ASCENT PEDIATRICS INC
CALIFORNIA STOCK OPTION PLAN
<DOCUMENT>
<TYPE>EX-10.21
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>CALIFORNIA STOCK OPTION PLAN
<TEXT>

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                             ASCENT PEDIATRICS, INC.
                          CALIFORNIA STOCK OPTION PLAN
1.     Purpose
       -------
     The  purpose  of  this  California Stock Option Plan (the "Plan") of Ascent
Pediatrics,  Inc.,  a  Delaware  corporation  (the "Company"), is to advance the
interests  of  the  Company's stockholders by enhancing the Company's ability to
attract,  retain  and  motivate  persons  who  make  (or  are  expected to make)
important  contributions  to  the  Company by providing such persons with equity
ownership  opportunities  and  performance-based  incentives  and thereby better
aligning the interests of such persons with those of the Company's stockholders.
Except  where  the  context otherwise requires, the term "Company" shall include
any  of  the  Company's  present  or future parent or subsidiary corporations as
defined  in  Sections  424(e)  or  (f)  of the Internal Revenue Code of 1986, as
amended,  and  any regulations promulgated thereunder (the "Code") and any other
business  venture  (including,  without  limitation,  joint  venture  or limited
liability  company)  in  which  the  Company  has  a  significant  interest,  as
determined  by  the  Board  of  Directors  of  the  Company  (the  "Board").
2.     Eligibility
       -----------
     All  of  the  Company's  employees,  officers,  directors,  consultants and
advisors  (and  any  individuals  who have accepted an offer for employment) are
eligible  to  be  granted options, restricted stock awards, or other stock-based
awards  (each,  an  "Award")  under  the  Plan,  provided  that such persons are
residents  of  the State of California on the date of grant of such Award.  Each
person  who  has  been  granted  an  Award  under  the  Plan  shall  be deemed a
"Participant".
3.     Administration  and  Delegation
       -------------------------------
(a)     Administration  by Board of Directors.  The Plan will be administered by
        -------------------------------------
the  Board.  The  Board shall have authority to grant Awards and to adopt, amend
and  repeal  such administrative rules, guidelines and practices relating to the
Plan  as  it shall deem advisable.  The Board may correct any defect, supply any
omission  or  reconcile any inconsistency in the Plan or any Award in the manner
and  to  the extent it shall deem expedient to carry the Plan into effect and it
shall  be  the  sole  and  final judge of such expediency.  All decisions by the
Board  shall  be  made  in  the  Board's  sole discretion and shall be final and
binding  on  all  persons  having or claiming any interest in the Plan or in any
Award.  No  director or person acting pursuant to the authority delegated by the
Board  shall  be liable for any action or determination relating to or under the
Plan  made  in  good  faith.
(b)     Appointment  of  Committees.  To the extent permitted by applicable law,
        ---------------------------
the  Board  may  delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee").  All references in the
Plan  to  the  "Board"  shall  mean the Board or a Committee of the Board to the
extent  that  the Board's powers or authority under the Plan have been delegated
to  such  Committee.
4.     Stock  Available  for  Awards.
       -----------------------------
(a)     Number  of Shares.  Subject to adjustment under Section 8, Awards may be
        -----------------
made  under  the Plan for up to 200,000 depositary shares ("Depositary Shares"),
each  Depositary  Share  representing  one share of common stock of the Company,
$.00004  par  value per share (the "Common Stock"), subject to a call option and
represented  by  a  depositary  receipt.  If any Award expires or is terminated,
surrendered  or  canceled without having been fully exercised or is forfeited in
whole  or  in part (including as the result of Depositary Shares subject to such
Award  being  repurchased by the Company at the original issuance price pursuant
to a contractual repurchase right) or results in any Depositary Shares not being
     issued,  the  unused Depositary Shares covered by such Award shall again be
available  for the grant of Awards under the Plan.  Shares issued under the Plan
may  consist  in  whole or in part of authorized but unissued shares or treasury
shares.  At no time while there is any Option (as defined below) outstanding and
held  by a Participant who was a resident of the State of California on the date
of  grant  of  such Option, shall the total number of Depositary Shares issuable
upon exercise of all outstanding options and the total number of shares provided
for  under  any stock bonus or similar plan of the Company exceed the applicable
percentage  as  calculated  in  accordance with the conditions and exclusions of
Section 260.140.45 of the California Code of Regulations, based on the shares of
the  Company  which  are  outstanding  at  the  time  the  calculation  is made.
(b)     Per-Participant  Limit.  Subject  to  adjustment  under  Section  8, the
        ----------------------
maximum  number  of  Depositary  Shares  with  respect  to which an Award may be
granted  to  any  Participant  under the Plan shall be 50,000 per calendar year.
The  per-Participant limit described in this Section 4(c) shall be construed and
applied  consistently  with  Section  162(m)  of  the  Code.
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5.     Stock  Options
       --------------
(a)     General.  The  Board  may  grant  options  to purchase Depositary Shares
        -------
(each,  an "Option") and determine the number of Depositary Shares to be covered
by  each  Option,  the  exercise  price  of  each  Option and the conditions and
limitations  applicable  to  the  exercise  of each Option, including conditions
relating  to  applicable  federal  or  state  securities  laws,  as it considers
necessary  or  advisable.  All  Options  under  this Plan shall be "Nonstatutory
Stock  Options"  and are not intended to comply with the requirements of Section
422  of  the  Code.
(b)     Exercise  Price.  The  Board  shall  establish the exercise price at the
        ---------------
time  each  Option is granted and specify it in the applicable option agreement.
(c)     Duration of Options.  Each Option shall be exercisable at such times and
        -------------------
subject  to such terms and conditions as the Board may specify in the applicable
option  agreement;  provided, however, that no Option will be granted for a term
in  excess  of 10 years and that no Option granted hereunder may be exercised on
the  Option  Closing  Date  (as  defined  in  Section  8(d)  below).
(d)     Exercise of Option.  Options may be exercised by delivery to the Company
        ------------------
of a written notice of exercise signed by the proper person or by any other form
of  notice  (including  electronic  notice)  approved by the Board together with
payment  in full as specified in Section 5(e) for the number of shares for which
the  Option  is  exercised.
(e)     Payment Upon Exercise.  Depositary Shares purchased upon the exercise of
        ----------------------
an  Option  granted  under  the  Plan  shall  be  paid  for  as  follows:
(1)     in  cash  or  by  check,  payable  to  the  order  of  the  Company;
(2)     except as the Board may, in its sole discretion, otherwise provide in an
option  agreement,  by  (i)  delivery  of  an  irrevocable  and  unconditional
undertaking  by  a  creditworthy  broker  to  deliver  promptly  to  the Company
sufficient  funds  to pay the exercise price and any required tax withholding or
(ii)  delivery  by  the  Participant to the Company of a copy of irrevocable and
unconditional  instructions  to a creditworthy broker to deliver promptly to the
Company  cash  or  a check sufficient to pay the exercise price and any required
tax  withholding;
(3)     by  delivery  of  Depositary  Shares  owned by the Participant valued at
their  fair market value as determined by (or in a manner approved by) the Board
in good faith ("Fair Market Value"), provided (i) such method of payment is then
permitted  under  applicable  law  and  (ii) such Depositary Shares, if acquired
directly  from  the  Company,  was  owned by the Participant at least six months
prior  to  such  delivery;
(4)     to  the  extent  permitted  by  the Board, in its sole discretion by (i)
delivery  of  a  promissory  note  of  the  Participant  to the Company on terms
determined  by  the Board, or (ii) payment of such other lawful consideration as
the  Board  may  determine;  or
(5)     by  any  combination  of  the  above  permitted  forms  of  payment.
(f)     Substitute  Options.  In connection with a merger or consolidation of an
        -------------------
entity  with  the Company or the acquisition by the Company of property or stock
of  an  entity,  the  Board may grant Options in substitution for any options or
other  stock  or  stock-based  awards  granted  by  such  entity or an affiliate
thereof.  Substitute  Options  may  be  granted on such terms as the Board deems
appropriate  in  the  circumstances,  notwithstanding any limitations on Options
contained  in  the  other  sections  of  this  Section  5  or  in  Section  2.
6.     Restricted  Stock
       -----------------
(a)     Grants.  The  Board  may  grant  Awards  entitling recipients to acquire
        ------
Depositary Shares, subject to the right of the Company to repurchase all or part
     of such shares at their issue price or other stated or formula price (or to
require  forfeiture  of  such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied  prior  to  the  end  of  the applicable restriction period or periods
established  by  the  Board  for  such Award (each, a "Restricted Stock Award").
(b)     Terms  and  Conditions.  The  Board  shall  determine  the  terms  and
        ----------------------
conditions  of  any  such  Restricted  Stock Award, including the conditions for
        -
repurchase  (or  forfeiture)  and  the  issue  price,  if  any.
(c)     Depositary  Receipts.  Any  depositary  receipts  issued in respect of a
        --------------------
Restricted  Stock  Award shall be registered in the name of the Participant and,
unless otherwise determined by the Board, deposited by the Participant, together
with a stock power endorsed in blank, with the Company (or its designee). At the
expiration of the applicable restriction periods, the Company (or such designee)
shall  deliver the depositary receipts no longer subject to such restrictions to
the  Participant  or if the Participant has died, to the beneficiary designated,
in  a manner determined by the Board, by a Participant to receive amounts due or
exercise  rights of the Participant in the event of the Participant's death (the
"Designated  Beneficiary").  In  the  absence  of  an effective designation by a
Participant,  Designated  Beneficiary  shall  mean  the  Participant's  estate.
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7.     Other  Stock-Based  Awards
       --------------------------
     The  Board  shall  have  the  right  to  grant  other Awards based upon the
Depositary  Shares  having such terms and conditions as the Board may determine,
including  the  grant  of  shares  based  upon  certain conditions, the grant of
securities  convertible  into  Depositary  Shares  and  the  grant  of  stock
appreciation  rights.
8.     Adjustments  for  Changes  in  Depositary Shares and Certain Other Events
       -------------------------------------------------------------------------
(a)     Changes  in  Capitalization.  In  the  event of any stock split, reverse
        ---------------------------
stock  split,  stock  dividend,  recapitalization,  combination  of  shares,
reclassification  of  shares, spin-off or other similar change in capitalization
or  event,  or  any  distribution  to  holders of Depositary Shares other than a
normal  cash  dividend,  (i)  the number and class of securities available under
this  Plan, (ii) the number and class of securities and exercise price per share
subject to each outstanding Option, (iii) the repurchase price per share subject
     to  each  outstanding  Restricted  Stock  Award, and (iv) the terms of each
other  outstanding  Award  shall  be  appropriately  adjusted by the Company (or
substituted  Awards  may  be  made, if applicable) to the extent the Board shall
determine, in good faith, that such an adjustment (or substitution) is necessary
and  appropriate.  If this Section 8(a) applies and Section 8(c) also applies to
any event, Section 8(c) shall be applicable to such event, and this Section 8(a)
shall  not  be  applicable.
(b)     Liquidation  or  Dissolution.  In the event of a proposed liquidation or
        ----------------------------
dissolution  of  the  Company,  the  Board  shall  upon  written  notice  to the
Participants  provide  that  all  then  unexercised  Options  will  (i)  become
exercisable  in  full  as of a specified time at least 10 business days prior to
the  effective  date  of  such  liquidation  or  dissolution  and (ii) terminate
effective  upon  such liquidation or dissolution, except to the extent exercised
before  such  effective date.  The Board may specify the effect of a liquidation
or  dissolution  on  any Restricted Stock Award or other Award granted under the
Plan  at  the  time  of  the  grant  of  such  Award.
(c)     Acquisition  Events
        -------------------
(1)     Definition.  An  "Acquisition  Event"  shall  mean:  (a)  any  merger or
        ----------
consolidation  of  the  Company with or into another entity as a result of which
the  Depositary  Shares are converted into or exchanged for the right to receive
cash,  securities or other property or (b) any exchange of shares of the Company
for cash, securities or other property pursuant to a share exchange transaction.
(2)     Consequences  of an Acquisition Event on Options. Upon the occurrence of
        -------------------------------------------------
an  Acquisition  Event,  or  the  execution by the Company of any agreement with
respect  to  an  Acquisition Event, the Board shall provide that all outstanding
Options  shall  be  assumed,  or equivalent options shall be substituted, by the
acquiring  or  succeeding  corporation  (or an affiliate thereof).  For purposes
hereof,  an  Option shall be considered to be assumed if, following consummation
of  the  Acquisition  Event,  the Option confers the right to purchase, for each
Depositary  Share subject to the Option immediately prior to the consummation of
the  Acquisition  Event,  the  consideration  (whether cash, securities or other
property) received as a result of the Acquisition Event by holders of Depositary
Shares  for  each Depositary Share held immediately prior to the consummation of
the  Acquisition  Event  (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding
Depositary  Shares);  provided, however, that if the consideration received as a
result  of  the Acquisition Event is not solely common stock of the acquiring or
succeeding  corporation  (or  an  affiliate  thereof), the Company may, with the
consent  of  the  acquiring  or  succeeding  corporation,  provide  for  the
consideration  to  be received upon the exercise of Options to consist solely of
common  stock  of  the  acquiring  or  succeeding  corporation  (or an affiliate
thereof) equivalent in fair market value to the per share consideration received
by  holders  of  outstanding  Depositary  Shares  as a result of the Acquisition
Event.
     Notwithstanding  the  foregoing, if the acquiring or succeeding corporation
(or  an  affiliate  thereof)  does  not agree to assume, or substitute for, such
Options,  then the Board shall, upon written notice to the Participants, provide
that  all  then  unexercised  Options  will  become  exercisable in full as of a
specified  time  prior  to  the Acquisition Event and will terminate immediately
prior  to  the  consummation  of  such  Acquisition  Event, except to the extent
exercised by the Participants before the consummation of such Acquisition Event;
provided,  however, that in the event of an Acquisition Event under the terms of
which holders of Depositary Shares will receive upon consummation thereof a cash
payment for each Depositary Share surrendered pursuant to such Acquisition Event
(the  "Acquisition  Price"),  then  the  Board  may  instead  provide  that  all
outstanding  Options shall terminate upon consummation of such Acquisition Event
and  that  each  Participant shall receive, in exchange therefor, a cash payment
equal  to  the  amount (if any) by which (A) the Acquisition Price multiplied by
the  number of Depositary Shares subject to such outstanding Options (whether or
not then exercisable), exceeds (B) the aggregate exercise price of such Options.
To  the  extent  all or any portion of an Option becomes exercisable solely as a
result of the first sentence of this paragraph, upon exercise of such Option the
Participant shall receive shares subject to a right of repurchase by the Company
or  its successor at the Option exercise price.  Such repurchase right (1) shall
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lapse  at  the  same  rate as the Option would have become exercisable under its
terms  and  (2)  shall  not  apply to any shares subject to the Option that were
exercisable  under  its  terms  without  regard  to  the  first sentence of this
paragraph.
If  any  Option  provides  that  it may be exercised for Depositary Shares which
remain  subject  to  a  repurchase  right  in  favor  of  the  Company, upon the
occurrence of an Acquisition Event, any shares of restricted stock received upon
exercise  of  such Option shall be treated in accordance with Section 8(c)(3) as
if  they  were  a  Restricted  Stock  Award.
(3)     Consequences  of  an Acquisition Event on Restricted Stock Awards.  Upon
        -----------------------------------------------------------------
the  occurrence  of an Acquisition Event, the repurchase and other rights of the
Company under each outstanding Restricted Stock Award shall inure to the benefit
     of the Company's successor and shall apply to the cash, securities or other
property  which  the  Depositary  Shares  were  converted  into or exchanged for
pursuant  to such Acquisition Event in the same manner and to the same extent as
they  applied  to  the Depositary Shares subject to such Restricted Stock Award.
(4)     Consequences  of  an Acquisition Event on Other Awards.  The Board shall
        ------------------------------------------------------
specify  the effect of an Acquisition Event on any other Award granted under the
Plan  at  the  time  of  the  grant  of  such  Award.
     Alpharma  Call  Option.
     -----------------------
(5)     From  and  after  the  date  of  adoption  of  this Plan by the Board of
Directors  of the Company until the Option Determination Date (as defined in the
Depositary  Agreement  dated  as  of February 16, 1999 by and among the Company,
Alpharma  USPD, Inc. and State Street Bank and Trust Company (the "Depositary"),
as  amended  (the  "Depositary  Agreement")),  the class of securities available
under  this  Plan  shall  mean  the  Depositary  Shares, and a Participant shall
receive from the Depositary, upon the exercise of an Option a depositary receipt
     representing the number of Depositary Shares issuable upon exercise of such
Option.
(6)     From  and  after  the  Option Closing Date (as defined in the Depositary
Agreement),  a  Participant  shall receive from the Company, upon exercise of an
Option,  cash in an amount equal to the Option Exercise Price (as defined in the
Depositary  Agreement)  for  each  Depositary  Share issuable upon conversion or
exercise  of  such Option.  Upon the occurrence of an Option Closing (as defined
in  the Depositary Agreement), except to the extent specifically provided to the
contrary  in the instrument evidencing any Option, Restricted Stock Award, other
Award  or  any  other  agreement  between a Participant and the Company: (i) all
Options  then-outstanding  shall automatically become immediately exercisable in
full,  (ii)  all Restricted Stock Awards then-outstanding shall automatically be
deemed  free of all conditions or restrictions, and (iii) all other Awards shall
become  exercisable,  realizable  or  vested  in  full,  or shall be free of all
conditions  or  restrictions,  as  applicable  to  each  such  Award.
(7)     From  and after the Option Expiration Date (as defined in the Depositary
Agreement),  the  class  of  securities available under this Plan shall mean the
Common Stock, and a Participant shall receive from the Company, upon exercise of
an  Option,  the  number  of shares of Common Stock of the Company issuable upon
conversion  or  exercise  of  such  Option.
9.     General  Provisions  Applicable  to  Awards
       -------------------------------------------
(a)     Transferability  of Awards.  Except as the Board may otherwise determine
        --------------------------
or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
     or  otherwise  encumbered  by  the  person to whom they are granted, either
voluntarily  or  by  operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, shall be exercisable only
by  the Participant.  References to a Participant, to the extent relevant in the
context,  shall  include  references  to  authorized  transferees.
(b)     Documentation.  Each  Award  shall  be  evidenced in such form (written,
        -------------
electronic  or  otherwise)  as the Board shall determine. Each Award may contain
terms  and  conditions  in  addition  to  those  set  forth  in  the  Plan.
(c)     Board  Discretion.  Except as otherwise provided by the Plan, each Award
        -----------------
may  be  made alone or in addition or in relation to any other Award.  The terms
of  each  Award need not be identical, and the Board need not treat Participants
uniformly.
(d)     Termination of Status.  The Board shall determine the effect on an Award
        ---------------------
of  the  disability,  death,  retirement,  authorized  leave of absence or other
change  in  the  employment  or  other status of a Participant and the extent to
which,  and  the  period  during which, the Participant, the Participant's legal
representative,  conservator,  guardian  or  Designated Beneficiary may exercise
rights  under  the  Award.
(e)     Withholding.  Each  Participant  shall  pay  to  the  Company,  or  make
        -----------
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of  the  event  creating  the  tax liability.  Except as the Board may otherwise
provide  in  an  Award,  Participants  may,  to  the extent then permitted under
applicable  law, satisfy such tax obligations in whole or in part by delivery of
Depositary  Shares,  including  shares  retained from the Award creating the tax
obligation, valued at their Fair Market Value; provided, however, that the total
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tax withholding where stock is being used to satisfy such tax obligations cannot
exceed the Company's minimum statutory withholding obligations (based on minimum
statutory  withholding  rates  for  federal  and  state  tax purposes, including
payroll  taxes,  that  are  applicable to such supplemental taxable income). The
Company  may,  to  the  extent permitted by law, deduct any such tax obligations
from  any  payment  of  any  kind  otherwise  due  to  a  Participant.
(f)     Amendment  of  Award.  The  Board  may  amend,  modify  or terminate any
        --------------------
outstanding  Award,  including but not limited to, substituting therefor another
Award  of  the  same  or  a  different type and changing the date of exercise or
realization,  provided  that  the  Participant's consent to such action shall be
required  unless  the  Board determines that the action, taking into account any
related  action,  would  not  materially  and  adversely affect the Participant.
(g)     Conditions  on Delivery of Shares.  The Company will not be obligated to
        ---------------------------------
deliver  any  Depositary  Shares  pursuant to the Plan or to remove restrictions
from  shares previously delivered under the Plan until (i) all conditions of the
Award  have  been met or removed to the satisfaction of the Company, (ii) in the
opinion of the Company's counsel, all other legal matters in connection with the
issuance  and  delivery  of  such  shares  have  been  satisfied,  including any
applicable  securities  laws  and  any applicable stock exchange or stock market
rules  and  regulations, and (iii) the Participant has executed and delivered to
the  Company  such  representations  or  agreements  as the Company may consider
appropriate  to  satisfy  the  requirements  of  any  applicable  laws, rules or
regulations.
(h)     Acceleration.  The  Board  may  at any time provide that any Award shall
        ------------
become  immediately  exercisable  in  full  or  in  part,  free  of  some or all
restrictions  or  conditions, or otherwise realizable in full or in part, as the
case  may  be.
10.     Miscellaneous
        -------------
(a)     No  Right To Employment or Other Status.  No person shall have any claim
        ---------------------------------------
or  right  to  be  granted  an  Award,  and  the  grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
     relationship with the Company.  The Company expressly reserves the right at
any  time  to dismiss or otherwise terminate its relationship with a Participant
free from any liability or claim under the Plan, except as expressly provided in
the  applicable  Award.
(b)     No  Rights  As Stockholder.  Subject to the provisions of the applicable
        --------------------------
Award,  no  Participant  or  Designated  Beneficiary  shall have any rights as a
stockholder with respect to any Depositary Shares to be distributed with respect
to  an  Award  until becoming the record holder of such shares.  Notwithstanding
the foregoing, in the event the Company effects a split of the Depositary Shares
by  means of a stock dividend and the exercise price of and the number of shares
subject  to  such  Option are adjusted as of the date of the distribution of the
dividend (rather than as of the record date for such dividend), then an optionee
who  exercises  an  Option between the record date and the distribution date for
such  stock dividend shall be entitled to receive, on the distribution date, the
stock  dividend  with respect to the Depositary Shares acquired upon such Option
exercise,  notwithstanding  the fact that such shares were not outstanding as of
the  close  of  business  on  the  record  date  for  such  stock  dividend.
(c)     Effective Date and Term of Plan.  The Plan shall become effective on the
        -------------------------------
date  on  which it is adopted by the Board. No Awards shall be granted under the
Plan  after  the  completion  of  ten  years from the date on which the Plan was
adopted by the Board, but Awards previously granted may extend beyond that date.
(d)     Amendment  of  Plan.  The Board may amend, suspend or terminate the Plan
        -------------------
or  any  portion  thereof  at  any  time.
(e)     Authorization  of  Sub-Plans.  The Board may from time to time establish
        ----------------------------
one  or more sub-plans under the Plan for purposes of satisfying applicable blue
sky, securities or tax laws of various jurisdictions.  The Board shall establish
such  sub-plans  by  adopting  supplements  to  this  Plan  containing  (i) such
limitations  on  the  Board's  discretion  under  the  Plan  as  the Board deems
necessary  or  desirable  or  (ii)  such  additional  terms  and  conditions not
otherwise  inconsistent  with  the  Plan  as  the  Board shall deem necessary or
desirable.  All  supplements  adopted by the Board shall be deemed to be part of
the  Plan,  but  each  supplement  shall  apply  only to Participants within the
affected jurisdiction and the Company shall not be required to provide copies of
any  supplement  to Participants in any jurisdiction which is not the subject of
such  supplement.
(f)     Governing Law.  The provisions of the Plan and all Awards made hereunder
        -------------
shall be governed by and interpreted in accordance with the laws of the State of
Delaware,  without  regard  to  any  applicable  conflicts  of  law.



</TEXT>
</DOCUMENT>
