Exhibit 10.1


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement
(this “Agreement”), is made and entered into
as of the 30th day of April, 2008 (the “Effective
Date”), by and between INTERLEUKIN GENETICS, INC., a Delaware
corporation (“Employer” or the “Company”), and Eliot Lurier, 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.  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 one (1) year thereafter unless earlier terminated in accordance
with the provisions hereof.  On the first
and each subsequent 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 sixty (60) 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 Chief Executive Officer, and Employee shall have the title and perform
the duties of Chief Financial Officer of the Company, and such other
reasonable, usual and customary duties of such office as may be delegated to
Employee from time to time by the Chief Executive Officer or 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, 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
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 $217,000 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.


 


4.             Bonus;
Stock Options.


 


(a)           Sign-On
Bonus.  In addition to the Base Salary,
Employee shall be eligible to receive a sign on bonus (the “Sign-On Bonus”) in the amount of $15,000,
upon completion of his first four (4) months of employment with
Employer.  The Sign-On Bonus will be paid
within fifteen (15) days after it is earned, in accordance with Employer’s
usual payroll practices.


 


(b)           Annual
Bonus.  In addition to the Base Salary,
Employee shall also be eligible to receive a discretionary annual performance
bonus (the “Annual Bonus”) of up
to thirty percent (30%) of Employee’s Base Salary in effect at the end of the
calendar year to which it relates.  The
award and amount of any Annual Bonus shall be determined by the Chief Executive
Officer and the Compensation Committee of the Board (or its designee), in their
sole discretion, and shall be primarily based on Employee’s performance and the
overall performance of the Company.  The
Annual Bonus will be paid within (15) business days after it is awarded, in
accordance with Employer’s usual payroll practices.


 


(c)           Stock
Options.  Employee
will receive an incentive stock option for 40,000 shares of common stock at an
exercise price equal to the fair market value of such stock on the “Grant Date,”
which will be approximately April 30, 2008, and which options will vest
annually in five (5) equal installments (i.e.,
installments of 8,000 options each) on the yearly anniversary of the Effective
Date, provided that Employee remains employed by Employer.


 


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.  All
such expenses shall be submitted for reimbursement and shall be reimbursed no
later than two and one half (2.5) months after the year in which incurred.


 


(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, 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) the willful and intentional (with such intent or
willfulness to be determined by the Board) 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), if such failure or
refusal continues after Employer provides Employee with thirty (30) days’
written notice of such failure or refusal and an opportunity to cure any such
failure or notice within such timeframe; (B) the engaging by Employee in
misconduct which is injurious to the Company’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 the Company; (D) Employee’s commission
of an act of fraud or embezzlement against the Company; (E) 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; (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)           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.  Employer, at
its exclusive option, may elect to provide Employee with pay in lieu of any or
all of the aforementioned notice period. 
Upon termination in accordance with this Section 6(b), 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.


 

















 


(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 at least three (3) 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 further
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
Without Cause.  Employer
shall have the right, exercisable upon thirty (30) days’ prior written notice,
or at Employer’s sole option, payment in lieu of notice, to terminate Employee’s
employment under this Agreement for any reason other than set forth in Sections
6(a) and (c) above, at any time during the Term.  If Employee is so terminated by Employer
pursuant to this Section 6(d) within the first three (3) months
following the Effective Date, 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) at any time thereafter
during the Term, Employer shall pay to Employee Severance Compensation under
the terms and conditions described in Section 7.


 


7.             Severance
Compensation.  If Employee
is terminated by Employer pursuant to Section 6(d) during the Term
and at any time after the first three (3) months following the Effective
Date, and provided that Employee is in compliance with the Non-Competition
restrictions contained in Section 9(a) of this Agreement, Employer
shall pay to Employee the following: (a) an amount equivalent to six (6) months
of Employee’s Base Salary in effect at the time of the termination; and (b) provided
that Employee chooses to exercise his right under COBRA to continue his
participation in the Company’s health plans, the Employer will pay for the
costs for such coverage for a period of six (6) month(s) following
the termination, to the same extent (including Employee’s co-pay, if any, which
shall be deducted from the Base Salary payment(s) in Section 7(i))
that such insurance is provided to persons then currently employed by the
Company).  Employer, in its sole
discretion, may make the payments provided for in this Section 7 in
accordance with its regular payroll schedule or in a lump sum payment(s).


 


Employer shall not be obligated
to pay Employee any of the payments or benefits set forth in Section 6(d) (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.


 


8.             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 the Company, without the prior written approval of the Company.


 

















 


9.             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 six (6) 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
based in the United States that develops and sells genetic testing products
during Employee’s employment with Employer, 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 six (6) 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;


 


(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, provided,
however, that the parties understand and
agree that clients or customers with whom Employee had a business relationship
prior to the Effective Date are specifically excluded from the scope of this
provision; 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.


 


10.          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)           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 Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”). 
Employer and Employee agree that 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 10(d) by
giving notice of such change to the other parties in the manner which is
provided in this Section 10(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.


 


(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 8 and 9
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.


 


(k)           Equitable
Relief.  In the event of a breach or a
threatened breach by Employee of any of the provisions contained in Sections 8
or 9 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.


 


(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.


 

















 


IN WITNESS WHEREOF, the
parties have executed this Employment Agreement as of the date first set forth
above.


 


	
  INTERLEUKIN GENETICS, INC.

  	
   

  	
  ELIOT LURIER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Lewis H. Bender

  	
   

  	
  /s/ Eliot Lurier

  
	
   

  	
  Lewis H. Bender

  	
   

  	
  Signature

  	
   

  
	
   

  	
  Chief Executive Officer