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June 30, 1998



Stephen Flaim, Ph.D
4455 Foxhollow Court
San Diego, CA 92130

Dear Dr. Flaim:

We are pleased to extend you an offer of employment with Trega Biosciences, 
Inc. This letter shall serve to clarify the terms and conditions of the job 
we are offering you. 

We are offering you a position as Vice President, Biology reporting to Dr. 
Larry Muschek.  Your employment will begin on July 20, 1998 with an exempt 
monthly salary of $14,166.67, annualized at $170,000. 

In addition to your base compensation, you will be eligible to participate in 
an attractive bonus award program.  During your first year of employment, up 
to a maximum of 50% of your annual salary will be awarded to you should you 
successfully accomplish the criteria to be agreed upon between us. The amount 
of the award will be determined by the President/CEO and the President,  
Research & Development.

You will be eligible to participate in the Company's health-care benefit 
plans on the first of the month following your hire date and in the Company's 
401 (k) Retirement Plan during the first enrollment period following 90 days 
after your hire date.  You will begin accruing vacation at a rate of 10 days 
per year, with an additional day of vacation for every year of service, which 
you will be eligible to take after six (6) months of employment with the 
Company. Subject to the approval of the Compensation Committee, you will be 
granted 70,000 stock options, which will vest in three (3) month periods over 
four (4) years.  



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Stephen Flaim, Ph.D.
June 30, 1998
page 2

You acknowledge that you will be required to execute a Confidentiality 
Agreement and any and all other documents reasonably required by the Company 
to protect its proprietary trade secrets from disclosure and to prevent the 
unauthorized use by the Company of any proprietary trade secrets of other 
parties or entities.  These documents are incorporated into this letter by 
reference.

You acknowledge and agree that in accordance with California law, your 
employment with the Company is "at will" and that you understand that the 
Company or you may terminate your employment at any time, for any reason 
whatsoever, with or without cause and with or without notice. Additionally, 
on your first day of work please be prepared to provide the appropriate 
documentation showing you are authorized to work in the United States.

You further agree that all disputes, claims or causes of action arising out 
of or relating to this agreement or your employment relationship including 
termination of that relationship, shall be submitted to binding arbitration, 
except where the law specifically forbids the use of arbitration as a final 
and binding remedy (See Exhibit A).

Dr. Flaim, we look forward to your joining our organization.  In order to 
confirm your agreement with and acceptance of these terms, please sign one 
copy of this letter and return it to me.  The other copy is for your records. 
If there is any matter in this letter which you wish to discuss further, 
please do not hesitate to speak to me.

Sincerely,

/s/ Lawrence D. Muschek
------------------------

Larry Muschek, Ph.D.
President, Research & Development

                                   ACKNOWLEDGMENT

I agree to the terms and conditions of employment set forth in this letter.

/s/ Stephen F. Flaim                              7/7/98
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Stephen Flaim, Ph.D.                              Date