EXHIBIT
10.3


Second
Amended and Restated


Employment
Agreement


 


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


WHEREAS, the
Company and the Executive previously entered into an employment contract (the “Original
Employment Contract”); and


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


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


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


 


WHEREAS, the Company has agreed with the Executive
that this Agreement shall set forth the terms and conditions of the Executive’s
employment with the Company;


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


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


2.                                       Position
and Duties.  The Executive shall
serve 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 are
customarily associated with such position, including but not limited to, those
he may have as of the Effective Date. 
The Executive shall devote such time to the performance of his duties as
is necessary to satisfactorily perform his responsibilities and duties.


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


4.                                       Compensation
and Related Matters.  During the Term
of the Executive’s employment, as compensation and consideration for the
performance by the Executive of the Executive’s duties, responsibilities and
covenants pursuant to this Agreement, the Company shall pay the Executive and
the Executive agrees to accept in full payment for such performance the amounts
and benefits set forth below.


(a)                                  Salary.  The Company shall pay to the Executive an
annual base salary of $221,000 (“Base Salary”), payable in substantially equal
installments no less frequently than monthly in accordance with the Company’s
applicable payroll practices.  The
Compensation Committee of the Board of Directors of the Company (the “Compensation
Committee”) shall review the Base Salary, annually at a minimum, or at such
other time as it deems a review necessary and may increase the Base Salary on a
prospective basis.  Any such salary
adjustment shall then be considered Base Salary for the purposes of this
Agreement. The Executive’s Base Salary shall not be reduced after any increase,
without the Executive’s consent.


 


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(b)                                 Bonus.  The Executive shall be eligible to
participate throughout the Term in the Company’s annual bonus plan or any
similar or successor bonus plan (“Bonus Plan”) in accordance with the Company’s
compensation practices and the terms and provisions of the Bonus Plan.  Each year, the Executive may be eligible to
receive a target performance
bonus of thirty percent (30%) of Base Salary.  
The amount of the Executive’s target performance bonus shall be reviewed
annually and may be increased by the Compensation Committee.


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


(d)                                 Other
Benefits and Perquisites.  During the
Term of the Executive’s employment hereunder:


(i)  Benefit
Plans.  The Executive shall be
entitled to participate in or receive benefits under any employee pension or
welfare benefit plan or arrangement made available by the Company at any time
during his employment hereunder to its employees (collectively the “Benefit
Plans”), including without limitation each qualified retirement plan, life
insurance and accident plan, medical, dental insurance plans, and disability
plan, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements, as they may be amended
from time to time.


(ii) Vacation.  The Executive shall be entitled to not less
than 25  days of paid vacation in each calendar
year, in accordance with the Company’s vacation policy.


(iii)          Expense
Reimbursement.  The Executive shall
be entitled to receive reimbursement for all reasonable business, travel or
other out-of-pocket expenses incurred by the Executive in fulfilling the
Executive’s duties and responsibilities hereunder, provided that such expenses
are incurred and accounted for in accordance with the policies and procedures
established by the Company. 
Additionally, the Company will reimburse the Executive upon expense
receipt submission, the annual expenses of membership in two (2) financial
groups and the annual costs of a health club membership and physical examination
up to an amount of $2,000 of total expenses per year.


5.                                       Termination.


(a)                                  The
Executive’s employment hereunder may be terminated under the following
circumstances:


(i)            The death of the Executive;


(ii)           By the Company for “Cause”, which shall mean any of the
following:, as determined by the Board in its discretion:  (A) conviction of or plea of guilty or nolo contendere to any criminal violation
involving dishonesty or fraud; (B) engagement in conduct that is injurious to
the Company; (C) engagement in any act of dishonesty or misconduct that results
in damage to the Company or its business or reputation or that the Board
determines to adversely affect the value, reliability or performance of the
Executive to the Company; (D) refusal or failure to substantially comply with
the Company’s human resources rules, policies, directions and/or restrictions
relating to harassment and/or discrimination, or with compliance or risk
management rules, policies, directions and/or restrictions; (E) unauthorized use
or disclosure of Confidential Information (as defined below) or other trade
secrets of the Company; (F) loss of any license or registration that is
necessary for the Executive to perform his duties to the Company, or commission
of any act that could result in the legal disqualification of the Executive
from being employed by the Company or any of its affiliates; (G) failure to
cooperate with the Company or any of its affiliates in any internal
investigation or administrative, regulatory or judicial proceeding; or (H)
continuous failure by the Executive to perform his duties to the Company (which
may include any sustained and unexcused absence of the Executive from the
performance of such duties, which absence has not been certified in writing as
due to physical or mental illness or disability), after a written demand for
performance has been delivered to the Executive identifying the manner in which
the Executive has failed to substantially perform such duties.  The application of any part of the definition
of Cause set forth in clauses (A) through (H) above to the Executive shall not
preclude or prevent the reliance by the Company or the Board on any other part
of the definition that also may be applicable. 
In addition, the Executive’s employment shall be deemed to have
terminated for Cause if, after the Executive’s employment has terminated, facts
and circumstances are discovered that would have justified a termination for
Cause.


 


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


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


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


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


6.                                       Compensation
Upon Termination.


(a)                                  The
following payments shall be made upon the Executive’s termination of employment
for any reason:  (i) earned but unpaid
Base Salary through the Executive’s Date of Termination; (ii) any accrued but
unpaid vacation; (iii) unreimbursed business expenses owed pursuant to Section
4(d)(iii); (iv) any outstanding notes payable to the Executive along with the
interest due; and (v) any amounts payable under any of the Company’s Bonus Plan
and 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 soon
as administratively practicable thereafter.


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


(c)                                  If
the Executive’s employment is terminated by the parties pursuant to Section
5(a)(iii) above, the Executive shall be entitled to receive the compensation
the parties specify in any written agreement that the Company and the Executive
execute regarding the Executive’s termination.


(d)                                 In
addition to the payments made under Section 6(a), if the Executive’s employment
is terminated by the Company without Cause pursuant to Section 5(a)(iv) above,
and conditioned upon the Executive’s execution of a valid and legally
enforceable release of claims against the Company, the Company shall, for a
period of twelve (12) months following the Date of Termination (the “Severance
Period”):  (i) provide to the Executive
salary continuation paid in accordance with the Company’s applicable payroll
practices, at the Executive’s Base Salary rate in effect as of the Date of
Termination and (ii) continue the Executive’s coverage under the Company’s
health medical, dental, vision, disability, and life and accident benefit
plans, in which the Executive participated immediately prior to the Date of
Termination, provided, however, that if the Company cannot continue such
coverage, the Company shall provide or arrange to provide, at its expense,
similar coverage to the Executive and if such coverage cannot be arranged, the
Company 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 employment
is terminated, the Company shall pay the Executive in a lump sum an amount
equal to the Executive’s target performance bonus multiplied by a fraction, the
numerator of which is the number of days in the calendar year in which the
Executive’s employment is terminated through the Date of Termination and the
denominator of which is 365. 
Notwithstanding the forgoing, vacation days shall not accrue during the
Severance Period.


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


 


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


 


 


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


(a)                                  Payments and
Benefits Upon Employment Termination Upon a Change in Control.  If, within (24) months after a Change in
Control, the Executive’s employment is terminated by the Company other than for
Cause or if the Executive terminates employment for Good Reason (as defined
below), the Company shall provide the following payments and benefits to the
Executive, 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 shall
pay the Executive a lump sum cash amount equal to (2) times the sum of (A) the
Executive’s annual Base Salary as in effect on the date of the Executive’s
termination of employment and (B) the Executive’s target performance bonus
amount as in effect as in effect for the fiscal year in which the Executive’s
employment is terminated:


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


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


(b)                                 Timing of
Payment.  All payments under Section
7(a)(i) shall be made in a lump sum cash payment as soon as practicable, but in
no event more than 10 days after the Executive’s termination of employment.


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


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


(A)          any “person” (as such term is defined
in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) 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), other
than (I) the Company, (II) any wholly-owned subsidiary of the Company, (III)
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any of its affiliates, or (IV) a “Permitted Holder” (as defined
below), becomes a “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company having
fifty percent (50%) or more of the combined voting power of the
then-outstanding securities of the Company that may be cast for the election of
directors of the Company (other than as a result of an issuance of securities
initiated by the Company in the ordinary course of business) (the “Company
Voting Securities”); provided, however, that the event described in this
Section 7(c)(i) shall not be deemed to be a Change in Control by virtue of any
underwriter temporarily holding securities pursuant to an offering of such
securities;


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


 


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(C)           the consummation by the Company of a reorganization,
merger or consolidation, or sale or other disposition of all or substantially
all 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 Company
entitled to vote generally in the election of directors of the Company
immediately prior to such Business Combination own or hold, in substantially
the same proportions as their ownership immediately prior to such Business
Combination, more than 50% of the combined voting power of then outstanding voting
securities entitled to vote generally in the election of directors of (x) the
entity resulting from such Business Combination, or (y) if applicable, the
entity that as a result of such Business Combination owns the Company or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries; or


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


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


Further notwithstanding the
foregoing, unless a majority of the Incumbent Directors determines otherwise,
no Change in Control shall be deemed to have occurred with respect to the
Executive if the Change in Control results from actions or events in which the
Executive 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 or
spouse 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 controlling
interest of which consists of the Principal and/or such other persons referred
to in the immediately preceding clause (B), or (D) the trustees of any trust
referred 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’s
Base Salary, (B) a material diminution in the Executive’s authority, duties, or
responsibilities, (C) a material diminution in the authority, duties, or
responsibilities of the supervisor to whom the Executive is required to report,
including a requirement that the Executive report to a corporate officer or
employee instead of reporting directly to the Board (or other similar governing
body), (D) a material diminution in the budget over which the Executive retains
authority, (E) a material change in the geographic location at which the
Executive must perform services, and (F) any other action or inaction that constitutes
a material breach by the Company of this Agreement.  If one or more of the above conditions
exists, 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) days
during which it may remedy the condition.


(d)                                 Treatment
of Parachute Payments.


(i)            Notwithstanding any other provisions
of this Agreement, and except as set forth below, in the event that any payment
or benefit received or to be received by the Executive in connection with a
Change in Control or the termination of the Executive’s employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company, any person whose actions result in a Change in
Control or any person affiliated with the Company or such person) (all such
payments and benefits, including payments under Section 7(a) above, being
hereinafter called “Total Payments”) is determined to be an “excess parachute
payment” pursuant to Section 280G of the Internal Revenue Code of 1986, as
amended (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 tax
described in Code Section 4999 or any successor or 


 


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substitute provision of
the Code (the “Excise Tax”), then, after taking into account any reduction in
the 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 this
Agreement shall first be reduced, and the noncash payments and benefits shall
thereafter be reduced, to the extent necessary so that no portion of the Total
Payments is subject to the Excise Tax.


(ii)           All determinations required to be
made under this Section 7(d), and the assumptions to be utilized in arriving at
such determination, shall be made by the certified public accounting firm used
for auditing purposes by the Company immediately prior to the date of the
Executive’s termination of employment or, if the parties determine that such
certified public accounting firm cannot make such determination because of
legal restrictions, the parties shall agree on a different certified public
accounting firm (such certified public accounting firm is hereinafter referred
to as the “Accounting Firm”), which shall provide detailed supporting
calculations both to the Company and the Executive not later than 5 days prior
to the date of the Executive’s termination of employment.  The Company shall pay all fees and expenses
of the Accounting Firm.  Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive, except as provided in paragraph (ii) below.


(iii)          As a result of the uncertainty in the
application of Code Sections 280G and 4999 at the time of the initial
determination by the Accounting Firm hereunder, it is possible that the
Internal Revenue Service (the “IRS”) or other agency will claim that an Excise
Tax, or a greater Excise Tax, is due.  If
the Executive is required to make a payment of any such Excise Tax, the Company
will promptly pay the Executive an additional amount equal to the amount, or
greater amount, of Excise Tax the Executive is required to pay (plus a gross up
payment for any income taxes, interest, penalties or additional Excise Tax
payable by Executive with respect to such Excise Tax or additional payment), as
determined by the Accounting Firm.  The
Executive will notify the Company in writing of any claim by the IRS or other
agency that, if successful, would require payment by the Company of the
additional payments under this paragraph. 
The Executive and the Company shall each reasonably cooperate with the
other in connection with any administrative or judicial proceedings concerning
the existence or amount of liability for Excise Tax with respect to the Total
Payments.  The Company shall pay all fees
and expenses of the Executive relating to a claim by the IRS or other
agency.  Payments under this Section
7(d)(iii) will be made by the end of the Executive’s taxable year next
following the Executive’s taxable year in which the Executive remits the
related taxes, in accordance with Code Section 409A and Treas. Reg.
§1.409A-3(i)(1)(v) (or any similar or successor provisions).


8.                                       Code
Section 409A.


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


                                                (b)                                 To
the extent payments under Section 6(d) are subject to Code Section 409A and the
Executive is a Specified Employee (as defined below) as of the Date of
Termination, distributions to the Executive may not be made before the date
that 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 meaning
given to that term in Code Section 409A and Treas. Reg. §1.409A-1(c)(i) (or
other similar or successor provisions). 
Payments to which the Executive would otherwise be entitled during the
first six months following the Date of Termination (the “Six Month Delay”) will
be accumulated and paid on the first day of the seventh month following the
Date of Termination.  Notwithstanding the
Six Month Delay Rule set forth in this Section 8(b), to the maximum extent
permitted under Code Section 409A and Treas. Reg. §1.409A-1(b)(9)(iii) (or any
similar or successor provision), during the Six Month Delay, the Company will
provide the payments set forth in Section 6(d)(i) above, but in no event will
the amount of such payments exceed during the Six Month Delay an amount equal
to two times the lesser of (i) the maximum amount that may be taken into
account under a qualified plan pursuant to Code Section 401(a)(17) for the year
in which the Date of Termination occurs and (ii) the sum of the Executive’s
annualized compensation based upon the annual rate of pay for services provided
to the Company for the taxable year of the Executive preceding the taxable year
of the Executive in which the Executive’s Date of Termination occurs (adjusted
for any increase during that year that was expected to continue indefinitely if
the Executive had not had a Date of Termination), provided that amounts paid
under this sentence will count toward, and will not be in addition to, the total
payment amount required to be made to the Executive by the Company under
Section 6(d)(i) above.  Notwithstanding
the Six Month Delay Rule set forth in this Section 8(b), to the maximum extent
permitted under 


 


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


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


                                                (i)                                     To
the maximum extent permitted under Code Section 409A and Treas. Reg.
§1.409A-1(b)(9)(iii) (or any similar or successor provision), during the first
month of the Six-Month Delay, the Company will pay the Executive an amount
equal to the lesser of:  (i) the total
lump sum severance provided under Section 7(a)(i) or (ii) two times the lesser
of (A) the maximum amount that may be taken into account under a qualified plan
pursuant to Code Section 401(a)(17) for the year in which the Date of
Termination occurs, and (B) the sum of the Executive’s annualized compensation
based upon the annual rate of pay for services provided to the Company for the
taxable year of the Executive preceding the taxable year of the Executive in
which the Executive’s Date of Termination occurs (adjusted for any increase
during that year that was expected to continue indefinitely if the Executive
had not had a Date of Termination); provided that amounts paid under this
sentence will count toward, and will not be in addition to, the total payment
amount required to be made to the Executive by the Company under Section
7(a)(i) above.


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


9.                                       Restrictive  Covenants.


(a)                                  Trade
Secrets.  The Executive acknowledges that
he 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 supplier
information, financial data, employee records, cost information, pricing
information, sales and marketing strategies, the identity of customers,
information received by the Company under an obligation of confidentiality to
customers, and all information generated by the Company for customers) relating
to the past, present or planned business, customers, clients, contacts,
prospects and assets of the Company that is unique, valuable and has not
purposefully been made generally known to the public by the Company (“Confidential
Information”).  Confidential Information
shall 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 constitutes
a breach of this Section 9, generally known or available to the public; (ii) is
hereafter furnished without restriction on disclosure to the Executive by a
third party, other than an employee or agent of the Company, who is not under
any obligation of confidentiality to the Company; (iii) is disclosed with the
written approval of the Company; or (iv) is required to be disclosed or
provided by law, court order, or similar compulsion, including pursuant to or
in connection with any legal proceeding involving the parties hereto; provided,
however, that such disclosure shall be limited to the extent so required or
compelled; and provided further, however, that if the Executive is required to
disclose such Confidential Information, the Executive shall give the Company
notice of such disclosure and cooperate in seeking suitable protections.  The Executive acknowledges that all
Confidential Information, and all documents, files, reports, drawings, designs,
specifications, formulae, samples, data, writings, tools, equipment, memory
devices or any other tangible objects that incorporate, contain, refer to or
embody any Confidential Information (“Items”), acquired by the Executive in
connection with the Executive’s employment with 


 


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the Company are the property of the
Company.  Other than in the course of
performing services for the Company or otherwise authorized in writing by the
Company, 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 absolutely
confidential.  The Executive shall
deliver promptly to the Company, at the termination of his employment or at any
other time at the request of the Company, without retaining any copies, all
Items and any other documents or materials in the Executive’s possession
relating, directly or indirectly, to any Confidential Information.


(b)                                 Non-competition.  Beginning on the Effective Date and for a
period of twelve (12) months following Executive’s Date of Termination (the “Restricted
Period”), Executive shall not directly or indirectly, alone or in conjunction
with any other party, own any interest in, operate, control, engage in or participate
as a partner, director, principal, officer, employee, independent contractor or
agent of, act as a consultant to, perform any services for, or assist in any
way any company, person, or entity in the United States that is engaged in “Competing
Services” (as defined herein).  Competing
Services shall mean chemistry and biology research and development relating to,
arising from, connected with, or competitive with or intended to be competitive
with, any product or research project as to which the Executive performed
services for the Company, or about which the Executive received access to
Confidential Information while employed by the Company.  If the Executive obtains other employment
during the twelve-month period after the Executive’s Date of Termination, the
Executive agrees to notify the Company in writing of the name and address of
such employer.


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


(d)                                 Non-Solicitation
of Customers.  During the Restricted
Period, the Executive shall not, directly or indirectly, solicit or induce, or
attempt to solicit or induce, any customer, supplier, licensee, licensor or
other business relation of the Company to terminate its relationship or
contract with the Company, to cease doing business with the Company, or in any
way interfere with the relationship between any such customer, supplier,
licensee or business relation and the Company (including making any negative
statements or communications concerning the Company or their employees).


(e)                                  Inventions.  The Executive acknowledges all inventions of
the Company (including, but not limited to, procedures, systems, machines,
methods, processes, uses, apparatuses, compositions of matter, designs, or
configurations of any kind, discovered, conceived, reduced to practice,
developed, made or produced) (“Inventions”) that (i) relate to the present or
planned business of the Company or the work performed by the Company for its
customers, and (ii) are conceived or reduced to practice by the Executive,
either alone or with others, during the Executive’s employment with the Company
or 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 sole
property of the Company, including, without limitation, all domestic and
foreign patent rights, rights of registration or other protection under the
copyright laws, or other rights pertaining to the Inventions.  For purposes of this Agreement, Inventions
shall include any improvements to an Invention and shall not be limited to the
definition of a patentable invention or copyrightable work of authorship as
contained in the United States patent or copyright laws.  The Executive shall disclose promptly and
fully in writing to the Company each Invention, whether or not reduced to
practice, that the Executive conceives or learns (either alone or jointly with
others) during the Term of Employment. 
The Executive hereby assigns to the Company, or its nominee, all of the
Executive’s right, title and interest, including international priority rights,
in and to all Inventions (other than any Invention that was developed entirely
on the Executive’s own time and for which no equipment, supplies, facilities or
trade secret information of the Company was used, unless such Invention relates
directly to the Company’s business or to the Company’s actual or demonstrably
anticipated research or development), and in and to all United States or
foreign patents, copyrights and other proprietary rights granted thereon or
resulting therefrom, and in and to all applications for United States or
foreign 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 deems
necessary or advisable (at the Company’s expense) for the preparation, filing,
prosecution, issuance, procurement, maintenance or enforcement of patents
applications and patents of the United States and foreign countries, and for
obtaining and enforcing copyright protection and registration, of any
Invention.  To that end, the Executive
shall at the Company’s request and without limitation, testify in any suit or
other proceeding involving any of the Inventions, execute all documents that
the Company 


 


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reasonably
determines to be necessary or convenient for use in applying for and obtaining
patent or copyright protection and registration on any of the Inventions and
enforcement of that protection and registration, and execute all necessary
documents and papers required to vest title in and assign to the Company (or
its nominee) patent or copyright protection and registration.  The Executive’s obligation to assist the
Company in obtaining and enforcing patent or copyright protection and
registration for the Inventions shall continue following termination of this
Agreement, but Company shall compensate the Executive following the expiration
or termination of this Agreement at a rate of $10 for the execution of each
document and $150 per day for each day or portion thereof spent at the Company’s
request in rendering assistance, plus reimbursement for the reasonable
out-of-pocket expenses incurred by the Executive for such assistance.  The Executive hereby irrevocably appoints the
Company and its duly authorized officers and agents as his agent and
attorney-in-fact to act for and on behalf of the Executive in filing all patent
applications, applications for copyright protection and registration
amendments, renewals and all other appropriate documents in any way related to
the Inventions.


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


(g)                                 Scope
Limitations.  If the scope, period of
time or area of restriction specified in this Section 9 are or would be judged
to be unreasonable in any court proceeding, then the period of time, scope or
area of restriction shall be reduced or limited in the manner and to the extent
necessary to make the restriction reasonable, so that the restriction may be
enforced in those areas, during the period of time and in the scope that are or
would be judged to be reasonable.


10.                                 Binding
Agreement; Successors.  This
Agreement and all rights of the Executive hereunder shall inure to the benefit
of and be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.  If the Executive should die
while any amounts would still be payable to him hereunder if he had continued
to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance 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’s
estate.  This Agreement shall be binding
upon, and inure to the benefit of, any successors or assigns of the
Company.  This Agreement is not intended
to confer upon any person other than the parties hereto (and the Executives’
Spouse and dependents) any rights or remedies, except as specifically provided
in this Section 10.


11.                                 Notice.  Notices, demands and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered, if delivered personally, or (unless otherwise
specified) when received, if mailed by United States certified or registered
mail, return receipt requested, postage prepaid, by Federal Express or other
reputable 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:


Advanced
Life Sciences, Inc.


1440 Davey Road


Woodridge, Illinois 60517


Attn: Chief Executive Officer


or to such other
address as any party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.


12.                                 General
Provisions.  No provision of this
Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by the Executive and
such officer of the Company as may be specifically designated by the Company’s
Board.  No waiver by either party hereto
at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the 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 that
are not set forth expressly in this Agreement.


 


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13.                                 Validity.  The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.  If any provision
of 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 the
manner necessary to render it valid and enforceable, or shall be deemed excised
from this Agreement, as the case may require, and this Agreement shall be
construed and enforced to the maximum extent permitted by law, as if the provision
had been originally incorporated herein as so modified or restricted, or as if
it had not originally been incorporated herein, as the case may be.


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


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


16.                                 Irreparable
Harm.  The Executive acknowledges
that: (i) the Executive’s compliance with this Agreement is necessary to
preserve and protect the proprietary rights, Confidential Information and the
goodwill of the Company and its subsidiaries as going concerns; (ii) any
failure by the Executive to comply with the provisions of this Agreement shall
result in irreparable and continuing injury for which there will be no adequate
remedy at law; and (iii) in the event that the Executive should fail to comply
with 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 equitable
relief (including, but not limited to, the issuance of an injunction and/or
temporary restraining order) as may be necessary to cause the Executive to
comply with this Agreement, to restore to the Company its property, and to make
the Company whole.


17.                                 Consent
to Jurisdiction and Forum; Legal Fees and Costs.  The Company and the Executive hereby
expressly 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 by
the Company shall only be brought in a federal or state court located in Cook
County, Illinois.  The Executive hereby
irrevocably consents to personal jurisdiction in such court and to accept
service of process in accordance with the provisions of such court.  In connection with any dispute arising out of
or based upon this Agreement or the Executive’s employment by the Company, each
party shall be responsible for its or his own legal fees and expenses and all
court costs shall be shared equally by the Company and the Executive unless the
court apportions such legal fees or court costs in a different manner.


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


19.                                 Governing
Law.  This Agreement is governed by
and is to be construed and enforced in accordance with the laws of the State of
Illinois, without regard to its conflict of law provisions.


IN WITNESS WHEREOF, the parties have executed this Agreement on the
date 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

  



 


 


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