LYNX THERAPEUTICS, INC.



                             1992 STOCK OPTION PLAN



                              ADOPTED JULY 1, 1992

                   LAST AMENDED BY THE BOARD ON MARCH 1, 2001

                  LAST APPROVED BY STOCKHOLDERS ON MAY 24, 2001

                        TERMINATION DATE: MARCH 11, 2006



PURPOSES.



      ELIGIBLE OPTION RECIPIENTS. The persons eligible to receive Options are

the Employees, Directors and Consultants of the Company and its Affiliates.



      AVAILABLE OPTIONS. The purpose of the Plan is to provide a means by which

eligible recipients of Options may be given an opportunity to benefit from

increases in value of the Common Stock through the granting of the following

Options: (i) Incentive Stock Options, and (ii) Nonstatutory Stock Options.



      GENERAL PURPOSE. The Company, by means of the Plan, seeks to retain the

services of the group of persons eligible to receive Options, to secure and

retain the services of new members of this group and to provide incentives for

such persons to exert maximum efforts for the success of the Company and its

Affiliates.



DEFINITIONS.



      "AFFILIATE" means any parent corporation or subsidiary corporation of the

Company, whether now or hereafter existing, as those terms are defined in

Sections 424(e) and (f), respectively, of the Code.



      "BOARD" means the Board of Directors of the Company.



      "CODE" means the Internal Revenue Code of 1986, as amended.



      "COMMITTEE" means a Committee appointed by the Board in accordance with

subsection 3(c).



      "COMMON STOCK" means the common stock of the Company.



      "COMPANY" means Lynx Therapeutics, Inc., a Delaware corporation.



      "CONSULTANT" means any person, including an advisor, (1) engaged by the

Company or an Affiliate to render consulting or advisory services and who is

compensated for such services or (2) who is a member of the Board of Directors

of an Affiliate. However, the term "Consultant" shall not include either

Directors of the Company who are not compensated by the Company for their

services as Directors or Directors of the Company who are merely paid a

director's fee by the Company for their services as Directors.







                                       1.

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      "CONTINUOUS SERVICE" means that the Optionholder's service with the

Company or an Affiliate, whether as an Employee, Director or Consultant, is not

interrupted or terminated. The Optionholder's Continuous Service shall not be

deemed to have terminated merely because of a change in the capacity in which

the Optionholder renders service to the Company or an Affiliate as an Employee,

Consultant or Director or a change in the entity for which the Optionholder

renders such service, provided that there is no interruption or termination of

the Optionholder's Continuous Service. For example, a change in status from an

Employee of the Company to a Consultant of an Affiliate or a Director of the

Company will not constitute an interruption of Continuous Service. The Board or

the chief executive officer of the Company, in that party's sole discretion, may

determine whether Continuous Service shall be considered interrupted in the case

of any leave of absence approved by that party, including sick leave, military

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