Exhibit 10.1
                         ARONEX PHARMACEUTICALS, INC.
                  AMENDED AND RESTATED 1989 STOCK OPTION PLAN


      1. Purpose of the Plan

      This Aronex  Pharmaceuticals,  Inc. Amended and Restated 1989 Stock Option
Plan is intended  to promote  the  interests  of the  Company by  providing  the
employees and  consultants of the Company,  who are largely  responsible for the
management,  growth  and  protection  of the  business  of the  Company,  with a
proprietary interest in the Company.

      2. Definitions

      As  used  in the  Plan,  the  following  definitions  apply  to the  terms
indicated below:

          (a)"Board  of  Directors"  shall mean the Board of Directors of Aronex
     Pharmaceuticals, Inc.

          (b)"Cause,"  when  used  in  connection  with  the  termination  of  a
     Participant's  employment  with the Company,  shall mean the termination of
     the Participant's employment by the Company by reason of (i) the conviction
     of the  Participant  of a crime  involving  moral  turpitude  by a court of
     competent jurisdiction as to which no further appeal can be taken; (ii) the
     proven  commission by the  Participant of an act of fraud upon the Company;
     (iii) the willful and proven  misappropriation  of any funds or property of
     the  Company  by  the   Participant;   (iv)  the  willful,   continued  and
     unreasonable  failure by the  Participant to perform duties assigned to him
     and agreed to by him; (v) the knowing  engagement by the Participant in any
     direct,  material conflict of interest with the Company without  compliance
     with the  Company's  conflict of interest  policy,  if any, then in effect;
     (vi)  the  knowing  engagement  by the  Participant,  without  the  written
     approval of the Board of Directors of the  Company,  in any activity  which
     competes  with the  business  of the  Company  or which  would  result in a
     material  injury to the  Company;  or (vii) the knowing  engagement  in any
     activity which would  constitute a material  violation of the provisions of
     the Company's  Insider  Trading Policy or Business  Ethics Policy,  if any,
     then in effect.

          (c)"Change  in  Control"  shall  mean  the  occurrence  of  any of the
     following events:

            (i) any Person  becomes,  after the effective date of this Plan, the
         "beneficial  owner" (as  defined in Rule  13d-3  promulgated  under the
         Exchange  Act),  directly or  indirectly,  of securities of the Company
         representing  30% or more of the combined voting power of the Company's
         then outstanding securities;

            (ii)  Individuals who constitute the Incumbent Board cease,  for any
         reason,  to  constitute  at least a majority of the Board of Directors;
         provided,  however,  that any person becoming a director  subsequent to
         the Effective  Date who was nominated for election by at least 66 2/3 %
         of the  Incumbent  Board (other than the  nomination  of an  individual
         whose initial  assumption of office is in connection  with an actual or
         threatened  election  contest  relating to the election of the Board of
         Directors,  as such  terms are used in Rule  14a-11 of  Regulation  14A
         promulgated  under the  Exchange  Act) shall be, for  purposes  of this
         Plan, considered a member of the Incumbent Board;

            (iii) the Board of  Directors  determines  in its sole and  absolute
         discretion that there has been a change in control of the Company.

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

          (e)"Committee"  shall mean the Compensation  Committee of the Board of
     Directors or such other  committee as the Board of Directors  shall appoint
     from time to time to administer the Plan.

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          (f)"Common  Stock" shall mean the Company's  common  stock,  $.001 par
     value per share.

          (g)"Company"  shall  mean  Aronex  Pharmaceuticals,  Inc.,  a Delaware
     corporation, and each of its Subsidiaries, and its successors.

          (h)"Consultant" shall mean any person who is engaged by the Company or
     any Parent or Subsidiary to render  consulting  services and is compensated
     for such consulting services.

          (i)"Disability"  shall mean the physical or mental  disability  of the
     Participant to such an extent that the Participant is unable  substantially
     to  perform  his or her  usual  duties  at the  Company  for a period of 60
     consecutive days, or a written certification by two doctors selected by the
     Participant   and  acceptable  to  the  Company  that  the  Participant  is
     substantially unable to perform such duties.

          (j)"Effective  Date"  shall  mean  the  date  upon  which  the Plan is
     approved by the affirmative  vote of the holders of the requisite  majority
     of the outstanding shares of the Company's capital stock.

          (k)"Employee"  shall mean any person  employed  by the  Company or any
     Parent or Subsidiary of the Company. The payment of a director's fee by the
     Company shall not be sufficient to constitute "employment" by the Company.

          (l)"Exchange  Act" shall mean the Securities  Exchange Act of 1934, as
     amended from time to time.

          (m)the  "Fair  Market  Value" of a share of  Common  Stock on any date
     shall be (i) the closing sales price on the immediately  preceding business
     day of a share of Common  Stock as  reported  on the  principal  securities
     exchange  on which  shares of Common  Stock are then  listed or admitted to
     trading or (ii) if not so  reported,  the  average of the  closing  bid and
     asked  prices  for a share of  Common  Stock on the  immediately  preceding
     business day as quoted on the National  Association  of Securities  Dealers
     Automated Quotation System ("NASDAQ") or (iii) if not quoted on NASDAQ, the
     average of the closing bid and asked  prices for a share of Common Stock as
     quoted by the National  Quotation  Bureau's  "Pink  Sheets" or the National
     Association of Securities  Dealers' OTC Bulletin Board System. If the price
     of a share of Common Stock shall not be so reported,  the Fair Market Value
     of a share of Common  Stock shall be  determined  by the  Committee  in its
     absolute discretion.

          (n)"Incentive Award" shall mean an Option, a grant of Restricted Stock
     or a Stock Bonus granted pursuant to the terms of the Plan.

          (o)"Incentive   Stock  Option"  shall  mean  an  Option  which  is  an
     "incentive  stock option" within the meaning of Section 422 of the Code and
     which is identified as an Incentive  Stock Option in the agreement by which
     it is evidenced.

          (p)"Incumbent  Board" shall mean the Board of Directors as constituted
     on the Effective Date.

          (q)"Issue  Date" shall mean the date  established  by the Committee on
     which certificates  representing shares of Restricted Stock shall be issued
     by the Company pursuant to the terms of Section 7(d) hereof.

          (r)"Non-Qualified  Stock  Option" shall mean an Option which is not an
     Incentive  Stock Option and which is  identified as a  Non-Qualified  Stock
     Option in the agreement by which it is evidenced.

          (s)"Option" shall mean an option to purchase shares of Common Stock of
     the  Company  granted  pursuant to Section 6 hereof.  Each Option  shall be
     identified  either as an Incentive  Stock Option or a  Non-Qualified  Stock
     Option in the agreement by which it is evidenced.

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          (t)"Parent"  shall  mean  a  "parent   corporation,"  whether  now  or
     hereafter existing, as defined in Section 425(e) of the Code.

          (u)"Participant"  shall mean an employee or  consultant of the Company
     who is eligible to participate  in the Plan and to whom an Incentive  Award
     is granted  pursuant to the Plan and his successors,  heirs,  executors and
     administrators, as the case may be, to the extent permitted hereby.

          (v)"Person"  shall mean a  "person,"  as such term is used in Sections
     13(d) and 14(d) of the  Exchange  Act,  and the  rules and  regulations  in
     effect from time to time thereunder.

          (w)"Plan" shall mean this Amended and Restated 1989 Stock Option Plan,
     as it may be amended from time to time.

          (x)"Qualified   Domestic  Relations  Order"  shall  mean  a  qualified
     domestic relations order as defined in the Code, in Title I of the Employee
     Retirement  Income  Security Act, or in the rules and regulations as may be
     in effect from time to time thereunder.

          (y)"Regulations"  shall mean all regulations  promulgated  pursuant to
     the Code.

          (z)"Restricted  Stock"  shall  mean a share of Common  Stock  which is
     granted  pursuant to the terms and subject to the restrictions set forth in
     Section 7 hereof.

          (aa)"Securities Act" shall mean the Securities Act of 1933, as amended
     from time to time.

          (ab)"Stock  Bonus" shall mean a grant of a bonus  payable in shares of
     Common Stock pursuant to Section 8 hereof.

          (ac)"Subsidiary" or "Subsidiaries" shall mean any and all corporations
     in which at the pertinent  time the Company owns,  directly or  indirectly,
     stock  vested  with more than fifty  percent of the total  combined  voting
     power of all classes of stock of such corporation.

          (ad)"Vesting Date" shall mean the date established by the Committee on
     which a share of Restricted Stock may vest.

      3. Stock Subject to the Plan

      Under the Plan, the Committee may grant to Participants (i) Options,  (ii)
Restricted Stock, and/or (iii) Stock Bonuses.

      The Committee  may grant  Options,  shares of  Restricted  Stock and Stock
Bonuses  under the Plan with  respect to a number of shares of Common Stock that
in the aggregate  does not exceed the greater of (i)  2,490,000  shares and (ii)
ten percent of the issued and outstanding  shares of Common Stock  determined as
of the close of business on the last day of the preceding  fiscal quarter of the
Company.  The  Company  will,  during  the term of this Plan,  reserve  and keep
available for issuance a sufficient  number of shares of Common Stock to satisfy
the requirements of the Plan.

      The total number of shares of Common Stock with respect to which Incentive
Stock Options may be granted under the Plan shall be 2,490,000  shares,  subject
to adjustment on the same basis as outstanding  Options are adjusted pursuant to
Section 9(b).


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      The maximum  number of shares of Common Stock subject to Options which may
be issued to any  Participant  during any period of three  consecutive  years is
500,000 shares,  subject to adjustment on the same basis as outstanding  Options
are adjusted pursuant to Section 9(b).

      If any  outstanding  Option  expires,  terminates  or is canceled  for any
reason,  the shares of Common Stock subject to the  unexercised  portion of such
Option  shall  again be  available  for grant  under the Plan.  If any shares of
Restricted  Stock or any shares of Common  Stock  granted  in a Stock  Bonus are
forfeited or canceled for any reason,  such shares shall again be available  for
grant under the Plan.

      Shares of Common Stock issued under the Plan may be either newly issued or
treasury shares, at the discretion of the Committee.

      4. Administration of the Plan

      The Plan shall be  administered  by the Committee,  which shall consist of
two or more persons each of whom shall be a "non-employee  director"  within the
meaning of Rule l6b-3(b)(3)(i)  promulgated under Section 16 of the Exchange Act
and an "outside  director" within the meaning of Section 162(m) of the Code. The
Committee  shall  from  time to time  designate  the  Participants  who shall be
granted Incentive Awards and the amount and type of such Incentive Awards.

      The Committee shall have full authority to administer the Plan,  including
authority to interpret  and construe any  provision of the Plan and the terms of
any Incentive  Award issued under it and to adopt such rules and regulations for
administering  the Plan as it may deem  necessary.  Decisions  of the  Committee
shall be final and binding on all parties.

      The Committee  may, in its absolute  discretion (i) accelerate the date on
which any Option  granted  under the Plan becomes  exercisable,  (ii) extend the
date on which any Option  granted  under the Plan  ceases to be  exercisable  or
(iii) accelerate the Vesting Date or Issue Date, or waive any condition  imposed
pursuant to Section 7(b) hereof,  with respect to any share of Restricted  Stock
granted under the Plan.

      In  addition,  the  Committee  may,  in  its  absolute  discretion,  grant
Incentive  Awards  to  Participants  on the  condition  that  such  Participants
surrender  to  the  Committee  for  cancellation  such  other  Incentive  Awards
(including, without limitation, Incentive Awards with higher exercise prices) as
the Committee  specifies.  Notwithstanding  Section 3 hereof,  Incentive  Awards
granted on the condition of surrender of outstanding  Incentive Awards shall not
count  against  the limits  set forth in such  Section 3 until such time as such
Incentive Awards are surrendered.

      Whether  an  authorized  leave  of  absence  or  absence  in  military  or
government   service  shall  constitute   termination  of  employment  shall  be
determined by the Committee in its absolute discretion.

      No member of the Committee  shall be liable for any action,  omission,  or
determination  relating to the Plan,  and the Company  shall  indemnify and hold
harmless each member of the Committee and each other director or employee of the
Company  to  whom  any  duty  or  power  relating  to  the   administration   or
interpretation  of the Plan  has been  delegated  from and  against  any cost or
expense  (including  attorneys'  fees) or liability  (including  any sum paid in
settlement  of a claim with the  approval of the  Committee)  arising out of any
action,  omission or determination relating to the Plan, unless, in either case,
such  action,  omission  or  determination  was  taken  or made by such  member,
director or employee in bad faith and without  reasonable  belief that it was in
the best interests of the Company.

      5. Eligibility

      All Employees and  Consultants of the Company shall be eligible to receive
Incentive Awards pursuant to the Plan; however, Incentive Stock Options may only
be granted to Employees of the Company.


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      6. Options

      The Committee may grant Options  pursuant to the Plan, which Options shall
be evidenced by agreements in such form as the Committee shall from time to time
approve.  Options  shall comply with and be subject to the  following  terms and
conditions:

         (a)Identification of Options

         All Options  granted under the Plan shall be clearly  identified in the
      agreement  evidencing such Options as either Incentive Stock Options or as
      Non-Qualified Stock Options.

         (b)Exercise Price

         The exercise price of any Non-Qualified  Stock Option granted under the
      Plan shall be such price as the Committee  shall  determine on the date on
      which such  Non-Qualified  Stock  Option is granted;  provided,  that such
      price may not be less than the minimum  price  required by law.  Except as
      provided in Section 6(d) hereof, the exercise price of any Incentive Stock
      Option  granted  under  the Plan  shall be not less  than 100% of the Fair
      Market  Value  of a share  of  Common  Stock  on the  date on  which  such
      Incentive Stock Option is granted.

         (c)Term and Exercise of Options

            (1) Each Option shall be exercisable  on such date or dates,  during
         such period and for such  number of shares of Common  Stock as shall be
         determined  by the Committee on the day on which such Option is granted
         and  set  forth  in the  agreement  evidencing  the  Option;  provided,
         however,  that (A) no Incentive Stock Option shall be exercisable after
         the expiration of seven years from the date such Incentive Stock Option
         was granted, and (B) no Non-Qualified Stock Option shall be exercisable
         after  the  expiration  of seven  years  and one day from the date such
         Non-Qualified Stock Option was granted;  and, provided,  further,  that
         each  Option  shall be subject to earlier  termination,  expiration  or
         cancellation as provided in the Plan.

            (2) Each  Option  shall  be  exercisable  in  whole or in part  with
         respect to whole  shares of Common  Stock.  The partial  exercise of an
         Option shall not cause the  expiration,  termination or cancellation of
         the remaining portion thereof.  Upon the partial exercise of an Option,
         the  agreement   evidencing  such  Option  shall  be  returned  to  the
         Participant  exercising  such Option  together with the delivery of the
         certificates described in Section 6(c)(5) hereof.

            (3) An  Option  shall  be  exercised  by  delivering  notice  to the
         Company's principal office, to the attention of its Secretary, no fewer
         than  five  business  days  in  advance  of the  effective  date of the
         proposed  exercise.  Such notice shall be  accompanied by the agreement
         evidencing  the  Option,  shall  specify the number of shares of Common
         Stock  with  respect  to which the  Option is being  exercised  and the
         effective  date of the  proposed  exercise,  and shall be signed by the
         Participant. The Participant may withdraw such notice at any time prior
         to the close of business on the business day immediately  preceding the
         effective date of the proposed  exercise,  in which case such agreement
         shall be  returned  to the  Participant.  Payment  for shares of Common
         Stock  purchased  upon the  exercise of an Option  shall be made on the
         effective date of such exercise either (i) in cash, by certified check,
         bank  cashier's  check or wire transfer or (ii) subject to the approval
         of the  Committee,  in shares of Common Stock owned by the  Participant
         and valued at their Fair  Market  Value on the  effective  date of such
         exercise, or partly in shares of Common Stock with the balance in cash,
         by certified check, bank cashier's check or wire transfer.  Any payment
         in shares of Common  Stock shall be  effected  by the  delivery of such
         shares to the  Secretary  of the  Company,  duly  endorsed  in blank or
         accompanied  by stock powers duly executed in blank,  together with any
         other  documents  and  evidences as the  Secretary of the Company shall
         require from time to time.


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            (4)  Any  Option  granted  under  the  Plan  may be  exercised  by a
         broker-dealer   acting  on  behalf   of  a   Participant   if  (i)  the
         broker-dealer  has received from the  Participant or the Company a duly
         endorsed  agreement  evidencing such Option and instructions  signed by
         the Participant  requesting the Company to deliver the shares of Common
         Stock  subject  to such  Option to the  broker-dealer  on behalf of the
         Participant and specifying the account into which such shares should be
         deposited,  (ii)  adequate  provision has been made with respect to the
         payment of any  withholding  taxes due upon such exercise and (iii) the
         broker-dealer and the Participant have otherwise  complied with Section
         220.3(e)(4) of Regulation T, 12 CFR Part 220.

            (5)  Certificates  for  shares of Common  Stock  purchased  upon the
         exercise  of an Option  shall be issued in the name of the  Participant
         and delivered to the  Participant as soon as practicable  following the
         effective  date on which the Option is  exercised;  provided,  however,
         that such  delivery  shall be effected  for all  purposes  when a stock
         transfer agent of the Company shall have deposited such certificates in
         the United States mail, addressed to the Participant.

            (6) During the lifetime of a Participant  each Option granted to him
         shall be  exercisable  only by him. No Option  shall be  assignable  or
         transferable  otherwise  than  by will or by the  laws of  descent  and
         distribution or pursuant to a Qualified Domestic Relations Order.

         (d)Limitations on Grant of Incentive Stock Options

            (1) The  aggregate  Fair Market Value of shares of Common Stock with
         respect to which  Incentive Stock Options are exercisable for the first
         time by a  Participant  during any calendar year under the Plan and any
         other stock option plan of the Company or any Subsidiary of the Company
         shall not exceed  $100,000.  Such Fair Market Value shall be determined
         as of the date on which each such Incentive Stock Option is granted. If
         the  aggregate  Fair Market Value of shares of Common Stock  underlying
         such Incentive  Stock Options  exceeds  $100,000,  then Incentive Stock
         Options granted hereunder to such Participant  shall, to the extent and
         in the order required by Regulations promulgated under the Code (or any
         other  authority  having the force of  Regulations),  automatically  be
         deemed to be  Non-Qualified  Stock  Options,  but all  other  terms and
         provisions of such Incentive Stock Options shall remain  unchanged.  In
         the absence of such Regulations (and authority), or if such Regulations
         (or  authority)  require or permit a  designation  of the options which
         shall cease to constitute  Incentive  Stock  Options,  Incentive  Stock
         Options  shall,  to the extent of such excess and in the order in which
         they were granted,  automatically be deemed to be  Non-Qualified  Stock
         Options,  but all other terms and  provisions of such  Incentive  Stock
         Options shall remain unchanged.

            (2) No Incentive Stock Option may be granted to an individual if, at
         the time of the proposed grant,  such individual owns stock  possessing
         more than ten percent of the total combined voting power of all classes
         of stock  of the  Company  or any of its  Subsidiaries  unless  (i) the
         exercise price of such Incentive  Stock Option is at least 110 % of the
         Fair Market Value of a share of Common Stock at the time such Incentive
         Stock  Option is granted and (ii) such  Incentive  Stock  Option is not
         exercisable  after  the  expiration  of five  years  from the date such
         Incentive Stock Option is granted.

         (e)Effect of  Termination  of  Employment  Unless  otherwise  expressly
      provided for by the Committee in its approval of an Option:

            (1) If the  employment  of a  Participant  with  the  Company  shall
         terminate  for any reason other than Cause,  Disability,  the voluntary
         retirement  of  the   Participant  in  accordance  with  the  Company's
         retirement policy as then in effect or the death of the Participant (i)
         Options  granted  to such  Participant,  to the  extent  that they were
         exercisable at the time of such termination,  shall remain  exercisable
         until the expiration of one month after such termination, on which date
         they shall expire, and (ii) Options granted to such Participant, to the
         extent that they were not exercisable at the time of such  termination,
         shall expire at the close of business on the date of such  termination;
         provided, however, that the Committee may extend

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         such period in its sole  discretion  (except that the  agreement of the
         holder of any  Incentive  Stock Option shall be required as a condition
         to such extension if the effect of such extension would be to make such
         option  ineligible for treatment as an Incentive Stock Option under the
         Code; and provided  further,  no Option shall be exercisable  after the
         expiration of its term.

            (2) If the  employment  of a  Participant  with  the  Company  shall
         terminate on account of the Disability, the voluntary retirement of the
         Participant in accordance with the Company's  retirement policy as then
         in effect or the death of the  Participant  (i) Options granted to such
         Participant,  to the extent that they were  exercisable  at the time of
         such termination,  shall remain exercisable until the expiration of one
         year after such termination,  on which date they shall expire, and (ii)
         Options granted to such  Participant,  to the extent that they were not
         exercisable at the time of such termination,  shall expire at the close
         of business on the date of such  termination;  provided,  however,  the
         Committee  may extend such period in its sole  discretion  (except that
         the  agreement  of the holder of any  Incentive  Stock  Option shall be
         required  as a  condition  to  such  extension  if the  effect  of such
         extension  would be to make such option  ineligible for treatment as an
         Incentive  Stock Option under the Code; and provided  further,  that no
         Option shall be exercisable after the expiration of its term.

            (3) In the event of the  termination of a  Participant's  employment
         for Cause, all outstanding  Options granted to such  Participant  shall
         expire at the commencement of business on the date of such termination.

         (f)Acceleration of Exercise Date Upon Change in Control

         Upon the  occurrence of a Change in Control,  each Option granted under
      the Plan and  outstanding at such time shall become fully and  immediately
      exercisable and shall remain exercisable until its expiration, termination
      or cancellation pursuant to the terms of the Plan.

      7. Restricted Stock

         The  Committee  may grant shares of  Restricted  Stock  pursuant to the
Plan.  Each  grant of  shares  of  Restricted  Stock  shall be  evidenced  by an
agreement in such form as the Committee  shall from time to time  approve.  Each
grant of shares of  Restricted  Stock  shall  comply  with and be subject to the
following terms and conditions:

         (a)Issue Date and Vesting Date

         At the time of the grant of shares of Restricted  Stock,  the Committee
      shall establish an Issue Date or Issue Dates and a Vesting Date or Vesting
      Dates with respect to such shares.  The  Committee  may divide such shares
      into  classes and assign a different  Issue Date and/or  Vesting  Date for
      each class.  Except as provided in Sections 7(c) and 7(f) hereof, upon the
      occurrence of the Issue Date with respect to a share of Restricted  Stock,
      a share  of  Restricted  Stock  shall be  issued  in  accordance  with the
      provisions  of Section 7(d) hereof.  Provided  that all  conditions to the
      vesting of a share of Restricted  Stock  imposed  pursuant to Section 7(b)
      hereof are  satisfied,  and except as provided  in Sections  7(c) and 7(f)
      hereof, upon the occurrence of the Vesting Date with respect to a share of
      Restricted  Stock,  such share shall vest and the  restrictions of Section
      7(c) hereof shall cease to apply to such share.

         (b)Conditions to Vesting

         At the time of the grant of shares of Restricted  Stock,  the Committee
      may impose such  restrictions  or conditions,  not  inconsistent  with the
      provisions  hereof,  to the vesting of such  shares as it in its  absolute
      discretion  deems  appropriate.  By  way  of  example  and  not  by way of
      limitation,  the Committee  may require,  as a condition to the vesting of
      any class or classes of shares of Restricted  Stock,  that the Participant
      or the

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<PAGE>



      Company  achieve  certain  performance  criteria,   such  criteria  to  be
      specified by the Committee at the time of the grant of such shares.

         (c)Restrictions on Transfer Prior to Vesting

         Prior to the vesting of a share of Restricted  Stock,  no transfer of a
      Participant's  rights with  respect to such share,  whether  voluntary  or
      involuntary,  by operation of law or otherwise,  shall vest the transferee
      with  any  interest  or  right  in or  with  respect  to such  share,  but
      immediately upon any attempt to transfer such rights,  such share, and all
      of the rights related  thereto,  shall be forfeited by the Participant and
      the transfer shall be of no force or effect.

         (d)Issuance of Certificates

            (1) Except as provided in Sections  7(c) or 7(f) hereof,  reasonably
         promptly  after the Issue  Date with  respect  to shares of  Restricted
         Stock,  the  Company  shall  cause to be  issued  a stock  certificate,
         registered  in the name of the  Participant  to whom such  shares  were
         granted,  evidencing such shares;  provided, that the Company shall not
         cause to be issued such a stock  certificates  unless it has received a
         stock power duly  endorsed in blank with respect to such  shares.  Each
         such stock certificate shall bear the following legend:

            The  transferability  of this  certificate  and the  shares of stock
            represented  hereby  are  subject  to the  restrictions,  terms  and
            conditions  (including forfeiture and restrictions against transfer)
            contained in the Aronex Pharmaceuticals, Inc. 1989 Stock Option Plan
            and an Agreement  entered into between the registered  owner of such
            shares and Aronex  Pharmaceuticals,  Inc. A copy of the Plan and the
            Agreement  is on file  in the  office  of the  Secretary  of  Aronex
            Pharmaceuticals,  Inc., 3400 Research  Forest Drive,  The Woodlands,
            Texas 77381-4223

         Such legend shall not be removed from the  certificate  evidencing such
      shares until such shares vest pursuant to the terms hereof.

            (2) Each  certificate  issued pursuant to Paragraph  7(d)(1) hereof,
         together  with the stock  powers  relating to the shares of  Restricted
         Stock evidenced by such certificate,  shall be held by the Company. The
         Company  shall  issue  to the  Participant  a  receipt  evidencing  the
         certificates  held  by it  which  are  registered  in the  name  of the
         Participant.

         (e)Consequences Upon Vesting

         Upon the vesting of a share of Restricted  Stock  pursuant to the terms
      hereof,  the  restrictions  of Section 7(c) hereof shall cease to apply to
      such share.  Reasonably  promptly after a share of Restricted  Stock vests
      pursuant to the terms  hereof,  the  Company  shall cause to be issued and
      delivered  to  the  Participant  to  whom  such  shares  were  granted,  a
      certificate  evidencing  such  share,  free of the  legend  set  forth  in
      Paragraph  7(d)(1)  hereof,  together  with  any  other  property  of  the
      Participant  held by Company  pursuant to Section 7(d)  hereof;  provided,
      however,  that such  delivery  shall be effected for all purposes when the
      Company shall have  deposited such  certificate  and other property in the
      United States mail, addressed to the Participant.

         (f)Effect of Termination of Employment

            (1) If the  employment  of a  Participant  with  the  Company  shall
         terminate  for any  reason  other than  Cause  prior to the  vesting of
         shares of Restricted  Stock granted to such  Participant,  a portion of
         such  shares,  to the extent not  forfeited  or canceled on or prior to
         such termination  pursuant to any provision  hereof,  shall vest on the
         date of such  termination.  The portion  referred  to in the  preceding
         sentence shall

                                     -8-

<PAGE>



         be  determined by the Committee at the time of the grant of such shares
         of  Restricted  Stock  and  may  be  based  on the  achievement  of any
         conditions  imposed  by the  Committee  with  respect  to  such  shares
         pursuant to Section 10(b). Such portion may equal zero.

            (2) In the event of the  termination of a  Participant's  employment
         for Cause,  all shares of Restricted  Stock granted to such Participant
         which  have  not  vested  as of the  date  of  such  termination  shall
         immediately be forfeited.

         (g)Effect of Change in Control

         Upon the  occurrence  of a Change in Control,  all shares of Restricted
      Stock which have not theretofore  vested  (including those with respect to
      which the Issue Date has not yet occurred) shall immediately vest.

      8. Stock Bonuses

      The Committee may, in its absolute discretion, grant Stock Bonuses in such
amounts as it shall  determine from time to time. A Stock Bonus shall be paid at
such time and subject to such conditions as the Committee shall determine at the
time of the grant of such Stock Bonus.  Certificates  for shares of Common Stock
granted as a Stock Bonus shall be issued in the name of the  Participant to whom
such grant was made and  delivered to such  Participant  as soon as  practicable
after the date on which such Stock Bonus is required to be paid.

      9. Adjustment Upon Changes in Common Stock

         (a)Outstanding Restricted Stock

         Unless the Committee in its absolute discretion  otherwise  determines,
      if a  Participant  receives any  securities or other  property  (including
      dividends paid in cash) with respect to a share of Restricted  Stock,  the
      Issue Date with respect to which occurs prior to such event, but which has
      not  vested as of the date of such  event,  as a result  of any  dividend,
      stock split recapitalization, merger, consolidation, combination, exchange
      of shares or otherwise,  such  securities or other  property will not vest
      until  such  share of  Restricted  Stock  vests,  and shall be held by the
      Company pursuant to Paragraph 7(d)(2) hereof.

         The  Committee  may, in its  absolute  discretion,  adjust any grant of
      shares of Restricted  Stock,  the Issue Date with respect to which has not
      occurred as of the date of the occurrence of any of the following  events,
      to  reflect  any   dividend,   stock  split,   recapitalization,   merger,
      consolidation, combination, exchange of shares or similar corporate change
      as the  Committee  may deem  appropriate  to prevent  the  enlargement  or
      dilution of rights of Participants under the grant.

     (b)Outstanding  Options,  Increase  or Decrease  in Issued  Shares  Without
Consideration

         Subject to any required action by the  stockholders of the Company,  in
      the event of any  increase or  decrease in the number of issued  shares of
      Common Stock  resulting from a subdivision or  consolidation  of shares of
      Common Stock or the payment of a stock dividend (but only on the shares of
      Common  Stock),  or any other  increase  or decrease in the number of such
      shares  effected  without  receipt of  consideration  by the Company,  the
      Committee  shall  proportionally  adjust  the  number  of  shares  and the
      exercise  price per  share of Common  Stock  subject  to each  outstanding
      Option.  Conversion of any of the Company's  convertible  securities shall
      not be deemed to have been "effected  without receipt of  consideration by
      the Company."

         (c)Outstanding Options, Certain Mergers

         Subject to any required action by the  stockholders of the Company,  if
      the  Company  shall  be  the  surviving   corporation  in  any  merger  or
      consolidation  (except a merger or  consolidation as a result of which the
      holders

                                     -9-

<PAGE>



      of shares of Common Stock receive securities of another corporation), each
      Option  outstanding  on the date of such  merger  or  consolidation  shall
      entitle the  Participant to acquire upon exercise the  securities  which a
      holder of the  number of shares of Common  Stock  subject  to such  Option
      would have received in such merger or consolidation.

         (d)Outstanding Options, Certain Other Transactions

         In the event of a dissolution or liquidation of the Company,  a sale of
      all  or   substantially   all  of  the  Company's   assets,  a  merger  or
      consolidation  involving  the  Company  in which  the  Company  is not the
      surviving  corporation or a merger or consolidation  involving the Company
      in which the  Company  is the  surviving  corporation  but the  holders of
      shares of Common Stock receive  securities of another  corporation  and/or
      other  property,  including  cash,  the Committee  shall,  in its absolute
      discretion, have the power to:

            (i) cancel,  effective  immediately  prior to the occurrence of such
         event, each Option outstanding immediately prior to such event (whether
         or  not  then   exercisable),   and,  in  full  consideration  of  such
         cancellation, pay to the Participant to whom such Option was granted an
         amount in cash,  for each share of Common Stock  subject to such Option
         equal to the excess of (A) the value, as determined by the Committee in
         its absolute  discretion,  of the property (including cash) received by
         the  holder of a share of Common  Stock as a result of such  event over
         (B) the exercise price of such Option; or

            (ii) provide for the exchange of each Option outstanding immediately
         prior to such event (whether or not then  exercisable) for an option on
         some or all of the  property  for which such Option is  exchanged  and,
         incident  thereto,  make an equitable  adjustment  as determined by the
         Committee  in its  absolute  discretion  in the  exercise  price of the
         option,  or the number of shares or amount of  property  subject to the
         option  or,  if  appropriate,   provide  for  a  cash  payment  to  the
         Participant  to whom such Option was  granted in partial  consideration
         for the exchange of the Option.

         (e)Outstanding Options, Other Changes

         In the event of any  change in the  capitalization  of the  Company  or
      corporate  change  other than those  specifically  referred to in Sections
      9(b), (c) or (d) hereof,  the Committee  may, in its absolute  discretion,
      make such adjustments in the number and class of shares subject to Options
      outstanding  on the date on which such change  occurs and in the per share
      exercise  price  of  each  such  Option  as  the  Committee  may  consider
      appropriate to prevent dilution or enlargement of rights.

         (f)No Other Rights

         Except as expressly provided in the Plan, no Participant shall have any
      rights by reason of any subdivision or consolidation of shares of stock of
      any class,  the payment of any  dividend,  any increase or decrease in the
      number of shares  of stock of any class or any  dissolution,  liquidation,
      merger or consolidation of the Company or any other corporation. Except as
      expressly  provided  in the Plan,  no issuance by the Company of shares of
      stock of any class, or securities  convertible into shares of stock of any
      class,  shall affect,  and no  adjustment by reason  thereof shall be made
      with  respect  to,  the  number of shares of Common  Stock  subject  to an
      Incentive Award or the exercise price of any Option.

      10.   Rights as a Stockholder

      No person  shall  have any  rights as a  stockholder  with  respect to any
shares of Common Stock  covered by or relating to any  Incentive  Award  granted
pursuant to this Plan until the date of the issuance of a stock certificate with
respect to such  shares.  Except as  otherwise  expressly  provided in Section 9
hereof,  no  adjustment  to any  Incentive  Award shall be made for dividends or
other  rights  for which the  record  date  occurs  prior to the date such stock
certificate is issued.

                                     -10-

<PAGE>



      11.   No Special Employment Rights; No Right to Incentive Award

      Nothing contained in the Plan or any Incentive Award shall confer upon any
Participant any right with respect to the  continuation of his employment by the
Company or interfere  in any way with the right of the  Company,  subject to the
terms of any  separate  employment  agreement  to the  contrary,  at any time to
terminate  such  employment or to increase or decrease the  compensation  of the
Participant  from the rate in existence at the time of the grant of an Incentive
Award.

      No person  shall  have any claim or right to receive  an  Incentive  Award
hereunder.  The  Committee's  granting of an Incentive Award to a Participant at
any time shall neither require the Committee to grant an Incentive Award to such
Participant  or any other  Participant  or other person at any time nor preclude
the Committee  from making  subsequent  grants to such  Participant or any other
Participant or other person.

      12.   Securities Matters

         (a)The Company shall be under no obligation to effect the  registration
      pursuant to the  Securities Act of any shares of Common Stock to be issued
      hereunder  or  to  effect  similar   compliance   under  any  state  laws.
      Notwithstanding  anything herein to the contrary, the Company shall not be
      obligated to cause to be issued or delivered any  certificates  evidencing
      shares of Common  Stock  pursuant to the Plan unless and until the Company
      is  advised  by its  counsel  that  the  issuance  and  delivery  of  such
      certificates  is in compliance  with all applicable  laws,  regulations of
      governmental  authority and the requirements of any securities exchange on
      which shares of Common Stock are traded.  The Committee may require,  as a
      condition of the issuance and delivery of certificates  evidencing  shares
      of Common Stock  pursuant to the terms hereof,  that the recipient of such
      shares make such covenants, agreements and representations,  and that such
      certificates bear such legends, as the Committee,  in its sole discretion,
      deems necessary or desirable.

         (b)The exercise of any Option granted hereunder shall only be effective
      at such time as counsel to the  Company  shall  have  determined  that the
      issuance and delivery of shares of Common Stock  pursuant to such exercise
      is in compliance  with all applicable  laws,  regulations of  governmental
      authorities  and the  requirements  of any  securities  exchange  on which
      shares  of  Common  Stock  are  traded.  The  Company  may,  in  its  sole
      discretion,  defer the  effectiveness of any exercise of an Option granted
      hereunder  in order to allow  the  issuance  of  shares  of  Common  Stock
      pursuant  thereto to be made pursuant to registration or an exemption from
      registration  or other methods for compliance  available  under federal or
      state securities laws. The Company shall inform the Participant in writing
      of its  decision to defer the  effectiveness  of the exercise of an Option
      granted  hereunder.  During  the  period  that  the  effectiveness  of the
      exercise of an Option has been deferred,  the Participant  may, by written
      notice,  withdraw  such  exercise and obtain the refund of any amount paid
      with respect thereto.

      13.   Withholding Taxes

      Whenever  shares of Common  Stock are to be issued upon the exercise of an
Option, the occurrence of the Issue Date or Vesting Date with respect to a share
of Restricted  Stock or the payment of a Stock Bonus, the Company shall have the
right to  require  the  Participant  to remit to the  Company  in cash an amount
sufficient to satisfy federal, state and local withholding tax requirements,  if
any, attributable to such exercise,  occurrence or payment prior to the delivery
of any certificate or certificates for such shares.

      14.   Amendment of the Plan

      The Board of Directors may at any time suspend or discontinue  the Plan or
revise or amend it in any respect whatsoever,  provided,  however,  that without
approval of the holders of a majority of the outstanding  shares of Common Stock
present in person or by proxy at an annual or special  meeting of  stockholders,
no revision or amendment shall (i) increase the number of shares of Common Stock
that may be issued under the Plan, except as provided in Section

                                     -11-

<PAGE>



9 hereof,  (ii) materially increase the benefits accruing to individuals holding
Incentive  Awards granted  pursuant to the Plan or (iii)  materially  modify the
requirements as to eligibility for participation in the Plan.

      15.   No Obligation to Exercise

      The grant to a Participant  of an Option shall impose no  obligation  upon
such Participant to exercise such Option.

      16.   Transfers Upon Death

      Upon the death of a Participant,  outstanding  Incentive Awards granted to
such Participant may be exercised only by the executors or administrators of the
Participant's  estate or by any person or persons who shall have  acquired  such
right  to  exercise  by will or by the  laws of  descent  and  distribution.  No
transfer by will or the laws of descent and distribution of any Incentive Award,
or the right to exercise  any  Incentive  Award,  shall be effective to bind the
Company  unless the Committee  shall have been furnished with (a) written notice
thereof and with a copy of the will and/or such  evidence as the  Committee  may
deem necessary to establish the validity of the transfer and (b) an agreement by
the  transferee  to comply with all the terms and  conditions  of the  Incentive
Award that are or would have been  applicable to the Participant and to be bound
by the  acknowledgments  made by the Participant in connection with the grant of
the Incentive Award.

      17.   Expenses and Receipts

      The  expenses  of the Plan  shall  be paid by the  Company.  Any  proceeds
received by the Company in connection  with any Incentive Award will be used for
general corporate purposes.

      18.   Failure to Comply

      In addition to the remedies of the Company elsewhere  provided for herein,
failure by a Participant  to comply with any of the terms and  conditions of the
Plan or the  agreement  executed by such  Participant  evidencing  an  Incentive
Award, unless such failure is remedied by such Participant within ten days after
having been notified of such failure by the Committee,  shall be grounds for the
cancellation  and forfeiture of such Incentive Award, in whole or in part as the
Committee, in its absolute discretion, may determine.

      19.   Effective Date and Term of Plan

      The amendment and restatement of this Plan shall become effective, subject
to stockholder approval, on April 1, 1997. The amendment and restatement of this
Plan, and all Incentive Awards granted pursuant to the amendment and restatement
of this Plan  prior to  stockholder  approval,  shall be void and of no  further
force and effect unless the amendment  and  restatement  of this Plan shall have
been approved by the requisite  vote of the  stockholders  entitled to vote at a
meeting of the stockholders of the Company called for such purpose prior to July
30, 1997.  In the event such  stockholder  approval is not  obtained,  this Plan
shall continue in existence with the terms and conditions in effect prior to the
effective  date  of the  amendment  and  restatement  provided  for  hereby.  No
Incentive Award shall be granted  pursuant to this Plan on or after December 31,
1999.

                                     -12-