EXHIBIT 10.19




 




EMPLOYMENT AGREEMENT




 




This EMPLOYMENT AGREEMENT (this

“Agreement”), is made and entered into as of the 18th day of June, 2000 (the

“Effective Date”), by and between INTERLEUKIN GENETICS, INC., a Texas

corporation (“Employer”), and FENEL ELOI, 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. Employer agrees to

employ Employee, and Employee agrees to serve Employer, in accordance with the

terms of this Agreement, for a term (the “Term”) beginning on the Effective

Date and continuing for a period of four (4) years thereafter unless earlier

terminated in accordance with the provisions hereof.




 




2. Employment of Employee.




 




(a) Specific Positions. 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 shall have the titles

and perform the duties of Chief Operating Officer and Chief Financial Officer

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.




 




(b) 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 or committee member 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 materially

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”) of

$195,000.00 per year, payable in equal monthly installments. The Base Salary

may be increased (but not decreased) annually at the Employer’s sole discretion

throughout the Term on each anniversary of the Effective Date in the discretion

of Employer’s Board.




 




4. Bonus. In addition to the

Base Salary, Employee shall also receive a bonus, if any, as determined

annually by the Board of Directors of Employer in its sole discretion.




 





























 




5. Benefits.




 




(a) Stock Options. The Employer shall issue to Employee stock options

to purchase 200,000 shares of the Employer’s stock. These options will be

issued under the Employer’s 2000 Employee Stock Compensation Plan which will be

approved by shareholders at the June 2000 Annual Meeting. The options will be

issued as soon as practical after shareholder approval of the Plan and the

strike price will be set at the closing price of the stock on the date the

options are issued. The options will vest as follows:




 




•              20,000

shares on December 31, 2000




 




•              3,333

shares each month from January 31, 2001 through June 30, 2001




 




•              4,167

shares each month from July 31, 2001 through June 30, 2002




 




•              5,000

shares each month from July 31, 2002 through June 30, 2003




 




•              4,167

shares each month from July 31, 2003 through May 31, 2004




 




•              4,161

shares on June 30, 2004




 




We will maximize the ISO

portion of the award, utilizing the maximum allowable under IRS code ($100,000

per year), The strike price for the ISOs will be the closing price on the first

business day following the effective date of this agreement. All remaining

options will be nonqualified stock options with a strike price based on the

closing price on the date this agreement is executed by both parties.




 




In the event there is a change

of control of the Company, all outstanding unvested options will immediately

vest.  A change in control of the

Company shall be defined here as a purchase of the majority of the outstanding

common stock by an outside entity not organized solely for the purpose of

investment.




 




(b) 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, vision, dental, life and other

insurance plans and such other similar benefits available to other employees.




 




(c) 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.




 




(d) Vacation. During Employee’s employment with Employer hereunder,

Employee shall be entitled to an annual vacation leave of three (3) weeks at

full pay, which shall be adjusted in accordance with the vacation policy

generally applicable to employees of the Employer.




 




6. Termination.




 




(a) Termination for Cause. Employer shall have the right, exercisable

immediately upon written notice, to terminate Employee’s employment for

“Cause.”




 




(i) Definition of Cause. As used herein, “Cause” means any of the

following: (A) habitual drunkenness under the influence of alcohol by Employee

or illegal use of narcotics; (B) Employee is convicted by a court of competent

jurisdiction, or pleads “no contest” to, a felony or any other conduct of a

criminal nature (other than minor traffic violations) by Employee; (C) Employee

engages in fraud, embezzlement, or any other illegal conduct; (D) Employee

imparts confidential information relating to Employer or its business to

competitors or to other third parties other than in the course of carrying out

Employee’s duties; (E) Employee refuses to perform his duties hereunder or

otherwise breaches any covenant, warranty or representation of this Agreement

or Employee’s Non-Disclosure and Confidentiality Agreement executed

concurrently herewith, and, except for any conduct described in clauses (A)

through (D) of this Section 6(a)(i), fails to cure such breach (if




 





























 




such breach is then capable of being cured) within ten (10) business

days following written notice thereof specifying in reasonable detail the

nature of such breach, or if such breach is not capable of being cured in such

time, a cure shall not have been diligently initiated within such ten (10)

business day period.




 




(ii) Effect of Termination. Upon termination in accordance with this

Section 6(a), Employee shall be entitled to no further compensation hereunder

other than the Base Salary and other benefits accrued hereunder through, but

not including, the effective date of such termination. Employer’s exercise of

its right to terminate for Cause shall be without prejudice to any other remedy

to which it may be entitled at law, in equity or under this Agreement.




 




(b) Voluntary Termination. Employee may terminate his employment at any

time by giving no less than thirty (30) days’ written notice to Employer.




 




(i) No Reason. Upon termination in accordance with this Section 6(b),

except as otherwise provided in Section 6(b)(ii) below, Employee shall be

entitled to no further compensation hereunder other than the Base Salary and

other benefits accrued hereunder through, but not including, the effective date

of such termination.




 




(ii) Good Reason. Notwithstanding anything to the contrary in Section

6(b)(i) above, if Employee terminates his employment under this Section 6(b)

for Good Reason (as defined below), Employee shall be entitled to receive from

Employer all of the compensation and benefits provided for in Section 6(e)

below. As used herein, “Good Reason” means any of the following: (A) the

assignment to Employee of duties materially inconsistent with those of other

employees of Employer in like positions where Employee provides written notice

to Employer within six (6) months of such assignment that such duties are

materially inconsistent with those duties of similarly situated employees and

Employer fails to release Employee from his obligation to perform such

inconsistent duties within twenty (20) business days after Employer’s receipt

of such notice; or (B) a failure by Employer to comply with any other material

provision of Sections 3 through 5, inclusive, of this Agreement which has not

been cured within fifteen (15) business days after notice of such noncompliance

has been given by Employee to Employer, or if such failure is not capable of

being cured in such time, a cure shall not have been diligently initiated by

Employer within such fifteen (15) business day period.




 




(c) Termination Due to Death or Disability. This Agreement shall

automatically terminate upon the death of Employee. In addition, if 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 six (6) months, Employer may terminate Employee’s employment upon

written notice to Employee. Upon termination in accordance with this Section

6(c), Employee (or Employee’s estate, as the case may be) shall be entitled to

no farther compensation hereunder other than the Base Salary and other benefits

accrued hereunder through, but not including, the date of death or, in the case

of disability, the date of termination.




 




(d) Termination Upon Cessation of Business. Employer shall have the

right to immediately terminate Employee’s employment under this Agreement upon

a “Cessation of Business.” For purposes of this Agreement, a “Cessation of

Business” shall mean Employer’s ceasing to operate in the ordinary course of

business, whether by dissolution, liquidation, sale of assets, consolidation,

merger or otherwise, in connection with, pursuant to or arising out of a good

faith determination by the Board that the continuing operation of the business

in its ordinary course is reasonably likely to render Employer unable to meet

its liabilities as they mature. Upon termination in accordance with this

Section 6(d), Employee shall be entitled to no further compensation hereunder

other than the Base Salary and other benefits accrued hereunder through, but not

including, the effective date of such termination. If Employee is so terminated

by Employer pursuant to this Section 6(d) during the Term, Employer shall (i)

pay to Employee the Base Salary, and (ii) provide the same health insurance

benefits to which Employee was entitled hereunder, in each case (i.e., the Base

Salary and health insurance benefits), until the earlier to occur of (A) the

expiration of the remaining portion of the Term, or (B) the expiration of the

twelve (12) month period




 





























 




commencing on the date Employee is terminated. Employer may make such

payments in accordance with its regular payroll schedule or in a single lump

sum payment in its sole discretion.




 




(e) Termination Without Cause. Employer shall have the right,

exercisable upon 30 days’ prior written notice, to terminate Employee’s

employment under this Agreement for any reason other than set forth in Sections

6(a), (c) and (d) above, at any time during the Term. If Employee is so

terminated by Employer pursuant to this Section 6(e) during the Term, Employer

shall (i) pay to Employee the Base Salary, and (ii) provide the same health

insurance benefits to which Employee was entitled hereunder, in each case

(i.e., the Base Salary and health insurance benefits), until the expiration of the

twelve (12) month period commencing on the date Employee is terminated.




 




7. Publicity. During the term

of this Agreement 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 the Company, without the prior

written approval of the Company.




 




8. Restrictive Covenants.




 




(a) Non-Competition. In consideration of the benefits of this

Agreement, including Employee’s access to and limited use of proprietary and

confidential information of the Company, as well as training, education and

experience provided to Employee by the Company directly and/or as a result of

work projects assigned by the Company with respect thereto, Employee hereby

covenants and agrees that during the term of this Agreement and for a period of

twelve (12) months following termination of this Agreement, regardless of how

such termination may be brought about, Employee shall not, directly or

indirectly, as proprietor, partner, stockholder, director, officer, employee,

consultant, joint venture, 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

the Company participates during Employee’s employment with the Company;

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 the Company, 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 of

this Agreement and for a period of twelve (12) months following termination of

this Agreement, regardless of how such termination may be brought about,

provide any services to any person or entity which may be used against, or in

conflict with the interests of, the Company or its customers or clients.




 




(b) Judicial Reformation. Employee acknowledges that, given the nature

of the Company’s business, the covenants contained in Section 8(a) 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 the Company’s business and to protect

its legitimate business interests. If, however, Section 8(a) 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.




 




(c) 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 the Company, as well as training,

education and experience provided to Employee by the Company directly and/or as

a result of work projects assigned by the Company with respect thereto,

Employee hereby further covenants and agrees that for a period of twelve (12)

months following the termination of this Agreement, regardless of how such

termination may be brought about, Employee shall not, directly or indirectly,

(i) use or make




 





























 




known to any person or entity the names or addresses of any clients or

customers of the Company or any other information pertaining to them, (ii) call

on for the purpose of competing, solicit, take away or attempt to call on,

solicit or take away any clients or customers of the Company on whom Employee

called or with whom he became acquainted during his employment with the

Company, nor (iii) recruit or attempt to recruit any employees of the Company.




 




(d) Affiliates. When used in this Section 8, the term “Company”

includes Interleukin Genetics, Inc. and all affiliates 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.




 




(b) 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.




 




(c) 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(c) by giving notice of such change to the other

parties in the manner which is provided in this Section 9(c).




 




(d) 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.




 




(e) Headings. The headings of Sections herein are used for convenience

only and shall not affect the meaning of contents hereof.




 




(f) 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.




 




(g) 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.




 




(h) Governing Law. This Agreement shall be governed by and construed in

accordance with the laws of the State of Texas.




 




(i) Arbitration. Except for the provisions of Sections 7 and 8 with

regard to which the Company 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 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.




 




(j) 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, Employee acknowledges that the Company will suffer irreparable

injury not fully compensable by money damages and, therefore, will not have an

adequate remedy available at law. Accordingly, the Company 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 the Company may have under this Agreement, at law or in equity, including,

without limitation, the right to sue for damages.




 




IN WITNESS WHEREOF, the parties

have executed this Agreement as of the date first set forth above.




 




	

  “EMPLOYER”


  	

   


  	

  “EMPLOYEE”


  
	

   


  	

   


  	

   


  
	

  INTERLEUKIN

  GENETICS, INC.


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  By:


  	

  /s/ Kenneth

  S. Kornman


  	

   


  	

  /s/ Fenel

  Eloi


  	

   


  
	

   


  	

  Kenneth S.

  Kornman


  	

   


  	

  Fenel Eloi


  
	

   


  	

   


  	

   


  
	

  Address:


  	

   


  	

  Address:


  
	

  100 N.E.

  Loop 410, Suite 820


  	

   


  	

  135 Beaver

  Street, 2nd Floor


  
	

  San Antonio,

  Texas 78216


  	

   


  	

  Waltham,

  Massachusetts 02452


  





 




Execution date April 17, 2000