<PAGE>   1

                                                                   Exhibit 10.12


                              EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of October 21,
2000, by and between Alteon Inc., a Delaware corporation (the "Company"), and
Elizabeth A. O'Dell (the "Employee").

         WHEREAS, the Company wishes to employ the Employee as Vice President,
Finance and Administration; and

         WHEREAS, the Employee wishes to enter into the employ of the Company as
its Vice President; Finance and Administration; Treasurer and Secretary;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereby agree as follows;

         1.   Term of Employment. Subject to the terms and conditions hereof,
              the Company will employ the Employee, and the Employee will serve
              the Company, as Vice President, Finance and Administration, for a
              period beginning on the date hereof and terminating December 31,
              2003, subject to extension by mutual agreement of the Company and
              the Employee (such term, as it may be extended, is hereinafter
              referred to as the "Term of Employment").

         2.   Duties. During the Term of Employment, the Employee will serve as
              Vice President, Finance and Administration, subject to the terms
              of this Agreement and the direction and control of the Board of
              Directors, and/or the Chief Executive Officer of the Company. The
              Employee will, during the Term of Employment, serve the Company
              faithfully, diligently and competently and to the best of
              Employee's ability, and will, consistent with the dignity of Vice
              President, Finance and Administration of the Company, hold, in
              addition to the offices of Vice President, Finance and
              Administration of the Company, such other offices in the Company
              to which Employee may be appointed or assigned from time to time
              by the Board of Directors and/or the Chief Executive Officer of
              the Company and will discharge such duties in connection
              therewith. The Employee shall devote all business time to the
              performance of the duties hereunder.

         3.   Compensation. During the Term of Employment, the Company will pay
              to the Employee as compensation for the performance of Employee's
              duties and obligations hereunder a base salary at the rate of
              $145,000 per annum until December 31, 2000 and at the rate of
              $150,800 per annum for the calendar year 2001 ("Salary"), payable
              in equal semi-monthly installments. For periods after calendar
              year 2001, such Salary shall be reviewed annually by the Board of
              Directors of the Company in accordance with the Company's
              compensation program. In each of the Company's fiscal years during
              the Term of Employment, the Employee shall be eligible to receive
              a cash bonus of up to $5,000, to be awarded at the sole discretion
              of the Board of Directors of the Company. The Board shall use as a
              basis for determining the extent of such bonus awards the
              attainment of stated goals and objectives for the Employee to be
              set by the Compensation Committee of the Board after consultation
              with the Chief Executive Officer.

         4.   Other Benefits. During the Term of Employment:

              A.  The Employee shall be entitled during the Term of Employment
                  to participate in employee benefit plans and programs of the
                  Company to the extent that Employee's position, tenure,
                  salary, age, health and other qualifications make Employee
                  eligible to participate.
<PAGE>   2
                                                                   Exhibit 10.12

Employment Agreement                                                      Page 2


                  The Company does not guarantee the adoption or continuance of
                  any particular employee benefit plan or program during the
                  Term of Employment, and the Employee's participation in any
                  such plan or program shall be subject to the provisions,
                  rules, regulations and laws applicable thereto; provided,
                  however, that during the Term of Employment, the Employee
                  shall be entitled to health and hospital insurance benefits
                  consistent with the past practices of the Company in effect
                  with respect to Company personnel generally; and, further
                  provided, the Employee is eligible for protection under the
                  Alteon Inc. Change in Control Severance Benefits Plan, as in
                  effect from time to time.

              B.  The Employee shall be entitled to five weeks vacation per year
                  while employed hereunder. Such vacation may be taken by the
                  Employee at such times as do not unreasonably interfere with
                  the business of the Company. The accumulation of annual
                  vacation time earned, but not taken, will be in accordance
                  with the Company policy guidelines. Additional vacation will
                  be earned in accordance with Company policy.

         5.   Expenses. During the Term of Employment, the Company will
              reimburse the Employee for all travel and other reasonable
              business expenses incident to the rendering of services by the
              Employee under this Agreement, subject to the submission of
              appropriate vouchers and receipts in accordance with the Company's
              policy from time to time in effect.

         6.   Death or Disability.

              A.  This Agreement shall be terminated by the death of the
                  Employee. In addition, this Agreement may be terminated by the
                  Board of Directors of the Company if the Employee shall be
                  rendered incapable by illness or any other disability, from
                  complying with the terms, conditions and provisions on
                  Employee's part to be kept, observed and performed for a
                  period in excess of 180 days (whether or not consecutive) or
                  90 days consecutively, as the case may be, during a 12-month
                  period during the Term of Employment ("Disability"). If this
                  Agreement is terminated by reason of Disability of the
                  Employee, the Company shall give written notice to that effect
                  to the Employee in the manner provided herein. In the event
                  that the Employee receives disability insurance benefits paid
                  for by the Company during any period prior to termination of
                  this Agreement pursuant to this Section 6(a), the Employee's
                  Salary shall be reduced by an amount equal to such disability
                  insurance benefits during such period.

              B.  In addition to and not in substitution for any other benefits
                  which may be payable by the Company with respect to the death
                  or Disability of the Employee in the event of such death or
                  Disability, the Salary payable hereunder shall continue to be
                  paid at the then current rate for three months after the
                  termination of employment, and any bonus to which the Employee
                  would have been entitled for the year in which Employee's
                  death occurs shall be pro rated to the date of Employee's
                  death and paid not later than three months after the
                  termination of employment. In the event of the death of the
                  Employee during the Term of this Agreement, the sums payable
                  hereunder shall be paid to Employee's personal representative.

         7.   Disclosure of Information, Inventions and Discoveries. The
              Employee shall promptly disclose to the Company all processes,
              trademarks, inventions, improvements discoveries and other
              information related to the business of the Company (collectively,
              "Developments") conceived, developed or acquired by Employee alone
              or with others during the Term of Employment or during any earlier
              period of employment by the Company or any predecessor of the
              Company, whether or not during regular working hours or through
              the use of materials or facilities of the Company. All such
              Developments shall be the sole and exclusive property of
<PAGE>   3
                                                                   Exhibit 10.12

Employment Agreement                                                      Page 3


              the Company, and, upon request, the Employee shall promptly
              deliver to the Company all drawings, sketches, models and other
              data and records relating to such Developments. In the event any
              such Development shall be deemed by the Company to be patentable,
              the Employee shall, at the expense of the Company, assist the
              Company in obtaining a patent or patents thereon and execute all
              documents and do all such other acts and things necessary or
              proper to obtain letters of patents and to invest in the Company
              full right, title and interest in and to such Developments.

         8.   Non-Disclosure. The Employee shall not, at any time during or
              after the Term of Employment, divulge, furnish or make accessible
              to anyone (otherwise than in the regular course of business of the
              Company), or use for Employee's own account or for the account of
              any person, any knowledge or information with respect to
              confidential or secret processes, inventions, discoveries,
              improvements, formulae, plans, materials, devices or ideas or
              other know-how, whether patentable or not, with respect to any
              confidential or secret development or research work or with
              respect to any other confidential or secret aspects of the
              Company's business (including, without limitation, customer lists,
              supplier lists and pricing arrangements with customers or
              suppliers).

         9.   Non-Competition. The Company and the Employee agree that the
              services rendered by the Employee hereunder are unique and
              irreplaceable. The Employee hereby agrees that, during the Term of
              Employment and for a period of one year thereafter, the Employee
              shall not (i) in any geographical area in the United States or in
              those foreign countries where the Company, during the Term of
              Employment, conducts or proposes to conduct business or initiates
              activities, engage or participate in, directly or indirectly
              (whether as an officer, director, employee, partner, consultant,
              holder of an equity or debt investment, lender or in any other
              manner or capacity), or lend Employee's name (or any part or
              variant thereof) to any business which is, or as a result of the
              Employee's engagement or participation would become, competitive
              with any aspect of the business of the Company, such business
              being the commercialization of the measurement, prevention therapy
              or reversal of glucose-mediated non-enzymatic crosslinking of
              macro-molecules, and such other specific technologies in which the
              Company has, during the Term of Employment, initiated significant
              plans to develop products, (ii) deal, directly or indirectly, in a
              competitive manner with any customers doing business with the
              Company during the Term of Employment (except in connection with
              the performance of the duties and obligations of the Employee
              during the Term of Employment), (iii) solicit any officer,
              director, employee, consultant or agent of the Company to become
              an officer, director, employee, consultant or agent of the
              Employee, Employee's respective affiliates or anyone else, and
              (iv) engage in or participate in, directly or indirectly, any
              business conducted under any name that shall be the same as or
              similar to the name of the Company or any trade name used by it.
              Ownership, in the aggregate, of less than one percent of the
              outstanding shares of capital stock of any corporation with one or
              more classes of its capital stock listed on a national securities
              exchange or publicly traded in the over-the-counter market shall
              not constitute a violation of the foregoing provision.

         10.  Remedies. The Employee acknowledges that irreparable damage would
              result to the Company if the provisions of Section 7, 8, 9 or 14
              were not specifically enforced, and agrees that the Company shall
              be entitled to any appropriate legal, equitable or other remedy,
              including injunctive relief, in respect to any failure to comply
              with the provisions of Section 7, 8, 9 or 14.


         11.  Termination for Cause. In addition to any other remedy available
              to the Company, either at law or in equity, the Employee's
              employment with the Company may be terminated by the
<PAGE>   4
                                                                   Exhibit 10.12

Employment Agreement                                                      Page 4


              Board of Directors for cause, which shall include (i) the
              Employee's conviction for, or plea of nolo contendere, to a felony
              or a crime involving moral turpitude, (ii) the Employee's
              commission of an act of personal dishonesty or a breach of
              fiduciary duty involving personal profit in connection with the
              Employee's employment by the Company, (iii) the Employee's
              commission of an act which the Board of Directors shall reasonably
              have found to have involved willful misconduct or gross negligence
              on the part of the Employee in the conduct of Employee's duties
              under this Agreement, (iv) habitual absenteeism, (v) the
              Employee's material breach of any material provision of this
              Agreement, or (vii) the willful and continued failure by the
              Employee to perform substantially Employee's duties with the
              Company (other than any such failure resulting from Employee's
              incapacity due to physical or mental illness). In the event of
              termination under this Section 11, the Company's obligations under
              this Agreement shall cease and the Employee shall forfeit all
              rights to receive any future compensation under this Agreement.
              Notwithstanding any termination of this Agreement pursuant to this
              Section 11, the Employee, in consideration of Employee's
              employment hereunder to the date of such termination, shall remain
              bound by the provisions of Section 7, 8, 9 and 14 hereof.

         12.  Termination Without Cause. Each of the Company and Employee may
              terminate this Agreement at any time for any reasons whatsoever,
              without any further liability or obligation of the Company to the
              Employee or of the Employee to the Company from and after the date
              of such termination (other than liabilities or obligations accrued
              but unsatisfied on, or surviving, the date of such termination),
              by sending 30 days' prior written notice to the other party. In
              the event (a) the Company elects to terminate this Agreement prior
              to the end of the Term of Employment, or (b) the Company gives
              Employee notice of its election not to extend the Term of
              Employment beyond the expiration of the then current Term of
              Employment, or (c) by the date which is four months prior to the
              end of the then current Term of Employment, the Company has not
              offered to extend the then current Term of Employment, the Company
              shall continue to pay the Employee the full Salary (exclusive of
              bonuses, if any) as such Salary would have otherwise accrued for a
              period of six months if the effective date of such termination
              occurs prior to the first anniversary of this Agreement, and for a
              period of six months if the effective date of such termination
              occurs thereafter. In the event the Employee elects to terminate
              prior to the end of the Term of Employment, the Company's
              obligation to pay Salary shall cease as of the effective date of
              termination. Notwithstanding any termination of this Agreement
              pursuant to this Section 12, the Employee, in consideration of
              Employee's employment hereunder to the date of such termination,
              shall remain bound by the provisions of Section 7, 8, 9 and 14
              hereof. Any termination of this Agreement by the Company as
              provided in this Section 12 shall be in addition to, and not in
              substitution for, any rights with respect to termination of the
              Employee which the Company may have pursuant to Section 11.

         13.  Resignation. In the event that the Employee's services under this
              Agreement are terminated under any of the provisions of this
              Agreement (except by death), the Employee agrees to deliver
              written resignation from all positions held with the Company to
              the Board of Directors, such resignation to become effective
              immediately; provided, however, that nothing herein shall be
              deemed to affect the provisions of Section 7, 8, 9 and 14 hereof
              relating to the survival thereof following termination of the
              Employee's services hereunder, and provided, further, that except
              as expressly provided in this Agreement, the Employee shall be
              entitled to no further compensation hereunder.

         14.  Data. Upon termination of the Term of Employment or termination
              pursuant to Sections 6, 11 or 12 hereof, the Employee or
              Employee's personal representative shall promptly deliver to
<PAGE>   5
                                                                   Exhibit 10.12

Employment Agreement                                                      Page 5

              the Company all books, memoranda, plans, records and written data
              of every kind relating to the business and affairs of the Company
              which are then in Employee's possession.

         15.  Insurance. The Company shall have the right, at its own cost and
              expense, to apply for and to secure in its own name or otherwise,
              life, health or accident insurance or any or all of them covering
              the Employee, and the Employee agrees to submit to usual and
              customary medical examinations and otherwise to cooperate with the
              Company in connection with the procurement of any such insurance,
              and any claims thereunder.

         16.  Waiver of Breach. Any waiver of any breach of this Agreement shall
              not be construed to be a continuing waiver or consent to any
              subsequent breach on the part either of the Employee or of the
              Company.

         17.  Assignment. This Agreement shall inure to the benefit of and be
              binding upon the successors and assigns of the Company upon any
              sale of all or substantially all of the Company's assets, or upon
              any merger or consolidation of the Company with or into any other
              entity, all as though such successors and assigns of the Company
              and their respective successors and assigns were the Company.
              Insofar as the Employee is concerned, this Agreement, being
              personal, may not be assigned.

         18.  Severability. To the extent any provision of this Agreement shall
              be invalid or unenforceable, it shall be considered deleted
              therefrom and the remainder of such provision and of this
              Agreement shall be unaffected and shall continue in full force and
              effect. In furtherance and not in limitation of the foregoing,
              should the duration or geographical extent of, or business
              activities covered by, any provision of this Agreement be in
              excess of that which is valid and enforceable under applicable
              law, then such provision shall be construed to cover only that
              duration, extent or activities which may be validly and
              enforceable covered.

         19.  Notices. All notices, requests and other communications pursuant
              to this Agreement shall be in writing and shall be deemed to have
              been duly given, if delivered in person or by courier,
              telegraphed, telexed or by facsimile transmission or five business
              days after being sent by registered or certified mail, return
              receipt requested, postage paid, addressed as follows:

              If to the Employee:

                           Elizabeth A. O'Dell
                           53 Avon Drive
                           Essex Fells, New Jersey 07021

              If to the Company:

                           Alteon Inc.
                           170 Williams Drive
                           Ramsey, New Jersey 07446

              with a copy to:

                           Richard J. Pinto, Esq.
                           Smith, Stratton, Wise, Heher & Brennan
                           600 College Road East
                           Princeton, New Jersey 08540
<PAGE>   6
                                                                   Exhibit 10.12

Employment Agreement                                                      Page 6

              Any party may, by written notice to the other in accordance with
              this Section 19, change the address to which notices to such party
              are to be delivered or mailed.

         20.  General. Except as otherwise provided herein, the terms and
              provisions of this Agreement and any Stock Option Grant Agreements
              entered into between the Employee and the Company shall constitute
              the entire agreement by the Company and the Employee with respect
              to the subject matter hereof, and shall supersede any and all
              prior agreements or understandings between the Employee and the
              Company, whether written or oral. This Agreement may be amended or
              modified only by a written instrument executed by the Employee and
              the Company. This Agreement may be executed in any number of
              counterparts, all of which, when executed, shall be deemed to be
              an original, and all of which together shall constitute one and
              the same instrument.

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

                                   ALTEON INC.


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


                                         /s/ Elizabeth A. O'Dell
                                       -------------------------------------
                                       Elizabeth A. O'Dell