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                                                                   EXHIBIT 10.27


                                  HYSEQ, INC.

      Form of Non-Stockholder Approved Stock Option Agreement for Officers

<Table>

<Caption>

<S>             <C>             <C>          <C>        <C>
                                    NUMBER       PRICE    SOCIAL SECURITY
GRANTED TO         GRANT DATE     OF SHARES    PER SHARE     NUMBER
----------         ----------     ---------    ---------  ----------------



</Table>

     1. You are hereby granted, in connection with and in partial consideration
of your initial employment by Hyseq, Inc. (the "COMPANY") as its [Title], an
option (the "OPTION") to purchase, at the above stated price, upon and subject
to the provisions and conditions hereinafter set forth, the above stated number
of shares of common stock, $.001 par value per share ("COMMON STOCK"), of the
Company, which Option shall become exercisable for the number of shares and on
the dates as shown below. This Option is a non-statutory stock option, which is
not granted under any stock option plan sponsored by the Company, and is
neither designated as, nor intended to be, an incentive stock option.

<Table>

<Caption>

           <S>                             <C>
             NUMBER OF SHARES                 ACCRUAL DATE
         ------------------------          ------------------


</Table>

Unless earlier terminated pursuant to the terms of this Agreement, the Option
shall expire on [Date].

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I hereby acknowledge receipt of this Option and understand that it is governed
by the terms of this contract. I acknowledge that I am aware of the provisions
contained in this contract whereby the Board of Directors of the Company (the
"BOARD OF DIRECTORS") may terminate or amend this contract. I further
acknowledge that the grant hereby made to me does not, under any circumstances,
create any right for me to receive any grant in the future.

--------------------------         Date ----------------------
Name:




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     2. To exercise your Option to purchase any shares hereunder, it shall be
necessary for you, on or after the date on which such purchase privilege accrues
and prior to the above stated expiration date, to make payment in full to the
Company, in cash or in Common Stock of the Company or in a combination thereof,
for the shares which you so elect to purchase, at the price per share herein
described, whereupon you will receive the shares for which you thus make
payment; provided, however, if all or part of the payment is in shares of Common
Stock of the Company, that if such shares were acquired pursuant to an incentive
stock option plan (as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code")) of the Company, then the applicable holding
period requirements of Section 422 of the Code have been met with respect to
such shares, and, provided further, that if you are subject to the reporting
requirements of Section 16 of the Securities Exchange Act of 1934, as amended
from time to time, then, if (i) such shares were granted pursuant to an option,
then such option must have been granted at least six (6) months prior to the
exercise of the Option hereunder, and (ii) such shares were purchased other than
through the grant and exercise of an option, such shares were owned by you for
more than six (6) months prior to the exercise of the Option hereunder. If all
or part of the payment is in shares of Common Stock of the Company, such shares
shall be valued at their fair market value on the date of exercise.

     3.  The Board of Directors reserves and shall have the right, by written
notice to you, to amend or terminate the provisions of this contract in any
manner that it may deem necessary or advisable to carry out the purpose of this
grant as the result of, or to comply with, any change in applicable regulations,
interpretation or statutory enactment, provided that any such change shall be
applicable only to the shares for which payment shall not then have been made as
herein provided.

     4.  Upon the termination of your employment with the Company for any reason
or no reason, the unvested portion of the Option shall be forfeited. Except as
set forth in Paragraph 5, the vested unexercised portion of the Option shall be
exercisable by you for a period of thirty (30) days following such a termination
of your employment, or, if earlier, until the expiration of the originally
prescribed term of the Option. Upon the expiration of such thirty (30) day
period (or, if earlier, the originally prescribed term of the Option), the
unexercised Option shall expire and be forfeited.

     5.  Upon the termination of your employment with the Company as the result
of your death or disability while an employee, the outstanding vested portion of
the Option will be exercisable by you (or your legal representative or
designated beneficiary) for one (1) year following your death of disability, or,
if earlier, until the expiration of the originally prescribed term of the
Option. Upon the expiration of such one (1) year period, (or, if earlier, the
originally prescribed term of the Option), the unexercised Option shall expire
and be forfeited. For purposes of this Agreement, disability shall mean
permanent and total disability as defined in Section 22(e)(3) of the Code.


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     6.   (a)  If the outstanding shares of Common Stock are increased,
decreased or changed into, or exchanged for, a different number or kind of
shares or securities of the Company through a reorganization or merger in which
the Company is the surviving entity, or through a combination,
recapitalization, reclassification, stock split, stock dividend, stock
consolidation or otherwise, an appropriate adjustment shall be made in the
number and kind of shares that may be issued pursuant to the Option. The
corresponding adjustment to the consideration payable with respect to the
Option shall also be made. Any such adjustment, however, shall be made without
change to the total payment, if any, applicable to the portion of the Option
not exercised with a corresponding adjustment in the price for each share.

          (b)  In the event of a "change of control" of the Company, the
Option, whether or not exercisable pursuant to the schedule set forth in
Paragraph 1 at the time of the change of control, shall become immediately
exercisable. A change of control shall be deemed to occur on the earliest of
(i) the acquisition by any entity, person, or group of beneficial ownership, as
that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934,
of more than 50% of the outstanding capital stock of the Company entitled to
vote for the election of directors ("Voting Stock"); (ii) the commencement by
any entity, person, or group (other than the Company or a subsidiary of the
Company) of a tender offer or an exchange offer for more than 50% of the
outstanding Voting Stock of the Company; (iii) the effective time of (A) a
merger or consolidation of the Company with one or more corporations as a
result of which the holders of the outstanding Voting Stock of the Company
immediately prior to such merger hold less than 50% of the Voting Stock of the
surviving or resulting corporation, or (B) a transfer of substantially all of
the property or assets of the Company other than to an entity of which the
Company owns at least 80% of the Voting Stock; or (iv) the election to the
Board, without the recommendation or approval of the incumbent Board of the
lesser of (A) three directors, or (B) directors constituting a majority of the
number of directors of the Company then in office.

     7.   The Option herein granted shall be exercisable during your lifetime
only by you or your legal representative, and in the event of your death then
thereafter only by your beneficiary, and in any event only in accordance with
and subject to the provisions and conditions herein set forth. You may name,
from time to time, any beneficiary or beneficiaries (who may be named
contingently or successively). Each designation will revoke all prior
designations and will be effective only when filed in writing with the Company
during your lifetime. In the absence of any such designation, your estate shall
be deemed to be your beneficiary.

     8.   This contract and the purchase privilege or Option herein granted
shall not otherwise by transferable by you, expressly or by operation of law,
and any attempted transfer or other disposition thereof by you shall be void and
shall nullify this Option and result in the cancellation of this contract by the
Company.

     9.   If the exercise of this Option requires withholding of tax under any
law, including, without limitation, under any federal, state or local law, the
Company may require you to pay to it or may withhold from your compensation, at
its discretion, the amount of such withholding


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prior to issuing any Common Stock or retain such amount from any payment
otherwise due to you.

     10. Neither this Option nor any shares to be acquired pursuant to the
exercise of any rights relating to this Option have been or will be registered
under any securities laws other than the federal securities laws of the United
States and the Company has no obligation to register this Option or any such
shares. Any shares acquired pursuant to rights relating to this Option may not
be sold, transferred or otherwise traded in the absence of registration under or
an exemption from any applicable requirements of any securities laws applicable
to you, and each certificate representing such shares shall bear an appropriate
legend to such effect, if applicable.

     11. Nothing in this contract shall interfere with or limit in any way the
right of the Company to terminate employment at any time, nor confer upon you
any right to continue in the employ of the Company for any period of time or to
continue your present or any other rate of compensation.

     12. The issuance of shares of Common Stock shall be subject to all
applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required. It is
the intent of the parties that: (i) the terms of this contract shall be governed
by, and construed in accordance with, the laws of the State of Nevada, and (ii)
the terms of the contract shall be subject to the jurisdiction of the courts of
the State of Nevada.

     13. Please acknowledge receipt of this Option at the bottom of the
duplicate copy of the first page herewith enclosed and return the same within
thirty (30) days from the date you receive this Option Agreement to the office
of Hyseq, Inc., Attention: Secretary, 670 Almanor Avenue, Sunnyvale, California
94085.

HYSEQ, INC.

By: /s/ Ted W. Love
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   Ted W. Love
   President and Chief Executive Officer