STOCK INCENTIVE PLAN ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT

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Exhibit 10.1

STOCK INCENTIVE PLAN

ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT

This STOCK INCENTIVE PLAN ASSIGNMENT, ASSUMPTION AND AMENDMENT

AGREEMENT (as the same may be amended, restated, supplemented or otherwise

modified from time to time, this "Agreement") dated as of December 13, 2004 is

by and between Advanced Life Sciences, Inc., an Illinois corporation ("ALS") and

Advanced Life Sciences Holdings, Inc., a Delaware corporation ("ALS Holdings").

WITNESSETH:

WHEREAS, ALS maintains the Advanced Life Sciences, Inc. Stock

Incentive Plan (the "Plan"); and

WHEREAS, pursuant to the Plan, ALS has granted options to purchase

common stock to numerous employees under a form of Nonqualified Stock Option

Agreement (an "Award") (each employee who has received a grant being referred to

as a "Participant"); and

WHEREAS, ALS is undergoing a recapitalization and reorganization as of

the date hereof pursuant to which, among other things, ALS has become a

wholly-owned subsidiary of ALS Holdings (the "Recapitalization"); and

WHEREAS, in connection with the Recapitalization, ALS and ALS Holdings

consider it desirable and in the best interests of the Participants to provide

for the assumption and continuation of the Plan by ALS Holdings under the terms

and conditions set forth herein; and

WHEREAS, the Boards of Directors of ALS and ALS Holdings (the "Boards

of Directors") have each approved the Recapitalization, including the respective

rights and obligations of ALS and ALS Holdings under this Agreement, and have

determined that this Agreement, taking into account any related actions, would

not adversely alter or impair any rights or obligations under any outstanding

Award under the Plan.

NOW, THEREFORE, in consideration of such benefits and for other good

and valuable consideration, the receipt and sufficiency are hereby acknowledged,

ALS and ALS Holdings agree as follows:

Section 1. ASSIGNMENT AND ASSUMPTION.

(a) Pursuant to the provisions of Sections 13.1 and 13.2 of

the Plan and under the authority of the Boards of Directors, ALS and ALS

Holdings hereby agree that, on and as of the date hereof, (i) ALS Holdings

will assume sponsorship of the Plan and will be substituted for ALS as the

"Company" under the Plan; and (ii) ALS Holdings will assume and be vested

with, and ALS will be divested of, all of the powers, rights, duties and

obligations vested in ALS as the "Company" under the Plan.

(b) Service taken into account under the Plan prior to the

date hereof, for purposes of determining vesting of an "Award" under the

Plan, will continue to be taken into account thereunder on and after the

date hereof for vesting purposes, in accordance with the terms of the Plan

as it may be amended from time to time.

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(c) The substitution of ALS Holdings for ALS as the "Company"

under the Plan will not in any way effect a termination or discontinuance

of the Plan or be considered a "Change in Control" (as defined in the

Plan), and no person will be entitled to any payments under the Plan solely

because of such substitution.

Section 2. AMENDMENT TO PLAN. ALS and ALS Holdings hereby agree that the

Plan shall be amended and restated in its entirety as of the date hereof in the

form attached hereto at EXHIBIT A (the "AMENDED PLAN").

Section 3. OUTSTANDING GRANTS. Any Awards in favor of Participants on or

prior to the date hereof shall continue and be subject to the Amended Plan. Any

reference to "Advanced Life Sciences, Inc." in the Awards shall be deemed to be

a reference to "Advanced Life Sciences Holdings, Inc."

Section 4. HEADINGS. Article and section headings contained in this

Agreement are for reference purposes only and are not intended to describe,

interpret, define or limit the scope, extent or intent of this Agreement or any

provision hereof.

Section 5. COUNTERPARTS. This Agreement may be executed in one or more

counterparts, each of which shall be deemed an original, but all of which,

together, shall constitute one and the same instrument.

Section 6. SAVINGS CLAUSE. If any provision hereof shall be held invalid

or unenforceable by any court of competent jurisdiction or as a result of future

legislative action, such holding or action shall be strictly construed and shall

not affect the validity or effect of any other provision hereof.

Section 7. GOVERNING LAW. The validity, interpretation and effect of this

Agreement shall be governed exclusively by the laws of the State of Delaware,

without regard to provisions concerning conflicts of laws.

Section 8. NOTICES. Any notices or communications permitted or required

hereunder shall be deemed sufficiently given if hand-delivered, or sent by (i)

registered or certified mail return receipt requested, (ii) telecopy or other

electronic transmission service (to the extent receipt is confirmed) or (iii) by

overnight courier, in each case to the parties at their current respective

addresses and telecopy numbers, or to such other address of which any party may

notify the other party in writing.

Section 9. NO THIRD PARTY BENEFICIARY. This Agreement is being entered

into solely for the benefit of the parties hereto, and the parties do not intend

that any employee or any other person shall be a third-party beneficiary of the

covenants by any party contained in this Agreement.

[signature page follows]

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IN WITNESS WHEREOF, the undersigned have executed this Agreement on

the date first specified above.

ADVANCED LIFE SCIENCES, INC.

/s/ John L. Flavin

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By: John L. Flavin

President

ADVANCED LIFE SCIENCES HOLDINGS, INC.

/s/ Michael T. Flavin

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By: Michael T. Flavin

Chief Executive Officer

STOCK INCENTIVE PLAN ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT

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AMENDED AND RESTATED

STOCK INCENTIVE PLAN

STOCK INCENTIVE PLAN ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT

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ADVANCED LIFE SCIENCES HOLDINGS, INC. STOCK INCENTIVE PLAN

(As Amended Effective December 13, 2004)

ARTICLE 1. ESTABLISHMENT, OBJECTIVES AND DURATION

1.1 ESTABLISHMENT OF THE PLAN. Advanced Life Sciences Holdings, Inc., a

Delaware corporation, has adopted this "Advanced Life Sciences Holdings, Inc.

Stock Incentive Plan." Capitalized terms will have the meanings given to them in

Article 2. The Plan permits the grant of Nonqualified Stock Options, Incentive

Stock Options, and Restricted Stock.

1.2 OBJECTIVES OF THE PLAN. The Plan's purpose is to optimize the

profitability and growth of the Company through long-term incentives that are

consistent with the Company's objectives and that link Participants' interests

to those of the Company's stockholders; to give Participants an incentive for

excellence in individual performance; to promote teamwork among Participants;

and to give the Company a significant advantage in attracting and retaining key

employees, directors and consultants.

1.3 EFFECTIVE DATE AND TERM OF THE PLAN.

(a) The Plan will be effective as of October 1, 1999. No Option

granted under the Plan may be exercised, and no Shares will be issued under

the Plan, until the Company's stockholders approve the Plan. If such

stockholder approval is not obtained within twelve (12) months after the

date of the Board's adoption of the Plan, then all Awards previously

granted under the Plan will terminate and cease to be outstanding, and no

further Awards will be made and no shares will be issued under the Plan.

Subject to such limitation, the Board may make Awards and issue Shares

under the Plan at any time after the Plan's Effective Date and before the

date fixed herein for termination of the Plan.

(b) The Plan will terminate upon the earliest of (i) the

expiration of the ten (10) year period measured from the date the Board

adopts the Plan, (ii) the expiration of the ten (10) year period measured

from the date the Company's stockholders approve the Plan, or (iii) the

date on which all Shares available for issuance under the Plan have been

issued pursuant to the exercise of Options or the Award of Shares (whether

vested or unvested) under the Plan. Upon such Plan termination, all Awards

outstanding under the Plan will continue to have full force and effect in

accordance with the terms of the Award Agreement evidencing such Award.

ARTICLE 2. DEFINITIONS

Whenever used in the Plan, the following terms have the meanings set forth

below, and when the meaning is intended, the initial letter of the word will be

capitalized:

"AFFILIATE" means any corporation that is a parent or subsidiary

corporation (as Code Sections 424(e) and (f) define those terms) with respect to

the Company.

"AWARD" means, individually or collectively, a grant under this Plan to a

Participant of Nonqualified Stock Options, Incentive Stock Options, or

Restricted Stock.

"AWARD AGREEMENT" means an agreement entered into by the Company and a

Participant setting forth the terms and provisions applicable to an Award or

Awards granted to the Participant.

STOCK INCENTIVE PLAN ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT

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"BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" has the meaning ascribed to

that term in Rule 13d-3 of the General Rules and Regulations under the Exchange

Act.

"BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the

Company.

"CAUSE" will have the meaning set forth in any employment, consulting, or

other agreement between the Company (or an Affiliate) and the Participant. If

there is no employment, consulting, or other agreement between the Company (or

an Affiliate) and the Participant, or if such agreement does not define "Cause,"

then "Cause" will mean the Participant's: (i) conviction of or plea of guilty or

NOLO CONTENDERE to any criminal violation involving dishonesty or fraud; (ii)

willful engagement in any gross misconduct in the performance of the

Participant's duties that materially injures the Company or an Affiliate; (iii)

unauthorized use or disclosure of confidential information or trade secrets of

the Company or any Affiliate; or (iv) willful and substantial nonperformance of

assigned duties, provided that such nonperformance has continued more than

thirty days after the Company has given written notice of such nonperformance

and of its intention to terminate Participant's Service because of such

nonperformance.

"CHANGE IN CONTROL" means any one of the following transactions to which

the Company is a party:

(a) a merger or consolidation in which securities possessing more

than fifty percent (50%) of the total combined voting power of the

Company's outstanding securities are transferred to a Person or Persons

other than (i) a Permitted Holder, or (ii) the Persons directly or

indirectly holding those securities immediately prior to the merger or

consolidation;

(b) the sale, transfer or other disposition of all or

substantially all of the Company's assets to a Person or Persons other than

to a Person or Persons of which fifty percent (50%) or more of the total

combined voting securities are owned directly or indirectly by (i) a

Permitted Holder, or (ii) the Persons holding the Company's voting

securities directly or indirectly immediately prior to the transaction; or.

(c) the complete liquidation or dissolution of the Company.

"CODE" means the Internal Revenue Code of 1986, as amended from time to

time.

"COMMITTEE" means, as specified in Article 3, a Committee the Board may

appoint to administer the Plan.

"COMMON STOCK" means the Company's common stock, par value $.01.

"COMPANY" means Advanced Life Sciences Holdings, Inc., a Delaware

corporation, and any successor thereto as provided in Article 15.

"DESIGNATED BENEFICIARY" means the Person or Persons the Participant

designates in a signed writing, filed with the Company, as the beneficiary of

any amounts or benefits the Participant owns or is to receive under the Plan. If

the Participant has not designated a beneficiary under the Plan, or if the

Participant's Designated Beneficiary is not living on the relevant date

hereunder, the Company shall treat the Participant's estate as the Designated

Beneficiary.

"DIRECTOR" means any individual who is a member of the Board of Directors.

STOCK INCENTIVE PLAN ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT

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"DISTRIBUTION ACCOUNT" means a book keeping account maintained by the

Company that holds and distributes the Redemption Value of the portion of the

Participant's Shares with respect to which a Participant exercised a Put Right

or the Company exercised a Call Right, pursuant to Article 9.

"DISABILITY" will have the meaning set forth in any employment, consulting,

or other agreement between the Participant and the Company (or an Affiliate). If

there is no employment, consulting, or other agreement between the Participant

and the Company (or an Affiliate), or if such agreement does not define

"Disability," then "Disability" will have the meaning set forth in the Company's

long-term disability insurance policy covering the Participant. If there is no

long-term disability insurance policy covering the Participant, "Disability"

means (i) the Participant is unable to engage in any substantial gainful

activity by reason of any medically determinable physical or mental impairment

that is expected to result in death or to last for a continuous period of not

less than twelve (12) months.

"EFFECTIVE DATE" means December 1, 1999.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from

time to time, or any successor act thereto.

"EXERCISE PRICE" means the price at which a Participant may purchase a

Share pursuant to an Option.

"FAIR MARKET VALUE" means, as it relates to Shares, the average of the high

and low trading prices of the Shares on the New York Stock Exchange (or, if the

Shares are not traded on the New York Stock Exchange, on any other exchange on

which they are traded); and if the Shares are not traded on any exchange, the

fair market value of the Shares as determined by the Board or, at the discretion

of the Board, by an independent appraiser selected by the Board.

"INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares

granted under Article 6 that the Board designates as an Incentive Stock Option,

and that is intended to meet the requirements of Code Section 422.

"INITIAL PUBLIC OFFERING" or IPO" means an initial offering of the

Company's stock to the public pursuant to the registration statement filed under

Section 12(g) of the Exchange Act.

"NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase Shares

granted under Article 6 that is not intended to meet the requirements of Code

Section 422.

"OPTION" means an Incentive Stock Option or a Nonqualified Stock Option, as

described in Article 6.

"OWNED SHARES" means Shares that a Participant has acquired through the

exercise of an Option or the vesting of Restricted Stock, in accordance with

Article 6 or 7, and the terms of any Award Agreement.

"PARTICIPANT" means a person whom the Board has selected to receive an

Award under the Plan, pursuant to Section 5.2, or who has outstanding an Award

granted under the Plan.

"PERMITTED HOLDERS" means (i) Michael T. Flavin (the "Principal"), (ii) 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, (iii) a trust,

corporation, partnership or other entity, the beneficiaries, stockholders,

partners, owners or persons beneficially holding, directly or indirectly, a

controlling interest

STOCK INCENTIVE PLAN ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT

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of which consists of the Principal and/or such other persons referred to in the

immediately preceding clause (ii), or (iv) the trustees of any trust referred to

in clause (iii).

"PERSON" has the meaning ascribed to that term in Section 3(a)(9) of the

Exchange Act and used in Sections 13(d) and 14(d) thereof, including a "group"

as defined in Section 13(d) thereof.

"PLAN" means the Advanced Life Sciences Holdings, Inc. Stock Incentive

Plan, as set forth in this document.

"REDEMPTION VALUE" means the amount the Company will pay to the Participant

in redemption of the Participant's Shares, following the Participant's exercise

of his or her Put Right or the Company's exercise of its Call Right, pursuant to

Article 8.

"RESTRICTION PERIOD" means the period during which the transfer of Shares

of Restricted Stock is limited in some way (based on the passage of time, the

achievement of performance objectives, or the occurrence of other events as the

Board determines, in its discretion), and/or the Restricted Stock is not vested.

"RESTRICTED STOCK" means a contingent grant of Shares awarded to a

Participant pursuant to Article 7.

"RETIREMENT" means termination of Service on or after reaching the age

established by the Company as the normal retirement age in any unexpired

employment, consulting, or other agreement between the Participant and the

Company and/or an Affiliate or, if different, a qualified retirement plan

sponsored by the Company.

"SERVICE" means the provision of services in the capacity of (i) an

Employee of the Company or an Affiliate, (ii) a non-employee member of the

Company's Board or the Board of Directors of an Affiliate, or (iii) a consultant

or other independent advisor to the Company or an Affiliate.

"SETTLEMENT DATE" means a date within 30 days after the last day of the

month before Participant exercises his or her Put Right or the Company exercises

its Call Right, and on which the Participant will deliver to the Company any

Shares being purchased by the Company pursuant to the exercise of either the Put

Right or the Call Right free and clear of any liens or encumbrances.

"SHAREHOLDERS AGREEMENT" means the Shareholders agreement by and among the

Company, Michael T. Flavin, and others, as amended from time to time.

"SHARES" means the shares of the Company's Common Stock.

"STOCK EXCHANGE" means the New York Stock Exchange, the American Stock

Exchange or any other exchange or market, including the NASDAQ National Market.

"TEN PERCENT OWNER" means an individual who, at the time an Award is

granted under this Plan, owns stock possessing more than 10 percent (10%) of the

total combined voting power of all classes of stock of the Company or any

Affiliate.

ARTICLE 3. ADMINISTRATION

3.1 PLAN ADMINISTRATION. The Plan will be administered by the

Board, a Committee, or individual that the Board designates

for this purpose. If the Board

STOCK INCENTIVE PLAN ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT

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designates a Committee to administer this Plan, the Board will

appoint the Committee members, from time to time, and the

Committee members will serve at the Board's discretion. If the

Board designates an individual to administer this Plan, the

Board will appoint that individual who will serve at the

Board's discretion.

3.2 The Committee will act by a majority of its members at the

time in office and eligible to vote on any particular matter,

and Committee action may be taken either by a vote at a

meeting or in writing without a meeting.

3.2 AUTHORITY OF THE BOARD. Except as limited by law and subject to the

provisions of this Plan, the Board will have full power to: (i) select eligible

persons to participate in the Plan; (ii) determine the sizes and types of

Awards; (iii) determine the class of the Company's stock to which the Award

relates; (iv) determine the terms and conditions of Awards in a manner

consistent with the Plan; (v) construe and interpret the Plan and any agreement

or instrument entered into under the Plan; (vi) establish, amend or waive rules

and regulations for the Plan's administration; and (vii) (subject to the

provisions of Article 13) amend the terms and conditions of any outstanding

Award to the extent they are within the discretion of the Board as provided in

the Plan. Further, the Board will make all other determinations that may be

necessary or advisable to administer the Plan. As permitted by law and

consistent with Section 3.1, the Board may delegate some or all of its authority

under the Plan.

3.3 DECISIONS BINDING. All determinations and decisions made by the

Board pursuant to the provisions of the Plan will be final, conclusive and

binding on all persons, including, without limitation, the Company, its Board,

its stockholders, all Affiliates, employees, Participants and their estates and

beneficiaries.

ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

4.1 NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment as

provided in Section 4.3, no more than 180,000 shares of the Company's Common

Stock may be subject to Awards under the Plan.

The maximum number of Shares that may be granted during any calendar year

to any one Participant under Options or Restricted Stock is 100,000, as adjusted

under Section 4.3 below.

4.2 LAPSED AWARDS. If any Award granted under this Plan is canceled,

terminates, expires or lapses for any reason, any Shares subject to the Award

will again be available for the grant of an Award under the Plan.

4.3 ADJUSTMENTS IN AUTHORIZED SHARES. If the Shares, as cu