Exhibit 10.1


 





 


December
14, 2015


 


 


Kenneth S. Kornman


920 Centre Street


Newton, MA 02459


 


Re:Agreement of Employment


 


Dear Ken:


 


I am pleased to provide
you with this agreement (the “Letter Agreement”), which provides the terms and conditions of your continued employment
by Interleukin Genetics, Inc. (“Interleukin”).


 


1.Commencement
Date. This Letter Agreement shall be effective as of December 1, 2015. This agreement is intended to replace that certain
Employment Agreement, dated November 12, 2008, as amended on March 31, 2012 and November 29, 2012, by and between you and Interleukin,
which terminated by its terms as of November 30, 2015 (the “Prior Agreement”).


 


2.Position
and Responsibilities. Your position will be President and Chief Scientific Officer. As an Interleukin employee, we expect
you to devote all of your professional and working time and energies to the business and affairs of Interleukin, and to perform
any and all duties and responsibilities that are associated with this position and such additional duties and responsibilities
that the management of Interleukin otherwise may assign to you; provided, however, that the foregoing requirements will not prohibit
you from devoting reasonable time to (i)  serving as a director, committee member or scientific editor of any organization
that does not compete with Interleukin or that does not involve a conflict of interest with Interleukin; (ii) managing your personal
investments; so long as in either case, such activities do not materially interfere with the regular performance of your duties
under this Agreement; or (iii) delivering scientific lectures in the area of Periodontal Disease and Treatment and such other scientific
areas, as shall be approved by the CEO or the Board. You agree to abide by all reasonable employment policies instituted by Interleukin,
as they may be instituted or amended from time to time. Your performance will be reviewed on a periodic basis, but no less frequently
than annually, as long as you remain employed by Interleukin.


 


3.At-Will
Nature of Relationship. No provision of this Letter Agreement will be construed to create an express or implied employment
contract, or a promise of employment for any specific period of time. Your employment with Interleukin is at-will employment which
may be terminated by you or Interleukin at any time for any reason (or for no reason) with or without advance notice, subject
to your eligibility for specified types of severance payments upon specified types of terminations, as described in Section 5.


 






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4.Compensation
and Benefits.


 


(a)Base Pay.
Your initial base pay will be $360,000 on an annualized basis (your “Base Pay”), less applicable taxes and standard
withholdings and deductions, paid in accordance with Interleukin’s standard payroll procedures. Interleukin will review your
Base Pay on an annual basis.


 


(b) Annual Bonus.
You are eligible to participate in the Interleukin Bonus Plan, with a target maximum annual bonus of thirty-five percent (35%)
of your Base Pay for the 2016 Bonus Plan Year. The annual bonus period will begin January 1, 2016 and will be pro-rated for any
period of inactive employment. The actual amount of any annual bonus will be determined by the Compensation Committee of the Interleukin
Board of Directors after assessing Interleukin goals and individual milestones. The annual bonus is expressly subject to your employment
through the date the annual bonus is paid, and will not be earned unless you are employed on such date. The Board’s Compensation
Committee has absolute discretion as to whether annual bonuses will be awarded and the size of any annual bonus, notwithstanding
whether any certain corporate goals are met.


 


(c)Equity.
Pursuant to and subject to the terms and conditions of the Interleukin Genetics Inc. 2013 Employee, Director and Consultant Equity
Incentive Plan (the “Plan”) and any applicable option agreement, Interleukin will grant you 400,000 options to purchase
shares of common stock of Interleukin at an exercise price equal to the Fair Market Value (as defined in the Plan) of the common
stock on the date of approval of the grant by the Board of Directors or an authorized committee thereof. The options will vest
over a four (4) year period in 48 equal monthly installments on the first day of each month beginning on January 1, 2016. Notwithstanding
the foregoing, if at any time within ninety (90) days prior to or twelve (12) months following the effective date of a Change in
Control (as defined below), you are terminated without Cause (as defined in Section 5(a) below), then this option shall become
fully vested and exercisable as of the date of such termination.


 


For purposes of
this section, “Change in Control” means the occurrence of any of the following events: (i) any “Person”
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “Beneficial Owner” (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), directly or indirectly, of
securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding
voting securities (excluding for this purpose any such voting securities held by the Company or its affiliates or by any employee
benefit plan of the Company) pursuant to a transaction or a series of related transactions; or (ii)(a) a merger or consolidation
of the Company whether or not approved by the Board, other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or the parent of such corporation) more than 50% of the total voting power represented
by the voting securities of the Company or such surviving entity or parent of such corporation, as the case may be, outstanding
immediately after such merger or consolidation; or (b) the sale or disposition by the Company of all or substantially all of the
Company’s assets in a transaction requiring stockholder approval.


 


(d)Vacation.
 You will be entitled to twenty (20) days of vacation per year, which will accrue ratably on an annual basis, subject to the
terms and conditions of Interleukin’s vacation policy.


 






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(e)Fringe
Benefits. You may take advantage of various benefits offered by Interleukin, which currently include group medical and dental
insurance, short term disability coverage, group life insurance, and a 401(k) plan. Please note that Interleukin benefits may be
modified, changed or eliminated from time to time at the sole discretion of Interleukin, and the provision of such benefits to
you in no way changes or impacts your status as an at-will employee. Where a particular benefit is subject to a formal plan (for
example, medical insurance), eligibility to participate in and receive such benefit is governed solely by the applicable plan document.
Interleukin will pay life insurance premiums annually in the amount of $3,296.00 on a policy for you. You shall have the right
to designate ownership and beneficiary of said policy.


 


(f)Expense
Reimbursement. Interleukin will reimburse you for all ordinary and reasonable out-of-pocket business expenses incurred by you
in furtherance of Interleukin’s business in accordance with Interleukin’s policies with respect thereto as in effect
from time to time. All reimbursements provided under this Letter Agreement will be made or provided in accordance with the
requirements of Section 409A (“Section 409A”) of the Internal Revenue Code and the rules and regulations there under
(the “Code”) including, where applicable, the requirement that (A) any reimbursement is for expenses incurred
during your lifetime (or during a shorter period of time specified in this Agreement); (B) the amount of expenses eligible
for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year; (C)
the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which
the expense is incurred; and (D) the right to reimbursement or in kind benefits is not subject to liquidation or exchange
for another benefit.


 


5.Termination
Payments. As stated above, your employment with Interleukin is at-will employment, which may be terminated by you or Interleukin
at any time for any reason, with or without advance notice. Notwithstanding for the foregoing, the parties agree to the following
regarding payments on termination.


 


(a)Termination
without Cause. If your employment hereunder is terminated by Interleukin without Cause (as defined below) at any time, and
if you execute and do not revoke a release agreement in connection with such termination (as described in Section 5(c)), then:


 


(i)                
 Interleukin will pay you an amount equal to your Base Pay in effect at the time of such termination for a period commencing
on the effective date of the release agreement and ending on the six (6) month anniversary of such effective date.


 


For purposes of this
section, “Cause” means your: (i) willful misconduct or gross negligence that results in loss, damage or injury
to Interleukin; (ii) unauthorized disclosure of Interleukin trade secrets or confidential and proprietary information;
(iii) dishonesty of a material nature (including, but not limited to, theft or embezzlement of Interleukin funds or assets),
willful disloyalty, or breach of fiduciary duty to Interleukin or its shareholders; (iv) breach of your obligations under
this Letter Agreement or your Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement; (v)
failure to perform your responsibilities or duties as an employee of Interleukin, which failure has not been cured within thirty
(30) days after written notice thereof to you by Interleukin; or (vi) commission of, or plea of guilty or nolo contendere
to, a felony (excluding minor traffic violations).


 






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(b)Other Termination.
If your employment hereunder is terminated by you at any time for any reason, or by Interleukin in any circumstances or for any
reason other than those specifically described in Section 5(a), then you will not be eligible for any form of severance pay, benefits
or compensation, other than Accrued Obligations described below.


 


(c)Release of
Claims; Timing of Payment. Interleukin will not be obligated to provide you with any payment or benefit described in Section
5(a) unless you execute and do not revoke a release agreement in a form acceptable to Interleukin, which will include (at a minimum)
a general release of claims against Interleukin and its affiliated entities and each of their officers, directors, employees and
others associated with Interleukin and its affiliated entities. The release agreement will be provided to you following your separation
of service from Interleukin, and must become effective and irrevocable before the sixtieth (60th) day following such
separation from service (the “Review Period”). If you sign and do not revoke the release agreement within the Review
Period, then applicable payments and benefits will be made or will commence, as applicable, on
Interleukin’s first regular payroll date following the conclusion of the Review Period, provided that if the Review Period
begins in one taxable year of yours and ends in a later taxable year of yours, then the payment(s) will commence in the later taxable
year. 


 


(d)Payment of
Accrued Obligations. You will be paid the following upon an employment termination, regardless of the reason therefor and/or
the application of any of the above sections: (i) the portion of your Base Pay that is accrued but not yet paid; (ii)
the portion of your vacation that is accrued and not yet used, pursuant to the terms of any applicable Interleukin policy; and
(iii) the business expenses properly incurred by you and not yet reimbursed, pursuant to the terms of any applicable Interleukin
policy. Your entitlement to any other compensation or benefit under any plan of Interleukin will be governed by and determined
in accordance with the terms of such plans.


 


6.Your Certifications.
By signing this Letter Agreement, you are certifying and representing to Interleukin that: (a) you are free to enter
into and fully perform the duties of your position; (b) you are not subject to any employment, confidentiality, non-competition
or other agreement that would restrict your right to work for Interleukin in any way, and you have provided Interleukin with a
copy of any agreement that could be interpreted as such; (c) your employment with Interleukin does not violate any order,
judgment or injunction applicable to you, and you have provided Interleukin with a copy of any such order, judgment, or injunction;
and (d) all facts you have presented to Interleukin are accurate and true, including all oral and written statements you
have made to Interleukin pertaining to your education, training, qualifications, licensing and prior work experience on any job
application, resume or c.v., or in any interview or discussion with Interleukin.


 


7.Confidentiality
and Intellectual Property. Interleukin considers the protection of its confidential information, proprietary materials
and intellectual property to be extremely important. Consequently, as a condition of this offer of employment, you are required
to sign the enclosed Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement. Prior to accepting
employment with any subsequent employer, you will inform such employer of any restrictions set forth therein which apply to your
activities for or employment by such employer, and permit Interleukin to do the same.


 






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8.General.


 


(a)Entire
Agreement. This Letter Agreement, along with any other agreement specifically referenced herein, constitutes the entire agreement
regarding the terms and conditions of your employment by Interleukin, and supersedes any prior agreements (including the Prior
Agreement), promises or statements (whether oral or written) regarding the offered terms of employment.


 


(b)Modification;
Waiver; Assignment.  This Letter Agreement’s terms may be modified or amended only by written agreement executed by
the parties hereto. This Letter Agreement’s terms may be waived, or consent for the departure therefrom granted, only by
a written document executed by the party entitled to the benefits of such terms or provisions. You may not assign your rights
and obligations hereunder without the prior written consent of Interleukin. Interleukin may assign its rights and obligations
hereunder to any person or entity that succeeds to all or substantially all of Interleukin’s business.


 


(c)Choice
of Law; Venue; Jury Waiver.  This Letter Agreement will be deemed to have been made in Massachusetts, will take effect
as an instrument under seal within Massachusetts, and will 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 to the law of another jurisdiction. Both you and Interleukin
agree that any action, demand, claim or counterclaim relating to or arising under this Letter Agreement will be commenced in Massachusetts
in a court of competent jurisdiction by a judge alone, and you hereby waive and renounce your right to a trial before a civil
jury.


 


(d)Code Sections
409A and 280G. 


 


(i)The
benefits set forth in Section 5(a) constitute “non-qualified deferred compensation” subject to Section 409A of the
Code. Any termination of your employment triggering payment of benefits under Section 5(a) must constitute a “separation
from service” under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits
can commence. To the extent that the termination of your employment does not constitute a separation of service under Section
409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated
to be provided by you to Interleukin at the time your employment terminates), any benefits payable under Section 5(a) that constitute
deferred compensation under Section 409A will be delayed until after the date of a subsequent event constituting a separation
of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h). For purposes of clarification, this Section
will not cause any forfeiture of benefits on your part, but will only act as a delay until such time as a “separation from
service” occurs. Further, if you are a “specified employee” (as that term is used in Section 409A and regulations
and other guidance issued thereunder) on the date your separation from service becomes effective, any benefits payable under Section
5(a) that constitute non-qualified deferred compensation subject to Section 409A will be delayed until the earlier of (A) the
business day following the six-month anniversary of the date your separation from service becomes effective, and (B) the date
of your death, but only to the extent necessary to avoid the adverse tax consequences and penalties under Section 409A; on the
earlier of (X) the business day following the six-month anniversary of the date your separation from service becomes effective,
and (Y) your death, Interleukin will pay you in a lump sum the aggregate value of the non-qualified deferred compensation that
Interleukin otherwise would have paid you prior to that date under Section 5(a). It is intended that each installment of the payments
and benefits provided under Section 5(a) will be treated as a separate “payment” for purposes of Section 409A. Neither
Interleukin nor you will have the right to accelerate or defer the delivery of any such payments or benefits except to the extent
specifically permitted or required by Section 409A.


 






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(ii)The
parties intend this Letter Agreement to be in compliance with Section 409A. You acknowledge and agree that Interleukin does not
guarantee the tax treatment or tax consequences associated with any payment or benefit arising under this Letter Agreement, including
but not limited to consequences related to Section 409A. Notwithstanding any other provision to the contrary, this Letter Agreement
will be interpreted and at all times administered in a manner that avoids the inclusion of compensation in income under Section
409A, or the payment of increased taxes, excise taxes or other penalties under Section 409A.


 


(iii)
If any payment or benefit you would receive under this Letter Agreement, when combined with any other payment or benefit you receive
pursuant to a Change of Control (for purposes of this section, a “Payment”) would: (A) constitute a “parachute
payment” within the meaning of Section 280G the Code; and (B) but for this sentence, be subject to the excise tax imposed
by Section 4999 of the Code (the “Excise Tax”), then such Payment will be either: (X) the full amount of such Payment;
or (Y) such lesser amount (with cash payments being reduced before stock option compensation) as would result in no portion of
the Payment being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state
and local employments taxes, income taxes, and the Excise Tax, results in your receipt, on an after-tax basis, of the greater
amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.


 


[Signature
Page to Follow]


 






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This Letter Agreement
may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute
one and the same instrument. You may accept this offer of employment and the terms and conditions hereof by signing the enclosed
additional copy of this Letter Agreement.


 





	 	Sincerely,
	 	 	 
	 	INTERLEUKIN GENETICS, INC.
	 	 	 
	 	By:  	/s/ Mark B. Carbeau
	 	 	Mark B. Carbeau
	 	 	Chief Executive Officer















 





Agreed to and Acknowledged:


 


/s/ Kenneth S. Kornman


Signature


 


12/14/2015


Date


 


 



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