Document:

Exhibit 10.2

 

	
  Name

  	
   

  	
  Position

  	
   

  	
  Execution Date

  
	
  A. Brian Davis

  	
   

  	
  Senior Vice President
  and Chief Financial Officer

  	
   

  	
  April 30, 2007

  
	
  Valerie M. Mulligan

  	
   

  	
  Senior Vice President,
  Quality and Regulatory Affairs

  	
   

  	
  April 30, 2007

  
	
  Bruce A. Wallin, M.D.

  	
   

  	
  Senior Vice President,
  Clinical Development and Chief Medical Officer

  	
   

  	
  April 30, 2007

  
	
  Shawn A. DeFrees, Ph.D.

  	
   

  	
  Senior
  Vice President, Research and Technical Development

  	
   

  	
  March 14, 2008

  

 

CHANGE OF CONTROL AGREEMENT

 

THIS CHANGE OF CONTROL AGREEMENT (the “Agreement”),
is dated as of                         ,
by and between NEOSE TECHNOLOGIES, INC. (the “Company”) and                         
(the “Employee”).

 

Background

 

The Employee, a senior executive of the Company, and
the Company are parties to a Change of Control Agreement dated                           
(“Original Agreement”), pursuant to which the Company and the Employee established
certain protections for the Employee in the event of his or her termination of
employment.  The parties desire to
replace the Original Agreement with this Agreement.

 

Terms

 

NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and promises contained herein, and intending to be bound
hereby, the parties agree as follows:

 

1.              Definitions.  As used herein:

 

1.1.  “Base
Salary” means, as of any given date, the annual base rate of salary payable
to the Employee by the Company, as then in effect; provided, however, that in
the case of a resignation by the Employee for the Good Reason described in Section 1.8.4,
“Base Salary” will mean the annual base rate of salary payable to the Employee
by the Company, as in effect immediately prior to the reduction giving rise to
the Good Reason.

 

1.2.  “Board”
means the Board of Directors of the Company.

 

1.3.  “Business”
means research, development, manufacture, supply, marketing, licensing, use and
sale of biologic, pharmaceutical and therapeutic materials and products and
related process technology directed to (a) the enzymatic synthesis of
complex carbohydrates for use in food, cosmetic, therapeutic, consumer and
industrial applications, (b) enzymatic synthesis or modification of the
carbohydrate portion of proteins or lipids, or modification of proteins or
lipids through the attachment of carbohydrates, 
(c) carbohydrate-based therapeutics, and (d) the development
of protein therapeutics using sialylation, fucosylation, glycosylation, GlycoPEGylationTM,
or GlycoConjugationTM.

 

1.4.  “Cause”
means fraud, embezzlement, or any other serious criminal conduct that adversely
affects the Company committed intentionally by the Employee in connection with 

 

 

his or her
employment or the performance of his or her duties as an officer or director of
the Company or the Employee’s conviction of, or plea of guilty or nolo contendere to, any felony.

 

1.5.  “Change
in Control” means a change in ownership or control of the Company effected
through:

 

1.5.1.                  the direct or indirect acquisition by
any person or related group of persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or is under common control
with, the Company) of beneficial ownership (within the meaning of Rule 13d-3
of the Securities Exchange Act of 1934, as amended) of securities possessing
more than 50% of the total combined voting power of the Company’s outstanding
securities;

 

1.5.2.                  a change in the composition of the
Board over a period of 36 months or less such that a majority of the Board
members ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (a) have been board
members continuously since the beginning of such period, or (b) have been
elected or nominated for election as Board members during such period by at
least a majority of the Board members described in clause (a) who were
still in office at the time such election or nomination was approved by the
Board;

 

1.5.3.                  the consummation of any
consolidation, share exchange or merger of the Company (a) in which the
stockholders of the Company immediately prior to such transaction do not own at
least a majority of the voting power of the entity which survives/results from
that transaction, or (b) in which a shareholder of the Company who does
not own a majority of the voting stock of the Company immediately prior to such
transaction, owns a majority of the Company’s voting stock immediately after
such transaction; or

 

1.5.4.                  the liquidation or dissolution of the
Company or any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all the assets of the
Company, including stock held in subsidiary corporations or interests held in subsidiary
ventures.

 

1.6.  “Code”
means Internal Revenue Code of 1986, as amended.

 

1.7.  “Disability”
means the Employee’s inability, by reason of any physical or mental impairment,
to substantially perform his or her regular duties as contemplated by this
Agreement, as determined by the Board in its sole discretion (after affording
the Employee the opportunity to present his or her case), which inability is
reasonably contemplated to continue for at least one year from its commencement
and at least 90 days from the date of such determination.

 

1.8.  “Good
Reason” means, without the Employee’s prior written consent, any of the
following:

 

1.8.1.                  an adverse change in the Employee’s
title;

 

2

 

1.8.2.                  a reduction in the Employee’s
authority, duties or responsibilities, or the assignment to the Employee of
duties that are inconsistent, in a material respect, with Employee’s position;

 

1.8.3.                  the relocation of the Company’s
headquarters more than 15 miles from Horsham, Pennsylvania, unless such move
reduces the Employee’s commuting time;

 

1.8.4.                  a reduction in the Employee’s Base
Salary or in the amount, expressed as a percentage of Base Salary, of the
Employee’s Target Bonus;

 

1.8.5.                  the Company’s failure to pay or make
available any material payment or benefit due under this Agreement or any other
material breach by the Company of this Agreement.

 

However,
the foregoing events or conditions will constitute Good Reason only if the
Employee provides the Company with written objection to the event or condition
within 60 days following the occurrence thereof, the Company does not reverse
or otherwise cure the event or condition within 30 days of receiving that
written objection and the Employee resigns his or her employment within 90 days
following the expiration of that cure period.

 

1.9.  “Intellectual
Property” means (a) all inventions (whether patentable or unpatentable
and whether or not reduced to practice), all improvements thereto, and all
patents and patent applications claiming such inventions, (b) all
trademarks, service marks, trade dress, logos, trade names, fictitious names,
brand names, brand marks and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith, (d) all
mask works and all applications, registrations, and renewals in connection
therewith, (e) all trade secrets (including research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, methodologies, technical data, designs, drawings and
specifications), (f) all computer software (including data, source and
object codes and related documentation), (g) all other proprietary rights,
(h) all copies and tangible embodiments thereof (in whatever form or
medium), or similar intangible personal property which have been or are
developed or created in whole or in part by the Employee (i) at any time
and at any place while the Employee is employed by Company and which, in the
case of any or all of the foregoing, are related to and used in connection with
the business of the Company, or (ii) as a result of tasks assigned to the
Employee by the Company.

 

1.10.  “Proprietary
Information” means any and all information of the Company or of any
subsidiary or affiliate of the Company.   Such Proprietary Information shall include,
but shall not be limited to, the following items and information relating to
the following items: (a) all intellectual property and proprietary rights
of the Company (including without limitation Intellectual Property), (b) computer
codes or instructions (including source and object code listings, program logic
algorithms, subroutines, modules or other subparts of computer programs and
related documentation, including program notation), computer processing systems
and techniques, all computer inputs and outputs (regardless of the media on
which stored or located), hardware and software configurations, designs,
architecture and interfaces, (c) business research, 

 

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studies,
procedures and costs, (d) financial data, (e) distribution methods, (f) marketing
data, methods, plans and efforts, (g) the identities of actual and
prospective customers, contractors and suppliers, (h) the terms of
contracts and agreements with customers, contractors and suppliers, (i) the
needs and requirements of, and the Company’s course of dealing with, actual or
prospective customers, contractors and suppliers, (j) personnel
information, (k) customer and vendor credit information, and (l) any
information received from third parties subject to obligations of
non-disclosure or non-use.  Failure by
the Company to mark any of the Proprietary Information as confidential or
proprietary shall not affect its status as Proprietary Information under the
terms of this Agreement.

 

1.11.  “Pro
Rata Bonus” means, with respect to each calendar year, a pro-rata bonus for such year equal to the
amount of Employee’s Target Bonus for such year multiplied by a fraction, the
numerator of which is the number of days during the year that transpired before
the date of the Employee’s termination of employment and the denominator of which is 365.

 

1.12.  “Release”
means a release substantially identical to the one attached hereto as Exhibit A.

 

1.13.  “Restricted
Period” means (i) in the case of a cessation of employment described
in Section 3, the period beginning on the date hereof and ending eighteen
months after such cessation, and (ii) in the case of any other cessation
of employment, the period beginning on the date hereof and ending on the first
anniversary of such cessation.

 

1.14.  “Restrictive
Covenants” means the covenants set forth in Sections 6.1, 6.2 and 6.3 of
this Agreement.

 

1.15.  “Target
Bonus” means, with respect to any year, the target amount of the annual
bonus payable to the Employee with respect to that year, whether under an
employment or incentive agreement, under any bonus plan or policy of the
Company, or otherwise, and whether or not all applicable performance goals have
been met and conditions to the payment of such bonus have been satisfied.

 

2.              Termination.

 

2.1.  In
General.  The Company may terminate
the Employee’s employment at any time. The Employee may terminate his or her
employment at any time, provided that before the Employee may voluntarily
terminate his or her employment with the Company, he or she must provide 30
days prior written notice (or such shorter notice as is acceptable to the
Company) to the Company.  Upon any
termination of the Employee’s employment with the Company for any reason: (a) the
Employee (unless otherwise requested by the Board) concurrently will resign any
officer or director positions he or she holds with the Company, its
subsidiaries or affiliates, and (b) the Company will pay to the Employee
all accrued but unpaid compensation (including without limitation salary and
bonus) through the date of termination, and (c) except as explicitly
provided in Sections 2, 3 or 4, or otherwise pursuant to COBRA, all
compensation and benefits will cease and the Company will have no further
liability or obligation to the Employee. 
The foregoing will not be construed to limit the Employee’s right to
payment or reimbursement for claims incurred under any insurance contract
funding an 

 

4

 

employee benefit
plan, policy or arrangement of the Company in accordance with the terms of such
insurance contract.

 

2.2.  Termination Without Cause or For
Good Reason.  If the Employee’s
employment by the Company ceases due to a termination by the Company without
Cause or a resignation by the Employee for Good Reason, then, in addition to
the payments and benefits provided for in Section 2.1 above and subject to
Section 5 below, the Company will:

 

2.2.1.                  Pay
to the Employee a lump sum cash payment equal
to the Pro-Rata Bonus for the calendar year in which the termination
occurs;

 

2.2.2.                  Pay
to the Employee a lump sum cash payment equal to the sum of  (i) Employee’s Base Salary, as in effect
on such date, and (ii) Employee’s Target Bonus for the calendar year in
which the termination occurs;

 

2.2.3.                  Continue
to provide medical benefits to the Employee (and, if covered immediately prior
to such termination, his or her spouse and dependents) for a period of one year
commencing from the date of the Employee’s termination of employment at a
monthly cost to the Employee equal to the Employee’s monthly contribution, if
any, toward the cost of such coverage immediately prior to such termination;
and

 

2.2.4.                  Arrange
for the provision to the Employee of reasonable executive outplacement services
by a provider selected by the mutual agreement of the Company and the Employee.

 

2.3.  Termination
Due to Death or Disability.  If the
Employee’s employment by the Company ceases due to death or Disability, then,
in addition to the payments and benefits provided for in Section 2.1 above
and subject to Section 5 below, the Company will pay to Employee the
payments and provide to Employee the benefits described in Sections 2.2.1,
2.2.2, 2.2.3 and 2.2.4, provided that the cash payments described in such
Sections will be offset by the actuarial present value of the benefits paid or
payable to the Employee (or his or her representatives, heirs, estate or
beneficiaries) pursuant to any life insurance or disability plans, policies or
arrangements of the Company by virtue of his or her death or such Disability
(including, for this purpose, only that portion of such life insurance or
disability benefits funded by the Company or by premium payments made by the
Company).

 

2.4.    The payments and benefits described in Sections
2.2 and 2.3 are in lieu of (and not in addition to) any other severance
arrangement maintained by the Company.

 

3.              Certain
Terminations Following a Change in Control. 
If the Employee’s employment with the Company ceases within twelve
months following a Change in Control as a result of a termination by the
Company without Cause or a resignation by the Employee for Good Reason, then in
lieu of the payments and benefits provided for in Section 2.2,:

 

3.1.  The Company
will pay to the Employee on the date of termination a lump sum cash payment
equal to the Pro-Rata Bonus for the
calendar year in which the termination occurs;

 

5

 

3.2.  The
Company will pay to the Employee on the date of termination a lump sum cash
payment equal to the sum of (i) eighteen months of the Employee’s Base
Salary as in effect on such date, and (ii) the product of 1.5 times the
Employee’s Target Bonus for the calendar year in which the termination occurs;

 

3.3.  The
Company will continue to provide medical benefits to the Employee (and, if
covered immediately prior to such term, his or her spouse and dependents) for a
period of eighteen months commencing from the date of the Employee’s termination
of employment at a monthly cost to the Employee equal to the Employee’s monthly
contribution, if any, toward the cost of such coverage immediately prior to
such termination;

 

3.4.  The
Company will arrange for the provision to the Employee of reasonable executive
outplacement services by a provider selected by the mutual agreement of the
Company and the Employee; and

 

3.5.  All
outstanding stock options then held by the Employee will then become fully
vested and immediately exercisable and will remain exercisable and,
notwithstanding any inconsistent language in any equity incentive plan or
agreement, will remain exercisable for the shortest of (a) the 18 month
period immediately following the Employee’s termination of employment, (b) the
period remaining until the scheduled expiration of the option (determined
without regard to the Employee’s termination of employment), or (c) the
longest period that does not result in the option becoming subject to an
additional tax under Section 409A of the Code.

 

4.              Parachute
Payments.

 

4.1.  Generally.  All amounts payable to the Employee under
this Agreement will be made without regard to whether the deductibility of such
payments (considered together with any other entitlements or payments otherwise
paid or due to the Employee) would be limited or precluded by Section 280G
of the Code and without regard to whether such payments would subject the
Employee to the excise tax levied on certain “excess parachute payments” under Section 4999
of the Code (the “Parachute Excise Tax”).

 

4.2.  Gross-Up.  If all or any portion of the payments or
other benefits provided under any section of this Agreement, either alone or
together with any other payments and benefits which the Employee receives or is
entitled to receive from the Company or its affiliates (whether paid or payable
or distributed or distributable) pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation any stock option, stock
appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing (the “Payment”)
would result in the imposition of a Parachute Excise Tax, the Employee will be
entitled to an additional payment (the “Gross-up Payment”) in an amount
such that the net amount of the Payment and the Gross-up Payment retained by
the Employee after the calculation and deduction of all excise taxes (including
any interest or penalties imposed with respect to such taxes) on the Payment
and all federal, state and local income tax, employment tax and excise tax
(including any interest or penalties imposed with respect to such taxes) on the
Gross-up Payment provided for in this Section 4.2, and taking into account
any lost or reduced tax deductions on account of the Gross-up Payment, shall be
equal to the Payment.

 

6

 

4.3.  Measurements
and Adjustments.  The determination
of the amount of the payments and benefits paid and payable to the Employee,
and whether and to what extent payments under Section 4.2 are required to
be made, will be made at the Company’s expense by an independent auditor
selected by mutual agreement of the Company and the Employee, which auditor
shall provide the Employee and the Company with detailed supporting
calculations with respect to its determination within 15 business days after
the receipt of notice from the Employee or the Company that the Employee has
received or will receive a payment that is potentially subject to the Parachute
Excise Tax.  For the purposes of
determining whether any payments will be subject to the Parachute Excise Tax
and the amount of such Parachute Excise Tax, such payments will be treated as “parachute
payments” within the meaning of Section 280G of the Code, and all “parachute
payments” in excess of the “base amount” (as defined under Section 280G(b)(3) of
the Code) shall be treated as subject to the Parachute Excise tax, unless and
except to the extent that, in the opinion of independent accounting experts
reasonably selected by the Company, such payments (in whole or in part) either
do not constitute “parachute payments” or represent reasonable compensation for
services actually rendered (within the meaning of Section 280G(b)(4) of
the Code) in excess of the “base amount,” or such “parachute payments” are
otherwise not subject to such Parachute Excise Tax.  For purposes of determining the amount of the
Gross-up Payment, if any, the Employee shall be deemed to pay federal income
taxes at the highest applicable marginal rate of federal income taxation for
the calendar year in which the gross-up payment is to be made and to pay any
applicable state and local income taxes at the highest applicable marginal rate
of taxation for the calendar year in which the gross-up payment is to be made,
net of the maximum reduction in federal income taxes which could be obtained
from the deduction of such state or local taxes if paid in such year
(determined without regard to limitations on deductions based upon the amount
of the Employee’s adjusted gross income); and to have otherwise allowable
deductions for federal, state and local income tax purposes at least equal to
those disallowed because of the inclusion of the gross-up payment in the
Employee adjusted gross income.  Any
Gross-up Payment shall be paid by the Company at the time the Employee is
entitled to receive the Payment.  Any
determination by the auditor shall be binding upon the Company and the Employee.

 

4.4.  Underpayment
or Overpayment.  In the event of any
underpayment or overpayment to the Employee (determined after the application
of Section 4.2), the amount of such underpayment or overpayment will be,
as promptly as practicable, paid by the Company to the Employee or refunded by
the Employee to the Company, as the case may be, with interest at the
applicable federal rate specified in Section 1274(d) of the Code.

 

5.              Timing
of Payments Following Termination.

 

5.1.  Subject to
Section 5.2, and notwithstanding any other provision of this Agreement,
the payments and benefits described in Sections 2, 3 and 4 are conditioned on
the Employee’s execution and delivery to the Company, within 60 days following
cessation of employment, of a Release in a manner consistent with the Older
Workers Benefit Protection Act and any similar state law that is
applicable.  The amounts described in
Sections 2.2 or 3 (as applicable) will be paid in a lump sum, on the eighth day
following the Employee’s execution and delivery of the Release, provided the
Release has not been revoked by the Employee.

 

7

 

5.2.  To
the extent the compliance with requirements of Treas. Reg. §1.409A-3(i)(2) (or
any successor provision) is necessary to avoid the application of an additional
tax under Section 409A of the Code on payments due to the Employee upon or
following separation from service, then notwithstanding any other provision of
this Agreement (or any otherwise applicable plan, policy, agreement or
arrangement), any such payments that are otherwise due within six months
following the Employee’s separation from service will be deferred (without
interest) and paid to the Employee in a lump sum immediately following
that six month period.

 

6.              Restrictive
Covenants.  As consideration for all
of the payments to be made to the Employee pursuant to Sections 2, 3, and 4 of
this Agreement, the Employee agrees to be bound by the Restrictive Covenants
set forth in this Section 6.  The
Restrictive Covenants will apply without regard to whether any termination of
the Employee’s employment is initiated by the Company or the Employee, and
without regard to the reason for that termination.

 

6.1.                            Covenant
Not To Compete.  The Employee
covenants that, during the Restricted Period, the Employee will not (except in
his or her capacity as an employee or director of the Company or with the prior
consent of the Company) do any of the following, directly or indirectly,
anywhere in the world:

 

6.1.1.                  engage or participate in any business
competitive with the Business;

 

6.1.2.                  become interested (as owner,
stockholder, lender, partner, co-venturer, director, officer, employee, agent
or consultant) in any person, firm, corporation, association or other entity
engaged in any business competitive with the Business.  Notwithstanding the foregoing, the Employee
may hold up to 4.9% of the outstanding securities of any class of any
publicly-traded securities of any company;

 

6.1.3.                  engage in any business, or solicit or
call on any customer, supplier, licensor, licensee, contractor, agent,
representative, advisor, strategic partner, distributor or other person with
whom the Company shall have dealt or any prospective customer, supplier,
licensor, licensee, contractor, agent, representative, advisor, strategic
partner, distributor or other person that the Company shall have identified and
solicited at any time during the Employee’s employment by the Company for a
purpose competitive with the Business;

 

6.1.4.                  influence or attempt to influence any
employee, consultant, customer, supplier, licensor, licensee, contractor,
agent, representative, advisor, strategic partner, distributor or other person
to terminate or adversely modify any written or oral agreement, arrangement or
course of dealing with the Company; or

 

6.1.5.                  solicit for employment or employ or
retain (or arrange to have any other person or entity employ or retain) any
person who has been employed or retained by the Company within the 12 months
preceding the termination of the Employee’s employment with the Company for any
reason.

 

6.2.  Confidentiality.  The Employee recognizes and acknowledges that
the Proprietary Information is a valuable, special and unique asset of the
business of the Company.  As a result,
both during the Employee’s employment by the Company and thereafter, the 

 

8

 

Employee will not,
without the prior written consent of the Company, for any reason either
directly or indirectly divulge to any third-party or use for his or her own
benefit, or for any purpose other than the exclusive benefit of the Company,
any Proprietary Information, provided that the Employee may during his or her
employment by the Company disclose Proprietary Information to third parties as
may be necessary or appropriate to the effective and efficient discharge of his
or her duties as an employee hereunder (provided that the third party recipient
has signed the Company’s then-approved confidentiality or similar agreement) or
as such disclosures may be required by law. 
If the Employee or any of his or her representatives becomes legally
compelled to disclose any of the Proprietary Information, the Employee will
provide the Company with prompt written notice so that the Company may seek a
protective order or other appropriate remedy. 
The non-disclosure and non-use obligations with respect to Proprietary
Information set forth in this Section 6.2 shall not apply to any
information that is in or becomes part of the public domain through no improper
act on the part of the Employee.

 

6.3.  Property
of the Company.

 

6.3.1.                  Proprietary Information. All
right, title and interest in and to Proprietary Information will be and remain
the sole and exclusive property of the Company. 
The Employee will not remove from the Company’s offices or premises any
documents, records, notebooks, files, correspondence, reports, memoranda or
similar materials of or containing Proprietary Information, or other materials
or property of any kind belonging to the Company unless necessary or
appropriate in the performance of his or her duties to the Company.  If the Employee removes such materials or
property in the performance of his or her duties, the Employee will return such
materials or property to their proper files or places of safekeeping as
promptly as possible after the removal has served its specific purpose.  The Employee will not make, retain, remove
and/or distribute any copies of any such materials or property, or divulge to
any third person the nature of and/or contents of such materials or property or
any other oral or written information to which he or she may have access or
become familiar in the course of his or her employment, except to the extent
necessary in the performance of his or her duties.  Upon termination of the Employee’s employment
with the Company, he or she will leave with the Company or promptly return to
the Company all originals and copies of such materials or property then in his
or her possession.

 

6.3.2.                  Intellectual Property.  The Employee agrees that all the Intellectual
Property will be considered “works made for hire” as that term is defined in Section 101
of the Copyright Act (17 U.S.C. § 101) and that all right, title and interest
in such Intellectual Property will be the sole and exclusive property of the
Company.  To the extent that any of the
Intellectual Property may not by law be considered a work made for hire, or to
the extent that, notwithstanding the foregoing, the Employee retains any
interest in the Intellectual Property, the Employee hereby irrevocably assigns
and transfers to the Company any and all right, title, or interest that the
Employee may now or in the future have in the Intellectual Property under
patent, copyright, trade secret, trademark or other law, in perpetuity or for
the longest period otherwise permitted by law, without the necessity of further
consideration.  The Company will be
entitled to obtain and hold in its own name all copyrights, patents, trade
secrets, trademarks and other similar registrations with respect to such
Intellectual Property.  The Employee
further agrees to execute any and all documents and provide any further
cooperation or assistance reasonably required by the Company to perfect,
maintain or otherwise protect its rights in the 

 

9

 

Intellectual Property.  If the
Company is unable after reasonable efforts to secure the Employee’s signature,
cooperation or assistance in accordance with the preceding sentence, whether
because of the Employee’s incapacity or any other reason whatsoever, the
Employee hereby designates and appoints the Company or its designee as the
Employee’s agent and attorney-in-fact, to act on his or her behalf, to execute
and file documents and to do all other lawfully permitted acts necessary or
desirable to perfect, maintain or otherwise protect the Company’s rights in the
Intellectual Property.  The Employee
acknowledges and agrees that such appointment is coupled with an interest and
is therefore irrevocable.

 

6.4.  Acknowledgments.  The Employee acknowledges that the
Restrictive Covenants are reasonable and necessary to protect the legitimate
interests of the Company and its affiliates and that the duration and
geographic scope of the Restrictive Covenants are reasonable given the nature
of this Agreement and the position the Employee holds within the Company.  The Employee further acknowledges that the
Restrictive Covenants are included herein in order to induce the Company to
enter into this Agreement and that the Company would not have entered into this
Agreement in the absence of the Restrictive Covenants.

 

6.5.  Remedies
and Enforcement Upon Breach.

 

6.5.1.                  Specific Enforcement. The
Employee acknowledges that any breach by him or her, willfully or otherwise, of
the Restrictive Covenants will cause continuing and irreparable injury to the
Company for which monetary damages would not be an adequate remedy.  The Employee shall not, in any action or
proceeding to enforce any of the provisions of this Agreement, assert the claim
or defense that such an adequate remedy at law exists.  In the event of any such breach by the
Employee, the Company shall have the right to enforce the Restrictive Covenants
by seeking injunctive or other relief in any court, without any requirement
that a bond or other security be posted, and this Agreement shall not in any
way limit remedies of law or in equity otherwise available to the Company.

 

6.5.2.                  Judicial Modification.  If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, such court shall have the
power to modify such provision and, in its modified form, such provision shall
then be enforceable.

 

6.5.3.                  Accounting.  If the Employee breaches any of the
Restrictive Covenants, the Company will have the right and remedy to require
the Employee to account for and pay over to the Company all compensation,
profits, monies, accruals, increments or other benefits derived or received by
the Employee as the result of such breach. 
This right and remedy will be in addition to, and not in lieu of, any
other rights and remedies available to the Company under law or in equity.

 

6.5.4.                  Enforceability.  If any court holds the Restrictive Covenants
unenforceable by reason of their breadth or scope or otherwise, it is the
intention of the parties hereto that such determination not bar or in any way
affect the right of the Company to the relief provided above in the courts of
any other jurisdiction within the geographic scope of such Restrictive
Covenants.

 

10

 

6.5.5.                  Disclosure of Restrictive
Covenants.  The Employee agrees to
disclose the existence and terms of the Restrictive Covenants to any employer
that the Employee may work for during the Restricted Period.

 

6.5.6.                  Extension of Restricted Period.  If the Employee breaches Section 6.1 in
any respect, the restrictions contained in that section will be extended for a
period equal to the period that the Employee was in breach.

 

7.              Miscellaneous.

 

7.1.  No
Liability of Officers and Directors for Severance Upon Insolvency.  Notwithstanding any other provision of the
Agreement and intending to be bound by this provision, the Employee hereby (a) waives
any right to claim payment of amounts owed to him or her, now or in the future,
pursuant to this Agreement from directors or officers of the Company if the
Company becomes insolvent, and (b) fully and forever releases and
discharges the Company’s officers and directors from any and all claims,
demands, liens, actions, suits, causes of action or judgments arising out of
any present or future claim for such amounts.

 

7.2.  Successors
and Assigns. The Company may assign this Agreement to any successor to all
or substantially all of its assets and business by means of liquidation,
dissolution, merger, consolidation, transfer of assets, or otherwise.  The rights of the Employee hereunder are
personal to the Employee and may not be assigned by him.

 

7.3.  Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania without regard to the principles of conflicts of laws.

 

7.4.  Enforcement.  Any legal proceeding arising out of or
relating to this Agreement will be instituted in the United States District
Court for the Eastern District of Pennsylvania, or if that court does not have
or will not accept jurisdiction, in any court of general jurisdiction in the
Commonwealth of Pennsylvania, and the Employee and the Company hereby consent
to the personal and exclusive jurisdiction of such courts and hereby waive any
objections that they may have to personal jurisdiction, the laying of venue of
any such proceeding and any claim or defense of inconvenient forum.

 

7.5.  Waivers;
Separability.  The waiver by either
party hereto of any right hereunder or any failure to perform or breach by the
other party hereto shall not be deemed a waiver of any other right hereunder or
any other failure or breach by the other party hereto, whether of the same or a
similar nature or otherwise.  No waiver
shall be deemed to have occurred unless set forth in a writing executed by or
on behalf of the waiving party.  No such
written waiver shall be deemed a continuing waiver unless specifically stated
therein, and each such waiver shall operate only as to the specific term or
condition waived.  If any provision of
this Agreement shall be declared to be invalid or unenforceable, in whole or in
part, such invalidity or unenforceability shall not affect the remaining
provisions hereof which shall remain in full force and effect.

 

7.6.  Notices.  All notices and communications that are
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when delivered 

 

11

 

personally or upon
mailing by registered or certified mail, postage prepaid, return receipt
requested, as follows:

 

If to the Company, to:

 

Neose Technologies, Inc.

102 Rock Road

Horsham PA 19044

Attn: General Counsel

Fax: 215-315-9100

 

With a copy to:

 

Pepper Hamilton LLP

3000 Two Logan Square

18th & Arch Streets

Philadelphia, PA 19103

Attn: Barry M. Abelson, Esquire

Fax: 215-981-4750

 

If to Employee, to:

 

 

or to
such other address as may be specified in a notice given by one party to the
other party hereunder.

 

7.7.  Entire
Agreement; Amendments.  This
Agreement and the attached exhibit contain the entire agreement and
understanding of the parties relating to the provision of severance benefits
upon termination, and merges and supersedes all prior and contemporaneous
discussions, agreements and understandings of every nature relating to that
subject, including without limitation the Retention Agreement dated                     ,
the Noncompetition and Confidentiality Agreement dated                   ,
and the Original Agreement between the Employee and Company.  This Agreement may not be changed or
modified, except by an Agreement in writing signed by each of the parties
hereto.

 

7.8.  Withholding.  The Company will withhold from any payments
due to Employee hereunder, all taxes, FICA or other amounts required to be
withheld pursuant to any applicable law.

 

7.9.  Headings
Descriptive.  The headings of
sections and paragraphs of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of
this Agreement.

 

12

 

7.10.  Counterparts.  This Agreement may be executed in multiple counterparts,
each of which will be deemed to be an original, but all of which together will
constitute but one and the same instrument.

 

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

 

	
   

  	
  NEOSE TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  George J. Vergis, Ph.D.

  
	
   

  	
   

  	
  President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employee

  

 

13

 

Exhibit A

 

Release
and Non-Disparagement Agreement

 

THIS RELEASE AND NON-DISPARAGEMENT AGREEMENT (this “Release”)
is made as of the        day of               ,
           by and
between                                         
(the “Employee”) and NEOSE TECHNOLOGIES, INC. (the “Company”).

 

WHEREAS, the Employee’s employment as an executive of
the Company has terminated; and

 

WHEREAS, pursuant to Section[s] [2] [3] [and 4] of the
Change of Control Agreement by and between the Company and the Employee dated
as of April 30, 2007 (the “Change of Control Agreement”), the
Company has agreed to pay the Employee certain amounts and to provide him or
her with certain rights and benefits, subject to the execution of this Release.

 

NOW THEREFORE, in consideration of these premises and
the mutual promises contained herein, and intending to be legally bound hereby,
the parties agree as follows:

 

SECTION 1.                            Consideration.  The Employee acknowledges that: (a) the
payments, rights and benefits set forth in Section[s] [2] [3] [and 4] of the
Change of Control Agreement constitute full settlement of all of his or her
rights under the Change of Control Agreement, 
(b) he or she has no entitlement under any other severance or
similar arrangement maintained by the Company, and (c) except as otherwise
provided specifically in this Release, the Company does not and will not have
any other liability or obligation to the Employee.  The Employee further acknowledges that, in
the absence of his or her execution of this Release, the payments and benefits
specified in Section[s] [2] [3] [and 4] of the Change of Control Agreement
would not otherwise be due to the Employee.

 

SECTION 2.                            Release
and Covenant Not to Sue.  The
Employee hereby fully and forever releases and discharges the Company and its
parents, affiliates and subsidiaries, including all predecessors and successors,
assigns, officers, directors, trustees, employees, agents and attorneys, past
and present, from any and all claims, demands, liens, agreements, contracts,
covenants, actions, suits, causes of action, obligations, controversies, debts,
costs, expenses, damages, judgments, orders and liabilities, of whatever kind
or nature, direct or indirect, in law, equity or otherwise, whether known or
unknown, arising through the date of this Release, out of his or her employment
by the Company or the termination thereof, including, but not limited to, any
claims for relief or causes of action under the Age Discrimination in
Employment Act, 29 U.S.C. § 621 et seq., or any
other federal, state or local statute, ordinance or regulation regarding
discrimination in employment and any claims, demands or actions based upon
alleged wrongful or retaliatory discharge or breach of contract under any state
or federal law.  The Employee expressly
represents that he or she has not filed a lawsuit or initiated any other administrative
proceeding against the Company (including for purposes of this Section 2,
its parents, affiliates and subsidiaries), and that he or she has not assigned
any claim against the Company (or its parents, affiliates and subsidiaries) to
any other person or entity.  The Employee
further promises not to initiate a lawsuit or to bring any other claim against
the Company (or its parents, affiliates and subsidiaries) arising out of or in
any way related to his or her employment by the Company or the termination of
that employment.  The forgoing will not
be deemed to release the Company from (a) claims solely to enforce this
Release, (b) claims solely to enforce Section[s] [2] [3] [and 4] of the
Change of Control Agreement, (c) claims for indemnification under the
Company’s By-Laws, under any indemnification agreement between the Company and
the Employee or under any similar agreement or (d) claims solely to
enforce the terms of any equity incentive award agreement 

 

14

 

between
the Employee and the Company.  This
Release will not prevent the Employee from filing a charge with the Equal
Employment Opportunity Commission (or similar state agency) or participating in
any investigation conducted by the Equal Employment Opportunity Commission (or
similar state agency); provided, however, that any claims by the Employee for
personal relief in connection with such a charge or investigation (such as
reinstatement or monetary damages) would be barred.

 

SECTION 3.                            Restrictive
Covenants.  The Employee acknowledges
that the terms of Section 6 of the Change in Control Agreement will
survive the termination of his or her employment.  The Employee affirms that the restrictions
contained in Section 6 of the Change in Control Agreement are reasonable
and necessary to protect the legitimate interests of the Company, that he or
she received adequate consideration in exchange for agreeing to those
restrictions and that he or she will abide by those restrictions.

 

SECTION 4.                            Non-Disparagement.  The Company (meaning, solely for this
purpose, Company’s directors and executive officers and other individuals
authorized to make official communications on Company’s behalf) will not
disparage the Employee or the Employee’s performance or otherwise take any
action which could reasonably be expected to adversely affect the Employee’s
personal or professional reputation. 
Similarly, the Employee will not disparage Company or any of its
directors, officers, agents or employees or otherwise take any action which
could reasonably be expected to adversely affect the reputation of the Company
or the personal or professional reputation of any of the Company’s directors,
officers, agents or employees.

 

SECTION 5.                            Cooperation.  The Employee further agrees that, subject to
reimbursement of his or her reasonable expenses, he or she will cooperate fully
with the Company and its counsel with respect to any matter (including
litigation, investigations, or governmental proceedings) which relates to
matters with which the Employee was involved during his or her employment with
Company.  The Employee shall render such
cooperation in a timely manner on reasonable notice from the Company.

 

SECTION 6.                            Rescission Right.  The Employee expressly acknowledges and recites
that (a) he or she has read and understands this Release in its entirety, (b) he
or she has entered into this Release knowingly and voluntarily, without any
duress or coercion; (c) he or she has been advised orally and is hereby
advised in writing to consult with an attorney with respect to this Release before
signing it; (d) he or she was provided 21 calendar days after receipt of
the Release to consider its terms before signing it (or such longer period as
is required for this Release to be effective under the Age Discrimination in
Employment Act or any similar state law); and (e) he or she is provided
seven (7) calendar days from the date of signing to terminate and revoke
this Release (or such longer period required by applicable state law), in which
case this Release shall be unenforceable, null and void.  The Employee may revoke this Release during those seven (7) days (or
such longer period required by applicable state law) by providing written
notice of revocation to the Company.

 

SECTION 7.                            Challenge.
 If the Employee violates or challenges
the enforceability of any provisions of the Noncompetition Agreement or this
Release, no further payments, rights or benefits under Section[s] [2] [3] [and
4] of the Change of Control Agreement will be due to the Employee.

 

SECTION 8.                            Miscellaneous.

 

8.1.                            No
Admission of Liability.  This Release
is not to be construed as an admission of any violation of any federal, state
or local statute, ordinance or regulation or of any duty owed by 

 

15

 

the Company to the Employee.  There have been no such violations, and the
Company specifically denies any such violations.

 

8.2.                            No
Reinstatement.  The Employee agrees
that he or she will not apply for reinstatement with the Company or seek in any
way to be reinstated, re-employed or hired by the Company in the future.

 

8.3.                            Successors
and Assigns.  This Release shall
inure to the benefit of and be binding upon the Company and the Employee and
their respective successors, executors, administrators and heirs.  The Employee may make any assignment of this
Release or any interest herein, by operation of law or otherwise.  The Company may assign this Release to any
successor to all or substantially all of its assets and business by means of
liquidation, dissolution, merger, consolidation, transfer of assets, or
otherwise.

 

8.4.                            Severability.  Whenever possible, each provision of this
Release will be interpreted in such manner as to be effective and valid under
applicable law.  However, if any
provision of this Release is held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability will not affect
any other provision, and this Release will be reformed, construed and enforced
as though the invalid, illegal or unenforceable provision had never been herein
contained.

 

8.5.                            Entire
Agreement; Amendments.  Except as
otherwise provided herein, this Release contains the entire agreement and
understanding of the parties hereto relating to the subject matter hereof, and
merges and supersedes all prior and contemporaneous discussions, agreements and
understandings of every nature relating to the subject matter hereof.  This Release may not be changed or modified,
except by an Agreement in writing signed by each of the parties hereto.

 

8.6.                            Governing
Law.  This Release shall be governed
by, and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania without regard to the application of the principles of conflicts
of laws.

 

8.7.                            Counterparts
and Facsimiles.  This Release may be
executed, including execution by facsimile signature, in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.

 

IN WITNESS WHEREOF, the Company has caused this
Release to be executed by its duly authorized officer, and the Employee has
executed this Release, in each case as of the date first above written.

 

	
  NEOSE
  TECHNOLOGIES, INC.

  
	
   

  
	
  By:

  
	
  Name &
  Title:

  	
   

  
	
   

  
	
   

  
	
  EMPLOYEE

  
	
   

  
	
   

  
	
   

  	
   

  
			

 

16Exhibit 10.3

 

NEOSE TECHNOLOGIES, INC.

2004 EQUITY INCENTIVE PLAN

 

NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

 

Neose Technologies, Inc. (the “Company”) hereby
grants to                       
(the “Optionee”) an option (the “Option”) to purchase a total of               
shares of the Company’s Common Stock, at the price and on the terms set forth
herein, and in all respects subject to the terms and provisions of the Neose
Technologies, Inc. 2004 Equity Incentive Plan (the “Plan”) applicable to
Non-Qualified Stock Options, which terms and provisions are incorporated by
reference herein.  Unless otherwise
defined herein, capitalized terms used but not defined herein shall have the
meanings given to them in the Plan.

 

1.             Nature of the Option.  The
Option is intended to be a Non-Qualified Stock Option and is NOT intended to be an incentive
stock option within the meaning of Section 422 of the Code.

 

2.             Date of Grant.  The
Option is granted as of the           ,
20     (the “Date of Grant”).

 

3.             Term of Option.  The Option shall have a term of ten years from
the Date of Grant and shall terminate at 5:00 p.m. on           ,
       unless it is terminated at an
earlier date pursuant to the provisions of this Agreement or the Plan.

 

4.             Option
Exercise Price.  The Option
exercise price is $                
per share.

 

5.             Exercise
of Option.

 

5.1          Vesting.  Subject to Section 12 of the Plan, the
Option shall become vested and will be exercisable during its term only in
accordance with the terms and provisions of the Plan and this Award Agreement,                         
the Option becoming exercisable with respect to     %
of the shares subject to the Option on                               ,
until the Option is exercisable with respect to 100% of the shares; provided that
vesting shall cease upon the Optionee’s termination of employment or other
Service.

 

5.2          Right to Exercise.  Subject to the vesting provisions of Section 5.1
above and the termination provisions of Section 6.7 of the Plan, the
Option may be exercised in whole or in part at any time and from time to time
during the term of the Option.  Any
portion of the Option that is not vested is not exercisable.  The unvested portion of the Option may not be
exercised until it becomes vested in accordance with Section 5.1.

 

5.3          Method of Exercise.  The Option shall be exercisable by written
notice from the Optionee to the Company setting forth the Optionee’s election
to exercise the Option and the number of shares in respect of which the Option
is being exercised.  Such notice shall be
signed by the Optionee, delivered to the Company in a manner consistent with Section 13.13
of the Plan, and accompanied by payment of the exercise price.  The Option will be deemed to be 

 

 

exercised upon the receipt by the Company of such notice and payment of
the exercise price.  The Optionee shall
have no right to vote or receive dividends and shall have no other rights as a
stockholder with respect to the shares with respect to which the Option is
exercised, notwithstanding the exercise of the Option, until the issuance by
the Company (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company) of the stock certificate
evidencing the shares that are being issued upon exercise of the Option.  The Company will issue (or cause to be
issued) such stock certificates promptly following the exercise of the
Option.  The certificate or certificates
for the shares as to which the Option shall be exercised shall be registered in
the name of the Optionee and shall contain any legend as may be required under
the Plan and/or applicable law.

 

5.4          Restrictions on Exercise.  The Option may not be exercised if the
issuance of the shares upon such exercise would constitute a violation of any
applicable federal or state securities laws or other laws or regulations.  As a condition to the exercise of the Option,
the Company may require the Optionee to make any representations and warranties
to the Company as may be required by the Plan or any applicable law or
regulation.

 

6.             Withholding.  The Company reserves
the right to withhold, in accordance with any applicable laws, from any
consideration payable to the Optionee any taxes required to be withheld by
federal, state or local law as a result of the grant or exercise of the Option
or the sale or other disposition of the shares issued upon exercise of the
Option.  If the amount of any
consideration payable to the Optionee is insufficient to pay such taxes or if
no consideration is payable to the Optionee, then upon the request of the
Company, the Optionee (or such other person entitled to exercise the Option)
shall pay to the Company an amount sufficient for the Company to satisfy any
federal, state or local tax withholding requirements the Company may incur as a
result of the grant or exercise of the Option or the sale or other disposition
of the shares issued upon the exercise of the Option.  Unless otherwise determined by the Board, the
minimum required withholding obligation arising in connection with the exercise
of the Option may be settled with shares, including shares that would otherwise
be payable to the Optionee in connection with the exercise of the Option.

 

7.             The Plan.  This Award Agreement
is subject to, and the Company and the Optionee agree to be bound by, all of
the terms and conditions of the Plan as it may be amended from time to time in
accordance with the terms thereof. 
Pursuant to the Plan, the Board is authorized to adopt rules and
regulations not inconsistent with the Plan as it shall deem appropriate and
proper.  A copy of the Plan in its
present form is attached hereto and a copy will be available for inspection
during business hours by the Optionee or the persons entitled to exercise the
Option at the Company’s principal office.

 

8.             Entire
Agreement.  This Award Agreement,
together with the Plan, represents the entire agreement between the parties.

 

9.             Governing
Law.  This Award Agreement shall
be construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to any conflicts of laws.

 

10.          Amendment.  Subject to the provisions of the Plan, this
Award Agreement may only be amended by a writing signed by the Company and the
Optionee.

 

2

 

11.          Restriction
on Transfer.  Unless otherwise
permitted by the Committee or the terms of the Plan, the Option may not be
transferred by Optionee in any manner other than by will or the laws of descent
or distribution.  The terms of the
Option, including the terms and restrictions set forth in the Plan, shall be
binding upon the executors, administrators, heirs, successors and assigns of
the Optionee.

 

IN WITNESS WHEREOF, this Award Agreement has been
executed by the parties on this                           .

 

 

	
   

  	
  NEOSE TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  

 

3

 

Acknowledgment

Of Stock Option Grant

Under

Neose Technologies, Inc. 2004 Equity Plan

 

The
Optionee hereby acknowledges receipt of the Stock Option Award Agreement dated                         
(“Agreement”), and the Neose Technologies, Inc. 2004 Equity Plan (“Plan”),
a copy of which is attached to the Agreement. 
Optionee hereby agrees that the Option is subject to the terms and
provisions of the Agreement and Plan and agrees to accept as binding,
conclusive and final all decisions or interpretations by the Board or the
Committee concerning the Plan.

 

 

	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
                ,
  200  

  	
   

  
						

 

 

Please return this acknowledgment
to the HR Department within 10 days.

 

4

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