INTERLEUKIN GENETICS INC
EMPLOYMENT AGREEMENT - WITH PAUL MARTHA
<DOCUMENT>
<TYPE>EX-10.24
<SEQUENCE>2
<FILENAME>b38725igex10-24.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT - WITH PAUL MARTHA
<TEXT>

<PAGE>   1

EXHIBIT 10.24

                              EMPLOYMENT AGREEMENT


            This EMPLOYMENT AGREEMENT (this "Agreement), is made and entered
      into as of the 20th day of November, 2000 (the "Effective Date"), by and
      between INTERLEUKIN GENETICS, INC., a Delaware corporation ("Employer"),
      and Paul Martha, MD., an individual ("Employee").

                                 R E C I T A L S

      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

                                A G R E E M E N T

      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 title
and perform the duties of Vice President of Medical Affairs and Chief Medical
Officer and such other reasonable, usual and customary duties of such office as
may be delegated to Employee from time to time by the CEO and 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


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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; (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 or
(iii) for delivering lectures. The Company recognizes and acknowledges that for
a period of six months from the employment date, the Employee will have from
time to time the need to consult with his former Employer "Praecis" as long as
such activity does not preclude the Employee from discharging the duties and
responsibilities of his office.

      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 of
Directors.

      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. This award is being made
                  effective November 20, 2000, the Employee's hire date. These
                  awards will be covered in detail by separate Option
                  Agreements. The options will vest as follows:

<TABLE>
<S>                                                     <C>
                  20,000                                on May 20, 2001
                    3,333 per month                     June 20, 2001 - November 20, 2001
                    4,167 per month                     December 20, 2001 - November 20, 2002
                    5,000 per month                     December 20, 2002 - November 20, 2003
                    4,167 per month                     December 20, 2003 - October 20, 2004
                    4,161                               November 30, 2004
</TABLE>

                  We will maximize the ISO portion of the award, utilizing the
                  maximum allowable under IRS Code ($100,00 per year). The
                  strike price for the ISO's will be the closing price on the
                  effective date of this agreement. All remaining options will
                  be non-qualified 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 (as defined in the
                  Company's 2000 Employee Stock Compensation Plan), all
                  outstanding unvested options will immediately vest.


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            (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 four (4)
weeks at full pay, which shall be adjusted in accordance with the vacation
policy generally applicable to employees of the Employer and Holdings.



      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.


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            (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 accured 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
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 or 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 the 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

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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 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.

      7.    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, manager,
                  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
                  Employees 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 the 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.


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            (b)   Judicial Reformation. Employee acknowledges that, given the
                  future 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 determines 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 areas 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" 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.

      8.    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


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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 8(c) by giving notice of such change to the
other parties in the manner which is provided in this Section 8(c).

            (d) Entire Agreement. This Agreement together with the Stock Option
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 Commonwealth of Massachusetts.

            (i) Arbitration. 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


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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.

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

"EMPLOYER":                               "EMPLOYEE":

INTERLEUKIN GENETICS, INC.


By:________________________________       ___________________________________
   PHILIP R. REILLY, MD, JD               PAUL MARTHA, MD

Address:                                  Address:

135 Beaver Street - Second Floor          101 Hill Street
Waltham, MA  02452                        Topsfield, MA  01983


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