Document:

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                                                                    EXHIBIT 10.2

     THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR
     INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
     DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
     AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
     COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

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

                                  LIPOMED, INC.
                       NONQUALIFIED STOCK OPTION AGREEMENT

     LipoMed, Inc. (the "Company"), granted to the individual named below an
option to purchase certain shares of common stock of the Company pursuant to the
LipoMed, Inc. Stock Option Plan, in the manner and subject to the provisions of
this Option Agreement.

1.   Definitions:
     -----------

     (a)  "Code" shall mean the Internal Revenue Code of 1986, as amended. (All
          citations to sections of the Code are to such sections as they may
          from time to time be amended or renumbered.)

     (b)  "Company" shall mean LipoMed, Inc., a Delaware corporation, and
          any successor corporation thereto.

     (c)  "Date of Option Grant" shall mean ____________________.

     (d)  "Disability" shall mean disability within the meaning of section
          22(e)(3) of the Code, as determined by the Board in its discretion
          under procedures established by the Board of Directors of the Company.

     (e)  "Exercise Price" shall mean ___________________ ($________) per share
          as adjusted from time to time pursuant to paragraph 9 below.

     (f)  "Number of Option Shares" shall mean ________________ (______) shares
          of common stock of the Company as adjusted from time to time pursuant
          to paragraph 9 below.

     (g)  "Option Term Date" shall mean the date ten (10) years after the Date
          of Option Grant.

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     (h)  "Optionee" shall mean ______________________________.

     (i)  "Participating Company" shall mean (i) the Company and (ii) any
          present or future parent and/or subsidiary corporation of the Company
          while such corporation is a parent or subsidiary of the Company. For
          purposes of this Option Agreement, a parent corporation and a
          subsidiary corporation shall be as defined in Sections 424(e) and
          424(f) of the Code.

     (j)  "Participating Company Group" shall mean at any point in time all
          corporations collectively which are then a Participating Company.

     (k)  "Plan" shall mean the LipoMed, Inc. Stock Option Plan.

2.   Nonqualified Stock Option. This Option is intended to be a nonqualified
     -------------------------
     stock option. The Optionee should consult with the Optionee's own tax
     advisors regarding the tax effects of this Option.

3.   Administration. All questions of interpretation concerning this Option
     --------------
     Agreement shall be determined by the Board of Directors of the Company (the
     "Board") and/or by a duly appointed committee of the Board having such
     powers as shall be specified by the Board. Any subsequent references herein
     to the Board shall also mean the committee if such committee has been
     appointed and, unless the powers of the committee have been specifically
     limited, the committee shall have all of the powers of the Board granted in
     the Plan, other than the power to terminate or amend the Plan as provided
     in section 12 of the Plan, subject to the terms of the Plan and any
     applicable limitations imposed by law. All determinations by the Board
     shall be final and binding upon all persons having an interest in the
     Option. Any officer of a Participating Company shall have the authority to
     act on behalf of the Company with respect to any matter, right, obligation
     or election which is the responsibility of or which is allocated to the
     Company herein, provided the officer has apparent authority with respect to
     such matter, right, obligation or election.

4.   Exercise and Vesting of the Option.
     ----------------------------------

     (a)  Right to Exercise. The Option shall vest and become exercisable from
          -----------------
          time to time, subject to the schedule set forth below, in whole or in
          part, subject to the termination provisions of paragraphs 6 and 7
          hereof and the Optionee's agreement that any shares purchased upon
          exercise are subject to the Company's repurchase rights set forth in
          paragraph 11 below:

               [Insert vesting schedule.]

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          The schedule set forth above is cumulative, so that shares as to which
          the Option has become exercisable on and after a date indicated by the
          schedule may be purchased pursuant to exercise of the Option at any
          subsequent date prior to termination of the Option. The Option may be
          exercised at any time and from time to time to purchase up to the
          number of shares as to which it is then exercisable.

     (b)  Method of Exercise. The Option shall be exercised by written notice to
          ------------------
          the Company in the form of Exhibit A hereto stating the election to
                                     ---------
          exercise the Option, the number of shares for which the Option is
          being exercised and such other representations and agreements as to
          the Optionee's investment intent with respect to such shares as may be
          required by the Company. The written notice must be signed by the
          Optionee and must be delivered in person or by certified or registered
          mail, return receipt requested, to the Chief Financial Officer of the
          Company, or other authorized representative of the Participating
          Company Group, prior to the termination of the Option as set forth in
          paragraph 6 below, accompanied by (i) full payment of the exercise
          price for the number of shares being purchased and (ii) an executed
          copy, if required herein, of the then current form of joint escrow
          instructions referenced below.

     (c)  Form of Payment of Option Price. Such payment shall be made in cash,
          -------------------------------
          check or cash equivalent or in any other form as may be permitted by
          the Board in its discretion.

     (d)  Withholding. At the time the Option is exercised, in whole or in part,
          -----------
          or at any time thereafter as requested by the Company, the Optionee
          hereby authorizes payroll withholding and otherwise agrees to make
          adequate provision for foreign, federal and state tax withholding
          obligations of the Company, if any, which arise in connection with the
          Option, including, without limitation, obligations arising upon (i)
          the exercise, in whole or in part, of the Option, (ii) the transfer,
          in whole or in part, of any shares acquired on exercise of the Option,
          (iii) the operation of any law or regulation providing for the
          imputation of interest, or (iv) the lapsing of any restriction with
          respect to any shares acquired on exercise of the Option.

     (e)  Certificate Registration. The certificate or certificates for the
          ------------------------
          shares as to which the Option shall be exercised shall be registered
          in the name of the Optionee, or, if applicable, the heirs of the
          Optionee.

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     (f)  Restrictions on Grant of the Option and Issuance of Shares. The grant
          ----------------------------------------------------------
          of the Option and the issuance of the shares upon exercise of the
          Option shall be subject to compliance with all applicable requirements
          of federal or state law with respect to such securities. The Option
          may not be exercised if the issuance of shares upon such exercise
          would constitute a violation of any applicable federal or state
          securities laws or other law or regulations. In addition, no Option
          may be exercised unless (i) a registration statement under the
          Securities Act of 1933, as amended (the "Securities Act"), shall at
          the time of exercise of the Option be in effect with respect to the
          shares issuable upon exercise of the Option or (ii) in the opinion of
          legal counsel to the Company, the shares issuable upon exercise of the
          Option may be issued in accordance with the terms of an applicable
          exemption from the registration requirements of the Securities Act.

               THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY
               NOT BE EXERCISABLE UNLESS THE FOREGOING CONDITIONS
               ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE
               ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH
               THE OPTION IS VESTED.

          As a condition to the exercise of the Option, the Company may require
          the Optionee to satisfy any qualifications that may be necessary or
          appropriate, to evidence compliance with any applicable law or
          regulation and to make any representation or warranty with respect
          thereto as may be requested by the Company.

     (g)  Fractional Shares. The Company shall not be required to issue
          -----------------
          fractional shares upon the exercise of the Option.

5.   Non-Transferability of the Option. The Option may be exercised during the
     ---------------------------------
     lifetime of the Optionee only by the Optionee and may not be assigned or
     transferred in any manner except by will or by the laws of descent and
     distribution.

6.   Termination of the Option. The Option shall terminate and may no longer be
     -------------------------
     exercised on the first to occur of (a) the Option Term Date as defined
     above, (b) the last date for exercising the Option following termination of
     employment as described in paragraph 7 below, or (c) upon a Transfer of
     Control as described in paragraph 8 below.

7.   Termination of Employment.
     -------------------------

     (a)  Termination of the Option. If the Optionee ceases to be an employee of
          -------------------------
          the Participating Company Group for any reason except death or
          Disability, the Option, to the extent unexercised and exercisable by
          the Optionee on the date on which the Optionee ceased to be an
          employee, may be exercised by the Optionee

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          within three (3) months after the date on which the Optionee's
          employment terminates, but in any event no later than the Option Term
          Date. If the Optionee's employment with the Participating Company
          Group is terminated because of the death or Disability of the
          Optionee, the Option, to the extent unexercised and exercisable by the
          Optionee on the date on which the Optionee ceased to be an employee,
          may be exercised by the Optionee (or the Optionee's legal
          representative) at any time prior to the expiration of twelve (12)
          months from the date the Optionee's employment terminated, but in any
          event no later than the Option Term Date. The Optionee's employment
          shall be deemed to have terminated on account of death if the Optionee
          dies within three (3) months after the Optionee's termination of
          employment. This paragraph shall be interpreted such that the Option
          ceases to vest on the date on which the Optionee ceases to be an
          employee of the Participating Company Group (pursuant to this
          paragraph 7) for any reason, notwithstanding any period after such
          cessation of employment during which the Option may remain exercisable
          as provided in this paragraph 7.

     (b)  Termination of Employment Defined. For purposes of this paragraph 7,
          ---------------------------------
          the Optionee's employment shall be deemed to have terminated either
          upon an actual termination of employment or upon the Optionee's
          employer ceasing to be a Participating Company.

     (c)  Exercise Prevented by Law. Except as provided in this paragraph 7, the
          -------------------------
          Option shall terminate and may not be exercised after the Optionee's
          employment with the Participating Company Group terminates unless the
          exercise of the Option in accordance with this paragraph 7 is
          prevented by the provisions of paragraph 4(f) above. If the exercise
          of the Option is so prevented, the Option shall remain exercisable
          until three (3) months after the date the Optionee is notified by the
          Company that the Option is exercisable, but in any event no later than
          the Option Term Date.

     (d)  Optionee Subject to Section 16(b). Notwithstanding the foregoing, if
          ---------------------------------
          the exercise of the Option within the applicable time periods set
          forth above would subject the Optionee to suit under Section 16(b) of
          the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
          the Option shall remain exercisable until the earliest to occur of (i)
          the tenth (10th) day following the date on which the Optionee would no
          longer be subject to such suit, (ii) the one hundred and ninetieth
          (190th) day after the Optionee's termination of employment, or (iii)
          the Option Term Date.

     (e)  Leave of Absence. For purposes hereof, the Optionee's employment with
          ----------------
          the Participating Company Group shall not be deemed to terminate if
          the Optionee takes any military leave, sick leave, or other bona fide
          leave of absence approved by the Company of ninety (90) days or less.
          In the event of a leave in excess of ninety (90) days, the Optionee's
          employment shall be deemed to terminate on the

<PAGE>

          ninety-first (91st) day of the leave unless the Optionee's right to
          reemployment with the Participating Company Group remains guaranteed
          by statute or contract.

     (f)  Directors, Consultants and Advisors. In the event an Optionee is a
          -----------------------------------
          director or consultant or advisor but not an employee of a
          Participating Company at the time the Option is granted, termination
          of the Optionee's status as a director or consultant or advisor of the
          Participating Company shall be deemed to be termination of the
          Optionee's employment.

8.   Transfer of Control. Upon a merger, consolidation, corporate
     -------------------
     reorganization, or any transaction in which all or substantially all of the
     assets of the Company are sold, leased, transferred or otherwise disposed
     of (other than a mere reincorporation transaction or one in which the
     holders of capital stock of the Company immediately prior to such merger or
     consolidation continue to hold at least a majority of the voting power of
     the surviving corporation) (a "Transfer of Control"), then any
     unexercisable portion of an outstanding Option shall become immediately
     exercisable as of a date prior to the Transfer of Control, which date shall
     be determined by the Board. The exercise of any Option that was permissible
     solely by reason of this paragraph 8 shall be conditioned upon the
     consummation of the Transfer of Control. The Board may further elect, in
     its sole discretion, to provide that any Options which become exercisable
     solely by reason of this paragraph 8 and which are not exercised as of the
     date of the Transfer of Control shall terminate effective as of the date of
     the Transfer of Control.

9.   Effect of Change in Stock Subject to the Option. The Board shall make
     -----------------------------------------------
     appropriate adjustments in the number, exercise price and class of shares
     of stock subject to the Option in the event of a stock dividend, stock
     split, reverse stock split, combination, reclassification, or like change
     in the capital structure of the Company. In the event a majority of the
     shares which are of the same class as the shares that are subject to the
     Option are exchanged for, converted into, or otherwise become (whether or
     not pursuant to a Transfer of Control) shares of another corporation (the
     "New Shares"), the Board may unilaterally amend the Option to provide that
     the Option is exercisable for New Shares. In the event of any such
     amendment, the number of shares and the exercise price shall be adjusted in
     a fair and equitable manner.

10.  Rights as a Shareholder or Employee. The Optionee shall have no rights as a
     -----------------------------------
     shareholder with respect to any shares covered by the Option until the date
     of the issuance of a certificate or certificates for the shares for which
     the Option has been exercised. No adjustment shall be made for dividends or
     distributions or other rights for which the record date is prior to the
     date such certificate or certificates are issued, except as provided in
     paragraph 9 above. Nothing in the Option shall confer upon the Optionee any
     right to continue in the employ of a Participating Company or interfere in
     any way with any right of the Participating Company Group to terminate the
     Optionee's employment at any time.

11.  Right of First Refusal.
     ----------------------

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     (a)  Right of First Refusal. In the event the Optionee proposes to sell,
          ----------------------
          pledge, or otherwise transfer any shares acquired upon exercise of the
          Option (the "Transfer Shares") to any person or entity, including,
          without limitation, any shareholder of the Participating Company
          Group, the Company shall have the right to repurchase the Transfer
          Shares under the terms and subject to the conditions set forth in this
          paragraph 11 (the "Right of First Refusal").

     (b)  Notice of Proposed Transfer. Prior to any proposed transfer of the
          ---------------------------
          Transfer Shares, the Optionee shall give a written notice (the
          "Transfer Notice") to the Company describing fully the proposed
          transfer, including the number of Transfer Shares, the name and
          address of the proposed transferee (the "Proposed Transferee") and, if
          the transfer is voluntary, the proposed transfer price and containing
          such information necessary to show the bona fide nature of the
          proposed transfer. In the event of a bona fide or involuntary
          transfer, the proposed transfer price shall be deemed to be the fair
          market value of the Transfer Shares as determined by the Company in
          good faith. In the event the Optionee proposes to transfer any
          Transfer Shares to more than one (1) Proposed Transferee, the Optionee
          shall provide a separate Transfer Notice for the proposed transfer to
          each Proposed Transferee. The Transfer Notice shall be signed by both
          the Optionee and the Proposed Transferee and must constitute a binding
          commitment of the Optionee and the Proposed Transferee for the
          transfer of the Transfer Shares to the Proposed Transferee subject
          only to the Right of First Refusal.

     (c)  Bona Fide Transfer. In the event that the Company shall determine that
          ------------------
          the information provided by the Optionee in the Transfer Notice is
          insufficient to establish the bona fide nature of a proposed voluntary
          transfer, the Company shall give the Optionee written notice of the
          Optionee's failure to comply with the procedure described in this
          paragraph 11 and the Optionee shall have no right to transfer the
          Transfer Shares without first complying with the procedures described
          in this paragraph 11. The Optionee shall not be permitted to transfer
          the Transfer Shares if the proposed transfer is not bona fide.

     (d)  Exercise of the Right of First Refusal. In the event the proposed
          --------------------------------------
          transfer is deemed to be bona fide, the Company shall have the right
          to purchase all, but not less than all, of the Transfer Shares at the
          purchase price and on the terms set forth in the Transfer Notice by
          delivery to the Optionee of a notice of exercise of the Right of First
          Refusal within thirty (30) days after the date the Transfer Notice is
          delivered to the Company. The Company's exercise or failure to
          exercise the Right of First Refusal with respect to any proposed
          transfer described in a Transfer Notice shall not affect the Company's
          ability to exercise the Right of First Refusal with respect to any
          proposed transfer described in any other Transfer Notice, whether or
          not such other Transfer Notice is issued by the Optionee or issued by
          a person other than the Optionee with respect to a proposed transfer
          to

<PAGE>

          the same Proposed Transferee. If the Company exercises the Right of
          First Refusal, the Company and the Optionee shall thereupon consummate
          the sale of the Transfer Shares to the Company on the terms set forth
          in the Transfer Notice; provided however, that in the event that the
          Transfer Notice provides for the payment for the Transfer Shares other
          than in cash, the Company shall have the option of paying for the
          Transfer Shares by the discounted cash equivalent of the consideration
          described in the Transfer Notice as reasonably determined by the
          Company. For purposes of the foregoing, cancellation of any
          indebtedness of the Optionee to any Participating Company shall be
          treated as payment to the Optionee in cash to the extent of the unpaid
          principal and any accrued interest cancelled.

     (e)  Failure to Exercise the Right of First Refusal. If the Company fails
          ----------------------------------------------
          to exercise the Right of First Refusal in full within the period
          specified in paragraph 11(d) above, the Optionee may conclude a
          transfer to the Proposed Transferee of the Transfer Shares on the
          terms and conditions described in the Transfer Notice, provided such
          transfer occurs not later than one hundred twenty (120) days following
          delivery to the Company of the Transfer Notice. The Company shall have
          the right to demand further assurances from the Optionee and the
          Proposed Transferee (in a form satisfactory to the Company) that the
          transfer of the Transfer Shares was actually carried out on the terms
          and conditions described in the Transfer Notice. No Transfer Shares
          shall be transferred on the books of the Company until the Company has
          received such assurances, if so demanded, and has approved the
          proposed transfer as bona fide. Any proposed transfer on terms and
          conditions different from those described in the Transfer Notice, as
          well as any subsequent proposed transfer by the Optionee, shall again
          be subject to the Right of First Refusal and shall require compliance
          by the Optionee with the procedure described in this paragraph 11.

     (f)  Transferees of the Transfer Shares. All transferees of the Transfer
          ----------------------------------
          Shares or any interest therein, other than the Company, shall be
          required as a condition of such transfer to agree in writing (in a
          form satisfactory to the Company) that such transferee shall receive
          and hold such Transfer Shares or interests subject to the provisions
          of this paragraph 11 providing for the Right of First Refusal with
          respect to any subsequent transfer. Any sale or transfer of any shares
          acquired upon exercise of the Option shall be void unless the
          provisions of this paragraph 11 are met.

     (g)  Transfers Not Subject to the Right of First Refusal. The Right of
          ---------------------------------------------------
          First Refusal shall not apply to any transfer or exchange of the
          shares acquired pursuant to the exercise of the Option if (i) such
          transfer is in connection with a Transfer of Control, (ii) such
          transfer is to one or more members of the Optionee's immediate family
          (or a trust for their benefit) provided all such transferees agree in
          writing to the restrictions in paragraph 11(f), or (iii) such transfer
          has been approved by the Board of Directors of the Company, which
          approval many be granted or withheld

<PAGE>

          in its complete discretion. If the consideration received pursuant to
          such transfer or exchange consists of stock of a Participating
          Company, such consideration shall remain subject to the Right of First
          Refusal unless the provisions of paragraph 11(i) below result in a
          termination of the Right of First Refusal.

     (h)  Assignment of the Right of First Refusal. The Company shall have the
          ----------------------------------------
          right to assign the Right of First Refusal at any time, whether or not
          the Optionee has attempted a transfer, to one (1) or more persons as
          may be selected by the Company.

     (i)  Early Termination of the Right of First Refusal. The other provisions
          -----------------------------------------------
          of this paragraph 11 notwithstanding, the Right of First Refusal shall
          terminate, and be of no further force and effect upon (i) the
          occurrence of a Transfer of Control, unless the surviving, continuing,
          successor, or purchasing corporation, as the case may be, assumes the
          Company's rights and obligations under the Plan, or (ii) the existence
          of a public market for the class of shares subject to the Right of
          First Refusal. A "public market" shall be deemed to exist if (x) such
          stock is listed on a national securities exchange (as that term is
          used in the Exchange Act) or (y) such stock is traded on the
          over-the-counter market and prices therefor are published daily on
          business days in a recognized financial journal.

12.  Escrow.
     ------

     (a)  Establishment of Escrow. To insure shares subject to the Right of
          -----------------------
          First Refusal will be available for repurchase, the Company may
          require the Optionee to deposit the certificate or certificates
          evidencing the shares which the Optionee purchases upon exercise of
          the Option with an escrow agent designated by the Company under the
          terms and conditions of an escrow agreement approved by the Company.
          If the Company does not require such deposit as a condition of
          exercise of the Option, the Company reserves the right at any time to
          require the Optionee to so deposit the certificate or certificates in
          escrow. The Company shall bear the expenses of the escrow.

     (b)  Delivery of Shares to Optionee. As soon as practicable after the
          ------------------------------
          expiration of the Right of First Refusal, the escrow agent shall
          deliver to the Optionee the shares no longer subject to such
          restrictions.

     (c)  Notices and Payments. In the event the shares held in escrow are
          --------------------
          subject to the Company's exercise of the Right of First Refusal, the
          notices required to be given to the Optionee shall be given to the
          escrow agent and any payment required to be given to the Optionee
          shall be given to the escrow agent. Within thirty (30) days after
          payment by the Company, the escrow agent shall deliver the shares
          which the Company has purchased to the Company and shall deliver the
          payment received from the Company to the Optionee.

<PAGE>

13.  Stock Dividends Subject to Option Agreement. If, from time to time, there
     -------------------------------------------
     is any stock dividend, stock split, or other change in the character or
     amount of any of the outstanding stock of the Company, the stock of which
     is subject to the provisions of this Option Agreement, then, in such event,
     any and all new substituted or additional securities to which the Optionee
     is entitled by reason of the Optionee's ownership of the shares acquired
     upon exercise of the Option shall be immediately subject to the Right of
     First Refusal with the same force and effect as the shares subject to the
     Right of First Refusal immediately before such event.

14.  Legends. The Company may at any time place legends referencing the Right of
     -------
     First Refusal set forth in paragraph 11 above and an applicable federal or
     state securities law restriction on all certificates representing shares of
     stock subject to the provisions of this Option Agreement. The Optionee
     shall, at the request of the Company, promptly present to the Company any
     and all certificates representing shares acquired pursuant to the Option in
     the possession of the Optionee in order to effectuate the provisions of
     this paragraph. Unless otherwise specified by the Company, legends placed
     on such certificates may include, but shall not be limited to, the
     following:

     (a)  THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
          TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
          REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SHARES, THE SALE
          IS MADE IN ACCORDANCE WITH RULE 144 OR RULE 701 UNDER THE ACT, OR THE
          CORPORATION RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
          SHARES REASONABLY SATISFACTORY TO THE CORPORATION, STATING THAT SUCH
          SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
          REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

     (b)  THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF
          FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION OR ITS ASSIGNEE SET
          FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED
          HOLDER, OR SUCH HOLDER'S PREDECESSOR IN INTEREST, A COPY OF WHICH IS
          ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION.

15.  Initial Public Offering. The Optionee hereby agrees that in the event of an
     -----------------------
     initial public offering of stock made by the Company under the Securities
     Act, the Optionee shall not offer, sell, contract to sell, pledge,
     hypothecate, grant any option to purchase or make any short sale of, or
     otherwise dispose of any shares of stock of the Company or any rights to
     acquire stock of the Company for such period of time as may be established
     by the underwriter for such initial public offering; provided, however,
     that such period of time

<PAGE>

     shall not exceed one hundred eighty (180) days from the effective date of
     the registration statement to be filed in connection with such initial
     public offering. The foregoing limitation shall not apply to shares
     registered under the Securities Act.

16.  Binding Effect. This Option Agreement shall inure to the benefit of and be
     --------------
     binding upon the parties hereto and their respective heirs, executors,
     administrators, successors and assigns.

17.  Termination or Amendment. The Board may terminate or amend this Option
     ------------------------
     Agreement at any time; provided, however, that no such termination or
     amendment may adversely affect the Option or any unexercised portion hereof
     without the consent of the Optionee.

18.  Integrated Agreement. This Option Agreement constitutes the entire
     --------------------
     understanding and agreement of the Optionee and the Participating Company
     Group with respect to the subject matter contained herein, and there are no
     other agreements, understandings, restrictions, representations, or
     warranties among the Optionee and the Company with respect to the subject
     matter contained herein other than those as set forth or provided for
     herein. To the extent contemplated herein, the provisions of this Option
     Agreement shall survive any exercise of the Option and shall remain in full
     force and effect.

19.  Terms and Conditions of Plan. The terms and conditions included in the Plan
     ----------------------------
     are incorporated by reference herein, and to the extent that any conflict
     may exist between any term or provision of this Option Agreement and any
     term or provision of the Plan, the term or provision of the Plan shall
     control.

20.  Applicable Law. This Option Agreement shall be governed by the laws of the
     --------------
     State of Delaware such laws are applied to agreements between Delaware
     residents entered into and to be performed entirely within the State of
     Delaware.

                                        LIPOMED, INC.

                                        By: __________________________________
                                            Richard A. Franco,
                                            Chief Executive Officer

<PAGE>

     The Optionee represents that the Optionee is familiar with the terms and
provisions of this Option Agreement, including the Right of First Refusal set
forth in paragraph 11, and hereby accepts the Option subject to all of the terms
and provisions thereof. The Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board of Directors
of the Company made in good faith upon any questions arising under this Option
Agreement.

     The undersigned hereby acknowledges receipt of a copy of the Plan.

Date:_________________________                    ______________________________
                                                  (Signature of Optionee)

                                                  ______________________________
                                                  (Printed Name of Optionee)

<PAGE>

                                    EXHIBIT A
                                    ---------

LipoMed, Inc.
3009 New Bern Ave.
Raleigh, North Carolina 27610

     Re: Exercise of Non-Qualified Stock Option

Dear Sirs:

     Pursuant to the terms and conditions of the Non-Qualified Stock Option
Award Agreement dated as of __________, (the "Agreement"), between__________
("Optionee") and LipoMed, Inc. (the "Company"), the Optionee hereby agrees to
purchase _____ shares (the "Shares") of the Common Stock of the Company and
tender payment in full for such shares in accordance with the terms of the
Agreement.

     The Shares are being issued to Optionee in a transaction not involving a
public offering and pursuant to an exemption from registration under the
Securities Act of 1933, as amended (the "1933 Act"). In connection with such
purchase, Optionee represents, warrants and agrees as follows:

  1. The Shares are being purchased for the Optionee's own account, and not for
     the account of any other person, with the intent of holding the Shares for
     investment and not with the intent of participating, directly or
     indirectly, in a distribution or resale of the Shares or any portion
     thereof.

  2. The Optionee is not acquiring the Shares based upon any representation,
     oral or written, by any person with respect to the future value of, or
     income from, the Shares, but rather upon independent examination and
     judgment as to the prospects of the Company.

  3. The Optionee has had complete access to and the opportunity to review all
     material documents related to the business of the Company, has examined
     all such documents as the Optionee desired, is familiar with the business
     and affairs of the Company and realizes that any purchase of the Shares
     is a speculative investment and that any possible profit therefrom is
     uncertain.

  4. The Optionee has had the opportunity to ask questions of and receive
     answers from the Company and its executive officers and to obtain all
     information necessary for the Optionee to make an informed decision with
     respect to the investment in the Company represented by the Shares.

  5. The Optionee is able to bear the economic risk of any investment in the
     Shares, including the risk of a complete loss of the investment, and the
     Optionee

<PAGE>

     acknowledges that he or she may need to continue to bear the economic risk
     of the investment in the Shares for an indefinite period.

  6. The Optionee understands and agrees that the Shares are being issued and
     sold to the Optionee without registration under any state or federal laws
     relating to the registration of securities, in reliance upon exemptions
     from registration under appropriate state and federal laws based in part
     upon the representations of the Optionee made herein.

  7. The Company is under no obligation to register the Shares or to comply
     with any exemption available for sale of the Shares by the Optionee without
     registration, and the Company under no obligation to act in any
     manner so as to make Rule 144 promulgated under the Securities Act of 1933
     available with respect to any sale of the Shares by the Optionee.

  8. The Optionee has not relied upon the Company or an employee or agent of
     the Company with respect to any tax consequences related to exercise of
     this Option or the disposition of the Shares. The Optionee assumes full
     responsibility for all such tax consequences and the filing of all tax
     returns and elections the Optionee may be required to or find desirable to
     file in connection therewith.

Date: ____________________

                                   Very truly yours,

                                        ________________________________

                                        Print Name: ____________________

                                        ________________________________
                                        ________________________________
                                        ________________________________
                                                   (Address)<PAGE>

                                                                    EXHIBIT 10.3

          THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR
          INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
          DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED
          WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
          OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
          IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

                            ________________________

                                  LIPOMED, INC.
                        INCENTIVE STOCK OPTION AGREEMENT

          LipoMed, Inc. (the "Company") granted to the individual named below an
option to purchase certain shares of common stock of the Company pursuant to the
LipoMed, Inc. Stock Option Plan, in the manner and subject to the provisions of
this Option Agreement.

1.        Definitions:
          -----------

          (a)  "Code" shall mean the Internal Revenue Code of 1986, as amended.
               (All citations to sections of the Code are to such sections as
               they may from time to time be amended or renumbered.)

          (b)  "Commencement Date" shall mean ________________.

          (c)  "Company" shall mean LipoMed, Inc., a Delaware corporation, and
               any successor corporation thereto.

          (d)  "Date of Option Grant" shall mean __________________.

          (e)  "Disability" shall mean disability within the meaning of section
               22(e)(3) of the Code, as determined by the Board in its
               discretion under procedures established by the Board of Directors
               of the Company.

          (f)  "Exercise Price" shall mean ___________ ($______) per share as
               adjusted from time to time pursuant to paragraph 9 below.

          (g)  "Number of Option Shares" shall mean ________________ (______)
               shares of common stock of the Company as adjusted from time to
               time pursuant to paragraph 9 below.

          (h)  "Option Term Date" shall mean the date ten (10) years after the
               Date of Option Grant.

<PAGE>

          (i)  "Optionee" shall mean _______________________________.

          (j) "Participating Company" shall mean (i) the Company and (ii) any
          present or future parent and/or subsidiary corporation of the Company
          while such corporation is a parent or subsidiary of the Company. For
          purposes of this Option Agreement, a parent corporation and a
          subsidiary corporation shall be as defined in sections 424(e) and
          424(f) of the Code.

          (k)  "Participating Company Group" shall mean at any point in time all
               corporations collectively which are then a Participating Company.

          (l)  "Plan" shall mean the LipoMed, Inc. Stock Option Plan.

2.        Status of the Option. This Option is intended to be an incentive stock
          --------------------
          option as described in section 422 of the Code, but the Company does
          not represent or warrant that this Option qualifies as such. The
          Optionee should consult with the Optionee's own tax advisors regarding
          the tax effects of this Option and the requirements necessary to
          obtain favorable income tax treatment under section 422 of the Code,
          including, but not limited to, holding period requirements.

3.        Administration. All questions of interpretation concerning this Option
          --------------
          Agreement shall be determined by the Board of Directors of the Company
          (the "Board") and/or by a duly appointed committee of the Board having
          such powers as shall be specified by the Board. Any subsequent
          references herein to the Board shall also mean the committee if such
          committee has been appointed and, unless the powers of the committee
          have been specifically limited, the committee shall have all of the
          powers of the Board granted in the Plan, other than the power to
          terminate or amend the Plan as provided in section 12 of the Plan,
          subject to the terms of the Plan and any applicable limitations
          imposed by law. All determinations by the Board shall be final and
          binding upon all persons having an interest in the Option. Any officer
          of a Participating Company shall have the authority to act on behalf
          of the Company with respect to any matter, right, obligation or
          election which is the responsibility of or which is allocated to the
          Company herein, provided the officer has apparent authority with
          respect to such matter, right, obligation or election.

4.        Exercise and Vesting of the Option.
          ----------------------------------

          (a)  Right to Exercise. The Option shall vest and become exercisable
               -----------------
               from time to time, subject to the schedule set forth below, in
               whole or in part, subject to the termination provisions of
               paragraphs 6 and 7 hereof and the Optionee's agreement that any
               shares purchased upon exercise are subject to the Company's
               repurchase rights set forth in paragraph 11 below:

               [Insert vesting schedule.]

                                       2

<PAGE>

          The schedule set forth above is cumulative, so that shares as to which
          the Option has become exercisable on and after a date indicated by the
          schedule may be purchased pursuant to exercise of the Option at any
          subsequent date prior to termination of the Option. The Option may be
          exercised at any time and from time to time to purchase up to the
          number of shares as to which it is then exercisable.

          Notwithstanding the foregoing, if the aggregate fair market value,
          determined as of the Date of Option Grant, of the stock with respect
          to which the Optionee may exercise incentive stock options (determined
          without regard to this provision) for the first time during any
          calendar year (under this Plan or under any other plan of the
          Participating Company Group), as determined in accordance with section
          422(d) of the Code, shall exceed one hundred thousand dollars
          ($100,000), the Option shall be deemed a nonqualified stock option to
          the extent of such excess.

     (b)  Method of Exercise. The Option shall be exercised by written notice to
          ------------------
          the Company in the form of Exhibit A hereto stating the election to
                                     ---------
          exercise the Option, the number of shares for which the Option is
          being exercised and such other representations and agreements as to
          the Optionee's investment intent with respect to such shares as may be
          required by the Company. The written notice must be signed by the
          Optionee and must be delivered in person or by certified or registered
          mail, return receipt requested, to the Chief Financial Officer of the
          Company, or other authorized representative of the Participating
          Company Group, prior to the termination of the Option as set forth in
          paragraph 6 below, accompanied by (i) full payment of the exercise
          price for the number of shares being purchased and (ii) an executed
          copy, if required herein, of the then current form of joint escrow
          instructions referenced below.

     (c)  Form of Payment of Option Price. Such payment shall be made in cash,
          -------------------------------
          check or cash equivalent or in any other form as may be permitted by
          the Board in its discretion.

     (d)  Withholding. At the time the Option is exercised, in whole or in part,
          -----------
          or at any time thereafter as requested by the Company, the Optionee
          hereby authorizes payroll withholding and otherwise agrees to make
          adequate provision for foreign, federal and state tax withholding
          obligations of the Company, if any, which arise

                                       3

<PAGE>

          in connection with the Option, including, without limitation,
          obligations arising upon (i) the exercise, in whole or in part, of the
          Option, (ii) the transfer, in whole or in part, of any shares acquired
          on exercise of the Option, (iii) the operation of any law or
          regulation providing for the imputation of interest, or (iv) the
          lapsing of any restriction with respect to any shares acquired on
          exercise of the Option.

     (e)  Certificate Registration. The certificate or certificates for the
          ------------------------
          shares as to which the Option shall be exercised shall be registered
          in the name of the Optionee, or, if applicable, the heirs of the
          Optionee.

     (f)  Restrictions on Grant of the Option and Issuance of Shares. The grant
          ----------------------------------------------------------
          of the Option and the issuance of the shares upon exercise of the
          Option shall be subject to compliance with all applicable requirements
          of federal or state law with respect to such securities. The Option
          may not be exercised if the issuance of shares upon such exercise
          would constitute a violation of any applicable federal or state
          securities laws or other law or regulations. In addition, no Option
          may be exercised unless (i) a registration statement under the
          Securities Act of 1933, as amended (the "Securities Act"), shall at
          the time of exercise of the Option be in effect with respect to the
          shares issuable upon exercise of the Option or (ii) in the opinion of
          legal counsel to the Company, the shares issuable upon exercise of the
          Option may be issued in accordance with the terms of an applicable
          exemption from the registration requirements of the Securities Act.

                    THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE
                    EXERCISABLE UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.
                    ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE
                    OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED.

          As a condition to the exercise of the Option, the Company may require
          the Optionee to satisfy any qualifications that may be necessary or
          appropriate, to evidence compliance with any applicable law or
          regulation and to make any representation or warranty with respect
          thereto as may be requested by the Company.

     (g)  Fractional Shares. The Company shall not be required to issue
          -----------------
          fractional shares upon the exercise of the Option.

5.   Non-Transferability of the Option. The Option may be exercised during the
     ---------------------------------
     lifetime of the Optionee only by the Optionee and may not be assigned or
     transferred in any manner except by will or by the laws of descent and
     distribution.

                                       4

<PAGE>

6.   Termination of the Option. The Option shall terminate and may no longer be
     -------------------------
     exercised on the first to occur of (a) the Option Term Date as defined
     above, (b) the last date for exercising the Option following termination of
     employment as described in paragraph 7 below, or (c) upon a Transfer of
     Control as described in paragraph 8 below.

7.   Termination of Employment.
     -------------------------

     (a)  Termination of the Option. If the Optionee ceases to be an employee of
          -------------------------
          the Participating Company Group for any reason except death or
          Disability, the Option, to the extent unexercised and exercisable by
          the Optionee on the date on which the Optionee ceased to be an
          employee, may be exercised by the Optionee within three (3) months
          after the date on which the Optionee's employment terminates, but in
          any event no later than the Option Term Date. If the Optionee's
          employment with the Participating Company Group is terminated because
          of the death or Disability of the Optionee, the Option, to the extent
          unexercised and exercisable by the Optionee on the date on which the
          Optionee ceased to be an employee, may be exercised by the Optionee
          (or the Optionee's legal representative) at any time prior to the
          expiration of twelve (12) months from the date the Optionee's
          employment terminated, but in any event no later than the Option Term
          Date. The Optionee's employment shall be deemed to have terminated on
          account of death if the Optionee dies within three (3) months after
          the Optionee's termination of employment. This paragraph shall be
          interpreted such that the Option ceases to vest on the date on which
          the Optionee ceases to be an employee of the Participating Company
          Group (pursuant to this paragraph 7) for any reason, notwithstanding
          any period after such cessation of employment during which the Option
          may remain exercisable as provided in this paragraph 7.

     (b)  Termination of Employment Defined. For purposes of this paragraph 7,
          ---------------------------------
          the Optionee's employment shall be deemed to have terminated either
          upon an actual termination of employment or upon the Optionee's
          employer ceasing to be a Participating Company.

     (c)  Exercise Prevented by Law. Except as provided in this paragraph 7, the
          -------------------------
          Option shall terminate and may not be exercised after the Optionee's
          employment with the Participating Company Group terminates unless the
          exercise of the Option in accordance with this paragraph 7 is
          prevented by the provisions of paragraph 4(f) above. If the exercise
          of the Option is so prevented, the Option shall remain exercisable
          until three (3) months after the date the Optionee is notified by the
          Company that the Option is exercisable, but in any event no later than
          the Option Term Date.

     (d)  Optionee Subject to Section 16(b). Notwithstanding the foregoing, if
          ---------------------------------
          the exercise of the Option within the applicable time periods set
          forth above would subject the Optionee to suit under Section 16(b) of
          the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
          the Option shall remain exercisable until the

                                       5

<PAGE>

          earliest to occur of (i) the tenth (10th) day following the date on
          which the Optionee would no longer be subject to such suit, (ii) the
          one hundred and ninetieth (190th) day after the Optionee's termination
          of employment, or (iii) the Option Term Date.

     (e)  Leave of Absence. For purposes hereof, the Optionee's employment with
          ----------------
          the Participating Company Group shall not be deemed to terminate if
          the Optionee takes any military leave, sick leave, or other bona fide
          leave of absence approved by the Company of ninety (90) days or less.
          In the event of a leave in excess of ninety (90) days, the Optionee's
          employment shall be deemed to terminate on the ninety-first (91st) day
          of the leave unless the Optionee's right to reemployment with the
          Participating Company Group remains guaranteed by statute or contract.

8.   Transfer of Control. Upon a merger, consolidation, corporate
     -------------------
     reorganization, or any transaction in which all or substantially all of the
     assets of the Company are sold, leased, transferred or otherwise disposed
     of (other than a mere reincorporation transaction or one in which the
     holders of capital stock of the Company immediately prior to such merger or
     consolidation continue to hold at least a majority of the voting power of
     the surviving corporation) (a "Transfer of Control"), then any
     unexercisable portion of an outstanding Option shall become immediately
     exercisable as of a date prior to the Transfer of Control, which date shall
     be determined by the Board. The exercise of any Option that was permissible
     solely by reason of this paragraph 8 shall be conditioned upon the
     consummation of the Transfer of Control. The Board may further elect, in
     its sole discretion, to provide that any Options which become exercisable
     solely by reason of this paragraph 8 and which are not exercised as of the
     date of the Transfer of Control shall terminate effective as of the date of
     the Transfer of Control.

9.   Effect of Change in Stock Subject to the Option. The Board shall make
     -----------------------------------------------
     appropriate adjustments in the number, exercise price and class of shares
     of stock subject to the Option in the event of a stock dividend, stock
     split, reverse stock split, combination, reclassification, or like change
     in the capital structure of the Company. In the event a majority of the
     shares which are of the same class as the shares that are subject to the
     Option are exchanged for, converted into, or otherwise become (whether or
     not pursuant to a Transfer of Control) shares of another corporation (the
     "New Shares"), the Board may unilaterally amend the Option to provide that
     the Option is exercisable for New Shares. In the event of any such
     amendment, the number of shares and the exercise price shall be adjusted in
     a fair and equitable manner.

10.  Rights as a Shareholder or Employee. The Optionee shall have no rights as a
     -----------------------------------
     shareholder with respect to any shares covered by the Option until the date
     of the issuance of a certificate or certificates for the shares for which
     the Option has been exercised. No adjustment shall be made for dividends or
     distributions or other rights for which the record date is prior to the
     date such certificate or certificates are issued, except as provided in
     paragraph 9 above. Nothing in the Option shall confer upon the Optionee any
     right to continue in the employ of a Participating Company or interfere in
     any way

                                       6

<PAGE>

     with any right of the Participating Company Group to terminate the
     Optionee's employment at any time.

11.  Right of First Refusal.
     ----------------------

     (a)  Right of First Refusal. In the event the Optionee proposes to sell,
          ----------------------
          pledge, or otherwise transfer any shares acquired upon exercise of the
          Option (the "Transfer Shares") to any person or entity, including,
          without limitation, any shareholder of the Participating Company
          Group, the Company shall have the right to repurchase the Transfer
          Shares under the terms and subject to the conditions set forth in this
          paragraph 11 (the "Right of First Refusal").

     (b)  Notice of Proposed Transfer. Prior to any proposed transfer of the
          ---------------------------
          Transfer Shares, the Optionee shall give a written notice (the
          "Transfer Notice") to the Company describing fully the proposed
          transfer, including the number of Transfer Shares, the name and
          address of the proposed transferee (the "Proposed Transferee") and, if
          the transfer is voluntary, the proposed transfer price and containing
          such information necessary to show the bona fide nature of the
          proposed transfer. In the event of a bona fide or involuntary
          transfer, the proposed transfer price shall be deemed to be the fair
          market value of the Transfer Shares as determined by the Company in
          good faith. In the event the Optionee proposes to transfer any
          Transfer Shares to more than one (1) Proposed Transferee, the Optionee
          shall provide a separate Transfer Notice for the proposed transfer to
          each Proposed Transferee. The Transfer Notice shall be signed by both
          the Optionee and the Proposed Transferee and must constitute a binding
          commitment of the Optionee and the Proposed Transferee for the
          transfer of the Transfer Shares to the Proposed Transferee subject
          only to the Right of First Refusal.

     (c)  Bona Fide Transfer. In the event that the Company shall determine that
          ------------------
          the information provided by the Optionee in the Transfer Notice is
          insufficient to establish the bona fide nature of a proposed voluntary
          transfer, the Company shall give the Optionee written notice of the
          Optionee's failure to comply with the procedure described in this
          paragraph 11 and the Shares without first complying with the
          procedures described in this paragraph 11. The Optionee shall not be
          permitted to transfer the Transfer Shares if the proposed transfer is
          not bona fide.

     (d)  Exercise of the Right of First Refusal. In the event the proposed
          --------------------------------------
          transfer is deemed to be bona fide, the Company shall have the right
          to purchase all, but not less than all, of the Transfer Shares at the
          purchase price and on the terms set forth in the Transfer Notice by
          delivery to the Optionee of a notice of exercise of the Right of First
          Refusal within thirty (30) days after the date the Transfer Notice is
          delivered to the Company. The Company's exercise or failure to
          exercise the Right of First Refusal with respect to any proposed
          transfer described in a Transfer Notice shall not affect the Company's
          ability to exercise the Right of

                                       7

<PAGE>

          First Refusal with respect to any proposed transfer described in any
          other Transfer Notice, whether or not such other Transfer Notice is
          issued by the Optionee or issued by a person other than the Optionee
          with respect to a proposed transfer to the same Proposed Transferee.
          If the Company exercises the Right of First Refusal, the Company and
          the Optionee shall thereupon consummate the sale of the Transfer
          Shares to the Company on the terms set forth in the Transfer Notice;
          provided however, that in the event that the Transfer Notice provides
          for the payment for the Transfer Shares other than in cash, the
          Company shall have the option of paying for the Transfer Shares by the
          discounted cash equivalent of the consideration described in the
          Transfer Notice as reasonably determined by the Company. For purposes
          of the foregoing, cancellation of any indebtedness of the Optionee to
          any Participating Company shall be treated as payment to the Optionee
          in cash to the extent of the unpaid principal and any accrued interest
          cancelled.

     (e)  Failure to Exercise the Right of First Refusal. If the Company fails
          ----------------------------------------------
          to exercise the Right of First Refusal in full within the period
          specified in paragraph 11(d) above, the Optionee may conclude a
          transfer to the Proposed Transferee of the Transfer Shares on the
          terms and conditions described in the Transfer Notice, provided such
          transfer occurs not later than one hundred twenty (120) days following
          delivery to the Company of the Transfer Notice. The Company shall have
          the right to demand further assurances from the Optionee and the
          Proposed Transferee (in a form satisfactory to the Company) that the
          transfer of the Transfer Shares was actually carried out on the terms
          and conditions described in the Transfer Notice. No Transfer Shares
          shall be transferred on the books of the Company until the Company has
          received such assurances, if so demanded, and has approved the
          proposed transfer as bona fide. Any proposed transfer on terms and
          conditions different from those described in the Transfer Notice, as
          well as any subsequent proposed transfer by the Optionee, shall again
          be subject to the Right of First Refusal and shall require compliance
          by the Optionee with the procedure described in this paragraph 11.

     (f)  Transferees of the Transfer Shares. All transferees of the Transfer
          ----------------------------------
          Shares or any interest therein, other than the Company, shall be
          required as a condition of such transfer to agree in writing (in a
          form satisfactory to the Company) that such transferee shall receive
          and hold such Transfer Shares or interests subject to the provisions
          of this paragraph 11 providing for the Right of First Refusal with
          respect to any subsequent transfer. Any sale or transfer of any shares
          acquired upon exercise of the Option shall be void unless the
          provisions of this paragraph 11 are met.

     (g)  Transfers Not Subject to the Right of First Refusal. The Right of
          ---------------------------------------------------
          First Refusal shall not apply to any transfer or exchange of the
          shares acquired pursuant to the exercise of the Option if (i) such
          transfer is in connection with a Transfer of Control, (ii) such
          transfer is to one or more members of the Optionee's immediate

                                       8

<PAGE>

          family (or a trust for their benefit) provided all such transferees
          agree in writing to the restrictions of paragraph 11(f), or (iii) such
          transfer has been approved by the Board its complete discretion. If
          the consideration received pursuant to such transfer or exchange
          consists of stock of a Participating Company, such consideration shall
          remain subject to the Right of First Refusal unless the provisions of
          paragraph 11(i) below result in a termination of the Right of First
          Refusal.

     (h)  Assignment of the Right of First Refusal. The Company shall have the
          ----------------------------------------
          right to assign the Right of First Refusal at any time, whether or not
          the Optionee has attempted a transfer, to one (1) or more persons as
          may be selected by the Company.

      (i)  Stock Dividends Subject to Option Agreement.  If, from time to time,
          --------------------------------------------
          there is any stock dividend, stock split, or other change in the
          character or amount of any of the outstanding stock of the Company,
          the stock of which is subject to the provisions of this Option
          Agreement, then, in such event, any and all new substituted or
          additional securities to which the Optionee is entitled by reason of
          the Optionee's ownership of the shares acquired upon exercise of the
          Option shall be immediately subject to the Right of First Refusal
          with the same force and effect as the shares subject to the Right of
          First Refusal immediately before such event.

      (j)  Early Termination of the Right of First Refusal. The other provisions
          -----------------------------------------------
          of this paragraph 11 notwithstanding, the Right of First Refusal shall
          terminate, and be of no further force and effect, upon (i) the
          occurrence of a Transfer of Control, unless the surviving, continuing,
          successor, or purchasing corporation, as the case may be, assumes the
          Company's rights and obligations under the Plan, or (ii) the existence
          of a public market for the class of shares subject to the Right of
          First Refusal. A "public market" shall be deemed to exist if (x) such
          stock is listed on a national securities exchange (as that term is
          used in the Exchange Act) or (y) such stock is traded on the
          over-the-counter market and prices therefor are published daily on
          business days in a recognized financial journal.

12.  Escrow.
     ------

     (a)  Establishment of Escrow. To insure shares subject to the Right of
          -----------------------
          First Refusal will be available for repurchase, the Company may
          require the Optionee to deposit the certificate or certificates
          evidencing the shares which the Optionee purchases upon exercise of
          the Option with an escrow agent designated by the Company under the
          terms and conditions of an escrow agreement approved by the Company.
          If the Company does not require such deposit as a condition of
          exercise of the Option, the Company reserves the right at any time to
          require the Optionee to so deposit the certificate or certificates in
          escrow. The Company shall bear the expenses of the escrow.

     (b)  Delivery of Shares to Optionee. As soon as practicable after the
          ------------------------------
          expiration of the Right of First Refusal, the escrow agent shall
          deliver to the Optionee the shares no longer subject to such
          restrictions.

     (c)  Notices and Payments. In the event the shares held in escrow are
          --------------------
          subject to the Company's exercise of the Right of First Refusal, the
          notices required to be given to the Optionee shall be given to the
          escrow agent and any payment required to be given to the Optionee
          shall be given to the escrow agent. Within thirty (30) days after
          payment by the Company, the escrow agent shall deliver the shares
          which

                                       9

<PAGE>

          the Company has purchased to the Company and shall deliver the payment
          received from the Company to the Optionee.

13.  Notice of Sales Upon Disqualifying Disposition. The Optionee shall dispose
     ----------------------------------------------
     of the shares acquired pursuant to the Option only in accordance with the
     provisions of this Option Agreement. In addition, the Optionee shall
     promptly notify the Chief Financial Officer of the Company if the Optionee
     disposes of any of the shares acquired pursuant to the Option within one
     (1) year from the date the Optionee exercises all or part of the Option or
     within two (2) years of the date of grant of the Option. Until such time as
     the Optionee disposes of such shares in a manner consistent with the
     provisions of this Option Agreement, the Optionee shall hold all shares
     acquired pursuant to the Option in the Optionee's name (and not in the name
     of any nominee) for the one-year period immediately after exercise of the
     Option and the two-year period immediately after grant of the Option. At
     any time during the one-year or two-year periods set forth above, the
     Company may place a legend or legends on any certificate or certificates
     representing shares acquired pursuant to the Option requesting the transfer
     agent for the Company's stock to notify the Company of any such transfers.
     The obligation of the Optionee to notify the Company of any such transfer
     shall continue notwithstanding that a legend has been placed on the
     certificate or certificates pursuant to the preceding sentence.

14.  Legends. The Company may at any time place legends referencing the Right of
     -------
     First Refusal set forth in paragraph 11 above and any applicable federal or
     state securities law restriction on all certificates representing shares of
     stock subject to the provisions of this Option Agreement. The Optionee
     shall, at the request of the Company, promptly present to the Company any
     and all certificates representing shares acquired pursuant to the Option in
     the possession of the Optionee in order to effectuate the provisions of
     this paragraph. Unless otherwise specified by the Company, legends placed
     on such certificates may include, but shall not be limited to, the
     following:

     (a)  THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
          TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
          REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SHARES, THE SALE
          IS MADE IN ACCORDANCE WITH RULE 144 OR RULE 701 UNDER THE ACT, OR THE
          CORPORATION RECEIVES AN

                                       10

<PAGE>

          OPINION OF COUNSEL FOR THE HOLDER OF THESE SHARES REASONABLY
          SATISFACTORY TO THE CORPORATION, STATING THAT SUCH SALE, TRANSFER
          ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
          PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

     (b)  THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF
          FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION OR ITS ASSIGNEE SET
          FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED
          HOLDER, OR SUCH HOLDER'S PREDECESSOR IN INTEREST, A COPY OF WHICH IS
          ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION.

     (c)  THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE
          CORPORATION TO THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE
          STOCK OPTION AS DEFINED IN SECTION 422 OF THE INTERNAL REVENUE CODE OF
          1986, AS AMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY
          SHALL NOTIFY THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE SHARES
          BY THE REGISTERED HOLDER HEREOF MADE ON OR BEFORE THE REGISTERED
          HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE OPTION IN THE
          REGISTERED HOLDER'S NAME (AND NOT IN THE NAME OF ANY NOMINEE) FOR A
          PERIOD OF ONE YEAR FROM THE DATE OF EXERCISE OF THE OPTION OR TWO
          YEARS FROM THE DATE OF GRANT OF THE OPTION.

15.  Initial Public Offering. The Optionee hereby agrees that in the event of an
     -----------------------
     initial public offering of stock made by the Company under the Securities
     Act, the Optionee shall not offer, sell, contract to sell, pledge,
     hypothecate, grant any option to purchase or make any short sale of, or
     otherwise dispose of any shares of stock of the Company or any rights to
     acquire stock of the Company for such period of time as may be established
     by the underwriter for such initial public offering; provided, however,
     that such period of time shall not exceed one hundred eighty (180) days
     from the effective date of the registration statement to be filed in
     connection with such initial public offering. The foregoing limitation
     shall not apply to shares registered under the Securities Act.

16.  Binding Effect. This Option Agreement shall inure to the benefit of and be
     --------------
     binding upon the parties hereto and their respective heirs, executors,
     administrators, successors and assigns.

17.  Termination or Amendment. The Board may terminate or amend this Option
     ------------------------
     Agreement at any time; provided, however, that no such termination or
     amendment may adversely affect the Option or any unexercised portion hereof
     without the consent of the Optionee

                                       11

<PAGE>

     unless such amendment is required to enable the Option to qualify as an
     Incentive Stock Option.

18.  Integrated Agreement. This Option Agreement constitutes the entire
     --------------------
     understanding and agreement of the Optionee and the Participating Company
     Group with respect to the subject matter contained herein, and there are no
     other agreements, understandings, restrictions, representations, or
     warranties among the Optionee and the Company with respect to the subject
     matter contained herein other than those as set forth or provided for
     herein. To the extent contemplated herein, the provisions of this Option
     Agreement shall survive any exercise of the Option and shall remain in full
     force and effect.

19.  Terms and Conditions of Plan. The terms and conditions included in the Plan
     ----------------------------
     are incorporated by reference herein, and to the extent that any conflict
     may exist between any term or provision of this Option Agreement and any
     term or provision of the Plan, the term or provision of the Plan shall
     control.

20.  Applicable Law. This Option Agreement shall be governed by the laws of the
     --------------
     State of Delaware as such laws are applied to agreements between
     Delaware as residents entered into and to be performed entirely within
     the State of Delaware.

21.  Effect of Certain Transactions. Notwithstanding anything to contrary in
     ------------------------------
     this  Option Agreement, in the event that the Optionee has entered into a
     nondisclosure, invention and/or non-competition agreement with the Company
     and the Optionee breaches any such agreement, the Optionee shall forfeit
     100% of the Option granted pursuant to this Option Agreement, whether or
     not vested or exercisable.

                                                LIPOMED, INC.

                                                By:_____________________________
                                                   Richard A. Franco
                                                   President and Chief
                                                        Executive Officer

                                          12

<PAGE>

     The Optionee represents that the Optionee is familiar with the terms and
provisions of this Option Agreement, including the Right of First Refusal set
forth in paragraph 11, and hereby accepts the Option subject to all of the terms
and provisions thereof. The Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board of Directors
of the Company made in good faith upon any questions arising under this Option
Agreement.

     The undersigned hereby acknowledges receipt of a copy of the Plan.

Date:_________________________                  ________________________________
                                                (Signature of Optionee)

                                                ________________________________
                                                (Printed Name of Optionee)

                                       13

<PAGE>

                                    EXHIBIT A
                                    ---------

LipoMed, Inc.
3009 New Bern Avenue
Raleigh, North Carolina 27610

     Re:  Exercise of Incentive Stock Option

Dear Sirs:

     Pursuant to the terms and conditions of the Incentive Stock Option Award
Agreement dated as of __________,(the "Agreement"), between __________
("Optionee") and LipoMed, Inc. (the "Company"), Optionee hereby agrees to
purchase _____ shares (the "Shares") of the Common Stock of the Company and
tender payment in full for such shares in accordance with the terms of the
Agreement.

     The Shares are being issued to Optionee in a transaction not involving a
public offering and pursuant to an exemption from registration under the
Securities Act of 1933, as amended (the "1933 Act"). In connection with such
purchase, Optionee represents, warrants and agrees as follows:

 1.  The Shares are being purchased for the Optionee's own account and not for
     the account of any other person, with the intent of holding the Shares for
     investment and not with the intent of participating, directly or
     indirectly, in a distribution or resale of the Shares or any portion
     thereof.

 2.  The Optionee is not acquiring the Shares based upon any representation,
     oral or written, by any person with respect to the future value of, or
     income from, the Shares, but rather upon independent examination and
     judgment as to the prospects of the Company.

 3.  The Optionee has had complete access to and the opportunity to review all
     material documents related to the business of the Company, has examined
     all such documents as the Optionee desired, is familiar with the business
     and affairs of the Company and realizes that any purchase of the Shares
     is a speculative investment and that any possible profit therefrom is
     uncertain.

 4.  The Optionee has had the opportunity to ask questions of and receive
     answers from the Company and its executive officers and to obtain all
     information necessary for the Optionee to make an informed decision with
     respect to the investment in the Company represented by the Shares.

                                       14

<PAGE>

 5.  The Optionee is able to bear the economic risk of any investment in the
     Shares, including the risk of a complete loss of the investment, and the
     Optionee acknowledges that he or she may need to continue to bear the
     economic risk of the investment in the Shares for an indefinite period.

 6.  The Optionee understands and agrees that the Shares are being issued and
     sold to the Optionee without registration under any state or federal laws
     relating to the registration of securities, in reliance upon exemptions
     from registration under appropriate state and federal laws based in part
     upon the representations of the Optionee made herein.

 7.  The Company is under no obligation to register the Shares or to comply
     with any exemption available for sale of the Shares by the Optionee without
     registration, and the Corporation is under no obligation to act in any
     manner so as to make Rule 144 promulgated under the Securities Act of 1933
     available with respect to any sale of the Shares by the Optionee.

 8.  The Optionee has not relied upon the Company or an employee or agent of
     the Company with respect to any tax consequences related to exercise of
     this Option or the disposition of the Shares. The Optionee assumes full
     responsibility for all such tax consequences and the filing of all tax
     returns and elections the Optionee may be required to or find desirable to
     file in connection therewith.

Date: ____________________

                                Very truly yours,

                                        _____________________________________

                                        Print Name: _________________________

                                        _____________________________________

                                        _____________________________________

                                        _____________________________________
                                                      (Address)

                                       15

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