<PAGE>
As filed with the Securities and Exchange Commission on July 29, 1999.
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NANOGEN, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 330489621
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10398 Pacific Center Court
San Diego, California 92121 92121
------------------------------- -------------------
(Address of Principal Executive Offices) (Zip Code)
NANOGEN, INC. 1997 STOCK INCENTIVE PLAN
---------------------------------------
(Full title of the plan)
Copy to:
HOWARD C. BIRNDORF THOMAS E. SPARKS, JR.
Chairman of the Board and Chief Executive Officer Pillsbury Madison & Sutro LLP
Nanogen, Inc. P.O. Box 7880
10398 Pacific Center Court San Francisco, CA 94120
San Diego, California 92121 (415) 983-1000
(858) 410-4600 -----------------------
----------------------------
(Name, address and telephone
number, including area code,
of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed Maximum
Title of Securities To Be Amount To Be Maximum Offering Aggregate Offering Amount of
Registered Registered (1) Price per Share (2) Price (2) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par 925,000 shares $7.156 $6,619,300 $1,840.17
value, including related
Series A Participating
Preferred Stock Purchase
Rights
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Calculated pursuant to General Instruction E to Form S-8.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, upon the average of the high and low prices as
reported on the Nasdaq National Market on July 22, 1999.
The Registration Statement shall become effective upon filing in
accordance with Rule 462 under the Securities Act of 1933.
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION REQUIRED PURSUANT TO GENERAL INSTRUCTION E TO FORM S-8
GENERAL INSTRUCTION E INFORMATION
This Registration Statement is being filed for the purpose of
increasing the number of securities of the same class as other securities for
which a Registration Statement of the Registrant on Form S-8 relating to the
same employee benefit plan is effective.
Registrant's Registration Statement on Form S-8 filed with the
Securities and Exchange Commission ("SEC") on April 17, 1998 (File No.
333-50381) is hereby incorporated by reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed by Registrant with the Securities and
Exchange Commission are incorporated by reference in this Registration
Statement:
(1) Annual Report on Form 10-K (File No. 000-23541) for the fiscal
year ended December 31, 1998;
(2) Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999;
(3) The description of Registrant's Common Stock contained in
Registrant's Registration Statement on Form 8-A filed with the SEC on April 7,
1998; and
(4) The description of the Preferred Stock Purchase Rights for
Series A Participating Preferred Stock, par value $.001 per share, of the
Registrant contained in Registrant's Registration Statement on Form 8-A filed
with the SEC on November 24, 1998.
In addition, all documents subsequently filed by Registrant pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior
to the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this registration
statement and to be a part hereof from the date of filing of such documents.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Diego, State of California, on July 27,
1999.
NANOGEN, INC.
By /S/ Howard C. Birndorf
-----------------------------------------------
Howard C. Birndorf
Chairman of the Board and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Howard C. Birndorf or Harry J.
Leonhardt, and each of them, his or her true and lawful attorneys-in-fact and
agents, each with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities, to sign any
and all amendments, including post-effective amendments, to this Registration
Statement, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
his or her substitute or substitutes, may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Howard C. Birndorf Chairman of the Board and Chief July 27, 1999
- ------------------------------------ Executive Officer (Principal
Howard C. Birndorf Executive Officer)
/s/ Daniel D. Burgess Vice President and Chief Financial July 27, 1999
- ------------------------------------ Officer (Principal Financial and
Daniel D. Burgess Accounting Officer)
/s/ Tina S. Nova, Ph. D. President, Chief Operating Officer July 27, 1999
- ------------------------------------ and Director
Tina S. Nova, Ph. D.
/s/ Brook H. Byers Director July 27, 1999
- ------------------------------------
Brook H. Byers
/s/ Cam L. Garner Director July 27, 1999
- ------------------------------------
Cam L. Garner
/s/ David G. Ludvigson Director July 27, 1999
- ------------------------------------
David G. Ludvigson
/s/ Thomas G. Lynch Director July 27, 1999
- ------------------------------------
Thomas G. Lynch
</TABLE>
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<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------- ------------------------------------------------------------------
<S> <C>
5.1 Opinion regarding legality of securities to be offered.
10.1 1997 Stock Incentive Plan of Nanogen, Inc., as amended.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.3 Consent of Pillsbury Madison & Sutro LLP (included in Exhibit 5.1).
24.1 Power of Attorney (see page 3).
</TABLE>
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<PAGE>
Exhibit 5.1
July 28, 1999
Nanogen, Inc.
10398 Pacific Center Court
San Diego, California 92121
Gentlemen:
With reference to the Registration Statement on Form S-8 to be
filed by Nanogen, Inc., a Delaware corporation (the "Company"), with the
Securities and Exchange Commission under the Securities Act of 1933, relating
to 925,000 shares of the Company's Common Stock issuable pursuant to the
Nanogen, Inc. 1997 Stock Incentive Plan, as amended (the "Plan"), it is our
opinion that such shares of the Common Stock of the Company, when issued and
sold in accordance with the Plan, will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion with the Securities
and Exchange Commission as Exhibit 5.1 to the Registration Statement.
Very truly yours,
E-01885 /s/ Pillsbury Madison & Sutro LLP
<PAGE>
EXHIBIT 10.1
1997 STOCK INCENTIVE PLAN OF
NANOGEN, INC.
(Adopted Effective as of August 1, 1997)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE 1. INTRODUCTION...................................................1
ARTICLE 2. ADMINISTRATION.................................................1
2.1 Committee Composition..........................................1
2.2 Committee Responsibilities.....................................2
ARTICLE 3. SHARES AVAILABLE FOR GRANTS....................................2
3.1 Basic Limitation...............................................2
3.2 Additional Shares..............................................2
3.3 Dividend Equivalents...........................................2
ARTICLE 4. ELIGIBILITY....................................................2
4.1 General Rules..................................................2
4.2 Outside Directors..............................................3
4.3 Incentive Stock Options........................................3
ARTICLE 5. OPTIONS........................................................3
5.1 Stock Option Agreement.........................................3
5.2 Number of Shares...............................................3
5.3 Exercise Price.................................................3
5.4 Exercisability and Term........................................4
5.5 Effect of Change in Control....................................4
5.6 Modification or Assumption of Options..........................4
5.7 Other Requirements Prior to Company's Initial Public
Offering.......................................................4
ARTICLE 6. PAYMENT FOR OPTION SHARES......................................4
6.1 General Rule...................................................4
6.2 Surrender of Stock.............................................5
6.3 Exercise/Sale..................................................5
6.4 Exercise/Pledge................................................5
6.5 Promissory Note................................................5
6.6 Other Forms of Payment.........................................5
ARTICLE 7. STOCK APPRECIATION RIGHTS......................................5
7.1 SAR Agreement..................................................5
7.2 Number of Shares...............................................6
7.3 Exercise Price.................................................6
7.4 Exercisability and Term........................................6
7.5 Effect of Change in Control....................................6
7.6 Exercise of SARs...............................................6
7.7 Modification or Assumption of SARs.............................6
ARTICLE 8. RESTRICTED SHARES AND STOCK UNITS..............................7
8.1 Time, Amount and Form of Awards................................7
8.2 Payment for Awards.............................................7
8.3 Vesting Conditions.............................................7
8.4 Form and Time of Settlement of Stock Units.....................7
8.5 Death of Recipient.............................................8
8.6 Creditors' Rights..............................................8
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<PAGE>
ARTICLE 9. VOTING AND DIVIDEND RIGHTS.....................................8
9.1 Restricted Shares..............................................8
9.2 Stock Units....................................................8
ARTICLE 10. PROTECTION AGAINST DILUTION....................................8
10.1 Adjustments....................................................8
10.2 Reorganizations................................................9
ARTICLE 11. AWARDS UNDER OTHER PLANS.......................................9
ARTICLE 12. PAYMENT OF DIRECTOR'S FEES IN SECURITIES.......................9
12.1 Effective Date.................................................9
12.2 Elections to Receive NSOs, Restricted Shares or Stock
Units..........................................................9
12.3 Number and Terms of NSOs, Restricted Shares or Stock
Units..........................................................9
ARTICLE 13. LIMITATION ON RIGHTS......................................... 10
13.1 Retention Rights............................................. 10
13.2 Stockholders' Rights......................................... 10
13.3 Regulatory Requirements...................................... 10
ARTICLE 14. LIMITATION ON PAYMENTS....................................... 10
14.1 Gross-Up Payment............................................. 10
14.2 Determination by Accountant.................................. 10
14.3 Underpayments and Overpayments............................... 11
14.4 Related Corporations......................................... 11
ARTICLE 15. WITHHOLDING TAXES............................................ 12
15.1 General...................................................... 12
15.2 Share Withholding............................................ 12
ARTICLE 16. ASSIGNMENT OR TRANSFER OF AWARDS............................. 12
16.1 General...................................................... 12
16.2 Trusts....................................................... 12
ARTICLE 17. FUTURE OF THE PLAN........................................... 13
17.1 Term of the Plan............................................. 13
17.2 Amendment or Termination..................................... 13
ARTICLE 18. DEFINITIONS.................................................. 13
ARTICLE 19. EXECUTION.................................................... 17
</TABLE>
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<PAGE>
1997 STOCK INCENTIVE PLAN OF
NANOGEN, INC.
ARTICLE 1. INTRODUCTION.
The Plan was adopted by the Board effective as of August 1, 1997, and
was approved by the Company's stockholders as of August 1, 1997. The Plan is
effective as of August 1, 1997. However, Articles 7, 8 and 9 shall not apply
prior to the Company's initial public offering. The Plan was subsequently
amended January 22, 1999.
The purpose of the Plan is to promote the long-term success of the
Company and the creation of stockholder value by (a) encouraging Key Employees
to focus on critical long-range objectives, (b) encouraging the attraction and
retention of Key Employees with exceptional qualifications and (c) linking Key
Employees directly to stockholder interests through increased stock ownership.
The Plan seeks to achieve this purpose by providing for Awards in the form of
Restricted Shares, Stock Units, Options (which may constitute incentive stock
options or nonstatutory stock options) or stock appreciation rights.
The Plan shall be governed by, and construed in accordance with, the
laws of the State of California.
ARTICLE 2. ADMINISTRATION.
2.1 COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. Except as provided below, the Committee shall consist exclusively of
directors of the Company, who shall be appointed by the Board. In addition, the
composition of the Committee shall satisfy:
(a) Such requirements, if any, as the Securities and
Exchange Commission may establish for administrators acting under plans
intended to qualify for exemption under Rule 16b-3 (or its successor)
under the Exchange Act; and
(b) Such requirements as the Internal Revenue Service may
establish for outside directors acting under plans intended to qualify
for exemption under section 162(m)(4)(C) of the Code.
The Board may act on its own behalf with respect to Outside Directors and may
also appoint one or more separate committees composed of one or more officers of
the Company who need not be directors of the Company and who need not satisfy
the foregoing requirements, who may administer the Plan with respect to Key
Employees who are not "covered employees" under section 162(m)(3) of the Code
and who are not required to report pursuant to Section 16(a) of the Exchange
Act.
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<PAGE>
2.2 COMMITTEE RESPONSIBILITIES. The Committee shall (a) select the Key
Employees who are to receive Awards under the Plan, (b) determine the type,
number, vesting requirements and other features and conditions of such Awards,
(c) interpret the Plan and (d) make all other decisions relating to the
operation of the Plan. The Committee may adopt such rules or guidelines as it
deems appropriate to implement the Plan. The Committee's determinations under
the Plan shall be final and binding on all persons.
ARTICLE 3. SHARES AVAILABLE FOR GRANTS.
3.1 BASIC LIMITATION. Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares. The aggregate number of
Common Shares available for Restricted Shares, Stock Units, Options and SARs
awarded under the Plan shall not exceed 3,387,012. Of the Common Shares
available hereunder, no more than 25% in aggregate shall be available with
respect to Outside Directors. The limitation of this Section 3.1 shall be
subject to adjustment pursuant to Article 10. The number of Common Shares
available under this Plan shall be increased by unexercised or forfeited Common
Shares under the Company's 1993 and 1995 Stock Plans.
3.2 ADDITIONAL SHARES. If Stock Units, Options or SARs are forfeited or
if Options or SARs terminate for any other reason before being exercised, then
the corresponding Common Shares shall again become available for Awards under
the Plan. If Restricted Shares are forfeited before any dividends have been paid
with respect to such Shares, then such Shares shall again become available for
Awards under the Plan. If Stock Units are settled, then only the number of
Common Shares (if any) actually issued in settlement of such Stock Units shall
reduce the number available under Section 3.1 and the balance shall again become
available for Awards under the Plan. If SARs are exercised, then only the number
of Common Shares (if any) actually issued in settlement of such SARs shall
reduce the number available under Section 3.1 and the balance shall again become
available for Awards under the Plan.
3.3 DIVIDEND EQUIVALENTS. Any dividend equivalents distributed under
the Plan shall not be applied against the number of Restricted Shares, Stock
Units, Options or SARs available for Awards, whether or not such dividend
equivalents are converted into Stock Units.
ARTICLE 4. ELIGIBILITY.
4.1 GENERAL RULES. Only Key Employees (including, without limitation,
independent contractors who are not members of the Board) shall be eligible for
designation as Participants by the Committee.
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<PAGE>
4.2 OUTSIDE DIRECTORS. The Committee may provide that the NSOs that
otherwise would be granted to an Outside Director under this Plan shall instead
be granted to an affiliate of such Outside Director. Such affiliate shall then
be deemed to be an Outside Director for purposes of the Plan, provided that the
service-related vesting and termination provisions pertaining to the NSOs shall
be applied with regard to the service of the Outside Director.
4.3 INCENTIVE STOCK OPTIONS. Only Key Employees who are common-law
employees of the Company, a Parent or a Subsidiary shall be eligible for the
grant of ISOs. In addition, a Key Employee who owns more than 10% of the total
combined voting power of all classes of outstanding stock of the Company or any
of its Parents or Subsidiaries shall not be eligible for the grant of an ISO
unless the requirements set forth in section 422(c)(6) of the Code are
satisfied.
ARTICLE 5. OPTIONS.
5.1 STOCK OPTION AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms of the Plan and
may be subject to any other terms that are not inconsistent with the Plan. The
Stock Option Agreement shall specify whether the Option is an ISO or an NSO. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. Options shall be granted in consideration of services
rendered to the Company or a Subsidiary. A Stock Option Agreement may provide
that a new Option will be granted automatically to the Optionee when he or she
exercises a prior Option and pays the Exercise Price in the form described in
Section 6.2.
5.2 NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Common Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Article 10. Options granted to any
Optionee in a single calendar year shall in no event cover more than 750,000
Common Shares, subject to adjustment in accordance with Article 10.
5.3 EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price; provided that the Exercise Price under an ISO shall in no event
be less than 100% of the Fair Market Value of a Common Share on the date of
grant and the Exercise Price under an NSO shall in no event be less than the par
value of the Common Shares subject to such NSO. In the case of an NSO, a Stock
Option Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the NSO is outstanding, provided that prior to the
Company's initial public offering, the NSO Exercise Price shall be at least 85%
(110% for 10% shareholders) of the Fair Market Value of a Common Share of Stock
on the date of grant.
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<PAGE>
5.4 EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify
the date when all or any installment of the Option is to become exercisable,
provided that prior to the Company's initial public offering, Options shall
become exercisable pursuant to a schedule providing for at least 20% vesting per
year over a five-year period (or, in the case of performance options, to the
extent permitted under applicable regulations of the California Department of
Corporations). The Stock Option Agreement shall also specify the term of the
Option; provided that the term of an ISO shall in no event exceed 10 years from
the date of grant. A Stock Option Agreement may provide for accelerated
exercisability in the event of the Optionee's death, disability or retirement or
other events and may provide for expiration prior to the end of its term in the
event of the termination of the Optionee's service.
Options may be awarded in combination with SARs, and such an Award may
provide that the Options will not be exercisable unless the related SARs are
forfeited. NSOs may also be awarded in combination with Restricted Shares or
Stock Units, and such an Award may provide that the NSOs will not be exercisable
unless the related Restricted Shares or Stock Units are forfeited.
Options must be exercised within 90 days of the termination of
employment (six months for termination on account of death or disability).
5.5 EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the
time of granting an Option or thereafter, that such Option shall become fully
exercisable as to all Common Shares subject to such Option in the event that a
Change in Control occurs with respect to the Company.
5.6 MODIFICATION OR ASSUMPTION OF OPTIONS. Within the limitations of
the Plan, the Committee may modify, extend or assume outstanding options or may
accept the cancellation of outstanding options (whether granted by the Company
or by another issuer) in return for the grant of new options for the same or a
different number of shares and at the same or a different exercise price. The
foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, alter or impair his or her rights or obligations under
such Option.
5.7 OTHER REQUIREMENTS PRIOR TO COMPANY'S INITIAL PUBLIC OFFERING.
Prior to the Company's initial public offering, Optionees shall receive Company
financial statements at least annually.
ARTICLE 6. PAYMENT FOR OPTION SHARES.
6.1 GENERAL RULE. The entire Exercise Price of Common Shares issued
upon exercise of Options shall be payable in cash at the time when such Common
Shares are purchased, except as follows:
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<PAGE>
(a) In the case of an ISO granted under the Plan, payment
shall be made only pursuant to the express provisions of the applicable
Stock Option Agreement. The Stock Option Agreement may specify that
payment may be made in any form(s) described in this Article 6.
(b) In the case of an NSO, the Committee may at any time
accept payment in any form(s) described in this Article 6.
6.2 SURRENDER OF STOCK. To the extent that this Section 6.2 is
applicable, payment for all or any part of the Exercise Price may be made with
Common Shares which have already been owned by the Optionee for more than six
months. Such Common Shares shall be valued at their Fair Market Value on the
date when the new Common Shares are purchased under the Plan.
6.3 EXERCISE/SALE. To the extent that this Section 6.3 is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell
Common Shares and to deliver all or part of the sales proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.
6.4 EXERCISE/PLEDGE. To the extent that this Section 6.4 is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Common Shares to a securities broker or lender
approved by the Company, as security for a loan, and to deliver all or part of
the loan proceeds to the Company in payment of all or part of the Exercise Price
and any withholding taxes.
6.5 PROMISSORY NOTE. To the extent that this Section 6.5 is applicable,
payment may be made with a full-recourse promissory note; provided that the par
value of the Common Shares shall be paid in cash.
6.6 OTHER FORMS OF PAYMENT. To the extent that this Section 6.6 is
applicable, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.
ARTICLE 7. STOCK APPRECIATION RIGHTS.
7.1 SAR AGREEMENT. Each grant of an SAR under the Plan shall be
evidenced by an SAR Agreement between the Optionee and the Company. Such SAR
shall be subject to all applicable terms of the Plan and may be subject to any
other terms that are not inconsistent with the Plan. The provisions of the
various SAR Agreements entered into under the Plan need not be identical. SARs
may be granted in consideration of a reduction in the Optionee's other
compensation.
-5-
<PAGE>
7.2 NUMBER OF SHARES. Each SAR Agreement shall specify the number of
Common Shares to which the SAR pertains and shall provide for the adjustment of
such number in accordance with Article 10. SARs granted to any Optionee in a
single calendar year shall in no event pertain to more than 300,000 Common
Shares, subject to adjustment in accordance with Article 10.
7.3 EXERCISE PRICE. Each SAR Agreement shall specify the Exercise
Price. An SAR Agreement may specify an Exercise Price that varies in accordance
with a predetermined formula while the SAR is outstanding.
7.4 EXERCISABILITY AND TERM. Each SAR Agreement shall specify the
date when all or any installment of the SAR is to become exercisable. The SAR
Agreement shall also specify the term of the SAR. An SAR Agreement may
provide for accelerated exercisability in the event of the Optionee's death,
disability or retirement or other events and may provide for expiration prior
to the end of its term in the event of the termination of the Optionee's
service. SARs may also be awarded in combination with Options, Restricted
Shares or Stock Units, and such an Award may provide that the SARs will not
be exercisable unless the related Options, Restricted Shares or Stock Units
are forfeited. An SAR may be included in an ISO only at the time of grant but
may be included in an NSO at the time of grant or thereafter. An SAR granted
under the Plan may provide that it will be exercisable only in the event of a
Change in Control.
7.5 EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the
time of granting an SAR or thereafter, that such SAR shall become fully
exercisable as to all Common Shares subject to such SAR in the event that a
Change in Control occurs with respect to the Company.
7.6 EXERCISE OF SARS. The exercise of an SAR shall be subject to the
restrictions imposed by Rule 16b-3 (or its successor) under the Exchange Act, if
applicable. If, on the date when an SAR expires, the Exercise Price under such
SAR is less than the Fair Market Value on such date but any portion of such SAR
has not been exercised or surrendered, then such SAR shall automatically be
deemed to be exercised as of such date with respect to such portion. Upon
exercise of an SAR, the Optionee (or any person having the right to exercise the
SAR after his or her death) shall receive from the Company (a) Common Shares,
(b) cash or (c) a combination of Common Shares and cash, as the Committee shall
determine. The amount of cash and/or the Fair Market Value of Common Shares
received upon exercise of SARs shall, in the aggregate, be equal to the amount
by which the Fair Market Value (on the date of surrender) of the Common Shares
subject to the SARs exceeds the Exercise Price.
7.7 MODIFICATION OR ASSUMPTION OF SARS. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding SARs or may accept
the cancellation of outstanding
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<PAGE>
SARs (whether granted by the Company or by another issuer) in return for the
grant of new SARs for the same or a different number of shares and at the same
or a different exercise price. The foregoing notwithstanding, no modification of
an SAR shall, without the consent of the Optionee, alter or impair his or her
rights or obligations under such SAR.
ARTICLE 8. RESTRICTED SHARES AND STOCK UNITS.
8.1 TIME, AMOUNT AND FORM OF AWARDS. Awards under the Plan may be
granted in the form of Restricted Shares, in the form of Stock Units, or in any
combination of both. Restricted Shares or Stock Units may also be awarded in
combination with NSOs or SARs, and such an Award may provide that the Restricted
Shares or Stock Units will be forfeited in the event that the related NSOs or
SARs are exercised.
8.2 PAYMENT FOR AWARDS. To the extent that an Award is granted in the
form of newly issued Restricted Shares, the Award recipient, as a condition to
the grant of such Award, shall be required to pay the Company in cash an amount
equal to the par value of such Restricted Shares. To the extent that an Award is
granted in the form of Restricted Shares from the Company's treasury or in the
form of Stock Units, no cash consideration shall be required of the Award
recipients.
8.3 VESTING CONDITIONS. Each Award of Restricted Shares or Stock Units
shall become vested, in full or in installments, upon satisfaction of the
conditions specified in the Stock Award Agreement. A Stock Award Agreement may
provide for accelerated vesting in the event of the Participant's death,
disability or retirement or other events. The Committee may determine, at the
time of making an Award or thereafter, that such Award shall become fully vested
in the event that a Change in Control occurs with respect to the Company.
8.4 FORM AND TIME OF SETTLEMENT OF STOCK UNITS. Settlement of vested
Stock Units may be made in the form of (a) cash, (b) Common Shares or (c) any
combination of both, as determined by the Committee. The actual number of Stock
Units eligible for settlement may be larger or smaller than the number included
in the original Award, based on predetermined performance factors. Methods of
converting Stock Units into cash may include (without limitation) a method based
on the average Fair Market Value of Common Shares over a series of trading days.
Vested Stock Units may be settled in a lump sum or in installments. The
distribution may occur or commence when all vesting conditions applicable to the
Stock Units have been satisfied or have lapsed, or it may be deferred to any
later date. The amount of a deferred distribution may be increased by an
interest factor or by dividend equivalents. Until an Award of Stock Units is
settled, the number of such Stock Units shall be subject to adjustment pursuant
to Article 10.
-7-
<PAGE>
8.5 DEATH OF RECIPIENT. Any Stock Units Award that becomes payable
after the recipient's death shall be distributed to the recipient's beneficiary
or beneficiaries. Each recipient of a Stock Units Award under the Plan shall
designate one or more beneficiaries for this purpose by filing the prescribed
form with the Company. A beneficiary designation may be changed by filing the
prescribed form with the Company at any time before the Award recipient's death.
If no beneficiary was designated or if no designated beneficiary survives the
Award recipient, then any Stock Units Award that becomes payable after the
recipient's death shall be distributed to the recipient's estate.
8.6 CREDITORS' RIGHTS. A holder of Stock Units shall have no rights
other than those of a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Stock Award Agreement.
ARTICLE 9. VOTING AND DIVIDEND RIGHTS.
9.1 RESTRICTED SHARES. The holders of Restricted Shares awarded under
the Plan shall have the same voting, dividend and other rights as the Company's
other stockholders. A Stock Award Agreement, however, may require that the
holders of Restricted Shares invest any cash dividends received in additional
Restricted Shares. Such additional Restricted Shares shall be subject to the
same conditions and restrictions as the Award with respect to which the
dividends were paid. Such additional Restricted Shares shall not reduce the
number of Common Shares available under Article 3.
9.2 STOCK UNITS. The holders of Stock Units shall have no voting
rights. Prior to settlement or forfeiture, any Stock Unit awarded under the Plan
may, at the Committee's discretion, carry with it a right to dividend
equivalents. Such right entitles the holder to be credited with an amount equal
to all cash dividends paid on one Common Share while the Stock Unit is
outstanding. Dividend equivalents may be converted into additional Stock Units.
Settlement of dividend equivalents may be made in the form of cash, in the form
of Common Shares, or in a combination of both. Prior to distribution, any
dividend equivalents which are not paid shall be subject to the same conditions
and restrictions as the Stock Units to which they attach.
ARTICLE 10. PROTECTION AGAINST DILUTION.
10.1 ADJUSTMENTS. In the event of a subdivision of the outstanding
Common Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares in an
amount that has a material effect on the price of Common Shares, a combination
or consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a lesser number of Common Shares, a recapitalization, a spinoff
or a similar occurrence, the Committee shall make such adjustments as
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it, in its sole discretion, deems appropriate in one or more of (a) the
number of Options, SARs, Restricted Shares and Stock Units available for
future Awards under Article 3, (b) the limitations set forth in Sections 5.2
and 7.2, (c) the number of NSOs to be granted to Outside Directors under
Section 4.2, (d) the number of Stock Units included in any prior Award which
has not yet been settled, (e) the number of Common Shares covered by each
outstanding Option and SAR or (f) the Exercise Price under each outstanding
Option and SAR. Except as provided in this Article 10, a Participant shall
have no rights by reason of any issue by the Company of stock of any class or
securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock
dividend or any other increase or decrease in the number of shares of stock
of any class.
10.2 REORGANIZATIONS. In the event that the Company is a party to a
merger or other reorganization, outstanding Options, SARs, Restricted Shares and
Stock Units shall be subject to the agreement of merger or reorganization. Such
agreement may provide, without limitation, for the assumption of outstanding
Awards by the surviving corporation or its parent, for their continuation by the
Company (if the Company is a surviving corporation), for accelerated vesting and
accelerated expiration (provided the Company has previously had its initial
public offering), or for settlement in cash.
ARTICLE 11. AWARDS UNDER OTHER PLANS.
The Company may grant awards under other plans or programs. Such awards
may be settled in the form of Common Shares issued under this Plan. Such Common
Shares shall be treated for all purposes under the Plan like Common Shares
issued in settlement of Stock Units and shall, when issued, reduce the number of
Common Shares available under Article 3.
ARTICLE 12. PAYMENT OF DIRECTOR'S FEES IN SECURITIES.
12.1 EFFECTIVE DATE. No provision of this Article 12 shall be
effective unless and until the Board has determined to implement such
provision.
12.2 ELECTIONS TO RECEIVE NSOS, RESTRICTED SHARES OR STOCK UNITS. An
Outside Director may elect to receive his or her annual retainer payments and
meeting fees from the Company in the form of cash, NSOs, Restricted Shares,
Stock Units, or a combination thereof, as determined by the Board. Such NSOs,
Restricted Shares and Stock Units shall be issued under the Plan. An election
under this Article 12 shall be filed with the Company on the prescribed form.
12.3 NUMBER AND TERMS OF NSOS, RESTRICTED SHARES OR STOCK UNITS. The
number of NSOs, Restricted Shares or Stock Units to be granted to Outside
Directors in lieu of annual retainers and meeting fees that would otherwise be
paid in cash shall be calculated
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in a manner determined by the Board. The terms of such NSOs, Restricted Shares
or Stock Units shall also be determined by the Board.
ARTICLE 13. LIMITATION ON RIGHTS.
13.1 RETENTION RIGHTS. Neither the Plan nor any Award granted under the
Plan shall be deemed to give any individual a right to remain an employee,
consultant or director of the Company, a Parent or a Subsidiary. The Company and
its Parents and Subsidiaries reserve the right to terminate the service of any
employee, consultant or director at any time, with or without cause, subject to
applicable laws, the Company's certificate of incorporation and by-laws and a
written employment agreement (if any).
13.2 STOCKHOLDERS' RIGHTS. A Participant shall have no dividend rights,
voting rights or other rights as a stockholder with respect to any Common Shares
covered by his or her Award prior to the issuance of a stock certificate for
such Common Shares. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date when such certificate is
issued, except as expressly provided in Articles 8, 9 and 10.
13.3 REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Award prior to the satisfaction of all legal requirements relating to the
issuance of such Common Shares, to their registration, qualification or listing
or to an exemption from registration, qualification or listing.
ARTICLE 14. LIMITATION ON PAYMENTS.
14.1 GROSS-UP PAYMENT. In the event that it is determined that any
payment or transfer by the Company under the Plan to or for the benefit of (the
"Payment") would be subject to the excise tax imposed by section 4999 of the
Code or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest or penalties, are collectively referred to
as the "Excise Tax"), then the Participant shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount that shall fund the
payment by the Participant of any Excise Tax on the Payment as well as all
income taxes imposed on the Gross-Up Payment, any Excise Tax imposed on the
Gross-Up Payment and any interest or penalties imposed with respect to taxes on
the Gross-Up Payment or any Excise Tax.
14.2 DETERMINATION BY ACCOUNTANT. All mathematical determinations
and all determinations of whether any of the Payments
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are "parachute payments" (within the meaning of section 280G of the Code)
including all determinations of whether a Gross-Up Payment is required, of the
amount of such Gross-Up Payment and of amounts determined under Section 14.3
shall be made by the independent auditors most recently selected by the Board
(the "Auditors"), which shall provide its determination (the "Determination"),
together with detailed supporting calculations regarding the amount of any
Gross-Up Payment and any other relevant matters, both to the Company and to the
Participant within seven business days of the Participant's termination date, if
applicable, or such earlier time as is requested by the Company or by the
Participant (if the Participant reasonably believes that any of the Total
Payments may be subject to the Excise Tax). If the Accounting Firm determines
that no Excise Tax is payable by the Participant, it shall furnish the
Participant with a written statement that the Auditors have concluded that no
Excise Tax is payable (including the reasons therefor) and that the Participant
has substantial authority not to report any Excise Tax on the Participant's
federal income tax return. If a Gross-Up Payment is determined to be payable, it
shall be paid to the Participant within five business days after the
Determination is delivered to the Company or the Participant. Any determination
by the Auditors shall be binding upon the Company and the Participant, absent
manifest error.
14.3 UNDERPAYMENTS AND OVERPAYMENTS. As a result of uncertainty in the
application of section 4999 of the Code at the time of the initial determination
by the Auditors hereunder, it is possible that Gross-Up Payments not made by the
Company should have been made ("Underpayments") or that Gross-Up Payments will
have been made by the Company which should not have been made ("Overpayments").
In either event, the Auditors shall determine the amount of the Underpayment or
Overpayment that has occurred. In the case of an Underpayment, the amount of
such Underpayment shall promptly be paid by the Company to or for the benefit of
the Employee. In the case of an Overpayment, the Employee shall, at the
direction and expense of the Company, take such steps as are reasonably
necessary (including the filing of returns and claims for refund), follow
reasonable instructions from, and procedures established by, the Company and
otherwise reasonably cooperate with the Company to correct such Overpayment;
PROVIDED, HOWEVER, that (i) the Employee shall in no event be obligated to
return to the Company an amount greater than the net after-tax portion of the
Overpayment that the Employee has retained or has recovered as a refund from the
applicable taxing authorities and (ii) this provision shall be interpreted in a
manner consistent with the intent of this Article 14, which is to make the
Employee whole, on an after-tax basis, for the application of the Excise Tax, it
being understood that the correction of an Overpayment may result in the
Employee's repaying to the Company an amount which is less than the Overpayment.
14.4 RELATED CORPORATIONS. For purposes of this Article 14, the term
"Company" shall include affiliated corporations to the
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extent determined by the Auditors in accordance with section 280G(d)(5) of
the Code.
ARTICLE 15. WITHHOLDING TAXES.
15.1 GENERAL. To the extent required by applicable federal, state,
local or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any withholding
tax obligations that arise in connection with the Plan. The Company shall not be
required to issue any Common Shares or make any cash payment under the Plan
until such obligations are satisfied.
15.2 SHARE WITHHOLDING. The Committee may permit a Participant to
satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold all or a portion of any Common Shares that otherwise
would be issued to him or her or by surrendering all or a portion of any Common
Shares that he or she previously acquired. Such Common Shares shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in
cash. Any payment of taxes by assigning Common Shares to the Company may be
subject to restrictions, including any restrictions required by rules of the
Securities and Exchange Commission.
ARTICLE 16. ASSIGNMENT OR TRANSFER OF AWARDS.
16.1 GENERAL. An Award granted under the Plan shall not be
anticipated, assigned, attached, garnished, optioned, transferred or made
subject to any creditor's process, whether voluntarily, involuntarily or by
operation of law, except as approved by the Committee. Notwithstanding the
foregoing, ISOs and, prior to the Company's initial public offering, NSOs may
not be transferable. However, this Article 16 shall not preclude a
Participant from designating a beneficiary who will receive any outstanding
Awards in the event of the Participant's death, nor shall it preclude a
transfer of Awards by will or by the laws of descent and distribution.
16.2 TRUSTS. Neither this Article 16 nor any other provision of the
Plan shall preclude a Participant from transferring or assigning Restricted
Shares to (a) the trustee of a trust that is revocable by such Participant
alone, both at the time of the transfer or assignment and at all times
thereafter prior to such Participant's death, or (b) the trustee of any other
trust to the extent approved in advance by the Committee in writing. A
transfer or assignment of Restricted Shares from such trustee to any person
other than such Participant shall be permitted only to the extent approved in
advance by the Committee in writing, and Restricted Shares held by such
trustee shall be subject to all of the conditions and restrictions set forth
in the Plan and in the applicable Stock Award Agreement, as if such trustee
were a party to such Agreement.
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ARTICLE 17. FUTURE OF THE PLAN.
17.1 TERM OF THE PLAN. The Plan, as set forth herein, was adopted on
_____________, 1997, and became effective August 1, 1997, except that
Articles 7, 8 and 9 shall not be effective prior to the date of the Company's
initial public offering. The Plan shall remain in effect until it is
terminated under Section 17.2, except that no ISOs shall be granted after
July 31, 2007.
17.2 AMENDMENT OR TERMINATION. The Board may, at any time and for any
reason, amend or terminate the Plan. An amendment of the Plan shall be subject
to the approval of the Company's stockholders only to the extent required by
applicable laws, regulations or rules. No Awards shall be granted under the Plan
after the termination thereof. The termination of the Plan, or any amendment
thereof, shall not affect any Award previously granted under the Plan.
ARTICLE 18. DEFINITIONS.
18.1 "AWARD" means any award of an Option, an SAR, a Restricted Share
or a Stock Unit under the Plan.
18.2 "BOARD" means the Company's Board of Directors, as constituted
from time to time.
18.3 "CHANGE IN CONTROL" shall mean the occurrence of any of
the following events:
(a) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power of the
continuing or surviving entity's securities outstanding immediately
after such merger, consolidation or other reorganization is owned by
persons who were not stockholders of the Company immediately prior to
such merger, consolidation or other reorganization;
(b) A change in the composition of the Board, as a result of
which fewer than one-half of the incumbent directors are directors who
either:
(A) Had been directors of the Company 24 months
prior to such change; or
(B) Were elected, or nominated for election, to
the Board with the affirmative votes of at least a majority
of the directors who had been directors of the Company 24
months prior to such change and who were still in office at
the time of the election or nomination; or
(c) Any "person" (as such term is used in sections 13(d) and
14(d) of the Exchange Act) by the acquisition
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or aggregation of securities is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing 50%
or more of the combined voting power of the Company's then outstanding
securities ordinarily (and apart from rights accruing under special
circumstances) having the right to vote at elections of directors (the
"Base Capital Stock"); except that any change in the relative
beneficial ownership of the Company's securities by any person
resulting solely from a reduction in the aggregate number of
outstanding shares of Base Capital Stock, and any decrease thereafter
in such person's ownership of securities, shall be disregarded until
such person increases in any manner, directly or indirectly, such
person's beneficial ownership of any securities of the Company. Thus,
for example, any person who owns less than 50% of the Company's
outstanding shares, shall cause a Change in Control to occur as of any
subsequent date if such person then acquires an additional interest in
the Company which, when added to the person's previous holdings, causes
the person to hold more than 50% of the Company's outstanding shares.
The term "Change in Control" shall not include the Company's initial public
offering or a transaction, the sole purpose of which is to change the state of
the Company's incorporation.
18.4 "CODE" means the Internal Revenue Code of 1986, as amended.
18.5 "COMMITTEE" means a committee of the Board, as described in
Article 2.
18.6 "COMMON SHARE" means one share of the common stock of the Company.
18.7 "COMPANY" means Nanogen, Inc., a Delaware corporation.
18.8 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
18.9 "EXERCISE PRICE," in the case of an Option, means the amount for
which one Common Share may be purchased upon exercise of such Option, as
specified in the applicable Stock Option Agreement. "Exercise Price," in the
case of an SAR, means an amount, as specified in the applicable SAR Agreement,
which is subtracted from the Fair Market Value of one Common Share in
determining the amount payable upon exercise of such SAR.
18.10 "FAIR MARKET VALUE" means the market price of Common Shares,
determined by the Committee as follows:
(a) If the Common Shares were traded over-the-counter on the
date in question but was not traded on the Nasdaq Stock Market or the
Nasdaq National Market, then the Fair Market Value shall be equal to
the mean between the last
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reported representative bid and asked prices quoted for such date by
the principal automated inter-dealer quotation system on which the
Common Shares are quoted or, if the Common Shares are not quoted on any
such system, by the "Pink Sheets" published by the National Quotation
Bureau, Inc.;
(b) If the Common Shares were traded over-the-counter on the
date in question and were traded on the Nasdaq Stock Market or the
Nasdaq National Market, then the Fair Market Value shall be equal to
the last-transaction price quoted for such date by the Nasdaq Stock
Market or the Nasdaq National Market;
(c) If the Common Shares were traded on a stock exchange on
the date in question, then the Fair Market Value shall be equal to the
closing price reported by the applicable composite transactions report
for such date; and
(d) If none of the foregoing provisions is applicable, then
the Fair Market Value shall be determined by the Committee in good
faith on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in the Western Edition of THE WALL STREET
JOURNAL. Such determination shall be conclusive and binding on all persons.
18.11 "ISO" means an incentive stock option described in
section 422(b) of the Code.
18.12 "KEY EMPLOYEE" means (a) a common-law employee of the Company, a
Parent or a Subsidiary, (b) an Outside Director and (c) a consultant or adviser
who provides services to the Company, a Parent or a Subsidiary as an independent
contractor. Service as an Outside Director or as an independent contractor shall
be considered employment for all purposes of the Plan, except as provided in
Sections 4.2 and 4.3.
18.13 "NSO" means a stock option not described in sections
422 or 423 of the Code.
18.14 "OPTION" means an ISO or NSO granted under the Plan and entitling
the holder to purchase one Common Share.
18.15 "OPTIONEE" means an individual or estate who holds an
Option or SAR.
18.16 "OUTSIDE DIRECTOR" shall mean a member of the Board who is not a
common-law employee of the Company, a Parent or a Subsidiary.
18.17 "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns
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stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain. A corporation that
attains the status of a Parent on a date after the adoption of the Plan shall be
considered a Parent commencing as of such date.
18.18 "PARTICIPANT" means an individual or estate who holds
an Award.
18.19 "PLAN" means this 1997 Stock Incentive Plan of Nanogen, Inc., as
amended from time to time.
18.20 "RESTRICTED SHARE" means a Common Share awarded under
the Plan.
18.21 "SAR" means a stock appreciation right granted under
the Plan.
18.22 "SAR AGREEMENT" means the agreement between the Company and an
Optionee which contains the terms, conditions and restrictions pertaining to his
or her SAR.
18.23 "STOCK AWARD AGREEMENT" means the agreement between the Company
and the recipient of a Restricted Share or Stock Unit which contains the terms,
conditions and restrictions pertaining to such Restricted Share or Stock Unit.
18.24 "STOCK OPTION AGREEMENT" means the agreement between the Company
and an Optionee which contains the terms, conditions and restrictions pertaining
to his or her Option.
18.25 "STOCK UNIT" means a bookkeeping entry representing the
equivalent of one Common Share, as awarded under the Plan.
18.26 "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.
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ARTICLE 19. EXECUTION.
To record the adoption of the Plan by the Board, the Company has caused
its duly authorized officer to affix the corporate name and seal hereto.
NANOGEN, INC.
By /s/ Harry J. Leonhardt
-------------------------------
Harry J. Leonhardt, Esq.
Vice President, General
Counsel and Secretary
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EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the Amended 1997 Stock Incentive Plan of
Nanogen, Inc. of our report dated January 22, 1999 with respect to the
consolidated financial statements of Nanogen, Inc. included in its Annual Report
(Form 10-K) for the year ended December 31, 1998, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
San Diego, California
July 26, 1999
