Document:

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                                                                    Exhibit 10.1

                            PARADIGM GENETICS, INC.

                            1998 STOCK OPTION PLAN

     1.   Purposes of the Plan.  The purposes of this Stock Option Plan are to
          --------------------
help enable the Company to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional incentive to
Employees, Directors and Consultants and to promote the success of the Company's
business.  Options granted under the Plan may be Incentive Stock Options or
Nonqualified Stock Options, as determined by the Administrator at the time of
grant.

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

          (a) "Administrator" means the Board or a Committee.
               -------------

          (b) "Applicable Laws" means the requirements relating to the
               ---------------
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are granted under the Plan.

          (c) "Board" means the Board of Directors of the Company.
               -----

          (d) "Code" means the Internal Revenue Code of 1986, as amended.
               ----

          (e) "Committee"  means a committee of Directors appointed by the Board
               ---------
to administer the Plan.  The Committee shall be constituted to comply with
Applicable Laws.

          (f) "Common Stock" means the Common Stock of the Company.
               ------------

          (g) "Company" means Paradigm Genetics, Inc., a North Carolina
               -------
corporation.

          (h) "Consultant" means any person who is engaged by the Company or any
               ----------
Parent or Subsidiary to render consulting or advisory services to such entity.

          (i) "Director" means a member of the Board.
               --------

          (j) "Disability" means total and permanent disability within the
               ----------
meaning of Section 22(e)(3) of the Code.

          (k) "Employee" means any person, including Officers and Directors,
               --------
employed by the Company or any Parent or Subsidiary of the Company or any entity
(an "Other Entity") in which the Company holds a significant equity interest,
such as a joint venture in which the Company is a partner.  An Employee shall
not cease to be an Employee solely by
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virtue of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary, any Other Entity, or any successor. For purposes of Incentive Stock
Options, no such leave may exceed ninety days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company is not so
guaranteed, on the 181st day of such leave any Incentive Stock Option held by
the Optionee shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonqualified Stock Option. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

          (l) "Exchange Act" means the Securities Exchange Act of 1934, as
               ------------
amended.

          (m) "Fair Market Value" means, as of any date, the value of Common
               -----------------
Stock determined as follows:

              (i)   If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

              (ii)  If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination; or

              (iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.

          (n) "Incentive Stock Option" means an Option intended to qualify as an
               ----------------------
incentive stock option within the meaning of Section 422 of the Code.

          (o) "Nonqualified Stock Option" means an Option not intended to
               -------------------------
qualify as an Incentive Stock Option.

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

          (q) "Option" means a stock option granted pursuant to the Plan.
               ------

                                      -2-
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          (r) "Option Agreement" means a written or electronic agreement between
               ----------------
the Company and an Optionee evidencing the terms and conditions of an individual
Option grant.  Each Option Agreement is subject to the terms and conditions of
the Plan.

          (s) "Option Exchange Program" means a program whereby outstanding
               -----------------------
Options are exchanged for Options with a lower exercise price.

          (t) "Optioned Stock" means the Common Stock subject to an Option.
               --------------

          (u) "Optionee" means the holder of an outstanding Option granted under
               --------
the Plan.

          (v) "Parent" means a "parent corporation," whether now or hereafter
               ------
existing, as defined in Section 424(e) of the Code.

          (w) "Plan" means this 1998 Stock Option Plan.
               ----

          (x) "Section 16(b)" means Section 16(b) of the Securities Exchange Act
               -------------
of 1934, as amended.

          (y) "Service Provider" means an Employee, Director or Consultant.
               ----------------

          (z) "Share" means a share of the Common Stock, as adjusted in
               -----
accordance with Section 12 below.

          (aa) "Subsidiary" means a "subsidiary corporation," whether now or
                ----------
hereafter existing, as defined in Section 424(f) of the Code.

     3.  Stock Subject to the Plan.  Subject to the provisions of Section 12 of
         -------------------------
the Plan, the maximum aggregate number of Shares which may be subject to option
and sold under the Plan is One Million Seven Hundred Sixty-five Thousand
(1,765,000)Shares.  The Shares may be authorized, but unissued, or reacquired
Common Stock.

     If an Option expires or becomes unexercisable without having been exercised
in full, or is surrendered pursuant to an Option Exchange Program or otherwise,
the unpurchased Shares which were subject thereto shall become available for
future grant or sale under the Plan (unless the Plan has terminated);  provided,
                                                                       --------
however, that Shares that have actually been issued under the Plan shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if unvested Shares purchased upon exercise of an
Option are repurchased by the Company at their original purchase price, such
Shares shall become available for future grant under the Plan.

     4.  Administration of the Plan.
         --------------------------

                                      -3-
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          (a) Procedure.  The Plan shall be administered by the Administrator.
              ---------

          (b) Powers of the Administrator.  Subject to the provisions of the
              ---------------------------
Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:

              (i)    to determine the Fair Market Value;

              (ii)   to select the Service Providers to whom Options may from
time to time be granted hereunder;

              (iii)  to determine the number of Shares to be covered by each
Option;

              (iv)   to approve forms of agreement for use under the Plan;

              (v)    to determine the terms and conditions of any Option granted
hereunder;

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

              (vii)  to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted;

              (viii) to institute an Option Exchange Program;

              (ix)   to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

              (x)    to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option that number of Shares having a Fair Market Value equal to
the amount required to be withheld. The Fair Market Value of the Shares to be
withheld shall be determined on the date that the amount of tax to be withheld
is to be determined. All elections by an Optionee to have Shares withheld for
this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and

              (xi)   to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.

          (c) Effect of Administrator's Decision.  All decisions, determinations
              ----------------------------------
and interpretations of the Administrator shall be final and binding on all
Optionees.

                                      -4-
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     5.  Eligibility.
         -----------

          (a) Nonqualified Stock Options may be granted to Service Providers.
Incentive Stock Options may be granted only to Employees; provided, however,
that Incentive Stock Options may not be granted to Employees of an Other Entity
that is not also a Subsidiary.

          (b) Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonqualified Stock Option.  However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonqualified Stock Options.  For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account in the order
in which they were granted.  The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

          (c) Neither the Plan nor any Option Agreement shall confer upon any
Optionee any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall either interfere in any way with
his or her right or the Company's right to terminate such relationship at any
time, with or without cause.

     6.  Term of Plan.  The Plan shall become effective upon its adoption by the
         ------------
Board.  It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 14 of the Plan.

     7.  Term of Option.  The term of each Option shall be stated in the Option
         --------------
Agreement; provided, however, that the term shall be no more than ten (10) years
from the date of grant thereof.  In the case of an Incentive Stock Option
granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant or such shorter term as may be provided
in the Option Agreement.

     8.  Option Exercise Price and Consideration.
         ---------------------------------------

          (a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:

              (i) In the case of an Incentive Stock Option

                  (A) granted to an Employee who, at the time the Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes

                                      -5-
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of stock of the Company or any Parent or Subsidiary, the exercise price shall be
no less than 110% of the Fair Market Value per Share on the date of grant.

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

          (ii) In the case of a Nonqualified Stock Option, the exercise price
shall be determined by the Administrator at the time of the grant.

     (b)  Notwithstanding the foregoing, Options may be granted with a per Share
exercise price of less than 100% of Fair Market Value on the date of grant
pursuant to a merger or other corporate transaction.

     (c)  The consideration to be paid for the Shares to be issued upon exercise
of an Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (i) cash, (ii)
check, (iii) promissory note, (iv) other Shares which in the case of Shares
acquired upon exercise of an Option have been owned by the Optionee for more
than six months on the date of surrender and have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, (v) consideration received by the Company
under a formal cashless exercise program adopted by the Company in connection
with the Plan, or (vi) any combination of the foregoing methods of payment.

     9.   Exercise of Option.
          ------------------

          (a) Procedure for Exercise; Rights as a Shareholder. Any Option
              -----------------------------------------------
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement.  An Option may not be exercised for a fraction of
a Share.

     An Option shall be deemed exercised when the Company receives: (i) written
or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised.  Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan.  Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse.  Notwithstanding
the exercise of the Option, until the Shares are issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights
as a shareholder shall exist with respect to the Shares.  The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised.

                                      -6-
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No adjustment will be made for a dividend or other right for which the record
date is prior to the date the Shares are issued, except as provided in Section
12 of the Plan.

          Exercise of an Option in any manner shall result in a decrease in the
number of Shares thereafter available, both for purposes of the Plan and for
purchase under the Option, by the number of Shares as to which the Option is
exercised.

     (b) Termination of Relationship as a Service Provider.  If an Optionee
         -------------------------------------------------
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement).  In the absence
of a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination.  If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

     (c) Disability of Optionee. If an Optionee ceases to be a Service Provider
         ----------------------
as a result of the Optionee's Disability, the Optionee may exercise his or her
Option within such period of time as is specified in the Option Agreement to the
extent the Option is vested on the date of termination, but in no event later
than the expiration date of the term of such Option as set forth in the Option
Agreement. In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
the entire Option, the Shares covered by the unvested portion of the Option
shall revert to the Plan. If, after termination, the Option is not exercised
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

     (d) Death of Optionee.  If an Optionee dies while a Service Provider, the
         -----------------
Option may be exercised within such period of time as is specified in the Option
Agreement to the extent that the Option is vested on the date of death (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement) by the Optionee's estate or by a person who acquires the
right to exercise the Option by bequest or inheritance.  In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable for
twelve (12) months following the Optionee's termination.  If, at the time of
death, the Optionee is not vested as to the entire Option, the Shares covered by
the unvested portion of the Option shall revert to the Plan.  If the Option is
not so exercised within the time specified herein, the Option shall terminate,
and the Shares covered by such Option shall revert to the Plan.

 10. Buyout Provisions. The Administrator may at any time offer to buy out, for
     -----------------
a payment in cash or Shares, any Option previously granted, based on such terms
and conditions as

                                      -7-
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the Administrator shall establish and communicate to the Optionee at the time
that such offer is made.

     11.  Non-Transferability of Options.  Unless determined otherwise by the
          ------------------------------
Administrator, Options may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.  If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.

     12.  Adjustments Upon Changes in Capitalization or Merger.
          ----------------------------------------------------

          (a) Changes in Capitalization.  Subject to any required action by the
              -------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration."  Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.

          (b) Dissolution or Liquidation.  In the event of the proposed
              --------------------------
dissolution or liquidation of the Company, the Administrator shall notify the
Optionee at least thirty (30) days prior to such proposed action.  To the extent
it has not been previously exercised, the Option will terminate immediately
prior to the consummation of such proposed action.

          (c) Merger or Asset Sale.  In the event of a merger of the Company
              --------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option shall be assumed or an equivalent option
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation.  In the event that the successor corporation refuses to
assume or substitute for the Option, the Optionee shall fully vest in and have
the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable.  If an
Option becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Administrator shall
notify the Optionee in writing or electronically that the Option shall be fully
exercisable for a period of thirty (30) days from the date of such notice, and
the Option shall

                                      -8-
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terminate upon the expiration of such period. For the purposes of this
paragraph, the Option shall be considered assumed if, following the merger or
sale of assets, the option confers the right to purchase or receive, for each
Share of Optioned Stock subject to the Option immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option for each Share of Optioned Stock
subject to the Option to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.

     13.  Date of Grant.  The date of grant of an Option shall, for all
          -------------
purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board.  Notice
of the determination shall be given to each Service Provider to whom an Option
is so granted within a reasonable time after the date of such grant.

     14.  Amendment and Termination of the Plan.
          -------------------------------------

          (a) Amendment and Termination.  The Board may at any time amend,
              -------------------------
alter, suspend or terminate the Plan.

          (b) Shareholder Approval.  The Board shall obtain shareholder approval
              --------------------
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.

          (c) Effect of Amendment or Termination.  No amendment, alteration,
              ----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

     15.  Conditions Upon Issuance of Shares.
          ----------------------------------

          (a) Legal Compliance.  Shares shall not be issued pursuant to the
              ----------------
exercise of an Option  unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

          (b) Investment Representations.  In the event the Shares have not been
              --------------------------
registered under the Securities Act of 1933, as amended (the "Securities Act"),
as a condition to the exercise of an Option, the Administrator may require the
person exercising such Option to

                                      -9-
<PAGE>

represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

          (c) Inability to Obtain Authority.  The inability of the Company to
              -----------------------------
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

     16.  Reservation of Shares.  The Company, during the term of this Plan,
          ---------------------
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     17.  Shareholder Approval.  The Plan shall be subject to approval by the
          --------------------
shareholders of the Company within twelve (12) months after the date the Plan is
adopted.  Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.

                                      -10-<PAGE>

                                                                   Exhibit 10.2
                         FOUNDER EMPLOYMENT AGREEMENT
                         ----------------------------

     This Founder Employment Agreement ("Agreement") is made and entered into as
of February 12, 1998 by Paradigm Genetics Inc., a North Carolina corporation
(hereinafter the "Company"), and John A. Ryals (hereinafter "Founder").  The
Company desires to employ Founder as its President and Chief Executive Officer
and Founder desires to accept such employment on the terms set forth below.

     In consideration of the mutual promises set forth below and other good and
valuable consideration, the receipt and sufficiency of which the parties
acknowledge, the Company and Founder agree as follows:

     1. EMPLOYMENT. The Company employs Founder and Founder accepts employment
        ----------
on the terms and conditions set forth in this Agreement.

     2. NATURE OF EMPLOYMENT. Founder shall serve as President and Chief
        --------------------
Executive Officer and have such responsibilities and authority as the Company
may reasonably assign from time to time. Additionally, Founder agrees to perform
such other duties as the Company may reasonably assign from time to time.

        2.1 Founder shall perform all duties and exercise all authority in
accordance with, and otherwise comply with, all Company policies, procedures,
practices and directions.

        2.2 Founder shall devote all working time, best efforts, knowledge and
experience to successfully perform his duties and advance the Company's
interests. During his employment, Founder shall not engage in any other business
activities of any nature whatsoever (including board memberships) for which he
receives compensation without the Company's prior written consent; provided,
however, this provision does not prohibit him from personally owning and trading
in stocks, bonds, securities, real estate, commodities or other investment
properties for his own benefit which do not create actual or potential conflicts
of interest with the Company.

        2.3 Founder's base of operation shall be at the Company's principal
executive office, subject to business travel as may be necessary in the
performance of his duties.

     3. COMPENSATION.

        3.1 Base Salary. Founder's annual salary for all services rendered shall
            -----------
be One Hundred Eighty Thousand Dollars ($180,000) (less applicable withholdings)
payable in accordance with the Company's policies, procedures and practices as
they may exist from time to time. Founder's salary shall be reviewed in
accordance with the Company's policies, procedures and practices as they may
exist from time to time.

        3.2 Bonus. Founder shall be eligible to receive bonus compensation, in
            -----
addition to base salary, of twenty-five percent (25%) of Founder's annual base
salary calculated at the end of each calendar year. Such bonus shall be awarded
on the basis of mutually agreed upon objectives and criteria between Founder and
the Company (which shall
<PAGE>

include the hiring of a Chief Financial Officer of the Company), and paid to
Founder within thirty (30) days of the end of each calendar year.

        3.3 Stock Options. Founder shall be eligible to receive stock options in
            -------------
accordance with a written stock option agreement; provided, however, that the
grant of any options is subject to the applicable terms, conditions and
requirements of any applicable stock option plan, some of which are within the
plan administrator's discretion, as they may exist from time to time.

        3.4 Tax Returns. Founder shall be entitled to tax return preparation and
            -----------
reasonable financial planning, consultation and advice by the Company's
accounting firm and/or legal counsel and/or financial consultants as the Company
may provide from time to time to Company Founders at Founder's compensation
level.

        3.5 Other Benefits. Founder may participate in all medical, dental,
            --------------
disability, insurance, retirement, pension, personal leave, car allowance and
other employee benefit plans and programs which may be made available from time
to time to employees of the Company generally and to Company Founders at
Founder's compensation level; provided, however, that Founder's participation is
subject to the applicable terms, conditions and eligibility requirements of
these plans and programs, some of which are within the plan administrator's
discretion, as they may exist from time to time.

        3.6 Business Expenses. Founder shall be reimbursed for reasonable and
            -----------------
necessary expenses actually incurred by him in performing services under this
Agreement in accordance with and subject to the terms and conditions of the
applicable Company reimbursement policies, procedures and practices as they may
exist from time to time. Expenses covered by this provision include but are not
limited to travel, entertainment, professional dues, subscriptions and dues,
fees and expenses associated with membership in various professional, business
and civic associations of which Founder's participation is in the Company's best
interest.

        3.7 Benefit Plans Subject to Amendment. Nothing in this Agreement shall
            ----------------------------------
require the Company to create, continue or refrain from amending, modifying,
revising or revoking any of the plans, programs or benefits set forth in
Sections 3.3 through 3.6. Any amendments, modifications, revisions and
revocations of these plans, programs and benefits shall apply to Founder.

        3.8 Life Insurance. The Founder may obtain and maintain a term life
            --------------
insurance policy, reasonably satisfactory to the Company, on the life of the
Founder in the amount of $500,000 and payable to the designee of Founder, for a
period of three (3) years from the date of this Agreement, and the Company shall
on an annual basis pay to the Founder additional compensation in an amount equal
to the annual premium for such policy (the "Insurance Bonus") plus an amount
equal to the applicable federal and state tax payable by the Founder in respect
of the Insurance Bonus; provided that the Company shall pay such amounts only so
long as the annual premium for such policy shall not increase by more than
fifteen percent (15%) over the initial annual premium; but if the premium does
exceed such percentage, then Founder shall have the option of continuing to
maintain such life insurance

                                       2
<PAGE>

and the Company shall be responsible for paying such additional compensation
except with respect to the amount of such excess.

     4. TERM OF EMPLOYMENT. Either party may terminate the employment
        ------------------
relationship with or without cause at any time.

        If Founder terminates the employment relationship for any reason or the
Company terminates it for Cause (as defined below), then the Company's
obligation to compensate Founder ceases upon the date of termination except as
to amounts due at that time, and Founder shall be subject to the provisions set
forth in Section 5.2 for a period of twelve (12) months following the date of
termination (the "Non-Competition Period").

        If the Company terminates Founder's employment without Cause, then its
obligation to compensate Founder ceases upon the date of termination except as
to amounts due at that time, and Founder shall be subject to the provisions set
forth in Section 5.2 for a period of three (3) months following the date of
termination, so long as the Company shall pay to Founder an amount equal to his
then current monthly salary (less applicable withholdings) payable on a monthly
basis during such three (3) month period following the date of termination;
provided, however, that within ten (10) business days after the date of
termination of employment, the Company may give to Founder written notice that
such three (3) month period shall be extended for up to twelve (12) months (in
the aggregate) following the date of termination and such period shall be so
extended, so long as the Company shall pay to Founder an amount equal to his
then current monthly salary (less applicable withholdings) on a monthly basis
during each such month so extended (such three (3) month period or such period
as so extended being referred to as the "Alternative Non-Competitive Period").
During the period in which Founder receives post-termination payments pursuant
to this Section 4, he may continue to participate in all employee welfare
benefit plans in which Founder participated on the date of termination of
employment; provided, that Founder's participation is subject to the applicable
terms, conditions and eligibility requirements of these plans and this is not a
guarantee of coverage.

        For the purpose of this Agreement, "Cause" shall mean: (i) to the extent
permitted by law, Founder's attaining age 65; (ii) Founder's death; (iii)
Founder's physical or mental inability to perform his duties for a period of
three (3) months or more; (iv) Founder's acts constituting fraud, deceit or
unlawful or illegal conduct involving the Company or any felony affecting the
Company; (v) Founder's engaging in "Competitive Business Activities" as
described in Section 5; (vi) Founder's neglect of duty, or failure to follow
reasonable written directions of the Board of Directors, and the failure to cure
same within thirty (30) days after receipt of written notice thereof from the
Company; or (vii) Founder's material breach of this Agreement, or the Founder
Proprietary Information and Inventions Agreement between Founder and the
Company, and the failure to cure same within thirty (30) days after receipt of
written notice thereof from the Company.

        This Agreement shall terminate upon the termination of the employment
relationship with the exception of Section 5 (Company Property and Competitive
Business Activities) and Section 3.8 (Life Insurance) which shall survive the
termination of Founder's employment and/or the termination of this Agreement
regardless of the reasons for such termination.

                                       3
<PAGE>

     Founder is not entitled to receive any compensation or benefits upon his
termination except as: (i) set forth in this Agreement; (ii) otherwise required
by law; or (iii) otherwise required by any employee benefit plan in which he
participates with the following exception. Nothing in this Agreement, however,
is intended to waive or supplant any death, disability, retirement or pension
benefits to which he may be entitled under employee benefit plans in which he
participates.

     5.  COMPANY PROPERTY AND COMPETITIVE BUSINESS ACTIVITIES. Founder
         ----------------------------------------------------
acknowledges and agrees that: (i) by virtue of his employment by and position
with the Company, he has or will have access to trade secrets and confidential
information of the Company, including valuable information about its business
operations and methods and entities with whom it does business in various
locations throughout the world, and he has developed or will develop
relationships with the Company's clients and customers and others with whom it
does business in various locations throughout the world; (ii) the market for the
Company's services is highly competitive and the Company competes on a worldwide
basis with other biotechnology and genomics companies; the Company's business is
worldwide, and the Company competes within the biotechnology and genomics
industry which is characterized by a global, worldwide marketplace; (iii) the
Founder has highly specialized scientific knowledge in the biotechnology and
genomics industry which is essential to the Company's ability to offer highly
specialized, global biotechnology and genomics services and to compete within
that industry; (iv) this Agreement is being executed contemporaneously with the
Stock Purchase Agreement dated on or about the date hereof among the Company and
certain investors, and this Agreement constitutes part of the consideration for
the parties entering into such Stock Purchase Agreement, and the Company is
relying on this Agreement in connection with entering into such Stock Purchase
Agreement and the transactions contemplated thereby; and (v) the "Competitive
Business Activities" provisions set forth in this Section 5 are reasonably
necessary to protect the Company's legitimate business interests, are reasonable
as to the time, territory and scope of activities which are restricted, do not
interfere with public policy or public interest and are described with
sufficient accuracy and definiteness to enable him to understand the scope of
the restrictions imposed upon him.

     5.1 Company Property. Upon termination of his employment, Founder shall:
         ----------------
(i) deliver to the Company all Company property (including, but not limited to,
keys, credit cards, client or customer files, contracts, proposals, work in
process, manuals, forms, computer stored work in process and other computer
data, research materials, other items of business information concerning any
Company client or customer, or Company business or business methods, including
all copies thereof) which is in his possession, custody or control; (ii) bring
all such records, files and other materials up to date before returning them;
and (iii) fully cooperate with the Company in winding up his work and
transferring that work to other individuals designated by the Company.

     5.2 Competitive Business Activities. During his employment and during the
         -------------------------------
Non-Competition Period or Alternative Non-Competition Period set forth in
Section 4, as applicable, Founder will not engage in the activities set forth
below in this Section 5.2):

                                       4
<PAGE>

     (a) on Founder's own or another's behalf, whether as an officer, director,
stockholder, partner, associate, owner, employee, consultant, advisor or
otherwise, directly or indirectly:

                (i)   compete with the Company within the geographical areas set
forth in Section 5.2.1;

                (ii)  solicit or do business which is the same as, similar to or
otherwise in competition with the business engaged in by the Company from or
with persons or entities: (a) who are customers of the Company; (b) who Founder,
or someone for whom he had management responsibility or supervision, solicited,
negotiated, contracted, serviced or had contact with on the Company's behalf;
(c) who were customers of the Company at any time during the last year of
Founder's employment with the Company; or (d) to whom the Company had made
proposals to do business at any time during the last year of Founder's
employment with the Company; or

                (iii) offer employment to or otherwise solicit for employment or
engagement (as a consultant, advisor, independent contractor or otherwise) any
employee or other person who had been employed or engaged by the Company during
the last year of Founder's employment with the Company; or

     (b) within the geographical areas set forth in Section 5.2.1, be employed
(or otherwise engaged) by any person or entity that competes with the Company in
the field of agricultural biotechnology and genomics, in (i) a management
capacity, (ii) other capacity providing the same or similar services which
Founder provided to the Company, or (iii) any capacity connected with
competitive business activities; or

     (c)  take any action which is materially detrimental or otherwise intended
to be adverse to the Company's goodwill, name, business relations, prospects and
operations.

     5.2.1 The restrictions set forth in Section 5.2 apply to the following
geographical areas: (i) the Raleigh/Durham/Research Triangle Park, North
Carolina metropolitan area; (ii) any city, metropolitan area, county (or similar
political subdivisions in foreign countries) in which the Company is located or
does or, during Founder's employment with Company did business; (iii) any city,
metropolitan area, county (or similar political subdivision in foreign
countries) in which Founder's services were provided (in person or otherwise),
or for which Founder had responsibility, or in which Founder worked on Company
projects, while employed by the Company; (iv) the State of North Carolina; (v)
the Los Angeles, California metropolitan area; (vi) the San Francisco,
California/San Francisco Bay metropolitan area; and (vii) the State of
California.

     5.2.2 Notwithstanding the foregoing, Founder's ownership, directly or
indirectly, of not more than one percent of the issued and outstanding stock of
a corporation the shares of which are regularly traded on a national securities
exchange or in the over-the-counter market shall not violate Section 5.2.

     5.3 Remedies. Founder acknowledges that his failure to abide by the
         --------
"Company Property" or "Competitive Business Activities" provisions of this
Section 5 would

                                       5
<PAGE>

cause irreparable harm to the Company for which legal remedies would be
inadequate. Therefore, in addition to any other relief to which the Company may
be entitled by virtue of Founder's failure to abide by these provisions, the
Company may seek legal and equitable relief, including but not limited to
preliminary and permanent injunctive relief, for Founder's actual or threatened
failure to abide by these provisions.

     5.4 Other Agreements. Nothing in this Agreement shall terminate, revoke or
         ----------------
diminish Founder's obligations or the Company's rights and remedies under law or
any agreements relating to trade secrets, confidential information, non-
competition and intellectual property which Founder has executed in the past or
may execute in the future or contemporaneously with this Agreement, including
without limitation agreements related to intellectual property rights previously
executed by and between Founder and Founder's previous employer, Novartis Crop
Protection, Inc. and its affiliates ("Novartis").

     6.  EMPLOYEE REPRESENTATION. Founder represents and warrants to the Company
         -----------------------
that, to the best of his knowledge, his employment and obligations under this
Agreement will not (i) breach any legal duty or obligation he owes to another or
(ii) violate any law, recognized ethics standard or recognized business custom.
The Founder has not and will not use any trade secrets of Novartis in the course
of his employment with the Company that may expose the Company or any employees
of the Company to any liability under any agreement, rule, regulation or
statute. No patent, discovery, invention, improvement, process or device made,
discovered or developed by Founder while employed with Novartis or within six
months subsequent to such employment has or will be used in any business of the
Company in any manner that violates or infringes the intellectual property
rights of Novartis or violates any agreement between Founder and Novartis.

     7.  CONFIDENTIALITY, TRADE SECRETS AND INTELLECTUAL PROPERTY AGREEMENT.
         ------------------------------------------------------------------
Founder's employment and continued employment shall be contingent upon his
execution of confidentiality, trade secrets and intellectual property agreements
as the Company may require Company Founders at his compensation level to execute
from time to time.

     8.  WAIVER OF BREACH. The Company's or Founder's waiver of any breach of a
         ----------------
provision of this Agreement shall not waive any subsequent breach by the other
party.

     9.  ENTIRE AGREEMENT. Except as expressly provided in this Agreement, this
         ----------------
Agreement: (i) supersedes all other understandings and agreements, oral or
written, between the parties with respect to the subject matter of this
Agreement; and (ii) constitutes the sole agreement between the parties with
respect to this subject matter. Each party acknowledges that: (i) no
representations, inducements, promises or agreements, oral or written, have been
made by any party or by anyone acting on behalf of any party, which are not
embodied in this Agreement; and (ii) no agreement, statement or promise not
contained in this Agreement shall be valid. No change or modification of this
Agreement shall be valid or binding upon the parties unless such change or
modification is in writing and is signed by the parties.

     10. SEVERABILITY. If a court of competent jurisdiction holds that any
         ------------
provision or sub-part thereof contained in this Agreement is invalid, illegal or
unenforceable, that invalidity, illegality or unenforceability shall not affect
any other provision in this Agreement. Additionally,

                                       6
<PAGE>

if any of the provision, clauses or phrases in the Competitive Business
Activities provisions set forth in this Agreement are held unenforceable by a
court of competent jurisdiction, then the parties desire that they be "blue-
penciled' or rewritten by the court to the extent necessary to render them
enforceable.

     11. PARTIES BOUND. The terms, provisions, covenants and agreements

contained in this Agreement shall apply to, be binding upon and inure to the
benefit of the Company's successors and assigns. Founder may not assign this
Agreement without the Company's prior written consent.

     12. GOVERNING LAW. This Agreement and the employment relationship created
by it shall be governed by North Carolina law without giving effect to North
Carolina choice of law provisions. The parties hereby consent to jurisdiction in
North Carolina for the purpose of any litigation relating to this Agreement and
agree that any litigation by or involving them relating to this Agreement shall
be conducted in the courts of Wake County, North Carolina or the federal courts
of the United States for the Eastern District of North Carolina.

                        [Signatures appear on next page]

                                       7
<PAGE>

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

                                                  /s/ John A. Ryals
                                        ----------------------------------------
                                                    John A. Ryals

                                        PARADIGM GENETICS INC.

                                        By:  /s/ Scott J. Uknes
                                           ------------------------------------
                                             Name: Scott J. Uknes
                                             Title: Secretary

                                       8

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