Document:

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                           ROSETTA INPHARMATICS, INC.

                                 2000 STOCK PLAN

         1.  PURPOSES OF THE PLAN.  The purposes of this 2000 Stock Plan are
to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants and to promote the success of the Company's business. Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code and the
regulations promulgated thereunder.

         2.  DEFINITIONS.  As used herein, the following definitions shall
apply:

             (a)  "ADMINISTRATOR" means the Board or its Committee appointed
pursuant to Section 4 of the Plan.

             (b)  "AFFILIATE" means an entity other than a Subsidiary (as
defined below) which, together with the Company, is under common control of a
third person or entity.

             (c)  "APPLICABLE LAWS" means the legal requirements relating to
the administration of stock option and restricted stock purchase plans under
applicable U.S. state corporate laws, U.S. federal and applicable state
securities laws, the Code, any Stock Exchange rules or regulations and the
applicable laws of any other country or jurisdiction where Options are
granted under the Plan, as such laws, rules, regulations and requirements
shall be in place from time to time.

             (d)  "BOARD" means the Board of Directors of the Company.

             (e)  "CAUSE" for termination of a Participant's Continuous
Service Status will exist if the Participant is terminated for any of the
following reasons: (i) Participant's willful failure substantially to perform
his or her duties and responsibilities to the Company or deliberate violation
of a Company policy; (ii) Participant's commission of any act of fraud,
embezzlement, dishonesty or any other willful misconduct that has caused or
is reasonably expected to result in material injury to the Company; (iii)
unauthorized use or disclosure by Participant of any proprietary information
or trade secrets of the Company or any other party to whom the Participant
owes an obligation of nondisclosure as a result of his or her relationship
with the Company; or (iv) Participant's willful breach of any of his or her
obligations under any written agreement or covenant with the Company. The
determination as to whether a Participant is being terminated for Cause shall
be made in good faith by the Company and shall be final and binding on the
Participant. The foregoing definition does not in any way limit the Company's
ability to terminate a Participant's employment or consulting relationship at
any time as provided in Section 5(d) below, and the term "Company" will be
interpreted to include any Subsidiary, Parent, Affiliate or successor
thereto, if appropriate.

             (f)  "CHANGE OF CONTROL" means a sale of all or substantially
all of the Company's assets, or any merger or consolidation of the Company
with or into another

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corporation other than a merger or consolidation in which the holders of more
than 50% of the shares of capital stock of the Company outstanding
immediately prior to such transaction continue to hold (either by the voting
securities remaining outstanding or by their being converted into voting
securities of the surviving entity) more than 50% of the total voting power
represented by the voting securities of the Company, or such surviving
entity, outstanding immediately after such transaction.

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

             (h)  "COMMITTEE" means one or more committees or subcommittees
of the Board appointed by the Board to administer the Plan in accordance with
Section 4 below.

             (i)  "COMMON STOCK" means the Common Stock of the Company.

             (j)  "COMPANY" means Rosetta Inpharmatics, Inc., a Delaware
corporation.

             (k)  "CONSULTANT" means any person, including an advisor, who is
engaged by the Company or any Parent, Subsidiary or Affiliate to render
services and is compensated for such services, and any director of the
Company whether compensated for such services or not.

             (l)  "CONTINUOUS SERVICE STATUS" means the absence of any
interruption or termination of service as an Employee or Consultant.
Continuous Service Status as an Employee or Consultant shall not be
considered interrupted in the case of: (i) sick leave; (ii) military leave;
(iii) any other leave of absence approved by the Administrator, provided that
such leave is for a period of not more than ninety (90) days, unless
reemployment upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to Company policy adopted from
time to time; or (iv) in the case of transfers between locations of the
Company or between the Company, its Parents, Subsidiaries, Affiliates or
their respective successors. A change in status from an Employee to a
Consultant or from a Consultant to an Employee will not constitute an
interruption of Continuous Service Status.

             (m)  "CORPORATE TRANSACTION" means a sale of all or
substantially all of the Company's assets, or a merger, consolidation or
other capital reorganization of the Company with or into another corporation
and includes a Change of Control.

             (n)  "DIRECTOR" means a member of the Board.

             (o)  "EMPLOYEE" means any person employed by the Company or any
Parent, Subsidiary or Affiliate, with the status of employment determined
based upon such factors as are deemed appropriate by the Administrator in its
discretion, subject to any requirements of the Code or the Applicable Laws.
The payment by the Company of a director's fee to a Director shall not be
sufficient to constitute "employment" of such Director by the Company.

             (p)  "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.

             (q)  "FAIR MARKET VALUE" means, as of any date, the fair market
value of the Common Stock, as determined by the Administrator in good faith
on such basis as it deems

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appropriate and applied consistently with respect to Participants. Whenever
possible, the determination of Fair Market Value shall be based upon the
closing price for the Shares as reported in the WALL STREET JOURNAL for the
applicable date.

             (r)  "INCENTIVE STOCK OPTION" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code, as designated in the applicable Option Agreement.

             (s)  "INVOLUNTARY TERMINATION" means termination of a
Participant's Continuous Service Status under the following circumstances:
(i) termination without Cause by the Company or a Subsidiary, Parent,
Affiliate or successor thereto, as appropriate; or (ii) voluntary termination
by the Participant within 30 days following (A) a material reduction in the
Participant's job responsibilities, provided that neither a mere change in
title alone nor reassignment following a Change of Control to a position that
is substantially similar to the position held prior to the Change of Control
shall constitute a material reduction in job responsibilities; (B) relocation
by the Company or a Subsidiary, Parent, Affiliate or successor thereto, as
appropriate, of the Participant's work site to a facility or location more
than 75 miles from the Participant's principal work site for the Company at
the time of the Change of Control; or (C) a reduction in Participant's
then-current base salary by at least 25%, provided that an across-the-board
reduction in the salary level of all other employees or consultants in
positions similar to the Participant's by the same percentage amount as part
of a general salary level reduction shall not constitute such a salary
reduction.

             (t)  "LISTED SECURITY" means any security of the Company that is
listed or approved for listing on a national securities exchange or
designated or approved for designation as a national market system security
on an interdealer quotation system by the National Association of Securities
Dealers, Inc.

             (u)  "NAMED EXECUTIVE" means any individual who, on the last day
of the Company's fiscal year, is the chief executive officer of the Company
(or is acting in such capacity) or among the four most highly compensated
officers of the Company (other than the chief executive officer). Such
officer status shall be determined pursuant to the executive compensation
disclosure rules under the Exchange Act.

             (v)  "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable Option
Agreement.

             (w)  "OPTION" means a stock option granted pursuant to the Plan.

             (x)  "OPTION AGREEMENT" means a written document, the form(s) of
which shall be approved from time to time by the Administrator, reflecting
the terms of an Option granted under the Plan and includes any documents
attached to or incorporated into such Option Agreement, including, but not
limited to, a notice of stock option grant and a form of exercise notice.

             (y)  "OPTION EXCHANGE PROGRAM" means a program approved by the
Administrator whereby outstanding Options are exchanged for Options with a
lower exercise

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price or are amended to decrease the exercise price as a result of a decline
in the Fair Market Value of the Common Stock.

             (z)  "OPTIONED STOCK" means the Common Stock subject to an
Option.

             (aa)  "OPTIONEE" means an Employee or Consultant who receives an
Option.

             (bb)  "PARENT" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code, or any
successor provision.

             (cc)  "PARTICIPANT" means any holder of one or more Options, or
the Shares issuable or issued upon exercise of such Options, under the Plan.

             (dd)  "PLAN" means this 2000 Stock Plan.

             (ee)  "REPORTING PERSON" means an officer, Director, or greater
than ten percent stockholder of the Company within the meaning of Rule 16a-2
under the Exchange Act, who is required to file reports pursuant to Rule
16a-3 under the Exchange Act.

             (ff)  "RULE 16b-3" means Rule 16b-3 promulgated under the
Exchange Act, as amended from time to time, or any successor provision.

             (gg)  "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 14 of the Plan.

             (hh)  "STOCK EXCHANGE" means any stock exchange or consolidated
stock price reporting system on which prices for the Common Stock are quoted
at any given time.

             (ii)  "SUBSIDIARY" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code, or any
successor provision.

             (jj)  "TEN PERCENT HOLDER" means a person who owns stock
representing more than ten percent (10%) of the voting power of all classes
of stock of the Company or any Parent or Subsidiary.

         3.  STOCK SUBJECT TO THE PLAN.  Subject to the provisions of Section
14 of the Plan, the maximum aggregate number of Shares that may be sold under
the Plan is 5,286,913 Shares of Common Stock, plus an annual increase on the
first day of each of the Company's fiscal years beginning in 2001 and ending
in 2009 equal to the lesser of (a) 1,200,000 Shares, (b) four (4%) percent of
the Shares outstanding on the last day of the immediately preceding fiscal
year, or (c) such lesser number of Shares as the Board shall determine. The
Shares may be authorized, but unissued, or reacquired Common Stock. If an
award should expire or become unexercisable for any reason without having
been exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased Shares that were subject thereto shall, unless the
Plan shall have been terminated, become available for future grant under the
Plan. In addition, any Shares of Common Stock which are retained by the
Company upon exercise of an award in order to satisfy any withholding taxes
due with respect to such exercise or purchase shall be treated as not issued
and shall continue to be available under the Plan. Shares issued under the
Plan and later

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repurchased by the Company pursuant to any repurchase right which the Company
may have shall not be available for future grant under the Plan.

         4.  ADMINISTRATION OF THE PLAN.

             (a)  GENERAL.  The Plan shall be administered by the Board or a
Committee, or a combination thereof, as determined by the Board. The Plan may
be administered by different administrative bodies with respect to different
classes of Participants and, if permitted by the Applicable Laws, the Board
may authorize one or more officers to make awards under the Plan.

             (b)  COMMITTEE COMPOSITION.  If a Committee has been appointed
pursuant to this Section 4, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board. From time to time
the Board may increase the size of any Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new
members in substitution therefor, fill vacancies (however caused) and remove
all members of a Committee and thereafter directly administer the Plan, all
to the extent permitted by the Applicable Laws and, in the case of a
Committee administering the Plan in accordance with the requirements of Rule
16b-3 or Section 162(m) of the Code, to the extent permitted or required by
such provisions.

             (c)  POWERS OF THE ADMINISTRATOR.  Subject to the provisions of
the Plan and in the case of a Committee, the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:

                  (i)     to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(q) of the Plan, provided that such
determination shall be applied consistently with respect to Participants
under the Plan;

                  (ii)    to select the Employees and Consultants to whom
Options may from time to time be granted;

                  (iii)   to determine whether and to what extent Options are
granted;

                  (iv)    to determine the number of Shares of Common Stock
to be covered by each award granted;

                  (v)     to approve the form(s) of agreement(s) used under
the Plan;

                  (vi)    to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder,
which terms and conditions include but are not limited to the exercise or
purchase price, the time or times when awards may be exercised (which may be
based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any
Option, Optioned Stock or restricted stock issued upon exercise of an Option,
based in each case on such factors as the Administrator, in its sole
discretion, shall determine;

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                  (vii)   to determine whether and under what circumstances
an Option may be settled in cash under Section 10(c) instead of Common Stock;

                  (viii)  to implement an Option Exchange Program on such
terms and conditions as the Administrator in its discretion deems
appropriate, provided that no amendment or adjustment to an Option that would
materially and adversely affect the rights of any Optionee shall be made
without the prior written consent of the Optionee;

                  (ix)    to adjust the vesting of an Option held by an
Employee or Consultant as a result of a change in the terms or conditions
under which such person is providing services to the Company;

                  (x)     to construe and interpret the terms of the Plan and
awards granted under the Plan, which constructions, interpretations and
decisions shall be final and binding on all Participants; and

                  (xi)    in order to fulfill the purposes of the Plan and
without amending the Plan, to modify grants of Options to Participants who
are foreign nationals or employed outside of the United States in order to
recognize differences in local law, tax policies or customs.

         5.  ELIGIBILITY.

             (a)  RECIPIENTS OF GRANTS.  Nonstatutory Stock Options may be
granted to Employees and Consultants. Incentive Stock Options may be granted
only to Employees, provided that Employees of Affiliates shall not be
eligible to receive Incentive Stock Options.

             (b)  TYPE OF OPTION.  Each Option shall be designated in the
Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option.

             (c)  ISO $100,000 LIMITATION.  Notwithstanding any designation
under Section 5(b), to the extent that the aggregate Fair Market Value of
Shares with respect to which Options designated as Incentive Stock Options
are exercisable for the first time by any Optionee during any calendar year
(under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
For purposes of this Section 5(c), Incentive Stock Options shall be taken
into account in the order in which they were granted, and the Fair Market
Value of the Shares subject to an Incentive Stock Option shall be determined
as of the date of the grant of such Option.

             (d)  NO EMPLOYMENT RIGHTS.  The Plan shall not confer upon any
Participant any right with respect to continuation of an employment or
consulting relationship with the Company, nor shall it interfere in any way
with such Participant's right or the Company's right to terminate his or her
employment or consulting relationship at any time, with or without Cause.

         6.  TERM OF PLAN.  The Plan shall become effective upon its adoption
by the Board of Directors. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 16 of the Plan.

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         7.  TERM OF OPTION.  The term of each Option shall be the term
stated in the Option Agreement; provided that the term shall be no more than
ten years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement and provided further that, in the case of an
Incentive Stock Option granted to a person who at the time of such grant is a
Ten Percent Holder, the term of the Option shall be five years from the date
of grant thereof or such shorter term as may be provided in the Option
Agreement.

         8.  LIMITATION ON GRANTS TO EMPLOYEES.  Subject to adjustment as
provided in Section 14 below, the maximum number of Shares that may be
subject to Options granted to any one Employee under this Plan for any fiscal
year of the Company shall be 2,000,000, provided that this Section 8 shall
apply only after such time, if any, as the Common Stock becomes a Listed
Security.

         9.  OPTION EXERCISE PRICE AND CONSIDERATION.

             (a)  EXERCISE PRICE.  The per Share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be such price as
is determined by the Administrator and set forth in the Option Agreement, but
shall be subject to the following:

                  (i)     In the case of an Incentive Stock Option

                          (A)  granted to an Employee who at the time of
grant is a Ten Percent Holder, the per Share exercise price shall be no less
than 110% of the Fair Market Value per Share on the date of grant; or

                          (B)  granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share
on the date of grant.

                  (ii)    In the case of a Nonstatutory Stock Option, the per
share Exercise Price shall be such price as determined by the Administrator,
provided that if such eligible person is a Named Executive of the Company at
the time of the Option grant, the per share Exercise Price shall be no less
than 100% of the Fair Market Value on the grant date if the Option is
intended to qualify as performance-based compensation under Section 162(m) of
the Code.

                  (iii)   Notwithstanding the foregoing, Options may be
granted with a per Share exercise price other than as required above pursuant
to a merger or other corporate transaction.

             (b)  PERMISSIBLE CONSIDERATION.  The consideration to be paid
for the Shares to be issued upon exercise of an Option, including the method
of payment, shall be determined by the Administrator (and, in the case of an
Incentive Stock Option, shall be determined at the time of grant) and may
consist entirely of (1) cash; (2) check; (3) delivery of Optionee's
promissory note with such recourse, interest, security and redemption
provisions as the Administrator determines to be appropriate (subject to the
provisions of Section 153 of the Delaware General Corporation Law); (4)
cancellation of indebtedness; (5) other Shares that have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares
as to which the Option is exercised, provided that in the case of Shares
acquired, directly or

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indirectly, from the Company, such Shares must have been owned by the
Optionee for more than six months on the date of surrender (or such other
period as may be required to avoid the Company's incurring an adverse
accounting charge); (6) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and a securities
broker approved by the Company shall require to effect exercise of the Option
and prompt delivery to the Company of the sale or loan proceeds required to
pay the exercise price and any applicable withholding taxes; or (7) any
combination of the foregoing methods of payment. In making its determination
as to the type of consideration to accept, the Administrator shall consider
if acceptance of such consideration may be reasonably expected to benefit the
Company and the Administrator may, in its sole discretion, refuse to accept a
particular form of consideration at the time of any Option exercise.

         10.  EXERCISE OF OPTION.

             (a)  GENERAL.

                  (i)     EXERCISABILITY.  Any Option granted hereunder shall
be exercisable at such times and under such conditions as determined by the
Administrator, consistent with the term of the Plan and reflected in the
Option Agreement, including vesting requirements and/or performance criteria
with respect to the Company and/or the Optionee.

                  (ii)    MINIMUM EXERCISE REQUIREMENTS.  An Option may not
be exercised for a fraction of a Share. The Administrator may require that an
Option be exercised as to a minimum number of Shares, provided that such
requirement shall not prevent an Optionee from exercising the full number of
Shares as to which the Option is then exercisable.

                  (iii)   PROCEDURES FOR AND RESULTS OF EXERCISE.  An Option
shall be deemed exercised when written notice of such exercise has been given
to the Company in accordance with the terms of the Option by the person
entitled to exercise the Option and the Company has received full payment for
the Shares with respect to which the Option is exercised. Full payment may,
as authorized by the Administrator, consist of any consideration and method
of payment allowable under Section 9(b) of the Plan, provided that the
Administrator may, in its sole discretion, refuse to accept any form of
consideration at the time of exercise. Exercise of an Option in any manner
shall result in a decrease in the number of Shares that thereafter may be
available, both for purposes of the Plan and for sale under the Option, by
the number of Shares as to which the Option is exercised.

                  (iv)    RIGHTS AS STOCKHOLDER.  Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the Shares, no right to vote or
receive dividends or any other rights as a stockholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. No
adjustment will be made for a dividend or other right for which the record
date is prior to the date the stock certificate is issued, except as provided
in Section 14 of the Plan.

             (b)  TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP.
Except as otherwise set forth in this Section 10(b), the Administrator shall
establish and set forth in the applicable Option Agreement the terms and
conditions upon which an Option shall remain

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exercisable, if at all, following termination of an Optionee's Continuous
Service Status, which provisions may be waived or modified by the
Administrator at any time. To the extent that the Optionee is not entitled to
exercise an Option at the date of his or her termination of Continuous
Service Status, or if the Optionee (or other person entitled to exercise the
Option) does not exercise the Option to the extent so entitled within the
time specified in the Option Agreement or below (as applicable), the Option
shall terminate and the Optioned Stock underlying the unexercised portion of
the Option shall revert to the Plan. In no event may any Option be exercised
after the expiration of the Option term as set forth in the Option Agreement
(and subject to Section 7).

             The following provisions shall apply to the extent an Option
Agreement does not specify the terms and conditions upon which an Option
shall terminate upon termination of an Optionee's Continuous Service Status:

                  (i)     TERMINATION OTHER THAN UPON DISABILITY OR DEATH OR
FOR CAUSE.  In the event of termination of an Optionee's Continuous Service
Status, such Optionee may exercise an Option for 30 days following such
termination to the extent the Optionee was entitled to exercise it at the
date of such termination. No termination shall be deemed to occur and this
Section 10(b)(i) shall not apply if (i) the Optionee is a Consultant who
becomes an Employee, or (ii) the Optionee is an Employee who becomes a
Consultant.

                  (ii)    DISABILITY OF OPTIONEE.  In the event of
termination of an Optionee's Continuous Service Status as a result of his or
her disability (including a disability within the meaning of Section 22(e)(3)
of the Code), such Optionee may exercise an Option at any time within six
months following such termination to the extent the Optionee was entitled to
exercise it at the date of such termination.

                  (iii)   DEATH OF OPTIONEE.  In the event of the death of an
Optionee during the period of Continuous Service Status since the date of
grant of the Option, or within thirty days following termination of
Optionee's Continuous Service Status, the Option may be exercised by
Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance at any time within six months following the
date of death, but only to the extent of the right to exercise that had
accrued at the date of death or, if earlier, the date the Optionee's
Continuous Service Status terminated.

             (c)  BUYOUT PROVISIONS.  The Administrator may at any time offer
to buy out for a payment in cash or Shares an Option previously granted under
the Plan based on such terms and conditions as the Administrator shall
establish and communicate to the Optionee at the time that such offer is made.

         11.  STOCK PURCHASE RIGHTS.

             (a)  RIGHTS TO PURCHASE.  When the Administrator determines that
it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid, and the time within which such person must
accept such offer. The purchase price of Shares subject to Stock Purchase
Rights shall be as

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determined by the Administrator. The offer to purchase Shares subject to
Stock Purchase Rights shall be accepted by execution of a Restricted Stock
Purchase Agreement in the form determined by the Administrator.

             (b)  REPURCHASE OPTION.  Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination
of the purchaser's employment with the Company for any reason (including
death or disability). The purchase price for Shares repurchased pursuant to
the Restricted Stock Purchase Agreement shall be the original purchase price
paid by the purchaser and may be paid by cancellation of any indebtedness of
the purchaser to the Company. The repurchase option shall lapse at such rate
as the Administrator may determine.

             (c)  OTHER PROVISIONS.  The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent
with the Plan as may be determined by the Administrator in its sole
discretion. In addition, the provisions of Restricted Stock Purchase
Agreements need not be the same with respect to each purchaser.

             (d)  RIGHTS AS A STOCKHOLDER.  Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered
upon the records of the duly authorized transfer agent of the Company. No
adjustment will be made for a dividend or other right for which the record
date is prior to the date the Stock Purchase Right is exercised, except as
provided in Section 14 of the Plan.

         12.  TAXES.

             (a)  As a condition of the exercise of an Option granted under
the Plan, the Participant (or in the case of the Participant's death, the
person exercising the Option) shall make such arrangements as the
Administrator may require for the satisfaction of any applicable federal,
state, local or foreign withholding tax obligations that may arise in
connection with the exercise of the Option and the issuance of Shares. The
Company shall not be required to issue any Shares under the Plan until such
obligations are satisfied. If the Administrator allows the withholding or
surrender of Shares to satisfy a Participant's tax withholding obligations
under this Section 12 (whether pursuant to Section 12(c), (d) or (e), or
otherwise), the Administrator shall not allow Shares to be withheld or
surrendered in an amount that exceeds the minimum statutory withholding rates
for federal and state tax purposes, including payroll taxes.

             (b)  In the case of an Employee and in the absence of any other
arrangement, the Employee shall be deemed to have directed the Company to
withhold or collect from his or her compensation an amount sufficient to
satisfy such tax obligations from the next payroll payment otherwise payable
after the date of an exercise of the Option.

             (c)  This Section 12(c) shall apply only after the date, if any,
upon which the Common Stock becomes a Listed Security. In the case of
Participant other than an Employee (or in the case of an Employee where the
next payroll payment is not sufficient to satisfy such tax obligations, with
respect to any remaining tax obligations), in the absence of any other
arrangement and to the extent permitted under the Applicable Laws, the
Participant shall be

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deemed to have elected to have the Company withhold from the Shares to be
issued upon exercise of the Option that number of Shares having a Fair Market
Value determined as of the applicable Tax Date (as defined below) equal to
the amount required to be withheld. For purposes of this Section 12, the Fair
Market Value of the Shares to be withheld shall be determined on the date
that the amount of tax to be withheld is to be determined under the
Applicable Laws (the "TAX DATE").

             (d)  If permitted by the Administrator, in its discretion, a
Participant may satisfy his or her tax withholding obligations upon exercise
of an Option by surrendering to the Company Shares that have a Fair Market
Value determined as of the applicable Tax Date equal to the amount required
to be withheld. In the case of shares previously acquired from the Company
that are surrendered under this Section 12(d), such Shares must have been
owned by the Participant for more than six (6) months on the date of
surrender (or such other period of time as is required for the Company to
avoid adverse accounting charges).

             (e)  Any election or deemed election by a Participant to have
Shares withheld to satisfy tax withholding obligations under Section 12(c) or
(d) above shall be irrevocable as to the particular Shares as to which the
election is made and shall be subject to the consent or disapproval of the
Administrator. Any election by a Participant under Section 12(d) above must
be made on or prior to the applicable Tax Date.

             (f)  In the event an election to have Shares withheld is made by
a Participant and the Tax Date is deferred under Section 83 of the Code
because no election is filed under Section 83(b) of the Code, the Participant
shall receive the full number of Shares with respect to which the Option is
exercised but such Participant shall be unconditionally obligated to tender
back to the Company the proper number of Shares on the Tax Date.

         13.  NON-TRANSFERABILITY OF OPTIONS.  Except as set forth in this
Section 13, Options and Stock Purchase Rights may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than
by will or by the laws of descent or distribution; provided that the
Administrator may in its discretion grant transferable Nonstatutory Stock
Options pursuant to Option Agreements specifying the manner in which such
Nonstatutory Stock Options are transferable. The designation of a beneficiary
by an Optionee will not constitute a transfer. An Option or Stock Purchase
Right may be exercised, during the lifetime of the holder of Option or Stock
Purchase Right, only by such holder or a transferee permitted by this Section
13.

         14.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR CERTAIN
OTHER TRANSACTIONS.

             (a)  CHANGES IN CAPITALIZATION.  Subject to any required action
by the stockholders of the Company, the number of Shares of Common Stock
covered by each outstanding Option, the numbers of Shares set forth in
Sections 3(a) and 8 above, and the number of Shares of Common Stock that have
been authorized for issuance under the Plan but as to which no Options have
yet been granted or that have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per Share of Common Stock
covered by each such outstanding Option, shall be proportionately adjusted
for any increase or decrease in the number of issued Shares of Common Stock
resulting from a stock split, reverse stock split, stock

                                      -11-
<PAGE>

dividend, combination, recapitalization or reclassification of the Common
Stock, or any other increase or decrease in the number of issued Shares of
Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Administrator, whose
determination in that respect shall be final, binding and conclusive. Except
as expressly provided herein, no issuance by the Company of shares of stock
of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of Shares of Common Stock subject to an Option.

             (b)  DISSOLUTION OR LIQUIDATION.  In the event of the
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such action, unless otherwise
determined by the Administrator.

             (c)  CORPORATE TRANSACTION; CHANGE OF CONTROL.  In the event of
a Corporate Transaction, each outstanding Option or Stock Purchase Right
shall be assumed or an equivalent option or right shall be substituted by
such successor corporation or a parent or subsidiary of such successor
corporation (the "SUCCESSOR CORPORATION"), unless the Successor Corporation
does not agree to assume the award or to substitute an equivalent option or
right, in which case such Option or Stock Purchase Right shall terminate upon
the consummation of the transaction.

             Notwithstanding the above, in the event of a Change of Control
and irrespective of whether outstanding awards are being assumed, substituted
or terminated in connection with the transaction, the vesting and
exercisability of each outstanding Option and Stock Purchase Right shall
accelerate such that the Options and Stock Purchase Rights shall become
vested and exercisable to the extent of 50% of the Shares then unvested, and
any repurchase right of the Company with respect to shares issued upon
exercise of an Option or Stock Purchase Right shall lapse as to 50% of the
Shares subject to such repurchase right prior to consummation of the Change
of Control, in each case effective as of immediately prior to consummation of
the transaction; provided, however, that in the event that the Successor
Corporation does not agree to assume the award or to substitute an equivalent
option or right, the vesting and exercisability of each outstanding Option
and Stock Purchase Right shall accelerate such that the Options and Stock
Purchase Rights shall become vested and exercisable to the extent of all of
the Shares then unvested, and any repurchase right of the Company with
respect to shares issued upon exercise of an Option or Stock Purchase Right
shall lapse as to all of the Shares subject to such repurchase right prior to
consummation of the Change of Control, in each case effective as of
immediately prior to consummation of the transaction. To the extent that an
Option or Stock Purchase Right is not exercised prior to consummation of a
Corporate Transaction in which the Option or Stock Purchase Right is not
being assumed or substituted, such Option or Stock Purchase Right shall
terminate upon such consummation.

             In addition, in the event a Participant holding an Option or
Stock Purchase Right assumed or substituted by the Successor Corporation in a
Change of Control, or holding Restricted Stock issued upon exercise of an
Option or Stock Purchase Right with respect to which the Successor
Corporation has succeeded to a repurchase right as a result of the Change of
Control, is Involuntarily Terminated by the Successor Corporation without
Cause in connection

                                      -12-
<PAGE>

with, or within twelve (12) months following consummation of, the
transaction, then any assumed or substituted Option or Stock Purchase Right
held by the terminated Participant at the time of termination shall
accelerate and become exercisable as to all of Shares, and any repurchase
right applicable to any Shares shall lapse as to all of Shares. The
acceleration of vesting and lapse of repurchase rights provided for in the
previous sentence shall occur immediately prior to the effective date of the
Participant's termination.

             For purposes of this Section 14(c), an Option shall be
considered assumed, without limitation, if, at the time of issuance of the
stock or other consideration upon a Corporate Transaction or a Change of
Control, as the case may be, each holder of an Option would be entitled to
receive upon exercise of the award the same number and kind of shares of
stock or the same amount of property, cash or securities as such holder would
have been entitled to receive upon the occurrence of the transaction if the
holder had been, immediately prior to such transaction, the holder of the
number of Shares of Common Stock covered by the award at such time (after
giving effect to any adjustments in the number of Shares covered by the
Option as provided for in this Section 14); provided that if such
consideration received in the transaction is not solely common stock of the
Successor Corporation, the Administrator may, with the consent of the
Successor Corporation, provide for the consideration to be received upon
exercise of the award to be solely common stock of the Successor Corporation
equal to the Fair Market Value of the per Share consideration received by
holders of Common Stock in the transaction.

             (d)  LIMITATION ON PAYMENTS.  In the event that the vesting
acceleration or lapse of a repurchase right provided for in Section 14(c)
above (x) constitutes "parachute payments" within the meaning of Section 280G
of the Code, and (y) but for this Section 14(d) would be subject to the
excise tax imposed by Section 4999 of the Code (or any corresponding
provisions of state income tax law), then such vesting acceleration or lapse
of a repurchase right shall be either

                  (A)  delivered in full, or

                  (B)  delivered as to such lesser extent which would result
in no portion of such severance benefits being subject to excise tax under
Code Section 4999,

             whichever amount, taking into account the applicable federal,
state and local income taxes and the excise tax imposed by Code Section 4999,
results in the receipt by the Participant on an after-tax basis of the
greater amount of acceleration or lapse of repurchase rights benefits,
notwithstanding that all or some portion of such benefits may be taxable
under Code Section 4999. Any determination required under this Section 14(d)
shall be made in writing by the Company's independent accountants, whose
determination shall be conclusive and binding for all purposes on the Company
and any affected Participant. In the event that (A) above applies, then the
Participant shall be responsible for any excise taxes imposed with respect to
such benefits. In the event that (B) above applies, then each benefit
provided hereunder shall be proportionately reduced to the extent necessary
to avoid imposition of such excise taxes.

             (e)  CERTAIN DISTRIBUTIONS.  In the event of any distribution to
the Company's stockholders of securities of any other entity or other assets
(other than dividends payable in cash or stock of the Company) without
receipt of consideration by the Company, the Administrator

                                      -13-
<PAGE>

may, in its discretion, appropriately adjust the price per Share of Common
Stock covered by each outstanding Option to reflect the effect of such
distribution.

         15.  TIME OF GRANTING OPTIONS.  The date of grant of an Option
shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option, or such other date as is determined by
the Administrator, provided that in the case of any Incentive Stock Option,
the grant date shall be the later of the date on which the Administrator
makes the determination granting such Incentive Stock Option or the date of
commencement of the Optionee's employment relationship with the Company.
Notice of the determination shall be given to each Employee or Consultant to
whom an Option is so granted within a reasonable time after the date of such
grant.

         16.  AMENDMENT AND TERMINATION OF THE PLAN.

             (a)  AUTHORITY TO AMEND OR TERMINATE.  The Board may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation (other than an adjustment pursuant to Section
14 above) shall be made that would materially and adversely affect the rights
of any Optionee under any outstanding grant, without his or her consent. In
addition, to the extent necessary and desirable to comply with the Applicable
Laws, the Company shall obtain stockholder approval of any Plan amendment in
such a manner and to such a degree as required.

             (b)  EFFECT OF AMENDMENT OR TERMINATION.  No amendment or
termination of the Plan shall materially and adversely affect Options already
granted, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee
or holder and the Company.

         17.  CONDITIONS UPON ISSUANCE OF SHARES.  Notwithstanding any other
provision of the Plan or any agreement entered into by the Company pursuant
to the Plan, the Company shall not be obligated, and shall have no liability
for failure, to issue or deliver any Shares under the Plan unless such
issuance or delivery would comply with the Applicable Laws, with such
compliance determined by the Company in consultation with its legal counsel.
As a condition to the exercise of an Option, the Company may require the
person exercising the award to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by law.

         18.  RESERVATION OF SHARES.  The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.

         19.  AGREEMENTS.  Options shall be evidenced by Option Agreements in
such form(s) as the Administrator shall from time to time approve.

         20.  STOCKHOLDER APPROVAL.  If required by the Applicable Laws,
continuance of the Plan shall be subject to approval by the stockholders of
the Company within twelve (12) months

                                      -14-
<PAGE>

before or after the date the Plan is adopted. Such stockholder approval shall
be obtained in the manner and to the degree required under the Applicable
Laws.

                                      -15-<PAGE>

                           ROSETTA INPHARMATICS, INC.

                       2000 EMPLOYEE STOCK PURCHASE PLAN

         The following constitute the provisions of the 2000 Employee Stock
Purchase Plan of Rosetta Inpharmatics, Inc.

         1.  PURPOSE.  The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase
Common Stock of the Company. It is the intention of the Company to have the
Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of the
Code. The provisions of the Plan shall, accordingly, be construed so as to
extend and limit participation in a manner consistent with the requirements
of that section of the Code.

         2.  DEFINITIONS.

             (a)  "BOARD" means the Board of Directors of the Company.

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

             (c)  "COMMON STOCK" means the Common Stock of the Company.

             (d)  "COMPANY" means Rosetta Inpharmatics, Inc., a Delaware
corporation.

             (e)  "COMPENSATION" means regular straight time gross earnings,
and shall not include commissions, payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses and other compensation.

             (f)  "CONTINUOUS STATUS AS AN EMPLOYEE" means the absence of any
interruption or termination of service as an Employee. Continuous Status as
an Employee shall not be considered interrupted in the case of (i) sick
leave; (ii) military leave; (iii) any other leave of absence approved by the
Administrator, provided that such leave is for a period of not more than 90
days, unless reemployment upon the expiration of such leave is guaranteed by
contract or statute, or unless provided otherwise pursuant to Company policy
adopted from time to time; or (iv) in the case of transfers between locations
of the Company or between the Company and its Designated Subsidiaries.

             (g)  "CONTRIBUTIONS" means all amounts credited to the account
of a participant pursuant to the Plan.

             (h)  "CORPORATE TRANSACTION" means a sale of all or
substantially all of the Company's assets, or a merger, consolidation or
other capital reorganization of the Company with or into another corporation.

             (i)  "DESIGNATED SUBSIDIARIES" means the Subsidiaries which have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan; provided however that the Board shall
only have the discretion to designate Subsidiaries if

                                      -1-
<PAGE>

the issuance of options to such Subsidiary's Employees pursuant to the Plan
would not cause the Company to incur adverse accounting charges.

             (j)  "EMPLOYEE" means any person, including an Officer, who is
customarily employed for at least twenty (20) hours per week and more than
five (5) months in a calendar year by the Company or one of its Designated
Subsidiaries.

             (k)  "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.

             (l)  "OFFERING DATE" means the first business day of each
Offering Period of the Plan.

             (m)  "OFFERING PERIOD" means a period of twenty-four (24) months
commencing on February 1 and August 1 of each year, except for the first
Offering Period as set forth in Section 4(a).

             (n)  "OFFICER" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

             (o)  "PLAN" means this Employee Stock Purchase Plan.

             (p)  "PURCHASE DATE" means the last day of each Purchase Period
of the Plan.

             (q)  "PURCHASE PERIOD" means a period of six (6) months within
an Offering Period, except for the first Purchase Period as set forth in
Section 4(b).

             (r)  "PURCHASE PRICE" means with respect to a Purchase Period an
amount equal to 85% of the Fair Market Value (as defined in Section 7(b)
below) of a Share of Common Stock on the Offering Date or on the Purchase
Date, whichever is lower; provided, however, that in the event (i) of any
increase in the number of Shares available for issuance under the Plan as a
result of a stockholder-approved amendment to the Plan, and (ii) all or a
portion of such additional Shares are to be issued with respect to one or
more Offering Periods that are underway at the time of such increase
("ADDITIONAL SHARES"), and (iii) the Fair Market Value of a Share of Common
Stock on the date of such increase (the "APPROVAL DATE FAIR MARKET VALUE") is
higher than the Fair Market Value on the Offering Date for any such Offering
Period, then in such instance the Purchase Price with respect to Additional
Shares shall be 85% of the Approval Date Fair Market Value or the Fair Market
Value of a Share of Common Stock on the Purchase Date, whichever is lower.

             (s)  "SHARE" means a share of Common Stock, as adjusted in
accordance with Section 19 of the Plan.

             (t)  "SUBSIDIARY" means a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.

                                      -2-
<PAGE>

         3.  ELIGIBILITY.

             (a)  Any person who is an Employee as of the Offering Date of a
given Offering Period shall be eligible to participate in such Offering
Period under the Plan, subject to the requirements of Section 5(a) and the
limitations imposed by Section 423(b) of the Code.

             (b)  Any provisions of the Plan to the contrary notwithstanding,
no Employee shall be granted an option under the Plan (i) if, immediately
after the grant, such Employee (or any other person whose stock would be
attributed to such Employee pursuant to Section 424(d) of the Code) would own
capital stock of the Company and/or hold outstanding options to purchase
stock possessing five percent (5%) or more of the total combined voting power
or value of all classes of stock of the Company or of any subsidiary of the
Company, or (ii) if such option would permit his or her rights to purchase
stock under all employee stock purchase plans (described in Section 423 of
the Code) of the Company and its Subsidiaries to accrue at a rate which
exceeds Twenty-Five Thousand Dollars ($25,000) of the Fair Market Value (as
defined in Section 7(b) below) of such stock (determined at the time such
option is granted) for each calendar year in which such option is outstanding
at any time.

         4.  OFFERING PERIODS AND PURCHASE PERIODS.

             (a)  OFFERING PERIODS.  The Plan shall be implemented by a
series of Offering Periods of approximately twenty-four (24) months duration,
with new Offering Periods commencing on or about February 1 and August 1 of
each year (or at such other time or times as may be determined by the Board
of Directors). The first Offering Period shall commence on the beginning of
the effective date of the Registration Statement on Form S-1 for the initial
public offering of the Company's Common Stock (the "IPO DATE") and continue
until July 31, 2002. The Plan shall continue until terminated in accordance
with Section 20 hereof. The Board of Directors of the Company shall have the
power to change the duration and/or the frequency of Offering Periods with
respect to future offerings without stockholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the
first Offering Period to be affected.

             (b)  PURCHASE PERIODS.  Each Offering Period shall consist of
four (4) consecutive Purchase Periods of approximately six (6) months'
duration. The last day of each Purchase Period shall be the "PURCHASE DATE"
for such Purchase Period. A Purchase Period commencing on February 1 shall
end on the next July 31. A Purchase Period commencing on August 1 shall end
on the next January 31. The first Purchase Period shall commence on the IPO
Date and shall end on January 31, 2001. The Board of Directors of the Company
shall have the power to change the duration and/or frequency of Purchase
Periods with respect to future purchases without stockholder approval if such
change is announced at least five (5) days prior to the scheduled beginning
of the first Purchase Period to be affected.

         5.  PARTICIPATION.

             (a)  An eligible Employee may become a participant in the Plan
by completing a subscription agreement on the form provided by the Company
and filing it with the Company

                                      -3-
<PAGE>

prior to the applicable Offering Date. The subscription agreement shall set
forth the percentage of the participant's Compensation (subject to Section
6(a) below) to be paid as Contributions pursuant to the Plan.

             (b)  Payroll deductions shall commence on the first payroll paid
following the Offering Date and shall end on the last payroll paid on or
prior to the last Purchase Period of the Offering Period to which the
subscription agreement is applicable, unless sooner terminated by the
participant as provided in Section 10.

         6.  METHOD OF PAYMENT OF CONTRIBUTIONS.

             (a)  A participant shall elect to have payroll deductions made
on each payday during the Offering Period in an amount not less than one
percent (1%) and not more than twenty percent (20%) (or such greater
percentage as the Board may establish from time to time before an Offering
Date) of such participant's Compensation on each payday during the Offering
Period; provided that to the extent a participant is participating in more
than one Offering Period, the maximum aggregate percentage of Compensation
that he or she may contribute under the Plan shall be twenty percent (20%)
(or such greater percentage as the Board may establish from time to time
before an Offering Date). All payroll deductions made by a participant shall
be credited to his or her account under the Plan. A participant may not make
any additional payments into such account.

             (b)  A participant may discontinue his or her participation in
the Plan as provided in Section 10, or, on one occasion only during a
Purchase Period may increase and on one occasion only during a Purchase
Period may decrease the rate of his or her Contributions with respect to the
Offering Period by completing and filing with the Company a new subscription
agreement authorizing a change in the payroll deduction rate. The change in
rate shall be effective as of the beginning of the next calendar month
following the date of filing of the new subscription agreement, if the
agreement is filed at least ten (10) business days prior to such date and, if
not, as of the beginning of the next succeeding calendar month.

             (c)  Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b), a participant's
payroll deductions may be decreased by the Company to 0% at any time during a
Purchase Period. Payroll deductions shall re-commence at the rate provided in
such participant's subscription agreement at the beginning of the first
Purchase Period which is scheduled to end in the following calendar year,
unless terminated by the participant as provided in Section 10. In addition,
a participant's payroll deductions may be decreased by the Company to 0% at
any time during a Purchase Period in order to avoid unnecessary payroll
contributions as a result of application of the maximum share limit set forth
in Section 7(a), or as a result of the limitations set forth in Section 3(b),
in which case payroll deductions shall re-commence at the rate provided in
such participant's subscription agreement at the beginning of the next
Purchase Period, unless terminated by the participant as provided in Section
10.

                                      -4-
<PAGE>

         7.  GRANT OF OPTION.

             (a)  On the Offering Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option to
purchase on each Purchase Date a number of Shares of the Company's Common
Stock determined by dividing such Employee's Contributions accumulated prior
to such Purchase Date and retained in the participant's account as of the
Purchase Date by the applicable Purchase Price; provided however that the
maximum number of Shares an Employee may purchase during each Purchase Period
shall be 1,800 Shares (subject to any adjustment pursuant to Section 19
below), and provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 13.

             (b)  The fair market value of the Company's Common Stock on a
given date (the "FAIR MARKET VALUE") shall be determined by the Board in its
discretion; provided that to the extent the Common Stock is trading on the
Nasdaq National Market (i) the Fair Market Value as of an Offering Date shall
be the closing sales price of the Common Stock as reported by the Nasdaq
National Market for the last trading day immediately preceding the Offering
Date, and (ii) the Fair Market Value of the Common Stock as of a Purchase
Date shall be the closing sales price of the Common Stock as reported by the
Nasdaq National Market for the Purchase Date, in each case as reported in THE
WALL STREET JOURNAL.  For purposes of the Offering Date under the first
Offering Period under the Plan, the Fair Market Value of a share of the
Common Stock of the Company shall be the Price to Public as set forth in the
final prospectus filed with the Securities and Exchange Commission pursuant
to Rule 424 under the Securities Act of 1933, as amended.

         8.  EXERCISE OF OPTION.  Unless a participant withdraws from the
Plan as provided in Section 10, his or her option for the purchase of Shares
will be exercised automatically on each Purchase Date of an Offering Period,
and the maximum number of full Shares subject to the option will be purchased
at the applicable Purchase Price with the accumulated Contributions in his or
her account. No fractional Shares shall be issued. The Shares purchased upon
exercise of an option hereunder shall be deemed to be transferred to the
participant on the Purchase Date. During his or her lifetime, a participant's
option to purchase Shares hereunder is exercisable only by him or her.

         9.  DELIVERY.  As promptly as practicable after each Purchase Date
of each Offering Period, the Company shall arrange the delivery to each
participant, as appropriate, the Shares purchased upon exercise of his or her
option. No fractional Shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full Share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 below. Any other amounts left over in a
participant's account after a Purchase Date shall be returned to the
participant.

         10.  VOLUNTARY WITHDRAWAL; TERMINATION OF EMPLOYMENT.

             (a)  A participant may withdraw all but not less than all the
Contributions credited to his or her account under the Plan at any time prior
to each Purchase Date by giving

                                      -5-
<PAGE>

written notice to the Company. All of the participant's Contributions
credited to his or her account will be paid to him or her promptly after
receipt of his or her notice of withdrawal and his or her option for the
current period will be automatically terminated, and no further Contributions
for the purchase of Shares will be made during the Offering Period.

             (b)  Upon termination of the participant's Continuous Status as
an Employee prior to the Purchase Date of an Offering Period for any reason,
including retirement or death, the Contributions credited to his or her
account will be returned to him or her or, in the case of his or her death,
to the person or persons entitled thereto under Section 15, and his or her
option will be automatically terminated.

             (c)  In the event an Employee fails to remain in Continuous
Status as an Employee of the Company for at least twenty (20) hours per week
during the Offering Period in which the employee is a participant, he or she
will be deemed to have elected to withdraw from the Plan and the
Contributions credited to his or her account will be returned to him or her
and his or her option terminated.

             (d)  A participant's withdrawal from an offering will not have
any effect upon his or her eligibility to participate in a succeeding
offering or in any similar plan which may hereafter be adopted by the Company.

         11.  AUTOMATIC WITHDRAWAL.  To the extent permitted by any
applicable laws, regulations or stock exchange rules, if the Fair Market
Value of the Shares on an Offering Date for an Offering Period (the "NEW
OFFERING PERIOD") commencing within an Offering Period (the "ONGOING OFFERING
PERIOD") then in progress is lower than was the Fair Market Value of the
Shares on the Offering Date for the Ongoing Offering Period, then every
participant in the Ongoing Offering Period shall automatically be deemed to
have (i) withdrawn from the Ongoing Offering Period at the close of the
Purchase Period immediately preceding the New Offering Period, and (ii)
enrolled in such New Offering Period. In addition, participants shall
automatically be withdrawn as of July 31, 2000 from the Offering Period
beginning on the IPO Date and re-enrolled in the Offering Period beginning on
August 1, 2000 if the Fair Market Value of the Shares on the IPO Date is
greater than the Fair Market Value of the Shares for the August 1, 2000
Offering Date, unless a participant notifies the Administrator prior to July
31, 2000 that he or she does not wish to be withdrawn and re-enrolled under
these circumstances.

         12.  INTEREST.  No interest shall accrue on the Contributions of a
participant in the Plan.

         13.  STOCK.

             (a)  Subject to adjustment as provided in Section 19, the
maximum number of Shares which shall be made available for sale under the
Plan shall be 350,000 Shares, plus an annual increase on the first day of
each of the Company's fiscal years beginning in 2001 and ending in 2010 equal
to the lesser of (i) 350,000 Shares, (ii) one and four-tenths percent (1.4%)
of the Shares outstanding on the last day of the immediately preceding fiscal
year, or (iii) such lesser number of Shares as is determined by the Board. If
the Board determines that, on a given

                                      -6-
<PAGE>

Purchase Date, the number of shares with respect to which options are to be
exercised may exceed (i) the number of shares of Common Stock that were
available for sale under the Plan on the Offering Date of the applicable
Offering Period, or (ii) the number of shares available for sale under the
Plan on such Purchase Date, the Board may in its sole discretion provide (x)
that the Company shall make a pro rata allocation of the Shares of Common
Stock available for purchase on such Offering Date or Purchase Date, as
applicable, in as uniform a manner as shall be practicable and as it shall
determine in its sole discretion to be equitable among all participants
exercising options to purchase Common Stock on such Purchase Date, and
continue all Offering Periods then in effect, or (y) that the Company shall
make a pro rata allocation of the shares available for purchase on such
Offering Date or Purchase Date, as applicable, in as uniform a manner as
shall be practicable and as it shall determine in its sole discretion to be
equitable among all participants exercising options to purchase Common Stock
on such Purchase Date, and terminate any or all Offering Periods then in
effect pursuant to Section 20 below. The Company may make pro rata allocation
of the Shares available on the Offering Date of any applicable Offering
Period pursuant to the preceding sentence, notwithstanding any authorization
of additional Shares for issuance under the Plan by the Company's
stockholders subsequent to such Offering Date.

             (b)  The participant shall have no interest or voting right in
Shares covered by his or her option until such option has been exercised.

             (c)  Shares to be delivered to a participant under the Plan will
be registered in the name of the participant or in the name of the
participant and his or her spouse.

         14.  ADMINISTRATION.  The Board, or a committee named by the Board,
shall supervise and administer the Plan and shall have full power to adopt,
amend and rescind any rules deemed desirable and appropriate for the
administration of the Plan and not inconsistent with the Plan, to construe
and interpret the Plan, and to make all other determinations necessary or
advisable for the administration of the Plan.

         15.  DESIGNATION OF BENEFICIARY.

             (a)  A participant may file a written designation of a
beneficiary who is to receive any Shares and cash, if any, from the
participant's account under the Plan in the event of such participant's death
subsequent to the end of a Purchase Period but prior to delivery to him or
her of such Shares and cash. In addition, a participant may file a written
designation of a beneficiary who is to receive any cash from the
participant's account under the Plan in the event of such participant's death
prior to the Purchase Date of an Offering Period. If a participant is married
and the designated beneficiary is not the spouse, spousal consent shall be
required for such designation to be effective.

             (b)  Such designation of beneficiary may be changed by the
participant (and his or her spouse, if any) at any time by written notice. In
the event of the death of a participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such Shares and/or cash to the
executor or administrator of the estate of the participant, or if no such
executor or administrator has been

                                      -7-
<PAGE>

appointed (to the knowledge of the Company), the Company, in its discretion,
may deliver such Shares and/or cash to the spouse or to any one or more
dependents or relatives of the participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company
may designate.

         16.  TRANSFERABILITY.  Neither Contributions credited to a
participant's account nor any rights with regard to the exercise of an option
or to receive Shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 15) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds in accordance with Section 10.

         17.  USE OF FUNDS.  All Contributions received or held by the
Company under the Plan may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate such Contributions.

         18.  REPORTS.  Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to participating
Employees at least annually, which statements will set forth the amounts of
Contributions, the per Share Purchase Price, the number of Shares purchased
and the remaining cash balance, if any.

         19.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE
TRANSACTIONS.

             (a)  ADJUSTMENT.  Subject to any required action by the
stockholders of the Company, the number of Shares covered by each option
under the Plan which has not yet been exercised and the number of Shares
which have been authorized for issuance under the Plan but have not yet been
placed under option (collectively, the "RESERVES"), as well as the maximum
number of shares of Common Stock which may be purchased by a participant in a
Purchase Period, the number of shares of Common Stock set forth in Section
13(a) above, and the price per Share of Common Stock covered by each option
under the Plan which has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued Shares
resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock (including any such
change in the number of Shares of Common Stock effected in connection with a
change in domicile of the Company), or any other increase or decrease in the
number of Shares effected without receipt of consideration by the Company;
provided however that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided
herein, no issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number or
price of Shares subject to an option.

             (b)  CORPORATE TRANSACTIONS.  In the event of a dissolution or
liquidation of the Company, any Purchase Period and Offering Period then in
progress will terminate immediately prior to the consummation of such action,
unless otherwise provided by the Board. In the event of a Corporate
Transaction, each option outstanding under the Plan shall be assumed

                                      -8-
<PAGE>

or an equivalent option shall be substituted by the successor corporation or
a parent or Subsidiary of such successor corporation. In the event that the
successor corporation refuses to assume or substitute for outstanding
options, each Purchase Period and Offering Period then in progress shall be
shortened and a new Purchase Date shall be set (the "NEW PURCHASE DATE"), as
of which date any Purchase Period and Offering Period then in progress will
terminate. The New Purchase Date shall be on or before the date of
consummation of the transaction and the Board shall notify each participant
in writing, at least ten (10) days prior to the New Purchase Date, that the
Purchase Date for his or her option has been changed to the New Purchase Date
and that his or her option will be exercised automatically on the New
Purchase Date, unless prior to such date he or she has withdrawn from the
Offering Period as provided in Section 10. For purposes of this Section 19,
an option granted under the Plan shall be deemed to be assumed, without
limitation, if, at the time of issuance of the stock or other consideration
upon a Corporate Transaction, each holder of an option under the Plan would
be entitled to receive upon exercise of the option the same number and kind
of shares of stock or the same amount of property, cash or securities as such
holder would have been entitled to receive upon the occurrence of the
transaction if the holder had been, immediately prior to the transaction, the
holder of the number of Shares of Common Stock covered by the option at such
time (after giving effect to any adjustments in the number of Shares covered
by the option as provided for in this Section 19); provided however that if
the consideration received in the transaction is not solely common stock of
the successor corporation or its parent (as defined in Section 424(e) of the
Code), the Board may, with the consent of the successor corporation, provide
for the consideration to be received upon exercise of the option to be solely
common stock of the successor corporation or its parent equal in Fair Market
Value to the per Share consideration received by holders of Common Stock in
the transaction.

         The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the
price per Share of Common Stock covered by each outstanding option, in the
event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of
Shares of its outstanding Common Stock, and in the event of the Company's
being consolidated with or merged into any other corporation.

         20.  AMENDMENT OR TERMINATION.

             (a)  The Board may at any time and for any reason terminate or
amend the Plan. Except as provided in Section 19, no such termination of the
Plan may affect options previously granted, provided that the Plan or an
Offering Period may be terminated by the Board on a Purchase Date or by the
Board's setting a new Purchase Date with respect to an Offering Period and
Purchase Period then in progress if the Board determines that termination of
the Plan and/or the Offering Period is in the best interests of the Company
and the stockholders or if continuation of the Plan and/or the Offering
Period would cause the Company to incur adverse accounting charges as a
result of a change after the effective date of the Plan in the generally
accepted accounting rules applicable to the Plan. Except as provided in
Section 19 and in this Section 20, no amendment to the Plan shall make any
change in any option previously granted which adversely affects the rights of
any participant. In addition, to the extent necessary to

                                      -9-
<PAGE>

comply with Rule 16b-3 under the Exchange Act, or under Section 423 of the
Code (or any successor rule or provision or any applicable law or
regulation), the Company shall obtain stockholder approval in such a manner
and to such a degree as so required.

             (b)  Without stockholder consent and without regard to whether
any participant rights may be considered to have been adversely affected, the
Board (or its committee) shall be entitled to change the Offering Periods and
Purchase Periods, limit the frequency and/or number of changes in the amount
withheld during an Offering Period, establish the exchange ratio applicable
to amounts withheld in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a participant in order to
adjust for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that amounts
applied toward the purchase of Common Stock for each participant properly
correspond with amounts withheld from the participant's Compensation, and
establish such other limitations or procedures as the Board (or its
committee) determines in its sole discretion advisable which are consistent
with the Plan.

         21.  NOTICES.  All notices or other communications by a participant
to the Company under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Company at the
location, or by the person, designated by the Company for the receipt thereof.

         22.  CONDITIONS UPON ISSUANCE OF SHARES.  Shares shall not be issued
with respect to an option unless the exercise of such option and the issuance
and delivery of such Shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, applicable state securities laws and the
requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

         As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any
of the aforementioned applicable provisions of law.

         23.  TERM OF PLAN; EFFECTIVE DATE.  The Plan shall become effective
upon the IPO Date. It shall continue in effect for a term of twenty (20)
years unless sooner terminated under Section 20.

                                      -10-
<PAGE>

                           ROSETTA INPHARMATICS, INC.

                        2000 EMPLOYEE STOCK PURCHASE PLAN
                             SUBSCRIPTION AGREEMENT

                                                          New Election
                                                                       ---------
                                                    Change of Election
                                                                       ---------

         1.  I, ________________________, hereby elect to participate in the
Rosetta Inpharmatics, Inc. 2000 Employee Stock Purchase Plan (the "PLAN") for
the Offering Period ______________, ____ to _______________, ____, and
subscribe to purchase shares of the Company's Common Stock in accordance with
this Subscription Agreement and the Plan.

         2.  I elect to have Contributions in the amount of ____% of my
Compensation, as those terms are defined in the Plan, applied to this
purchase. I understand that this amount (together with any other amounts I am
contributing under the Plan) must not be less than 1% and not more than 20%
of my Compensation during the Offering Period. (Please note that no
fractional percentages are permitted).

         3.  I hereby authorize payroll deductions from each paycheck during
the Offering Period at the rate stated in Item 2 of this Subscription
Agreement. I understand that all payroll deductions made by me shall be
credited to my account under the Plan and that I may not make any additional
payments into such account. I understand that all payments made by me shall
be accumulated for the purchase of shares of Common Stock at the applicable
purchase price determined in accordance with the Plan. I further understand
that, except as otherwise set forth in the Plan, shares will be purchased for
me automatically on the Purchase Date of each Offering Period unless I
otherwise withdraw from the Plan by giving written notice to the Company for
such purpose.

         4.  I understand that I may discontinue at any time prior to the
Purchase Date my participation in the Plan as provided in Section 10 of the
Plan. I also understand that I can increase or decrease the rate of my
Contributions on one occasion only with respect to any increase and one
occasion only with respect to any decrease during any Purchase Period by
completing and filing a new Subscription Agreement with such increase or
decrease taking effect as of the beginning of the calendar month following
the date of filing of the new Subscription Agreement, if filed at least ten
(10) business days prior to the beginning of such month. Further, I may
change the rate of deductions for future Offering Periods by filing a new
Subscription Agreement, and any such change will be effective as of the
beginning of the next Offering Period. In addition, I acknowledge that,
unless I discontinue my participation in the Plan as provided in Section 10
of the Plan, my election will continue to be effective for each successive
Offering Period.

<PAGE>

         5.  I have received a copy of the Company's most recent description
of the Plan and a copy of the complete "Rosetta Inpharmatics, Inc. 2000
Employee Stock Purchase Plan." I understand that my participation in the Plan
is in all respects subject to the terms of the Plan.

         6.  Shares purchased for me under the Plan should be issued in the
name(s) of (name of employee or employee and spouse only):

                                           ------------------------------------

                                           ------------------------------------

         7.  In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due to me under the Plan:

NAME:  (Please print)
                                           ------------------------------------
                                           (First)       (Middle)        (Last)

--------------------                       -------------------------------------
(Relationship)                             (Address)

                                           -------------------------------------

         8.  I understand that if I dispose of any shares received by me
pursuant to the Plan within 2 years after the Offering Date (the first day of
the Offering Period during which I purchased such shares) or within 1 year
after the Purchase Date, I will be treated for federal income tax purposes as
having received ordinary compensation income at the time of such disposition
in an amount equal to the excess of the fair market value of the shares on
the Purchase Date over the price which I paid for the shares, regardless of
whether I disposed of the shares at a price less than their fair market value
at the Purchase Date. The remainder of the gain or loss, if any, recognized
on such disposition will be treated as capital gain or loss.

         I HEREBY AGREE TO NOTIFY THE COMPANY IN WRITING WITHIN 30 DAYS AFTER
THE DATE OF ANY SUCH DISPOSITION, AND I WILL MAKE ADEQUATE PROVISION FOR
FEDERAL, STATE OR OTHER TAX WITHHOLDING OBLIGATIONS, IF ANY, WHICH ARISE UPON
THE DISPOSITION OF THE COMMON STOCK.  The Company may, but will not be
obligated to, withhold from my compensation the amount necessary to meet any
applicable withholding obligation including any withholding necessary to make
available to the Company any tax deductions or benefits attributable to the
sale or early disposition of Common Stock by me.

         9.  If I dispose of such shares at any time after expiration of the
2-year and 1-year holding periods, I understand that I will be treated for
federal income tax purposes as having received compensation income only to
the extent of an amount equal to the lesser of (1) the excess of the fair
market value of the shares at the time of such disposition over the purchase
price which I paid for the shares under the option, or (2) 15% of the fair
market value of the

                                      -2-
<PAGE>

shares on the Offering Date. The remainder of the gain or loss, if any,
recognized on such disposition will be treated as capital gain or loss.

         I UNDERSTAND THAT THIS TAX SUMMARY IS ONLY A SUMMARY AND IS SUBJECT
TO CHANGE.  I further understand that I should consult a tax advisor
concerning the tax implications of the purchase and sale of stock under the
Plan.

         10.  In connection with the initial public offering of the Company's
securities and upon request of the Company or the underwriters managing any
underwritten offering of the Company's securities, I agree not to sell, make
any short sale of, loan, grant any option for the purchase of, or otherwise
dispose of any securities of the Company, however or whenever I acquired
them, without the prior written consent of the Company or such underwriters,
as the case may be, for such period of time (not to exceed 180 days) from the
effective date of such registration as may be requested by the Company or
such managing underwriters and to execute an agreement reflecting the
foregoing as may be requested by the underwriters at the time of the public
offering.

         11.  I hereby agree to be bound by the terms of the Plan. The
effectiveness of this Subscription Agreement is dependent upon my eligibility
to participate in the Plan.

SIGNATURE:
           -----------------------------------------

SOCIAL SECURITY #:
                   ---------------------------------

DATE:
      ----------------------------------------------

SPOUSE'S SIGNATURE (necessary if beneficiary is
not spouse):

-----------------------------------------------------
(Signature)

-----------------------------------------------------
(Print name)

                                      -3-
<PAGE>

                           ROSETTA INPHARMATICS, INC.

                        2000 EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

         I, __________________________, hereby elect to withdraw my
participation in the Rosetta Inpharmatics, Inc. 2000 Employee Stock Purchase
Plan (the "PLAN") for the Offering Period that began on _________ ___, _____.
This withdrawal covers all Contributions credited to my account and is
effective on the date designated below.

         I understand that all Contributions credited to my account will be
paid to me within ten (10) business days of receipt by the Company of this
Notice of Withdrawal and that my option for the current period will
automatically terminate, and that no further Contributions for the purchase
of shares can be made by me during the Offering Period.

         The undersigned further understands and agrees that he or she shall
be eligible to participate in succeeding offering periods only by delivering
to the Company a new Subscription Agreement.

Dated:
       ---------------------           ----------------------------------------
                                       Signature of Employee

                                       ----------------------------------------
                                       Social Security Number

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