Exhibit 10.23

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT is made and entered into as of this 14 day of March
2014 (the “Effective Date”), by and between SPHERIX INCORPORATED, a Delaware
corporation (the “Corporation”), and Frank Reiner (the “Executive”), under the
following circumstances:

 

RECITALS:

 

A.           The Corporation desires to secure the services of the Executive
upon the terms and conditions hereinafter set forth; and

 

B.           The Executive desires to render services to the Corporation upon
the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, the parties mutually agree as follows:

 

1.          Employment. The Corporation hereby employs the Executive and the
Executive hereby accepts employment as an executive of the Corporation, subject
to the terms and conditions set forth in this Agreement.

 

2.          Duties. The Executive shall serve as the Vice President, Licensing,
with such duties, responsibilities and authority as are commensurate and
consistent with his position, as may be, from time to time, assigned to him by
the Chief Executive Officer of the Corporation (the “Chief Executive Officer”).
The Executive shall report directly to the Chief Executive Officer. During the
Term (as defined in Section 3), the Executive shall devote his full business
time and efforts to the performance of his duties hereunder unless otherwise
authorized by the Board. Notwithstanding the foregoing, the expenditure of
reasonable amounts of time by the Executive for the making of passive personal
investments, the conduct of business affairs and charitable and professional
activities shall be allowed, provided such activities do not materially
interfere with the services required to be rendered to the Corporation hereunder
and do not violate the restrictive covenants set forth in Section 9 below.

 

3.            Term of Employment. The term of the Executive’s employment
hereunder, unless sooner terminated as provided herein (the “Initial Term”),
shall be for a period of one (1) year commencing on the Effective Date. The term
of this Agreement shall automatically be extended for additional terms of one
(1) year each (each a “Renewal Term”) unless either party gives prior written
notice of non-renewal to the other party no later than sixty (60) days prior to
the expiration of the Initial Term (“Non-Renewal Notice”), or the then current
Renewal Term, as the case may be. For purposes of this Agreement, the Initial
Term and any Renewal Term are hereinafter collectively referred to as the
“Term.”

 

4.           Compensation of Executive.

 

(a)          The Corporation shall pay the Executive as compensation for his
services hereunder, in equal bi-weekly installments during the Term, an annual
salary of Two Hundred and Twenty Thousand Dollars (the “Base Salary”), less such
deductions as shall be required to be withheld by applicable law and
regulations. The Corporation shall review the Base Salary on an annual basis and
has the right but not the obligation to increase it.

 

(b)          In addition to the Base Salary set forth in Section 4(a), the
Executive shall be entitled to receive an annual bonus the (“Annual Bonus”) as
set forth in the attached Schedule A (unless adjusted by the Compensation
Committee of the Board (the “Compensation Committee”)). The Annual Bonus shall
be paid by the Corporation to the Executive promptly after determination that
the relevant targets have been met, it being understood that the attainment of
any financial targets associated with any bonus shall not be determined until
following the completion of the Corporation’s annual audit and public
announcement of such results and shall be paid promptly following the
Corporation’s announcement of earnings. In the event that the Compensation
Committee is unable to act or if there shall be no such Compensation Committee,
then all references herein and in Schedule A to the Compensation Committee
(except in the proviso to this sentence) shall be deemed to be references to the
Board.

 

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(c)          Equity Awards. Executive shall be eligible for such grants of
awards under stock option or other equity incentive plans of the Corporation
adopted by the Board and approved by the Corporation’s stockholders (or any
successor or replacement plan adopted by the Board and approved by the
Corporation’s stockholders) (the “Plan”) as the Compensation Committee of the
Corporation may from time to time determine (the “Share Awards”). Share Awards
shall be subject to the applicable Plan terms and conditions, provided, however,
that Share Awards shall be subject to any additional terms and conditions as are
provided herein or in any award certificate(s), which shall supersede any
conflicting provisions governing Share Awards provided under the Plan. On the
Effective Date, Executive shall be entitled to receive (i) a stock option grant
(the “Initial Option Grant”) to purchase up to 100,000 shares of common stock,
par value $0,0001 per share (the “Common Stock”) of the Corporation, which shall
vest in four (4) equal installments on each of July 1, 2014, October 1, 2014,
January 1, 2015 and April 1, 2015, and shall expire as to all installments on
the tenth (10th) anniversary of the Effective Date and (ii) 10,000 restricted
shares of Common Stock of the Corporation (the “Initial Stock Grant”), which
shall vest in four (4) equal installments on the Effective Date, June 14, 2014,
September 14, 2014 and December 14, 2014. Notwithstanding any provision to the
contrary, the Initial Option Grant and Initial Stock Grant shall immediately
vest in full upon the termination of the Executive’s services hereunder by the
Corporation other than for “Cause”.

 

(d)          The Corporation shall pay or reimburse the Executive for all
reasonable out-of-pocket expenses actually incurred or paid by the Executive in
the course of his employment, consistent with the Corporation’s policy for
reimbursement of expenses from time to time.

 

(e)          The Executive shall be entitled to participate in such pension,
profit sharing, group insurance, hospitalization, and group health and benefit
plans and all other benefits and plans, including perquisites, if any, as the
Corporation provides to its senior executives, including group family health
insurance coverage which shall be paid by the Corporation (the “Benefit Plans”).
In the event the Corporation does not have a health benefit plan in place, the
Corporation shall reimburse the Executive for expenses incurred in maintaining
health and dental insurance for Executive and his dependents, in an amount not
to exceed $2,000 per month.

 

(f)          The Corporation shall execute and deliver in favor of the Executive
an indemnification agreement on the same terms and conditions entered into with
the other officers and directors of the Corporation. Such agreement shall
provide for the indemnification of the Executive for the term of his employment.

 

5.          Termination.

 

(a)          This Agreement and the Executive’s employment hereunder shall
terminate upon the happening of any of the following events:

 

(i)          upon the Executive’s death;

 

(ii)         upon the Executive’s “Total Disability” (as herein defined);

 

(iii)        upon the expiration of the Initial Term of this Agreement or any
Renewal Term thereof, if either party has provided a timely notice of
non-renewal in accordance with Section 3, above;

 

(iv)        at the Executive’s option, upon sixty (60) days prior written notice
to the Corporation;

 

(v)         at the Executive’s option, in the event of an act by the
Corporation, defined in Section 5(c), below, as constituting “Good Reason” for
termination by the Executive; and

 

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(vi) at the Corporation’s option, in the event of an act by the Executive,
defined in Section 5(d), below, as constituting “Cause” for termination by the
Corporation.

 

(b)          For purposes of this Agreement, the Executive shall be deemed to be
suffering from a “Total Disability” if the Executive has failed to perform his
regular and customary duties to the Corporation for a period of 180 days out of
any 360-day period and if before the Executive has become “Rehabilitated” (as
herein defined) a majority of the members of the Board, exclusive of the
Executive, vote to determine that the Executive is mentally or physically
incapable or unable to continue to perform such regular and customary duties of
employment. As used herein, the term “Rehabilitated” shall mean such time as the
Executive is willing, able and commences to devote his time and energies to the
affairs of the Corporation to the extent and in the manner that he did so prior
to his Total Disability.

 

(c)          For purposes of this Agreement, the term “Good Reason” shall mean
that the Executive has resigned due to (i) any diminution of duties inconsistent
with Executive’s title, authority, duties and responsibilities (including,
without limitation, a change in the chain of reporting); (ii) any reduction of
or failure to pay Executive compensation provided for herein, except to the
extent Executive consents in writing to any reduction, deferral or waiver of
compensation, which non-payment continues for a period of fifteen (15) days
following written notice to the Corporation by Executive of such non-payment;
(iii) the consummation of any Change in Control Transaction (as defined below)
or (iv) any material violation by the Corporation of its obligations under this
Agreement that is not cured within thirty (30) days Agreement after receipt of
written notice thereof from the Executive. For purposes of this Agreement, the
term “Change in Control Transaction” means the sale of the Corporation to an
un-affiliated person or entity or group of un-affiliated persons or entities
pursuant to which such party or parties acquire (i) shares of capital stock of
the Corporation representing at least fifty percent (50%) of outstanding capital
stock or sufficient to elect a majority of the Board of the Corporation (whether
by merger, consolidation, sale or transfer of shares (other than a merger where
the Corporation is the surviving corporation and the shareholders and directors
of the Corporation prior to the merger constitute a majority of the shareholders
and directors, respectively, of the surviving corporation (or its parent)) or
(ii) all or substantially all of the Corporation’s assets determined on a
consolidated basis.

 

(d)          For purposes of this Agreement, the term “Cause” shall mean:

 

(i)          conviction of a felony or a crime involving fraud or moral
turpitude; or

 

(ii)         theft, material act of dishonesty or fraud, intentional
falsification of any employment or Corporation records, or commission of any
criminal act which impairs Executive’s ability to perform appropriate employment
duties for the Corporation; or

 

(iii)        intentional or reckless conduct or gross negligence materially
harmful to the Corporation or the successor to the Corporation after a Change in
Control Transaction, including violation of a non-competition or confidentiality
agreement; or

 

(iv)        willful failure to follow lawful and reasonable instructions of the
person or body to which Executive reports; or

 

(v)         gross negligence or willful misconduct in the performance of
Executive’s assigned

duties; or

 

(vi)        any material breach of this Agreement by Executive.

 

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6.          Effects of Termination.

 

(a)          Upon termination of the Executive’s employment pursuant to Section
5(a)(i) or (ii), in addition to the accrued but unpaid compensation and vacation
pay through the date of death or Total Disability and any other benefits accrued
to him under any Benefit Plans outstanding at such time and the reimbursement of
documented, unreimbursed expenses incurred prior to such date, the Executive or
his estate or beneficiaries, as applicable, shall be entitled to the following
severance benefits: (i) continued provision for a period of twelve (12) months
following the Executive’s death of benefits under Benefit Plans extended from
time to time by the Corporation to its senior executives; and (ii) payment on a
pro-rated basis of any bonus or other payments earned in connection with any
bonus plan to which the Executive was a participant as of the date of death or
Total Disability.

 

(b)          Upon termination of the Executive’s employment pursuant to Section
5(a)(iii), where the Corporation has offered to renew the term of the
Executive’s employment for an additional one (1) year period and the Executive
chooses not to continue in the employ of the Corporation, the Executive shall be
entitled to receive only the accrued but unpaid compensation and vacation pay
through the date of termination and any other benefits accrued to him under any
Benefit Plans outstanding at such time and the reimbursement of documented,
unreimbursed expenses incurred prior to such date. In the event the Corporation
tenders a Non-Renewal Notice to the Executive, then the Executive shall be
entitled to the same severance benefits as if the Executive’s employment were
terminated pursuant to Section 5(a)(v); provided, however, if such Non-Renewal
Notice was triggered due to the Corporation’s statement that the Executive’s
employment was terminated due to Section 5(a)(vi) (for “Cause”), then payment of
severance benefits will be contingent upon a determination as to whether
termination was properly for “Cause.”

 

(c)          Upon termination of the Executive’s employment pursuant to Section
5(a)(v) or other than pursuant to Section 5(a)(i), 5(a)(ii), 5(a)(iii),
5(a)(iv), or 5(a)(vi) (i.e., without “Cause”), in addition to the accrued but
unpaid compensation and vacation pay through the end of the Term or any then
applicable extension of the Term and any other benefits accrued to him under any
Benefit Plans outstanding at such time and the reimbursement of documented,
unreimbursed expenses incurred prior to such date, the Executive shall be
entitled to the following severance benefits: (i) a cash payment based on the
current scale of Executive’s Base Salary: (x) twelve (12) months of the Base
Salary at the then current rate to be paid in a single lump sum payment not
later than sixty (60) days following such termination, less withholding of all
applicable taxes; (ii) continued provision for a period of twelve (12) months
after the date of termination of the benefits under Benefit Plans extended from
time to time by the Corporation to its senior executives; and (iii) payment on a
pro-rated basis of any bonus or other payments earned in connection with any
bonus plan to which the Executive was a participant as of the date of the
Executive’s termination of employment. In addition, any options or restricted
stock shall be immediately vested upon termination of Executive’s employment
pursuant to Section 5(a)(v) or by the Corporation without “Cause”.

 

(d)          Upon termination of the Executive’s employment pursuant to Section
5(a)(iv) or (vi), in addition to the reimbursement of documented, unreimbursed
expenses incurred prior to such date, the Executive shall be entitled to the
following severance benefits: (i) accrued and unpaid Base Salary and vacation
pay through the date of termination, less withholding of applicable taxes; and
(ii) continued provision, for a period of one (1) month after the date of the
Executive’s termination of employment, of benefits under Benefit Plans extended
to the Executive at the time of termination. Executive shall have any conversion
rights available under the Corporation’s Benefit Plans and as otherwise provided
by law, including the Comprehensive Omnibus Budget Reconciliation Act.

 

(e)          Any payments required to be made hereunder by the Corporation to
the Executive shall continue to the Executive’s beneficiaries in the event of
his death until paid in full.

 

7.          Vacations. The Executive shall be entitled to a vacation of three
(3) weeks per year, during which period his salary shall be paid in full. The
Executive shall take his vacation at such time or times as the Executive and the
Corporation shall determine is mutually convenient. Any vacation not taken in
one (1) year shall accrue, and up to a maximum of six (6) weeks vacation shall
carry over to the subsequent year.

 

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8.          Disclosure of Confidential Information.

 

(a)          The Executive recognizes, acknowledges and agrees that he has had
and will continue to have access to secret and confidential information
regarding the Corporation, its subsidiaries and their respective businesses
(“Confidential Information”), including but not limited to, its products,
methods, formulas, software code, patents, sources of supply, customer dealings,
data, know-how, trade secrets and business plans, provided such information is
not in or does not hereafter become part of the public domain, or become known
to others through no fault of the Executive. The Executive acknowledges that
such information is of great value to the Corporation, is the sole property of
the Corporation, and has been and will be acquired by him in confidence. In
consideration of the obligations undertaken by the Corporation herein, the
Executive will not, at any time, during or after his employment hereunder,
reveal, divulge or make known to any person, any information acquired by the
Executive during the course of his employment, which is treated as confidential
by the Corporation, and not otherwise in the public domain. The provisions of
this Section 8 shall survive the termination of the Executive’s employment
hereunder for a period of two (2) years.

 

(b)          The Executive affirms that he does not possess and will not rely
upon the protected trade secrets or confidential or proprietary information of
any prior employer(s) in providing services to the Corporation or its
subsidiaries.

 

(c)          In the event that the Executive’s employment with the Corporation
terminates for any reason, the Executive shall deliver forthwith to the
Corporation any and all originals and copies, including those in electronic or
digital formats, of Confidential Information; provided, however, Executive shall
be entitled to retain (i) papers and other materials of a personal nature,
including, but not limited to, photographs, correspondence, personal diaries,
calendars and rolodexes, personal files and phone books, (ii) information
showing his compensation or relating to reimbursement of expenses, (iii)
information that he reasonably believes may be needed for tax purposes and (iv)
copies of plans, programs and agreements relating to his employment, or
termination thereof, with the Corporation.

 

9.          Non-Competition and Non-Solicitation.

 

(a)          The Executive agrees and acknowledges that the Confidential
Information that the Executive has already received and will receive is valuable
to the Corporation and that its protection and maintenance constitutes a
legitimate business interest of the Corporation, to be protected by the
non-competition restrictions set forth herein. The Executive agrees and
acknowledges that the non-competition restrictions set forth herein are
reasonable and necessary and do not impose undue hardship or burdens on the
Executive. The Executive also acknowledges that the Corporation’s business is
conducted in New York, Connecticut and New Jersey (the “Territory”), and that
the Territory, scope of prohibited competition, and time duration set forth in
the non-competition restrictions set forth below are reasonable and necessary to
maintain the value of the Confidential Information of, and to protect the
goodwill and other legitimate business interests of, the Corporation, its
affiliates and/or its clients, investors or customers. The provisions of this
Section 9 shall survive the termination of the Executive’s employment hereunder
for the time periods specified below.

 

(b)          The Executive hereby agrees and covenants that he shall not without
the prior written consent of the Corporation, directly or indirectly, in any
capacity whatsoever, including, without limitation, as an employee, employer,
consultant, principal, partner, shareholder, officer, director or any other
individual or representative capacity (other than (i) as a holder of less than
two (2%) percent of the outstanding securities of a company whose shares are
traded on any national securities exchange or (ii) as a limited partner, passive
minority interest holder in a venture capital fund, private equity fund or
similar investment entity which holds or may hold an equity or debt position in
portfolio companies that are competitive with the Corporation; provided however,
that the Executive shall be precluded from serving as an operating partner,
general partner, manager or governing board designee with respect to such
portfolio companies), whether on the Executive’s own behalf or on behalf of any
other person or entity or otherwise howsoever, during the Term and thereafter to
the extent described below, within the Territory:

 

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(1)         Engage, own, manage, operate, control, be employed by, consult for,
participate in, or be connected in any manner with the ownership, management,
operation or control of any business in competition with the Business of the
Corporation, as defined in the next sentence. “Business” shall mean the
acquisition and development of patents through internal or external research and
development, acquisition of existing rights to intellectual property through the
acquisition of already issued patents and pending patent applications, both in
the United States and abroad, development of products and processes associated
with the Corporation’s intellectual property and licensing its intellectual
property to others seeking to develop products or processes or whose products or
processes infringe its intellectual property rights through legal processes,
otherwise deriving value from licensing, commercialization, settlement and
litigation from its patents and obtaining patents from inventors and patent
owners to monetize patent portfolios.

 

(2)         Recruit, solicit or hire, or attempt to recruit, solicit or hire,
any employee, or independent contractor of the Corporation to leave the
employment (or independent contractor relationship) thereof, whether or not any
such employee or independent contractor is party to an employment agreement, for
the purpose of competing with the Business of the Corporation;

 

(3)         Attempt in any manner to solicit or accept from any third party,
with whom Executive had significant contact during Executive’s employment by the
Corporation (whether under this Agreement or otherwise), business competitive
with the Business done by the Corporation with such third party or to persuade
or attempt to persuade any such third party to cease to do business or to reduce
the amount of business which such third party has customarily done or might do
with the Corporation, or if any such party elects to move its business to a
person other than the Corporation, provide any services of the kind or
competitive with the Business of the Corporation for such party, or have any
discussions regarding any such service with such party, on behalf of such other
person for the purpose of competing with the Business of the Corporation; or

 

(4)         Otherwise interfere with any relationship, contractual or otherwise,
between the Corporation and any other party, including, without limitation, any
supplier, distributor, co-venturer or joint venturer of the Corporation, for the
purpose of soliciting such other party to discontinue or reduce its business
with the Corporation for the purpose of competing with the Business of the
Corporation.

 

With respect to the activities described in Paragraphs (1), (2), (3) and (4)
above, the restrictions of this Section 9 shall continue during the Employment
Period and, upon termination of the Executive’s employment for a period of six
(6) months thereafter.

 

10.         Clawback Rights. The Annual Bonus, and any and all stock based
compensation (such as options and equity awards, including Share Awards and the
Initial Option Grant) (collectively, the “Clawback Benefits”) shall be subject
to “Corporation Clawback Rights” as follows: During the period that the
Executive is employed by the Corporation and upon the termination of the
Executive’s employment and for a period of three (3) years thereafter, if there
is a restatement of any financial results from which any Clawback Benefits to
Executive shall have been determined, Executive agrees to repay any amounts
which were determined by reference to any Corporation financial results which
were later restated (as defined below), to the extent the Clawback Benefits
amounts paid exceed the Clawback Benefits amounts that would have been paid,
based on the restatement of the Corporation’s financial information. All
Clawback Benefits amounts resulting from such restated financial results shall
be retroactively adjusted by the Compensation Committee to take into account the
restated results, and any excess portion of the Clawback Benefits resulting from
such restated results shall be immediately surrendered to the Corporation and if
not so surrendered within ninety (90) days of the revised calculation being
provided to the Executive by the Compensation Committee following a publicly
announced restatement, the Corporation shall have the right to take any and all
action to effectuate such adjustment. The calculation of the Revised Clawback
Benefits amount shall be determined by the Compensation Committee in good faith
and applicable law, rules and regulations. All determinations by the
Compensation Committee with respect to the Clawback Rights shall be final and
binding on the Corporation and Executive. For purposes of this Section 9, a
restatement of financial results that requires a repayment of a portion of the
Clawback Benefits amounts shall mean a restatement resulting from material
non-compliance of the Corporation with any financial reporting requirement under
the federal securities laws and shall not include a restatement of financial
results resulting from subsequent changes in accounting pronouncements or
requirements which were not in effect on the date the financial statements were
originally prepared (“Restatements”). Additionally, if any material breach of
any agreement by Executive relating to confidentiality, non-competition,
non-raid of employees, or non-solicitation of vendors or customers (including,
without limitation, Sections 8 or 9 hereof) or if any material breach of
Corporation policy or procedures which causes material harm to the Corporation
occurs, as determined by the Board in its sole discretion, then the Executive
agrees to repay or surrender any Clawback Benefits upon demand by the
Corporation and if not so repaid or surrendered within ninety (90) days of such
demand, the Corporation shall have the right to take any and all action to
effectuate such adjustment. The parties acknowledge it is their intention that
the foregoing Clawback Rights as relates to Restatements conform in all respects
to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection
Act of 2010 (the “Dodd Frank Act”) and requires recovery of all
“incentive-based” compensation, pursuant to the provisions of the Dodd Frank Act
and any and all rules and regulations promulgated thereunder from time to time
in effect. Accordingly, the terms and provisions of this Agreement shall be
deemed automatically amended from time to time to assure compliance with the
Dodd Frank Act and such rules and regulation as hereafter may be adopted and in
effect.

 

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11.         Section 409A.

 

The provisions of this Agreement are intended to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) and any final regulations
and guidance promulgated thereunder (“Section 409A”) and shall be construed in a
manner consistent with the requirements for avoiding taxes or penalties under
Section 409A. The Corporation and Executive agree to work together in good faith
to consider amendments to this Agreement and to take such reasonable actions
which are necessary, appropriate or desirable to avoid imposition of any
additional tax or income recognition prior to actual payment to Executive under
Section 409A.

 

To the extent that Executive will be reimbursed for costs and expenses or
in-kind benefits, except as otherwise permitted by Section 409A, (a) the right
to reimbursement or in-kind benefits is not subject to liquidation or exchange
for another benefit, (b) the amount of expenses eligible for reimbursement, or
in-kind benefits, provided during any taxable year shall not affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other
taxable year; provided that the foregoing clause (b) shall not be violated with
regard to expenses reimbursed under any arrangement covered by Section 105(b) of
the Code solely because such expenses are subject to a limit related to the
period the arrangement is in effect and (c) such payments shall be made on or
before the last day of the taxable year following the taxable year in which you
incurred the expense.

 

A termination of employment shall not be deemed to have occurred for purposes of
any provision of this Agreement providing for the payment of any amounts or
benefits upon or following a termination of employment unless such termination
constitutes a “Separation from Service” within the meaning of Section 409A and,
for purposes of any such provision of this Agreement references to a
“termination,” “termination of employment” or like terms shall mean Separation
from Service.

 

Each installment payable hereunder shall constitute a separate payment for
purposes of Treasury Regulation Section 1.409A-2(b), including Treasury
Regulation Section 1.409A-2(b)(2)(iii). Each payment that is made within the
terms of the “short-term deferral” rule set forth in Treasury Regulation Section
1.409A-1 (b)(4) is intended to meet the “short-term deferral” rule. Each other
payment is intended to be a payment upon an involuntary termination from service
and payable pursuant to Treasury Regulation Section 1.409A-l(b)(9)(iii), et.
seq., to the maximum extent permitted by that regulation, with any amount that
is not exempt from Code Section 409A being subject to Code Section 409A.

 

Notwithstanding anything to the contrary in this Agreement, if Executive is a
“specified employee” within the meaning of Section 409A at the time of
Executive’s termination, then only that portion of the severance and benefits
payable to Executive pursuant to this Agreement, if any, and any other severance
payments or separation benefits which may be considered deferred compensation
under Section 409A (together, the “Deferred Compensation Separation Benefits”),
which (when considered together) do not exceed the Section 409A Limit (as
defined herein) may be made within the first six (6) months following
Executive’s termination of employment in accordance with the payment schedule
applicable to each payment or benefit. Any portion of the Deferred Compensation
Separation Benefits in excess of the Section 409A Limit otherwise due to
Executive on or within the six (6) month period following Executive’s
termination will accrue during such six (6) month period and will become payable
in one lump sum cash payment on the date six (6) months and one (1) day
following, the date of Executive’s termination of employment. All subsequent
Deferred Compensation Separation Benefits, if any, will be payable in accordance
with the payment schedule applicable to each payment or benefit. Notwithstanding
anything herein to the contrary, if Executive dies following termination but
prior to the six (6) month anniversary of Executive’s termination date, then any
payments delayed in accordance with this paragraph will be payable in a lump sum
as soon as administratively practicable after the date of Executive’s death and
all other Deferred Compensation Separation Benefits will be payable in
accordance with the payment schedule applicable to each payment or benefit.

 

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For purposes of this Agreement, “Section 409A Limit" will mean a sum equal (x)
to the amounts payable prior to March 15 following the year in which Executive
terminations plus (y) the lesser of two (2) times: (i) Executive’s annualized
compensation based upon the annual rate of pay paid to Executive during the
Corporation’s taxable year preceding the Corporation’s taxable year of
Executive’s termination of employment as determined under Treasury Regulation
1.409A-1 (b)(9)(iii)(A)(1) and any IRS guidance issued with respect thereto; or
(ii) the maximum amount that may be taken into account under a qualified plan
pursuant to Section 401(a)(17) of the Code for the year in which Executive’s
employment is terminated.

 

12.          Miscellaneous.

 

a.           The Executive acknowledges that the services to be rendered by him
under the provisions of this Agreement are of a special, unique and
extraordinary character and that it would be difficult or impossible to replace
such services. Accordingly, the Executive agrees that any breach or threatened
breach by him of Sections 8 or 9 of this Agreement shall entitle the
Corporation, in addition to all other legal remedies available to it, to apply
to any court of competent jurisdiction to seek to enjoin such breach or
threatened breach. The parties understand and intend that each restriction
agreed to by the Executive hereinabove shall be construed as separable and
divisible from every other restriction, that the unenforceability of any
restriction shall not limit the enforceability, in whole or in part, of any
other restriction, and that one or more or all of such restrictions may be
enforced in whole or in part as the circumstances warrant. In the event that any
restriction in this Agreement is more restrictive than permitted by law in the
jurisdiction in which the Corporation seeks enforcement thereof, such
restriction shall be limited to the extent permitted by law. The remedy of
injunctive relief herein set forth shall be in addition to, and not in lieu of,
any other rights or remedies that the Corporation may have at law or in equity.

 

b.           Neither the Executive nor the Corporation may assign or delegate
any of their rights or duties under this Agreement without the express written
consent of the other; provided however that the Corporation shall have the right
to delegate its obligation of payment of all sums due to the Executive
hereunder, provided that such delegation shall not relieve the Corporation of
any of its obligations hereunder.

 

c.           This Agreement constitutes and embodies the full and complete
understanding and agreement of the parties with respect to the Executive’s
employment by the Corporation, supersedes all prior understandings and
agreements, whether oral or written, between the Executive and the Corporation,
and shall not be amended, modified or changed except by an instrument in writing
executed by the party to be charged. The invalidity or partial invalidity of one
or more provisions of this Agreement shall not invalidate any other provision of
this Agreement. No waiver by either party of any provision or condition to be
performed shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same time or any prior or subsequent time.

 

d.           This Agreement shall inure to the benefit of, be binding upon and
enforceable against, the parties hereto and their respective successors, heirs,
beneficiaries and permitted assigns.

 

e.           The headings contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.

 

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f.            All notices, requests, demands and other communications required
or permitted to be given hereunder shall be in writing and shall be deemed to
have been duly given when personally delivered, sent by registered or certified
mail, return receipt requested, postage prepaid, or by private overnight mail
service (e.g. Federal Express) to the party at the address set forth above or to
such other address as either party may hereafter give notice of in accordance
with the provisions hereof. Notices shall be deemed given on the sooner of the
date actually received or the third business day after sending.

 

g.           This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York without reference to principles
of conflicts of laws and each of the parties hereto irrevocably consents to the
jurisdiction and venue of the federal and state courts located in the State of
New York.

 

h.           This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one of the same instrument. The parties hereto have
executed this Agreement as of the date set forth above.

 

[signature page follows immediately]

 

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of
the day and year first above written.

 

CORPORATION:       SPHERIX INCORPORATED         By: /s/ Anthony Hayes        
Title: Anthony Hayes CEO         EXECUTIVE:       /s/ FRANK REINER     3/14/14  
      FRANK REINER  

 

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