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                                                                    EXHIBIT 10.3

                             STOCK OPTION AGREEMENT

                      (NON-EMPLOYEE DIRECTOR STOCK OPTION)

      THIS STOCK OPTION AGREEMENT (this "Agreement"), effective as of
_____________ (the "Grant Date"), is by and between LEXICON GENETICS
INCORPORATED, a Delaware corporation (the "Company"), and _______________
("Optionee").

      To carry out the purposes of the Lexicon Genetics Incorporated 2000
Non-Employee Directors' Stock Option Plan (the "Plan"), by providing Optionee
the opportunity to purchase shares of Common Stock, par value $0.001 per share,
of the Company ("Stock"), and in consideration of the mutual agreements and
other matters set forth herein and in the Plan, the Company and Optionee hereby
agree as follows:

      1. Grant of Option. The Company hereby grants to Optionee the right and
option (the "Option") to purchase all or any part of an aggregate of _________
shares of Stock, on the terms and conditions set forth in this Agreement and in
the Plan. The Option shall be treated as a non-statutory stock option and not as
an "incentive stock option" within the meaning of section 422(b) of the Internal
Revenue Code of 1986, as amended (the "Code").

      2. Exercise Price. The price at which Optionee may purchase Stock upon
exercise of the Option (the "Exercise Price") shall be $_______ per share, which
has been determined to be the Fair Market Value (as defined in the Plan) of the
Stock on the Grant Date. The Exercise Price is subject to adjustment under
certain circumstances as provided in the Plan.

      3. Term. The Option shall expire on the 10th anniversary of the Grant
Date, subject to earlier termination under the circumstances specified in
Section 8 of this Agreement.

      4. Exercisability and Vesting. Subject to the terms and conditions set
forth in this Agreement and the Plan, the Option may be exercised, in whole or
in part, at any time and from time to time during the term of the Option, to
purchase the number of shares of Stock that have vested and become exercisable
in accordance with this Agreement. The Option shall vest and become exercisable
with respect to [1/12 of the total number of shares of Stock subject to the
Option each month after grant for 12 months after the Grant Date (For annual
grants)] [1/60 of the total number of shares of Stock subject to the Option each
month after grant for five years after the Grant Date (For initial grants)];
provided that, such vesting schedule may be accelerated upon a change in control
of the Company pursuant to the provisions of the Plan and; provided further,
that, upon the termination of Optionee's Continuous Service (as defined in the
Plan), the Option shall cease to vest and shall terminate with respect to all
shares of Stock that have not vested and become exercisable prior to such time.

      5. Procedures for Exercise. Subject to the terms and conditions set forth
in this Agreement and the Plan, the Option may be exercised by delivery to the
Company at its principal executive office of (i) written notice addressed to the
Secretary of the Company specifying the number of shares of Stock as to which
the Option is being exercised and (ii) payment in full of the Exercise Price for
such shares. The Exercise Price shall be paid in cash or in such other manner as
may be authorized by the administrator of the Plan in accordance with the terms
of the Plan. If the offering, sale and delivery of the shares of Stock issuable
upon exercise of the Option have not been registered under the Securities Act of
1933 (the "Securities Act"), the Company may require Optionee, as a condition to
Optionee's exercise of the Option, to enter into a stock purchase agreement
containing such representations and warranties as the Company may deem necessary
to

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permit the issuance of the Stock purchased upon exercise of the Option in
compliance with the Securities Act and applicable state securities laws.

      6. No Rights of Ownership in Stock Before Issuance. No person shall be
entitled to the rights and privileges of stock ownership with respect to any
shares of Stock issuable upon exercise of the Option until such shares have been
issued in accordance with the terms of this Agreement and the Plan.

      7. Non-Transferability. The Option may not be transferred by Optionee
otherwise than (i) by will or the laws of descent and distribution, by
instrument to an inter vivos or testamentary trust or by gift to a member of
Optionee's immediate family, in each case in accordance with the terms of the
Plan, or (ii) pursuant to a qualified domestic relations order (as defined in
Title I of the Employee Retirement Income Security Act of 1974, as amended, or
the rules thereunder).

      8. Termination of Option. If Optionee's Continuous Service is terminated
for any reason other than the Disability (as defined in the Plan) or death of
Optionee, the Option shall remain exercisable, with respect to the shares of
Stock that had vested under the terms of this Agreement before the date of such
termination, for a period of six months after the date of such termination
(subject to extension as provided in the Plan, but in no event later than the
expiration date of the Option specified in Section 3 of this Agreement),
following which six-month period this Agreement and Optionee's right to exercise
the Option shall terminate. If Optionee's Continuous Service is terminated
because of Disability of Optionee, the Option shall remain exercisable, with
respect to the shares of Stock that had vested under the terms of this Agreement
before the date of such termination, for a period of 12 months after the date of
such termination (but in no event later than the expiration date of the Option
specified in Section 3 of this Agreement), following which 12-month period this
Agreement and Optionee's right to exercise the Option shall terminate. If (i)
Optionee's Continuous Service is terminated because of death of Optionee or (ii)
Optionee dies within the three-month period after the termination of Optionee's
Continuous Service for a reason other than death, the Option shall remain
exercisable, with respect to the shares of Stock that had vested under the terms
of this Agreement before the date of death, for a period of 18 months after the
date of such termination (but in no event later than the expiration date of the
Option specified in Section 3 of this Agreement), following which 18-month
period this Agreement and the right to exercise the Option shall terminate.
Notwithstanding the foregoing, if the Optionee is removed from the Company's
Board of Directors for cause in accordance with the Company's Bylaws, this
Agreement and Optionee's right to exercise any portion of the Option, whether or
not vested, shall terminate at the commencement of business on the date of such
removal.

      9. Withholding of Tax. To the extent that the Company is required under
applicable federal or state income tax laws to withhold any amount on account of
any present or future tax imposed as a result of the exercise of the Option,
Optionee shall pay the Company, at the time of such exercise, funds in an amount
sufficient to permit the Company to satisfy such withholding obligations in
full. If Optionee fails to pay such amount, the Company shall be authorized (i)
to withhold from any cash remuneration then or thereafter payable to Optionee
any tax required to be withheld or (ii) to refuse to issue or transfer any
shares otherwise required to be issued pursuant to the terms of this Agreement.

      10. Status of Stock. (a) Unless the offering, sale and delivery of the
shares of Stock issuable upon exercise of the Option have been registered under
the Securities Act, Optionee agrees that any shares of Stock purchased upon
exercise of the Option shall be acquired for investment without a view to
distribution, within the meaning of the Securities Act, and shall not be sold,
transferred, assigned, pledged or hypothecated in the absence of an effective
registration statement under the Securities Act and applicable state securities
laws or an applicable exemption from the registration requirements of the Act
and any applicable state securities laws. Optionee further agrees that the
shares of Stock which Optionee may acquire by exercising the Option will not be
sold or disposed of in any manner which would constitute a violation of any
other applicable federal or state

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securities laws. In addition, Optionee agrees (i) that the certificates
representing the shares of Stock issued under this Agreement may bear such
legend or legends as the administrator of the Plan deems appropriate in order to
assure compliance with applicable securities laws, and (ii) that the Company may
give instruction to its transfer agent, if any, to stop transfer of the shares
of Stock issued under this Agreement on the stock transfer records of the
Company, if such proposed transfer would, in the opinion of counsel to the
Company, constitute a violation of any applicable securities law or any such
agreements.

      (b) Optionee further agrees that the Option granted herein shall be
subject to the requirement that if at any time the administrator of the Plan
shall determine, in its discretion, that the listing, registration or
qualification of the shares of Stock subject to such Option upon any securities
exchange or market or under any state or federal law, or the consent or approval
of any governmental regulatory body, is necessary or desirable as a condition
of, or in connection with, the purchase or issuance of shares of Stock
hereunder, such Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not reasonably acceptable to the
administrator of the Plan.

      11. Stock Option Plan. The Plan, a copy of which is available for
inspection by Optionee or other persons entitled to exercise this Option at the
Company's principal executive office during business hours, is incorporated by
reference in this Agreement. The Option is subject to, and the Company and
Optionee agree to be bound by, all of the terms and conditions of the Plan. In
the event of a conflict between this Agreement and the Plan, the terms of the
Plan shall control. Subject to the terms of the Plan, the administrator of the
Plan shall have authority to construe the terms of this Agreement, and the
determinations of the administrator of the Plan shall be final and binding on
Optionee and the Company.

      12. Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Optionee.

      13. Governing Law. This Agreement and all actions taken hereunder shall be
governed by and construed in accordance with the laws of the State of Delaware.

      IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and Optionee has executed this Agreement as of the day and year first
above written.

                                    LEXICON GENETICS INCORPORATED

                                    By: ________________________________________
                                           Arthur T. Sands, M.D., Ph.D.
                                           President and Chief Executive Officer

                                    OPTIONEE

                                    ____________________________________________
                                    [Name]

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