LYNX THERAPEUTICS, INC.



                               EMPLOYEE AGREEMENT

                                      FOR

                               KATHY A. SAN ROMAN



         This Employment Agreement ("Agreement") by and between KATHY A. SAN

ROMAN ("Executive") and LYNX THERAPEUTICS, INC., a Delaware corporation (the

"Company"), is entered into and is effective as of March 20, 2003 (the

"Effective Date").



                  WHEREAS, the Company desires that Executive continue to

         provide personal services to the Company, and wishes to provide

         Executive with the compensation and benefits set forth below in return

         for such services; and



                  WHEREAS, Executive wishes to continue to provide personal

         services to the Company in return for the compensation and benefits set

         forth below;



                  NOW, THEREFORE, in consideration of the mutual promises and

         covenants contained herein, it is hereby agreed by and between the

         parties hereto as follows:



    1. EMPLOYMENT BY THE COMPANY.



         1.1 Subject to the terms set forth herein, Executive shall be employed

in the position of Vice President, Human Resources and Administration, reporting

to the Chief Financial Officer of the Company. Executive agrees to devote her

best efforts and substantially all of her business time and attention (except

for vacation periods permitted by the Company's general employment policies,

reasonable periods of illness or other incapacities permitted by the Company's

general employment policies, and as otherwise provided herein) to the business

of the Company.



         1.2 Executive shall serve in an executive capacity and shall perform

such duties as are customarily associated with her then current title.



         1.3 The employment relationship between the parties is "at will," which

means that either party may terminate the relationship at any time, with or

without cause and with or without advance notice. The employment relationship

between the parties shall also be governed by the general employment policies

and practices of the Company, including those relating to protection of

confidential information and assignment of inventions, except that when the

terms of this Agreement differ from or are in conflict with the Company's

general employment policies or practices, this Agreement shall control.



    2. COMPENSATION.



         2.1 SALARY. As of the Effective Date, Executive shall receive for

services to be rendered hereunder an annualized base salary of One Hundred Sixty

Thousand U.S. Dollars ($160,000), payable on the Company's normal payroll

schedule, and subject to standard payroll deductions and withholdings.



         2.2 STOCK OPTION. The Board granted Executive a nonstatutory stock

option (the "Option") to purchase Twenty-five Thousand (25,000) shares of the

common stock of the Company (the "Common Stock") pursuant to the Company's 1992

Stock Option Plan (the "1992 Plan"), as amended. In addition, as part of

Executive's employment by the Company before the Effective Date of this

Agreement, Executive has been granted, on one or more occasion, an Option to

purchase shares of the common stock of the Company pursuant to the Company's

1992 Plan. Any such Option(s) will continue to be subject to the terms of the

Plan and Executive's corresponding Stock Option Grant Notices and Stock Option

Agreements.



                                        1



{PAGE}



         2.3 INCENTIVE COMPENSATION. The Company does not currently have an

incentive compensation plan or program in place, and therefore the Company

cannot offer Executive incentive compensation at this time. It is the Company's

intention, however, to implement such a plan or program and to cause Executive

to be eligible for such plan or program.



         2.4 STANDARD COMPANY BENEFITS. Executive shall continue to be entitled

to all rights and benefits for which she is eligible under the terms and

conditions of the standard Company benefits and compensation practices that may

be in effect from time to time and provided by the Company to its employees

generally, including but not limited to health benefit plans. Executive also

shall continue to be eligible to participate in the Company's 401(k) Plan,

including eligibility for a monthly matching contribution by the Company on

Executive's behalf, in an amount equal to that contributed by Executive up to a

maximum annual matching contribution of Seven Hundred Fifty Dollars ($750).



    3. PROPRIETARY INFORMATION OBLIGATIONS.



         3.1 AGREEMENT. Executive agrees to abide by the executed Employee

Invention Agreement attached hereto as Exhibit A.



         3.2 REMEDIES. Executive's duties under the Employee Invention Agreement

shall survive termination of her employment with the Company. Executive

acknowledges that a remedy at law for any breach or threatened breach by him of

the provisions of the Employee Invention Agreement would be inadequate, and she

therefore agrees that the Company shall be entitled to injunctive relief in case

of any such breach or threatened breach.



    4. OUTSIDE ACTIVITIES.



         4.1 Except with the prior written consent of the President and Chief

Executive Officer, Executive will not during the term of this Agreement

undertake or engage in any other employment, occupation or business enterprise,

other than ones in which Executive is a passive investor. Executive may engage

in civic and not-for-profit activities so long as such activities do not

materially interfere with the performance of her duties hereunder.



         4.2 Except as permitted by Section 4.3, Executive agrees not to

acquire, assume or participate in, directly or indirectly, any position,

investment or interest known by him to be adverse or antagonistic to the

Company, its business or prospects, financial or otherwise.



         4.3 During the term of her employment by the Company, except on behalf

of the Company, Executive will not directly or indirectly, whether as an

officer, director, stockholder, partner, proprietor, associate, representative,

consultant, or in any capacity whatsoever engage in, become financially

interested in, be employed by or have any business connection with any other

person, corporation, firm, partnership or other entity whatsoever which were

known by him to compete directly with the Company, throughout the world, in any

line of business engaged in (or planned to be engaged in) by the Company;

provided, however, that anything above to the contrary notwithstanding, she may

own, as a passive investor, securities of any competitor corporation, so long as

her direct holdings in any one such corporation shall not in the aggregate

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