**EXHIBIT10.3**

**SecondAmended and Restated**

**EmploymentAgreement**

 

THIS EMPLOYMENT AGREEMENT(this “Agreement”) made effective as of the 13th day of November 2007 (the “EffectiveDate”), by and between Advanced Life Sciences, Inc., an Illinois corporation(the “Company”), and R. Richard Wieland, II (the “Executive”).

WHEREAS, theCompany and the Executive previously entered into an employment contract (the “OriginalEmployment Contract”); and

WHEREAS, theCompany and the Executive entered into an Amended and Restated EmploymentAgreement, effective November 7, 2006 (the “First Amended and RestatedEmployment Agreement); and

WHEREAS, theCompany and the Executive desire to enter into this Second Amended and RestatedAgreement, effective as of the Effective Date, to amend and restate the FirstAmended and Restated Employment Agreement; and

WHEREAS, the Company desiresto employ the Executive in accordance with the terms and conditions hereinafterset forth and the Executive desires to be so employed; and

 

WHEREAS, the Company has agreed with the Executivethat this Agreement shall set forth the terms and conditions of the Executive’semployment with the Company;

NOW, THEREFORE, in consideration of the mutualcovenants contained herein, the Company and the Executive agree as follows:

1.                                       Term.  The employment of the Executive by theCompany pursuant to this Agreement shall begin as of the Effective Date andshall expire on the third anniversary of the Effective Date (the “Term”),unless extended, as set forth below, or otherwise terminated pursuant to theprovisions of this Agreement; provided, however, that commencingon the third anniversary of the Effective Date and on each anniversarythereafter, the Term of this Agreement shall automatically be extended for oneadditional year unless, not later than 90 days prior to such anniversary, theExecutive or the Company shall have given notice in writing that he or it doesnot wish to extend this Agreement.

2.                                       Positionand Duties.  The Executive shallserve as the Executive Vice President and Chief Financial Officer****of the Company, and shall have such responsibilities,duties and authority as are assigned by the Chief Executive Officer and arecustomarily associated with such position, including but not limited to, thosehe may have as of the Effective Date. The Executive shall devote such time to the performance of his duties asis necessary to satisfactorily perform his responsibilities and duties.

3.                                       Placeof Performance.  In connection withthe Executive’s employment by the Company, the Executive shall be based at theprincipal executive offices of the Company currently in Woodridge, Illinois,except for required travel on the Company’s business.

4.                                       Compensationand Related Matters.  During the Termof the Executive’s employment, as compensation and consideration for theperformance by the Executive of the Executive’s duties, responsibilities andcovenants pursuant to this Agreement, the Company shall pay the Executive andthe Executive agrees to accept in full payment for such performance the amountsand benefits set forth below.

(a)                                  Salary.  The Company shall pay to the Executive anannual base salary of $221,000 (“Base Salary”), payable in substantially equalinstallments no less frequently than monthly in accordance with the Company’sapplicable payroll practices.  TheCompensation Committee of the Board of Directors of the Company (the “CompensationCommittee”) shall review the Base Salary, annually at a minimum, or at suchother time as it deems a review necessary and may increase the Base Salary on aprospective basis.  Any such salaryadjustment shall then be considered Base Salary for the purposes of thisAgreement. The Executive’s Base Salary shall not be reduced after any increase,without the Executive’s consent.

 

21

----

 

(b)                                 Bonus.  The Executive shall be eligible toparticipate throughout the Term in the Company’s annual bonus plan or anysimilar or successor bonus plan (“Bonus Plan”) in accordance with the Company’scompensation practices and the terms and provisions of the Bonus Plan.  Each year, the Executive may be eligible toreceive a target performancebonus of thirty percent (30%) of Base Salary.  The amount of the Executive’s target performance bonus shall be reviewedannually and may be increased by the Compensation Committee.

(c)                                  StockIncentive Plan.  The Executive shallbe eligible to receive additional awards of the Company’s common stock underthe Company’s Stock Incentive Plan or under any other equity plan of theCompany as determined by the Compensation Committee in its discretion.

(d)                                 OtherBenefits and Perquisites.  During theTerm of the Executive’s employment hereunder:

(i)  BenefitPlans.  The Executive shall beentitled to participate in or receive benefits under any employee pension orwelfare benefit plan or arrangement made available by the Company at any timeduring his employment hereunder to its employees (collectively the “BenefitPlans”), including without limitation each qualified retirement plan, lifeinsurance and accident plan, medical, dental insurance plans, and disabilityplan, subject to and on a basis consistent with the terms, conditions andoverall administration of such plans and arrangements, as they may be amendedfrom time to time.

(ii) Vacation.  The Executive shall be entitled to not lessthan 25****days of paid vacation in each calendaryear, in accordance with the Company’s vacation policy.

(iii)          ExpenseReimbursement.  The Executive shallbe entitled to receive reimbursement for all reasonable business, travel orother out-of-pocket expenses incurred by the Executive in fulfilling theExecutive’s duties and responsibilities hereunder, provided that such expensesare incurred and accounted for in accordance with the policies and proceduresestablished by the Company. Additionally, the Company will reimburse the Executive upon expensereceipt submission, the annual expenses of membership in two (2) financialgroups and the annual costs of a health club membership and physical examinationup to an amount of $2,000 of total expenses per year.

5.                                       Termination.

(a)                                  TheExecutive’s employment hereunder may be terminated under the followingcircumstances:

(i)            The death of the Executive;

(ii)           By the Company for “Cause”, which shall mean any of thefollowing:, as determined by the Board in its discretion:  (A) conviction of or plea of guilty or *nolo contendere* to any criminal violationinvolving dishonesty or fraud; (B) engagement in conduct that is injurious tothe Company; (C) engagement in any act of dishonesty or misconduct that resultsin damage to the Company or its business or reputation or that the Boarddetermines to adversely affect the value, reliability or performance of theExecutive to the Company; (D) refusal or failure to substantially comply withthe Company’s human resources rules, policies, directions and/or restrictionsrelating to harassment and/or discrimination, or with compliance or riskmanagement rules, policies, directions and/or restrictions; (E) unauthorized useor disclosure of Confidential Information (as defined below) or other tradesecrets of the Company; (F) loss of any license or registration that isnecessary for the Executive to perform his duties to the Company, or commissionof any act that could result in the legal disqualification of the Executivefrom being employed by the Company or any of its affiliates; (G) failure tocooperate with the Company or any of its affiliates in any internalinvestigation or administrative, regulatory or judicial proceeding; or (H)continuous failure by the Executive to perform his duties to the Company (whichmay include any sustained and unexcused absence of the Executive from theperformance of such duties, which absence has not been certified in writing asdue to physical or mental illness or disability), after a written demand forperformance has been delivered to the Executive identifying the manner in whichthe Executive has failed to substantially perform such duties.  The application of any part of the definitionof Cause set forth in clauses (A) through (H) above to the Executive shall notpreclude or prevent the reliance by the Company or the Board on any other partof the definition that also may be applicable. In addition, the Executive’s employment shall be deemed to haveterminated for Cause if, after the Executive’s employment has terminated, factsand circumstances are discovered that would have justified a termination forCause.

 

22

----

 

(iii)          By mutual agreement between the Company and the Executive;or

(iv)          By the Executive orthe Company for any reason other than as stated in Sections 5(a)(i) through5(a)(iii) above, upon providing a Notice of Termination (as defined in Section5(b)).

(b)                                 Noticeof Termination.  Any termination ofthe Executive’s employment by the Company or by the Executive (other than atermination pursuant to Section 5(a)(i) above) shall be communicated by writtenNotice of Termination to the other party hereto in accordance with Section 10.  For purposes of this Agreement, a “Notice ofTermination” shall mean a notice that shall indicate the specific terminationprovision in this Agreement relied upon and shall set forth in reasonabledetail the facts and circumstances claimed to provide a basis for terminationof the Executive’s employment under the provision so indicated.

(c)                                  “Dateof Termination” shall mean (i) if the Executive’s employment is terminatedpursuant to Section 5(a)(i) above, the date of his death; (ii) if the Executive’semployment is terminated pursuant to Section 5(a)(ii) or 5(a)(iv) above, thedate such Notice of Termination is given (or such later date as providedtherein); (iii) if the Executive’s employment is terminated pursuant to Section5(a)(iii) above, the date mutually agreed to by the parties; (iv) the date theTerm of this Agreement expires, if either the Company or the Executive providesnotice in accordance with Section 1; or (v) if the Executive terminates hisemployment and fails to provide written notice to the Company of suchtermination, the date of such termination.

6.                                       CompensationUpon Termination.

(a)                                  Thefollowing payments shall be made upon the Executive’s termination of employmentfor any reason:  (i) earned but unpaidBase Salary through the Executive’s Date of Termination; (ii) any accrued butunpaid vacation; (iii) unreimbursed business expenses owed pursuant to Section4(d)(iii); (iv) any outstanding notes payable to the Executive along with theinterest due; and (v) any amounts payable under any of the Company’s Bonus Planand Benefit Plans in accordance with the terms of those plans.  All amounts under clauses (i) through (v)shall be paid in a lump sum on the Executive’s Date of Termination or as soonas administratively practicable thereafter.

(b)                                 Inthe event that the Executive’s employment is terminated pursuant to Sections5(a)(i) or 5(a)(ii), or by the Executive for any reason****pursuant to Section 5(a)(iv), above, theCompany shall have no further obligation to the Executive under this Agreement,other than the payments in Section 6(a).

(c)                                  Ifthe Executive’s employment is terminated by the parties pursuant to Section5(a)(iii) above, the Executive shall be entitled to receive the compensationthe parties specify in any written agreement that the Company and the Executiveexecute regarding the Executive’s termination.

(d)                                 Inaddition to the payments made under Section 6(a), if the Executive’s employmentis terminated by the Company without Cause pursuant to Section 5(a)(iv) above,and conditioned upon the Executive’s execution of a valid and legallyenforceable release of claims against the Company, the Company shall, for aperiod of twelve (12) months following the Date of Termination (the “SeverancePeriod”):  (i) provide to the Executivesalary continuation paid in accordance with the Company’s applicable payrollpractices, at the Executive’s Base Salary rate in effect as of the Date ofTermination and (ii) continue the Executive’s coverage under the Company’shealth medical, dental, vision, disability, and life and accident benefitplans, in which the Executive participated immediately prior to the Date ofTermination, provided, however, that if the Company cannot continue suchcoverage, the Company shall provide or arrange to provide, at its expense,similar coverage to the Executive and if such coverage cannot be arranged, theCompany will provide a cash equivalent payment to the Executive.  In addition, no later than two and one-half(21⁄2) months following the end of the year in which the Executive’s employmentis terminated, the Company shall pay the Executive in a lump sum an amountequal to the Executive’s target performance bonus multiplied by a fraction, thenumerator of which is the number of days in the calendar year in which theExecutive’s employment is terminated through the Date of Termination and thedenominator of which is 365. Notwithstanding the forgoing, vacation days shall not accrue during theSeverance Period.

(e)                                  TheExecutive shall not be required to mitigate the amount of any payment providedfor in this Section 6 by seeking other employment or otherwise, nor shall theamount of any payment or benefit provided for in this Section 6 be reduced byany compensation earned by the Executive as the result of employment by anotheremployer, by retirement benefits, by offset against any amount claimed to beowed by the Executive to the Company, or otherwise.

 

23

----

 

(f)                                    Theobligations of the Company to make payments and provide benefits under thisSection 6 shall survive the termination of this Agreement.

 

 

7.                                       Change inControl.  Upon a Change in Control (asdefined below), all outstanding stock options and other equity awards under theCompany’s Stock Incentive Plan or other similar or successor plan held by theExecutive will immediately become fully vested and exercisable.

(a)                                  Payments andBenefits Upon Employment Termination Upon a Change in Control.  If, within (24) months after a Change inControl, the Executive’s employment is terminated by the Company other than forCause or if the Executive terminates employment for Good Reason (as definedbelow), the Company shall provide the following payments and benefits to theExecutive, in lieu of those payments and benefits provided under Sections 6(d),but in addition to the amounts payable under Section 6(a):

(i)            The Company shallpay the Executive a lump sum cash amount equal to (2) times the sum of (A) theExecutive’s annual Base Salary as in effect on the date of the Executive’stermination of employment and (B) the Executive’s target performance bonusamount as in effect as in effect for the fiscal year in which the Executive’semployment is terminated:

(Base Salary + Target Performance Bonus)   x  (2)   =   lump sum cash amount

(ii)           The Company shallcontinue the Executive’s coverage under the Company’s health medical, dental,vision, disability, and life and accident insurance benefit plans in which theExecutive participated immediately prior to the Executive’s termination ofemployment for a period of twenty four (24) months, provided, however, that ifthe Company cannot continue such coverage, the Company shall provide or arrangeto provide, at its expense, similar coverage to the Executive and if suchcoverage cannot be arranged, the Company will provide a cash equivalent paymentto the Executive.

(b)                                 Timing ofPayment.  All payments under Section7(a)(i) shall be made in a lump sum cash payment as soon as practicable, but inno event more than 10 days after the Executive’s termination of employment.

(c)                                  Definitions.  For purposes of this Agreement, the followingterms shall have the following definitions:

(i)  “Change inControl” means the occurrence of any one or more of the following:

(A)          any “person” (as such term is definedin Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act),including a “group” (as defined in Section 13(d)(3) of the Exchange Act), otherthan (I) the Company, (II) any wholly-owned subsidiary of the Company, (III)any employee benefit plan (or related trust) sponsored or maintained by theCompany or any of its affiliates, or (IV) a “Permitted Holder” (as definedbelow), becomes a “beneficial owner” (as defined in Rule 13d-3 under theExchange Act), directly or indirectly, of securities of the Company havingfifty percent (50%) or more of the combined voting power of thethen-outstanding securities of the Company that may be cast for the election ofdirectors of the Company (other than as a result of an issuance of securitiesinitiated by the Company in the ordinary course of business) (the “CompanyVoting Securities”); provided, however, that the event described in thisSection 7(c)(i) shall not be deemed to be a Change in Control by virtue of anyunderwriter temporarily holding securities pursuant to an offering of suchsecurities;

(B)           individuals who, as of the date of this Agreement,constitute the Board (the “Incumbent Directors”), together with any newdirector(s) whose election or nomination for election by the Company’sstockholders subsequent to the date hereof was approved by a vote of at leasttwo-thirds (2/3) of the directors then still in office who either wereIncumbent Directors or whose election or nomination for election was previouslyso approved, cease for any reason to constitute a majority thereof;

 

24

----

 

(C)           the consummation by the Company of a reorganization,merger or consolidation, or sale or other disposition of all or substantiallyall of the assets of the Company (a “Business Combination”), in each case,unless immediately following such Business Combination:  (A) holders of the securities of the Companyentitled to vote generally in the election of directors of the Companyimmediately prior to such Business Combination own or hold, in substantiallythe same proportions as their ownership immediately prior to such BusinessCombination, more than 50% of the combined voting power of then outstanding votingsecurities entitled to vote generally in the election of directors of (x) theentity resulting from such Business Combination, or (y) if applicable, theentity that as a result of such Business Combination owns the Company or all orsubstantially all of the Company’s assets either directly or through one ormore subsidiaries; or

(D)          the stockholders of the Company approve a plan of completeliquidation or dissolution of the Company.

Notwithstanding theforegoing, a Change in Control shall not be deemed to occur solely because anyperson acquires beneficial ownership of more than fifty percent (50%) of theCompany Voting Securities as a result of the acquisition of Company VotingSecurities by the Company which reduces the number of Company Voting Securitiesoutstanding; provided, however, that if after such acquisition by the Companysuch person becomes the beneficial owner of additional Company VotingSecurities that increases the percentage of outstanding Company VotingSecurities beneficially owned by such person, a Change in Control transactionshall then occur.

Further notwithstanding theforegoing, unless a majority of the Incumbent Directors determines otherwise,no Change in Control shall be deemed to have occurred with respect to theExecutive if the Change in Control results from actions or events in which theExecutive is a participant in a capacity other than solely as an officer,employee or director of the Company or any of its affiliates.

(ii)           “Permitted Holders” means (A) Michael T. Flavin (the “Principal”),(B) the spouse or any immediate family member of the Principal and any child orspouse of any spouse or immediate family member of the Principal, (C) a trust,corporation, partnership or other entity, the beneficiaries, stockholders, partners,owners or persons beneficially holding, directly or indirectly, a controllinginterest of which consists of the Principal and/or such other persons referredto in the immediately preceding clause (B), or (D) the trustees of any trustreferred to in clause (D).

(iii)          “Good Reason” means any of the following conditions,without the Executive’s consent, (A) a material diminution in the Executive’sBase Salary, (B) a material diminution in the Executive’s authority, duties, orresponsibilities, (C) a material diminution in the authority, duties, orresponsibilities of the supervisor to whom the Executive is required to report,including a requirement that the Executive report to a corporate officer oremployee instead of reporting directly to the Board (or other similar governingbody), (D) a material diminution in the budget over which the Executive retainsauthority, (E) a material change in the geographic location at which theExecutive must perform services, and (F) any other action or inaction that constitutesa material breach by the Company of this Agreement.  If one or more of the above conditionsexists, the Executive must provide notice to the Company within ninety (90)days of the initial existence of the condition. Upon such notice, the Company shall have a period of thirty (30) daysduring which it may remedy the condition.

(d)                                 Treatmentof Parachute Payments.

(i)            Notwithstanding any other provisionsof this Agreement, and except as set forth below, in the event that any paymentor benefit received or to be received by the Executive in connection with aChange in Control or the termination of the Executive’s employment (whetherpursuant to the terms of this Agreement or any other plan, arrangement oragreement with the Company, any person whose actions result in a Change inControl or any person affiliated with the Company or such person) (all suchpayments and benefits, including payments under Section 7(a) above, beinghereinafter called “Total Payments”) is determined to be an “excess parachutepayment” pursuant to Section 280G of the Internal Revenue Code of 1986, asamended (the “Code”), or any successor or substitute provision of the Code,with the effect that the Executive is liable for the payment of the excise taxdescribed in Code Section 4999 or any successor or 

 

25

----

 

substitute provision ofthe Code (the “Excise Tax”), then, after taking into account any reduction inthe Total Payments provided by reason of Code Section 280G in such other plan,arrangement or agreement, the cash payments provided in Section 7(a)(i) of thisAgreement shall first be reduced, and the noncash payments and benefits shallthereafter be reduced, to the extent necessary so that no portion of the TotalPayments is subject to the Excise Tax.

(ii)           All determinations required to bemade under this Section 7(d), and the assumptions to be utilized in arriving atsuch determination, shall be made by the certified public accounting firm usedfor auditing purposes by the Company immediately prior to the date of theExecutive’s termination of employment or, if the parties determine that suchcertified public accounting firm cannot make such determination because oflegal restrictions, the parties shall agree on a different certified publicaccounting firm (such certified public accounting firm is hereinafter referredto as the “Accounting Firm”), which shall provide detailed supportingcalculations both to the Company and the Executive not later than 5 days priorto the date of the Executive’s termination of employment.  The Company shall pay all fees and expensesof the Accounting Firm.  Anydetermination by the Accounting Firm shall be binding upon the Company and theExecutive, except as provided in paragraph (ii) below.

(iii)          As a result of the uncertainty in theapplication of Code Sections 280G and 4999 at the time of the initialdetermination by the Accounting Firm hereunder, it is possible that theInternal Revenue Service (the “IRS”) or other agency will claim that an ExciseTax, or a greater Excise Tax, is due.  Ifthe Executive is required to make a payment of any such Excise Tax, the Companywill promptly pay the Executive an additional amount equal to the amount, orgreater amount, of Excise Tax the Executive is required to pay (plus a gross uppayment for any income taxes, interest, penalties or additional Excise Taxpayable by Executive with respect to such Excise Tax or additional payment), asdetermined by the Accounting Firm.  TheExecutive will notify the Company in writing of any claim by the IRS or otheragency that, if successful, would require payment by the Company of theadditional payments under this paragraph. The Executive and the Company shall each reasonably cooperate with theother in connection with any administrative or judicial proceedings concerningthe existence or amount of liability for Excise Tax with respect to the TotalPayments.  The Company shall pay all feesand expenses of the Executive relating to a claim by the IRS or otheragency.  Payments under this Section7(d)(iii) will be made by the end of the Executive’s taxable year nextfollowing the Executive’s taxable year in which the Executive remits therelated taxes, in accordance with Code Section 409A and Treas. Reg.§1.409A-3(i)(1)(v) (or any similar or successor provisions).

8.                                       CodeSection 409A.

                                                (a)                                  ThisAgreement is intended to comply with Code Section 409A and the interpretativeguidance thereunder, including the exceptions for short-term deferrals,separation pay arrangements, reimbursements, and in-kind distributions, andshall be administered accordingly.  TheAgreement shall be construed and interpreted with such intent.

                                                (b)                                 Tothe extent payments under Section 6(d) are subject to Code Section 409A and theExecutive is a Specified Employee (as defined below) as of the Date ofTermination, distributions to the Executive may not be made before the datethat is six months after the date of the Date of Termination or, if earlier,the date of the Executive’s death (the “Six Month Delay Rule”).  The term “Specified Employee” has the meaninggiven to that term in Code Section 409A and Treas. Reg. §1.409A-1(c)(i) (orother similar or successor provisions). Payments to which the Executive would otherwise be entitled during thefirst six months following the Date of Termination (the “Six Month Delay”) willbe accumulated and paid on the first day of the seventh month following theDate of Termination.  Notwithstanding theSix Month Delay Rule set forth in this Section 8(b), to the maximum extentpermitted under Code Section 409A and Treas. Reg. §1.409A-1(b)(9)(iii) (or anysimilar or successor provision), during the Six Month Delay, the Company willprovide the payments set forth in Section 6(d)(i) above, but in no event willthe amount of such payments exceed during the Six Month Delay an amount equalto two times the lesser of (i) the maximum amount that may be taken intoaccount under a qualified plan pursuant to Code Section 401(a)(17) for the yearin which the Date of Termination occurs and (ii) the sum of the Executive’sannualized compensation based upon the annual rate of pay for services providedto the Company for the taxable year of the Executive preceding the taxable yearof the Executive in which the Executive’s Date of Termination occurs (adjustedfor any increase during that year that was expected to continue indefinitely ifthe Executive had not had a Date of Termination), provided that amounts paidunder this sentence will count toward, and will not be in addition to, the totalpayment amount required to be made to the Executive by the Company underSection 6(d)(i) above.  Notwithstandingthe Six Month Delay Rule set forth in this Section 8(b), to the maximum extentpermitted under 

 

26

----

 

Code Section 409A andTreas. Reg. §1.409A-1(b)(9)(v) (or any similar or successor provision), theCompany will provide the payments set forth in Section 6(d)(ii), if nototherwise excepted from Code Section 409A, to the extent such payments do notexceed the applicable dollar amount under Code Section 402(g)(1)(B) for theyear in which the Date of Termination occurs; provided that amounts paid underthis sentence will count toward, and will not be in addition to, the totalpayment amount required to be made to the Executive by the Company underSection 6(d)(ii) above.

                                                (c)                                  Paymentsunder Section 7(a)(i) are intended to qualify as short-term deferrals.  However, if the Company reasonably determinesthat a payment under Section 7(a)(i) above does not qualify as a short-termdeferral under Code Section 409A and Treas. Reg. §1.409A-1(b)(4) (or anysimilar or successor provisions), or that other benefits under Section 7(a) donot qualify for an exception from Code Section 409A and the Executive is a SpecifiedEmployee as of the Date of Termination, distributions to the Executive aresubject to the Six Month Delay Rule. Payments to which the Executive would otherwise be entitled during theSix Month Delay will be accumulated and paid on the first day of the seventhmonth following the Date of Termination. Notwithstanding the Six-Month Delay Rule set forth in this Section 8(c):

                                                (i)                                     Tothe maximum extent permitted under Code Section 409A and Treas. Reg.§1.409A-1(b)(9)(iii) (or any similar or successor provision), during the firstmonth of the Six-Month Delay, the Company will pay the Executive an amountequal to the lesser of:  (i) the totallump sum severance provided under Section 7(a)(i) or (ii) two times the lesserof (A) the maximum amount that may be taken into account under a qualified planpursuant to Code Section 401(a)(17) for the year in which the Date ofTermination occurs, and (B) the sum of the Executive’s annualized compensationbased upon the annual rate of pay for services provided to the Company for thetaxable year of the Executive preceding the taxable year of the Executive inwhich the Executive’s Date of Termination occurs (adjusted for any increaseduring that year that was expected to continue indefinitely if the Executivehad not had a Date of Termination); provided that amounts paid under thissentence will count toward, and will not be in addition to, the total paymentamount required to be made to the Executive by the Company under Section7(a)(i) above.

                                                (ii)                                  Tothe maximum extent permitted under Code Section 409A and Treas. Reg.§1.409A-1(b)(9)(v) (or any similar or successor provision), the Company willprovide the payments set forth in Section 7(a)(ii), if not otherwise exceptedfrom Code Section 409A, to the extent such payments do not exceed theapplicable dollar amount under Code Section 402(g)(1)(B) for the year in whichthe Date of Termination occurs; provided that amounts paid under this sentencewill count toward, and will not be in addition to, the total payment amount requiredto be made to the Executive by the Company under Section 7(a)(ii) above.

9.                                       RestrictiveCovenants.

(a)                                  TradeSecrets.  The Executive acknowledges thathe has had and shall have access to confidential information of the Company,whether or not reduced to writing and whether in paper, electronic, digital,analog or other format (including, but not limited to, trade secrets, know-how,Inventions (as defined below), new product and product development information,research results, marketing and sales programs, customer and supplierinformation, financial data, employee records, cost information, pricinginformation, sales and marketing strategies, the identity of customers,information received by the Company under an obligation of confidentiality tocustomers, and all information generated by the Company for customers) relatingto the past, present or planned business, customers, clients, contacts,prospects and assets of the Company that is unique, valuable and has notpurposefully been made generally known to the public by the Company (“ConfidentialInformation”).  Confidential Informationshall not include any information that: (i) is now, or hereafter becomes,through no act or failure to act on the part of the Executive that constitutesa breach of this Section 9, generally known or available to the public; (ii) ishereafter furnished without restriction on disclosure to the Executive by athird party, other than an employee or agent of the Company, who is not underany obligation of confidentiality to the Company; (iii) is disclosed with thewritten approval of the Company; or (iv) is required to be disclosed orprovided by law, court order, or similar compulsion, including pursuant to orin connection with any legal proceeding involving the parties hereto; provided,however, that such disclosure shall be limited to the extent so required orcompelled; and provided further, however, that if the Executive is required todisclose such Confidential Information, the Executive shall give the Companynotice of such disclosure and cooperate in seeking suitable protections.  The Executive acknowledges that allConfidential Information, and all documents, files, reports, drawings, designs,specifications, formulae, samples, data, writings, tools, equipment, memorydevices or any other tangible objects that incorporate, contain, refer to orembody any Confidential Information (“Items”), acquired by the Executive inconnection with the Executive’s employment with 

 

27

----

 

the Company are the property of theCompany.  Other than in the course ofperforming services for the Company or otherwise authorized in writing by theCompany, the Executive shall not, at any time, directly or indirectly use,divulge, furnish or make accessible to any person any Confidential Information,but instead shall keep all Confidential Information strictly and absolutelyconfidential.  The Executive shalldeliver promptly to the Company, at the termination of his employment or at anyother time at the request of the Company, without retaining any copies, allItems and any other documents or materials in the Executive’s possessionrelating, directly or indirectly, to any Confidential Information.

(b)                                 Non-competition.  Beginning on the Effective Date and for aperiod of twelve (12) months following Executive’s Date of Termination (the “RestrictedPeriod”), Executive shall not directly or indirectly, alone or in conjunctionwith any other party, own any interest in, operate, control, engage in or participateas a partner, director, principal, officer, employee, independent contractor oragent of, act as a consultant to, perform any services for, or assist in anyway any company, person, or entity in the United States that is engaged in “CompetingServices” (as defined herein).  CompetingServices shall mean chemistry and biology research and development relating to,arising from, connected with, or competitive with or intended to be competitivewith, any product or research project as to which the Executive performedservices for the Company, or about which the Executive received access toConfidential Information while employed by the Company.  If the Executive obtains other employmentduring the twelve-month period after the Executive’s Date of Termination, theExecutive agrees to notify the Company in writing of the name and address ofsuch employer.

(c)                                  Non-Solicitationof Employees. During the Restricted Period, the Executive shall not, directlyor indirectly solicit or induce, or attempt to solicit or induce, any currentemployee of the Company, or any individual who becomes an employee during theRestricted Period, to leave his or her employment with the Company or join orbecome affiliated with any other business or entity, hire any employee of the Companyor in any way interfere with the relationship between any employee and theCompany.

(d)                                 Non-Solicitationof Customers.  During the RestrictedPeriod, the Executive shall not, directly or indirectly, solicit or induce, orattempt to solicit or induce, any customer, supplier, licensee, licensor orother business relation of the Company to terminate its relationship orcontract with the Company, to cease doing business with the Company, or in anyway interfere with the relationship between any such customer, supplier,licensee or business relation and the Company (including making any negativestatements or communications concerning the Company or their employees).

(e)                                  Inventions.  The Executive acknowledges all inventions ofthe Company (including, but not limited to, procedures, systems, machines,methods, processes, uses, apparatuses, compositions of matter, designs, orconfigurations of any kind, discovered, conceived, reduced to practice,developed, made or produced) (“Inventions”) that (i) relate to the present orplanned business of the Company or the work performed by the Company for itscustomers, and (ii) are conceived or reduced to practice by the Executive,either alone or with others, during the Executive’s employment with the Companyor during a period of 120 days after the Executive’s Date of Termination,whether or not done during the Executive’s regular working hours, are the soleproperty of the Company, including, without limitation, all domestic andforeign patent rights, rights of registration or other protection under thecopyright laws, or other rights pertaining to the Inventions.  For purposes of this Agreement, Inventionsshall include any improvements to an Invention and shall not be limited to thedefinition of a patentable invention or copyrightable work of authorship ascontained in the United States patent or copyright laws.  The Executive shall disclose promptly andfully in writing to the Company each Invention, whether or not reduced topractice, that the Executive conceives or learns (either alone or jointly withothers) during the Term of Employment. The Executive hereby assigns to the Company, or its nominee, all of theExecutive’s right, title and interest, including international priority rights,in and to all Inventions (other than any Invention that was developed entirelyon the Executive’s own time and for which no equipment, supplies, facilities ortrade secret information of the Company was used, unless such Invention relatesdirectly to the Company’s business or to the Company’s actual or demonstrablyanticipated research or development), and in and to all United States orforeign patents, copyrights and other proprietary rights granted thereon orresulting therefrom, and in and to all applications for United States orforeign copyrights, patents and other proprietary rights.  The Executive shall execute all papers,perform all lawful acts or assist the Company in any way the Company deemsnecessary or advisable (at the Company’s expense) for the preparation, filing,prosecution, issuance, procurement, maintenance or enforcement of patentsapplications and patents of the United States and foreign countries, and forobtaining and enforcing copyright protection and registration, of anyInvention.  To that end, the Executiveshall at the Company’s request and without limitation, testify in any suit orother proceeding involving any of the Inventions, execute all documents thatthe Company 

 

28

----

 

reasonablydetermines to be necessary or convenient for use in applying for and obtainingpatent or copyright protection and registration on any of the Inventions andenforcement of that protection and registration, and execute all necessarydocuments and papers required to vest title in and assign to the Company (orits nominee) patent or copyright protection and registration.  The Executive’s obligation to assist theCompany in obtaining and enforcing patent or copyright protection andregistration for the Inventions shall continue following termination of thisAgreement, but Company shall compensate the Executive following the expirationor termination of this Agreement at a rate of $10 for the execution of eachdocument and $150 per day for each day or portion thereof spent at the Company’srequest in rendering assistance, plus reimbursement for the reasonableout-of-pocket expenses incurred by the Executive for such assistance.  The Executive hereby irrevocably appoints theCompany and its duly authorized officers and agents as his agent andattorney-in-fact to act for and on behalf of the Executive in filing all patentapplications, applications for copyright protection and registrationamendments, renewals and all other appropriate documents in any way related tothe Inventions.

(f)                                    Survival.  The provisions set forth in this Section 9shall survive termination of this Agreement.

(g)                                 ScopeLimitations.  If the scope, period oftime or area of restriction specified in this Section 9 are or would be judgedto be unreasonable in any court proceeding, then the period of time, scope orarea of restriction shall be reduced or limited in the manner and to the extentnecessary to make the restriction reasonable, so that the restriction may beenforced in those areas, during the period of time and in the scope that are orwould be judged to be reasonable.

10.                                 BindingAgreement; Successors.  ThisAgreement and all rights of the Executive hereunder shall inure to the benefitof and be enforceable by the Executive’s personal or legal representatives,executors, administrators, successors, heirs, distributees, devisees andlegatees.  If the Executive should diewhile any amounts would still be payable to him hereunder if he had continuedto live, all such amounts, unless otherwise provided herein, shall be paid inaccordance with the terms of this Agreement to the Executive’s devisee,legatee, or other designee or, if there be no such designee, to the Executive’sestate.  This Agreement shall be bindingupon, and inure to the benefit of, any successors or assigns of theCompany.  This Agreement is not intendedto confer upon any person other than the parties hereto (and the Executives’Spouse and dependents) any rights or remedies, except as specifically providedin this Section 10.

11.                                 Notice.  Notices, demands and all other communicationsprovided for in this Agreement shall be in writing and shall be deemed to havebeen duly given when delivered, if delivered personally, or (unless otherwisespecified) when received, if mailed by United States certified or registeredmail, return receipt requested, postage prepaid, by Federal Express or otherreputable overnight courier service or by facsimile, addressed as follows:

If to the Executive:

R. Richard Wieland, II

1440 Davey Road

Woodridge, Illinois 60517

 

If to the Company:

AdvancedLife Sciences, Inc.

1440 Davey Road

Woodridge, Illinois 60517

Attn: Chief Executive Officer

or to such otheraddress as any party may have furnished to the other in writing in accordanceherewith, except that notices of change of address shall be effective only uponreceipt.

12.                                 GeneralProvisions.  No provision of thisAgreement may be modified, waived or discharged unless such waiver,modification or discharge is agreed to in writing signed by the Executive andsuch officer of the Company as may be specifically designated by the Company’sBoard.  No waiver by either party heretoat any time of any breach by the other party hereto of, or compliance with, anycondition or provision of this Agreement to be performed by such other partyshall be deemed a waiver of similar or dissimilar provisions or conditions atthe same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied,with respect to the subject matter hereof have been made by either party thatare not set forth expressly in this Agreement.

 

29

----

 

13.                                 Validity.  The invalidity or unenforceability of anyprovision or provisions of this Agreement shall not affect the validity orenforceability of any other provision of this Agreement, which shall remain infull force and effect.  If any provisionof this Agreement is found to be invalid or unenforceable, in whole or in part,then it shall be deemed to be modified or restricted to the extent and in themanner necessary to render it valid and enforceable, or shall be deemed excisedfrom this Agreement, as the case may require, and this Agreement shall beconstrued and enforced to the maximum extent permitted by law, as if the provisionhad been originally incorporated herein as so modified or restricted, or as ifit had not originally been incorporated herein, as the case may be.

14.                                 Counterparts.  This Agreement may be executed in one or morecounterparts, each of which shall be deemed to be an original but all of whichtogether shall constitute one and the same instrument.

15.                                 EntireAgreement.  This Agreement sets forththe entire agreement of the parties hereto in respect of the subject mattercontained herein and supersedes all prior agreements, promises, covenants,arrangements, communications, representations or warranties, whether oral orwritten, by any officer, employee or representative of any party hereto; andany prior agreement of the parties hereto in respect of the subject mattercontained herein is hereby terminated and canceled. For the avoidance of doubt,the Company and the Executive hereby agree that this Agreement shall replaceand supersede the Original Employment Contract and First Amended and RestatedEmployment Agreement and govern the relationship of the parties.

16.                                 IrreparableHarm.  The Executive acknowledgesthat: (i) the Executive’s compliance with this Agreement is necessary topreserve and protect the proprietary rights, Confidential Information and thegoodwill of the Company and its subsidiaries as going concerns; (ii) anyfailure by the Executive to comply with the provisions of this Agreement shallresult in irreparable and continuing injury for which there will be no adequateremedy at law; and (iii) in the event that the Executive should fail to complywith the terms and conditions of this Agreement, the Company shall be entitled,in addition to such other relief as may be proper, to all types of equitablerelief (including, but not limited to, the issuance of an injunction and/ortemporary restraining order) as may be necessary to cause the Executive tocomply with this Agreement, to restore to the Company its property, and to makethe Company whole.

17.                                 Consentto Jurisdiction and Forum; Legal Fees and Costs.  The Company and the Executive herebyexpressly and irrevocably agree that any action, whether at law or in equity,arising out of or based upon this Agreement or the Executive’s employment bythe Company shall only be brought in a federal or state court located in CookCounty, Illinois.  The Executive herebyirrevocably consents to personal jurisdiction in such court and to acceptservice of process in accordance with the provisions of such court.  In connection with any dispute arising out ofor based upon this Agreement or the Executive’s employment by the Company, eachparty shall be responsible for its or his own legal fees and expenses and allcourt costs shall be shared equally by the Company and the Executive unless thecourt apportions such legal fees or court costs in a different manner.

18.                                 Withholding.  All payments made to the Executive pursuantto this Agreement shall be subject to applicable withholding taxes, if any, andany amount so withheld shall be deemed to have been paid to the Executive forpurposes of amounts due to the Executive under this Agreement.

19.                                 GoverningLaw.  This Agreement is governed byand is to be construed and enforced in accordance with the laws of the State ofIllinois, without regard to its conflict of law provisions.

IN WITNESS WHEREOF, the parties have executed this Agreement on thedate and year first above written.
| **EXECUTIVE** | ** **                  | **ADVANCED LIFE SCIENCES, INC.** |
|---------------|-----------------------------|----------------------------------|
| ** **    | ** **                  | ** **                       |
| By:           | /s/  R. Richard Wieland, II |                             | By: | /s/  Michael T. Flavin |
| Name:         | R.  Richard Wieland, II     |                             | Name: | Michael  T. Flavin, Ph.D. |
|          |                        |                             | Title: | Chief  Executive Officer |

 

 

30

----