FORM OF CONSULTANT'S NON-QUALIFIED STOCK OPTION GRANT AGREEMENT

EX-10.3 5 w11666exv10w3.txt FORM OF CONSULTANT'S NON-QUALIFIED STOCK OPTION GRANT AGREEMENT Exhibit 10.3 [ALTOEN LOGO] ALTEON INC. CONSULTANT'S NON-QUALIFIED STOCK OPTION GRANT AGREEMENT Optionee:_______________________________________________________________________ Address:________________________________________________________________________ Shares Subject to Option:_______________________________________________________ Exercise Price Per Share:_______________________________________________________ Date of Grant:__________________________________________________________________ Expiration Date:________________________________________________________________ Vesting Schedule: 1. Grant of Option. Alteon Inc. (the "Company"), a Delaware corporation, hereby grants to the consultant named above (the "Optionee") an option (this "Option") to purchase the total number of shares of common stock of the Company ("Common Stock") set forth above (the "Shares") at the exercise price per share set forth above (the "Exercise Price"), subject to all of the terms and conditions set forth herein, under United States securities and tax laws and the Company's 2005 Stock Plan (the "Plan") which is incorporated herein by reference. This Option is not intended to qualify as an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, and shall be considered a non-qualified stock option. 2. Vesting Schedule of Option. Subject to the terms and conditions of the Plan and this Option, this Option shall vest and become exercisable as set forth above. Notwithstanding anything to the contrary contained herein, unless previously terminated pursuant to Section 4 hereof, any portion of this Option which is not vested and exercisable on the day immediately preceding the Expiration Date shall vest and become exercisable on such date; provided, however, that this Option shall expire on the Expiration Date and must be exercised, if at all, on or before the Expiration Date. 3. Restrictions. (a) This Option may not be exercised unless such exercise is in compliance with the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, all applicable state securities laws, and the requirements of the National Association of Securities Dealers or any stock exchange upon which the Shares may then be listed, as they are in effect on the date of exercise. (b) This Option may not be exercised as to fewer than 100 Shares unless it is exercised as to all Shares as to which this Option is then exercisable. 4. Termination of Option. (a) This Option shall terminate on the Expiration Date and must be exercised, if at all, on or before the Expiration Date. This Option shall be subject to earlier termination if the Optionee ceases to be considered a consultant of the Company. The Optionee shall be considered to be a consultant of the 6-19 Exhibit 10.3 Company if engaged by the Company or any Affiliate (as defined in the Plan) to render services and is compensated for such services, including as an advisor. The payment of a director's fee by the Company shall not render a director a consultant hereunder. The Administrator (as defined in the Plan) shall have discretion to determine whether the Optionee has ceased to be a consultant of the Company or any Affiliate of the Company and the effective date on which such consulting relationship terminated (the "Termination Date"). (b) If the Optionee ceases to be a consultant to the Company or any Affiliate of the Company for any reason, except death, Disability (as defined in the Plan), or termination of the Consultant for "cause" (as defined in the Plan), this Option, to the extent (and only to the extent) that it would have been exercisable by the Optionee on the Termination Date, may be exercised by the Optionee within three months after the Termination Date, but in any event no later than the Expiration Date. Notwithstanding the foregoing, in the event of the Optionee's death or Disability within three months after the termination of consultancy, the Optionee or the Optionee's Survivors may exercise this Option within one year after the date of the Optionee's termination but in any event no later than the Expiration Date. (c) If the Optionee's consultancy with the Company or any Affiliate of the Company is terminated because of the death or Disability of the Optionee, this Option may be exercised by the Optionee (or the Optionee's Survivor) within one year after the Termination Date, but in any event no later than the Expiration Date. In such event this Option shall be exercisable: (i) to the extent that this Option has become exercisable but has not been exercised as of the date of death or Disability; and (ii) in the event rights to exercise this Option accrue periodically over time, to the extent of a pro rata portion through the date of death or Disability of any additional vesting rights that would have accrued on the next vesting date had the Optionee not died or become Disabled. The proration shall be based upon the number of days accrued in the current vesting period prior to the date of death or Disability. (d) If the Optionee's consultancy with the Company or any Affiliate of the Company is terminated for "cause" (as defined in the Plan) the right to exercise all or any portion of this Option shall terminate immediately as of the time the Optionee is notified his or her consultancy is terminated for cause. Notwithstanding anything herein to the contrary, if subsequent to an Optionee's termination but prior to the exercise of this Option, the Board of Directors of the Company determines that, either prior or subsequent to the Optionee's termination, the Optionee engaged in conduct which would constitute "cause" then the Optionee shall immediately cease to have any right to exercise this Option and this Option shall thereupon terminate. (e) Nothing in the Plan or this Option shall confer on the Optionee any right to continue as a consultant with the Company or any Affiliate or limit in any way the right of the Company or any Affiliate to terminate the Optionee's consulting relationship at any time, with or without cause. 5. Manner of Exercise. (a) This Option shall be exercisable by delivery to the Company or its designee of an executed Stock Option Exercise Notice and Agreement in the form attached hereto as Exhibit A, or in such other form as may be approved by the Company, which shall set forth the Optionee's election to exercise this Option, the number of Shares being purchased, any restrictions imposed on the Shares and such other representations and agreements regarding the Optionee's investment intent and access to information as may be required by the Company to comply with applicable laws. Payment of the purchase price for such Shares shall be made in accordance with Paragraph 9 of the Plan. (b) Prior to the issuance of the Shares upon exercise of this Option, the Optioneee agrees that the Company may withhold, if required by law, from the Optionee's remuneration, if any, the minimum statutory amount of federal, state and local withholding taxes attributable to such amount that is 6-20 Exhibit 10.3 considered compensation includable in such person's gross income. At the Company's discretion, the amount required to be withheld may be withheld in cash from such remuneration, or in kind from the Shares otherwise deliverable to the Optionee on exercise of the Option. The Optionee further agrees that, if the Company does not withhold an amount from the Optionee's remuneration sufficient to satisfy the Company's income tax withholding obligation, the Optionee will reimburse the Company on demand, in cash, for the amount under-withheld. (c) Provided that such notice and payment are in form and substance satisfactory to the Company, the Company shall issue the Shares registered in the name of the Optionee or the Optionee's Survivor. (d) The Optionee acknowledges and agrees that neither the Company, its shareholders nor its directors and officers, has any duty or obligation to disclose to the Optionee any material information regarding the business of the Company or affecting the value of the Shares before, at the time of, or following a termination of the consultancy of the Optionee by the Company, including, without limitation, any information concerning plans for the Company to make a public offering of its securities or to be acquired by or merged with or into another firm or entity. 6. Compliance with Laws and Regulations. The issuance and transfer of Shares shall be subject to compliance by the Company and the Optionee with all applicable requirements of federal and state securities laws and with all applicable requirements of the National Association of Securities Dealers or any stock exchange on which the Common Stock may be listed at the time of such issuance or transfer. The Optionee understands that the Company is under no obligation to register or qualify the Shares with the Securities and Exchange Commission, any state securities commission, the National Association of Securities Dealers or any stock exchange to effect such compliance. 7. Nontransferability of Option. This Option may not be transferred in any manner other than by will or by the laws of descent and distribution and may be exercised during the lifetime of the Optionee only by the Optionee. The terms of this Option shall be binding upon the executors, administrators, successors and assigns of the Optionee. However, the Optionee, with the approval of the Administrator, may transfer any portion of this Option for no consideration to or for the benefit of the Optionee's Immediate Family (including, without limitation, to a trust for the benefit of the Optionee's Immediate Family or to a partnership or limited liability company for one or more members of the Optionee's Immediate Family), subject to such limits as the Administrator may establish, and the transferee shall remain subject to all the terms and conditions applicable to this Option prior to such transfer and each such transferee shall so acknowledge in writing as a condition precedent to the effectiveness of such transfer. The term "Immediate Family" shall mean the Optionee's spouse, former spouse, parents, children, stepchildren, adoptive relationships, sisters, brothers, nieces, nephews and grandchildren (and, for this purpose, shall also include the Optionee.) The terms of this Option shall be binding upon the executors, administrators, successors and assigns of the Optionee. 8. Tax Consequences. The Optionee acknowledges that any income or other taxes due from him or her with respect to this Option or the Shares issuable pursuant to this Option shall be the Optionee's responsibility. The Optionee acknowledges that upon exercise of this Option the Optionee will be deemed to have taxable income measured by the difference between the then fair market value of the Shares received upon exercise and the price paid for such Shares pursuant to this Agreement. 9. No Rights As Stockholder Until Exercise. The Optionee shall have no rights as a stockholder with respect to Shares subject to this Agreement until registration of the Shares in the Company's share register in the name of the Optionee. Except as is expressly provided in the Plan with respect to certain changes in the capitalization of the Company, no adjustment shall be made for dividends or similar rights for which the record date is prior to the date of such registration. 10. Adjustments. The Plan contains provisions covering the treatment of Options in a number of contingencies such as stock splits and mergers. Provisions in the Plan for adjustment with respect to 6-21 Exhibit 10.3 stock subject to Options and the related provisions with respect to successors to the business of the Company are hereby made applicable hereunder and are incorporated herein by reference. 11. Interpretation. Any dispute regarding the interpretation of this Option shall be submitted by the Optionee or the Company forthwith to the Administrator, which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Administrator shall be final and binding on the Company and on the Optionee. 12. Governing Law. This Agreement shall be construed and enforced in accordance with the law of the State of Delaware, without giving effect to the conflict of law principles thereof. For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to exclusive jurisdiction in New Jersey and agree that such litigation shall be conducted in the state courts of New Jersey or the federal courts of the United States for the District of New Jersey. 13. Entire Agreement. The Plan and the Notice and Agreement attached as Exhibit A are incorporated herein by reference. This Option, the Plan and the Notice and Agreement constitute the entire agreement of the parties and supersede all prior undertakings and agreements with respect to the subject matter hereof. 14. Modifications And Amendments. The terms and provisions of this Agreement may be modified or amended as provided in the Plan. 15. Waivers And Consents. Except as provided in the Plan, the terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent. 16. Data Privacy. By entering into this Agreement, the Optionee: (i) authorizes the Company and each Affiliate, and any agent of the Company or any Affiliate administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its Affiliates such information and data as the Company or any such Affiliate shall request in order to facilitate the grant of options and the administration of the Plan; (ii) waives any data privacy rights he or she may have with respect to such information; and (iii) authorizes the Company and each Affiliate to store and transmit such information in electronic form. ALTEON INC. By: ________________________________________ Kenneth I. Moch Title: President and Chief Executive Officer 6-22 Exhibit 10.3 ACCEPTANCE The Optionee hereby acknowledges receipt of a copy of the Plan, represents that the Optionee has read and understands the terms and provisions thereof, and accepts this Option subject to all the terms and provisions of the Plan and this Option. The Optionee acknowledges that there may be adverse tax consequences upon exercise of this Option or disposition of the Shares and that the Optionee should consult a tax adviser prior to such exercise or disposition. ____________________________________________________ Signature Date 6-23 Exhibit 10.3 EXHIBIT A STOCK OPTION EXERCISE NOTICE AND AGREEMENT Alteon Inc. 6 Campus Drive Parsippany, New Jersey 07054 Attention: Secretary 1. Exercise of Option. The undersigned ("Optionee") hereby elects to exercise his or her option to purchase _________ shares (the "Shares") of the common stock, $.01 par value, of Alteon Inc. (the "Company"), under and pursuant to the terms and conditions of the Company's 2005 Stock Plan (the "Plan"), and the Consultant's Non-Qualified Stock Option Grant Agreement dated _______________ (the "Option"). 2. Representations of Optionee. Optionee acknowledges that Optionee has received, read and understood the Plan and the Option and agrees to abide by and be bound by their terms and conditions. 3. Restrictions on Transfer. Optionee understands that the Shares may not be sold or otherwise transferred unless they are registered under the Securities Act of 1933, as amended, and applicable state securities acts or unless exemptions from such registration requirements are available. Optionee understands that the Company is under no obligation to register the Shares and that an exemption may not be available or may not permit the Optionee to transfer Shares in the amounts or at the times proposed by Optionee. 4. Tax Consequences. Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee's purchase or disposition of the Shares. Optionee represents that Optionee has consulted with any tax consultant(s) Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax advice. 5. Delivery of Payment. With this Stock Option Exercise Notice and Agreement, Optionee is delivering to the Company the aggregate purchase price of the Shares that Optionee has elected to purchase and has made provision for the payment of any federal or state withholding taxes required to be paid or withheld by the Company. 6. Entire Agreement. The Plan and Option are incorporated herein by reference. This Agreement, the Plan and the Option constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and are governed by New Jersey law except for that body of law pertaining to conflict of laws. SUBMITTED BY: ACCEPTED BY: ALTEON INC. Optionee: ______________________________ By:_________________________ Social Security Number:_________________________________ Name:_______________________ Address:________________________________ Title:______________________ Dated: _________________________________ Dated:______________________ 6-24