Document:

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                                                                   EXHIBIT 10.07

                               ATHEROGENICS, INC.
                             1995 STOCK OPTION PLAN

                                    ARTICLE 1
                                     PURPOSE

         1.1      General Purpose. The purpose of this Plan is to further the
growth and development of the Company by encouraging Directors, employees,
consultants and contractors of the Company or of a parent or subsidiary
corporation of the Company to obtain a proprietary interest in the Company by
owning its stock. The Company intends that the Plan will provide such persons
with an added incentive to continue to serve as Directors, employees,
consultants and contractors, and will stimulate their efforts in promoting the
growth, efficiency and profitability of the Company. The Company also intends
that the Plan will afford the Company a means of attracting persons of
outstanding quality to service as Directors, employees, consultants and
contractors of the Company or a parent or subsidiary corporation of the Company.

         1.2      Intended Tax Effects of Options. It is intended that the tax
effects of any Option granted hereunder should be determined under Code ss.83.

                                    ARTICLE 2
                                   DEFINITIONS

         The following words and phrases as used in this Plan shall have the
meanings set forth in this Article unless a different meaning is clearly
required by the context:

         2.1      1933 Act shall mean the Securities Act of 1933, as amended.

         2.2      1934 Act shall mean the Securities Exchange Act of 1934, as
amended.

         2.3      Beneficiary shall mean, with respect to an Optionee, the
Person to whom the Optionee's Option shall be transferred upon the Optionee's
death (i.e., the Optionee's Beneficiary).

                  (a)      Designation of Beneficiary. An Optionee's Beneficiary
         shall be the Person who is last designated in writing by the Optionee
         as such Optionee's Beneficiary hereunder. An Optionee shall designate
         his original Beneficiary in writing on his Option Agreement. Any
         subsequent modification of the Optionee's Beneficiary shall be in a
         written executed and notarized letter addressed to the Company and
         shall be effective when it is received and accepted by the Board,
         determined in the Board's sole discretion.

                  (b)      No Designated Beneficiary. If, at any time, no
         Beneficiary has been validly designated by an Optionee, or the
         Beneficiary designated by the Optionee is no longer living or no longer
         exists (whichever is applicable) at the time of the Optionee's

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         death, then the Optionee's Beneficiary shall be deemed to be the Person
         or Persons in the first of the following classes of individuals with
         one or members of such class surviving or in existence as of the
         Optionee's death, and in the absence thereof, the Optionee's estate:
         (A) the Optionee's surviving spouse; or (B) the Optionee's then living
         lineal descendants, per stirpes.

                  (c)      Designation of Multiple Beneficiaries. An Optionee
         may not designate more than one Person as a Beneficiary. To the extent
         that a designation purports to designate more than one Person as a
         Beneficiary, the designation shall be null and void.

                  (d)      Contingent Beneficiaries. An Optionee may designate a
         contingent Beneficiary to receive a Beneficiary's Option in the event
         that such Beneficiary should predecease the Optionee; otherwise, in the
         event a Beneficiary predeceases the Optionee, then the Person or
         Persons specified in subsection (b) above shall be the Optionee's
         Beneficiary.

         2.4      Board shall mean the Board of Directors of the Company.

         2.5      Cause shall mean an act or acts involving dishonesty,
incompetence, willful misconduct, breach of fiduciary duty, breach of contract
or any other obligation to the Company, intentional failure to perform stated
duties or violation of any law, rule or regulation (other than traffic
violations or similar offenses).

         2.6      Code shall mean the Internal Revenue Code of 1986, as amended.

         2.7      Common Stock shall mean the common stock of the Company.

         2.8      Company shall mean Atherogenics, Inc.

         2.9      Director shall mean an individual who is serving as a member
of the Board (i.e., a director of the Company) or who is serving as a member of
the board of directors of a parent or subsidiary corporation of the Company.

         2.10     Disability shall mean, with respect to an individual, the
total and permanent disability of such individual as determined by the Board in
its sole discretion.

         2.11     Effective Date shall mean the date on which this Plan is
adopted by the Board. See Article 9 herein.

         2.12     Fair Market Value of the Common Stock as of a date of
determination shall mean the following:

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                  (a)      Stock Listed and Shares Traded. If the Common Stock
         is listed and traded on a national securities exchange (as such term is
         defined by the 1934 Act) or on the NASDAQ National Market System on the
         date of determination, the Fair Market Value per share shall be the
         closing price of a share of the Common Stock on said national
         securities exchange or National Market System on the date of
         determination. If the Common Stock is traded in the over-the-counter
         market, the Fair Market Value per share shall be the average of the
         closing bid and asked prices on the date of determination.

                  (b)      Stock Listed But No Shares Traded. If the Common
         Stock is listed on a national securities exchange or on the National
         Market System but no shares of the Common Stock are traded on the date
         of determination but there were shares traded on dates within a
         reasonable period before the date of determination, the Fair Market
         Value shall be the closing price of the Common Stock on the most recent
         date before the date of determination. If the Common Stock is regularly
         traded in the over-the-counter market but no shares of the Common Stock
         are traded on the date of determination (or if records of such trades
         are unavailable or burdensome to obtain) but there were shares traded
         on dates within a reasonable period before the date of determination,
         the Fair Market Value shall be the average of the closing bid and asked
         prices of the Common Stock on the most recent date before the date of
         determination.

                  (c)      Stock Not Listed. If the Common Stock is not listed
         on a national securities exchange or on the National Market System and
         is not regularly traded in the over-the-counter market, then the Board
         shall determine the Fair Market Value of the Common Stock from all
         relevant available facts.

The Board's determination of Fair Market Value, which shall be made pursuant to
the foregoing provisions, shall be final and binding for all purposes of this
Plan.

         2.13     Option shall mean an option to which Code ss.421 (relating
generally to incentive stock options and other options) does not apply which is
granted to Persons pursuant to the terms and provisions of this Plan.

         2.14     Option Agreement shall mean a written agreement, executed and
dated by the Company and an Optionee, evidencing an Option granted under the
terms and provisions of this Plan, setting forth the terms and conditions of
such Option, and specifying the name of the Optionee and the number of shares of
stock subject to such Option. Such Agreement shall be in substantially the form
as shown in Appendix A hereto.

         2.15     Option Price shall mean the purchase price of the shares of
Common Stock underlying an Option.

         2.16     Optionee shall mean a Person who is granted an Option pursuant
to the terms and provisions of this Plan.

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         2.17     Optionee Restriction Agreement shall mean a written agreement,
executed and dated by the Company and an Optionee, evidencing certain
restrictions, limitations, and rights of the Company and certain third parties
with respect to any shares of Common Stock acquired by the Optionee pursuant to
an Option. Such Agreement shall be in substantially the form as shown in
Appendix B hereto.

         2.18     Person shall mean any individual, organization, corporation,
partnership or other entity.

         2.19     Plan shall mean this Atherogenics, Inc. 1995 Stock Option
Plan.

                                    ARTICLE 3
                                 ADMINISTRATION

         The Plan shall be administered and interpreted by the Board. Subject to
the express provisions of the Plan, the Board shall have authority to interpret
the Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to determine the terms and provisions of the Option Agreements by which
Options shall be evidenced (which shall not be inconsistent with the terms of
the Plan), and to make all other determinations necessary or advisable for the
administration of the Plan, all of which determinations shall be final, binding
and conclusive.

                                    ARTICLE 4
                                      STOCK

         The stock subject to the Options and other provisions of the Plan shall
be authorized but unissued or reacquired shares of Common Stock. Subject to
adjustment in accordance with the provisions of Article 7, the total number of
shares of Common Stock for which Options may be granted to persons participating
in the Plan shall not exceed in the aggregate 600,000 shares of Common Stock.
Notwithstanding the foregoing, shares of Common Stock allocable to the
unexercised portion of any expired or terminated Option again may become subject
to Options under the Plan.

                                    ARTICLE 5
                   ELIGIBILITY TO RECEIVE AND GRANT OF OPTIONS

         5.1      Persons Eligible for Grants of Options. The Persons eligible
to receive Options hereunder shall be solely those Persons who are Directors,
employees, consultants or contractors of the Company or a parent or subsidiary
corporation of the Company.

         5.2      Grants of Options. Subject to the provisions of the Plan, the
Board shall have the authority and sole discretion to determine and designate,
from time to time, those Persons (from among the Persons eligible for a grant of
Options under the Plan pursuant to Section 5.1 above)

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to whom Options will actually be granted, the Option Price of the shares covered
by any Options granted, the manner in and conditions under which Options are
exercisable (including, without limitation, any limitations or restrictions
thereon), and the time or times at which Options shall be granted. In making
such determinations, the Board may take into account the nature of the services
rendered by the respective Persons to whom Options may be granted, their present
and potential contributions to the Company's success and such other factors as
the Board, in its sole discretion, shall deem relevant. In its authorization of
the granting of an Option hereunder, the Board shall specify the name of the
Optionee and the number of shares of stock subject to such Option. The Board may
grant, at any time, new Options to an Optionee who previously has received
Options, whether such Options include prior Options that still are outstanding,
previously have been exercised in whole or in part, have expired or are canceled
in connection with the issuance of new Options. No Person shall have any claim
or right to be granted Options under the Plan.

                                    ARTICLE 6
                         TERMS AND CONDITIONS OF OPTIONS

         Options granted hereunder and Option Agreements shall comply with and
be subject to the following terms and conditions:

         6.1      Requirement of Option Agreement and Optionee Restriction
Agreement. Upon the grant of an Option hereunder, the Board shall prepare (or
cause to be prepared) an Option Agreement and an Optionee Restriction Agreement.
The Board shall present such Option Agreement and Optionee Restriction Agreement
to the Optionee. Upon execution of such Option Agreement and Optionee
Restriction Agreement by the Optionee, such Option shall be deemed to have been
granted effective as of the date of grant. The failure of the Optionee to
execute the Option Agreement and Optionee Restriction Agreement within 30 days
after the date of the receipt of same shall render the Option Agreement and the
underlying Option null and void ab initio.

         6.2      Optionee and Number of Shares. Each Option Agreement shall
state the name of the Optionee and the total number of shares of the Common
Stock to which it pertains, the Option Price, the Beneficiary of the Optionee
and the date as of which the Option was granted under this Plan.

         6.3      Vesting. Each Option shall first become exercisable (i.e.,
vested) with respect to such portions of the shares subject to such Option
(rounded to the nearest whole number) as are specified in the schedule set forth
hereinbelow:

                  (a)      Commencing as of the first anniversary of the date
         the Option is granted, the Optionee shall have the right to exercise
         the Option with respect to, and to thereby purchase, 20% of the shares
         subject to such Option. Prior to said date, the Option shall be
         unexercisable in its entirety.

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                  (b)      Commencing as of each monthly anniversary of the date
         the Option is granted occurring after the first anniversary of the date
         the Option is granted and prior to the fifth anniversary of the date
         the Option is granted, the Optionee shall have the right to exercise
         the Option with respect to, and to thereby purchase, an additional
         1-2/3% of the shares subject to the Option. For purposes of
         determining the monthly anniversary of the date an Option is granted,
         if the date of grant of an Option occurs on the 29th, 30th or 31st,
         then, if the month during which the monthly anniversary is to be
         determined does not contain such a 29th, 30th or 31st day,
         respectively, the last day of such month shall be considered the
         monthly anniversary of the date of grant.

                  (c)      Commencing as of the fifth anniversary of the date
         the Option is granted, the Optionee shall have the right to exercise
         the Option with respect to, and to thereby purchase, all the shares
         subject to such Option.

If an Optionee ceases to perform services for the Company for any reason
(including Disability or death), his rights with regard to all non-vested
Options shall cease immediately.

         6.4      Option Price. The Option Price of the shares of Common Stock
underlying each Option shall be the Fair Market Value of the Common Stock on the
date the Option is granted, unless otherwise determined by the Board; provided,
however, in no event shall the Option Price of any Option be less than 75% of
the Fair Market Value of the Common Stock on the date the Option is granted.
Upon execution of an Option Agreement by both the Company and Optionee, the date
as of which the Option was granted under this Plan as noted in the Option
Agreement shall be considered the date on which such Option is granted.

         6.5      Terms of Options. Terms of Options granted under the Plan
shall commence on the date of grant and shall expire on such date as the Board
may determine for each Option; provided, in no event shall any Option be
exercisable after 10 years from the date the Option is granted. No Option shall
be granted hereunder after 10 years from the date the Plan is adopted by the
Board.

         6.6      Terms of Exercise. The exercise of an Option may be for less
than the full number of shares of Common Stock subject to such Option, but such
exercise shall not be made for less than (i) 100 shares or (ii) the total
remaining shares subject to the Option, if such total is less than 100 shares.
Subject to the other restrictions on exercise set forth herein, the unexercised
portion of an Option may be exercised at a later date by the Optionee.

         6.7      Method of Exercise. All Options granted hereunder shall be
exercised by written notice directed to the Secretary of the Company at its
principal place of business or to such other person as the Board may direct.
Each notice of exercise shall identify the Option which the Optionee is
exercising (in whole or in part) and shall be accompanied by payment of the
Option Price for the number of shares specified in such notice and by any
documents required by

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Article 8 hereof. The Company shall make delivery of such shares within a
reasonable period of time; provided, if any law or regulation requires the
Company to take any action (including, but not limited to, the filing of a
registration statement under the 1933 Act and causing such registration
statement to become effective) with respect to the shares specified in such
notice before the issuance thereof, then the date of delivery of such shares
shall be extended for the period necessary to take such action.

         6.8      Medium and Time of Payment.

                  (a)      The Option Price shall be payable upon the exercise
         of the Option in an amount equal to the number of shares then being
         purchased times the per share Option Price. Payment, at the election of
         the Optionee (or his Beneficiary as provided in subsection (c) of
         Section 6.9), shall be (A) in cash; (B) by delivery to the Company of a
         certificate or certificates for shares of the Common Stock duly
         endorsed for transfer to the Company with signature guaranteed by a
         member firm of a national stock exchange or by a national or state bank
         or a federally chartered thrift institution (or guaranteed or notarized
         in such other manner as the Board may require) or by instructing the
         Company to retain shares of Common Stock upon the exercise of the
         Option with a Fair Market Value equal to the exercise price as payment;
         (C) by delivery to the Company of such other property or by the
         performance for the Company of such services as may be acceptable to
         the Board and allowed under applicable law; or (D) by a combination of
         (A), (B) and (C).

                  (b)      If all or part of the Option Price is paid by
         delivery of shares of the Common Stock, on the date of such payment,
         the Optionee must have held such shares for at least six months from
         (i) the date of acquisition, in the case of shares acquired other than
         through a stock option or other stock award plan or (ii) the date of
         grant or award in the case of shares acquired through such a plan; and
         the value of such Common Stock (which shall be the Fair Market Value of
         such Common Stock on the date of exercise) shall be less than or equal
         to the total Option Price payment. If the Optionee delivers Common
         Stock with a value that is less than the total Option Price, then such
         Optionee shall pay the balance of the total Option Price in cash, other
         property or services, as provided in subsection (a) above.

                  (c)      In addition to the payment of the purchase price of
         the shares then being purchased, an Optionee also shall pay in cash (or
         have withheld from his normal pay) an amount equal to, or by
         instructing the Company to retain Common Stock upon the exercise of the
         Option with a Fair Market Value equal to, the amount, if any, which the
         Company at the time of exercise is required to withhold under the
         income tax or Federal Insurance Contributions Act tax withholding
         provisions of the Code, of the income tax laws of the state of the
         Optionee's residence, and of any other applicable law.

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         6.9      Effect of Termination of Service, Disability or Death. Except
as provided in subsections (a), (b) and (c) below, no Option shall be
exercisable unless the Optionee thereof shall have been performing services for
the Company or a parent or subsidiary of the Company from the date of the
granting of the Option until the date of exercise; provided, the Board, in its
sole discretion, may waive the application of this Section and, instead, may
provide a different expiration date or dates in an Option Agreement.

                  (a)      Termination of Service. In the event an Optionee
         ceases to be performing services for the Company or a parent or
         subsidiary of the Company for any reason other than death or
         Disability, any Option or unexercised portion thereof granted to him
         shall terminate on and shall not be exercisable after the earliest to
         occur of (i) the expiration date of the Option, (ii) 30 days after the
         date the Optionee ceases to be performing such services, or (iii) the
         date on which the Company gives notice to such Optionee of termination
         of such services if such services are terminated by the Company or by
         its shareholders for Cause (an Optionee's resignation in anticipation
         of termination of service by the Company or by its shareholders for
         Cause shall constitute a notice of termination by the Company);
         provided, the Board may provide in the Option Agreement that such
         Option or any unexercised portion thereof shall terminate sooner. Prior
         to the earlier of the dates specified in the preceding sentences of
         this subsection (a), the Option shall be exercisable only in accordance
         with its terms and only for the number of shares exercisable on the
         date of termination of service. The question of whether an authorized
         leave of absence or absence for military or government service or for
         any other reason shall constitute a termination of service for purposes
         of the Plan shall be determined by the Board, which determination shall
         be final and conclusive.

                  (b)      Disability. Upon the termination of an Optionee's
         service for the Company or a parent or subsidiary of the Company due to
         Disability, any Option or unexercised portion thereof granted to him
         which is otherwise exercisable shall terminate on and shall not be
         exercisable after the earlier to occur of (i) the expiration date of
         such Option, or (ii) six months after the date on which such Optionee
         ceases to be performing such services due to Disability; provided, the
         Board may provide in the Option Agreement that such Option or any
         unexercised portion thereof shall terminate sooner. Prior to the
         earlier of such date, such Option shall be exercisable only in
         accordance with its terms and only for the number of shares exercisable
         on the date such. Optionee's service ceases due to Disability.

                  (c)      Death. In the event of the death of the Optionee (i)
         while he is performing services for the Company or a parent or
         subsidiary of the Company, (ii) within 30 days after the date on which
         such Optionee's service is terminated (for a reason other than Cause)
         as provided in subsection (a) above, or (iii) within six months after
         the date on which such Optionee's service terminated due to his
         Disability, any Option or unexercised portion thereof granted to him
         which is otherwise exercisable may be exercised by the Optionee's
         Beneficiary at any time prior to the expiration of six months from the
         date of

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         death of such Optionee, but in no event later than the date of
         expiration of the Option period; provided, the Board may provide in the
         Option Agreement that such Option or any unexercised portion thereof
         shall terminate sooner. Such exercise shall be effected pursuant to the
         terms of this Section as if such Beneficiary is the named Optionee.

         6.10     Restrictions on Transfer and Exercise of Options. No Option
shall be assignable or transferable by the Optionee except by transfer to a
Beneficiary upon the death of the Optionee, and any purported transfer (other
than as excepted above) shall be null and void. After the death of an Optionee
and upon the death of the Optionee's Beneficiary, an Option shall be transferred
only by will or by the laws of descent and distribution. During the lifetime of
an Optionee, the Option shall be exercisable only by him; provided, however,
that in the event the Optionee is incapacitated and unable to exercise Options,
such Options may be exercised by such Optionee's legal guardian, legal
representative, fiduciary or other representative whom the Board deems
appropriate based on applicable facts and circumstances. To the extent that any
transfer is allowed pursuant to this Section, the new holder of the Option (the
Optionee's Beneficiary or otherwise) shall be subject to the all restrictions
and limitations to which the original Optionee was subject under this Plan, the
Optionee's Option Agreement and the Optionee's Optionee Restriction Agreement.
See also Article 8 hereof.

         6.11     Rights as a Shareholder. An Optionee shall have no rights as a
shareholder with respect to shares covered by his Option until date of the
issuance of the shares to him and only after the Option Price of such shares is
fully paid. Unless specified in Article 7, no adjustment will be made for
dividends or other rights for which the record date is prior to the date of such
issuance.

         6.12     No Obligation to Exercise Option. The granting of an Option
shall impose no obligation upon the Optionee to exercise such Option.

         6.13     Acceleration. The Board shall at all times have the power to
accelerate the vesting date of Options previously granted under this Plan.

         6.14     Holding Period. Shares underlying any Option granted hereunder
to an Optionee who is an "affiliate" of the Company subject to the "short-swing
profit provisions" of Section 16(b) of the 1934 Act are subject to a six-month
holding period. Such holding period will be satisfied if, with regard to any
vested (i.e., exercisable) Option that is exercised within six months of the
date of grant, the shares acquired upon exercise are not disposed of until a
minimum of six months have elapsed from the date of grant of the Option.
Notwithstanding the foregoing, the Board may, in its sole discretion, waive the
preceding required holding period with respect to any Optionee.

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                                    ARTICLE 7
                   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

         7.1      Recapitalization. In the event that the outstanding shares of
the Common Stock of the Company are hereafter increased or decreased or changed
into or exchanged for a different number or kind of shares or other securities
of the Company by reason of a recapitalization, reclassification, stock split,
combination of shares or dividend payable in shares of the Common Stock, the
following rules shall apply:

                  (a)      The Board shall make or cause to be made an
         appropriate adjustment in the number and kind of shares available for
         the granting of Options under the Plan.

                  (b)      The Board also shall make an appropriate adjustment
         in the number and kind of shares as to which outstanding Options, or
         portions thereof then unexercised, shall be exercisable; any such
         adjustment in any outstanding Options shall be made without change in
         the total price applicable to the unexercised portion of such Option
         and with a corresponding adjustment in the Option Price per share. No
         fractional shares shall be issued or optioned in making the foregoing
         adjustments, and the number of shares available under the Plan or the
         number of shares subject to any outstanding Options shall be the next
         higher number of shares, rounding all fractions upward.

                  (c)      If any rights or warrants to subscribe for additional
         shares are given pro rata to holders of outstanding shares of the class
         or classes of stock then set aside for the Plan, each Optionee shall be
         entitled to the same rights or warrants on the same basis as holders of
         the outstanding shares with respect to such portion of his Option as is
         exercised on or prior to the record date for determining shareholders
         entitled to receive or exercise such rights or warrants.

         7.2      Reorganization. Subject to any required action by the
shareholders, if the Company shall be a party to any reorganization involving
merger, consolidation, acquisition of the stock or acquisition of the assets of
the Company, the Board, in its sole discretion, may declare that:

                  (a)      any Option granted but not yet exercised shall
         pertain to and apply, with appropriate adjustment as determined by the
         Board, to the securities of the resulting corporation to which a holder
         of the number of shares of the Common Stock subject to such Option
         would have been entitled;

                  (b)      any or all outstanding Options granted hereunder
         shall become immediately nonforfeitable and fully exercisable or vested
         (to the extent permitted under federal or state securities laws);
         and/or

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                  (c)      any or all Options granted hereunder shall become
         immediately nonforfeitable and fully exercisable or vested (to the
         extent permitted under federal or state securities laws) and are to be
         terminated after giving at least 30 days' notice to the Optionees to
         whom such Options have been granted.

         7.3      Dissolution and Liquidation. If the Board adopts a plan of
dissolution and liquidation that is approved by the shareholders of the Company,
the Board shall give each Optionee written notice of such event at least ten
days prior to its effective date, and the rights of all Optionees shall become
immediately nonforfeitable and fully exercisable or vested (to the extent
permitted under federal or state securities laws).

         7.4      Limits on Adjustments. Any issuance by the Company of stock of
any class, or securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of the Common Stock subject to any Option, except
as specifically provided otherwise in this Article. The grant of Options
pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure or to merge, consolidate or dissolve, or to
liquidate, sell or transfer all or any part of its business or assets. All
adjustments the Board makes under this Article shall be conclusive.

                                    ARTICLE 8
                AGREEMENT BY OPTIONEE AND SECURITIES REGISTRATION

         8.1      Agreement. If, in the opinion of counsel to the Company, such
action is necessary or desirable, no Options shall be granted to any Optionee,
and no Option shall be exercisable, unless, at the time of grant or exercise, as
applicable, such Optionee (i) represents and warrants that he will acquire the
Common Stock for investment only and not for purposes of resale or distribution,
and (ii) makes such further representations and warranties as are deemed
necessary or desirable by counsel to the Company with regard to holding and
resale of the Common Stock. The Optionee shall, upon the request of the Board,
execute and deliver to the Company an agreement or affidavit to such effect.
Should the Board have reasonable cause to believe that such Optionee did not
execute such agreement or affidavit in good faith, the Company shall not be
bound by the grant of the Option or by the exercise of the Option. All
certificates representing shares of Common Stock issued pursuant to the Plan
shall be marked with the following restrictive legend or similar legend, if such
marking, in the opinion of counsel to the Company, is necessary or desirable:

         The shares represented by this certificate [have not been registered
         under the Securities Act of 1933, as amended, or the securities laws of
         any state and] are held by an "affiliate" (as such term is defined in
         Rule 144 promulgated by the Securities and Exchange Commission under
         the Securities Act of 1933, as amended) of the Corporation.
         Accordingly, these shares may not be sold, hypothecated, pledged or
         otherwise transferred except (i) pursuant to an effective registration
         statement under the Securities Act of 1933, as amended, and any
         applicable securities laws or regulations of any state with respect to
         such shares, (ii) in accordance with

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         Securities and Exchange Commission Rule 144, or (iii) upon the issuance
         to the Corporation of a favorable opinion of counsel or the submission
         to the Corporation of such other evidence as may be satisfactory to the
         Corporation that such proposed sale, assignment, encumbrance or other
         transfer will not be in violation of the Securities Act of 1933, as
         amended, or any applicable securities laws of any state or any rules or
         regulations thereunder. Any attempted transfer of this certificate or
         the shares represented hereby which is in violation of the preceding
         restrictions will not be recognized by the Corporation, nor will any
         transferee be recognized as the owner thereof by the Corporation.

If the Common Stock is (A) held by an Optionee who is not an "affiliate," as
that term is defined in Rule 144 of the 1933 Act, or who ceases to be an
"affiliate," or (B) registered under the 1933 Act and all applicable state
securities laws and regulations as provided in Section 8.2, the Board, in its
discretion and with the advice of counsel, may dispense with or authorize the
removal of the restrictive legend set forth above or the portion thereof which
is inapplicable.

         8.2      Registration. In the event that the Company in its sole
discretion shall deem it necessary or advisable to register, under the 1933 Act
or any state securities laws or regulations, any shares with respect to which
Options have been granted hereunder, then the Company shall take such action at
its own expense before delivery of the certificates representing such shares to
an Optionee. In such event, and if the shares of Common Stock of the Company
shall be listed on any national securities exchange or on NASDAQ at the time of
the exercise of any Option, the Company shall make prompt application at its own
expense for the listing on such stock exchange or NASDAQ of the shares of Common
Stock to be issued.

         8.3      Optionee Restrictions. No Options shall be granted to any
Optionee, and no Option shall be exercisable by any Optionee (or other holder of
the Optionee's Option), unless, at the time of grant or exercise, as applicable,
the Optionee (or other holder of the Optionee's Option) is subject to the terms,
provisions, restrictions and limitations contained in the Optionee's Optionee
Restriction Agreement in the option of counsel to the Company.

                                    ARTICLE 9
                                 EFFECTIVE DATE

         The Plan shall be effective as of the Effective Date, and no Options
shall be granted hereunder prior to said date. Adoption of the Plan shall be
approved by the Board.

                                   ARTICLE 10
                            AMENDMENT AND TERMINATION

         10.1     Amendment and Termination By the Board. Subject to Section
10.2 below, the Board shall have the power at any time to add to, amend, modify
or repeal any of the provisions of the Plan, to suspend the operation of the
entire Plan or any of its provisions for any period or periods or to terminate
the Plan in whole or in part. In the event of any such action, the Board

                                    Page -12-

<PAGE>   13

shall prepare written procedures which shall govern the administration of the
Plan resulting from such addition, amendment, modification, repeal, suspension
or termination.

         10.2     Restrictions on Amendment and Termination. Notwithstanding the
provisions of Section 10.1 above, except as otherwise expressly provided in this
Plan or in an Option Agreement or an Optionee Restriction Agreement, no
addition, amendment, modification, repeal, suspension or termination shall
adversely affect, in any way, the rights of the Optionees who have outstanding
Options without the consent of such Optionees.

                                   ARTICLE 11
                            MISCELLANEOUS PROVISIONS

         11.1     Application of Funds. The proceeds received by the Company
from the sale of the Common Stock subject to the Options granted hereunder will
be used for general corporate purposes.

         11.2     Notices. All notices or other communications by an Optionee to
the Board pursuant to or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Board at the
location, or by the person, designated by the Board for the receipt thereof.

         11.3     Term of Plan. Subject to the terms of Article 10, the Plan
shall terminate upon the later of (i) the complete exercise or lapse of the last
outstanding Option, or (ii) the last date upon which Options may be granted
hereunder.

         11.4     Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Georgia.

         11.5     Additional Provisions By Board. The Option Agreements
authorized under the Plan may contain such other provisions, including, without
limitation, restrictions upon the exercise of an Option, as the Board shall deem
advisable.

         11.6     Plan Document Controls. In the event of any conflict between
the provisions of an Option Agreement and the Plan, the Plan shall control.

         11.7     Gender and Number. Wherever applicable, the masculine pronoun
shall include the feminine pronoun, and the singular shall include the plural.

         11.8     Headings. The titles in this Plan are inserted for convenience
of reference; they constitute no part of the Plan and are not to be considered
in the construction hereof.

         11.9     Legal References. Any references in this Plan to a provision
of law which is, subsequent to the Effective Date of this Plan, revised,
modified, finalized or redesignated, shall

                                    Page -13-

<PAGE>   14

automatically be deemed a reference to such revised, modified, finalized or
redesignated provision of law.

         11.10    No Rights to Perform Services. Nothing contained in the Plan,
or any modification thereof, shall be construed to give any Person any rights to
perform services for the Company or any parent or subsidiary corporation of the
Company.

         11.11    Unfunded Arrangement. The Plan shall not be funded, and except
for reserving a sufficient number of authorized shares to the extent required by
law to meet the requirements of the Plan, the Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any grant under the Plan.

                 ADOPTED BY BOARD OF DIRECTORS ON JUNE 13, 1995

                                    Page -14-

<PAGE>   15

                                   APPENDIX A

                                            NONQUALIFIED STOCK OPTION NO. ______

                               ATHEROGENICS, INC.
                             1995 STOCK OPTION PLAN

                       NONQUALIFIED STOCK OPTION AGREEMENT

         This Nonqualified Stock Option Agreement (the "Agreement") is entered
into as of the ________ day of _______________, ________, by and between
Atherogenics, Inc. (the "Company") and ______________________ ("Optionee").

                              W I T N E S S E T H:

         WHEREAS, the Company, has adopted the Atherogenics, Inc. 1995 Stock
Option Plan (the "Plan") which is administered by the Company's Board of
Directors (the "Board"); and

         WHEREAS, effective as of ____________, __________ the Board granted to
Optionee a nonqualified stock option under, and in accordance with, the terms of
the Plan to reward Optionee for his efforts on behalf of the Company and to
encourage his continued loyalty and diligence; and

         WHEREAS, to comply with the terms of the Plan and to further the
interests of the Company and Optionee, the parties hereto have set forth the
terms of such option in writing in this Agreement;

         NOW, THEREFORE, for and in consideration of the premises and mutual
promises herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree as follows:

         1.       Grant of Option. Effective as of ____________, __________, the
Optionee was granted a nonqualified stock option under the Plan. Under that
option and subject to the terms and conditions set forth herein, Optionee shall
have the right to purchase __________ shares of the common stock of the Company
(the "Common Stock"); such __________ shares hereinafter are referred to as the
"Optioned Shares", and this option hereinafter is referred to as the "Option".
The Option is intended to be a nonqualified stock option.

         2.       Option Price. The price per share for each of the Optioned
Shares shall be $__________ (the "Option Price"), which is not less than 75% of
the per share Fair Market Value of the Optioned Shares on the date of grant
specified above.

                                    Page -1-

<PAGE>   16

         3.       Exercise of Option.

                  (a)      General. The Option may be exercised by Optionee's
delivery to the Secretary of the Company of a written notice of exercise
executed by Optionee (the "Notice of Exercise"). The Notice of Exercise shall be
substantially in the form set forth as Exhibit A, attached hereto and made a
part hereof, and shall identify the Option and the number of Optioned Shares
that are being exercised.

                  (b)      Beginning of Exercise Period. The Option first shall
become exercisable (i.e., vested) according to the following schedule; provided,
if Optionee ceases to perform services for the Company for any reason (including
Disability or death), his rights with regard to all non-vested Options under
this schedule shall cease immediately:

                           (i)      As of the first anniversary of the date of
         grant of the Option, Optionee shall have the right to exercise 20% of
         the Optioned Shares;

                           (ii)     As of each monthly anniversary of the date
         of grant of the Option occurring after the first anniversary of the
         date of grant of the Option and prior to the fifth anniversary of the
         date of grant of the Option, the Optionee shall have the right to
         exercise the Option with respect to, and to thereby purchase, an
         additional 1-2/3% of the Optioned Shares (for purposes of determining
         the monthly anniversary of the date an Option is granted, if the date
         of grant of an Option occurs on the 29th, 30th or 31st day, then, if
         the month during which the monthly anniversary is to be determined does
         not contain such a 29th, 30th or 31st day, respectively, the last day
         of such month shall be considered the monthly anniversary of the date
         of grant); and

                           (iii)    As of the fifth anniversary of the date the
         Option is granted, the Optionee shall have the right to exercise the
         Option with respect to, and to thereby purchase, all the shares subject
         to such Option.

                  (c)      Partial Exercise. Optionee may exercise the Option
for less than the full number of exercisable Optioned Shares, but such exercise
may not be made for less than 100 shares or the total remaining shares subject
to the Option, if less than 100 shares.

         4.       Termination of Option. Notwithstanding any provisions to the
contrary herein, and except as otherwise specified in Attachment I (if
any).hereto, the Option shall not be exercisable either in whole or in part
after the earliest of:

                  (a)      Ten years from the date of grant;

                  (b)      The date that is immediately prior to the six month
anniversary of the date on which Optionee dies (i) while performing services for
the Company, (ii) within the 30 day period that begins on the date on which
Optionee ceases to be performing services for the

                                    Page -2-

<PAGE>   17

Company for any reason other than death or Disability or (iii) within the six
month period that begins on the date on which Optionee ceases to perform
services for the Company due to Disability;

                  (c)      The date of expiration of the six month period that
begins on the date on which Optionee ceases to perform services for the Company
due to Disability; provided, if Optionee dies during such six month period, the
terms of subsection (b) shall control;

                  (d)      The date of expiration of the 30 day that begins on
the date on which Optionee ceases to perform services for the Company for any
reason other than death or Disability; provided, if Optionee dies during such 30
day period, the terms of subsection (b) shall control;

                  (e)      The date on which the Company gives notice (or is
deemed to have given notice) to Optionee of his termination of service for
Cause, all as described in Section 6.9(a) of the Plan; or

                  (f)      Such other earlier date as may be required under the
terms of the Plan.

         5.       Option Non-Transferable. The Option shall not be transferable
by Optionee other than by will or by the laws of descent and distribution except
by transfer to a Beneficiary upon the death of the Optionee, and any purported
transfer (other than as excepted above) shall be null and void. After the death
of the Optionee and upon the death of the Optionee's Beneficiary, the Option may
be transferred by will or by the laws of descent and distribution. During the
lifetime of Optionee, the Option shall be exercisable only by Optionee (or, if
he becomes incapacitated or upon his Disability, by the guardian of his property
or his duly appointed attorney-in-fact), and shall not be assignable or
transferable by Optionee and, subject to Section 6 hereof, no other person shall
acquire any rights in the Option. To the extent that any transfer is allowed
pursuant to this Section, the new holder of the Option (the Optionee's
Beneficiary or otherwise) shall be subject to the all restrictions and
limitations to which the original Optionee was subject under this Plan, the
Optionee's Option Agreement and the Optionee's Optionee Restriction Agreement.
See also Article 8 of the Plan.

         6.       Death of Optionee and Transfer of Option. Except as otherwise
specified in Attachment I (if any) hereto, in the event of the death of Optionee
while performing services for the Company, within a six month period after the
termination of his service of the Company due to Disability, or within a 30 day
period after the Optionee ceases to perform services for the Company for any
reason other than for Cause, all or any of the unexercised portion of the Option
owned by the deceased Optionee may be exercised by Optionee's Beneficiary at any
time prior to the six month anniversary of the date of the death of Optionee,
but in no event later than the date as of which such Option expires pursuant to
Section 4 hereof. Such exercise shall be effected in accordance with the terms
hereof as if such Beneficiary was Optionee herein. The Optionee agrees that the
following individual shall initially be his Beneficiary:

                                    Page -3-

<PAGE>   18

         Name:
                  ----------------------
         Address:
                  ----------------------

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

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

Any subsequent modification of the Optionee's Beneficiary shall be made pursuant
to the terms and provisions of the Plan.

         7.       Medium and Time of Payment of Option Price.

                  (a)      General. The Option Price shall be payable by
Optionee (or his Beneficiary in accordance with Section 6 hereof) upon exercise
of the Option and shall be paid in cash, in shares of the Common Stock (or by
instructing the Company to retain shares of Common Stock as payment), in other
property or services acceptable to the Board and allowed under the terms of the
Plan and applicable law, or any combination thereof.

                  (b)      Payment in Shares of the Common Stock. If Optionee
pays all or part of the Option Price with shares of the Common Stock, the
following conditions shall apply:

                           (i)      Optionee shall deliver to the Secretary of
         the Company a certificate or certificates for shares of the Common
         Stock duly endorsed for transfer to the Company with signature
         guaranteed by a member firm of a national stock exchange or by a
         national or state bank (or guaranteed or notarized in such other manner
         as the Board may require);

                           (ii)     Optionee must have held any shares of the
         Common Stock used to pay the Option Price for at least six months prior
         to the date such payment is made;

                           (iii)    Such shares shall be valued on the basis of
         the Fair Market Value of the Common Stock on the date of exercise
         pursuant to the terms of the Plan; and

                           (iv)     The value of such Common Stock shall be less
         than or equal to the Option Price. If Optionee delivers Common Stock
         with a value that is less than the Option Price, then Optionee shall
         pay the balance of the Option Price in a form allowed under subsection
         (a) above.

In addition to the payment of the Option Price, Optionee also shall pay in cash
(or have withheld from his normal pay) an amount equal to, or by instructing the
Company to retain Common Stock upon the exercise of the Option with a Fair
Market Value equal to, the amount, if any, which the Company at the time of
exercise is required to withhold under the income tax and FICA withholding
provisions of the Internal Revenue Code of 1986, as amended, and of the income
tax laws of the state of Optionee's residence.

                                    Page -4-

<PAGE>   19

         8.       Agreement of Optionee. Optionee acknowledges that he has read
Article 8 of the Plan and understands that certain restrictions may apply with
respect to shares of the Common Stock acquired by him pursuant to his exercise
of the Option (including restrictions on resale applicable to "affiliates" under
Rule 144 of the Securities Act of 1933, as amended, and restrictions on resale
applicable to shares of the Common Stock that have not been registered under the
Securities Act of 1933, as amended, and applicable state securities laws).
Optionee hereby agrees to execute such documents and take such actions as the
Company may require with respect to state and federal securities laws and any
restrictions on the resale of such shares which may pertain. Optionee also
acknowledges that shares of Common Stock acquired through exercise of all or a
portion of the Option will be subject to the terms and provisions of the
Optionee Restriction Agreement which has been executed by the Optionee.

         9.       Delivery of Stock Certificates. Within a reasonable period of
time after the date of exercise of the Option and the receipt by the Company of
full payment therefor, the Company shall deliver to Optionee a stock certificate
representing the shares of the Common Stock acquired by Optionee pursuant to his
exercise of the Option.

         10.      Notices. All notices or other communications hereunder shall
be in writing and shall be effective (i) when personally delivered by courier
(including overnight carriers) or otherwise to the party to be given such notice
or other communication or (ii) on the third business day following the date
deposited in the United States mail if such notice or other communication is
sent by certified or registered mail with return receipt requested and postage
thereon fully prepaid. The addresses for such notices shall be as follows:

         If to the Company:

                       Atherogenics, Inc.
                       Attention: Corporate Secretary
                       3075B Northwoods Circle
                       Norcross, Georgia 30071

                                    Page -5-

<PAGE>   20

         If to Optionee:

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

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

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

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

Any party hereto, by notice of the other party hereunder, may change its address
for receipt of notices hereunder.

         11.      Other Terms and Conditions. In addition to the terms and
conditions set forth herein, the Option is subject to and governed by the other
terms and conditions set forth in the Plan and in any Attachment I attached
hereto, each of which is hereby incorporated by reference. In the event of any
conflict between the provisions of this Agreement and the Plan, the Plan shall
control. In the event of any conflict between the provisions of this Agreement
and Attachment I, Attachment I shall control.

         12.      Miscellaneous.

                  (a)      The granting of the Option and the execution of this
Agreement shall not give Optionee any rights to similar grants in future years
or any right to be retained in the service of the Company or to interfere in any
way with the right of the Company to terminate Optionee's services at any time.

                  (b)      Optionee shall have no rights of a stockholder with
respect to any shares covered by the Option until the date of issuance of a
stock certificate to him for such shares.

                  (c)      If any term, provision, covenant or restriction
contained in this Agreement or in any Attachment I attached hereto is held by a
court or a federal regulatory agency of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions contained in this Agreement or in such Attachment I shall remain in
full force and effect, and shall in no way be affected, impaired or invalidated.
If for any reason such court or regulatory agency determines that this Agreement
or any Attachment I will not permit Optionee to acquire the full number of
Optioned Shares as provided in Section 1 hereof, it is the express intention of
the Company to allow Optionee to acquire such lesser number of shares as may be
permissible without any amendment or modification hereof.

                  (d)      This Agreement shall be construed and enforced in
accordance with the laws of Georgia.

                                    Page -6-

<PAGE>   21

                  (e)      This Agreement, together with the Plan and any
Attachment I attached hereto, contains the entire understanding among the
parties and supersedes any prior understanding and agreements between them
representing the subject matter hereof. There are no representations,
agreements, arrangements or understandings, oral or written, between and among
the parties hereto relating to the subject matter hereof which are not fully
expressed herein, or in the Plan and in any Attachment I attached hereto.

                  (f)      Section and other headings contained in this
Agreement are for reference purposes only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.

                  (g)      This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement, and the signatures of any party or any counterpart
shall be deemed to be a signature to, and may be appended to, any other
counterpart.

                  (h)      All capitalized terms in this Agreement shall be
construed in accordance with their defined terms under the Plan.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the first date written above.

                                     ATHEROGENICS, INC.

                                     By:
                                         --------------------------------
                                     Title:
                                           ------------------------------
                                     OPTIONEE:

                                     ------------------------------------
                                     Signature

                                     ------------------------------------
                                     Print or type name

                                    Page -7-

<PAGE>   22

                                          NONQUALIFIED STOCK OPTION NO. ________

                               ATHEROGENICS, INC.
                             1995 STOCK OPTION PLAN

                       NONQUALIFIED STOCK OPTION AGREEMENT

                                  ATTACHMENT I
                ADDITIONAL TERMS AND PROVISIONS REGARDING OPTION

                                    Page -8-

<PAGE>   23

                                    Exhibit A
                               ATHEROGENICS, INC.
                             1995 STOCK OPTION PLAN

           NOTICE OF EXERCISE FOR NONQUALIFIED STOCK OPTION AGREEMENT

         This Notice of Exercise is given pursuant to the terms of the
Nonqualified Stock Option Agreement, dated _______________________,
__________________, between Atherogenics, Inc. (the "Company") and the
undersigned Optionee (the "Agreement"), which Agreement represents Nonqualified
Stock Option No. ______________and which is made a part hereof and incorporated
herein by reference.

         EXERCISE OF OPTION. Optionee hereby exercises his option to purchase
__________ of his Optioned Shares. Optionee hereby delivers, together with this
written statement of exercise, the full Option Price with respect to the
exercised Optioned Shares, which consists of: [COMPLETE ONLY ONE]

         -        cash in the total amount of $___________________________.

         -        ______ shares of the Company's Common Stock.

         -        cash in the total amount of $_____________________and
                  ______________shares of the Company's Common Stock.

         -        other (specify): _______________________.

         ACKNOWLEDGMENT. Optionee hereby acknowledges that, to the extent he is
an "affiliate" of the Company (as that term is defined in Rule 144 promulgated
under the Securities Act of 1933, as amended) or to the extent that the Optioned
Shares have not been registered under the Securities Act of 1933, as amended, or
applicable state securities laws, any shares of the Company's Common Stock
acquired by him as a result of his exercise of the Option pursuant to this
Notice are subject to, and the certificates representing such shares shall be
legended to reflect, certain trading restrictions under applicable securities
laws (including particularly the Securities and Exchange Commission's Rule 144),
all as described in Article 8 of the Plan, and Optionee hereby agrees to comply
with all such restrictions and to execute such documents or take such other
actions as the Company may require in connection with such restrictions.

         REPRESENTATIONS AND WARRANTIES OF OPTIONEE.  Optionee hereby
specifically represents and warrants as follows:

- The Shares are being purchased for the Optionee's own account without the
participation of any other person, with the intent of holding the Shares for
investment and without the intent of participating, directly or indirectly, in a
distribution of the Shares and not with a view to, or for

                                    Page -9-

<PAGE>   24

resale in connection with, any distribution of the Shares or any portion
thereof, nor is the Optionee aware of the existence of any distribution of the
Company's securities;

- 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 an independent examination and judgment as to the
prospects of the Company; and

- The Shares were not offered to the Optionee by means of publicly disseminated
advertisements or sales literature, nor is the Optionee aware of any offers made
to other persons by such means.

         Executed this ________________ day of ____________________.

                                    OPTIONEE:

                                    _________________________________
                                    Signature

                                    _________________________________
                                    Print or Type Name

                                    Page -10-

<PAGE>   25

                                   APPENDIX B

                               ATHEROGENICS, INC.
                             1995 STOCK OPTION PLAN

                         OPTIONEE RESTRICTION AGREEMENT

         This Optionee Restriction Agreement (the "Agreement") is made and
entered into as of 19__ between ATHEROGENICS, INC., a Georgia corporation (the
"Company"), and ________ ("Optionee").

                              W I T N E S S E T H:

         WHEREAS, the Company desires to grant to Optionee as of the date hereof
an option to purchase all or part of an aggregate of _____ shares (the "Shares")
of the Common Stock of the Company at a price of $_____ per share (the term
"Shares" refers to all shares acquired or which could be acquired pursuant to
such option and to all securities received in addition thereto or in replacement
thereof, pursuant to or in consequence of any stock dividend, stock split,
recapitalization, merger, reorganization, exchange of shares or other similar
event), and the Optionee wishes to receive such Option; and

         WHEREAS, the Company is party to a Series A Convertible Preferred Stock
Purchase Agreement dated as of _____, 1994 with Alliance Technology Ventures,
L.P., a Delaware limited partnership ("Alliance"), pursuant to which the Company
issued to such entity shares of the Company's Series A Convertible Preferred
Stock (the "Preferred Stock"); and

         WHEREAS, in order to provide assurance to Alliance and other persons
who may purchase or otherwise acquire shares of the Preferred Stock of the
Company in the future (collectively, the "Investors") and thereby to assist in
future equity financing of the Company, the Company requires that Optionee
execute and deliver this Agreement prior to the grant of any option by the
Company, and Optionee, in consideration for the Options to be granted to
Optionee, is willing to enter into this Agreement for the benefit of the
Company, the Investors and any other person or entity who holds stock of the
Company from time to time;

         NOW, THEREFORE, the parties hereto agree as follows:

                                        I
               COMPANY'S RIGHT OF FIRST REFUSAL RESPECTING SHARES

         1.1      Right of First Refusal. Subject to Section 1.5 hereof, in the
event that the Optionee proposes to sell, pledge, or otherwise transfer any
Shares, the Company shall have a

                                    Page -1-

<PAGE>   26

right of first refusal (the "Right of First Refusal") with respect to such
Shares. Optionee shall give a written notice (the "Transfer Notice") to the
Company describing fully any proposed transfer of Shares, including the number
of Shares proposed to be transferred, the proposed transfer price, and the name
and address of the proposed transferee. The Transfer Notice shall be signed both
by the Optionee and by the proposed transferee. The Company shall have the right
to purchase all, but not less than all, of the Shares subject to the Transfer
Notice at a price per share equal to the lower of (i) the proposed per share
transfer price or (ii) the fair market value of a share of Common Stock of the
Company, as most recently determined by the Board of Directors of the Company
prior to delivery of the Transfer Notice, by delivery of a notice of exercise of
the Company's Right of First Refusal within thirty (30) days after the date the
Transfer Notice is delivered to the Company. The Company's rights under this
Section shall be freely assignable, in whole or in part.

         1.2      Transfer of Exercised Shares. If the Company fails to exercise
the Right of First Refusal within thirty (30) days from the date the Transfer
Notice is delivered to the Company, the Optionee may, not later than ninety (90)
days following delivery to the Company of the Transfer Notice, conclude a
transfer of the Shares subject to the Transfer Notice on the terms and
conditions described in the Transfer Notice. 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 Section 1.1 of this Agreement. If the Company exercises
the Right of First Refusal, the parties shall consummate the sale of Shares on
the terms set forth in the Transfer Notice; provided, however, in the event the
Transfer Notice provides for payment for the Shares other than in cash, the
Company shall have the option of paying for the Shares by the discounted cash
equivalent of the consideration described in the Transfer Notice.

         1.3      Binding Effect. The Right of First Refusal shall inure to the
benefit of the successors and assigns of the Company and shall be binding upon
any transferee of Shares other than a transferee acquiring shares in a
transaction where the Company failed to exercise that Right of First Refusal (a
"Free Transferee") or a transferee of a Free Transferee.

         1.4      Termination of the Company's Right of First Refusal.
Notwithstanding anything in this Article I, the Company shall have no Right of
First Refusal, and Optionee shall have no obligation to comply with the
procedures in Sections 1.1 through 1.3 after the earlier of (i) the Company's
initial registered public offering of Common Stock to the public generally or
(ii) the date ten (10) years after the date of this Agreement.

         1.5      Limitations to Rights. Without regard and not subject to the
provisions of Sections 1.1 and 2.1:

         (a)      The Optionee may sell or otherwise assign Shares to any or all
of his ancestors, descendants, spouse, or members of his immediate family, or to
a custodian, trustee (including a

                                    Page -2-

<PAGE>   27

trustee of a voting trust), executor, or other fiduciary for the account of his
ancestors, descendants, spouse, or members of his immediate family, provided
that each such transferee or assignee, prior to the completion of the sale,
transfer, or assignment, shall have executed documents assuming the obligations
of the Optionee under this Agreement with respect to the transferred securities.

         (b)      To the extent permitted by the Company, the Optionee may sell
or transfer Shares in the first firmly underwritten public offering of
securities of the Company registered under the Securities Act of 1933, as
amended (the "Act").

                                       II
                                RIGHTS OF CO-SALE

         2.1      The Rights of Investors. If at any time Optionee proposes to
sell any Shares to parties other than the Investors or their assignees or
transferees (the "Eligible Holders") in a transaction (the "Transaction") not
registered under the Act in reliance upon a claimed exemption thereunder, then
to the extent the Company has not exercised its Right of First Refusal as to any
Shares being sold, any Eligible Holder (a "Selling Holder") which notifies the
Company in writing, within thirty (30) days after receipt of the notification
from the Optionee referred to in Section 2.2, shall have the opportunity to sell
a pro rata portion of Shares which the Optionee proposes to sell to such third
party in the Transaction; whereupon the Optionee shall assign so much of his
interest in the agreement of sale as the Selling Holder shall be entitled to and
shall request hereunder, and the Selling Holder shall assume such part of the
obligations of the Optionee under such agreement as shall relate to the sale of
the Shares by the Selling Holder. For the purposes of this Article II, the "pro
rata portion" which the Selling Holder shall be entitled to sell shall be an
amount of shares equal to the total amount of Shares proposed to be sold
multiplied by a fraction, the numerator of which is the number of shares of
Common Stock issuable upon conversion of the Preferred Shares and shares of
Common Stock owned by a Selling Holder, and the denominator of which is the
total number of such shares owned by all participating Selling Holders and the
Optionee. Each Selling Holder shall notify the Optionee whether it elects to
sell an amount equal to, more than or less than its pro rata portion of the
Shares so offered. Each Selling Holder shall be entitled to apportion Shares to
be sold among its partners and affiliates, provided that such Selling Holder
notifies the Company of such allocation.

         1.2      Notice. Prior to any sale by the Optionee of any Shares, the
Optionee shall notify each Eligible Holder and the Company, in writing, of his
intention to sell and issue such securities, setting forth the general terms
under which he proposes to make such sale. Such notice shall be signed by the
third parties, or a representative, of such third parties, or shall be
accompanied by a letter of intent signed by the third parties or representatives
of such third parties, to whom the sale, assignment or transfer is proposed and
shall indicate the third parties' concurrence with the description of the terms.

                                    Page -3-

<PAGE>   28

         2.3      Failure to Notify. If within thirty (30) days after the
Optionee gives his notice to the Eligible Holders, the Eligible Holders do not
notify the Company that they desire to sell all of their pro rata portion of the
Shares described in such notice at the price and on the terms and conditions set
forth therein, then the Optionee may, not later than ninety (90) days following
delivery of the notice under Section 2.2, as to the Shares to which the Eligible
Holders do not indicate a desire to sell, conclude a transfer on the terms and
conditions described in the notice. In the event the Optionee has not sold the
Shares or entered into an agreement to sell the Shares within such ninety (90)
days, the Optionee shall not thereafter sell any Shares without first notifying
the Eligible Holders and the Company in the manner provided above. The exercise
or nonexercise of the right to participate in one or more sales of Shares made
by the Optionee shall not adversely affect an Eligible Holder's right to
participate in subsequent sales of Shares by the Optionee pursuant to Section
2.1 hereof.

         2.4      Termination. The obligations of the Optionee under this
Article II shall terminate and be of no further force and effect upon the
occurrence of either event described in Section 1.4 of this Agreement.

                                       III
                                 MARKET STANDOFF

         Optionee hereby agrees that if so requested by the Company or any
representative of the underwriters in connection with any registration of the
offering of any securities of the Company under the Act, Optionee shall not sell
or otherwise transfer any Shares for a period of one hundred twenty (120) days
following the effective date of a Registration Statement filed under the Act;
provided, however, that such restriction shall apply only to the first two
Registration Statements of the Company to become effective under the Act which
include securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such one hundred twenty (120) day period.

                                       IV
          COMPANY'S RIGHT TO REPURCHASE UPON TERMINATION OF EMPLOYMENT

         4.1      Repurchase Right. The Shares shall be subject to a right (but
not obligation) of repurchase in favor of the Company (the "Right of
Repurchase"). If the Optionee ceases to perform services with the Company or an
affiliate for any reason whatsoever (the "Service Termination") before the Right
of Repurchase expires pursuant to this Article, the Company may purchase Shares
subject to the Right of Repurchase at a purchase price per share equal to the
purchase price per share paid by the Optionee for the Shares (exclusive of any
taxes paid upon acquisition of the stock). The Optionee may not dispose of or
transfer any Shares while such Shares are subject to the Right of Repurchase and
any such attempted transfer shall be null and void. The Company's rights under
this Section 4.1 shall be freely assignable, in whole or in part.

                                    Page -4-

<PAGE>   29

         4.2      Repurchase Procedure. The Company's Right of Repurchase shall
terminate if not exercised by written notice from the Company to the Optionee
within ninety (90) days from the date on which the Company learns of the Service
Termination. If the Company exercises its Right of Repurchase, the Optionee
shall promptly endorse and deliver to the Company the stock certificates
representing the Shares being repurchased, and the Company shall then pay
promptly (but in no event later than ninety (90) days after the date of Service
Termination), pursuant to the provisions of Section 4.3 of this Agreement, the
total repurchase price to the Optionee.

         4.3      Repurchase Payment. If, at the time of repurchase, any notes
are outstanding which represent any portion of the total purchase price for
Shares being so repurchased, the repurchase price shall be paid first by
cancellation of any obligation for accrued but unpaid interest under such notes,
next by cancellation of principal under such notes, and finally by payment of
cash or check.

         4.4      Binding Effect. The Company's Right of Repurchase shall inure
to the benefit of the successors and assigns of the Company and shall be binding
upon any representative, executor, administrator, heir, or legatee of the
Optionee.

         4.5      Expiration of Repurchase Right. The Right of Repurchase as set
forth in this Article shall expire in accordance with the following:

                  (a)      Commencing as of the first anniversary of the date
         the Option is granted, the Right of Repurchase shall expire with
         respect to, and thereafter not be applicable to, 20% of the shares
         subject to such Option. Prior to said date, the Right of Repurchase
         shall be applicable to all shares subject to such Option.

                  (b)      Commencing as of the second anniversary of the date
         the Option is granted, the Right of Repurchase shall expire with
         respect to, and thereafter not be applicable to, an additional 20% of
         the shares subject to the Option.

                  (c)      Commencing as of the third anniversary of the date
         the Option is granted, the Right of Repurchase shall expire with
         respect to, and thereafter not be applicable to, an additional 20% of
         the shares subject to the Option.

                  (d)      Commencing as of the fourth anniversary of the date
         the Option is granted, the Right of Repurchase shall expire with
         respect to, and thereafter not be applicable to, an additional 20% of
         the shares subject to the Option.

                  (e)      Commencing as of the fifth anniversary of the date
         the Option is granted, the Right of Repurchase shall expire with
         respect to, and thereafter not be applicable to, the remainder of the
         shares subject to such Option.

                                        V

                                    Page -5-

<PAGE>   30

                      STOCK CERTIFICATE RESTRICTIVE LEGENDS

         Stock certificates evidencing Shares may bear such restrictive legends
as the Company and the Company's counsel deem necessary or advisable under
applicable law or pursuant to this Agreement, including, without limitation, any
one or more of the following legends:

         The securities represented hereby are subject to a right of first
         refusal by the Company and a right of co-sale on the part of certain
         stockholders pursuant to the provisions of an agreement between the
         Company and the original purchaser of such securities relating to such
         securities, and may not be sold or otherwise transferred except in
         compliance with the terms of such agreement.

         The securities represented hereby may be subject to a right of
         repurchase by the Company, pursuant to the provisions of an agreement
         between the Company and the original purchaser of such securities
         relating to such securities should the person initially issued these
         securities cease to be employed by the Company or any affiliate
         thereof.

         The securities represented hereby are subject to restrictions on
         transfer for a period of 120 days following the effective date of a
         registration statement under the Securities Act of 1933, as amended,
         for an offering of the Company's securities as more fully provided in
         the agreement relating to the option to purchase such securities
         between the Company and the original purchaser of such securities.

                                       VI
                                 BINDING EFFECT

         Subject to the limitations set forth in this Agreement, this Agreement
shall be binding upon, and inure to the benefit of, the executors,
administrators, heirs, legal representatives, successors, and assigns of the
parties hereto, including any Beneficiary of the Optionee and any other holder
of the Optionee's Option.

                                       VII
                                     DAMAGES

         Optionee shall be liable to the Company for all costs and damages,
including incidental and consequential damages, resulting from a disposition of
Shares which is not in conformity with the provisions of this Agreement.

                                      VIII
                                  GOVERNING LAW

         This Agreement shall be governed by and construed in accordance with
the laws of the State of Georgia applicable to contracts entered into and wholly
to be performed within the State of Georgia by Georgia residents. The parties
agree that the exclusive jurisdiction and venue of any action with respect to
this Agreement shall be in the Superior Court of Georgia for the

                                    Page -6-

<PAGE>   31

County of Fulton or the United States District Court for the Northern District
of Georgia, and each of the parties hereby submits itself to the exclusive
jurisdiction and venue of such courts for the purpose of such action. The
parties agree that service of process in any such action may be effected by
delivery of the summons to the parties in the manner provided for delivery of
notices set forth in Article IX.

                                       IX
                                     NOTICES

         All notices and other communications under this Agreement shall be in
writing. Unless and until Optionee is notified in writing to the contrary, all
notices, communications and documents directed to the Company and related to the
Agreement, if not delivered by hand, shall be mailed, addressed as follows:

                          Atherogenics, Inc.
                    Attention: Corporate Secretary
                       3075B Northwoods Circle
                       Norcross, Georgia 30071

Unless and until the Company is notified in writing to the contrary, all
notices, communications and documents intended for Optionee and related to this
Agreement, if not delivered by hand, shall be mailed to Optionee's last known
address as shown on the Company's books. Notices and communications shall be
mailed by registered or certified mail, return receipt requested, postage
prepaid. All notices related to this Agreement shall be deemed received upon
delivery or, if mailed, within five (5) days after mailing in accordance with
this Article IX.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                     ATHEROGENICS, INC.

                                     By:
                                           ------------------------------
                                     Title:
                                           ------------------------------

         Optionee hereby accepts and agrees to be bound by all of the terms and
conditions of this Agreement.

                                     OPTIONEE:
                                              ---------------------------

                                    Page -7-

<PAGE>   32

                                 AMENDMENT NO. 1
                                       TO
                               ATHEROGENICS, INC.
                             1995 STOCK OPTION PLAN

         THIS AMENDMENT NO. 1 to the Atherogenics, Inc. 1995 Stock Option Plan
(the "Plan") is made by Atherogenics, Inc. (the "Company"), effective as of the
15th day of August, 1995.

                              W I T N E S S E T H:

         WHEREAS, the Board of Directors of the Company (the "Board") has
previously adopted the Plan, and pursuant to Section 10.1 thereof, the Board has
the right to amend the Plan at any time; and

         WHEREAS, the Board wishes to increase the number of shares of Common
Stock of the Company available for issuance upon the exercise of stock options
which may be granted under the Plan:

         NOW, THEREFORE, the Plan is amended as follows, effective as stated
above:

I.       Article 4 of the Plan shall be deleted in its entirety and amended to
         read as follows:

         "The stock subject to Options and other provisions of the Plan shall be
         authorized but unissued or reacquired shares of Common Stock. Subject
         to adjustment in accordance with the provisions of Article 7, the total
         number of shares of Common Stock for which Options may be granted to
         persons participating in the Plan shall not exceed in the aggregate
         800,000 shares of Common Stock. Notwithstanding the foregoing, shares
         of Common Stock allocable to the unexercised portion of any expired or
         terminated Option again may become subject to Options under the Plan."

II.      All other provisions of the Plan not inconsistent herewith are hereby
         confirmed and ratified.<PAGE>   1
                                                                   EXHIBIT 10.08

                           [LOGO] ATHEROGENICS, INC.

                             EQUITY OWNERSHIP PLAN
<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                Page
                                                                                ----

<S>        <C>                                                                  <C>
SECTION 1  DEFINITIONS                                                            1

           1.1      Definitions                                                   1

SECTION 2  GENERAL TERMS                                                          5

           2.1      Purpose of the Plan                                           5
           2.2      Stock Subject to the Plan                                     5
           2.3      Administration of the Plan                                    5
           2.4      Eligibility and Limits                                        5

SECTION 3  TERMS OF AWARDS                                                        6

           3.1      Terms and Conditions of All Awards                            6
           3.2      Terms and Conditions of Options                               6
                    (a)      Option Price                                         7
                    (b)      Option Term                                          7
                    (c)      Payment                                              7
                    (d)      Conditions to the Exercise of an Option              7
                    (e)      Termination of Incentive Stock Option                7
                    (f)      Special Provisions for Certain Substitute Options    8
           3.3      Terms and Conditions of Stock Appreciation Rights             8
                    (a)      Payment                                              8
                    (b)      Conditions to Exercise                               8
           3.4      Terms and Conditions of Stock Awards                          8
           3.5      Treatment of Awards Upon Termination of Employment            9

SECTION 4  RESTRICTIONS ON STOCK                                                 10

           4.1      Escrow of Shares                                             10
           4.2      Forfeiture of Shares                                         10
           4.3      Restrictions on Transfer                                     10
</TABLE>

                                       ii
<PAGE>   3

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>

                                                                                Page
                                                                                ----
<S>        <C>                                                                  <C>
SECTION 5  GENERAL PROVISIONS                                                    11

           5.1      Withholding                                                  11
           5.2      Changes in Capitalization; Merger; Liquidation               11
           5.3      Cash Awards                                                  12
           5.4      Compliance with Code                                         12
           5.5      Right to Terminate Employment                                12
           5.6      Restrictions on Delivery and Sale of Shares; Legends         12
           5.7      Non-alienation of Benefits                                   13
           5.8      Termination and Amendment of the Plan                        13
           5.9      Stockholder Approval                                         13
           5.10     Choice of Law                                                13
           5.11     Effective Date of Plan                                       13

</TABLE>

                                       iii

<PAGE>   4
                               ATHEROGENICS, INC.
                              EQUITY OWNERSHIP PLAN

AtheroGenics, Inc. hereby establishes this Plan to be called the AtheroGenics,
Inc. Equity Ownership Plan to encourage employees of the Company to acquire an
equity interest in the Company, to make monetary payments to certain employees
based upon the value of the Company's Stock, or based upon achieving certain
goals on a basis mutually advantageous to such employees and the Company and
thus provide an incentive for continuation of the efforts of the employees for
the success of the Company, for continuity of employment and to further the
interests of the shareholders.

                              SECTION 1 DEFINITIONS

         1.1      Definitions. Whenever used herein, the masculine pronoun shall
be deemed to include the feminine, the singular to include the plural, unless
the context clearly indicates otherwise, and the following capitalized words and
phrases are used herein with the meaning thereafter ascribed:

                  (a) "Administrator" means the Board or its designee(s).

                  (b) "Award" means any Stock Option, Stock Appreciation Right,
Restricted Stock or Performance Award granted under the Plan.

                  (c) "Beneficiary" means the person or persons designated by a
Participant to exercise an Award in the event of the Participant's death while
employed by the Company, or in the absence of such designation, the executor or
administrator of the Participant's estate.

                  (d) "Board" means the Board of Directors of the Company.

                  (e) "Cause" means conduct by the Participant amounting to (1)
fraud or dishonesty against the Company, (2) willful misconduct, repeated
refusal to follow the reasonable directions of an individual or group authorized
to give such directions, or knowing violation of law in the course of
performance of the duties of Participant's employment with the Company, (3)
repeated absences from work without a reasonable excuse, (4) intoxication with
alcohol or drugs while on the Company's premises during regular business hours,
(5) a conviction or plea of guilty or nolo contendere to a felony or a crime
involving dishonesty, or (6) a breach or violation of the terms of any
employment or other agreement to which Participant and the employer are party.

                  (f) "Change in Control" shall be deemed to have occurred if
(i) a tender offer shall be made and consummated of the ownership of 50% or more
of the outstanding voting securities of the Company, (ii) the Company shall be
merged or consolidated with another

                                      -1-
<PAGE>   5
corporation and as a result of such merger or consolidation less than 50% of the
outstanding voting securities of the surviving or resulting corporation shall be
owned in the aggregate by the former shareholders of the Company, other than
affiliates (within the meaning of the Securities Exchange Act of 1934) of any
party to such merger or consolidation, (iii) the Company shall sell
substantially all of its assets to another corporation which corporation is not
wholly owned by the Company, or (iv) a person, within the meaning of Section
3(a)(9) or of Section 13(d)(3) (as in effect on the date hereof) of the
Securities Exchange Act of 1934, shall acquire 50% or more of the outstanding
voting securities of the Company (whether directly, indirectly beneficially or
of record). For purposes hereof, ownership of voting securities shall take into
account and shall include ownership as determined by applying the provisions of
Rule 13d-3(d)(1)(i) (as in effect on the date hereof) pursuant to the Securities
Exchange Act of 1934.

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

                  (h) "Company" means AtheroGenics, Inc. a Georgia corporation.

                  (i) "Constructive Discharge" means a Termination of Employment
by the Participant on account of (i) any material reduction in the Participant's
Compensation, (ii) any material reduction in the level or scope of job
responsibility or status of the Participant occurring without the consent of the
Participant, or (iii) any relocation to an office of the Company which is more
than fifty (50) miles from the office where the Participant was previously
located to which the Participant has not agreed.

                  (j) "Disability" has the same meaning as provided in the
long-term disability plan maintained by the Company. In the event of a dispute,
the determination of Disability shall be made by the Administrator. If, at any
time during the period that this Plan is in operation, the Company does not
maintain a long term disability plan, Disability shall mean a physical or mental
condition which, in the judgment of the Administrator, permanently prevents a
Participant from performing his usual duties for the Company or such other
position or job which the Company makes available to him and for which the
Participant is qualified by reason of his education, training and experience. In
making its determination the Administrator may, but is not required to, rely on
advice of a physician competent in the area to which such Disability relates.
The Administrator may make the determination in its sole discretion and any
decision of the Administrator will be binding on all parties.

                  (k) "Disposition" means any conveyance, sale, transfer,
assignment, pledge or hypothecation, whether outright or as security, inter
vivos or testamentary, with or without consideration, voluntary or involuntary.

                  (l) "Equity Ownership Agreement" means an agreement between
the Company and a Participant or other documentation evidencing an Award.

                  (m) "Expiration Date" means, the last date upon which an Award
can be exercised.

                                      -2-
<PAGE>   6

                  (n) "Fair Market Value" means, for any particular date, (i)
for any period during which the Stock shall be listed for trading on a national
securities exchange or the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), the closing price per share of Stock on such
exchange or the NASDAQ closing bid price as of the close of such trading day, or
(ii) the market price per share of Stock as determined in good faith by the
Board in the event (i) above shall not be applicable. If the Fair Market Value
is to be determined as of a day when the securities markets are not open, the
Fair Market Value on that day shall be the Fair Market Value on the next
succeeding day when the markets are open.

                  (o) "Incentive Stock Option" means an incentive stock option,
as defined in Code Section 422, and described in Plan Section 3.2.

                  (p) "Initial Public Offering" means the first instance in
which the Company Stock is offered for sale to the public following successful
registration of the Stock with the Securities and Exchange Commission.

                  (q) "Involuntary Termination" means a Termination of
Employment but does not include a Termination of Employment for Cause or a
Voluntary Resignation.

                  (r) "Non-Qualified Stock Option" means a stock option, other
than an option qualifying as an Incentive Stock Option, described in Plan
Section 3.2.

                  (s) "Non-Employee Board Member" means a member of the
Board who is not an employee of the Company.

                  (t) "Option" means a Non-Qualified Stock Option or an
Incentive Stock Option.

                  (u) "Over 10% Owner" means an individual who at the time an
Incentive Stock Option is granted owns Stock possessing more than 10% of the
total combined voting power of the Company or one of its Parents or
Subsidiaries, determined by applying the attribution rules of Code Section
424(d).

                  (v) "Parent" means any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company if, with respect to
Incentive Stock Options, at the time of granting of the Option, each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.

                  (w) "Participant" means an individual who receives an Award
hereunder.

                  (x) "Plan" means the AtheroGenics, Inc. Equity Ownership
Plan.

                  (y) "Retirement" means a Termination of Employment after
attaining the normal retirement age specified in the qualified retirement plan
maintained by the Company.

                                      -3-
<PAGE>   7

                  (z)  "Stock" means the Company's common stock.

                  (aa) "Stock Appreciation Right" means a stock appreciation
right described in Plan Section 3.3.

                  (ab) "Stock Award" means a stock award described in Plan
Section 3.4.

                  (ac) "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if,
with respect to Incentive Stock Options, at the time of the granting of the
Option, each of the corporations other than the last corporation in the unbroken
chain owns stock possession 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.

                  (ad) "Termination of Affiliation" means the termination of a
business relationship, for any reason, between an advisor or consultant who is a
Participant and the Company or its affiliates. A Termination of Affiliation
shall be deemed to have occurred as of the date written notice to that effect is
received by the Participant.

                  (ae) "Termination of Employment" means the termination of the
employee-employer relationship between a Participant and the Company and its
affiliates regardless of the fact that severance or similar payments are made to
the Participant, for any reason, including, but not by way of limitation, a
Voluntary Resignation, Constructive Discharge, Involuntary Termination, death,
Disability or Retirement. The Administrator shall, in its absolute discretion,
determine the effect of all matters and questions relating to Termination of
Employment, including, but not by way of limitation, the question of whether a
leave of absence constitutes a Termination of Employment, or whether a
Termination of Employment is for Cause or is a Constructive Discharge. With
regard to a member of the Board, Termination of Employment shall mean the date
on which the individual ceases to be a member of the Board for any reason.

                  (af) "Vested" means that an Award is nonforfeitable and
exercisable with regard to a designated number of shares of Stock.

                  (ag) "Voluntary Resignation" means a Termination of Employment
as a result of the Participant's resignation but does not include a Constructive
Discharge.

                                      -4-
<PAGE>   8

                             SECTION 2 GENERAL TERMS

         2.1 Purpose of the Plan. The Plan is intended to (a) provide incentive
to employees of the Company and its affiliates to stimulate their efforts toward
the continued success of the Company and to operate and manage the business in a
manner that will provide for the long-term growth and profitability of the
Company; (b) encourage stock ownership by employees by providing them with a
means to acquire a proprietary interest in the Company by acquiring shares of
Stock or to receive compensation which is based upon appreciation in the value
of Stock; and (c) provide a means of obtaining and rewarding employees,
directors, advisors and consultants.

         2.2 Stock Subject to the Plan. Subject to adjustment in accordance with
Section 5.2, 1,484,416 shares of Stock (the "Maximum Plan Shares") are hereby
reserved and subject to issuance under the Plan. At no time shall the Company
have outstanding Awards and shares of Stock issued in respect to Awards in
excess of the Maximum Plan Shares. To the extent permitted by law, the shares of
Stock attributable to the nonvested, unpaid, unexercised, unconverted or
otherwise unsettled portion of any Award that is forfeited, canceled, expired or
terminated for any reason without becoming vested, paid, exercised, converted or
otherwise settled in full shall again be available for purposes of the Plan.

         2.3 Administration of the Plan. The Plan shall be administered by the
Administrator. The Administrator shall have full authority in its discretion to
determine the employees of the Company or its affiliates to whom Awards shall be
granted and the terms and provisions of Awards, subject to the Plan. Subject to
the provisions of the Plan, the Administrator shall have full and conclusive
authority to interpret the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of the
respective Equity Ownership Agreements and to make all other determinations
necessary or advisable for the proper administration of the Plan. The
Administrator's determination under the Plan need not be uniform and may be made
by it selectively among persons who receive, or are eligible to receive, Awards
under the Plan (whether or not such persons are similarly situated). The
Administrator's decisions shall be final and binding on all Participants.

         2.4 Eligibility and Limits. Participants in the Plan shall be selected
by the Administrator. No Participant may be granted Awards in excess of 30% of
the Maximum Plan Shares. In the case of Incentive Stock Options, the aggregate
Fair Market Value (determined as at the date an Incentive Stock Option is
granted) of Stock with respect to which Stock Options intended to meet the
requirements of Code Section 422 become exercisable for the first time by an
individual during any calendar year under all plans of the Company and its
Parents and Subsidiaries shall not exceed $100,000; provided further, that if
the limitation is exceeded, the Incentive Stock Option(s) which cause the
limitation to be exceeded shall be treated as Non-Qualified Stock Option(s).

                                      -5-
<PAGE>   9

                            SECTION 3 TERMS OF AWARDS

         3.1      Terms and Conditions of All Awards.

                  (a) The number of shares of Stock as to which an Award shall
be granted shall be determined by the Administrator in its sole discretion,
subject to the provisions of Sections 2.2 and 2.4 as to the total number of
shares available for grants under the Plan.

                  (b) Each Award shall be evidenced by an Equity Ownership
Agreement in such form as the Administrator may determine is appropriate,
subject to the provisions of the Plan.

                  (c) The date an Award is granted shall be the date on which
the Administrator has approved the terms and conditions of the Equity Ownership
Agreement and has determined the recipient of the Award and the number of shares
covered by the Award and has taken all such other action necessary to complete
the grant of the Award.

                  (d) The Administrator may provide in any Equity Ownership
Agreement a vesting schedule. The vesting schedule shall specify when such
Awards shall become Vested and thus exercisable. The Administrator may
accelerate the vesting schedule set forth in the Equity Ownership Agreement if
the Administrator determines that it is in the best interests of the Company and
Participant to do so. Notwithstanding any vesting schedule which may be
specified in an Equity Ownership Agreement, or any determination made by the
Administrator, no award will vest if, to do so, would create a situation in
which the exercisability of any such Award would result in an "excess parachute
payment" within the meaning of Section 280G of the Code.

                  (e) Awards shall not be transferable or assignable except by
will or by the laws of descent and distribution and shall be exercisable, during
the Participant's lifetime, only by the Participant, or in the event of the
Disability of the Participant, by the legal representative of the Participant.

         3.2      Terms and Conditions of Options. At the time any Option is
granted, the Administrator shall determine whether the Option is to be an
Incentive Stock Option or a Non-Qualified Stock Option, and the Option shall be
clearly identified as to its status as an Incentive Stock Option or a
Non-Qualified Stock Option. At the time any Incentive Stock Option is exercised,
the Company shall be entitled to place a legend on the certificates representing
the shares of Stock purchased pursuant to the Option to clearly identify them as
shares of Stock purchased upon exercise of an Incentive Stock Option. An
Incentive Stock Option may only be granted within ten (10) years from the date
the Plan, as amended and restated, is adopted or the date such Plan is approved
by the Company's stockholders, whichever is earlier. Incentive stock options may
only be granted to employees of the Company.

                  (a) Option Price. Subject to adjustment in accordance with
Section 5.2 and the other provisions of this Section 3.2, the exercise price
(the "Exercise Price") per share of the

                                      -6-
<PAGE>   10

Stock purchasable under any Option shall be as set forth in the applicable
Equity Ownership Agreement. With respect to each grant of an Incentive Stock
Option to a Participant who is not an Over 10% Owner, the Exercise Price per
share shall not be less than the Fair Market Value on the date the Option is
granted. With respect to each grant for an Incentive Stock Option to a
Participant who is an Over 10% Owner, the Exercise Price shall not be less than
110% of the Fair Market Value on the date the Option is granted.

                  (b) Option Term. The Equity Ownership Agreement shall set
forth the term of each option. Any Incentive Stock Option granted to a
Participant who is not an Over 10% Owner shall not be exercisable after the
expiration of ten (10) years after the date the Option is granted. Any Incentive
Stock Option granted to an Over 10% Owner shall not be exercisable after the
expiration of five (5) years after the date the Option is granted. In either
case, the Administrator may specify a shorter term and state such term in the
Equity Ownership Agreement.

                  (c) Payment. Payment for all shares of Stock purchased
pursuant to exercise of an Option shall be made in any form or manner authorized
by the Administrator in the Equity Ownership Agreement or by amendment thereto,
including, but not limited to, cash or, if the Equity Ownership Agreement
provides, (i) by delivery or deemed delivery (based on an attestation to the
ownership thereof) to the Company of a number of shares of Stock which have been
owned by the holder for at least six (6) months prior to the date of exercise
having an aggregate Fair Market Value on the date of exercise equal to the
Exercise Price or (ii) by tendering a combination of cash, and Stock. Payment
shall be made at the time that the Option or any part thereof is exercised, and
no shares shall be issued or delivered upon exercise of an option until full
payment has been made by the Participant. The holder of an Option, as such,
shall have none of the rights of a stockholder.

                  (d) Conditions to the Exercise of an Option. Each Option
granted under the Plan shall be exercisable by whom, at such time or times, or
upon the occurrence of such event or events, and in such amounts, as the
Administrator shall specify in the Equity Ownership Agreement; provided,
however, that subsequent to the grant of an Option, the Administrator, at any
time before complete termination of such Option, may accelerate the time or
times at which such Option may be exercised in whole or in part, including,
without limitation, upon a Change in Control and may permit the Participant or
any other designated person acting for the benefit of the Participant to
exercise the Option, or any portion thereof, for all or part of the remaining
Option term notwithstanding any provision of the Equity Ownership Agreement to
the contrary.

                  (e) Termination of Incentive Stock Option. With respect to an
Incentive Stock Option, in the event of Termination of Employment of a
Participant, the Option or portion thereof held by the Participant which is
unexercised shall expire, terminate, and become unexercisable no later than the
expiration of three (3) months after the date of Termination of Employment;
provided, however, that in the case of a holder whose Termination of Employment
is due to death or Disability, one (1) year shall be substituted for such three
(3) month period. For purposes of this Subsection (e), Termination of Employment
of the Participant shall not be deemed to have occurred if the Participant is
employed by another corporation (or a parent or

                                      -7-
<PAGE>   11

subsidiary corporation of such other corporation) which has assumed the
Incentive Stock Option of the Participant in a transaction to which Code Section
424(a) is applicable.

                  (f) Special Provisions for Certain Substitute Options.
Notwithstanding anything to the contrary in this Section 3.2, any Option issued
in substitution for an option previously issued by another entity, which
substitution occurs in connection with a transaction to which Code Section
424(a) is applicable, may provide for an exercise price computed in accordance
with such Code Section and the regulations thereunder and may contain such other
terms and conditions as the Administrator may prescribe to cause such substitute
Option to contain as nearly as possible the same terms and conditions (including
the applicable vesting and termination provisions) as those contained in the
previously issued option being replaced thereby.

         3.3      Terms and Conditions of Stock Appreciation Rights. A Stock
Appreciation Right may be granted in connection with all or any portion of a
previously or contemporaneously granted Award or not in connection with an
Award. A Stock Appreciation Right shall entitle the Participant to receive the
excess of (1) the Fair Market Value of a specified or determinable number of
shares of the Stock at the time of payment or exercise over (2) a specified
price which, in the case of a Stock Appreciation Right granted in connection
with an Option, shall be not less than the Exercise Price for that number of
shares. A Stock Appreciation Right granted in connection with an Award may only
be exercised to the extent that the related Award has not been exercised, paid
or otherwise settled. The exercise of a Stock Appreciation Right granted in
connection with an Award shall result in a pro rata surrender or cancellation of
any related Award to the extent the Stock Appreciation Right has been exercised.

                  (a) Payment. Upon payment or exercise of a Stock Appreciation
Right, the Company shall pay to the Participant the appreciation in cash or
shares of Stock (valued at the aggregate Fair Market Value on the date of
payment or exercise) as provided in the Equity Ownership Agreement or, in the
absence of such provision, as the Administrator may determine.

                  (b) Conditions to Exercise. Each Stock Appreciation Right
granted under the Plan shall be exercisable or payable at such time or times, or
upon the occurrence of such event or events, and in such amounts, as the
Administrator shall specify in the Equity Ownership Agreement; provided,
however, that subsequent to the grant of a Stock Appreciation Right, the
Administrator, at any time before complete termination of such Stock
Appreciation Right, may accelerate the time or times at which such Stock
Appreciation Right may be exercised or paid in whole or in part.

         3.4      Terms and Conditions of Stock Awards. The number of shares of
Stock subject to a Stock Award and restrictions or conditions on such shares, if
any, shall be as the Administrator determines, and the certificate for such
shares shall bear evidence of any restrictions or conditions. Subsequent to the
date of the grant of the Stock Award, the Administrator shall have the power to
permit, in its discretion, an acceleration of the expiration of an applicable
restriction period with respect to any part or all of the shares awarded to a
Participant. The Administrator may require a cash payment from the Participant
in an amount no greater than the aggregate Fair

                                      -8-
<PAGE>   12
Market Value of the shares of Stock awarded determined at the date of grant in
exchange for the grant of a Stock Award or may grant a Stock Award without the
requirement of a cash payment.

         3.5      Treatment of Awards Upon Termination of Employment or
Affiliation. Except as otherwise provided by Plan Section 3.2(e), any award
under this Plan to a Participant who incurs a Termination of Employment or
Affiliation may be canceled, accelerated, paid or continued, as provided in the
Equity Ownership Agreement or, in the absence of such provision, as the
Administrator may determine. The portion of any award exercisable in the event
of continuation or the amount of any payment due under a continued award may be
adjusted by the Administrator to reflect the Participant's period of service
from the date of grant through the date of the Participant's Termination of
Employment or Affiliation or such other factors as the Administrator determines
are relevant to its decision to continue the award.

                         SECTION 4 RESTRICTIONS ON STOCK

         4.1      Escrow of Shares. Any certificates representing the shares of
Stock issued under the Plan shall be issued in the Participant's name, but, if
the Equity Ownership Agreement so provides, the shares of Stock shall be held by
a custodian designated by the Administrator (the "Custodian"). Each Equity
Ownership Agreement providing for transfer of shares of Stock to the Custodian
shall appoint the Custodian as the attorney-in-fact for the Participant for the
term specified in the Equity Ownership Agreement, with full power and authority
in the Participant's name, place and stead to transfer, assign and convey to the
Company any shares of Stock held by the Custodian for such Participant, if the
Participant forfeits the shares under the terms of the Equity Ownership
Agreement. During the period that the Custodian holds the shares subject to this
Section, the Participant shall be entitled to all rights, except as provided in
the Equity Ownership Agreement, applicable to shares of Stock not so held. Any
dividends declared on shares of Stock held by the Custodian shall, as the
Administrator may provide in the Equity Ownership Agreement, be paid directly to
the Participant or, in the alternative, be retained by the Custodian until the
expiration of the term specified in the Equity Ownership Agreement and shall
then be delivered, together with any proceeds, with the shares of Stock to the
Participant or the Company, as applicable.

         4.2      Forfeiture of Shares. Notwithstanding any vesting schedule set
forth in any Equity Ownership Agreement, in the event that the Participant
violates a non competition agreement as set forth in the Equity Ownership
Agreement, all Awards and shares of Stock issued to the holder pursuant to the
Plan shall be forfeited; provided, however, that the Company shall return to the
holder the lesser of any consideration paid by the Participant in exchange for
Stock issued to the Participant pursuant to the Plan for the then Fair Market
Value of the Stock forfeited hereunder.

         4.3      Restrictions on Transfer. The Participant shall not have the
right to make or permit to exist any Disposition of the shares of Stock issued
pursuant to the Plan except as provided in the Plan or the Equity Ownership
Agreement. Any Disposition of the shares of Stock issued under the Plan by the
Participant, not made in accordance with the Plan or the

                                      -9-
<PAGE>   13
Equity Ownership Agreement, including, but not limited to, any right of
repurchase or right of first refusal, shall be void. The Company shall not
recognize, or have the duty to recognize, any Disposition not made in accordance
with the Plan and the Equity Ownership Agreement, and the shares of Stock so
transferred shall continue to be bound by the Plan and the Equity Ownership
Agreement.

                                      -10-
<PAGE>   14

                          SECTION 5 GENERAL PROVISIONS

         5.1      Withholding. The Company shall deduct from all cash
distributions under the Plan any taxes required to be withheld by federal, state
or local government. Whenever the Company proposes or is required to issue or
transfer shares of Stock under the Plan or upon the vesting of any Stock Award,
the Company shall have the right to require the recipient to remit to the
Company an amount sufficient to satisfy any federal, state and local withholding
tax requirements prior to the delivery of any certificate or certificates for
such shares or the vesting of such Stock Award. A Participant may pay the
withholding tax in cash, or, if the Equity Ownership Agreement provides, a
Participant may also elect to have the number of shares of Stock he is to
receive reduced by, or with respect to a Stock Award, tender back to the
Company, the smallest number of whole shares of Stock which, when multiplied by
the Fair Market Value of the shares determined as of the Tax Date (defined
below), is sufficient to satisfy federal, state and local, if any, withholding
taxes arising from exercise or payment of an Award (a "Withholding Election"). A
Participant may make a Withholding Election only if both of the following
conditions are met:

                  (a) The Withholding Election must be made on or prior to the
date on which the amount of tax required to be withheld is determined (the "Tax
Date") by executing and delivering to the Company a properly completed notice of
Withholding Election as prescribed by the Administrator; and

                  (b) Any Withholding Election made will be irrevocable;
however, the Administrator may in its sole discretion approve or give no effect
to the Withholding Election.

         5.2      Changes in Capitalization; Merger; Liquidation.

                  (a) The number of shares of Stock reserved for the grant of
Options, Dividend Equivalent Rights, Performance Unit Awards, Phantom Shares,
Stock Appreciation Rights and Stock Awards; the number of shares of Stock
reserved for issuance upon the exercise or payment, as applicable, of each
outstanding Option, Dividend Equivalent Right, Performance Unit Award, Phantom
Share and Stock Appreciation Right and upon vesting or grant, as applicable, of
each Stock Award; the Exercise Price of each outstanding Option and the
specified number of shares of Stock to which each outstanding Dividend
Equivalent Right, Phantom Share and Stock Appreciation Right pertains may be
proportionately adjusted by the Administrator for any increase or decrease in
the number of issued shares of Stock resulting from a subdivision or combination
of shares or the payment of a stock dividend in shares of Stock to holders of
outstanding shares of Stock or any other increase or decrease in the number of
shares of Stock outstanding effected without receipt of consideration by the
Company.

                  (b) In the event of a merger, consolidation or other
reorganization of the Company or tender offer for shares of Stock, the
Administrator may make such adjustments with respect to awards and take such
other action as it deems necessary or appropriate to reflect or in anticipation
of such merger, consolidation, reorganization or tender offer, including,
without limitation, the substitution of new awards, the termination or
adjustment of outstanding awards,

                                      -11-
<PAGE>   15
the acceleration of awards or the removal of restrictions on outstanding awards.
Any adjustment pursuant to this Section 5.2 may provide, in the Administrator's
discretion, for the elimination without payment therefore of any fractional
shares that might otherwise become subject to any Award.

                  (c) The existence of the Plan and the Awards granted pursuant
to the Plan shall not affect in any way the right or power of the Company to
make or authorize any adjustment, reclassification, reorganization or other
change in its capital or business structure, any merger or consolidation of the
Company, any issue of debt or equity securities having preferences or priorities
as to the Stock or the rights thereof, the dissolution or liquidation of the
Company, any sale or transfer of all or any part of its business or assets, or
any other corporate act or proceeding.

         5.3      Cash Awards. The Administrator may, at any time and in its
discretion, grant to any holder of an Award the right to receive, at such times
and in such amounts as determined by the Administrator in its discretion, a cash
amount which is intended to reimburse such person for all or a portion of the
federal, state and local income taxes imposed upon such person as a consequence
of the receipt of the Award or the exercise of rights thereunder.

         5.4      Compliance with Code. All Incentive Stock Options to be
granted hereunder are intended to comply with Code Section 422, and all
provisions of the Plan and all Incentive Stock Options granted hereunder shall
be construed in such manner as to effectuate that intent.

         5.5      Right to Terminate Employment. Nothing in the Plan or in any
Award shall confer upon any Participant the right to continue as an employee or
officer of the Company or any of its affiliates or affect the right of the
Company or any of its affiliates to terminate the Participant's employment at
any time.

         5.6      Restrictions on Delivery and Sale of Shares; Legends. Each
Award is subject to the condition that if at any time the Administrator, in its
discretion, shall determine that the listing, registration or qualification of
the shares covered by such Award upon any securities exchange or under any state
or federal law is necessary or desirable as a condition of or in connection with
the granting of such Award or the purchase or delivery of shares thereunder, the
delivery of any or all shares pursuant to such Award may be withheld unless and
until such listing, registration or qualification shall have been effected. If a
registration statement is not in effect under the Securities Act of 1933 or any
applicable state securities laws with respect to the shares of Stock purchasable
or otherwise deliverable under Awards then outstanding, the Administrator may
require, as a condition of exercise of any Option or as a condition to any other
delivery of Stock pursuant to an Award, that the Participant or other recipient
of an Award represent, in writing, that the shares received pursuant to the
Award are being acquired for investment and not with a view to distribution and
agree that shares will not be disposed of except pursuant to an effective
registration statement, unless the Company shall have received an opinion of
counsel that such disposition is exempt from such requirement under the
Securities Act of 1933 and any applicable state securities laws. The Company may
include on certificates representing shares delivered pursuant to an Award such
legends referring to the foregoing

                                      -12-
<PAGE>   16
representations or restrictions or any other applicable restrictions on resale
as the Company, in its discretion, shall deem appropriate.

         5.7      Non-alienation of Benefits. Other than as specifically
provided with regard to the death of a Participant, no benefit under the Plan
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge; and any attempt to do so shall be
void. No such benefit shall, prior to receipt by the Participant, be in any
manner liable for or subject to the debts, contracts, liabilities, engagements
or torts of the Participant.

         5.8      Termination and Amendment of the Plan. The Board at any time
may amend or terminate the Plan without stockholder approval; provided, however,
that the Board may condition any amendment on the approval of stockholders of
the Company if such approval is necessary or advisable with respect to tax,
securities or other applicable laws. No such termination or amendment without
the consent of the holder of an Award shall adversely affect the rights of the
Participant under such Award.

         5.9      Stockholder Approval. The Plan shall be submitted to the
stockholders of the Company for their approval within twelve (12) months before
the adoption of the Plan by the Board. If such approval is not obtained, any
Award granted hereunder shall be void.

         5.10     Choice of Law. The laws of the State of Georgia shall govern
the Plan, to the extent not preempted by federal law.

         5.11     Effective Date of Plan.  The Plan shall be effective as of
July 30, 1997.

                               * * * * * * * * * *

ATHEROGENICS, INC.                             ATTEST:

By: /s/ Russell M. Medford                     /s/ Mark Colonnese
   ------------------------------              --------------------------------
      Russell M. Medford, MD, PhD              Mark Colonnese
      President and C.E.O.                     Assistant Secretary

                                               [CORPORATE SEAL]

                                      -13-
<PAGE>   17
                            [LOGO]ATHEROGENICS, INC.

                                    FORM OF

                           EQUITY OWNERSHIP AGREEMENT

                                   RELATING TO

                             INCENTIVE STOCK OPTIONS

                                      NAME
                                     99I-##

<PAGE>   18
                                    FORM OF
                               ATHEROGENICS, INC.
                           EQUITY OWNERSHIP AGREEMENT

         THIS EQUITY OWNERSHIP AGREEMENT ("Agreement") is made and entered into
between AtheroGenics, Inc. ("Company") a Georgia corporation and Name N. Name
("Grantee").

                                   WITNESSETH:

         WHEREAS, the Board of Directors ("Board") of the Company has approved
the grant of Stock Options to selected employees pursuant to the AtheroGenics,
Inc. Equity Ownership Plan ("Plan"); and

         WHEREAS, the Grantee has been selected to receive Incentive Stock
Options under the Plan;

         NOW, THEREFORE, in consideration of the above premises, the Company and
the Grantee agree as set forth below:

         For purposes of this Agreement, the capitalized terms used herein, but
defined, shall have the meaning given to such terms by the AtheroGenics, Inc.
Equity Ownership Plan adopted July 30, 1997.

                            I. GRANT OF STOCK OPTIONS

         Subject to the terms and conditions set forth herein and in the Plan
which is attached hereto and made a part hereof the Grantee is hereby awarded
Incentive Stock Options to purchase ### shares of Stock of the Company. For
purposes of this Agreement, the Date of Grant of the Options is Month ##, 2XXX.

                               II. EXERCISE PRICE

         Each Option granted above shall have an Exercise Price of $.##, which
is equal to the Fair Market Value of a share of Stock of the Company as defined
in the Plan as of the above stated Date of Grant.

                                       2
<PAGE>   19

                                  III. VESTING

         The Grantee may exercise only those Options which are Vested and have
not yet expired as set forth in Section IV. Otherwise, unless specified in the
special rules which follow, Options granted under this Agreement become Vested
in accordance with Schedule A attached. (For purposes of determining the Monthly
Anniversary of the Date of Grant of an Option, if the Date of Grant occurs on
the 29th, 30th or 31st day of the month, and the month during which the Monthly
Anniversary is to be determined does not contain such a 29th, 30th or 31st day,
respectively, the last day of such month shall be considered the Monthly
Anniversary of the Date of Grant.)

Notwithstanding the Vesting set forth in Schedule A, and subject to the terms of
the Plan, the following special rules apply with regard to the Options granted
under this Agreement.

(a)     In the event of the Disability of the Grantee while employed by the
        Company, the Options granted herein will become 100% Vested.

(b)     In the event of the death of the Grantee while employed by the Company,
        the Options granted herein will become 100% Vested.

(c)     In the event of the Voluntary Resignation of the Grantee, no further
        Options will become Vested after the Termination of Employment.

(d)     In the event of the Involuntary Termination of the Grantee, no further
        Options will become Vested after the Termination of Employment.

(e)     In the event of Termination of Employment of the Grantee for Cause, no
        further Options will become Vested after the Termination of Employment.

(f)     In the event of a Change of Control followed by a Constructive Discharge
        or Involuntary Termination of the Grantee within twenty-four months
        following the Change of Control, the Options granted herein will become
        100% Vested.

(g)     In the event of the Grantee's Termination of Employment for any reason
        other than those specified above, no further options will become Vested
        as of the date of such Termination of Employment.

(h)     Additionally, the Administrator may accelerate the Vesting of Grantee's
        Options if the Administrator determines that it is in the best interests
        of the Company and the Grantee.

                                  IV. EXERCISE

         The Expiration Date of the Options granted herein is the date
immediately preceding the tenth anniversary of the Date of Grant. Prior to a
Termination of Employment, the Grantee may exercise any Vested Options until the
Options' Expiration Date. The Grantee's ability to exercise any Vested Options
following the date the Grantee ceases to be an employee is as follows:

                                       3
<PAGE>   20

(a)     In the event the Grantee ceases to be an employee as a result of
        Retirement, the Grantee may exercise any Vested Options for a period of
        thirty (30) days following the date of the Grantee's Termination of
        Employment (or not later than the Expiration Date of the Options, if
        shorter).

(b)     Unless otherwise extended by death during the period of Disability, in
        the event the Grantee ceases to be an employee as a result of a
        Disability, the Grantee may exercise any Vested Options for a period of
        six (6) months following the date of the Grantee's Termination of
        Employment (or not later than the Expiration Date of the Options, if
        shorter).

(c)     In the event the Grantee dies while an employee of the Company or during
        the six (6) month period following Disability, the legal representative
        of such Grantee's estate may exercise any Vested Options on the
        Grantee's behalf for a period of six (6) months following the date of
        death (or not later than the Expiration Date of the Options, if
        shorter).

(d)     In the event the Grantee ceases to be an employee as a result of a
        Voluntary Resignation, the Grantee may exercise any Vested Options for a
        period of thirty (30) days following the date of the Grantee's
        Termination of Employment (or not later than the Expiration Date of the
        Options, if shorter).

(e)     In the event the Grantee ceases to be an employee as a result of an
        Involuntary Termination, the Grantee may exercise any Vested Options for
        a period of thirty (30) days following the date of the Grantee's
        Termination of Employment (or not later than the Expiration Date of the
        Options, if shorter).

(f)     In the event that the Grantee ceases to be an employee as a result of a
        Termination of Employment for Cause, the Grantee shall have no further
        right to exercise any Option granted hereunder effective with the
        Company's delivery (or deemed delivery) of notice to the Grantee of such
        Termination of Employment for Cause.

(g)     In the event that the Grantee ceases to be an employee for any other
        reason not specified above, the Grantee may exercise any Vested Options
        for a period of thirty (30) days following the date the Grantee's
        Termination of Employment (or not later than the Expiration Date of the
        Options, if shorter).

         Neither Grantee nor any other person entitled to exercise the Options
under the terms of the Plan shall be, or have any of the rights or privileges
of, a shareholder of the Company in respect to any shares of Stock issuable upon
exercise of the Option, unless and until the Exercise Price for such shares has
been paid in full.

                                       4
<PAGE>   21

                            V. DISPOSITIONS OF STOCK

         Prior to an Initial Public Offering, the Grantee may not sell,
exchange, transfer, pledge or otherwise dispose of any Stock acquired through
the exercise of any Option granted hereunder until after the expiration of a six
(6) month period following the transfer of such Stock to the Grantee.

         In the event of, and after an Initial Public Offering, the Grantee, by
acceptance hereof, hereby represents, warrants and agrees that, upon exercise of
this Option, unless the shares of stock are then covered by an effective
registration statement under the Securities Act of 1993, as amended (the "Act"):

(a)      the Stock is being acquired for investment and not with a view towards
         the public distribution or resale thereof;

(b)      the Grantee will not sell, transfer or assign any Stock except in
         compliance with the Act and the rules and regulations thereunder;

(c)      the certificate representing the Stock may bear an appropriate
         restrictive legend; and

(d)      the transfer agent of the Company may place a stop transfer notation
         with respect to the shares in the Stock transfer books of the Company.

                           VI. RIGHT OF FIRST REFUSAL

         Prior to an Initial Public Offering, the Company, following the
expiration of the six (6) month holding period referred to in V. above, shall
have the right of first refusal with respect to Grantee's stock at a purchase
price equal to the higher of Fair Market Value or the price offered by a bona
fide purchaser.

                             VII. NOTICE AND PAYMENT

         Subject to the limitations set forth in this Agreement, the Grantee may
exercise Options granted under this Agreement by delivering written notice to
the Company, on a form provided by the Company, specifying the number of shares
of Stock to be purchased. The Exercise Price of any Option shall be payable to
the Company in full at the time of exercise of the Option (i) in cash or its
equivalent, (ii) by delivery or deemed delivery (based on an attestation of the
ownership thereof) of previously acquired Stock which has been held by the
Grantee for at least six (6) months having a Fair Market Value on the date of
exercise equal to the total Exercise Price, or (iii) by a combination of cash
and previously acquired stock.

                                       5
<PAGE>   22

                                  VIII. GENERAL

         Administration. Administration of this agreement will be governed by
the terms and conditions set forth in the Plan in effect on the Date of Grant.
That document is incorporated in this Agreement in its entirety.

         Notices. Every notice or other communication relating to the Agreement
shall be in writing, and shall be mailed to or delivered to the party for whom
it is intended at such address as may from time to time be designated by such
party. Unless and until some other address is so designated, all notices or
communications by the Grantee to the Company shall be mailed to AtheroGenics,
Inc., 8995 Westside Parkway, Alpharetta, GA 30004, Attention: Chief Executive
Officer. All notices by the Company to the Grantee may be delivered to the
Grantee personally or may be mailed to the Grantee at the address shown on the
records of the Company.

         Withholding: The Company shall deduct from any payment of any kind due
to the Grantee, any federal, state or local taxes of any kind required by law to
be withheld with respect to the exercise of the Stock Options or require the
Grantee to remit an additional amount in cash or its equivalent to pay for such
withholding.

         Interpretation: This Agreement is subject in all respects to the terms
of the Plan, and in the event that any provision of the Agreement shall be
inconsistent with the terms of the Plan, then the terms of the Plan shall
govern. Any question of interpretation arising under this Agreement shall be
determined by the Administrator and its determinations shall be final and
conclusive upon all parties in interest.

         Counterparts: This Agreement may be executed in one or more
counterparts, each counterpart of which will be regarded for all purposes as an
original.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the _______day of ___________, .

                                    ATHEROGENICS, INC.

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                    By:
                                       ----------------------------------------
                                       Name

                                       6
<PAGE>   23

                                   SCHEDULE A
                                VESTING SCHEDULE

<TABLE>
<CAPTION>
  MONTHLY ANNIVERSARY           INCREMENTAL VESTING PERCENT           TOTAL PERCENT VESTED
  <S>                           <C>                                   <C>
           1                                0%                                 0%
           2                                0%                                 0%
           3                                0%                                 0%
           4                                0%                                 0%
           5                                0%                                 0%
           6                                0%                                 0%
           7                                0%                                 0%
           8                                0%                                 0%
           9                                0%                                 0%
           10                               0%                                 0%
           11                               0%                                 0%
           12                               25%                                25%
           13                               2%                                 27%
           14                               2%                                 29%
           15                               2%                                 31%
           16                               2%                                 33%
           17                               2%                                 35%
           18                               2%                                 37%
           19                               2%                                 39%
           20                               2%                                 41%
           21                               2%                                 43%
           22                               2%                                 45%
           23                               2%                                 47%
           24                               3%                                 50%
           25                               2%                                 52%
           26                               2%                                 54%
           27                               2%                                 56%
           28                               2%                                 58%
           29                               2%                                 60%
           30                               2%                                 62%
           31                               2%                                 64%
           32                               2%                                 66%
           33                               2%                                 68%
           34                               2%                                 70%
           35                               2%                                 72%
           36                               3%                                 75%
           37                               2%                                 77%
           38                               2%                                 79%
           39                               2%                                 81%
           40                               2%                                 83%
           41                               2%                                 85%
           42                               2%                                 87%
           43                               2%                                 89%
           44                               2%                                 91%
           45                               2%                                 93%
           46                               2%                                 95%
           47                               2%                                 97%
           48                               3%                                100%
</TABLE>

<PAGE>   24

                               ATHEROGENICS, INC.

                                    FORM OF

                           EQUITY OWNERSHIP AGREEMENT

                                   RELATING TO

                           NON-QUALIFIED STOCK OPTIONS

                                    NAME NAME

<PAGE>   25
                                    FORM OF
                               ATHEROGENICS, INC.
                           EQUITY OWNERSHIP AGREEMENT

         THIS AGREEMENT between AtheroGenics, Inc. ("Company") a Georgia
corporation and Name ("Grantee").

                                   WITNESSETH:

         WHEREAS, the Board of Directors ("Board") of the Company has approved
the grant of Stock Options to selected Participants pursuant to the
AtheroGenics, Inc. Equity Ownership Plan ("Plan"); and

         WHEREAS, the Grantee has been selected to receive Non-Qualified Stock
Options under the Plan;

         NOW, THEREFORE, in consideration of the above premises, the Company and
the Grantee agree as follows:

                            I. GRANT OF STOCK OPTIONS

         Subject to the terms and conditions set forth herein and in the Plan
which is attached hereto and made a part hereof the Grantee is hereby awarded
Non-Qualified Stock Options to purchase ### shares of Stock of the Company. For
purposes of this Agreement, the Date of Grant of the Options is Month XX, 2XXX.

                               II. EXERCISE PRICE

         Each Option granted above shall have an Exercise Price of $.XX.

                                  III. VESTING

         The Grantee may exercise only those Options which are Vested and have
not yet expired as set forth in Section IV. All Options granted under this
Agreement are 100% Vested as of the Date of Grant.

                                       2
<PAGE>   26

                                  IV. EXERCISE

         The Expiration Date of the Options granted herein is the date
immediately preceding the tenth anniversary of the Date of Grant. Prior to a
Termination of Employment or Termination of Affilliation the Grantee may
exercise any Vested Options until the Options' Expiration Date. The Grantee's
ability to exercise any Vested Options following a Termination of Employment or
Termination of Affiliation is as follows:

       (a) In the event the Grantee dies or becomes Disabled prior to a
Termination of Employment or Termination of Affiliation, the Grantee or the
legal representative of such Grantee's estate acting on the Grantee's behalf may
exercise any Vested Options for a period of six (6) months following Disability
or death (or not later than the Expiration Date of the Options, if shorter).

       (b) In the event that the Grantee incurs a Termination of Employment or
Termination of Affiliation for Cause, the Grantee shall have no further right to
exercise any Option granted hereunder effective with the Company's delivery (or
deemed delivery) of notice to the Grantee of such Termination of Employment or
Termination of Affiliation for Cause.

       (c) In the event that the Grantee incurs a Termination of Employment or
Termination of Affiliation for any other reason not specified above, the Grantee
may exercise any Vested Options for a period of thirty (30) days following the
date of the Grantee's Termination of Employment or Termination of Affiliation
(or not later than the Expiration Date of the Options, if shorter).

         Neither Grantee nor any other person entitled to exercise the Options
under the terms of the Plan shall be, or have any of the rights or privileges
of, a shareholder of the Company in respect to any shares of Stock issuable upon
exercise of the Option, unless and until the Exercise Price for such shares has
been paid in full.

                            V. DISPOSITIONS OF STOCK

         Prior to an Initial Public Offering, the Grantee may not sell,
exchange, transfer, pledge or otherwise dispose of any Stock acquired through
the exercise of any Option granted hereunder until after the expiration of a six
(6) month period following the transfer of such Stock to the Grantee.

           In the event of, and after an Initial Public Offering, the Grantee,
by acceptance hereof, hereby represents, warrants and agrees that, upon exercise
of this Option, unless the shares of Stock are then covered by an effective
registration statement under the Securities Act of 1993, as amended (the "Act"):

         (a) the Stock is being acquired for investment and not with a view
towards the public distribution or resale thereof;

         (b) the Grantee will not sell, transfer or assign any Stock except in
compliance with the Act and the rules and regulations thereunder;

         (c) the certificate representing the Stock may bear an appropriate
restrictive legend; and

                                       3
<PAGE>   27

         (d) the transfer agent of the Company may place a stop transfer
notation with respect to the shares in the Stock transfer books of the Company.

                    VI. RIGHT OF FIRST REFUSAL AND REPURCHASE

         In the event that the Grantee shall incur a Termination of Employment
or a Termination of Affiliation for any reason including death or Disability,
the Company, following the expiration of the six (6) month holding period
referred to in Section V. above, shall have the right to repurchase some or all
of Grantee's Stock acquired through the exercise of an Option granted herein in
accordance with the following:

         (a) If the Termination of Employment or Termination of Affiliation
occurs prior to the first anniversary of the Date of Grant, all the Grantee's
Stock acquired through the exercise of an Option granted herein may be
repurchased at the purchase price originally paid for such Stock upon exercise
of the Option.

         (b) If the Termination of Employment or Termination of Affiliation
occurs on or after the first anniversary of the Date of Grant and prior to the
second anniversary of the Date of Grant a number of shares of Stock equal to 75%
of the total Options granted herein may be repurchased at the purchase price
originally paid for such stock upon exercise of the Option.

         (c) If the Termination of Employment or Termination of Affiliation
occurs on or after the second anniversary of the Date of Grant and prior to the
third anniversary of the Date of Grant a number of shares of Stock equal to 50%
of the total Options granted herein may be repurchased at the purchase price
originally paid for such stock upon exercise of the Option.

         (d) If the Termination of Employment or Termination of Affiliation
occurs on or after the third anniversary of the Date of Grant and prior to the
fourth anniversary of the Date of Grant a number of shares of Stock equal to 25%
of the total Options granted herein may be repurchased at the purchase price
originally paid for such stock upon exercise of the Option.

         Prior to an Initial Public Offering, the Company, following the
expiration of the six (6) month holding period referred to in V. above, shall
have the right of first refusal with respect to Grantee's stock at a purchase
price equal to the higher of Fair Market Value or the price offered by a bona
fide purchaser.

                             VII. NOTICE AND PAYMENT

         Subject to the limitations set forth in this Agreement, the Grantee may
exercise Options granted under this Agreement by delivering written notice to
the Company, on a form provided by the Company, specifying the number of shares
of Stock to be purchased. The Exercise Price of any Option shall be payable to
the Company in full at the time of exercise of the Option (i) in cash or its
equivalent, (ii) by delivery or deemed delivery (based on an attestation of the
ownership thereof) of previously acquired Stock which has been held by the
Grantee for at least six (6) months having a Fair Market Value on the date of
exercise equal to the total Exercise Price, or (iii) by a combination of cash
and previously acquired stock.

                                       4
<PAGE>   28

                                  VIII. GENERAL

         Administration. Administration of this agreement will be governed by
the terms and conditions set forth in the Plan in effect on the Date of Grant.
That document is incorporated in this Agreement in its entirety.

         Notices. Every notice or other communication relating to the Agreement
shall be in writing, and shall be mailed to or delivered to the party for whom
it is intended at such address as may from time to time be designated by such
party. Unless and until some other address is so designated, all notices or
communications by the Grantee to the Company shall be mailed to AtheroGenics,
Inc., 8995 Westside Parkway, Alpharetta, GA 30004. Attention: Chief Executive
Officer. All notices by the Company to the Grantee may be delivered to the
Grantee personally or may be mailed to the Grantee at the address shown on the
records of the Company.

         Withholding: The Company shall deduct from any payment of any kind due
to the Grantee, any federal, state or local taxes of any kind required by law to
be withheld with respect to the exercise of the Stock Options or require the
Grantee to remit an additional amount in cash or its equivalent to pay for such
withholding.

         Interpretation: This Agreement is subject in all respects to the terms
of the Plan, and in the event that any provision of the Agreement shall be
inconsistent with the terms of the Plan, then the terms of the Plan shall
govern. Any question of interpretation arising under this Agreement shall be
determined by the Administrator and its determinations shall be final and
conclusive upon all parties in interest.

         Counterparts: This Agreement may be executed in one or more
counterparts, each counterpart of which will be regarded for all purposes as an
original.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the _______day of ___________, 2____.

                                     By:
                                        ---------------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:
                                              ---------------------------------

                                     By:
                                        ---------------------------------------
                                        Grantee

                                       5

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