<PAGE>

                                                                    Exhibit 10.2

[ALTEON LOGO]
ALTEON INC.

       DIRECTOR'S FORMULA AWARD NON-QUALIFIED STOCK OPTION GRANT AGREEMENT

Optionee:_______________________________________________________________________

Address:________________________________________________________________________

Shares Subject to Option: 20,000

Exercise Price Per Share:_______________________________________________________

Date of Grant:__________________________________________________________________

      1. Grant of Option. Alteon Inc. (the "Company"), a Delaware corporation,
hereby grants to the director 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 on the date
of the Company's first annual meeting of shareholders following the date of its
grant, provided that the Optionee is then serving as a director of the Company.

      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. This Option shall expire ten years from the Date
of Grant (the "Expiration Date") and must be exercised, if at all, on or before
the Expiration Date. Notwithstanding the foregoing, this Option shall terminate
on the date the Optionee ceases to be serving as a director of the Company if on
such date no portion of this Option is vested and exercisable pursuant to
Section 3 hereof. Once this Option, or any portion thereof, has become
exercisable, it shall remain exercisable (until the Expiration Date) regardless
of whether or not the Optionee later ceases to be a director of the Company.

      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

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                                                                    Exhibit 10.2

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 Optionee agrees that the Company may, if required by law, withhold
from the Optionee's remuneration, if any, the minimum statutory amount of
federal, state and local withholding taxes attributable to such amount that is
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.

      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. 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 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

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                                                                    Exhibit 10.2

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

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                                                                    Exhibit 10.2

                                   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

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                                                                    Exhibit 10.2

                                    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 Director's Formula Award 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:_______________________

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