Exhibit 10.1
 
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EMPLOYMENT AGREEMENT
 
This Employment Agreement (this “Agreement”), is made and entered into as of the
21st day of January, 2010 (the “Effective Date”), by and between INTERLEUKIN
GENETICS, INC., a Delaware corporation (“Employer”), and LEWIS H. BENDER, an
individual (“Employee”).
 
RECITALS
 
A.           Employer desires to obtain the benefit of the services of Employee
and Employee desires to render such services to Employer.
 
B.           The Board of Directors of Employer (the “Board”) has determined
that it is in Employer’s best interest to employ Employee and to provide certain
benefits to Employee.
 
C.           Employer and Employee desire to set forth the terms and conditions
of Employee’s employment with Employer on the terms and subject to the
conditions of this Agreement.
 
AGREEMENT
 
In consideration of the foregoing recitals and of the mutual covenants and
conditions contained herein, the parties, intending to be legally bound, agree
as follows:
 
1.           Term and Renewal.  Subject to the terms hereof, Employee’s
employment hereunder will commence on the Effective Date and continue until the
first (1st) anniversary thereof (the “Initial Term”), unless earlier terminated
in accordance with the provisions of this Agreement.  On each anniversary of the
Effective Date, the term of Employee’s employment hereunder will be
automatically extended for an additional period of one (1) year (each a
“Subsequent Term”) unless either Employee or Employer provides written notice to
the other that such automatic extension will not occur (a “Non-Renewal Notice”),
which notice is given not less than ninety (90) days prior to the relevant
anniversary of the Effective Date, and unless Employee’s employment is not
otherwise earlier terminated in accordance with the provisions of this
Agreement.  The Initial Term and any Subsequent Term are referred to herein
collectively as the “Term.”
 
2.           Employment of Employee.
 
(a)      Specific Position.  Employer and Employee hereby agree that, subject to
the provisions of this Agreement, Employer will employ Employee and Employee
will serve as an employee of Employer.  Employee will report directly to the
Board, and Employee shall have the title and perform the duties of Chief
Executive Officer of Employer, and such other reasonable, usual and customary
duties of such office as may be delegated to Employee from time to time by the
Board, subject always to the policies as reasonably determined from time to time
by the Board.  Employee will work from Employer’s Waltham, MA office.

 

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(b)      Board Membership.  During the Term, Employee will serve as a member of
the Board, subject to any required approval of Employer’s
stockholders.  Employee shall resign from the Board effective upon the
termination of Employee’s employment with Employer for any reason.
 
(c)      Promotion of Employer’s Business.  During the Term, Employee shall not
engage in any business competitive with Employer.  Employee agrees to devote his
full business time, attention, knowledge, skill and energy to the business,
affairs and interests of Employer and matters related thereto, and shall use his
best efforts and abilities to promote Employer’s interests; provided, however,
that Employee is not precluded from devoting reasonable periods to time
required: (i) for serving as a director, committee member or scientific editor
of any organization that does not compete with Employer or that does not involve
a conflict of interest with Employer; or (ii) for managing his personal
investments; so long as in either case, such activities do not interfere with
the regular performance of his duties under this Agreement.
 
3.           Salary.  Employer shall pay to Employee during the Term of this
Agreement a base salary (“Base Salary”) in the gross amount of $340,000 per
year, payable in equal monthly installments in accordance with Employer’s usual
payroll practices.  The Base Salary may be increased (but not decreased)
annually at end of each calendar year at the discretion of the Compensation
Committee of the Board (the “Compensation Committee”) throughout the Term.
 
4.           Bonus/Stock Options.
 
(a)      Annual Bonus.  In addition to the Base Salary, Employee shall be
eligible to receive a discretionary annual performance bonus (the “Annual
Bonus”) based on Employer’s financial performance between January 1st and
December 31st of each year (the “Bonus Year”), under the following terms and
conditions:
 
(i)           If the Compensation Committee determines that Employer’s
performance met the threshold of the standards and measures (the “Threshhold
Measures”) approved by the Compensation Committee for the Bonus Year, Employee
will be entitled to an Annual Bonus in an amount equal to ten percent (10%) of
the Base Salary;
 
(ii)          If the Compensation Committee determines that Employer’s
performance met the target of the standards and measures (the “Target Measures”)
approved by the Compensation Committee for the Bonus Year, Employee will be
entitled to an Annual Bonus in an amount equal to twenty percent (20%) of the
Base Salary; and
 
(iii)         If the Compensation Committee determines that Employer’s
performance was exceptional as compared to the standards and measures (the
“Exceptional Measures”) approved by the Compensation Committee for the Bonus
Year, Employee will be entitled to an Annual Bonus in an amount equal to fifty
percent (50%) of the Base Salary.

 
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The Threshold Measures, Target Measures & Exceptional Measures shall be
determined and agreed upon by the parties within thirty (30) days from the
Effective Date.  The Annual Bonus shall be paid to Employee within thirty (30)
days following the close of the Bonus Year, in accordance with Employer’s usual
payroll practices.  The Annual Bonus for the first Bonus Year, if any, will be
paid on a pro-rata basis according to the start date of Employee.  The
Compensation Committee may, in its sole discretion, award an Annual Bonus that
exceeds the amounts listed in subsections (i) - (iii) above.  Employee must be
employed by Employer at the time that the Annual Bonus is paid in order to be
eligible for, and to be deemed as having earned, such Annual Bonus.
 
(b)      Stock Options.
 
(i)           Employer and Employee acknowledge that Employee has been granted
options to purchase 500,000 shares of common stock in Employer (the
“Options”) at an exercise price equal to the fair market value of such stock on
the date of grant (the “Grant Date”), pursuant to an Incentive Stock Option
Agreement dated January 22, 2008 (the “Incentive Stock Option Agreement”) and a
Non-Qualified Stock Option Agreement dated January 22, 2008 (the “Non-Qualified
Stock Option Agreement”). Employer and Employee acknowledge that Employee
already has vested in 200,000 shares subject to the Options, which remain
subject to the terms and conditions of the Incentive Stock Option Agreement and
Non-Qualified Stock Option Agreement. Employer and Employee further acknowledge
that Employee is scheduled to vest in 94,339 shares of Employer’s common stock
($.001 par value per share) on each of February 1, 2011, February 1, 2012, and
February 1, 2013 pursuant to the Incentive Stock Option Agreement, and that
Employee is scheduled to vest in 5,661 shares of Employer’s common stock ($.001
par value per share) on each of February 1, 2011, February 1, 2012, and February
1, 2013 pursuant to the Non-Qualified Stock Option Agreement.  Both the
Incentive Stock Option Agreement and the Non-Qualified Stock Option Agreement
are expressly incorporated herein and shall survive the execution of this
Agreement.  Employee must be employed by Employer on the date of vesting in
order to be eligible for and be entitled to the vesting of options under the
Incentive Stock Option Agreement and the Non-Qualified Stock Option Agreement.
 
(ii)          Subject to approval of Board or an appropriate committee thereof,
Employee will be granted a stock option to purchase 100,000 shares of common
stock in Employer at the fair market value of the common stock on the date of
grant (the “Supplemental Option”), pursuant to the terms of Employer’s 2004
Employee, Director and Consultant Stock Plan (the “Plan”) and a standard form of
stock option agreement to be executed by Employee pursuant thereto (the
“Supplemental Option Agreement”).  To the maximum extent permissible, the
Supplemental Option shall be treated as an “incentive stock option” within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended.  One
hundred percent (100%) of the Supplemental Option shall be vested as of the date
of grant.

 
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(c)       Accelerated Vesting Of Stock Options.  Subject to approval by the
Board or an appropriate committee thereof, the vesting of the Options described
in Section 4(b)(i) may be accelerated upon Employer’s attainment of certain
milestones (e.g., earnings, products to market, execution of strategic
agreements, etc.), with any such milestones and the terms and conditions of any
such acceleration to be agreed upon in writing, in advance, by Employee and
Employer. In addition, in the event of Employee’s death or in the event that
Employer undergoes a Change of Control and Employee’s employment hereunder is
terminated by Employer without Cause or by Employee for Good Reason (as these
terms are defined in Section 6(c) below) within six (6) months following the
consummation of such Change of Control, then Employer will accelerate the
vesting of all remaining unvested Options granted to Employee pursuant to the
Incentive Stock Option Agreement and Non-Qualified Stock Option Agreement and
all remaining unvested Supplemental Options granted to Employee pursuant to this
Agreement and the Supplemental Option Agreement that are outstanding as of the
date of termination of employment, with such vesting occurring immediately prior
to the Change of Control or on the date of Employee’s death, as applicable.
 
(d)      Additional Option Grants.  Subject to approval by the Board or an
appropriate committee thereof, Employee may be granted additional stock options
during the course of his employment with Employer, with the terms of the award
and amount of any such grant to be determined by Employer in its sole
discretion, and with such grant (if made) to be made pursuant to the terms of a
formal stock option agreement and stock plan.
 
5.           Benefits.
 
(a)      Fringe Benefits.  During Employee’s employment by Employer under this
Agreement, Employee shall be eligible for participation in and shall be covered
by any and all such medical, disability, life and other insurance plans and such
other similar benefits available to other executive employees.
 
(b)      Reimbursements.  During Employee’s employment with Employer under this
Agreement, Employee shall be entitled to receive prompt reimbursement of all
reasonable expenses incurred by Employee in performing services hereunder,
including all expenses of travel at the request of or in the service of
Employer, provided that such expenses are incurred and accounted for in
accordance with the policies and procedures established by Employer.  Employee
must submit any request for reimbursement no later than ninety (90) days
following the date that such business expense is incurred.  Any reimbursement in
one calendar year shall not affect the amount that may be reimbursed in any
other calendar year and a reimbursement (or right thereto) may not be exchanged
or liquidated for another benefit or payment.  Any business expense
reimbursements subject to Section 409A (“Code Section 409A”) of the Internal
Revenue Code of 1986 (the “Code”) and any successor statute, regulation and
guidance thereto shall be made no later than the end of the calendar year
following the calendar year in which such business expense is incurred by
Employee.
 
(c)      Vacation.  During Employee’s employment with Employer hereunder,
Employee shall be entitled to an annual vacation leave of four (4) weeks at full
pay.

 
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6.           Termination And Termination Payment.

 
(a)     Termination. Notwithstanding anything else contained in this Agreement,
Employee’s employment hereunder will terminate upon the earliest to occur of the
following:
 
(i)          Expiration of the Term.  If a Non-Renewal Notice has been given
pursuant to Section 1, immediately upon expiration of the Term.
 
(ii)         Death or Disability. Immediately upon Employee’s death or
Disability (as defined below).
 
(iii)        Termination by Employer.
 
(A)           If by Employer for Cause (as defined below), written notice by
Employer to Employee that Employee’s employment is being terminated for Cause
and that sets forth the factual basis supporting the alleged Cause, which
termination shall be effective on the date of such notice or such later date as
specified in writing by Employer; or
 
(B)           If by Employer for reasons other than under Sections 6(a)(i), or
6(a)(iii)(A), written notice by Employer to Employee that Employee’s employment
is being terminated, which termination shall be effective thirty (30) days after
the date of such notice, provided that Employer, at its exclusive option, may
elect to provide Employee with pay in lieu of any or all of the aforementioned
notice period.
 
(iv)        Termination by Employee.
 
(A)           If by Employee for Good Reason (as defined below), written notice
by Employee to Employer that Employee is terminating Employee’s employment for
Good Reason and that sets forth the factual basis supporting the alleged Good
Reason, which termination shall be effective thirty (30) days after Employer’s
receipt of such notice, provided that Employer, at its exclusive option, may
elect to provide Employee with pay in lieu of any or all of the aforementioned
notice period, and further provided that if Employer has cured the circumstances
giving rise to the Good Reason within thirty (30) days after Employer’s receipt
of such notice, then such termination shall not be effective; or
 
(B)           If by Employee without Good Reason, written notice by Employee to
Employer that Employee is terminating Employee’s employment, which termination
shall be effective ninety (90) days after the date of such notice.
 
Notwithstanding anything in this Section 6(a), Employer may at any point
terminate Employee’s employment for Cause prior to the effective date of any
other termination contemplated hereunder.

 
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(b)     Termination Payments.

 
(i)          Termination for Cause by Employer, by Employee Without Good Reason,
as Result of Employee’s Disability or Death, or as Result of Expiration of
Term.  If Employee’s employment hereunder is terminated by Employer for Cause,
by Employee without Good Reason, as a result of Employee’s Disability or death,
or as a result of the expiration of the Term, Employer will pay the Accrued
Obligations (as defined below) to Employee (or Employee’s estate, as the case
may be) promptly (within fifteen (15) days) following the effective date of such
termination, and Employee (or Employee’s estate, as the case may be) shall be
entitled to no further compensation hereunder.
 
(ii)         Termination Without Cause or for Good Reason. If Employee’s
employment hereunder is terminated by Employer without Cause or by Employee for
Good Reason, then:
 
(A)           Employer will pay the Accrued Obligations to Employee promptly
(within fifteen (15) days) following the effective date of such termination.
 
(B)           Employer will provide Employee with additional separation pay in
an amount equal to eighteen (18) months of the Base Salary, paid in equal
monthly installments in accordance with Employer’s usual payroll practices, or
in a single lump sum payment in Employer’s sole discretion.
 
(C)           Should Employee continue his medical and dental insurance pursuant
to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), Employer
will reimburse to Employee the cost of the COBRA payments made by Employee to
continue his participation in Employer’s medical and dental insurance plans,
less Employee’s co-pay if any (which shall be deducted from any payments made to
Employee under this subsection), through the applicable eighteen (18) month
period described in subsection (ii)(B), to the extent permissible under COBRA,
and to the same extent that such insurance is provided to persons employed by
Employer.
 
(D)           The payments and benefits described in this subsection (ii) will
begin on the first regular pay date following the effective date of the
separation agreement set forth in subsection (iv) below.
 
(E)           In the event that Employee is eligible for payments and benefits
under subsection (iii) below, Employee shall not be eligible for and shall not
receive any payments and benefits described in this subsection (ii).
 
(iii)        Termination Without Cause or for Good Reason After Change Of
Control.  If Employer undergoes a Change of Control (as defined below) and
Employee’s employment hereunder is terminated by Employer without Cause  or by
Employee for Good Reason within six (6) months following the consummation of
such Change of Control, then:

 
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(A)           Employer will pay the Accrued Obligations to Employee promptly
(within fifteen (15) days) following the effective date of such termination.
 
(B)           Employer will provide Employee with additional separation pay in
an amount equal to twenty four (24) months of the Base Salary, paid in equal
monthly installments in accordance with Employer’s usual payroll practices, or
in a single lump sum payment in Employer’s sole discretion.
 
(C)           Should Employee continue his medical and dental insurance pursuant
to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), Employer
will reimburse to Employee the cost of the COBRA payments made by Employee to
continue his participation in Employer’s medical and dental insurance plans,
less Employee’s co-pay if any (which shall be deducted from any payments made to
Employee under this subsection), through the applicable twenty four (24) month
period described in subsection (iii)(B), to the extent permissible under COBRA,
and to the same extent that such insurance is provided to persons employed by
Employer.
 
(D)           The payments and benefits described in this subsection (iii) will
begin on the first regular pay date following the effective date of the
separation agreement set forth in subsection (iv) below.
 
(E)           In the event that Employee is eligible for payments and benefits
under subsection (ii) above, Employee shall not be eligible for and shall not
receive any payments and benefits described in this subsection (iii).
 
(iv)        Separation Agreement; Release of Claims; Timing of Payment and
Benefits.  Employer shall not be obligated to pay Employee any of the payments
or benefits set forth in Sections 6(b)(ii) or 6(b)(iii) (other than the Accrued
Obligations) unless and until Employee has executed (without revocation) a
timely separation agreement in a form that is acceptable to Employer and
Employee, which will include, at a minimum, a complete release of claims against
Employer and its affiliated entities. Provided that Employee executes (without
revocation) such separation agreement, Employer will pay the payments or
benefits set forth in Sections 6(b)(ii) or 6(b)(iii), as applicable, no later
than sixty (60) days following the termination of employment, or earlier
pursuant to applicable law and the parties’ written agreement

 
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(c)     Definitions.
 
(i)           Cause.  As used herein, “Cause” means any of the following: (A)
the continued failure or refusal by Employee to substantially perform his duties
hereunder (other than any such failure resulting from his incapacity due to
physical or mental illness); (B) the engaging by Employee in misconduct which is
injurious to Employer’s business or reputation, monetarily or otherwise; (C) the
disloyalty, deliberate dishonesty, breach of fiduciary duty or violation by
Employee of any provision of this Agreement or any other Agreement he has with
Employer; (D) Employee’s commission of an act of fraud or embezzlement against
Employer; (E) Employee is convicted by a court of competent jurisdiction, or
pleads “no contest” to, a felony (other than minor traffic violations) by
Employee; (F) the use by Employee of so-called “street” or illicit drugs,
whether or not during business hours, regardless of whether such use results in
arrest or conviction, or the abuse of any drug or medication so as to materially
and adversely affect Employee’s performance.
 
(ii)          Good Reason.  As used herein, “Good Reason” means any of the
following: (A) a change in the principal location at which Employee provides
services to Employer to over fifty (50) miles away from Waltham, Massachusetts,
without Employee’s prior written consent; (B) a change in the lines of reporting
such that Employee no longer reports to the Board; or (C) a material breach of
this Agreement by Employer, provided that “Good Reason” shall not be deemed to
have occurred unless: (1) Employee provides Employer with written notice that he
intends to terminate his employment hereunder for one of the grounds set forth
in Section 6(c)(ii) within sixty (60) days of such reason(s) occurring, (2) if
such ground is capable of being cured, Employer has failed to cure such ground
within a period of thirty (30) days from the date of such written notice, and
(3) Employee terminates his employment within one (1) year from the date that
Good Reason first occurs. For purposes of clarification, the above-listed
conditions shall apply separately to each occurrence of Good Reason and failure
to adhere to such conditions in the event of Good Reason shall not disqualify
Employee from asserting Good Reason for any subsequent occurrence of Good
Reason.
 
(iii)        Disability. As used herein, “Disability” means Employee is unable
to perform the essential functions of his job with or without a reasonable
accommodation because of a physical or mental impairment for a period of at
least three (3) months.
 
(iv)        Accrued Obligations.  As used herein, “Accrued Obligations” means:
(A) the portion of Employee’s Base Salary that has accrued prior to any
termination of Employee’s employment with Employer and has not yet been paid;
and (B) the amount of any expenses properly incurred by Employee on behalf of
Employer prior to any such termination and not yet reimbursed.  Employee’s
entitlement to any other compensation or benefit under any plan of Employer
shall be governed by and determined in accordance with the terms of such plans,
except as otherwise specified in this Agreement.
 
(v)         Change of Control.  As used herein, “Change of Control” means: any
person, entity or group (within the meaning of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than
Alticor Inc. and its affiliates), becomes the “beneficial owner” (as such term
is defined in Rule 13(d) under the Exchange Act), directly or indirectly, of
outstanding securities of Employer representing more than 50% of the total
voting power represented by all voting securities of Employer entitled to vote
generally in the election of directors.
 
 
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(d)     No Other Payments or Benefits Owing.  The payments and benefits set
forth in Section 6(b) shall be the sole amounts owing to Employee upon
termination of Employee’s employment for any reason.  Employee shall not be
eligible for any other payments or other forms of compensation or benefits.  The
payments and benefits set forth in Section 6(b) shall be the sole remedy, if
any, available to Employee in the event that he brings any claim against
Employer relating to the termination of his employment under this Agreement.
 
(e)     409A Limitation.  Notwithstanding any other provision with respect to
the timing of payments under Section 6, if, at the time of Employee’s
termination, Employee is deemed to be a “Specified Employee” of Employer within
the meaning of Code Section 409A and if any amount to be paid to Employee
pursuant to this Agreement as a result of Employee’s termination of employment
is “deferred compensation” within the meaning of Code Section 409A, then limited
only to the extent necessary to comply with the requirements of Code Section
409A, any payments to which Employee may become entitled under Section 6 which
are subject to Code Section 409A (and not otherwise exempt from its application)
will be withheld until the first (1st) business day of the seventh (7th) month
following the termination of Employee’s employment, at which time Employee shall
be paid an aggregate amount equal to the accumulated, but unpaid, payments
otherwise due to Employee under the terms of Section 6.
 
7.           Publicity.  During the Term and for a period of one (1) year
thereafter, Employee shall not, directly or indirectly, originate or participate
in the origination of any publicity, news release or other public announcements,
written or oral, whether to the public press or otherwise, relating to this
Agreement, to any amendment hereto, to Employee’s employment hereunder or to
Employer, without the prior written approval of Employer.  No officer or
director of Employer shall make disparaging remarks regarding Employee during
the Term or one (1) year thereafter.
 
8.           Restrictive Covenants.
 
(a)     Non-Competition; Customer Lists; Non-Solicitation.  In consideration of
the benefits of this Agreement, including Employee’s access to and limited use
of proprietary and confidential information of Employer, as well as training,
education and experience provided to Employee by Employer directly and/or as a
result of work projects assigned by Employer with respect thereto, Employee
hereby covenants and agrees that during the Term and for a period of twelve (12)
months following termination of Employee’s employment, regardless of how such
termination may be brought about, Employee shall not, directly or indirectly:
 
(i)           as proprietor, partner, stockholder, director, officer, employee,
consultant, joint venturer, investor or in any other capacity, engage in, or
own, manage, operate or control, or participate in the ownership, management,
operation or control, of any entity which engages anywhere in the world in any
business activity which is competitive to current business activities in which
Employer participates during Employee’s employment with Employer, or take any
action in preparation to do any of the foregoing; provided, however, the
foregoing shall not, in any event, prohibit Employee from purchasing and holding
as an investment not more than 1% of any class of publicly traded securities of
any entity which conducts a business in competition with the business of
Employer, so long as Employee does not participate in any way in the management,
operation or control of such entity.  It is further recognized and agreed that,
even though an activity may not be restricted under the foregoing provision,
Employee shall not during the Term and for a period of twelve (12) months
following termination of his employment, regardless of how such termination may
be brought about, provide services to any person or entity which may be used
against, or is or may be in conflict with the interests of, Employer or its
customers or clients;

 
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(ii)         use or make known to any person or entity the names or addresses of
any clients or customers of Employer or any other information pertaining to
them;
 
(iii)        call on for the purpose of competing, solicit, take away or attempt
to call on, solicit or take away any clients or customers of Employer on whom
Employee called or with whom he became acquainted during his employment with
Employer; or
 
(iv)        recruit or attempt to recruit or hire or attempt to hire any
employees of Employer.
 
(b)     Confidentiality.  Employee agrees to execute the Confidentiality and
Intellectual Property Agreement attached hereto as Exhibit A and agrees to
fulfill his obligations thereunder.
 
(c)     Judicial Reformation.  Employee acknowledges that, given the nature of
Employer’s business, the covenants contained in Section 8 establish reasonable
limitations as to time, geographic area and scope of activity to be restrained
and do not impose a greater restraint than is reasonably necessary to protect
and preserve the goodwill of Employer’s business and to protect its legitimate
business interests.  If, however, Section 8 is determined by any court of
competent jurisdiction to be unenforceable by reason of its extending for too
long a period of time or over too large a geographic area or by reason of it
being too extensive in any other respect or for any other reason, it will be
interpreted to extend only over the longest period of time for which it may be
enforceable and/or over the largest geographic area as to which it may be
enforceable and/or to the maximum extent in all other aspects as to which it may
be enforceable, all as determined by such court.
 
(d)     Affiliates.  When used in this Section 8, the term “Employer” includes
Interleukin Genetics, Inc. and all affiliates, parents, and subsidiaries of
Interleukin Genetics, Inc.
 
9.           Miscellaneous.
 
(a)      Withholdings.  All payments to Employee hereunder shall be made after
reduction for all federal, state and local withholding and payroll taxes, all as
determined under applicable law and regulations, and Employer shall make all
reports and similar filings required by such law and regulations with respect to
such payments, withholdings and taxes.

 
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(b)      Taxation.  Employee acknowledges and agrees that Employer does not
guarantee the tax treatment or tax consequences associated with any payment or
benefit arising under this Agreement, including but not limited to consequences
related to Code Section 409A.  Employer and Employee agree that, in addition to
abiding by Section 6(e) if applicable, both will negotiate in good faith and
jointly execute an amendment to modify this Agreement to the extent necessary to
comply with the requirements of Code Section 409A, or any successor statute,
regulation and guidance thereto; provided, that no such amendment shall increase
the total financial obligation of Employer under this Agreement.
 
(c)      Succession.  This Agreement shall inure to the benefit of and shall be
binding upon Employer, its successors and assigns.  The obligations and duties
of Employee hereunder shall be personal and not assignable.
 
(d)      Notices.  Any and all notices, demands, requests or other
communications hereunder shall be in writing and shall be deemed duly given when
personally delivered to or transmitted overnight express delivery or by
facsimile to and received by the party to whom such notice is intended (provided
the original thereof is sent by mail, in the manner set forth below, on the next
business day after the facsimile transmission is sent), or in lieu of such
personal delivery or overnight express delivery or facsimile transmission, on
receipt when deposited in the United States mail, first-class, certified or
registered, postage prepaid, return receipt requested, addressed to the
applicable party at the address set forth below such party's signature to this
Agreement.  The parties may change their respective addresses for the purpose of
this Section 9(d) by giving notice of such change to the other parties in the
manner which is provided in this Section 9(d).
 
(e)      Entire Agreement.  This Agreement contains the entire agreement of the
parties relating to the subject matter hereof, and it replaces and supersedes
any prior agreements between the parties relating to said subject matter.
 
(f)      Headings.  The headings of Sections herein are used for convenience
only and shall not affect the meaning of contents hereof.
 
(g)      Waiver; Amendment.  No provision hereof may be waived except by a
written agreement signed by the waiving party.  The waiver of any term or of any
condition of this Agreement shall not be deemed to constitute the waiver of any
other term or condition.  This Agreement may be amended only by a written
agreement signed by the parties hereto.
 
(h)      Severability.  If any of the provisions of this Agreement shall be held
unenforceable by the final determination of a court of competent jurisdiction
and all appeals therefrom shall have failed or the time for such appeals shall
have expired, such provision or provisions shall be deemed eliminated from this
Agreement but the remaining provisions shall nevertheless be given full
effect.  In the event this Agreement or any portion hereof is more restrictive
than permitted by the law of the jurisdiction in which enforcement is sought,
this Agreement or such portion shall be limited in that jurisdiction only to the
extent required by the law of that jurisdiction.

 
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(i)         Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
 
(j)         Arbitration.  Except for the provisions of Sections 7 and 8, and
Exhibit A  hereto, with regard to which Employer expressly reserves the right to
petition a court directly for injunctive or other relief, any dispute arising
out of or relating to this Agreement, or the breach, termination or the validity
hereof, shall be settled by arbitration in Massachusetts, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.  Judgment
upon the award rendered by the arbitrator or arbitrators may be entered in any
court having jurisdiction thereof.  THE ARBITRATOR OR ARBITRATORS ARE NOT
EMPOWERED TO AWARD DAMAGES IN EXCESS OF COMPENSATORY DAMAGES (INCLUDING
REASONABLE ATTORNEYS FEES AND EXPERT WITNESS FEES) AND EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT TO RECOVER SUCH DAMAGES (INCLUDING, WITHOUT
LIMITATION, PUNITIVE DAMAGES) IN ANY FORUM.  The arbitrator or arbitrators may
award equitable relief in those circumstances where monetary damages would be
inadequate.  The arbitrator or arbitrators shall be required to follow the
applicable law as set forth in the governing law section of this Agreement.  The
arbitrator or arbitrators shall award reasonable attorneys fees and costs of
arbitration to the prevailing party in such arbitration.
 
(k)         Equitable Relief.  In the event of a breach or a threatened breach
by Employee of any of the provisions contained in Sections 7 or 8 of this
Agreement or Exhibit A hereto, Employee acknowledges that Employer will suffer
irreparable injury not fully compensable by money damages and, therefore, will
not have an adequate remedy available at law.  Accordingly, Employer shall be
entitled to obtain such injunctive relief or other equitable remedy from any
court of competent jurisdiction as may be necessary or appropriate to prevent or
curtail any such breach, threatened or actual, without having to post bond.  The
foregoing shall be in addition to and without prejudice to any other rights that
Employer may have under this Agreement, at law or in equity, including, without
limitation, the right to sue for damages.
 
(l)         Counterparts.  This Agreement may be executed in two or more
counterparts, and by different parties hereto on separate counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of
the date first set forth above.
 
LEWIS H. BENDER
 
INTERLEUKIN GENETICS, INC.
           
By:
/s/ Lewis H. Bender
 
By:
/s/ James M. Weaver
       
  James Weaver
         
Address:
 
Address:
     
135 Beaver Street
     
Waltham, MA 02452
 

 
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[logo.jpg]          
 
EXHIBIT A
 
 
 

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[logo.jpg]          
 
January 21, 2010
 
Lewis H. Bender

Re:       Confidentiality And Intellectual Property Agreement
 
Dear Lewis:
 
As a condition of your continued employment with Interleukin Genetics, Inc. (the
“Employer”), you must sign and return this letter agreement (the
“Agreement”).  This Agreement confirms your promise to protect and preserve
information and property which is confidential and proprietary to Employer, its
subsidiaries and affiliates, as well as other terms and conditions of your
employment.  No provision of this Agreement shall be construed to create an
express or implied employment contract for any specific period of time, and
either party may terminate your employment at any time, subject to the
requirements of your employment agreement executed concurrently (the “Employment
Agreement”).
 
In consideration of the employment offered to you, and for other good and
valuable consideration, you agree as follows:
 
1.           Your Duties Regarding Confidentiality.  Employer has developed,
uses and maintains trade secrets1 and other confidential and proprietary
information including, without limitation, technical data and specifications,
business and financial information, product and marketing plans, customer and
client information, customer and client lists, customer, client and vendor
identities and characteristics, agreements, marketing knowledge and information,
sales figures, pricing information, marketing plans, business plans, strategy
forecasts, financial information, budgets, software, projections and procedures,
and Inventions (as defined in Section 2), in written, oral, electronic and/or
other forms (“Confidential Information”), and Employer has taken and shall
continue to take all reasonable measures to protect the confidentiality of such
Confidential Information.  You acknowledge that during your employment with
Employer you will be given direct access to and knowledge of Confidential
Information.
 
You agree that all such Confidential Information is and shall remain the sole
property of Employer and that you will hold in strictest confidence, and will
not, either during or after the termination of your employment (except as
required in the course of your duties on behalf of Employer), use, disclose or
give to others (whether a business, firm, entity, person or otherwise), either
directly or indirectly, any of the Confidential Information or any other
scientific, technical, trade or business secret or confidential or proprietary
information of Employer or of any third party provided to you during your
employment by Employer.

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1           The term “trade secrets,” as used in this Agreement, shall be given
its broadest possible interpretation under Massachusetts law and shall include,
but not be limited to, anything tangible or intangible or electronically kept or
stored, which constitutes, represents, evidences or records a secret scientific,
technical, merchandising, production or management information, design, process,
procedure, formula, invention or improvement; and other confidential and
proprietary information and documents.

 
 

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Your obligation of confidentiality under this Agreement does not apply to
information that (a) becomes a matter of public knowledge through no fault of
your own or (b) must be disclosed pursuant to lawful subpoena, court order or
statutory requirement.  However, you agree that in the event you are questioned
by anyone not employed by Employer, or by an employee of or a consultant to
Employer not authorized to receive such information, in regard to any such
Confidential Information or any other secret or confidential work of Employer,
you will promptly notify Employer’s Board of Directors in writing.  You further
agree that you will return all Confidential Information, including all copies
and versions of such Confidential Information (including but not limited to
information maintained on paper, disk, CD-ROM, network server, or any other
retention device whatsoever) and other property of Employer, to Employer
immediately upon termination of your employment.
 
The terms of this Section 1 of this Agreement are in addition to, and not in
lieu of, any other contractual, statutory or common law obligations that you may
have relating to the protection of Employer’s Confidential Information or its
property.  The terms of this section shall survive indefinitely your employment
with Employer.
 
2.          Ownership of Ideas, Copyrights and Patents.
 
(a)         Property of Employer.  You agree that all ideas, discoveries,
creations, manuscripts and properties, innovations, improvements, know-how,
inventions, designs, developments, apparatus, techniques, methods, writings,
specifications, sound recordings, pictorial and graphical representations and
formulae (collectively, “Inventions”) which may be used by or which relate to
the business or activities of Employer, whether patentable, copyrightable or
not, which you may conceive, reduce to practice or develop during your
employment (or, if directly derived from any Confidential Information known by
Employee, made by you within one (1) year after the termination of such
employment), whether or not during normal working hours and whether or not on
Employer’s premises or with the use of its equipment, whether alone or in
conjunction with others, and whether or not at the request or suggestion of
Employer or otherwise, shall be “works made for hire,” and shall be the sole and
exclusive property of Employer, and that you shall not publish any such
Inventions without the prior written consent of Employer.  You hereby assign to
Employer all of your right, title and interest in and to such Inventions.  You
further represent and agree that to the best of your knowledge and belief none
of the Inventions will violate or infringe upon any right, patent, copyright,
trademark or right of privacy, or constitute libel or slander against or violate
any other rights of any person, firm or corporation, and that you will use
commercially reasonable efforts to prevent any such violation.
 
(b)         Your Duty to Cooperate.  During your employment with Employer and
afterwards, you agree that you will fully cooperate with Employer, its attorneys
and agents in the preparation and filing of all papers and other documents as
may be required to perfect Employer’s rights in and to any such Inventions,
including, but not limited to, joining in any proceeding to obtain letters
patent, copyrights, trademarks or other legal rights of the United States and of
any and all other countries on such Inventions, provided that Employer will bear
the expense of such proceedings, and that any patent or other legal right so
issued to you, personally, shall be assigned by you to Employer without charge
by you.

 
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(c)         Licensing and Use of Data You Provide to Employer.  With respect to
any Inventions, and work of any similar nature (from any source), whenever
created, which you have not prepared or originated in the performance of your
employment, but which you provide to Employer or incorporate in any Employer
product or system, you grant to Employer a royalty-free, fully paid-up,
non-exclusive, perpetual and irrevocable license throughout the world to use,
modify, create derivative works from, disclose, publish, translate, reproduce,
deliver, perform, dispose of, and to authorize others so to do, all such
Inventions.  You promise that you will not include in any Inventions you deliver
to Employer or use on its behalf, without the prior written approval of
Employer, any material which is or will be patented, copyrighted or trademarked
by you or others unless you provide Employer with the written permission of the
holder of any patent, copyright or trademark owner for Employer to use such
material in a manner consistent with then-current Employer policy.
 
(d)         Data in Which You Claim Any Interest.  Listed on Exhibit 1 to this
Agreement are any and all Inventions in which you claim or intend to claim any
right, title and interest, including but not limited to patent, copyright and
trademark interest, which to the best of your knowledge shall be or may be
delivered to Employer in the course of your employment, or incorporated into any
Employer product or system.  You explicitly acknowledge that your obligation to
disclose such information is ongoing during your employment with Employer, and
that after you execute this Agreement, if you determine that any additional
Inventions in which you claim or intend to claim any right, title or interest,
including but not limited to patent, copyright and trademark interest, has been
or is likely to be delivered to Employer or incorporated in any Employer product
or system, you shall make immediate written disclosure of the same to Employer.
 
3.          Your Representations Regarding Prior Work and Legal Obligations.
 
(a)         No Other Agreement Prohibits You from Working for Employer.  By
signing this Agreement, you represent that you have no agreement with or other
legal obligation to any prior employer or any other person or entity that
restricts your ability to engage in employment discussions, to accept employment
with, or to perform any function for Employer.  You acknowledge that Employer is
basing important business decisions on these representations, and affirm that
your representations made in this section of this Agreement are true.
 
(b)         You Will Not Provide Confidential Information from Other
Employers.  You also acknowledge that Employer has advised you that at no time,
either during any pre-employment discussions or at any time thereafter, should
you divulge to or use for the benefit of Employer any trade secret or
confidential or proprietary information of any previous employer.  By signing
this Agreement, you affirm that you have not divulged or used any such
information for the benefit of Employer, and that you have not and will not
misappropriate any Invention that you played any part in creating while working
for any former employer.
 

 
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4.          Provisions Necessary and Reasonable. You specifically agree that the
provisions of Sections 1 and 2 of this Agreement are necessary and reasonable to
protect Employer’s Confidential Information, property rights and business
interests.  You further agree that a breach or threatened breach by you of
Sections 1 and 2 of this Agreement would pose the risk of irreparable harm to
Employer, and that in the event of a breach or threatened breach of any of such
covenants, in addition to such other remedies as Employer may have at law,
without posting any bond or security, Employer shall be entitled to seek and
obtain equitable relief, in the form of specific performance, or temporary,
preliminary or permanent injunctive relief, or any other equitable remedy which
then may be available.  The seeking of such injunction or order shall not affect
Employer’s right to seek and obtain damages or other equitable relief on account
of any such actual or threatened breach.
 
5.          Choice of Law; Enforceability; Waiver of Jury Trial.
 
(a)         The Law of Massachusetts Applies to this Agreement.  This Agreement
shall be deemed to have been made in the Commonwealth of Massachusetts, shall
take effect as an instrument under seal within Massachusetts, and the validity,
interpretation and performance of this Agreement shall be governed by, and
construed in accordance with, the internal law of Massachusetts, without giving
effect to conflict of law principles, and specifically excluding any conflict or
choice of law rule or principle that might otherwise refer construction or
interpretation of this Agreement to the substantive law of another
jurisdiction.  We both acknowledge that the last act necessary to render this
Agreement enforceable is its execution by Employer in Massachusetts, and that
the Agreement shall be maintained in Massachusetts.
 
(b)         Any Dispute Regarding This Agreement Will Take Place in
Massachusetts.  Both of us agree that any action, demand, claim or counterclaim
relating to, or arising under, the terms and provisions of this Agreement, or to
its breach, shall be commenced in Massachusetts in a court of competent
jurisdiction.  We both further acknowledge that venue shall exclusively lie in
Massachusetts and that material witnesses and documents would be located in
Massachusetts.
 
(c)         We Both Waive the Right to a Jury Trial.  Finally, we both agree
that any action, demand, claim or counterclaim related to, or arising under,
this Agreement shall be resolved by a judge alone, and we both waive and forever
renounce the right to a trial before a civil jury.
 
6.          General.
 
(a)         Agreement Enforceable if You Are Transferred.  You acknowledge and
agree that if you should transfer between or among any affiliates of Employer,
wherever situated, or be promoted or reassigned to functions other than your
present functions, all terms of this Agreement shall continue to apply with full
force.
 
(b)        This Agreement along with the Employment Agreement and Stock Option
Agreements are the Entire Agreements Between Us.  This Agreement embodies the
entire agreement and understanding between us with respect to its subject matter
and supersedes all prior and contemporaneous oral and written agreements and
understandings relating to its subject matter.  No statement, representation,
warranty, covenant or agreement of any kind not expressly set forth in this
Agreement shall affect, or be used to interpret, change or restrict, the express
terms and provisions of this Agreement.

 
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(c)         Modification and Amendment; Waiver; Assignment and Benefit.  The
terms and provisions of this Agreement may be modified or amended only by
written agreement executed by both parties.  The terms and provisions of this
Agreement may be waived, or consent for the departure from its terms granted,
only by a written document executed by the party entitled to the benefits of
such terms or provisions.  No such waiver or consent shall be deemed to be or
shall constitute a waiver or consent with respect to any other terms or
provisions of this Agreement, whether or not similar.  Each such waiver or
consent shall be effective only in the specific instance and for the purpose for
which it was given, and shall not constitute a continuing waiver or
consent.  Employer may assign its rights and obligations under this Agreement at
its sole discretion.  As this Agreement is personal to you, you may not assign
your rights and obligations under this Agreement.  All statements,
representations, warranties, covenants and agreements in this Agreement shall be
binding on the parties, and shall inure to the benefit of any successors and/or
permitted assigns of the parties.
 
(d)         Severability.  The parties intend this Agreement to be enforced as
written.  However, if any portion or provision of this Agreement shall to any
extent be declared illegal or unenforceable by a duly authorized court having
jurisdiction, we both desire that such portion or provision be modified by such
a court so as to make it enforceable, and that the remainder of this Agreement
be enforced to the fullest extent permitted by law.
 
(e)         Meanings of Headings.  The headings in this Agreement are for
convenience only, and we both agree that they shall not be construed or
interpreted to modify or affect the construction or interpretation of any
provision of this Agreement.
 
7.          Your Acknowledgement.  By signing this Agreement, you are
acknowledging that you have had adequate opportunity to review this Agreement,
to reflect upon and consider the terms and conditions of this Agreement and how
they may affect you, that you fully understand this Agreement's terms, and that
you are agreeing voluntarily to its terms.  If this document accurately reflects
our agreement, please so indicate by signing and returning to us the enclosed
copy of this letter.
 

   
INTERLEUKIN GENETICS, INC.
               
By:  James Weaver
     
Accepted and Agreed:
                
Lewis H. Bender
         
/   /
   
Date
   

 
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EXHIBIT 1

 

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