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                                                                   EXHIBIT 10.56

                           CALIPER TECHNOLOGIES CORP.

                             KEY EMPLOYEE AGREEMENT
                                       FOR
                                 KEVIN HRUSOVSKY

         This Key Employee Agreement ("Agreement") is entered into by and
between Kevin Hrusovsky ("Executive") and Caliper Technologies Corp., a Delaware
corporation (the "Company").

         WHEREAS, Executive is currently employed by Zymark Corporation, a
Delaware corporation ("Zymark");

         WHEREAS, the Company is currently negotiating the acquisition by the
Company of all the outstanding capital stock of ZYAC Holding Corporation, a
Delaware corporation, ("ZYAC") of which Zymark is a wholly-owned subsidiary,
pursuant to a stock purchase agreement (the "Acquisition");

         WHEREAS, the Company desires to employ Executive in the position of
Chief Executive Officer ("CEO") and President to provide personal services to
the Company, and wishes to provide Executive with certain compensation and
benefits in return for his services, in the event the Acquisition closes; and

         WHEREAS, Executive wishes to be employed by the Company and provide
personal services to the Company in return for certain compensation and
benefits, in the event the Acquisition closes.

         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      TITLE AND RESPONSIBILITIES. Subject to the terms set forth
herein, the Company agrees to employ Executive in the position of CEO,
President, and Executive hereby accepts such employment, effective upon the
closing of the Acquisition (the "Employment Date"). During his employment with
the Company, Executive will devote his best efforts and substantially all of his
business time and attention (except for vacation periods as set forth herein and
reasonable periods of illness or other incapacities permitted by the Company's
general employment policies) to the business of the Company.

                                       1.

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         1.2      EXECUTIVE POSITION. Executive shall report to the Company's
Board of Directors (the "Board") and serve in an executive capacity with overall
responsibility for management of the Company, consistent with the bylaws of the
Company and as required by the Board.

         1.3      ELECTION TO THE BOARD. Executive will serve as a director of
the Company. Executive further agrees that in the event he ceases to serve as
the CEO of the Company, then he shall immediately resign from his position on
the Board in writing, unless otherwise requested by the Board.

         1.4      COMPANY EMPLOYMENT POLICIES. 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.

         1.5      ACQUISITION AND ZYAC STOCKHOLDER APPROVAL. Executive's
employment with the Company is conditioned upon the Acquisition closing, and
therefore this Agreement shall have no force and effect if the Acquisition fails
to close. For the purposes of this Agreement, "Acquisition Parachute Payments"
are payments pursuant to this Agreement that may be characterized as "excess
parachute payments" as defined in Section 280G(b)(1) of the Internal Revenue
Code of 1986, as amended (the "Code") where the change in ownership or effective
control element in Section 280G(b)(2)(A)(i)(I) is the Acquisition. All
Acquisition Parachute Payments are expressly conditioned upon the stockholders
of ZYAC approving such Acquisition Parachute Payments at least five (5) days
prior to the Acquisition closing in the manner provided for under Section
280G(b)(5)(B) of the Code and applicable regulations. Before the closing of the
Acquisition, Executive shall provide evidence reasonably satisfactory to the
Company that such stockholder approval was obtained or it shall be presumed that
such stockholder approval was not obtained.

2.       COMPENSATION.

         2.1      SALARY. Executive shall receive a monthly base salary of
$31,667 (or $380,004 per year), payable semi-monthly in accordance with the
Company's payroll policies and subject to standard deductions and withholdings.

         2.2      ANNUAL INCENTIVE BONUS. Executive shall be eligible to earn an
annual incentive bonus in the target amount of one hundred percent (100%) of
Executive's then-current base salary, less standard withholdings and deductions
(the "Annual Incentive Bonus"). The amount of the Annual Incentive Bonus, if
any, will be determined by the Board in its sole discretion and may be increased
or reduced based on the Company's achievement of certain performance milestones
and financial targets for the calendar year, to be established by mutual
agreement between the Board and Executive within ninety (90) days of the
Employment Date. Any Annual Incentive Bonus Executive earns

                                       2.

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will be paid out in accordance with the Company's standard practice. To earn the
Annual Incentive Bonus, Executive must be employed by the Company as CEO
throughout the entire bonus year, and no prorated Annual Incentive Bonus can be
earned. Because Executive will be joining the Company during the middle of 2003,
Executive will only be eligible to receive up to one-half of the Annual
Incentive Bonus for 2003, as provided in this paragraph.

         2.3      STANDARD COMPANY BENEFITS. Executive shall be entitled to all
rights and benefits for which he is eligible under the terms and conditions of
the standard Company benefits and benefit plans which may be in effect from time
to time and provided by the Company to its executives generally.

         2.4      EQUITY COMPENSATION.

                  (a)      STOCK OPTION GRANT. Subject to approval by the Board,
Executive shall be granted an option to purchase seven hundred thousand
(700,000) shares of the Company's common stock, with a per share exercise price
equal to the fair market value of the Company's common stock based on the last
sale price of the Company's common stock on the date of grant, and subject to
the terms and conditions of the applicable plan documents and the related stock
option agreement (the "Option"). For the purposes of the foregoing, the Company
shall have the discretion to grant the Option from one or more plans, including,
without limitation, the 1999 Equity Incentive Plan or the Acquisition Equity
Incentive Plan. The Option shall vest as follows: twenty-five percent (25%) of
the shares subject to the Option shall vest on the first anniversary of the
Employment Date, with the remaining shares subject to the Option to vest in
equal portions on a monthly basis for thirty-six (36) months thereafter, during
Executive's active service with the Company such that the Option shall be fully
vested after four (4) years of continuous active service with the Company. The
Option shall be an incentive stock option to the maximum extent permitted by
applicable law.

                  (b)      RESTRICTED STOCK AWARD. Subject to the approval by
the Board, the Company shall grant Executive one hundred thousand (100,000)
shares of restricted stock in the Company, subject to the terms and conditions
of the governing plan documents and applicable purchase agreement (the
"Restricted Shares"). The Restricted Shares shall vest as follows: twenty-five
percent (25%) of the shares shall vest on the first anniversary of the
Employment Date, with the remaining shares to vest in equal portions on a
monthly basis for thirty-six (36) months thereafter, during Executive's active
service with the Company such that the Restricted Shares shall be fully vested
after four (4) years of continuous active service with the Company.
Notwithstanding the foregoing, in the event a vesting date occurs during a
period when Executive is restricted from selling shares of stock of the Company
due to restrictions contained in Company trading policies, the applicable
vesting date shall be postponed until the fifth (5th) day of the first "Open
Window" that occurs after the applicable vesting date. For the purposes of the
foregoing, "Open Window" means a time period when Executive may sell shares of
stock of the Company without any restriction from Company trading policies.

                                       3.

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3.       PROPRIETARY INFORMATION OBLIGATIONS.

         3.1      AGREEMENT. Executive will be required to sign and abide by the
Proprietary Information and Inventions Agreement attached hereto as Exhibit A.

         3.2      REMEDIES. Executive's duties under the Proprietary Information
and Inventions Agreement shall survive termination of his employment with the
Company. Executive acknowledges that a remedy at law for any breach or
threatened breach by him of the provisions of the Proprietary Information and
Inventions Agreement would be inadequate, and he 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      ACTIVITIES. Except with the prior written consent of the
Board, 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 his duties hereunder.

         4.2      INVESTMENTS AND INTERESTS. 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 to
the Company and its business or prospects, financial or otherwise.

         4.3      NON-COMPETITION. During the term of his employment by the
Company and for a period of one (1) year following the termination of
Executive's employment with 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 person, corporation, firm, partnership or other entity whatsoever that
competes directly with the Company, throughout the United States, in any line of
business engaged in (or planned to be engaged in) by the Company; provided,
however, that he may own, as a passive investor, securities of any competitor
corporation, so long as his direct holdings in any one such corporation shall
not in the aggregate constitute more than one percent (1%) of the voting stock
of such corporation.

5.       TERMINATION OF EMPLOYMENT.

         5.1      TERMINATION WITHOUT CAUSE.

                  (a)      TERMINATION. The Company shall have the right to
terminate Executive's employment with the Company at any time without Cause.

                  (b)      SEVERANCE BENEFITS. In the event Executive's
employment is terminated by the Company without Cause at any time other than
within thirteen (13)

                                       4.

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months following a Change in Control (as defined herein), and Executive signs a
release of claims in favor of the Company and allows that release to become
effective pursuant to Section 6 of this Agreement, then Executive shall receive
the following severance benefits: (i) an amount equivalent to his base salary
for eighteen (18) months from the date of termination, payable as salary
continuation in accordance with the Company's ordinarily scheduled payroll (less
standard payroll deductions and withholdings); (ii) reimbursement for his health
insurance premiums at his current rate of coverage for eighteen (18) months
following the termination of Company-paid group health insurance coverage,
provided Executive timely elects continued coverage under COBRA; and (iii) the
vesting of the Option and Restricted Shares (but not the Acquisition Restricted
Shares) shall be accelerated such that, in addition to the number of options and
shares vested as of the date of Executive's termination pursuant to terms of the
applicable plan documents and agreements, the number of options and shares that
would have vested over the eighteen (18) month period following such date of
termination had the Executive's employment not been terminated without Cause,
shall be deemed vested as of the date of termination.

                  (c)      NO OTHER COMPENSATION OR BENEFITS. In the event
Executive's employment is terminated without Cause, he will not be entitled to
any severance pay, pay in lieu of notice or other such compensation or benefits
except as provided in this Agreement.

         5.2      TERMINATION FOR CAUSE.

                  (a)      TERMINATION. The Company shall have the right to
terminate Executive's employment with the Company at any time for Cause.

                  (b)      DEFINITION OF CAUSE. Cause for termination shall
mean: (i) conduct that constitutes willful gross neglect or willful gross
misconduct in carrying out Executive's duties, resulting, in either case, in
material economic harm to the company, unless Executive believed in good faith
that such conduct was in, or not opposed to, the best interest of the Company;
(ii) any unjustified refusal to follow reasonable directives by the Board; or
(iii) conviction of a felony crime involving moral turpitude; provided, however,
that the Board shall provide written notice of its intent to terminate Executive
under (i) or (ii) above and Executive shall have a 30-day period to correct
Executive's actions, if such actions can be corrected.

                  (c)      NO COMPENSATION OR BENEFITS. In the event Executive's
employment is terminated by the Company at any time with Cause, he will not be
entitled to severance pay, pay in lieu of notice, accelerated vesting of equity
compensation, or any other compensation or benefits.

         5.3      RESIGNATION FOR GOOD REASON.

                  (a)      RESIGNATION. Executive may resign his employment for
Good Reason so long as he tenders his resignation of employment and membership
on the

                                       5.

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Board to the Company within sixty (60) days after the occurrence of the event
which forms the basis for termination for Good Reason. If Executive terminates
his employment for Good Reason at any time other than within thirteen (13)
months following a Change in Control (as defined herein), and Executive signs a
release of claims in favor of the Company and allows that release to become
effective pursuant to Section 6 of this Agreement, he shall receive the
following severance benefits: (i) an amount equivalent to his base salary for
eighteen (18) months from the date of termination, payable as salary
continuation in accordance with the Company's ordinarily scheduled payroll (less
standard payroll deductions and withholdings); (ii) reimbursement for his health
insurance premiums at his current rate of coverage for eighteen (18) months
following the termination of Company-paid group health insurance coverage,
provided Executive timely elects continued coverage under COBRA; and (iii) the
vesting of the Option and Restricted Shares (but not the Acquisition Restricted
Shares) shall be accelerated such that, in addition to the number of options and
shares vested as of the date of Executive's resignation pursuant to terms of the
applicable plan documents and agreements, the number of options and shares that
would have vested over the eighteen (18) month period following such date of
resignation had Executive not resigned, shall be deemed vested as of the
resignation date. The severance payments and health care reimbursement in
subsections (i) and (ii) above shall cease when Executive commences full-time
employment with another business entity. Executive hereby agrees to notify the
Company within three (3) business days of accepting such employment. If
Executive resigns without Good Reason, then he will not be entitled to any
severance benefits.

                  (b)      DEFINITION OF GOOD REASON. For purposes of this
Agreement, Good Reason shall mean any one of the following events occurs without
Executive's consent: (i) a substantial reduction of Executive's annual base
salary; (ii) a substantial reduction in the package of benefits and incentives,
taken as a whole, provided to Executive (although employee contributions may be
raised to the extent of any cost increases imposed by third parties), except to
the extent that such benefits and incentives of all other executive officers of
the Company are similarly reduced; or (iii) any substantial diminution of
Executive's duties, responsibilities, authority, or reporting structure, or (iv)
Executive is required to relocate to a working location such distance that a
relocation from current residence would be required.

         5.4      CHANGE IN CONTROL TERMINATION.

                  (a)      DEFINITION OF CHANGE IN CONTROL. For purposes of this
Agreement, Change in Control means the occurrence of any of the following:

                           (i)      a sale of substantially all of the assets of
the Company;

                           (ii)     a merger or consolidation in which the
Company is not the surviving corporation (other than a merger or consolidation
in which the Company's stockholders immediately before the merger or
consolidation have, immediately after the merger or consolidation, more than
fifty percent (50%) of the voting power of the surviving corporation);

                                       6.

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                           (iii)    a reverse merger in which the Company is the
surviving corporation but the shares of the Company's common stock outstanding
immediately preceding the merger are either not converted or by virtue of the
merger are converted into other property, whether in the form of securities,
cash or otherwise, in each case in which the Company's stockholders immediately
before the merger do not have, immediately after the merger, more than fifty
percent (50%) of the voting power of the Company; or

                           (iv)     any transaction or series of related
transactions in which in excess of fifty percent (50%) of the Company's voting
power is transferred.

                  (b)      TERMINATION AFTER A CHANGE IN CONTROL. In the event
Executive's employment with the Company is terminated without Cause, or
Executive suffers a Constructive Termination, within thirteen (13) months
following a Change in Control, and Executive signs a release of claims in favor
of the Company and allows that release to become effective pursuant to Section 6
of this Agreement, then Executive shall receive the following severance
benefits: (i) an amount equivalent to his base salary for eighteen (18) months
from the date of termination, payable as salary continuation in accordance with
the Company's ordinarily scheduled payroll (less standard payroll deductions and
withholdings); (ii) reimbursement for his health insurance premiums at his
current rate of coverage for eighteen (18) months following the termination of
Company-paid group health insurance coverage, provided Executive timely elects
continued coverage under COBRA; and (iii) the vesting of the Option and
Restricted Shares (but not the Acquisition Restricted Shares) shall be
accelerated such that in addition to the number of options and shares vested as
of the date of termination pursuant to terms of the applicable plan documents
and agreements, the number of options and shares that would have vested over the
thirty (30) month period following such date of termination had the Executive's
employment not been terminated without Cause, shall be deemed vested as of the
date of termination. The severance payments and health care reimbursement in
subsections (i) and (ii) above shall cease when Executive commences full-time
employment with another business entity. Executive hereby agrees to notify the
Company within three (3) business days of accepting such employment. Executive
understands and agrees that the benefits he is eligible to receive under this
Section 5.4(b) are being provided to him in lieu of any benefits he would
otherwise be entitled to receive under the Company's Change of Control Senior
Management Severance/Equity Acceleration Plan, and that Executive shall not be
entitled to any benefits under that plan under any circumstances.

                  (c)      DEFINITION OF CONSTRUCTIVE TERMINATION. For purposes
of this Agreement, Constructive Termination shall mean either (i) a material
reduction in Executive's duties, responsibilities or position, or (ii) a
material reduction in Executive's compensation or benefits, except for
reductions in compensation and benefits that are concurrent with and consistent
with reductions for all executives of the acquiring or surviving corporation.
Constructive Termination is triggered by Executive's actual resignation within
thirty (30) days of the above change.

                                       7.

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                  (d)      TERMINATION WITH CAUSE OR NO CONSTRUCTIVE
TERMINATION. In the event Executive is terminated with Cause, or resigns without
having suffered a Constructive Termination, following a Change in Control, then
Executive will not be entitled to severance pay, pay in lieu of notice,
accelerated vesting of equity compensation, or any other such compensation or
benefits.

                  (e)      PARACHUTE PAYMENTS. If any cash compensation payment,
employee benefits or acceleration of vesting of stock options or other stock
awards Executive would receive in connection with a Change in Control
("Payment") would (i) constitute a "parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and
(ii) but for this sentence, be subject to the excise tax imposed by Section 4999
of the Code (the "Excise Tax"), then such Payment shall be reduced to the
Reduced Amount. The "Reduced Amount" shall be either (x) the largest portion of
the Payment that would result in no portion of the Payment being subject to the
Excise Tax or (y) the largest portion, up to and including the total, of the
Payment, whichever amount, after taking into account all applicable federal,
state and local employment taxes, income taxes, and the Excise Tax (all computed
at the highest applicable marginal rate), results in Executive's receipt, on an
after-tax basis, of the greater amount of the Payment notwithstanding that all
or some portion of the Payment may be subject to the Excise Tax. If a reduction
in payments or benefits constituting "parachute payments" is necessary so that
the Payment equals the Reduced Amount, reduction shall occur in the following
order unless the Executive elects in writing a different order (provided,
however, that such election shall be subject to Company approval if made on or
after the effective date of Executive's termination of employment): reduction of
cash payments, reduction of employee benefits, and cancellation of accelerated
vesting of stock awards. In the event that acceleration of vesting of stock
award compensation is to be reduced, such acceleration of vesting shall be
cancelled in the reverse order of the date of grant of the Executive's stock
awards unless the Executive elects in writing a different order for
cancellation.

The accounting firm engaged by the Company for general audit purposes as of the
day prior to the effective date of the Executive's termination of employment
shall perform the foregoing calculations. If the accounting firm so engaged by
the Company is serving as accountant or auditor for the individual, entity or
group effecting a change in ownership or effective control of the Company, the
Company shall appoint a nationally recognized accounting firm to make the
determinations required hereunder. The Company shall bear all expenses with
respect to the determinations by such accounting firm required to be made
hereunder.

The accounting firm engaged to make the determinations hereunder shall provide
its calculations, together with detailed supporting documentation, to the
Company and Executive within fifteen (15) calendar days after the date on which
Executive's right to a Payment arises (if requested at that time by the Company
or Executive) or at such other time as requested by the Company or Executive. If
the accounting firm determines that no Excise Tax is payable with respect to a
Payment, either before or after the application of the Reduced Amount, it shall
furnish the Company and Executive with an opinion

                                       8.

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reasonably acceptable to Executive that no Excise Tax will be imposed with
respect to such Payment. Any good faith determination of the accounting firm
made hereunder shall be final, binding and conclusive upon the Company and
Executive.

6.       RELEASE. Within thirty (30) days following the termination of
Executive's employment, Executive shall provide the Company with an executed and
effective general release substantially in the form attached hereto as Exhibit B
(the "Release"), as a condition of receipt of any severance benefits provided
under Section 5 of this Agreement. Unless the Release is executed by Executive
and becomes fully effective under the terms set forth in the Release, no
severance shall be payable to Executive, he shall not be entitled to health care
reimbursement, any acceleration of shares provided in this Agreement shall not
apply, and Executive shall only have the right to exercise shares following the
date of his termination as provided in the applicable plan documents and
applicable agreements. The Company will also provide a similar release to the
Executive in the form attached hereto as Exhibit B

7.       NONINTERFERENCE. While employed by the Company, and for one (1) year
immediately following his employment termination date, Executive agrees not to
interfere with the business of the Company by soliciting, attempting to solicit,
inducing, or otherwise causing any employee of the Company to terminate his or
her employment in order to become an employee, consultant or independent
contractor to or for any competitor of the Company, or directly or indirectly
soliciting the business of any customer of the Company which at the time of
Executive's termination or one year immediately prior thereto was listed on the
Company's customer list.

8.       INDEMNIFICATION. Executive shall receive indemnification as a corporate
officer and director of the Company to the maximum extent extended to the other
officers and directors of the Company. Executive shall also be covered by the
Company's directors and officers insurance policy.

9.       GENERAL PROVISIONS.

         9.1      NOTICES. Any notices provided hereunder must be in writing and
shall be deemed effective upon the earlier of personal delivery (including
personal delivery by fax) or the third day after mailing by first class mail, to
the Company at its primary office location and to Executive at his address as
listed on the Company payroll.

         9.2      SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction to the extent possible in
keeping with the intent of the parties.

                                       9.

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         9.3      WAIVER. If either party should waive any breach of any
provisions of this Agreement, he or it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.

         9.4      COMPLETE AGREEMENT. This Agreement and its Exhibits,
constitute the entire agreement between Executive and the Company and it is the
complete, final, and exclusive embodiment of their agreement with regard to this
subject matter. It is entered into without reliance on any promise or
representation other than those expressly contained herein, supersedes any other
agreements or promises made to Executive by anyone, whether oral or written, and
cannot be modified or amended except in a writing signed by an officer of the
Company. No provision of this Agreement, including, without limitation, Sections
5.1(c), 5.2(c), 5.3(a) and 5.4(d), shall restrict or limit in any manner the
entitlement of Executive to benefits pursuant to the Stay Incentive Agreement,
dated December 30, 2002, between Zymark and Executive.

         9.5      COUNTERPARTS. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.

         9.6      HEADINGS. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.

         9.7      SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors, assigns, heirs, executors and administrators,
except that Executive may not assign any of his duties hereunder and he may not
assign any of his rights hereunder without the written consent of the Company,
which shall not be withheld unreasonably.

         9.8      ATTORNEYS' FEES. If either party hereto brings any action to
enforce his or its rights hereunder, neither party shall be entitled to recover
from the other party his or its attorneys' fees and costs incurred in connection
with such action.

         9.9      CHOICE OF LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the law of the
Commonwealth of Massachusetts.

                                      10.

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.

                                    CALIPER TECHNOLOGIES CORP.

                                    By: /s/ Daniel L. Kisner
                                        ----------------------------------
                                            Daniel L. Kisner, M.D.
                                            Chairman of the Board of Directors

                                    Date: June 8, 2003

Accepted and agreed this
8th day of June, 2003.

KEVIN HRUSOVSKY, AN INDIVIDUAL

/s/ Kevin Hrusovsky
--------------------------------

FINAL VERSION, JUNE 8, 2003

                                      11.

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                                    EXHIBIT A

                PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

                           CALIPER TECHNOLOGIES CORP.

                        EMPLOYEE PROPRIETARY INFORMATION
                            AND INVENTIONS AGREEMENT

      In consideration of my employment or continued employment by CALIPER
TECHNOLOGIES CORP. (the "COMPANY"), and the compensation now and hereafter paid
to me, I hereby agree as follows:

1.    NONDISCLOSURE

      1.1 RECOGNITION OF COMPANY'S RIGHTS; NONDISCLOSURE. At all times during my
employment and thereafter, I will hold in strictest confidence and will not
disclose, use, lecture upon or publish any of the Company's Proprietary
Information (defined below), except as such disclosure, use or publication may
be required in connection with my work for the Company, or unless an officer of
the Company expressly authorizes such in writing. I will obtain Company's
written approval before publishing or submitting for publication any material
(written, verbal, or otherwise) that relates to my work at Company and/or
incorporates any Proprietary Information. I hereby assign to the Company any
rights I may have or acquire in such Proprietary Information and recognize that
all Proprietary Information shall be the sole property of the Company and its
assigns.

      1.2 PROPRIETARY INFORMATION. The term "PROPRIETARY INFORMATION" shall mean
any and all confidential and/or proprietary knowledge, data or information of
the Company. By way of illustration but not limitation, "PROPRIETARY
INFORMATION" includes (a) trade secrets, inventions, ideas, processes, formulas,
products, formulations, developmental or experimental work, publications,
clinical data, test data, methods, samples, media and/or call lines, other works
of authorship, know-how, improvements, discoveries, developments, designs and
techniques (hereinafter collectively referred to as "INVENTIONS"); and (b)
information regarding plans for research, development, new products, marketing
and selling, business plans, budgets and unpublished financial statements,
licenses, prices and costs, suppliers and customers; and (c) information
regarding the skills and compensation of other employees of the Company.
Notwithstanding the foregoing, it is understood that, at all such times, I am
free to use information which is generally known in the trade or industry, which
is not gained as result of a breach of this Agreement, and my own, skill,
knowledge, know-how and experience to whatever extent and in whichever way I
wish.

      1.3 THIRD PARTY INFORMATION. I understand, in addition, that the Company
has received and in the future will receive from third parties confidential or
proprietary information ("THIRD PARTY INFORMATION") subject to a duty on the
Company's part to maintain the confidentiality of such information and to use it
only for certain limited purposes. During the term of my employment and
thereafter, I will hold Third Party Information in the strictest confidence and
will not disclose to anyone (other than Company personnel who need to know such
information in connection with their work for the Company) or use, except in
connection with my work for the Company, Third Party Information unless
expressly authorized by an officer of the Company in writing.

      1.4 NO IMPROPER USE OF INFORMATION OF PRIOR EMPLOYERS AND OTHERS. During
my employment by the Company I will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employer or any
other person to whom I have an obligation of confidentiality, and I will not
bring onto the premises of the Company any unpublished documents or any property
belonging to any former employer or any other person to whom I have an
obligation of confidentiality unless consented to in writing by that former
employer or person. I will use in the performance of my duties only information
which is generally known and used by persons with training and experience
comparable to my own, which is common knowledge in the industry or otherwise
legally in the public domain, or which is otherwise provided or developed by the
Company.

2.    ASSIGNMENT OF INVENTIONS.

      2.1 PROPRIETARY RIGHTS. The term "PROPRIETARY RIGHTS" shall mean all trade
secret, patent, copyright, mask work and other intellectual property rights
throughout the world.

      2.2 PRIOR INVENTIONS. Inventions, if any, patented or unpatented, which I
made prior to the commencement of my employment with the Company are excluded
from the scope of this Agreement. To preclude any possible uncertainty, I have
set forth on Exhibit B (Previous Inventions) attached hereto a complete list of
all Inventions that I have, alone or jointly with others, conceived, developed
or reduced to practice or caused to be conceived, developed or reduced to
practice prior to the commencement of my employment with the Company, that I
consider to be my property or the property of third parties and that I wish to


                                       1
<PAGE>
have excluded from the scope of this Agreement (collectively referred to as
"PRIOR INVENTIONS"). If disclosure of any such Prior Invention would cause me to
violate any prior confidentiality agreement, I understand that I am not to list
such Prior Inventions in Exhibit B but am only to disclose a cursory name for
each such invention, a listing of the party(ies) to whom it belongs and the fact
that full disclosure as to such inventions has not been made for that reason. A
space is provided on Exhibit B for such purpose. If no such disclosure is
attached, I represent that there are no Prior Inventions. If, in the course of
my employment with the Company, I incorporate a Prior Invention into a Company
product, process or machine, the Company is hereby granted and shall have a
nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with
rights to sublicense through multiple tiers of sublicensees) to make, have made,
modify, use and sell such Prior Invention. Notwithstanding the foregoing, I
agree that I will not incorporate, or permit to be incorporated, Prior
Inventions in any Company Inventions without the Company's prior written
consent.

      2.3 ASSIGNMENT OF INVENTIONS. Subject to Sections 2.4, and 2.6, I hereby
assign and agree to assign in the future (when any such Inventions or
Proprietary Rights are first reduced to practice or first fixed in a tangible
medium, as applicable) to the Company all my right, title and interest in and to
any and all Inventions (and all Proprietary Rights with respect thereto) whether
or not patentable or registrable under copyright or similar statutes, made or
conceived or reduced to practice or learned by me, either alone or jointly with
others, during the period of my employment with the Company. Inventions assigned
to the Company, or to a third party as directed by the Company pursuant to this
Section 2, are hereinafter referred to as "COMPANY INVENTIONS."

      2.4 NONASSIGNABLE INVENTIONS. This Agreement does not apply to an
Invention which qualifies fully as a nonassignable Invention under Section 2870
of the California Labor Code (hereinafter "SECTION 2870"). I have reviewed the
notification on Exhibit A (Limited Exclusion Notification) and agree that my
signature acknowledges receipt of the notification.

      2.5 OBLIGATION TO KEEP COMPANY INFORMED. During the period of my
employment and for six (6) months after termination of my employment with the
Company, I will promptly disclose to the Company fully and in writing all
Inventions authored, conceived or reduced to practice by me, either alone or
jointly with others. In addition, I will promptly disclose to the Company all
patent applications filed by me or on my behalf within a year after termination
of employment. At the time of each such disclosure, I will advise the Company in
writing of any Inventions that I believe fully qualify for protection under
Section 2870; and I will at that time provide to the Company in writing all
evidence necessary to substantiate that belief. The Company will keep in
confidence and will not use for any purpose or disclose to third parties without
my consent any confidential information disclosed in writing to the Company
pursuant to this Agreement relating to Inventions that qualify fully for
protection under the provisions of Section 2870. I will preserve the
confidentiality of any Invention that does not fully qualify for protection
under Section 2870.

      2.6 GOVERNMENT OR THIRD PARTY. I also agree to assign all my right, title
and interest in and to any particular Invention to a third party, including
without limitation the United States, as directed by the Company.

      2.7 WORKS FOR HIRE. I acknowledge that all original works of authorship
which are made by me (solely or jointly with others) within the scope of my
employment and which are protectable by copyright are "works made for hire,"
pursuant to United States Copyright Act (17 U.S.C., Section 101).

      2.8 ENFORCEMENT OF PROPRIETARY RIGHTS. I will assist the Company in every
proper way to obtain, and from time to time enforce, United States and foreign
Proprietary Rights relating to Company Inventions in any and all countries. To
that end I will execute, verify and deliver such documents and perform such
other acts (including appearances as a witness) as the Company may reasonably
request for use in applying for, obtaining, perfecting, evidencing, sustaining
and enforcing such Proprietary Rights and the assignment thereof. In addition, I
will execute, verify and deliver assignments of such Proprietary Rights to the
Company or its designee. My obligation to assist the Company with respect to
Proprietary Rights relating to such Company Inventions in any and all countries
shall continue beyond the termination of my employment, but the Company shall
compensate me at a reasonable rate after my termination for the time actually
spent by me at the Company's request on such assistance.

      In the event the Company is unable for any reason, after reasonable
effort, to secure my signature on any document needed in connection with the
actions specified in the preceding paragraph, I hereby irrevocably designate and
appoint the Company and its duly authorized officers and agents as my agent and
attorney in fact, which appointment is coupled with an interest, to act for and
in my behalf to execute, verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of the preceding paragraph with
the same legal force and effect as if executed by me. I hereby waive and
quitclaim to the Company any and all claims, of any nature whatsoever,


                                       2
<PAGE>
which I now or may hereafter have for infringement of any Proprietary Rights
assigned hereunder to the Company.

3.    RECORDS. I agree to keep and maintain adequate and current records (in the
form of notes, sketches, drawings and in any other form that may be required by
the Company) of all Proprietary Information developed by me and all Inventions
made by me during the period of my employment at the Company, which records
shall be available to and remain the sole property of the Company at all times.

4.    ADDITIONAL ACTIVITIES. I agree that during the period of my employment by
the Company I will not, without the Company's express written consent, engage in
any employment or business activity which is competitive with, or would
otherwise conflict with, my employment by the Company. I agree further that for
the period of my employment by the Company and for one (l) year after the date
of termination of my employment by the Company I will not induce any employee of
the Company to leave the employ of the Company.

5.    NO CONFLICTING OBLIGATION. I represent that my performance of all the
terms of this Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence information acquired by me in
confidence or in trust prior to my employment by the Company. I have not entered
into, and I agree I will not enter into, any agreement either written or oral in
conflict herewith.

6.    RETURN OF COMPANY DOCUMENTS. When I leave the employ of the Company, I
will deliver to the Company any and all drawings, notes, memoranda,
specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Company Inventions,
Third Party Information or Proprietary Information of the Company. I further
agree that any property situated on the Company's premises and owned by the
Company, including disks and other storage media, filing cabinets or other work
areas, is subject to inspection by Company personnel at any time with or without
notice. Prior to leaving, I will cooperate with the Company in completing and
signing the Company's termination statement.

7.    LEGAL AND EQUITABLE REMEDIES. Because my services are personal and unique
and because I may have access to and become acquainted with the Proprietary
Information of the Company, the Company shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or other
equitable relief, without bond and without prejudice to any other rights and
remedies that the Company may have for a breach of this Agreement.

8.    NOTICES. Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified below or at such other address as the
party shall specify in writing. Such notice shall be deemed given upon personal
delivery to the appropriate address or if sent by certified or registered mail,
three (3) days after the date of mailing.

9.    NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ of the
Company, I hereby consent to the notification of my new employer of my rights
and obligations under this Agreement.

10.   GENERAL PROVISIONS.

      10.1 GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This Agreement will
be governed by and construed according to the laws of the State of California,
as such laws are applied to agreements entered into and to be performed entirely
within California between California residents. I hereby expressly consent to
the personal jurisdiction of the state and federal courts located in Santa Clara
County, California for any lawsuit filed there against me by Company arising
from or related to this Agreement.

      10.2 SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If moreover, any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to duration, geographical scope, activity or subject, it shall be construed
by limiting and reducing it, so as to be enforceable to the extent compatible
with the applicable law as it shall then appear.

      10.3 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives and will be for the
benefit of the Company, its successors, and its assigns.

      10.4 SURVIVAL. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the Company
to any successor in interest or other assignee.

      10.5 EMPLOYMENT. I agree and understand that the employment relationship
between me and the company is voluntary and without any fixed term and therefore
may be terminated with or without cause by either party at any time in its sole
discretion.


                                       3
<PAGE>
      10.6 WAIVER. No waiver by the Company of any breach of this Agreement
shall be a waiver of any preceding or succeeding breach. No waiver by the
Company of any right under this Agreement shall be construed as a waiver of any
other right. The Company shall not be required to give notice to enforce strict
adherence to all terms of this Agreement.

      10.7 ENTIRE AGREEMENT. The obligations pursuant to Sections 1 and 2 of
this Agreement shall apply to any time during which I was previously employed,
or am in the future employed, by the Company as a consultant if no other
agreement governs nondisclosure and assignment of inventions during such period.
This Agreement is the final, complete and exclusive agreement of the parties
with respect to the subject matter hereof and supersedes and merges all prior
discussions between us. No modification of or amendment to this Agreement, nor
any waiver of any rights under this Agreement, will be effective unless in
writing and signed by the party to be charged. Any subsequent change or changes
in my duties, salary or compensation will not affect the validity or scope of
this Agreement.

      This Agreement shall be effective as of the first day of my employment
with the Company, namely: _____________, 20____.

      I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY FILLED OUT EXHIBIT B TO THIS AGREEMENT.

Dated:
      ------------------------


---------------------------------------
SIGNATURE


---------------------------------------
(PRINTED NAME)

ACCEPTED AND AGREED TO:

CALIPER TECHNOLOGIES CORP.

By:
   ------------------------------------

Title:
      ---------------------------------

605 Fairchild Drive
---------------------------------------
(Address)

Mountain View, CA 94043
---------------------------------------


                                       4
<PAGE>
                                    EXHIBIT A

                         LIMITED EXCLUSION NOTIFICATION

      THIS IS TO NOTIFY you in accordance with Section 2872 of the California
Labor Code that the foregoing Agreement between you and the Company does not
require you to assign or offer to assign to the Company any invention that you
developed entirely on your own time without using the Company's equipment,
supplies, facilities or trade secret information except for those inventions
that either:

      (1) Relate at the time of conception or reduction to practice of the
invention to the Company's business, or actual or demonstrably anticipated
research or development of the Company;

      (2) Result from any work performed by you for the Company.

      To the extent a provision in the foregoing Agreement purports to require
you to assign an invention otherwise excluded from the preceding paragraph, the
provision is against the public policy of this state and is unenforceable.

      This limited exclusion does not apply to any patent or invention covered
by a contract between the Company and the United States or any of its agencies
requiring full title to such patent or invention to be in the United States.

      I ACKNOWLEDGE RECEIPT of a copy of this notification.

                                       By:
                                          --------------------------------------
                                                      (Printed Name of Employee)

                                       Date:
                                            ------------------------------------



WITNESSED BY:


----------------------------------------
(Printed Name of Representative)

Dated:
      -------------------------


                                      A-1.
<PAGE>
                                    EXHIBIT B

   TO:         CALIPER TECHNOLOGIES CORP.

   FROM:
               ----------------------------
   DATE:
               ----------------------------

SUBJECT:       PREVIOUS INVENTIONS

         1. Except as listed in Section 2 below, the following is a complete
list of all inventions or improvements relevant to the subject matter of my
employment by Caliper Technologies Corp. (the "COMPANY") that have been made or
conceived or first reduced to practice by me alone or jointly with others prior
to my engagement by the Company:

     [ ] No inventions or improvements.

     [ ] See below:

         ---------

         ---------

         ---------


[ ]  Additional sheets attached.


      2. Due to a prior confidentiality agreement, I cannot complete the
disclosure under Section 1 above with respect to inventions or improvements
generally listed below, the proprietary rights and duty of confidentiality with
respect to which I owe to the following party(ies):

     INVENTION OR IMPROVEMENT          PARTY(IES)          RELATIONSHIP
     ------------------------          ----------          ------------
1.
     ------------------------          ----------          ------------
2.
     ------------------------          ----------          ------------
3.
     ------------------------          ----------          ------------

[ ] Additional sheets attached.


                                      B-1.
<PAGE>

                                    EXHIBIT B

                                RELEASE AGREEMENT

I understand that my position with Caliper Technologies Corp. (the "Company")
terminated effective ___________, 20__ (the "Separation Date"). The Company has
agreed that if I choose to sign this Release, the Company will provide me with
certain severance benefits pursuant to the terms of the Key Employee Agreement
(the "Agreement") between myself and the Company, and any agreements
incorporated therein by reference. I understand that I am not entitled to such
benefits unless I sign this Release and it becomes fully effective. I understand
that, regardless of whether I sign this Release, the Company will pay me all of
my accrued salary and vacation through the Separation Date, to which I am
entitled by law.

In consideration for the severance benefits I am receiving under the Agreement,
I hereby release the Company, its affiliates and its and their respective
officers, directors, agents, attorneys, employees, shareholders, parents,
subsidiaries, and affiliates from any and all claims, liabilities, demands,
causes of action, attorneys' fees, damages, or obligations of every kind and
nature, whether they are now known or unknown, arising at any time prior to and
including the date I sign this Release. This general release includes, but is
not limited to: all federal and state statutory and common law claims related to
my employment or the termination of my employment or related to all claims for
breach of contract, tort, wrongful termination, discrimination, wages or
benefits, or claims for any form of equity or compensation. Notwithstanding the
release in the preceding sentence, I am not releasing any right of
indemnification I may have in my capacity as an employee, officer and/or
director of the Company pursuant to any express indemnification agreement, nor
am I releasing any rights I may have as an owner and/or holder of the Company's
common stock and stock options.

In releasing claims unknown to me at present, I am waiving all rights and
benefits under Section 1542 of the California Civil Code, and any law or legal
principle of similar effect in any jurisdiction: "A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

If I am forty (40) years of age or older as of the Separation Date, I
acknowledge that I am knowingly and voluntarily waiving and releasing any rights
I may have under the Federal Age Discrimination in Employment Act of 1967, as
amended ("ADEA"). I also acknowledge that the consideration given for the
release and waiver herein is in addition to anything of value to which I was
already entitled. I have been advised by this writing, as required by the ADEA
that: (a) my waiver and release do not apply to any claims that may arise after
my signing of this Release; (b) I should consult with an attorney prior to
executing this Release; (c) I have twenty-one (21) days within which to consider
this Release (although I may choose to voluntarily execute this Release
earlier); (d) I have seven (7) days following the execution of this Release to
revoke the Release; and (e) this Release will not be effective until the eighth
day after this Release has been signed both by me and by the Company.

The Company hereby releases, acquits and forever discharges you and your agents,
successors, assigns, attorneys and affiliates from any and all claims,
liabilities, demands, causes of action,

<PAGE>

costs, expenses, attorneys' fees, damages, indemnities and obligations of any
kind and nature, in law, equity or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed, arising out of or in any way related to
agreements, events, acts or conduct at any time within the authorized course and
scope of your employment with the Company.

         Agreed:

         CALIPER TECHNOLOGIES CORP.               KEVIN HRUSOVSKY, AN INDIVIDUAL

         By:_______________________________       ______________________________
            Daniel L. Kisner, M.D.
            Chairman of the Board of Directors

            Date:                                 Date: