 of the
Option shall vest
each month thereafter, subject to Optionee continuing to be a
Service Provider
on such dates.
Termination Period:
This
Option shall be exercisable for three (3) months after Optionee
ceases
to be a Service Provider. Upon Optionee's death or Disability, this
Option may
be exercised for one (1) year after
<PAGE>
Optionee ceases to be a Service Provider. In no event may Optionee
exercise this
Option after the Term/Expiration Date as provided above.
II. AGREEMENT
1.
Grant of Option. The Plan Administrator of the Company hereby
grants to
the Optionee named in the Notice of Grant (the "Optionee"), an
option (the
"Option") to purchase the number of Shares set forth in the Notice
of Grant, at
the exercise price per Share set forth in the Notice of Grant (the
"Exercise
Price"), and subject to the terms and conditions of the Plan, which
is
incorporated herein by reference. Subject to Section 15(c) of the
Plan, in the
event of a conflict between the terms and conditions of the Plan
and this Option
Agreement, the terms and conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock
Option
("ISO"), this Option is intended to qualify as an Incentive Stock
Option as
defined in Section 422 of the Code. Nevertheless, to the extent
that it exceeds
the $100,000 rule of Code Section 422(d), this Option shall be
treated as a
Nonstatutory Stock Option ("NSO").
2. Exercise of
Option.
(a) Right to Exercise. This Option shall be exercisable during
its
term in accordance with the Vesting Schedule set out in the Notice
of Grant and
with the applicable provisions of the Plan and this Option
Agreement.
(b) Method of Exercise. This Option shall be 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 with
respect to which the Option is being exercised, and such other
representations
and agreements as may be required by 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 the aggregate
Exercise
Price.
No Shares shall be issued pursuant to the exercise of an Option
unless
such issuance and such exercise complies with Applicable Laws.
Assuming such
compliance, for income tax purposes the Shares shall be considered
transferred
to the Optionee on the date on which the Option is exercised with
respect to
such Shares.
3.
Optionee's Representations. In the event the Shares have not
been
registered under the Securities Act of 1933, as amended, at the
time this Option
is exercised, the Optionee shall, if required by the Company,
concurrently with
the exercise of all or any portion of this Option, deliver to the
Company his or
her Investment Representation Statement in the form attached hereto
as Exhibit
B.
4.
Lock-Up Period. Optionee hereby agrees that Optionee shall not
offer,
pledge, sell, contract to sell, sell any option or contract to
purchase,
purchase any option or contract to sell, grant any option, right or
warrant to
purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any
Common Stock (or other securities) of the Company or enter into any
swap,
hedging
-2-
<PAGE>
or other arrangement that transfers to another, in whole or in
part, any of the
economic consequences of ownership of any Common Stock (or other
securities) of
the Company held by Optionee (other than those included in the
registration) for
a period specified by the representative of the underwriters of
Common Stock (or
other securities) of the Company not to exceed one hundred eighty
(180) days
following the effective date of any registration statement of the
Company filed
under the Securities Act.
Optionee agrees to execute and deliver such other agreements as may
be
reasonably requested by the Company or the underwriter which are
consistent with
the foregoing or which are necessary to give further effect
thereto. In
addition, if requested by the Company or the representative of the
underwriters
of Common Stock (or other securities) of the Company, Optionee
shall provide,
within ten (10) days of such request, such information as may be
required by the
Company or such representative in connection with the completion of
any public
offering of the Company's securities pursuant to a registration
statement filed
under the Securities Act. The obligations described in this Section
shall not
apply to a registration relating solely to employee benefit plans
on Form S-1 or
Form S-8 or similar forms that may be promulgated in the future, or
a
registration relating solely to a Commission Rule 145 transaction
on Form S-4 or
similar forms that may be promulgated in the future. The Company
may impose
stop-transfer instructions with respect to the shares of Common
Stock (or other
securities) subject to the foregoing restriction until the end of
said one
hundred eighty (180) day period. Optionee agrees that any
transferee of the
Option or shares acquired pursuant to the Option shall be bound by
this Section.
5.
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 formal
cashless
exercise program adopted by the Company in connection with the
Plan; or
(c) surrender of other Shares which, (i) in the case of Shares
acquired from the Company, either directly or indirectly, 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.
6.
Restrictions on Exercise. This Option may not be exercised until
such
time as the Plan has been approved by the shareholders of the
Company, or if the
issuance of such Shares upon such exercise or the method of payment
of
consideration for such shares would constitute a violation of any
Applicable
Law.
7.
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 Optionee. The
terms of the
Plan and this Option Agreement shall be binding upon the
executors,
administrators, heirs, successors and assigns of the Optionee.
-3-
<PAGE>
8.
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 Plan and the terms of this Option.
9.
Tax Obligations.
(a) Withholding Taxes. Optionee agrees to make appropriate
arrangements with the Company (or the Parent or Subsidiary
employing or
retaining Optionee) for the satisfaction of all Federal, state,
local and
foreign income and employment tax withholding requirements
applicable to the
Option exercise. Optionee acknowledges and agrees that the Company
may refuse to
honor the exercise and refuse to deliver Shares if such withholding
amounts are
not delivered at the time of exercise.
(b) Notice of Disqualifying Disposition of ISO Shares. If the
Option
granted to Optionee herein is an ISO, and if Optionee sells or
otherwise
disposes of any of the Shares acquired pursuant to the ISO on or
before the
later of (1) the date two years after the Date of Grant, or (2) the
date one
year after the date of exercise, the Optionee shall immediately
notify the
Company in writing of such disposition. Optionee agrees that
Optionee may be
subject to income tax withholding by the Company on the
compensation income
recognized by the Optionee.
10.
Entire Agreement; Governing Law. The Plan is incorporated herein
by
reference. The Plan and this 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
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 signed by the
Company and
Optionee. This agreement is governed by the internal substantive
laws but not
the choice of law rules of the State of Washington.
11.
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
(NOT THROUGH
THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING
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 CONTINUED
ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL,
AND SHALL
NOT INTERFERE IN ANY WAY 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.
Optionee acknowledges receipt of a copy of the Plan and represents
that he
or she is familiar with the terms and provisions thereof, and
hereby accepts
this Option subject to all of the terms and provisions thereof.
Optionee has
reviewed the Plan and this Option in their entirety, has had an
opportunity to
obtain the advice of counsel prior to executing this Option and
fully
understands all provisions of the Option. Optionee hereby agrees to
accept as
binding, conclusive and final all
-4-
<PAGE>
decisions or i
