<PAGE>

                                                                    Exhibit 10.1




                                   May 5, 2003



Robert C. deGroof, Ph.D.
145 Water Crest Drive
Doylestown, Pennsylvania 18901

Dear Bob:

This letter will confirm certain matters related to your employment by Alteon
Inc. (the "Company") and shall constitute an amendment to your Employment
Agreement with the Company dated as of March 14, 2000 (the "Employment
Agreement").

Your Term of Employment, as defined in Paragraph 1 of your Employment Agreement
expired on March 14, 2003, and this letter will confirm that such Employment
Agreement is extended for an additional three years from that date to March 14,
2006.

On December 18, 2002, the Company issued and delivered to you options to
purchase 100,000 shares of the Company's common stock at an exercise price of
$1.87 per share which is the fair market value of the stock on December 18,
2002, when the Special Compensation Subcommittee of the Board approved this
award. The options will be subject to the terms set forth in the resolution of
the Compensation Committee authorizing such grant on that date, which is
attached hereto.

Paragraph 4 of your Employment Agreement ("Other Benefits") is amended to
include four (4) weeks' vacation per year.

Paragraph 5 of your Employment Agreement ("Expenses") is amended to include an
evaluation at December 31 of each year regarding commuting and housing expenses.

Paragraph 20 of your Employment Agreement ("General") is amended to include
reference to the new stock option grant agreement and this letter as part of the
"entire agreement," with respect to the subject matter of your employment by the
Company under these agreements.

Except as modified by this letter, the terms of all the foregoing enumerated
agreements shall remain in full force and effect.
<PAGE>
Robert C. deGroof, Ph.D.                                             May 5, 2003
Page 2


If the foregoing is acceptable to you, please indicate your agreement by signing
and returning the enclosed copy of this letter.

                                    Sincerely,



                                    /s/ Kenneth I. Moch
                                    ------------------------------------
                                    President and Chief Executive Officer

Attachment

Accepted and Agreed
this 8th day of May 2003.

/s/ Robert C. deGroof, Ph.D.
------------------------------------
Robert C. deGroof, Ph.D.
<PAGE>
                                   ALTEON INC.

                  SPECIAL COMPENSATION SUBCOMMITTEE RESOLUTIONS

                            Adopted December 18, 2002

      RESOLVED, that, in connection with the extension of his employment
agreement, the Company grant to Dr. deGroof an incentive stock option (or to the
extent that such option does not qualify as an incentive stock option, a
non-qualified stock option), pursuant to the Company's 1995 Stock Option Plan
(the "Plan"), to purchase 100,000 shares of common stock of the Company with an
exercise price per share of $1.87 which is current fair market value as
determined under the Plan. Such option shall be in the form of, and on such
terms and conditions as provided in, the Company's standard form of Stock Option
Grant Agreement currently in effect with such additional provisions as
contemplated by Section 4(d) of Dr. deGroof's employment agreement. Such Stock
Option Grant Agreement shall provide, on condition that Dr. deGroof is employed
by the Company on the relevant vesting dates and that option shares shall vest
as follows:

      1)    75,000 options to vest over a 36-month period at the rate of 2,083
            shares on the first day of each calendar month, commencing as of
            March 1, 2003.

      2)    25,000 options to vest in a lump sum on December 18, 2007, provided
            that such shares shall be subject to accelerated vesting on December
            18, 2005, accordingly to the following terms. The average fair
            market value for a share of the Company's Common Stock (measured as
            provided under the Plan) shall be determined for each of the trading
            days during the six-month period ending on December 18, 2005. If the
            average share value for such period is below $12, then no options
            shall vest early. If such value is $12 or more, then 6,250 options
            shall vest early for each full dollar that such value exceeds $11,
            such that all 25,000 options shall vest early if such value equals
            or exceeds $15.