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EXHIBIT 10.2
NANOGEN, INC.
1997 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
Nanogen, Inc., a Delaware corporation (the "Company"), hereby grants an
Option to purchase shares of its common stock ("Shares") to the Optionee named
below. The terms and conditions of the Option are set forth in this cover sheet,
in the attachment and in the Company's 1997 Stock Incentive Plan, as amended
(the "Plan").
Date of Grant:
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Name of Optionee:
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Optionee's Social Security Number:
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Number of Shares Covered by Option:
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Exercise Price per Share:
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Vesting Start Date:
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Check here if Optionee is a 10% owner (so that exercise price must be
------ 110% of fair market value and term will not exceed five (5) years).
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY
OF WHICH IS ALSO ATTACHED.
Optionee:
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Signature
Company:
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Signature
Title: Senior Vice President, General Counsel and Secretary
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DO NOT SEPARATE THIS PAGE FROM ATTACHED PAGES
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NANOGEN, INC.
1997 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
INCENTIVE STOCK OPTION This Option is intended to be an incentive
stock option ("ISO") under section 422 of
the Internal Revenue Code and will be
interpreted accordingly. TO THE EXTENT THE
OPTION EXCEEDS THE $100,000 ANNUAL
LIMITATION OF SECTION 422(b) OF THE INTERNAL
REVENUE CODE, IT WILL BE TREATED AS A
NONQUALIFIED OPTION AND WILL NOT BE ELIGIBLE
FOR ISO TAX TREATMENT.
VESTING Your Option vests monthly over a four
(4)-year period beginning on the Vesting
Start Date as shown on the cover sheet. The
number of Shares which vest under this
Option at the Exercise Price shall be equal
to the product of the number of months of
your continuous service with the Company
("Service") (including any approved leaves
of absence) from the Vesting Start Date
times the number of Shares covered by this
Option times 1/48. The resulting number of
Shares will be rounded to the nearest whole
number. Notwithstanding the above, no shares
will vest until you have performed twelve
months of Service from the Vesting Start
Date. This Option shall be fully vested upon
a Change in Control as defined in the Plan.
Change in Control does not include any
public offering of Shares. No additional
Shares will vest after your Service has
terminated for any reason.
TERM Your Option will expire in any event at the
close of business at Company headquarters on
the day before the tenth anniversary (fifth
anniversary for a 10% owner) of the Date of
Grant, as shown on the cover sheet. (It will
expire earlier if your Service terminates,
as described below.)
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REGULAR TERMINATION If your Service terminates for any reason
except death or Disability, your Option will
expire at the close of business at Company
headquarters on the 90th day after your
termination date. During that ninety
(90)-day period, you may exercise that
portion of your Option that was vested on
your termination date. Your Option will be
eligible for ISO tax treatment only if it is
exercised within three (3) months following
the termination of your Service as an
Employee.
DEATH If you die while in Service with the
Company, your Option will expire at the
close of business at Company headquarters on
the date twelve (12) months after the date
of death. During that twelve (12)- month
period, your estate or heirs may exercise
that portion of your Option that was vested
on the date of death.
DISABILITY If your Service terminates because of your
Disability, your Option will expire at the
close of business at Company headquarters on
the date twelve (12) months after your
termination date. (However, if your
Disability is not expected to result in
death or to last for a continuous period of
at least twelve (12) months, your Option
will be eligible for ISO tax treatment only
if it is exercised within three (3) months
following the termination of your Service as
an Employee.) During that twelve (12)-month
period, you may exercise that portion of
your Option that was vested on the date of
your Disability.
"Disability" means that you are unable to
engage in any substantial gainful activity
by reason of any medically determinable
physical or mental impairment.
LEAVES OF ABSENCE For purposes of this Option, your Service
does not terminate when you go on a BONA
FIDE leave of absence that was approved by
the Company in writing, if the terms of the
leave provide for continued service
crediting, or when continued service
crediting is required by applicable law.
However, your Service will be treated as
terminating ninety (90) days after you went
on leave, unless your right to return to
active work is guaranteed by law or by a
contract. Your Service terminates in any
event when the approved leave ends unless
you immediately return to active work. The
Company determines which leaves count for
this purpose, and when your Service
terminates for all purposes under the Plan.
If your right to return to active work is
not guaranteed by law or contract, your
Option will be eligible for ISO tax
treatment only if it is exercised
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within three (3) months following the
termination of your Service as an active
Employee at the beginning of your leave of
absence. The Company also determines the
extent to which you may exercise the vested
portion of your Option during a leave of
absence.
NOTICE OF EXERCISE When you wish to exercise this Option,
complete and file a Notice of Exercise with
the Company. Your exercise will be effective
when it is received by the Company. If
someone else wants to exercise this Option
after your death, that person must prove to
the Company's satisfaction that he or she is
entitled to do so.
FORM OF PAYMENT When you submit your Notice of Exercise with
the Company, you must include payment of the
Exercise Price for the Shares you are
purchasing. Payment may be made in one (or a
combination) of the following forms:
- Your personal check, a cashier's
check or money order.
- Shares which you have owned for six
(6) months and which are
surrendered to the Company. The
value of the Shares, determined as
of the effective date of the Option
exercise, will be applied to the
Exercise Price.
- To the extent that a public market
for the Shares exists as determined
by the Company, by delivery (on a
form prescribed by the Committee)
of an irrevocable direction to a
securities broker to sell Shares
and to deliver all or part of the
sale proceeds to the Company in
payment of the aggregate Exercise
Price.
- Any other form of legal
consideration approved by the
Committee.
WITHHOLDING TAXES You will not be allowed to exercise this
Option unless you make acceptable
arrangements to pay any withholding or other
taxes that may be due as a result of the
Option exercise or the sale of Shares
acquired upon exercise of this Option.
RESTRICTIONS ON By signing this Agreement, you agree not to
EXERCISE AND RESALE sell any Option Shares at a time when
applicable laws or Company policies prohibit
a sale. This restriction will apply as long
as you are in the Service of the Company (or
a subsidiary).
TRANSFER OF OPTION Prior to your death, only you may exercise
this Option. You cannot transfer or assign
this Option except as expressly permitted in
the Plan for revocable trusts or as approved
by the Committee. For instance, you may not
sell this Option or use it as security for a
loan. If you attempt to do any of these
things, this Option will immediately become
invalid. You may, however, dispose of this
Option in your will.
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Regardless of any marital property
settlement agreement, the Company is not
obligated to honor a Notice of Exercise from
your spouse or former spouse, nor is the
Company obligated to recognize such
individual's interest in your Option in any
other way.
RETENTION RIGHTS This Agreement does not give you the right
to be retained by the Company in any
capacity. The Company reserves the right to
terminate your Service at any time and for
any reason.
SHAREHOLDER RIGHTS Neither you, nor your estate or heirs, have
any rights as a shareholder of the Company
until a certificate for the Shares acquired
upon exercise of this Option has been
issued. No adjustments are made for
dividends or other rights if the applicable
record date occurs before your stock
certificate is issued, except as described
in the Plan.
ADJUSTMENTS In the event of a stock split, a stock
dividend or a similar change in the
Company's Stock, the number of Shares
covered by this Option and the Exercise
Price per share may be adjusted pursuant to
the Plan. Your Option shall be subject to
the terms of the agreement of merger,
liquidation or reorganization in the event
the Company is subject to such corporate
activity.
APPLICABLE LAW This Agreement will be interpreted and
enforced under the laws of the State of
California (without regard to their choice
of law provisions).
THE PLAN AND OTHER AGREEMENTS The text of the Plan is incorporated in this
Agreement by reference. Certain capitalized
terms used in this Agreement are defined in
the Plan.
This Agreement and the Plan constitute the
entire understanding between you and the
Company regarding this Option. Any prior
agreements, commitments or negotiations
concerning this Option are superseded.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE
TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.
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