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                                                                    Exhibit 10.1

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is made and entered into February 19, 1999 and amended
and restated as of September 20, 2002 (this "Agreement"), by and between
Triangle Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and
Chris A. Rallis ("Executive").

                              W I T N E S S E T H :

         WHEREAS, Executive has been an employee of the Company since November
1, 1995;

         WHEREAS, Executive and the Company entered into an Employment Agreement
dated February 19, 1999 (the "Original Employment Agreement"); and

         WHEREAS, the Company and Executive desire to amend and restate the
Original Employment Agreement as set forth in this Agreement and this Agreement
shall replace and supersede the Original Employment Agreement.

         NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, including the
employment of Executive by the Company under this Agreement, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

         1. EMPLOYMENT. The Company hereby employs Executive as President and
Chief Operating Officer. Executive hereby accepts such employment upon the terms
and conditions set forth herein for the Term of the Agreement, as defined in
Section 2 hereof. While so employed, Executive agrees to devote his full time
and attention to carrying out his duties and responsibilities under this
Agreement and to use his best efforts, skills and abilities to further the
interests of the Company. While employed by the Company, Executive may not work
for any other entity, in any capacity, without the prior express written consent
of the Company. Executive agrees to comply with all applicable governmental
laws, rules and regulations, and policies, standards and regulations of the
Company now existing or hereafter promulgated.

         2. TERM OF AGREEMENT.

                  (a) The term of this Agreement shall commence as of the date
         and year first above written and shall continue until December 31,
         2002, unless terminated earlier as provided herein. As used in this
         Agreement, "Term of Agreement" means the period of time from the date
         and year first above written to December 31, 2002.

                  (b) Executive is currently a member of the Company's Board of
         Directors ("Board"). Upon the termination of this Agreement for any
         reason, Executive shall deliver a written notice to the Company
         indicating that, effective with the termination of his employment,
         Executive is resigning as a member of the Board.

         3. COMPENSATION.

                  (a) BASE SALARY. Executive shall commence receiving, effective
         January 1, 2002, a base salary of $323,604 a year ("Base Salary") less
         required federal and state withholdings and other authorized
         deductions, payable in accordance with the Company's normal payroll
         schedule.

                  (b) BONUS PAYMENT. On the earlier of December 1, 2002 or the
         date of termination of this Agreement, unless such termination is by
         the Company pursuant to Section 6(b) (for Cause) or by

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         Executive pursuant to Section 6(c) (voluntary termination), Executive
         shall receive a bonus of $113,261 (less required federal and state
         withholdings and other authorized deductions), which amount shall be
         paid in a lump sum ("Bonus Payment").

         4. OTHER BENEFITS. Executive may be eligible to participate in the
Company's retirement and welfare benefit plans under the terms and conditions
established by the applicable plan documents. Executive shall be entitled
annually to paid vacation and other paid time off in compliance with all
applicable laws and in accordance with the terms and conditions of the Company's
vacation and professional leave policies, as may be amended from time to time in
the Company's sole discretion.

         5. DISABILITY PAYMENTS. If Executive becomes eligible to receive
benefits under any short-term or long-term disability plan or policy sponsored
by the Company, then all payments and benefits provided by this Agreement,
including, but not limited to, the compensation described in Section 3, will
cease, and this Agreement shall terminate when Executive is considered to be a
terminated employee under the applicable policies and procedures of the Company.

         6. TERMINATION OF EMPLOYMENT.

                  (a) TERMINATION OF EMPLOYMENT RELATIONSHIP. The employment
         relationship between the Company and Executive shall terminate
         automatically on December 31, 2002 or upon the termination of this
         Agreement by either party as provided in Section 6, whichever shall
         occur first.

                  (b) TERMINATION FOR CAUSE. The Board of Directors of the
         Company may terminate this Agreement for Cause, as defined in Section
         8, upon three (3) business days written notice which shall state the
         reason for such termination and shall be delivered to Executive in
         accordance with Section 16 hereof. Upon the mailing or the delivery in
         person of such notice, Executive's duties and authority to act on
         behalf of the Company shall cease immediately and his employment shall
         be deemed to terminate on the date fixed in the notice.

                  (c) VOLUNTARY TERMINATION. Either the Company or Executive may
         voluntarily terminate this Agreement upon thirty (30) days written
         notice, for any reason, other than death or "Retirement," as defined in
         Section 8.

                  (d) TERMINATION UPON DEATH OR RETIREMENT. This Agreement shall
         terminate automatically, except as otherwise provided herein, upon
         Executive's death or Retirement. If this Agreement is terminated on
         account of Executive's Retirement, the parties shall be required to
         carry out any provisions hereof which contemplate performance thereof
         subsequent to termination and nothing contained herein shall be deemed
         to preclude Executive and the Company from negotiating a mutually
         acceptable basis upon which Executive continues his employment by the
         Company in a full-time or part-time capacity.

                  (e) TERMINATION FOR GOOD REASON. Executive may terminate this
         Agreement at any time upon three (3) business days written notice to
         the Company for "Good Reason," as defined in Section 8.

         7. EFFECT OF TERMINATION.

                  (a) TERMINATION FOR CAUSE. If this Agreement is terminated for
         Cause pursuant to Section 6(b), the Company shall pay Executive such
         Base Salary as Executive may be entitled to receive for services
         rendered prior to the effective date of such termination and for any
         accrued but unused vacation, including any banked vacation.

                  (b) VOLUNTARY TERMINATION BY EXECUTIVE. If Executive
         voluntarily terminates this Agreement pursuant to Section 6(c), the
         Company shall pay Executive such Base Salary as Executive may be
         entitled to receive for services rendered prior to the effective date
         of such termination and for any accrued but unused vacation, including
         any banked vacation.

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                  (c) TERMINATION UPON DEATH OR RETIREMENT. If this Agreement is
         terminated on account of Executive's death or Retirement pursuant to
         Section 6(d), the Company shall pay Executive: such Base Salary as
         Executive may be entitled to receive for services rendered prior to the
         effective date of such termination; any accrued but unused vacation,
         including any banked vacation. In addition, if this Agreement is
         terminated on account of Executive's death, all outstanding options to
         purchase shares of stock of the Company granted to Executive will
         become fully vested and exercisable, and the Company's rights to
         repurchase, and all other restrictions applicable to awards of
         restricted stock, shall lapse on the date of Executive's death, subject
         to the terms and conditions of the applicable plan documents and
         agreement(s), except that any provisions of such plan documents and
         agreements to the contrary notwithstanding, Executive's estate shall
         have until and including December 31, 2004 to exercise any outstanding
         option for vested shares of the Company's stock.

                  (d) TERMINATION WITHOUT CAUSE. Except as provided in Section
         7(e), if this Agreement is terminated by the Company without Cause
         pursuant to Section 6(c), then:

                           (i) The Company shall pay Executive such Base Salary
                  as he may be entitled to receive for services rendered prior
                  to the date of such termination (the "Payment for Services
                  Rendered");

                           (ii) The Company shall pay Executive for any accrued
                  but unused  vacation,  including any banked vacation (the
                  "Vacation Payment");

                           (iii) Subject the restrictions set forth in Sections
                  9 and 10, the Company shall pay Executive an amount equal to
                  one-twelfth (1/12) of Executive's Base Salary each month for a
                  period of eighteen (18) months, less required federal and
                  state withholdings and other authorized deductions, payable in
                  accordance with the regularly scheduled payroll of the Company
                  beginning on or after the Release Date, as defined in Section
                  8 (the "Eighteen Month Payment");

                           (iv) Subject to the restrictions set forth in
                  Sections 9 and 10, if Executive timely elects to continue
                  coverage under the Company's health care plan, pursuant to the
                  Consolidated Omnibus Budget Reconciliation Act of 1985, as
                  amended ("COBRA"), the Company shall pay Executive at the end
                  of each month for the first eighteen (18) months beginning on
                  the first day of the first month following the Release Date,
                  an amount equal to Executive's monthly premium for the COBRA
                  coverage so elected (the "COBRA Payment"). The Company's
                  obligation under this Section 7(d)(iv) shall immediately cease
                  at such time as Executive becomes eligible for comparable
                  health coverage from another company. If Executive fails to
                  notify the Company that he is eligible for other health
                  coverage within thirty (30) days of becoming eligible for such
                  coverage, Executive shall be considered in breach of this
                  Agreement and shall be required to repay to the Company all
                  payments made under this Section 7(d)(iv); and

                           (v) Subject to the restrictions set forth in Section
                  9, the Company shall accelerate the vesting of any outstanding
                  option to purchase shares of stock of the Company granted to
                  Executive by one (1) year, and accelerate the lapse of all
                  repurchase rights and forfeiture restrictions applicable to
                  any restricted stock award by one (1) year, all subject to the
                  terms and conditions of the applicable plan documents and
                  agreement(s), except that, any provisions of such plan
                  documents and agreement(s) to the contrary notwithstanding,
                  Executive shall have until and including December 31, 2004 to
                  exercise any outstanding option for vested shares of the
                  Company's stock.

                  (e) TERMINATION FOLLOWING A CHANGE OF CONTROL. If this
         Agreement is terminated following a Change of Control by the Company
         without Cause, by the Executive for Good Reason, or by expiration of
         the Term on December 31, 2002, then the Company shall pay Executive the
         Payment for Services Rendered and the Vacation Payment. In addition to
         the foregoing, and subject to the restrictions set forth in Section 9:

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                           (i) the Company shall pay Executive an amount equal
                  to one-twelfth (1/12) of Executive's Base Salary each month
                  for a period of twenty-four (24) months, less required federal
                  and state withholdings and other authorized deductions, (the
                  "Twenty-Four Month Payment"), which amount shall be payable in
                  accordance with the regularly scheduled payroll of the Company
                  beginning on or after the Release Date, as defined in Section
                  8;

                           (ii) all outstanding options to purchase shares of
                  stock of the Company granted to Executive will become fully
                  vested and exercisable, and the Company's rights to
                  repurchase, and all other restrictions applicable to awards of
                  restricted stock, shall lapse, all subject to the terms and
                  conditions of the applicable plan documents and agreement(s);
                  and

                           (iii) the Company shall pay Executive the COBRA
                  Payment. The Company's obligation under this Section 7(e)(iii)
                  shall immediately cease at such time as Executive becomes
                  eligible for comparable health coverage from another company.
                  If Executive fails to notify the Company that he is eligible
                  for other health coverage within thirty (30) days of becoming
                  eligible for such coverage, Executive shall be considered in
                  breach of this Agreement and shall be required to repay to the
                  Company all payments made under this Section 7(e)(iii).

                  (f) TERMINATION UPON EXPIRATION OF AGREEMENT. If this
         Agreement is terminated due to the expiration of the Term as provided
         in Section 2:

                           (i) the Company shall pay Executive the Payment for
                  Services Rendered;

                           (ii) the Company shall pay Executive the Vacation
                  Payment;

                           (iii) subject to the restrictions in Sections 9 and
                  10, the Company shall pay Executive the Eighteen Month
                  Payment;

                           (iv) subject to the restrictions in Section 9 and 10,
                  the Company shall pay Executive the Cobra Payment. The
                  Company's obligation under this Section 7(f)(iv) shall
                  immediately cease at such time as Executive becomes eligible
                  for comparable health coverage from another company. If
                  Executive fails to notify the Company that he is eligible for
                  other health coverage within thirty (30) days of becoming
                  eligible for such coverage, Executive shall be considered in
                  breach of this Agreement and shall be required to repay to the
                  Company all payments made under this Section 7(f)(iv); and

                           (v) subject to the restrictions set forth in Section
                  9, the Company shall accelerate the vesting of any outstanding
                  option to purchase shares of stock of the Company granted to
                  Executive by one (1) year, and accelerate the lapse of all
                  repurchase rights and forfeiture restrictions applicable to
                  any restricted stock award by one (1) year, all subject to the
                  terms and conditions of the applicable plan documents and
                  agreement(s), except that any provisions of such plan
                  documents and agreements to the contrary notwithstanding,
                  Executive shall have until and through December 31, 2004 to
                  exercise any outstanding option for vested shares of the
                  Company's stock.

                  (g) Notwithstanding the foregoing, except as otherwise
         specified in Section 25, nothing herein shall be construed to entitle
         Executive to any severance benefits beyond those specified in this
         Section, and the severance benefits described in this Section are in
         lieu of any other severance benefits which may be offered by the
         Company, whether by the terms of this Agreement or otherwise, to any
         employee.

                  (h) Notwithstanding the foregoing, the Company shall have the
         right to waive or accelerate any applicable notice period for
         termination of this Agreement and may terminate this Agreement
         immediately upon payment to Executive of an amount which the Company
         determines, in its sole discretion and in good faith, to be equal to
         the amount of Base Salary Executive would have received if notice had
         not been waived or accelerated by the Company.

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         8. DEFINITIONS.

                  (a) For purposes of this Agreement, "Cause" shall be defined
         as:

                           (i) Executive being formally charged with the
                  commission of a felony, or being convicted of a misdemeanor
                  involving moral turpitude.

                           (ii) Executive's demonstrable fraud or dishonesty.

                           (iii) Executive's use of illegal drugs or any illegal
                  substance, or his use of alcohol in any manner that materially
                  interferes with the performance of his duties under this
                  Agreement.

                           (iv) Executive's intentional, reckless or grossly
                  negligent conduct detrimental to the best interests of the
                  Company, including without limitation, any misappropriation or
                  unauthorized use of the Company's property or improper
                  disclosure of confidential information.

                           (v) Executive's failure to perform material duties
                  under this Agreement if such failure has continued for twenty
                  (20) days after Executive has been notified in writing by the
                  Company of the nature of Executive's failure to perform.

                           (vi) Executive's chronic absence from work for
                  reasons other than illness.

                           (vii)  Executive's violation of the Company's policy
                  prohibiting sexual harassment.

                           (viii) Executive's violation of the Company's policy
                  prohibiting unlawful discrimination.

                  (b) For purposes of this Agreement, "Change of Control" shall
         be deemed to have occurred if:

                           (i) ASSUMPTION OR ASSIGNMENT. A merger or asset sale
                  occurs in which this Agreement is assumed or assigned;

                           (ii) TENDER OFFER OR ACQUISITION. Any "person" as
                  defined in Section 3(a)(9) of the United States Securities
                  Exchange Act of 1934 (the "Act"), including a "group" (as that
                  term is used in sections 13(d)(3) and 14(d)(2) of the Act),
                  but excluding the Company and any Executive benefit plan
                  sponsored or maintained by the Company, including any trustee
                  of such plan acting as trustee, who:

                                    (1) makes a tender or exchange offer for any
                           shares of the Company's stock pursuant to which at
                           least fifty percent (50%) of the Company's stock is
                           purchased; or

                                    (2) together with its "affiliates" and
                           "associates" (as those terms are defined in Rule
                           12b-2 under the Act) becomes the "beneficial owner"
                           (within the meaning of Rule 13d-3 under the Act) of
                           at least fifty percent (50%) of the Company's stock;

                           (iii)    MERGER OR  CONSOLIDATION.  The shareholders
                  of the Company approve one of the following  transactions to
                  which the Company is a party:

                                    (1) a merger or consolidation in which
                           securities possessing more than fifty percent (50%)
                           of the total combined voting power of the Company's
                           outstanding securities are transferred to a person or
                           persons different from the persons holding those
                           securities immediately prior to such transaction; or

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                                    (2) the sale, transfer or other disposition
                           of all or substantially all of the Company's assets
                           in complete liquidation or dissolution of the
                           Company; or

                           (iv) CHANGE IN BOARD. When, during the Term of
                  Agreement, the individuals who, at the beginning of such
                  period, constitute the Board (the "Incumbent Directors") cease
                  for any reason other than death or retirement to constitute at
                  least a majority thereof; provided, however, that a director
                  who was not a director at the beginning of the Term of
                  Agreement shall be deemed to have satisfied such requirement,
                  and be an Incumbent Director, if such director was elected by,
                  or on the recommendation of or with the approval of, at least
                  two-thirds of the directors who then qualified as Incumbent
                  Directors either actually, because they were directors at the
                  beginning of the Term of Agreement, or by prior operation of
                  this Section.

                  (c) For purposes of this Agreement, "Good Reason" shall mean
         the termination of Executive's employment by Executive following a
         Change of Control on account of (i) a change in Executive's position
         with the Company which materially reduces his level of responsibility;
         (ii) a reduction in Executive's level of compensation (including base
         salary, fringe benefits and participation in any corporate performance
         based bonus or incentive programs) by more than fifteen percent (15%);
         or (iii) a relocation of Executive's place of employment by more than
         fifty (50) miles, provided and only if such change, reduction or
         relocation is effected by the Company, without Executive's consent.

                  (d) "Release Date" shall mean the date on which the Release,
         as defined in Section 9, is effective, which date shall be set forth in
         the Release.

                  (e) For purposes of this Agreement, "Retirement" shall occur
         at the Executive's election, exercisable by ninety (90) days prior
         written notice, at the end of any fiscal year during which or after
         Executive attains age seventy (70), or age fifty-five (55) and fifteen
         (15) years of continuous service.

         9. CONDITION OF PAYMENT OF BENEFITS.

                  (a) Executive agrees that he shall be entitled to the Eighteen
         Month Payment, the COBRA Payment, the Twenty-Four Month Payment and the
         benefits under the terms of Sections 7(d)(v), 7(e)(ii) and 7(f)(v), as
         applicable, only if he timely executes a complete and general release
         in a form substantially comparable to the release set forth in EXHIBIT
         A hereto and incorporated herein by reference or in such other
         comparable form as is determined by the Company in good faith to be
         advisable due to legitimate legal or business needs of the Company, so
         long as any such changes are consistent with the intent of this
         Agreement and EXHIBIT A (the "Release"). The Release shall contain a
         release by Executive and any beneficiary of Executive entitled to
         receive all or any portion of the benefits specified in such Sections
         of any claims arising from Executive's employment or association with
         the Company or otherwise existing against the Company and its officers,
         directors, agents, employees, shareholders, and representatives at the
         time of execution of the release. The Company agrees to prepare and
         deliver to Executive for execution the Release promptly following the
         termination of employment. Notwithstanding any other provision set
         forth herein, if the Executive elects not to execute the Release, then
         Executive shall have no entitlement to the Eighteen Month Payment, the
         COBRA Payment, the Twenty-Four Month Payment, or the benefits under
         Sections 7(d)(v), 7(e)(ii) and 7(f)(v), as applicable, and Executive
         shall be entitled only to payment of an amount equal to one-twelfth
         (1/12) of Executive's Base Salary in effect at the time of the
         termination, less required federal and state withholdings and other
         authorized deductions, which amount shall be payable in a lump sum in
         accordance with the regularly scheduled payroll of the Company. In
         addition, if Executive elects not to execute the Release and he has
         received the Bonus Payment, then he shall be required to repay the
         entire Bonus Payment amount to the Company within thirty (30) days of
         the termination of his employment.

                  (b) Notwithstanding anything to the contrary contained in this
         Agreement, in the event that Section 10(d)(i) of this Agreement, to the
         extent applicable pursuant to Section 10(e), is determined to be
         unenforceable due to Executive's actions, to any extent, by a court or
         arbitration panel, whether by

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         preliminary or final adjudication, the Company shall not be liable for
         the Eighteen Month Payment or the COBRA Payments payable pursuant to
         Sections 7(d)(iv) or 7(f)(iv).

         10. NONCOMPETITION AND NONSOLICITATION.

                  (a) NEED FOR COVENANTS. Executive acknowledges that the
         Company has expended, and is expected to expend, large amounts of time,
         money and effort in researching, developing, designing and testing its
         products, developing and keeping a committed management team. Executive
         acknowledges and agrees that as an employee of the Company, he has had
         and will have access to, the benefit of, and acquire a considerable
         amount of know-how, confidential and proprietary information, and other
         valuable knowledge and goodwill with respect to the business of the
         Company, which knowledge, information, know-how and goodwill would be
         extremely detrimental to the Company if used by Executive to compete
         with the Company, and Executive agrees that the Company is entitled to
         be protected from the possibility, both during and after Executive's
         employment terminates, of Executive becoming associated with a business
         which competes with the Company. Executive further acknowledges that if
         he did become associated with such a business, such business would
         compete unfairly with the business of the Company in view of the trade
         secrets and confidential, proprietary information which has and will
         become known to the Executive by reason of being employed by the
         Company. Executive further acknowledges that the nature of the
         Company's products are such that its natural market will be worldwide
         because the development of drugs for the treatment of HIV/HBV diseases
         can be conducted worldwide and the Company's competition in the
         development of drugs for the treatment of HIV/HBV diseases is located
         throughout the world and competes in a worldwide market. Accordingly,
         Executive hereby agrees that the time, geographic and other
         restrictions contained in this Agreement are reasonable to protect the
         legitimate interests of the Company and do not unfairly restrict or
         penalize Executive.

                  (b) Executive agrees that during his employment and, for so
         long of the period after his employment terminates as he may elect to
         honor his obligations under this Section 10(b) but in any event no
         longer than eighteen (18) months following the termination of his
         employment (the "Noncompetition Period") with the Company for any
         reason and by any party, Executive will not within the Restricted Area
         defined below, directly or indirectly, engage in any other business or
         be a consultant to or general partner, employee, officer or director of
         any partnership, firm, corporation, or other entity, or act as an agent
         for any of the foregoing persons or entities, if (i) such other
         business, partnership, firm, corporation, entity or person is engaged
         in for-profit activity in the pharmaceutical industry within the
         Restricted Area, as defined below, and competes with the Company in the
         field of HIV or HBV diseases or such other field in which the Company
         has drug candidates in the clinical stage of development on the date of
         termination or expiration of this Agreement; and (ii) Executive
         performs duties in the same or similar functional area for such other
         business, partnership, firm, corporation, entity or person as are
         substantially comparable to, those performed by Executive at the
         Company; and (iii) Executive's duties are performed in the United
         States. As used in clause (i) of this Section 10(b), "competes" shall
         mean that such business, partnership, firm, corporation, entity or
         person is conducting clinical studies with respect to a proprietary
         drug compound or candidate (i.e., owned or licensed) in the HIV or HBV
         field or is marketing or co-marketing or co-promoting a drug in the HIV
         or HBV field.

                  (c) For purposes of this Agreement, Restricted Area, means
          any location within North America.

                  (d) Executive agrees that during the Term of Agreement and
          for the Noncompetition Period, he will not, in the Restricted Area:

                           (i)  encourage or solicit any employee or consultant
                  to the Company to leave the Company for any reason; or

                           (ii) solicit the business of any client or customer
                  of the Company (other than on behalf of the Company). However,
                  this obligation shall not affect any responsibility Executive

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                  may have as an employee of the Company with respect to the
                  bona fide hiring and firing of Company personnel.

                  (e) This Section 10 shall apply after termination of
         employment only in the event that (i) the Company terminates
         Executive's employment without Cause pursuant to Section 6(c) or (ii)
         this Agreement terminates due to the expiration of the Term as provided
         in Section 2. Accordingly, this Section 10 does not apply if (i) the
         Company terminates Executive's employment pursuant to Section 6(b);
         (ii) Executive voluntarily terminates his employment pursuant to
         Section 6(c); (iii) Executive terminates his employment for Good Reason
         pursuant to Section 6(c); (iv) the Company terminates Executive's
         employment without Cause following a Change of Control; or (v)
         Executive terminates his employment on account of Executive's
         Retirement pursuant to Section 6(d).

                  (f) If, for any reason, any provision of this Section 10, to
         the extent applicable pursuant to Section 10(e), is determined to be
         unenforceable due to Executive's actions, by a court or arbitration
         panel, whether by preliminary or final adjudication, or Executive
         elects not to adhere to the restrictions of Sections 10(b) or
         10(d)(ii), which is his right subject to forfeiture of his eligibility
         for the payments and benefits described herein, the Company shall cease
         immediately payment of the Eighteen Month Payment and the COBRA
         Payments payable pursuant to Sections 7(d)(iv) or 7(f)(iv). Executive
         agrees to notify the Company immediately of his election not to adhere
         to Sections 10(b) or 10(d)(ii). If Executive fails to notify the
         Company within thirty (30) days of making such election, Executive
         shall be considered in breach of this Agreement, the Company shall have
         no further obligations hereunder, and Executive shall be required to
         repay to the Company all payments made for the Eighteen Month Payment
         and the COBRA Payments payable pursuant to Sections 7(d)(iv) or
         7(f)(iv).

                  (g) The Noncompetition Period shall be extended for any period
         of time in which Executive is in violation of the provisions of Section
         10 or period(s) of time required for legal action to enforce the
         provisions of Section 10.

                  (h) Executive acknowledges and agrees that the provisions of
         Section 10 are reasonable and necessary to protect the legitimate
         business interests of the Company, and are reasonable with respect to
         time and territory.

                  (i) In the event the duration, scope or geographic area in
         Section 10 are determined to be unenforceable by a court or arbitration
         panel, the parties agree that such duration, scope or geographic area
         shall be deemed to be reduced to the greatest scope, duration or
         geographic area which would be enforceable.

                  (j) The provisions of Section 10 shall be deemed severable,
         and the invalidity or unenforceability of any provision (or part
         thereof) shall in no way affect the validity or enforceability of any
         other provisions (or remaining part thereof). Without limiting the
         foregoing, in the event any of the restrictions on competition,
         interference, or solicitation as set forth in Section 10 are determined
         to be invalid or unenforceable, the provisions of Section 10 shall be
         deemed severable, and the invalidity or unenforceability of any
         provision (or part thereof) shall in no way effect the validity or
         enforceability of any other provision (or remaining part thereof).

                  (k) The provisions of Section 10 shall survive the
         termination of this Agreement and the employment relationship between
         the parties.

         11. REMEDIES. Executive acknowledges and agrees that any breach of
Section 10(d)(i) of this Agreement will result in irreparable damage and
continuing injury to the Company. Therefore, in the event of any breach or
threatened breach of Section 10(d)(i) by Executive, Executive acknowledges and
agrees that the Company shall be entitled, without limiting any other available
legal or equitable remedy (whether conferred by statute or otherwise), to an
injunction to be issued by any court of competent jurisdiction enjoining and
restraining Executive from committing any violation or threatened violation of
Section 10(d)(i), and Executive hereby consents to the issuance of such
injunction. The Company shall not be required to post any bond to obtain any
such injunction. Executive agrees that all remedies available to the Company by
reason of a breach of any of the foregoing

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provisions of this Agreement are cumulative and that none is exclusive and that
all remedies may be exercised concurrently or consecutively at the option of the
Company.

         12. ARBITRATION. The parties agree that any and all disputes that they
have with one another which arise out of Executive's employment or under the
terms of this Agreement shall be resolved through final and binding arbitration,
as specified herein. This shall include, without limitation, disputes relating
to this Agreement, Executive's employment by the Company or the termination
thereof, claims for breach of contract or breach of the covenant of good faith
and fair dealing, and any claims of discrimination or other claims under any
federal, state or local law or regulation now in existence or hereinafter
enacted and as amended from time to time concerning in any way the subject of
Executive's employment with the Company or its termination. The only claims not
covered by this Section 12 are claims for benefits under the workers'
compensation laws or claims for unemployment insurance benefits, which will be
resolved pursuant to those laws. Binding arbitration will be conducted in
Durham, North Carolina, in accordance with the rules and regulations of the
American Arbitration Association. Each party will bear one half of the cost of
the arbitration filing and hearing fees, and the cost of the arbitrator.
Executive understands and agrees that the arbitration shall be instead of any
civil litigation and that the arbitrator's decision shall be final and binding
to the fullest extent permitted by law and enforceable by any court having
jurisdiction thereof. Notwithstanding the foregoing, the Company shall be
permitted to seek injunctive relief before any court within the State of North
Carolina for any alleged breach of Section 10(d)(i) of this Agreement.

         13. MODIFICATION. No modification, amendment, or alteration of any
provision of this Agreement shall be effective unless contained in a written
agreement signed by the parties hereto, and then such modification, amendment,
or alteration shall be effective only in the specific instances and for the
specific purposes for which given.

         14. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of the parties and their respective successors and permitted assigns.
Upon prior notice to Executive, the Company may assign this Agreement to a
wholly-owned subsidiary, "spin-off' Company, or other entity affiliated with the
Company. Executive shall not assign his rights or obligations hereunder to any
person or entity without the prior written consent of the Company.

         15. NO WAIVER. No delay or failure on the part of the Company in the
exercise of any right, power, or privilege under this Agreement shall impair any
such right, power, or privilege or be construed as a waiver of any default or
any acquiescence therein. No waiver shall be valid against the Company unless
made in writing and signed by it, and then only to the extent expressly
specified therein.

         16. NOTICES. All notices and communications provided for hereunder
shall be in writing and personally delivered or sent by first-class, registered,
or certified mail, postage prepaid, and addressed as follows:

         If to the Company:

         Triangle Pharmaceuticals, Inc.
         Attn: Director of Human Resources
         4 University Place
         4611 University Drive
         Durham, North Carolina 27707

         If to Executive:

         To the Executive's last known address as shown on the Company's
records.

Either party may change its address for notice purposes by notice to the other
party as specified herein.

         17. RESTRICTIVE LEGENDS. Promptly, and in any event within five (5)
business days after any request is made by or on behalf of Executive to remove
any restrictive legends on any vested shares of the Company's stock owned by
Executive, the Company shall instruct its stock transfer agent to remove such
restrictive legends, except to

                                       9
<Page>

the extent that such vested shares cannot be sold by Executive at the time of
such request pursuant to (i) a lock-up agreement entered into by Executive which
restricts the transfer of such shares (provided that the Company shall promptly
instruct its stock transfer agent to remove such restrictive legends following
the expiration of such lock-up period) or (ii) Rule 144 of the Regulations under
the Securities Act of 1933; provided that with respect to the portion of such
shares (if any) which Executive cannot sell pursuant to subsection (k) of Rule
144, the Company may require such notices, representations and other actions by
or from Executive and/or his/her agents as are customarily required and/or
reasonably necessary prior to directing the Company's stock transfer agent to
remove such restrictive legends therefrom. Solely with respect to this Section
17, reference to Executive shall include reference to Executive's spouse, an
immediate family member or other permissible transferee, to the extent such
transferee, consistent with applicable law, shall request the removal of any
restrictive legends. The Company agrees that any stock certificates issued upon
the exercise of options for stock of the Company shall be issued without any
restrictions on transfer. The provisions of this Section shall survive any
termination or expiration of this Agreement. Notwithstanding the foregoing, the
parties agree that (a) the lock-up periods in such agreements, if any, shall
expire upon the termination or expiration of this Agreement, provided that, upon
the reasonable request of any underwriter of the Company, Executive agrees to
consider in good faith the continuation of such lock-up periods in accordance
with their terms for a duration not to exceed three (3) months following the
termination of employment of Executive pursuant to this Agreement, provided
further that all executive officers and directors of the Company are bound by
substantially similar agreements, and (b) Executive shall in any event be deemed
for purposes of this Agreement to be able to sell pursuant to Rule 144 after
three (3) months have elapsed following the termination of employment of
Executive pursuant to this Agreement.

         18. GOVERNING LAW. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of North Carolina without reference to
its conflict of law provisions, and any legal action brought by the parties
related to this Agreement shall be brought in Durham County, North Carolina.

         19. SEVERABILITY. If any provision or part thereof contained in this
Agreement shall be invalid or unenforceable under applicable law, that provision
or part thereof shall be ineffective to the extent of such invalidity only,
without in any way affecting the remainder of this Agreement.

         20. ENTIRE AGREEMENT. This Agreement with attachments constitutes the
entire understanding of the parties with respect to the subject matter hereof.
This Agreement supersedes any and all other understandings and agreements,
either oral or in writing, between the parties hereto with respect to the
subject matter hereof and constitutes the sole and only Agreement between the
parties with respect to said subject matter. Each party to this Agreement
acknowledges that no representations, inducements, promises or agreements, oral
or otherwise, have been made by any party or by anyone acting on behalf of any
party, which are not embodied herein, and that no agreement, statement or
promise not contained in this Agreement shall be valid or binding or of any
force or effect. Notwithstanding the foregoing, Executive will adhere to and
honor all obligations to the Company as described in the Proprietary Information
and Inventions Agreement dated October 27, 1995, except that the provisions of
Section 3(h) and 3(i) of said agreement are superseded, and any agreement
providing for the award of stock options and/or restricted stock to which
Executive is a party.

         21. DUPLICATION. If a benefit promised herein is otherwise provided by
the terms of a plan or policy sponsored by the Company on account of the same
event giving rise to the benefit under this Agreement, nothing herein shall be
construed to entitle Executive to duplicate benefits; however, if the terms of
this Agreement provide for an enhanced benefit, Executive shall be entitled to
the incremental benefit hereunder whether under the plan or policy or by direct
payments from the Company.

         22. WITHHOLDING. All payments made hereunder shall be less taxes and
applicable withholdings.

         23. GENDER. The use of the masculine gender is for convenience only and
shall be deemed to refer to the applicable gender.

         24. SURVIVAL. The provisions of Sections 7 through 26 shall survive the
termination of this Agreement and the termination of Executive's employment.

                                       10
<Page>

         25. SAVING PROVISION. In the event that, prior to December 31, 2002,
(i) the Company terminates Executive's employment without Cause pursuant to
Section 6(c); or (ii) this Agreement terminates automatically following a Change
of Control, for purposes of the provisions of Section 7, this Agreement will be
deemed to have continued in effect until December 31, 2002 with the intent of
the parties being that Executive shall be paid all amounts and be entitled to
all benefits specified in Section 7 as though this Agreement remained in effect
until such date. By way of example, if this Agreement were to terminate pursuant
to clause (i) above on October 31, 2002, then the Eighteen Month Payment in
Section 7(d)(iii), the COBRA Payment in Section 7(d)(iv) and the one (1) year
periods in Sections 7(d)(v), 7(e)(ii), and 7(f)(v), as applicable, would each be
extended by a period of two months.

         26. CONFIDENTIALITY. Except with the Company's express prior written
consent or as required by law, Executive shall keep the terms of this Agreement,
excluding the terms in Sections 1, 2, 10, 11 and 12, strictly confidential, and
shall not disclose the terms of this Agreement, excluding Sections 1, 2, 10, 11
and 12, to any persons other than Executive's immediate family and legal and
financial advisors, subject to their agreement to keep such terms confidential.
If required by law to produce a copy of this Agreement or to make such
disclosure, Executive shall give the Company reasonable written notice prior to
such production or disclosure and shall cooperate with the Company to limit such
disclosure in accordance with applicable law in all reasonable respects. Nothing
herein shall be interpreted as otherwise relieving Executive from any applicable
fiduciary and confidentiality obligations.

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

                           TRIANGLE PHARMACEUTICALS, INC.

                           By:  Daniel G. Welch
                              ---------------------------------------------

                           Name:  Daniel G. Welch

                           Authorized Representative

                           EXECUTIVE

                           /s/ Chris A. Rallis                       (SEAL)
                           ------------------------------------------
                           Chris A. Rallis

                                       11<Page>

                                                                    Exhibit 10.2

                                 THIRD AMENDMENT
                                       TO
                         TRIANGLE PHARMACEUTICALS, INC.
                            1996 STOCK INCENTIVE PLAN
                (AS AMENDED AND RESTATED THROUGH MARCH 27, 1998)

         THIS THIRD AMENDMENT is made and entered into this 20th day of
September, 2002, effective as stated below, by Triangle Pharmaceuticals, Inc., a
Delaware corporation (the "Corporation").

                              W I T N E S S E T H:

         WHEREAS, the Corporation has previously adopted the Triangle
Pharmaceuticals, Inc. 1996 Stock Incentive Plan, as last amended on May 23, 2002
("Plan");

         WHEREAS, Article Six, Section IV, of the Plan provides, in part, that
the Board of Directors of the Corporation (the "Board") shall have complete and
exclusive power and authority to amend or modify the Plan in any or all
respects, subject to stockholder approval if required by applicable laws or
regulations or otherwise required by the Board;

         WHEREAS, on August 2, 2002, the Board authorized the following
amendments to the Plan, subject to the approval of the stockholders of the
Corporation at a special meeting of stockholders of the Corporation:

         (i)      increasing the number of shares of common stock available
                  for issuance under the plan by 3,000,000 shares, and

         (ii)     (ii) increasing the number of options, stock appreciation
                  rights and stock issuances which may be granted to any one
                  person in the aggregate per calendar year to 1,500,000.

         WHEREAS, on September 20, 2002 the stockholders of the Corporation
approved such amendment at the special meeting of stockholders of the
Corporation.

         NOW, THEREFORE, the Corporation hereby amends the Plan as follows:

         I. The following hereby amends and restates in its entirely Article
One, Section V.A of the Plan:

                  "The stock issuable under the Plan shall be shares of
         authorized but unissued or reacquired Common Stock, including shares
         repurchased by the Corporation on the open market. Effective September
         20, 2002, the number of shares of Common Stock reserved for issuance
         under the Plan shall be 12,162,158 shares. On January 1 of each year,
         beginning January 1, 2003, the number of shares of Common Stock
         reserved for issuance under the Plan shall automatically increase so
         that the number of authorized shares available for new grants under the
         plan on each January 1 will equal the lesser of 4.5% of the total
         number of shares of Triangle Common Stock outstanding on the preceding
         December 31st or 5,000,000 shares. For example, if on any such December
         31, there are 200,000 shares that remain available for future grants
         under the Plan, and 70,000,000 shares of Common Stock are outstanding,
         then the number of shares issuable under the Plan shall be increased by
         2,950,000 additional shares, so that 3,150,000 shares (70,000,000 x
         4.5%) are available for issuance under the Plan as of the following
         January 1."

         II. The following hereby amends and restates in its entirety Article
One, Section V.B. of the Plan:

<Page>

                  "No one person participating in the Plan may receive options,
         separately exercisable stock appreciation rights and direct stock
         issuances for more than 1,500,000 shares of Common Stock in the
         aggregate per calendar year, beginning with the 2002 calendar year."

         III. The following hereby amends and restates in its entirety Article
Six, Section 3.D of the Plan:

                  "D. On the Plan Effective Date, 2,200,000 shares of Common
         Stock were available for issuance over the term of the Plan. Such
         authorized share reserve was comprised of the number of shares which
         remained available for issuance, as of the Plan Effective Date, under
         the Predecessor Plan as last approved by the Corporation's
         stockholders, including the shares subject to the outstanding options
         incorporated into the Plan and the additional shares which were
         otherwise available for future grant, plus an additional increase of
         500,000 shares authorized by the Board and subsequently approved by the
         stockholders prior to the Section 12 Registration Date.

                  On December 4, 1997, the Board adopted an amendment to the
         Plan (the "1997 Amendment") to effect the following changes: (i)
         increase the maximum number of shares of Common Stock available for
         issuance over the term of the Plan by an additional 1,000,000 shares,
         and (ii) implement an automatic share increase feature pursuant to
         which the number of shares of Common Stock available for issuance under
         the Plan automatically increased on January 1 of each of the calendar
         years 1999, 2000 and 2001 by an amount equal to four percent (4%) of
         the total number of shares of Common Stock issued and outstanding on
         December 31st of the immediately preceding calendar year; provided,
         however, that in no event did any such annual increase exceed the
         difference between (x) 1,000,000 shares and (y) the number of shares of
         Common Stock available for future option grants under the Plan on such
         December 31 (net of all outstanding options and unvested stock
         issuances). The increase under this provision was 629,723 shares
         effective January 1, 1999, 905,791 shares effective January 1, 2000,
         and 964,315 shares effective January 1, 2001, for an aggregate of
         2,499,829 over this three year period.

                  In addition, on March 27, 1998, the Board adopted an amendment
         to the Plan (the "1998 Amendment") to effect the following change:
         under the Automatic Option Grant Program, effective with the 1998
         Annual Meeting (A) automatically grant to each individual who is first
         appointed or elected as a non-employee Board member an option to
         purchase shares of Common Stock in an amount equal to 2,000 shares of
         Common Stock plus 2,000 shares for any partial year and for each full
         year of the term for which the non-employee Board member is first
         appointed or elected, and (B) automatically grant to each individual
         who is re-elected to serve as a non-employee Board member an option to
         purchase 2,000 shares of Common Stock for each full year of the term
         for which the non-employee Board member is re-elected to the Board. The
         1997 Amendment and the 1998 Amendment were approved by the stockholders
         of the Corporation at the 1998 Annual Meeting.

                  In addition, on March 6, 2001, the Board unanimously adopted
         an amendment to the Plan (the "2001 Amendment") to (i) increase the
         maximum number of shares of Common Stock available for issuance over
         the term of the Plan by an additional 1,500,000 shares effective
         January 1, 2002, (ii) increase the maximum number of shares of Common
         Stock available for issuance over the term of the Plan by an additional
         1,500,000 shares effective January 1, 2003 and (iii) under the
         Automatic Option Grant Program, effective with the 2001 Annual Meeting
         (A) automatically grant to each individual who is first appointed or
         elected as a non-employee Board member an option to purchase 7,500
         shares of Common Stock (B) during any partial year and for each full
         year of the term for which the non-employee Board member is first
         appointed or elected, automatically grant an option to purchase 7,500
         shares of Common Stock, and (C) during each full year of the term for
         which the non-employee Board member is re-elected to the Board,
         automatically grant to each individual who is re-elected to serve as a
         non-employee Board member an option to purchase 7,500 shares of Common
         Stock. The 2001 Amendment was approved by the stockholders of the
         Corporation at the 2001 Annual Meeting.

<Page>

                  In addition, effective February 27, 2002, the Board
         unanimously adopted an amendment to the Plan (the "2002 Amendment"),
         subject to approval by the stockholders of the Corporation to (i)
         increase the number of shares of Common Stock authorized for issuance
         under the Plan by an additional 1,962,329 shares and (ii) increase the
         number of shares of Common Stock available for issuance under the Plan
         effective January 1 of each year beginning January 1, 2003 so that the
         number of authorized shares available for new grants under the plan on
         each January 1 will equal the lesser of 4.5% of the total number of
         shares of Triangle Common Stock outstanding on the preceding December
         31st or 5,000,000 shares. The 2002 Amendment was approved by the
         stockholders of the Corporation at the 2002 Annual Meeting.

                  In addition, on August 2, 2002, the Board adopted an amendment
         to the Plan (the "Second 2002 Amendment"), subject to approval by the
         stockholders of the Corporation, to (i) increase the number of shares
         of common stock available for issuance under the plan by 3,000,000
         shares, and (ii) increase the number of options, stock appreciation
         rights and stock issuances which may be granted to any one person in
         the aggregate per calendar year to 1,500,000. The Second 2002 Amendment
         was approved by the stockholders of the Corporation at a special
         meeting of stockholders on September 20, 2002."

         IV. This Amendment does not supersede the terms and conditions of the
Plan, except to the extent expressly described herein.

         IN WITNESS WHEREOF, the Corporation has caused this Amendment to be
executed by its duly authorized officer, all as of the day and year first above
written.

                                            TRIANGLE PHARMACEUTICALS, INC.

                                            By: /s/ Andrew Finkle
                                                ----------------------
                                                R. Andrew Finkle
                                                Executive Vice President,
                                                General Counsel and Secretary

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