TREGA BIOSCIENCES INC, S-8, 1998-11-24

TREGA BIOSCIENCES INC
S-8, 1998-11-24
BIOLOGICAL PRODUCTS, (NO DIAGNOSTIC SUBSTANCES)

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<PAGE> 1
As filed with the Securities and Exchange Commission on November 24, 1998.
Registration No. 333 -
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

TREGA BIOSCIENCES, INC.
(Exact name of registrant as specified in its charter)

Delaware 51-0336233
- ------------------------------ -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

9880 Campus Point Drive
San Diego, California 92121
- ------------------------------ -------------------------
(Address of Principal (Zip Code)
Executive Offices)

NAVICYTE, INC. 1997 STOCK PLAN
---------------------------------------------------------------
(Full title of the plan)

Copy to:
ROBERT S. WHITEHEAD T. MICHAEL HIRD
Trega Biosciences, Inc. Pillsbury Madison & Sutro LLP
9880 Campus Point Drive 101 W. Broadway, Suite 1800
San Diego, California 92121 San Diego, California 92101
(619) 410-6500 (619) 544-3176
- ------------------------------ -----------------------------
(Name, address and telephone
number, including area code,
of agent for service)

<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------
Title of Amount Proposed Maximum Proposed Amount of
Securities To To Be Offering Price Maximum Aggregate Registration
Be Registered Registered per Share(1) Offering Price(1) Fee
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 707,564 shares $0.0085 $ 6,014.30
par value $.001 298,734 shares $0.2059 $61,509.33
65,458 shares $0.4118 $26,955.61
--------------- ----------
Total: 1,071,756 shares Total: $94,479.24 $26.27
- -----------------------------------------------------------------------------------------------
</TABLE>

(1) Pursuant to Rule 457(h)(i) under the Securities Act of 1933, the
registration fee is based upon the price at which the options may be
exercised.

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

This Registration Statement shall become effective upon filing in accordance
with Rule 462 under the Securities Act of 1933.

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

<PAGE> 2
PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

The Registrant and NaviCyte, Inc., a Delaware corporation ("NaviCyte"),
have entered into that certain Agreement and Plan of Reorganization (the "Merger
Agreement") pursuant to which NaviCyte has been merged with and into a wholly
owned subsidiary of the Registrant (the "Merger"). As a result, at the effective
time of the Merger (the "Effective Time"), (i) NaviCyte became a wholly owned
subsidiary of the Registrant, (ii) all shares of the capital stock of NaviCyte
issued and outstanding prior to the Effective Time were converted into merger
consideration as provided in the Merger Agreement, including shares of the
Common Stock of the Registrant, par value $0.001 per share ("Common Stock"), and
(iii) all options to acquire shares of the capital stock of NaviCyte outstanding
prior to the Merger (each of which had been granted under the NaviCyte, Inc.
1997 Stock Plan (the "1997 Plan")) were assumed by the Registrant, and thus
converted into options to acquire shares of Common Stock (collectively, the
"Substitute Options"); however, the Registrant assumed the obligations of
NaviCyte under the 1997 Plan and the Substitute Options remain subject to the
1997 Plan (although the "Company" and the "Stock," for purposes of the 1997
Plan, are now deemed to mean the "Registrant" and "Common Stock," respectively,
from and after the Effective Time).

Item 1. Plan Information.*

Item 2. Registrant Information and Employee Plan Annual Information.*

- ----------
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act of 1933, as amended (the "1933
Act"), and the Note to Part I of Form S-8.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Certain Documents by Reference.

The following documents filed by the Registrant with the Securities and
Exchange Commission (the "SEC") are incorporated by reference in this
Registration Statement:

-2-

<PAGE> 3
(1) The Registrant's Annual Report on Form 10-K (File No. 000-27972)
for the fiscal year ended December 31, 1997, which contains,
among other things, the consolidated financial statements of the
Registrant and certain supplementary data for the fiscal year
ended December 31, 1997 together with the report thereon of Ernst
& Young LLP, independent auditors.

(2) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), since December 31, 1997.

(3) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed on March
13, 1996.

In addition, all documents subsequently filed by the Registrant with the
SEC pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such documents.

Item 4. Description of Securities.

Not applicable.

Item 5. Interests of Named Experts and Counsel.

Not applicable.

Item 6. Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law (the "DGCL")
provides for the indemnification of officers, directors and other corporate
agents in terms sufficiently broad to indemnify such persons under certain
circumstances for liabilities (including reimbursement of expenses incurred)
arising under the 1933 Act. Article VII of the Registrant's Restated Certificate
of Incorporation provides for indemnification to the fullest extent authorized
by the DGCL, and Article V of the Registrant's Amended and Restated Bylaws
provides for broad indemnification of persons acting as officers or directors of
the Registrant. The Registrant has also entered into agreements with each of its
directors and certain of its officers that provide for the indemnification of
and the advancement of expenses to such persons to the greatest extent permitted
by Delaware law.

Item 7. Exemption from Registration Claimed.

Not applicable.

-3-
<PAGE> 4
Item 8. Exhibits.

See Index to Exhibits.

Item 9. Undertakings.

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.

(b) The undersigned Registrant hereby further undertakes
that, for purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

-4-

<PAGE> 5
SIGNATURES

Pursuant to the requirements of the 1933 Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of San Diego, State of California, on this 24th day of November, 1998.

TREGA BIOSCIENCES, INC.

By /s/ Robert S. Whitehead
-------------------------------------
Robert S. Whitehead
President, Chief Executive Officer
and Acting Chief Financial Officer
(Principal Executive, Financial
and Accounting Officer)

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:

<TABLE>
<CAPTION>
Name Title Date
- ---- ----- ----
<S> <C> <C>
/s/ Robert S. Whitehead President, Chief Executive Officer November 24, 1998
- ------------------------------- and Acting Chief Financial Officer
Robert S. Whitehead (Principal Executive, Financial and
Accounting Officer) and Chairman
of the Board of Directors

*/s/ Lawrence D. Muschek President of Research and November 24, 1998
- ------------------------------- Development and Director
Lawrence D. Muschek

*/s/ James C. Blair Director November 24, 1998
- -------------------------------
James C. Blair

*/s/ Harry D. Lambert Director November 24, 1998
- -------------------------------
Harry D. Lambert

*/s/ Jeremy M. Levin Director November 24, 1998
- -------------------------------
Jeremy M. Levin
</TABLE>

-5-
<PAGE> 6
<TABLE>
<CAPTION>
Name Title Date
- ---- ----- ----
<S> <C> <C>
*/s/ Harvey S. Sadow Director November 24, 1998
- -------------------------------
Harvey S. Sadow

- -------------------------------- Director November __, 1998
Ronald R. Tuttle

*/s/ Anders P. Wiklund Director November 24, 1998
- -------------------------------
Anders P. Wiklund

* By /s/ Robert S. Whitehead
---------------------------
Attorney-in-fact
</TABLE>

-6-
<PAGE> 7
INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit
Number Exhibit
<S> <C>
3.1(1) Restated Certificate of
Incorporation of the Registrant.

3.2(2) Certificate of Ownership and Merger
(amending Section 1 of the Restated
Certificate of Incorporation).

3.3(3) Amended and Restated Bylaws of
the Registrant.

4.1 Reference is made to Exhibits 3.1,
3.2 and 3.3.

5.1 Opinion regarding legality of securities to
be offered.

23.1 Consent of Ernst & Young LLP,
Independent Auditors.

23.2 Consent of Pillsbury Madison &
Sutro LLP (included in Exhibit 5.1).

24.1 Power of Attorney.

99.1 NaviCyte, Inc. 1997 Stock Plan.

99.2 Form of Trega Biosciences, Inc. Stock Option
Agreement Relating to Options
Originally Granted under the Navicyte,
Inc. 1997 Stock Plan
(Incentive Stock Option).
</TABLE>

-7-

<PAGE> 8
<TABLE>
<S> <C>
99.3 Form of Trega Biosciences, Inc. Stock Option
Agreement Relating to Options
Originally Granted under the Navicyte,
Inc. 1997 Stock Plan
(Nonstatutory Stock Option).
</TABLE>

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

(1) Incorporated by reference from the Registrant's Registration Statement
on Form S-1 (File No. 333-1376) which was declared effective on March
29, 1996 (to the Exhibit of the same number in such Registration
Statement).

(2) Incorporated by reference from the Registrant's Current Report on Form
8-K dated May 1, 1997 (Exhibit 1).

(3) Incorporated by reference from the Registrant's Annual Report on Form
10-K for the year ended December 31, 1996 (Exhibit 3.4).

-8-

<PAGE> 1
EXHIBIT 5.1

November 23, 1998

Trega Biosciences, Inc.
9880 Campus Point Drive
San Diego, CA 92121

Re: Registration Statement on Form S-8

Ladies and Gentlemen:

With reference to the Registration Statement on Form S-8 to be filed by
Trega Biosciences, Inc., a Delaware corporation (the "Company"), with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
relating to 1,071,756 shares of the Company's Common Stock which may be issuable
pursuant to the NaviCyte, Inc. 1997 Stock Plan (the "Plan"), it is our opinion
that such shares of the Common Stock of the Company, when issued and sold in
accordance with the Plan, will be legally issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as Exhibit 5.1 to the Registration Statement.

Very truly yours,

/s/ Pillsbury Madison & Sutro LLP

<PAGE> 1
EXHIBIT 23.1

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to the NaviCyte, Inc. 1997 Stock Plan of our
report dated February 28, 1998, with respect to the consolidated financial
statements of Trega Biosciences, Inc. included in its Annual Report on Form 10-K
for the year ended December 31, 1997, filed with the Securities and Exchange
Commission.

/s/ ERNST & YOUNG LLP

San Diego, California
November 17, 1998

<PAGE> 1
EXHIBIT 24.1

POWER OF ATTORNEY

KNOW ALL MEN AND WOMEN BY THESE PRESENTS, that each of the undersigned
constitutes and appoints Robert S. Whitehead and Lawrence D. Muschek, and each
of them, his true and lawful attorney-in-fact and agent, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to do the following:

(1) execute a registration statement of Trega Biosciences, Inc., a
Delaware corporation ("Trega"), which registration statement
registers 1,071,756 shares of common stock of Trega (and related
plan interests, if any) for issuance pursuant to the NaviCyte,
Inc. 1997 Stock Plan, and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities
and Exchange Commission (the "SEC"); and

(2) execute any supplement or amendment to the foregoing, and to file
the same, with exhibits thereto and other documents in connection
therewith, with the SEC;

granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and
<PAGE> 2
confirming all that each of said attorneys-in-fact and agents or his substitute
or their substitutes may lawfully do or cause to be done by virtue hereof.

Dated: November 16, 1998 /s/ Robert S. Whitehead
------------------------
Robert S. Whitehead

Dated: November 16, 1998 /s/ James C. Blair
------------------------
James C. Blair

Dated: November 19, 1998 /s/ Harry D. Lambert
------------------------
Harry D. Lambert

Dated: November 18, 1998 /s/ Jeremy M. Levin
------------------------
Jeremy M. Levin

Dated: November 16, 1998 /s/ Lawrence D. Muschek
------------------------
Lawrence D. Muschek

Dated: November 18, 1998 /s/ Harvey S. Sadow
------------------------
Harvey S. Sadow

Dated: November __, 1998
------------------------
Ronald R. Tuttle

Dated: November 17, 1998 /s/ Anders P. Wiklund
------------------------
Anders P. Wiklund

<PAGE> 1
EXHIBIT 99.1

NAVICYTE, INC.

1997 STOCK PLAN

ADOPTED ON FEBRUARY 18, 1997

<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. ESTABLISHMENT AND PURPOSE............................................ 1

SECTION 2. ADMINISTRATION...................................................... 1
(a) Committees of the Board of Directors............................. 1
(b) Authority of the Board of Directors.............................. 1

SECTION 3. ELIGIBILITY......................................................... 1
(a) General Rule..................................................... 1
(b) Ten-Percent Stockholders......................................... 1

SECTION 4. STOCK SUBJECT TO PLAN............................................... 2
(a) Basic Limitation................................................. 2
(b) Additional Shares................................................ 2

SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES............................. 2
(a) Stock Purchase Agreement......................................... 2
(b) Duration of Offers and Nontransferability of Rights.............. 2
(c) Purchase Price................................................... 2
(d) Withholding Taxes................................................ 2
(e) Restrictions on Transfer of Shares and Minimum Vesting........... 3
(f) Accelerated Vesting.............................................. 3

SECTION 6. TERMS AND CONDITIONS OF OPTIONS..................................... 3
(a) Stock Option Agreement........................................... 3
(b) Number of Shares................................................. 3
(c) Exercise Price................................................... 3
(d) Withholding Taxes................................................ 4
(e) Exercisability................................................... 4
(f) Accelerated Exercisability....................................... 4
(g) Basic Term....................................................... 4
(h) Nontransferability............................................... 4
(i) Termination of Service (Except by Death)......................... 4
(j) Leaves of Absence................................................ 5
(k) Death of Optionee................................................ 5
(l) No Rights as a Stockholder....................................... 5
(m) Modification, Extension and Assumption of Options................ 6
(n) Restrictions on Transfer of Shares and Minimum Vesting........... 6
(o) Accelerated Vesting.............................................. 6

SECTION 7. PAYMENT FOR SHARES.................................................. 6
(a) General Rule..................................................... 6
(b) Surrender of Stock............................................... 6
</TABLE>

<PAGE> 3
<TABLE>
<S> <C>
(c) Services Rendered................................................ 6
(d) Promissory Note.................................................. 6
(e) Exercise/Sale.................................................... 7
(f) Exercise/Pledge.................................................. 7

SECTION 8. ADJUSTMENT OF SHARES................................................ 7
(a) General.......................................................... 7
(b) Mergers and Consolidations....................................... 7
(c) Reservation of Rights............................................ 8

SECTION 9. SECURITIES LAW REQUIREMENTS......................................... 8
(a) General.......................................................... 8
(b) Financial Reports................................................ 8

SECTION 10. NO RETENTION RIGHTS................................................ 8

SECTION 11. DURATION AND AMENDMENTS............................................ 8
(a) Term of the Plan................................................. 8
(b) Right to Amend or Terminate the Plan............................. 9
(c) Effect of Amendment or Termination............................... 9

SECTION 12. DEFINITIONS........................................................ 9
(a) "Board of Directors"............................................. 9
(b) "Change In Control".............................................. 9
(c) "Code"........................................................... 9
(d) "Committee"...................................................... 9
(e) "Company"........................................................ 9
(f) "Consultant"..................................................... 10
(g) "Disability"..................................................... 10
(h) "Employee"....................................................... 10
(i) "Exercise Price"................................................. 10
(j) "Fair Market Value".............................................. 10
(k) "ISO"............................................................ 10
(l) "Nonstatutory Option"............................................ 10
(m) "Option"......................................................... 10
(n) "Optionee"....................................................... 10
(o) "Outside Director"............................................... 10
(p) "Parent"......................................................... 10
(q) "Plan"........................................................... 10
(r) "Purchase Price"................................................. 10
(s) "Purchaser"...................................................... 11
(t) "Service"........................................................ 11
(u) "Share".......................................................... 11
(v) "Stock".......................................................... 11
(w) "Stock Option Agreement"......................................... 11
(x) "Stock Purchase Agreement"....................................... 11
</TABLE>

<PAGE> 4
<TABLE>
<S> <C>
(y) "Subsidiary"..................................................... 11

SECTION 13. EXECUTION.......................................................... 11
</TABLE>

<PAGE> 5
NAVICYTE, INC. 1997 STOCK PLAN

SECTION 1. ESTABLISHMENT AND PURPOSE.

The purpose of the Plan is to offer selected individuals an opportunity
to acquire a proprietary interest in the success of the Company, or to increase
such interest, by purchasing Shares of the Company's Stock. The Plan provides
both for the direct award or sale of Shares and for the grant of Options to
purchase Shares. Options granted under the Plan may include Nonstatutory Options
as well as ISOs intended to qualify under Section 422 of the Code.

Capitalized terms are defined in Section 12.

SECTION 2. ADMINISTRATION.

(a) COMMITTEES OF THE BOARD OF DIRECTORS. The Plan may be administered
by one or more Committees. Each Committee shall consist of one or more members
of the Board of Directors who have been appointed by the Board of Directors.
Each Committee shall have such authority and be responsible for such functions
as the Board of Directors has assigned to it. If no Committee has been
appointed, the entire Board of Directors shall administer the Plan. Any
reference to the Board of Directors in the Plan shall be construed as a
reference to the Committee (if any) to whom the Board of Directors has assigned
a particular function.

(b) AUTHORITY OF THE BOARD OF DIRECTORS. Subject to the provisions of
the Plan, the Board of Directors shall have full authority and discretion to
take any actions it deems necessary or advisable for the administration of the
Plan. All decisions, interpretations and other actions of the Board of Directors
shall be final and binding on all Purchasers, all Optionees and all persons
deriving their rights from a Purchaser or Optionee.

SECTION 3. ELIGIBILITY.

(a) GENERAL RULE. Only Employees, Outside Directors and Consultants
shall be eligible for the grant of Options or the direct award or sale of
Shares. Only Employees shall be eligible for the grant of ISOs.

(b) TEN-PERCENT STOCKHOLDERS. An individual who owns more than 10% of
the total combined voting power of all classes of outstanding stock of the
Company, its Parent or any of its Subsidiaries shall not be eligible for
designation as an Optionee or Purchaser unless (i) the Exercise Price is at
least 110% of the Fair Market Value of a Share on the date of grant, (ii) the
Purchase Price (if any) is at least 100% of the Fair Market Value of a Share and
(iii) in the case of an ISO, such ISO by its terms is not exercisable after the
expiration of five years from the date of grant. For purposes of this Subsection
(b), in determining stock ownership, the attribution rules of Section 424(d) of
the Code shall be applied.

-1-
<PAGE> 6
SECTION 4. STOCK SUBJECT TO PLAN.

(a) BASIC LIMITATION. Shares offered under the Plan may be authorized
but unissued Shares or treasury Shares. The aggregate number of Shares that may
be issued under the Plan (upon exercise of Options or other rights to acquire
Shares) shall not exceed 1,950,000 Shares, subject to adjustment pursuant to
Section 8. The number of Shares that are subject to Options or other rights
outstanding at any time under the Plan shall not exceed the number of Shares
that then remain available for issuance under the Plan. The Company, during the
term of the Plan, shall at all times reserve and keep available sufficient
Shares to satisfy the requirements of the Plan.

(b) ADDITIONAL SHARES. In the event that any outstanding Option or other
right for any reason expires or is canceled or otherwise terminated, the Shares
allocable to the unexercised portion of such Option or other right shall again
be available for the purposes of the Plan. In the event that Shares issued under
the Plan are reacquired by the Company pursuant to any forfeiture provision,
right of repurchase or right of first refusal, such Shares shall again be
available for the purposes of the Plan, except that the aggregate number of
Shares which may be issued upon the exercise of ISOs shall in no event exceed
1,950,000 Shares (subject to adjustment pursuant to Section 8).

SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES.

(a) STOCK PURCHASE AGREEMENT. Each award or sale of Shares under the
Plan (other than upon exercise of an Option) shall be evidenced by a Stock
Purchase Agreement between the Purchaser and the Company. Such award or sale
shall be subject to all applicable terms and conditions of the Plan and may be
subject to any other terms and conditions which are not inconsistent with the
Plan and which the Board of Directors deems appropriate for inclusion in a Stock
Purchase Agreement. The provisions of the various Stock Purchase Agreements
entered into under the Plan need not be identical.

(b) DURATION OF OFFERS AND NONTRANSFERABILITY OF RIGHTS. Any right to
acquire Shares under the Plan (other than an Option) shall automatically expire
if not exercised by the Purchaser within 30 days after the grant of such right
was communicated to the Purchaser by the Company. Such right shall not be
transferable and shall be exercisable only by the Purchaser to whom such right
was granted.

(c) PURCHASE PRICE. The Purchase Price of Shares to be offered under the
Plan shall not be less than 85% of the Fair Market Value of such Shares, and a
higher percentage may be required by Section 3(b). Subject to the preceding
sentence, the Purchase Price shall be determined by the Board of Directors at
its sole discretion. The Purchase Price shall be payable in a form described in
Section 7.

(d) WITHHOLDING TAXES. As a condition to the purchase of Shares, the
Purchaser shall make such arrangements as the Board of Directors may require for
the satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with such purchase.

-2-
<PAGE> 7
(e) RESTRICTIONS ON TRANSFER OF SHARES AND MINIMUM VESTING. Any Shares
awarded or sold under the Plan shall be subject to such special forfeiture
conditions, rights of repurchase, rights of first refusal and other transfer
restrictions as the Board of Directors may determine. Such restrictions shall be
set forth in the applicable Stock Purchase Agreement and shall apply in addition
to any restrictions that may apply to holders of Shares generally. Any right to
repurchase a Purchaser's Shares at the original Purchase Price (if any) upon
termination of the Purchaser's Service shall lapse at least as rapidly as the
following schedule:

<TABLE>
<CAPTION>
Anniversary of Date Percentage of
of Sale or Award Shares Vested
- ------------------- -------------
<S> <C>
First 20%
Second 40%
Third 60%
Fourth 80%
Fifth 100%

</TABLE>

Any such repurchase right may be exercised only within 90 days after the
termination of the Purchaser's Service for cash or for cancellation of
indebtedness incurred in purchasing the Shares.

(f) ACCELERATED VESTING. Unless the applicable Stock Purchase Agreement
provides otherwise, any right to repurchase a Purchaser's Shares at the original
Purchase Price (if any) upon termination of the Purchaser's Service shall lapse
and all of such Shares shall become vested if the Company is subject to a Change
in Control.

SECTION 6. TERMS AND CONDITIONS OF OPTIONS.

(a) STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms and conditions of the Plan
and may be subject to any other terms and conditions which are not inconsistent
with the Plan and which the Board of Directors deems appropriate for inclusion
in a Stock Option Agreement. The provisions of the various Stock Option
Agreements entered into under the Plan need not be identical.

(b) NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Shares that are subject to the Option and shall provide for the
adjustment of such number in accordance with Section 8. The Stock Option
Agreement shall also specify whether the Option is an ISO or a Nonstatutory
Option.

(c) EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price. The Exercise Price of an ISO shall not be less than 100% of the
Fair Market Value of a Share on the date of grant, and a higher percentage may
be required by Section 3(b). The Exercise Price of a Nonstatutory Option shall
not be less than 85% of the Fair Market Value of a Share on the date of grant,
and a higher percentage may be required by Section 3(b). Subject to the
preceding two sentences, the Exercise Price under any Option shall be determined
by the Board

-3-
<PAGE> 8
of Directors at its sole discretion. The Exercise Price shall be payable in a
form described in Section 7.

(d) WITHHOLDING TAXES. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Board of Directors may require for
the satisfaction of any federal, state, local or foreign withholding tax
obligations that may arise in connection with such exercise. The Optionee shall
also make such arrangements as the Board of Directors may require for the
satisfaction of any federal, state, local Or foreign withholding tax obligations
that may arise in connection with the disposition of Shares acquired by
exercising an Option.

(e) EXERCISABILITY. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to become exercisable. An Option
shall become exercisable at least as rapidly as set forth in the following
schedule:

<TABLE>
<CAPTION>
Anniversary of Percentage of Shares
Date of Option Grant Exercisable
- -------------------- --------------------
<S> <C>
First 20%
Second 40%
Third 60%
Fourth 80%
Fifth 100%
</TABLE>

Subject to the preceding sentence, the exercisability provisions of any Stock
Option Agreement shall be determined by the Board of Directors at its sole
discretion.

(f) ACCELERATED EXERCISABILITY. Unless the applicable Stock Option
Agreement provides otherwise, all of an Optionee's Options shall become
exercisable in full if the Company is subject to a Change in Control.

(g) BASIC TERM. The Stock Option Agreement shall specify the term of the
Option. The term shall not exceed 10 years from the date of grant, and a shorter
term may be required by Section 3(b). Subject to the preceding sentence, the
Board of Directors at its sole discretion shall determine when an Option is to
expire.

(h) NONTRANSFERABILITY. No Option shall be transferable by the Optionee
other than by beneficiary designation, will or the laws of descent and
distribution. An Option may be exercised during the lifetime of the Optionee
only by the Optionee or by the Optionee's guardian or legal representative. No
Option or interest therein may be transferred, assigned, pledged or hypothecated
by the Optionee during the Optionee's lifetime, whether by operation of law or
otherwise, or be made subject to execution, attachment or similar process.

(i) TERMINATION OF SERVICE (EXCEPT BY DEATH). If an Optionee's Service
terminates for any reason other than the Optionee's death, then the Optionee's
Options shall expire on the earliest of the following occasions:

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<PAGE> 9
(i) The expiration date determined pursuant to Subsection (g)
above;

(ii) The date three months after the termination of the
Optionee's Service for any reason other than Disability; or

(iii) The date six months after the termination of the Optionee's
Service by reason of Disability.

The Optionee may exercise all or part of the Optionee's Options at any time
before the expiration of such Options under the preceding sentence, but only to
the extent that such Options had become exercisable before the Optionee's
Service terminated (or became exercisable as a result of the termination) and
the underlying Shares had vested before the Optionee's Service terminated (or
vested as a result of the termination). The balance of such Options shall lapse
when the Optionee's Service terminates. In the event that the Optionee dies
after the termination of the Optionee's Service but before the expiration of the
Optionee's Options, all or part of such Options may be exercised (prior to
expiration) by the executors or administrators of the Optionee's estate or by
any person who has acquired such Options directly from the Optionee by
beneficiary designation bequest or inheritance, but only to the extent that such
Options had become exercisable before the Optionee's Service terminated (or
became exercisable as a result of the termination) and the underlying Shares had
vested before the Optionee's Service terminated (or vested as a result of the
termination).

(j) LEAVES OF ABSENCE. For purposes of Subsection (i) above, Service
shall be deemed to continue while the Optionee is on a bona fide leave of
absence, if such leave was approved by the Company in writing and if continued
crediting of Service for this purpose is expressly required by the terms of such
leave or by applicable law (as determined by the Company).

(k) DEATH OF OPTIONEE. If an Optionee dies while the Optionee is in
Service, then the Optionee's Options shall expire on the earlier of the
following dates:

(i) The expiration date determined pursuant to Subsection (g)
above;

(ii) The date 12 months after the Optionee's death.

All or part of the Optionee's Options may be exercised at any time before the
expiration of such Options under the preceding sentence by the executors or
administrators of the Optionee's estate or by any person who has acquired such
Options directly from the Optionee by beneficiary designation, bequest or
inheritance, but only to the extent that such Options had become exercisable
before the Optionee's death or became exercisable as a result of the death. The
balance of such Options shall lapse when the Optionee dies.

(l) NO RIGHTS AS A STOCKHOLDER. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by the Optionee's Option until

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<PAGE> 10
such person becomes entitled to receive such Shares by filing a notice of
exercise and paying the Exercise Price pursuant to the terms of such Option.

(m) MODIFICATION, EXTENSION AND ASSUMPTION OF OPTIONS. Within the
limitations of the Plan, the Board of Directors may modify, extend or assume
outstanding Options or may accept the cancellation of outstanding Options
(whether granted by the Company or another issuer) in return for the grant of
new Options for the same or a different number of Shares and at the same or a
different Exercise Price. The foregoing notwithstanding, no modification of an
Option shall, without the consent of the Optionee, impair the Optionee's rights
or increase the Optionee's obligations under such Option.

(n) RESTRICTIONS ON TRANSFER OF SHARES AND MINIMUM VESTING. Any Shares
issued upon exercise of an Option shall be subject to such special forfeiture
conditions, rights of repurchase, rights of first refusal and other transfer
restrictions as the Board of Directors may determine. Such restrictions shall be
set forth in the applicable Stock Option Agreement and shall apply in addition
to any restrictions that may apply to holders of Shares generally. Any right to
repurchase an Optionee's Shares at the original Exercise Price upon termination
of the Optionee's Service shall lapse at least as rapidly as the schedule set
forth in Subsection (e) above. Any such repurchase right may be exercised only
within 90 days after the termination of the Optionee's Service for cash or for
cancellation of indebtedness incurred in purchasing the Shares.

(o) ACCELERATED VESTING. Unless the applicable Stock Option Agreement
provides otherwise, any right to repurchase an Optionee's Shares at the original
Exercise Price upon termination of the Optionee's Service shall lapse and all of
such Shares shall become vested if the Company is subject to a Change in
Control.

SECTION 7. PAYMENT FOR SHARES.

(a) GENERAL RULE. The entire Purchase Price or Exercise Price of Shares
issued under the Plan shall be payable in cash or cash equivalents at the time
when such Shares are purchased, except as otherwise provided in this Section 7.

(b) SURRENDER OF STOCK. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part with Shares owned by the Optionee
or the Optionee's representative. Such Shares shall be surrendered to the
Company in good form for transfer and shall be valued at their Fair Market Value
on the date when the Option is exercised. This Subsection (b) shall not apply to
the extent that acceptance of Shares in payment of the Exercise Price would
cause the Company to recognize compensation expense with respect to the Option
for financial reporting purposes.

(c) SERVICES RENDERED. At the discretion of the Board of Directors,
Shares may be awarded under the Plan in consideration of services rendered to
the Company, a Parent or a Subsidiary prior to the award.

(d) PROMISSORY NOTE. To the extent that a Stock Option Agreement or
Stock Purchase Agreement so provides, all or a portion of the Exercise Price or
Purchase Price (as the case may

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<PAGE> 11
be) of Shares issued under the Plan may be paid with a full-recourse promissory
note. The par value of the Shares, if newly issued, shall be paid in cash or
cash equivalents. The Shares shall be pledged as security for payment of the
principal amount of the promissory note and interest thereon. The interest rate
payable under the terms of the promissory note shall not be less than the
minimum rate (if any) required to avoid the imputation of additional interest
under the Code. Subject to the foregoing, the Board of Directors (at its sole
discretion) shall specify the term, interest rate, amortization requirements (if
any) and other provisions of such note.

(e) EXERCISE/SALE. To the extent that a Stock Option Agreement so
provides, and if Stock is publicly traded, payment may be made all or in part by
the delivery (on a form prescribed by the Company) of an irrevocable direction
to a securities broker approved by the Company to sell Shares and to deliver all
or part of the sales proceeds to the Company in payment of all or part of the
Exercise Price and any withholding taxes.

(f) EXERCISE/PLEDGE. To the extent that a Stock Option Agreement so
provides, and if Stock is publicly traded, payment may be made all or in part by
the delivery (on a form prescribed by the Company) of an irrevocable direction
to pledge Shares to a securities broker or lender approved by the Company, as
security for a loan, and to deliver all or part of the loan proceeds to the
Company in payment of all or part of the Exercise Price and any withholding
taxes.

SECTION 8. ADJUSTMENT OF SHARES.

(a) GENERAL. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of an extraordinary
dividend payable in a form other than Shares in an amount that has a material
effect on the Fair Market Value of the Stock, a combination or consolidation of
the outstanding Stock into a lesser number of Shares, a recapitalization, a
spin-off, a reclassification or a similar occurrence, the Board of Directors
shall make appropriate adjustments in one or more of (i) the number of Shares
available for future grants under Section 4, (ii) the number of Shares covered
by each outstanding Option or (iii) the Exercise Price under each outstanding
Option.

(b) MERGERS AND CONSOLIDATIONS. In the event that the Company is a party
to a merger or consolidation, outstanding Options shall be subject to the
agreement of merger or consolidation. Such agreement, without the Optionees'
consent, may provide for:

(i) The continuation of such outstanding Options by the Company
(if the Company is the surviving corporation;

(ii) The assumption of the Plan and such outstanding Options by
the surviving corporation or its parent;

(iii) The substitution by the surviving corporation or its parent
of options with substantially the same terms for such outstanding
Options; or

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<PAGE> 12
(iv) The cancellation of such outstanding Options without payment
of any consideration.

(c) RESERVATION OF RIGHTS. Except as provided in this Section 8, an
Optionee or Purchaser shall have no rights by reason of (i) any subdivision or
consolidation of shares of stock of any class, (ii) the payment of any dividend
or (iii) any other increase or decrease in the number of shares of stock of any
class. Any issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.

SECTION 9. SECURITIES LAW REQUIREMENTS.

(a) GENERAL. Shares shall not be issued under the Plan unless the
issuance and delivery of such Shares comply with (or are exempt from) all
applicable requirements of law, including (without limitation) the Securities
Act of 1933, as amended, the rules and regulations promulgated thereunder, state
securities laws and regulations, and the regulations of any stock exchange or
other securities market on which the Company's securities may then be traded.

(b) FINANCIAL REPORTS. The Company each year shall furnish to Optionees,
Purchasers and stockholders who have received Stock under the Plan its balance
sheet and income statement, unless such Optionees, Purchasers or stockholders
are key Employees whose duties with the Company assure them access to equivalent
information. Such balance sheet and income statement need not be audited.

SECTION 10. NO RETENTION RIGHTS.

Nothing in the Plan or in any right or Option granted under the Plan
shall confer upon the Purchaser or Optionee any right to continue in Service for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Company (or any Parent or Subsidiary employing or
retaining the Purchaser or Optionee) or of the Purchaser or Optionee, which
rights are hereby expressly reserved by each, to terminate his or her Service at
any time and for any reason, with or without cause.

SECTION 11. DURATION AND AMENDMENTS.

(a) TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board of Directors, subject to the
approval of the Company's stockholders. In the event that the stockholders fail
to approve the Plan within 12 months after its adoption by the Board of
Directors, any grants of Options or sales or awards of Shares that have already
occurred shall be rescinded, and no additional grants, sales or awards shall be
made thereafter under the Plan. The Plan shall terminate automatically 10 years
after its adoption by

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<PAGE> 13
the Board of Directors and may be terminated on any earlier date pursuant to
Subsection (b) below.

(b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board of Directors may
amend, suspend or terminate the Plan at any time and for any reason; provided,
however, that any amendment of the Plan which increases the number of Shares
available for issuance under the Plan (except as provided in Section 8), or
which materially changes the class of persons who are eligible for the grant of
ISOs, shall be subject to the approval of the Company's stockholders.
Stockholder approval shall not be required for any other amendment of the Plan.

(c) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or
sold under the Plan after the termination thereof, except upon exercise of an
Option granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Share previously issued or any Option
previously granted under the Plan.

SECTION 12. DEFINITIONS.

(a) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time.

(b) "CHANGE IN CONTROL" shall mean:

(i) The consummation of a merger or consolidation of the Company
with or into another entity or any other corporate reorganization, if
more than 50% of the combined voting power of the continuing or
surviving entity's securities outstanding immediately after such merger,
consolidation or other reorganization is owned by persons who were not
stockholders of the Company immediately prior to such merger,
consolidation or other reorganization; or

(ii) The sale, transfer or other disposition of all or
substantially all of the Company's assets.

A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.

(d) "COMMITTEE" shall mean a committee of the Board of Directors, as
described in Section 2(a).

(e) "COMPANY" shall mean Navicyte, Inc., a Delaware corporation.

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<PAGE> 14
(f) "CONSULTANT" shall mean an individual who performs bona fide
services for the Company, a Parent or a Subsidiary as a consultant or advisor,
excluding Employees and Outside Directors.

(g) "DISABILITY" shall mean that the Optionee is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment.

(h) "EMPLOYEE" shall mean any individual who is a common-law employee of
the Company, a Parent or a Subsidiary.

(i) "EXERCISE PRICE" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified by the Board of Directors in
the applicable Stock Option Agreement.

(j) "FAIR MARKET VALUE" shall mean the fair market value of a Share, as
determined by the Board of Directors in good faith. Such determination shall be
conclusive and binding on all persons.

(k) "ISO" shall mean an employee incentive stock option described in
Section 422(b) of the Code.

(l) "NONSTATUTORY OPTION" shall mean a stock option not described in
Sections 422(b) or 423(b) of the Code.

(m) "OPTION" shall mean an ISO or Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.

(n) "OPTIONEE" shall mean an individual who holds an Option.

(o) "OUTSIDE DIRECTOR" shall mean a member of the Board of Directors who
is not an Employee.

(p) "PARENT" shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.

(q) "PLAN" shall mean this Navicyte, Inc. 1997 Stock Plan.

(r) "PURCHASE PRICE" shall mean the consideration for which one Share
may be acquired under the Plan (other than upon exercise of an Option), as
specified by the Board of Directors.

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<PAGE> 15
(s) "PURCHASER" shall mean an individual to whom the Board of Directors
has offered the right to acquire Shares under the Plan (other than upon exercise
of an Option).

(t) "SERVICE" shall mean service as an Employee, Outside Director or
Consultant.

(u) "SHARE" shall mean one share of Stock, as adjusted in accordance
with Section 8 (if applicable).

(v) "STOCK" shall mean the Common Stock of the Company, with a par value
of $.0001 per Share.

(w) "STOCK OPTION AGREEMENT" shall mean the agreement between the
Company and an Optionee which contains the terms, conditions and restrictions
pertaining to the Optionee's Option.

(x) "STOCK PURCHASE AGREEMENT" shall mean the agreement between the
Company and a Purchaser who acquires Shares under the Plan which contains the
terms, conditions and restrictions pertaining to the acquisition of such Shares.

(y) "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.

SECTION 13. EXECUTION.

To record the adoption of the Plan by the Board of Directors, the Company has
caused its authorized officer to execute the same.

NAVICYTE, INC.

By:_____________________________________

Title:__________________________________

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<PAGE> 1
EXHIBIT 99.2

THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.(1)

TREGA BIOSCIENCES, INC.
STOCK OPTION AGREEMENT RELATING TO OPTIONS
ORIGINALLY GRANTED UNDER THE
NAVICYTE, INC. 1997 STOCK PLAN
(INCENTIVE STOCK OPTION)

Name of Optionee: ____________________________
Number of Shares of Trega
Common Stock: ____________________________
Type of Option: Incentive Stock Option
Exercise Price Per Share: ____________________________
Effective Date of
Original Grant: ____________________________
Date Exercisable: Immediately Upon Issuance
Vesting: Fully Vested
Absolute Expiration Date: ____________________________

This Stock Option Agreement (this "OPTION AGREEMENT") is entered into as
of __________ __, 1998 (the "OPTION AGREEMENT DATE") between the above-named
Optionee (the "OPTIONEE") and Trega Biosciences, Inc., a Delaware corporation
("TREGA" or the "COMPANY"), with reference to the following facts:

A. Trega and NaviCyte, Inc., a Delaware corporation ("NAVICYTE"), have
entered into that certain Agreement and Plan of Reorganization (the "MERGER
AGREEMENT") pursuant to which NaviCyte has been merged with and into a wholly
owned subsidiary of Trega (the "MERGER"). As a result, at the effective time of
the Merger (the "EFFECTIVE TIME"), (i) NaviCyte became a wholly owned subsidiary
of Trega, (ii) all shares of the capital stock of NaviCyte issued and
outstanding prior to the Effective Time were converted into merger consideration
as provided in the Merger Agreement, including shares of the Common Stock of
Trega, par value $0.001 per share ("TREGA COMMON STOCK"), and (iii) all options
to acquire shares of the capital stock of

- --------

1 Note: It is the intent of Trega to file a Registration Statement on Form S-8
with the Securities and Exchange Commission with respect to the shares of Trega
Common Stock issuable upon any exercise of the Option (as defined herein)
following the Effective Time (as defined herein). However, on the date of this
Stock Option Agreement, such a Registration Statement has not yet been filed.

<PAGE> 2
NaviCyte outstanding prior to the Merger were converted into options to acquire
shares of Trega Common Stock ("SUBSTITUTE TREGA OPTIONS").

B. Among other matters contemplated by the Merger Agreement, one-fourth
(25%) of all shares of Trega Common Stock issued as a result of the Merger
(whether as merger consideration or upon the exercise of any Substitute Trega
Option, including the Option (as defined below) set forth herein) shall be
"ESCROW SHARES" as defined in the Merger Agreement.
As a result, and without limitation:

* one-fourth (25%) of the shares of Trega Common Stock available
for issuance upon the exercise of the Option (i) are subject to
the provisions of Sections 1.5 and 6 of the Merger Agreement
(including, without limitation, Trega's Offset Right (as defined
in the Merger Agreement)), SCHEDULE 1 to the Merger Agreement
and the provisions of the Escrow Agreement (as defined in the
Merger Agreement) and (ii) shall be delivered, as applicable
(e.g., subject to Trega's rights pursuant to the Trega's Offset
Right and/or release pursuant to the provisions of SCHEDULE 1 to
the Merger Agreement), into the Escrow Account (as defined in
the Merger Agreement) promptly upon issuance; and

* the Optionee, upon any exercise of the Option, shall become an
"ENTITLED HOLDER" for purposes of Section 1.5(c)(iv) of the
Merger Agreement as though the Option had been exercised prior
to the Effective Time.

C. Prior to the Effective Time, the Optionee held an option to acquire
shares of the Common Stock of NaviCyte, par value $0.0001 per share (the "PRIOR
OPTION"), which had been granted under the NaviCyte, Inc. 1997 Stock Plan (the
"1997 PLAN"). This Option Agreement is intended to reflect the assumption by
Trega of the obligations of NaviCyte with respect to the Prior Option (albeit
subject to the terms and conditions set forth herein).

D. This Option Agreement remains subject to the terms of the 1997 Plan
which, for purposes of this Option Agreement, Trega has assumed (although the
"Company" and the "Stock," for purposes of the 1997 Plan, shall be deemed to be
"Trega" and "Trega Common Stock," respectively, from and after the Effective
Time).

NOW, THEREFORE, in consideration of the premises and of the mutual
provisions, agreements and covenants herein contained, the parties agree as
follows:

SECTION 1. OPTION

(a) Option. On the terms and conditions set forth in this Option
Agreement, the Optionee possesses the option (the "OPTION") to purchase, at the
Exercise Price Per Share (as noted above), the Number of Shares of Trega Common
Stock (as noted above).

(b) Type of Option. The Option is intended to be an ISO, as noted above.

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<PAGE> 3
(c) Stock Plan and Defined Terms. The Option and this Option Agreement
are subject to the 1997 Plan, a copy of which the Optionee acknowledges having
received. The provisions of the 1997 Plan are incorporated into this Option
Agreement by this reference (although (i) the "Company" and the "Stock," for
purposes of the 1997 Plan, shall be deemed to be "Trega" and "Trega Common
Stock," respectively, from and after the Effective Time and (ii) to the extent
that any conflict shall exist between the terms of this Option Agreement and the
1997 Plan, the terms of this Option Agreement shall control).

(d) Terms. Capitalized terms are defined in Section 14 of this Agreement
and/or in the Plan.

SECTION 2. RIGHT TO EXERCISE

(a) Exercisability. The Option may be immediately exercised in full.
Shares acquired by the Optionee upon any exercise of the Option are not subject
to any right of repurchase in favor of the Company under the 1997 Plan.

(b) $100,000 Limitation. Since the Option is designated as an ISO, the
Optionee's right to exercise the Option shall be deferred to the extent (and
only to the extent) that the Option otherwise would not be treated as an ISO by
reason of the $100,000 annual limitation under Section 422(d) of the Code,
except that:

(i) The Optionee's right to exercise the Option shall not be
deferred with respect to that portion of the Shares subject to the Option whose
Fair Market Value as of the Effective Date of Original Grant (as noted above)
exceeds $500,000; and

(ii) The Optionee's right to exercise the Option shall no longer
be deferred in the event that (A) a Change in Control occurs, (B) the Option is
not assumed by the surviving corporation or its parent and (C) the surviving
corporation or its parent does not substitute its own option for the Option.

SECTION 3. NO TRANSFER OR ASSIGNMENT OF OPTION

Except as otherwise provided in this Option Agreement, the Option and
the rights and privileges conferred hereby shall not be sold, pledged or
otherwise transferred (whether by operation of law or otherwise) and shall not
be subject to sale under execution, attachment, levy, or similar process.

SECTION 4. EXERCISE PROCEDURES

(a) Notice of Exercise. The Optionee or the Optionee's representative
may exercise the Option by giving written notice to the Company pursuant to
Section 13(c). The notice shall specify the election to exercise the Option, the
number of Shares for which it is being exercised and the form of payment. The
notice shall be signed by the person exercising the Option. In the event that
the Option is being exercised by the representative of the Optionee, the notice
shall be accompanied by proof (satisfactory to the Company) of the
representative's right to exercise

- 3 -
<PAGE> 4
the Option. The Optionee or the Optionee's representative shall deliver to the
Company, at the time of giving the notice, payment in a form permissible under
Section 5 for the full amount of the Purchase Price.

(b) Issuance of Shares. After receiving a proper notice of exercise, the
Company shall cause to be issued a certificate or certificates for the Shares as
to which the Option has been exercised, registered in the name of the person
exercising the Option (or in the names of such person and his or her spouse as
community property or as joint tenants with right of survivorship). The Company
shall cause such certificate or certificates to be deposited in escrow or
delivered to or upon the order of the person exercising the Option.

(c) Withholding Taxes. In the event that the Company determines that it
is required to withhold any tax as a result of the grant or exercise of the
Option, the Optionee, as a condition to the exercise of the Option, shall make
arrangements satisfactory to the Company to enable it to satisfy all withholding
requirements. The Optionee shall also make arrangements satisfactory to the
Company to enable it to satisfy any withholding requirements that may arise in
connection with the vesting or disposition of Shares purchased by exercising the
Option.

SECTION 5. PAYMENT FOR STOCK

(a) Cash. All or part of the Purchase Price may be paid in cash or cash
equivalents.

(b) Surrender of Stock. All or part of the Purchase Price may be paid by
the surrender of Shares in good form for transfer. Such Shares must have a fair
market value (as determined by the Board of Directors) on the date of exercise
of the Option which, together with any amount paid in another form permissible
under this Section 5, is equal to the Purchase Price. The Optionee shall not
surrender Shares in payment of the Exercise Price Per Share (as noted above) if
such surrender would cause the Company to recognize compensation expense with
respect to the Option for financial reporting purposes.

(c) Exercise/Sale. If Stock is publicly traded, all or part of the
Purchase Price and any withholding taxes may be paid by the delivery (on a form
prescribed by the Company) of an irrevocable direction to a securities broker
approved by the Company to sell Shares and to deliver all or part of the sales
proceeds to the Company.

(d) Exercise/Pledge. If Stock is publicly traded, all or part of the
Purchase Price and any withholding taxes may be paid by the delivery (on a form
prescribed by the Company) of an irrevocable direction to pledge Shares to a
securities broker or lender approved by the Company, as security for a loan, and
to deliver all or part of the loan proceeds to the Company.

SECTION 6. TERM AND EXPIRATION

(a) Basic Term. This option shall in any event expire on the Absolute
Expiration Date (as noted above), which date is ten (10) years after the
Effective Date of Original Grant (as noted above), or five (5) years after the
Effective Date of Original Grant if the Option is designated as an ISO (as noted
above) and Section 3(b) of the Plan applies.

- 4 -
<PAGE> 5
(b) Termination of Service (Except by Death). If the Optionee's Service
terminates for any reason other than death, then the Option shall expire on the
earliest of the following occasions:

(i) The expiration date determined pursuant to Subsection
(a) above;

(ii) The date three (3) months after the termination of the
Optionee's Service for any reason other than Disability; or

(iii) The date six (6) months after the termination of the
Optionee's Service by reason of Disability.

The Optionee may exercise all or part of the Option at any time before its
expiration under the preceding sentence. In the event that the Optionee dies
after termination of Service but before the expiration of the Option, all or
part of the Option may be exercised (prior to expiration) by the executors or
administrators of the Optionee's estate or by any person who has acquired the
Option directly from the Optionee by beneficiary designation, bequest or
inheritance.

(c) Death of the Optionee. If the Optionee dies while in Service,
then the Option shall expire on the earlier of the following dates:

(i) The expiration date determined pursuant to Subsection (a)
above; or

(ii) The date 12 months after the Optionee's death.

All or part of the Option may be exercised at any time before its expiration
under the preceding sentence by the executors or administrators of the
Optionee's estate or by any person who has acquired the Option directly from the
Optionee by beneficiary designation, bequest or inheritance.

(d) Leaves of Absence. For any purpose under this Agreement,
Service shall be deemed to continue while the Optionee is on a bona fide leave
of absence, if such leave was approved by the Company in writing and if
continued crediting of Service for such purpose is expressly required by the
terms of such leave or by applicable law (as determined by the Company).

(e) Notice Concerning ISO Treatment. Since the Option is
designated as an ISO (as noted above), it ceases to qualify for favorable tax
treatment as an ISO to the extent it is exercised (i) more than three months
after the date the Optionee ceases to be an Employee for any reason other than
death or permanent and total disability (as defined in Section 22(e)(3) of the
Code), (ii) more than 12 months after the date the Optionee ceases to be an
Employee by reason of such permanent and total disability or (iii) after the
Optionee has been on a leave of absence for more than 90 days, unless the
Optionee's reemployment rights are guaranteed by statute or by contract.

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<PAGE> 6
SECTION 7. NO FURTHER RIGHTS TO ACQUIRE NAVICYTE SHARES

Without limiting any other consents or arrangements between the Optionee
and the Company and/or NaviCyte, the Optionee agrees that the Optionee has no
further entitlement whatsoever to acquire any shares of the capital stock of
NaviCyte.

SECTION 8. ESCROW ARRANGEMENTS; OFFSET SHARES

(a) The Merger Agreement, to the extent that it relates to the issuance
of Escrow Shares and Trega's Offset Right, and any and all arrangements relating
thereto (e.g., Sections 1.5 and 6 of the Merger Agreement, SCHEDULE 1 to the
Merger Agreement and the form of Escrow Agreement attached to the Merger
Agreement), is hereby incorporated herein by reference as though fully set forth
herein.

(b) The Optionee agrees that one-fourth (25%) of all shares of Trega
Common Stock issued upon any exercise of the Option shall be "ESCROW SHARES" as
defined in the Merger Agreement. As a result, and without limitation:

SECTION 9. LEGALITY OF INITIAL ISSUANCE

No Shares shall be issued upon any exercise of the Option unless and
until the Company has determined that:

(a) It and the Optionee have taken any actions required to
register the Shares under the Securities Act or to perfect an exemption from the
registration requirements thereof;

(b) Any applicable listing requirements of any stock exchange on
which Stock is listed or any requirements of any primary inter-dealer quotation
service on which trading in the Stock is reported have been satisfied; and

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<PAGE> 7
SECTION 10. NO REGISTRATION RIGHTS

The Company may, but shall not be obligated to, register or qualify the
sale of Shares under the Securities Act or any other applicable law. The Company
shall not be obligated to take any affirmative action in order to cause the sale
of Shares under this Option Agreement to comply with any law.

SECTION 11. RESTRICTIONS ON TRANSFER

(a) Securities Law Restrictions. Regardless of whether the offering and
sale of Shares under the 1997 Plan have been registered under the Securities Act
or have been registered or qualified under the securities laws of any state, the
Company, at its discretion, may impose restrictions upon the sale, pledge or
other transfer of such Shares (including the placement of appropriate legends on
stock certificates or the imposition of stop-transfer instructions) if, in the
judgment of the Company, such restrictions are necessary or desirable in order
to achieve compliance with the Securities Act, the securities laws of any state
or any other law.

(b) ONE-YEAR PROHIBITION ON SALES. NOTWITHSTANDING ANY OTHER PROVISION
IN THIS OPTION AGREEMENT OR THE 1997 PLAN TO THE CONTRARY, ANY SHARES ACQUIRED
UPON AN EXERCISE OF THE OPTION SHALL NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF FOR A PERIOD OF ONE YEAR FOLLOWING THE OPTION AGREEMENT DATE.

(c) Investment Intent at Grant. The Optionee represents and agrees that
the Shares to be acquired upon any exercise of the Option will be acquired for
investment, and not with a view to the sale or distribution thereof.

(d) Investment Intent at Exercise. In the event that the sale of Shares
under the 1997 Plan is not registered under the Securities Act but an exemption
is available which requires investment representations or other representations,
the Optionee shall represent and agree at the time of exercise that the Shares
being acquired upon any exercise of the Option are being acquired for
investment, and not with a view to the sale or distribution thereof, and shall
make such other representations as are deemed necessary or appropriate by the
Company and its counsel.

(e) Legends. All certificates evidencing Shares purchased under this
Agreement shall bear the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNTIL [_________], 1999
[ONE YEAR FOLLOWING THE OPTION AGREEMENT DATE]

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<PAGE> 8
All certificates evidencing Shares purchased upon an exercise of the Option in
an unregistered transaction shall bear the following legend (and such other
restrictive legends as are required or deemed advisable under the provisions of
any applicable law):

"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."

(f) Removal of Legends. If, in the opinion of the Company and its
counsel, any legend placed on a stock certificate representing Shares issued
upon an exercise of this Option is no longer required, the holder of such
certificate shall be entitled to exchange such certificate for a certificate
representing the same number of Shares but without such legend.

(g) Administration. Any determination by the Company and its
counsel in connection with any of the matters set forth in this Section 11 shall
be conclusive and binding on the Optionee and all other persons.

SECTION 12. ADJUSTMENT OF SHARES

In the event of any transaction described in Section 8(a) of the Plan,
the terms of the Option (including, without limitation, the number and kind of
Shares subject to the Option and the Exercise Price Per Share as noted above)
shall be adjusted as set forth in Section 8(a) of the Plan. In the event that
the Company is a party to a merger or consolidation, the Option shall be subject
to the agreement of merger or consolidation, as provided in Section 8(b) of the
Plan.

SECTION 13. MISCELLANEOUS PROVISIONS

(a) Rights as a Stockholder. Neither the Optionee nor the
Optionee's representative shall have any rights as a stockholder with respect to
any Shares subject to the Option until the Optionee or the Optionee's
representative becomes entitled to receive such Shares by filing a notice of
exercise and paying the Purchase Price pursuant to Sections 4 and 5.

(b) No Retention Rights. Nothing in this Option Agreement or in
the Plan shall confer upon the Optionee any right to continue in Service for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Company (or any Parent or Subsidiary employing or retaining
the Optionee), which rights are hereby expressly reserved, to terminate the
Optionee's Service at any time and for any reason, with or without cause.

(c) Notice. Any notice required by the terms of this Agreement
shall be given in writing and shall be deemed effective upon personal delivery
or upon deposit with the United States Postal Service, by registered or
certified mail, with postage and fees prepaid. Notice shall

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<PAGE> 9
be addressed to the Company at its principal executive office and to the
Optionee at the address that he or she most recently provided to the Company.

(d) Entire Agreement. This Option Agreement, the 1997 Plan and
the Merger Agreement constitute the entire contract between the parties hereto
with regard to the subject matter hereof. They supersede any other agreements,
representations or understandings (whether oral or written and whether express
or implied) which relate to the subject matter hereof.

(e) Choice of Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, as such laws
are applied to contracts entered into and performed in such State.

SECTION 14. DEFINITIONS

(a) "AGREEMENT" shall mean this Stock Option Agreement.

(b) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time or, if a Committee has been appointed,
such Committee.

(i) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate reorganization, if
more than 50% of the combined voting power of the continuing or surviving
entity's securities outstanding immediately after such merger, consolidation or
other reorganization is owned by persons who were not stockholders of the
Company immediately prior to such merger, consolidation or other reorganization;
or

(ii) The sale, transfer or other disposition of all or
substantially all of the Company's assets.

(d) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.

(e) "COMMITTEE" shall mean a committee of the Board of Directors,
as described in Section 2 of the Plan.

(f) "COMPANY" shall mean Trega Biosciences, Inc., a Delaware
corporation.

(g) "CONSULTANT" shall mean an individual who performs bona fide
services for the Company, a Parent or a Subsidiary as a consultant or advisor,
excluding Employees and Outside Directors.

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<PAGE> 10
(h) [RESERVED]

(i) "DISABILITY" shall mean that the Optionee is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment.

(j) "EMPLOYEE" shall mean any individual who is a common-law
employee of the Company, a Parent or a Subsidiary.

(k) [RESERVED]

(l) "FAIR MARKET VALUE" shall mean the fair market value of a
Share, as determined by the Board of Directors in good faith. Such determination
shall be conclusive and binding on all persons.

(m) "ISO" shall mean an employee incentive stock option described
in Section 422(b) of the Code.

(n) "NONSTATUTORY OPTION" shall mean a stock option not described
in Sections 422(b) or 423(b) of the Code.

(o) [RESERVED]

(p) [RESERVED]

(q) "OUTSIDE DIRECTOR" shall mean a member of the Board of
Directors who is not an Employee.

(r) "PARENT" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

(s) "PLAN" shall mean the Navicyte, Inc. 1997 Stock Plan, as in
effect immediately prior to the Effective Time.

(t) "PURCHASE PRICE" shall mean the Exercise Price Per Share (as
noted above) multiplied by the number of Shares with respect to which the Option
is being exercised.

(u) [RESERVED]

(v) [RESERVED]

(w) [RESERVED]

(x) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.

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<PAGE> 11
(y) "SERVICE" shall mean service as an Employee, Outside Director
or Consultant.

(z) "SHARE" shall mean one share of Stock, as adjusted in
accordance with Section 8 of the Plan (if applicable).

(aa) "STOCK" shall mean the Common Stock of the Company, with a
par value of $0.001 per Share.

(ab) "SUBSIDIARY" shall mean any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company, if
each of the corporations other than the last corporation in the unbroken chain
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

(ac) "TRANSFEREE" shall mean any person to whom the Optionee has
directly or indirectly transferred any Share acquired under this Agreement.

(ad) "TRANSFER NOTICE" shall mean the notice of a proposed
transfer of Shares described in Section 8.

IN WITNESS WHEREOF, the parties have executed this Option Agreement as
of the Option Agreement Date.

TREGA BIOSCIENCES, INC. OPTIONEE:

By: ______________________________ _________________________________________

Its: _____________________________ _________________________________________

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<PAGE> 1
EXHIBIT 99.3

TREGA BIOSCIENCES, INC.
STOCK OPTION AGREEMENT RELATING TO OPTIONS
ORIGINALLY GRANTED UNDER THE
NAVICYTE, INC. 1997 STOCK PLAN
(NONSTATUTORY STOCK OPTION)

Name of Optionee: ____________________________
Number of Shares of Trega
Common Stock: ____________________________
Type of Option: Nonstatutory Stock Option
Exercise Price Per Share: ____________________________
Effective Date of
Original Grant: ____________________________
Date Exercisable: Immediately Upon Issuance
Vesting: Fully Vested
Absolute Expiration Date: ____________________________

- --------
1 Note: It is the intent of Trega to file a Registration Statement on Form S-8
with the Securities and Exchange Commission with respect to the shares of Trega
Common Stock issuable upon any exercise of the Option (as defined herein)
following the Effective Time (as defined herein). However, on the date of this
Stock Option Agreement, such a Registration Statement has not yet been filed.

<PAGE> 2
NaviCyte outstanding prior to the Merger were converted into options to acquire
shares of Trega Common Stock ("SUBSTITUTE TREGA OPTIONS").

NOW, THEREFORE, in consideration of the premises and of the mutual
provisions, agreements and covenants herein contained, the parties agree as
follows:

SECTION 1. OPTION

(b) Type of Option. The Option is intended to be a Nonstatutory Option,
as noted above.

(d) Terms. Capitalized terms are defined in Section 14 of this Agreement
and/or in the Plan.

SECTION 2. RIGHT TO EXERCISE

The Option may be immediately exercised in full. Shares acquired by the
Optionee upon any exercise of the Option are not subject to any right of
repurchase in favor of the Company under the 1997 Plan.

SECTION 3. NO TRANSFER OR ASSIGNMENT OF OPTION

SECTION 4. EXERCISE PROCEDURES

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<PAGE> 4
to satisfy all withholding requirements. The Optionee shall also make
arrangements satisfactory to the Company to enable it to satisfy any withholding
requirements that may arise in connection with the vesting or disposition of
Shares purchased by exercising the Option.

SECTION 5. PAYMENT FOR STOCK

(a) Cash. All or part of the Purchase Price may be paid in cash or cash
equivalents.

SECTION 6. TERM AND EXPIRATION

(a) Basic Term. This option shall in any event expire on the Absolute
Expiration Date (as noted above), which date is ten (10) years after the
Effective Date of Original Grant (as noted above).

(b) Termination of Service (Except by Death). If the Optionee's Service
terminates for any reason, then the Option shall expire on the earliest of the
following occasions:

(i) The expiration date determined pursuant to Subsection (a)
above; or

(ii) The date thirty (30) days after the termination of the
Optionee's Service for any reason;

provided, however, that the Option shall not expire prior to the date which is
two (2) years after the Option Agreement Date.

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<PAGE> 5
the executors or administrators of the Optionee's estate or by any person who
has acquired the Option directly from the Optionee by beneficiary designation,
bequest or inheritance.

SECTION 7. NO FURTHER RIGHTS TO ACQUIRE NAVICYTE SHARES

SECTION 8. ESCROW ARRANGEMENTS; OFFSET SHARES

SECTION 9. LEGALITY OF INITIAL ISSUANCE

No Shares shall be issued upon any exercise of the Option unless and
until the Company has determined that:

(a) It and the Optionee have taken any actions required to
register the Shares under the Securities Act or to perfect an exemption from the
registration requirements thereof;

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<PAGE> 6
(c) Any applicable provisions of state or federal law have been
satisfied.

SECTION 10. NO REGISTRATION RIGHTS

SECTION 11. RESTRICTIONS ON TRANSFER

(e) Legends. All certificates evidencing Shares purchased under this
Agreement shall bear the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNTIL [__________], 1999
[ONE YEAR FOLLOWING THE OPTION AGREEMENT DATE]

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<PAGE> 7
All certificates evidencing Shares purchased upon an exercise of the Option in
an unregistered transaction shall bear the following legend (and such other
restrictive legends as are required or deemed advisable under the provisions of
any applicable law):

SECTION 12. ADJUSTMENT OF SHARES

SECTION 13. MISCELLANEOUS PROVISIONS

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<PAGE> 8
be addressed to the Company at its principal executive office and to the
Optionee at the address that he or she most recently provided to the Company.

SECTION 14. DEFINITIONS

(a) "AGREEMENT" shall mean this Stock Option Agreement.

(b) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time or, if a Committee has been appointed,
such Committee.

(i) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate reorganization, if
more than 50% of the combined voting power of the continuing or surviving
entity's securities outstanding immediately after such merger, consolidation or
other reorganization is owned by persons who were not stockholders of the
Company immediately prior to such merger, consolidation or other reorganization;
or

(ii) The sale, transfer or other disposition of all or
substantially all of the Company's assets.

(d) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.

(e) "COMMITTEE" shall mean a committee of the Board of Directors,
as described in Section 2 of the Plan.

(f) "COMPANY" shall mean Trega Biosciences, Inc., a Delaware
corporation.

(g) "CONSULTANT" shall mean an individual who performs bona fide
services for the Company, a Parent or a Subsidiary as a consultant or advisor,
excluding Employees and Outside Directors.

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<PAGE> 9
(h) [RESERVED]

(i) [RESERVED]

(j) "EMPLOYEE" shall mean any individual who is a common-law
employee of the Company, a Parent or a Subsidiary.

(k) [RESERVED]

(l) "FAIR MARKET VALUE" shall mean the fair market value of a
Share, as determined by the Board of Directors in good faith. Such determination
shall be conclusive and binding on all persons.

(m) "ISO" shall mean an employee incentive stock option described
in Section 422(b) of the Code.

(n) "NONSTATUTORY OPTION" shall mean a stock option not described
in Sections 422(b) or 423(b) of the Code.

(o) [RESERVED]

(p) [RESERVED]

(q) "OUTSIDE DIRECTOR" shall mean a member of the Board of
Directors who is not an Employee.

(s) "PLAN" shall mean the Navicyte, Inc. 1997 Stock Plan, as in
effect immediately prior to the Effective Time.

(t) "PURCHASE PRICE" shall mean the Exercise Price Per Share (as
noted above) multiplied by the number of Shares with respect to which the Option
is being exercised.

(u) [RESERVED]

(v) [RESERVED]

(w) [RESERVED]

(x) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.

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<PAGE> 10
(y) "SERVICE" shall mean service as an Employee, Outside Director
or Consultant.

(z) "SHARE" shall mean one share of Stock, as adjusted in
accordance with Section 8 of the Plan (if applicable).

(aa) "STOCK" shall mean the Common Stock of the Company, with a
par value of $0.001 per Share.

(ac) "TRANSFEREE" shall mean any person to whom the Optionee has
directly or indirectly transferred any Share acquired under this Agreement.

(ad) "TRANSFER NOTICE" shall mean the notice of a proposed
transfer of Shares described in Section 8.

IN WITNESS WHEREOF, the parties have executed this Option Agreement as
of the Option Agreement Date.

TREGA BIOSCIENCES, INC. OPTIONEE:

By: ______________________________ ________________________________________

Its: _____________________________ ________________________________________

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