Exhibit 10.5

 

Spherix Incorporated

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), is entered
into as of the 23rd day of March, 2004, between Spherix Incorporated, a Delaware
corporation (the “Corporation”), and Gilbert V. Levin (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Corporation is engaged in providing information services in health,
pharmaceutical and civic areas; in providing services in the areas of chemistry,
biology, exobiology, microbiology, occupational health, air and water pollution
and hazardous wastes control, industrial hygiene; and in the development of
proprietary products; and

 

WHEREAS, the Executive has been engaged as an expert and corporate executive in
major enterprises in the areas indicated above; and

 

WHEREAS, the Executive is presently, and has been since the formation of the
Corporation, an Executive of the Corporation; and

 

WHEREAS, the Executive has led the Company’s effort to commercialize its
non—fattening sugar as a major food products ingredient and for other non-food
uses, and its safe—for—humans pesticides; and

 

WHEREAS, the Executive has relinquished the positions of CEO and President of
Spherix as of September 1, 2003,

 

WHEREAS, the Company desires the Executive to continue to serve out the term of
this Employment Agreement in the capacity of Executive Officer for Science, and
the Executive desires to do so,

 

NOW, THEREFORE, in consideration of the mutual promises and covenants herein set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the Corporation and the Executive do hereby agree, each with the
other, as follows:

 

1.             Full-time Employment of Executive.

 

1.1.         Duties and Status.

 

1.1.1.       The Corporation hereby engages the Executive for the period (the
“Employment Period”) specified in Section 4 and the Executive accepts such
employment, on the terms and conditions set forth in this Agreement. During the
Employment Period, the Executive shall serve as Executive Officer for Science,
reporting directly to the Chief Executive Officer of the Corporation.

 

1.1.2.       During the Employment Period, the Executive shall (i) devote his
full-time and efforts to the business of the Corporation and its subsidiaries or
affiliates, primarily, but without limitation, to the business of the BioSpherix
Division, and will not engage in consulting work or any trade or business for
his own account or for or on behalf of any other person, firm or corporation
which competes, conflicts or interferes with the performance of his duties
hereunder in any way and (ii) accept such additional office or offices to which
he may be elected by the Board of Directors of the Corporation or its
subsidiaries or affiliates, including, without limitation, any joint venture or
subsidiary formed to commercialize the BioSpherix’s Division’s products,
processes or services.

 

1.1.3.       The Executive shall be required to perform the services and duties
provided for in Section 1.1.1. only at the location where the Executive was
employed immediately prior to the effective date of this Agreement, or at the
Annapolis location of the BioSpherix Division.  The Executive may
schedule telecommuting via the internet from home as approved by the
Compensation Committee and the Board of Directors of the Company at their May
15, 2002, Meetings. The Executive shall be entitled to vacation, leave of
absence, and leave for illness or temporary disability in accordance with the
policies of the Corporation in effect, which shall not be less favorable than

 

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those in effect at the date of this Agreement; and any leave on account of
illness or temporary disability which is short of total disability, as defined
in the Corporation’s long-term disability insurance plan (“Total Disability”),
shall not constitute a breach by the Executive of his agreements hereunder.

 

1.2.         Compensation and General Benefits. The Executive shall be
compensated as follows:

 

1.2.1.       The Corporation shall pay the Executive an annual base salary of
$118,000, effective January 1, 2004.  Such salary shall be payable in equal,
semi-monthly installments.

 

1.2.2.       The Executive shall be eligible to participate in such
profit—sharing, stock option, bonus, incentive and performance award programs
which provide opportunities to receive compensation which are the greater of the
opportunities (i) then provided by the Corporation to executives with reasonably
comparable authority and duties (and in any event not lesser than those provided
to executives with junior authority or duties), or (ii) available to the
Executive immediately prior to the effective date of this Agreement.

 

1.2.3.       The Executive shall be entitled to receive employee benefits,
including, without limitation, pension, disability, group life, sickness,
accident and health insurance programs and split-dollar life insurance programs,
and perquisites provided by the Corporation to executives which are the greater
of the employee benefits and perquisites (i) then provided by the Corporation to
executives with comparable authority or duties (and in any event not lesser than
those provided to executives with junior authority or duties), or (ii) available
to the Executive immediately prior to the effective date of this Agreement. The
health insurance benefits received by the Executive shall continue for the
Executive and the Executive’s spouse following the retirement of the Executive
and until the death of the survivor of the Executive and the Executive’s spouse.

 

1.2.4.       The Corporation shall pay for continuous, lifetime, long-term care
insurance for Dr. and Mrs. Levin in recognition of their years of service to the
Company.

 

1.2.5.       The Corporation shall reimburse the Executive for all reasonable
expenses incurred by the Executive in the performance of his duties hereunder.

 

1.2.6.       Following his complete retirement from the Corporation, the
Executive is to receive a cash payment of $12,500 each quarter of each year for
life.  Such payments will be made within 10 days after the end of each calendar
quarter and shall be subject to any deductions the Corporation is required to
make under applicable State or Federal law.

 

2.             Competition; Confidential Information.

 

2.1.         General. The Executive and the Corporation recognize that due to
the nature of his prior association with the Corporation and of his engagements
hereunder, and the relationship of the Executive to the Corporation, both in the
past as an executive and in the future hereunder, the Executive has had access
to and has acquired, will have access to and will acquire, and has assisted in
and may assist in developing, confidential and proprietary information relating
to the business and operations of the Corporation and its affiliates, including,
without limiting the generality of the foregoing, information with respect to
their present and prospective research projects; products, systems and processes
(whether or not patentable); customers and agents; and sales and marketing
methods. The Executive acknowledges that such information has been and will
continue to be of central importance to the business of the Corporation and its
affiliates and that disclosure of it to or its use by others could cause
substantial loss to the Corporation. The Executive and the Corporation also
recognize that an important part of the Executive’s duties will be to develop
good will for the Corporation and its affiliates through his personal contact
with customers, agents and others having business relationships with the
Corporation and its affiliates, and that there is a danger that this good will,
a proprietary asset of the Corporation and its affiliates, may follow the
Executive if and when his relationship with the Corporation is terminated. The
Executive accordingly agrees as follows:

 

2.2.         Non-Competition.

 

2.2.1.       During the Employment Period the Executive will not, directly or
indirectly, either individually or as owner, partner, agent, employee,
consultant or otherwise, except for the account of and on behalf of

 

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the Corporation or their affiliates, engage in any activity competitive with the
business of the Corporation or its affiliates, nor will he, in competition with
the Corporation or its affiliates, solicit or otherwise attempt to establish for
himself or any other person, firm or entity, any business relationships with any
person, firm or corporation which was, at any time during the Employment Period,
a customer of the Corporation or one of its affiliates.

 

2.2.2.       Nothing in this Section 2.2. shall be construed to prevent the
Executive from owning, as an investment, not more than 1% of a class of equity
securities issued by any competitor of the Corporation or its affiliates and
publicly traded and registered under Section 12 of the Securities Exchange Act
of 1934.

 

2.3.         Trade Secrets.  The Executive will keep confidential any trade
secrets or confidential or proprietary information of the Corporation and its
affiliates which are now known to him or which hereafter may become known to him
as a result of his employment or association with the Corporation and shall not
at any time directly or indirectly disclose any such information to any person,
firm or corporation, or use the same in any way other than in connection with
the business of the Corporation or its affiliates during and at all times after
the expiration of the Employment Period. For purposes of this Agreement, “trade
secrets or confidential or proprietary information” means information unique to
the Corporation or any of its affiliates which has a significant business
purpose and is not known or generally available from sources outside the
Corporation or any of its affiliates or typical of industry practice.

 

2.4.         Intellectual Property. Throughout the Employment Period, the
Executive will disclose to the Corporation all processes, operations, products
or improvements developed by him which relate directly or indirectly to the
business of the Corporation or its affiliates which may be patentable or
copyrightable. The Executive agrees that such will be the property of the
Corporation and that he will, at the Corporation’s request and cost, do whatever
is necessary to secure the rights thereto by patent or copyright.

 

3.             Corporation’s Remedies for Breach. It is recognized that damages
in the event of breach of Section 2 by the Executive would be difficult, if not
impossible, to ascertain, and it is therefore agreed that the Corporation, in
addition to and without limiting any other remedy or right they may have, shall
have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach, and the Executive hereby
waives any and all defenses he may have on the ground of lack of jurisdiction or
competence of the court to grant such an injunction or other equitable relief.
The existence of this right shall not preclude any other rights and remedies at
law or in equity which the Corporation may have.

 

4.             Employment Period.

 

4.1.         Duration.  The Employment Period shall commence on the effective
date of this Agreement and shall continue until the earlier of (i) close of
business on December 31, 2004 or (ii) any termination of this Agreement that
does not constitute an improper termination as defined in Section 4.3.1.

 

4.2.         Termination Payments.

 

4.2.1.       In the event of an improper termination of this Agreement (as
defined in Section 4.3.1. of this Agreement), the Corporation shall pay to the
Executive and provide him with the following:

 

4.2.1.1.    During the remainder of the Employment Period, the Corporation shall
continue to pay the Executive his salary at the rate and as required by
Section 1.2.1 and in effect immediately prior to the date of termination.

 

4.2.1.2.    During the remainder of the Employment Period, the Executive shall
continue to be treated as an executive (at the level provided for in
Section 1.1.1.) under the provisions of the Corporation’s profit-sharing, bonus,
incentive and performance award programs and any other incentive compensation
arrangement described in Section 1.2.2. In addition, the Executive shall
continue to be entitled to all benefits and service credits for benefits under
any pension plan, or medical, insurance, split-dollar life insurance and other
employee benefit plans, programs and arrangements of the Corporation described
in Section 1.2.3. as if he were still employed during such period under this
Agreement.

 

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4.2.1.3.    If, despite the provisions of Section 4.2.1.2., benefits or the
right to accrue further benefits under any profit sharing, bonus, incentive or
performance award programs or other long-term incentive compensation arrangement
described in Section 1.2.2. shall not be provided under any such arrangement to
the Executive, or his dependents, beneficiaries and estate, because he is no
longer an employee of the Corporation, the Corporation shall, to the extent
necessary, provide, pay or provide for payment of amounts equal to the after tax
benefits to the Executive, his dependents, beneficiaries and estate.

 

4.2.1.4.    If, despite the provisions of Section 4.2.1.2., benefits or service
credits under any employee benefit plan, including, without limitation, benefits
under any pension plan, or any medical, insurance, split-dollar life insurance
and other employee benefit plans, programs and arrangements described in
Section 1.2.3. shall not be payable or provided under any such plan to the
Executive, or his dependents, beneficiaries and estate, because he is no longer
an employee of the Corporation, the Corporation shall, to the extent necessary,
pay or provide for payment of equivalent after tax benefits and service credits
for such after tax benefit~ to the Executive, his dependents, beneficiaries and
estate.

 

4.2.1.5.    The Executive shall not be required to mitigate the amount of any
payment: provided for in this Section 4.2 by seeking employment or otherwise,
nor shall the amount of any payment provided for in this Section 4.2 be reduced
by any compensation or remuneration earned by the Executive as the result of
employment by another employer, or self-employment, or as a partner, after the
date of termination or otherwise.

 

4.2.2.       In the event of an improper termination, the Executive may elect,
within 60 days after such termination, to elect to be paid a lump sum severance
allowance, in lieu of termination payments, in an amount which is equal to the
sum of all of the salary payments which he would have been entitled to receive
in accordance with Section 4.2.1.1.  In the event that the Executive makes an
election pursuant to the preceding sentence to receive a lump sum severance
allowance, then, in addition to such amount, he shall accelerate all future
payments due with respect to (i) the pension benefits he would have accrued
under any pension benefit plan maintained by the Corporation if he had remained
in the employ of the Corporation for the remainder of the Employment Period,
which benefits will be paid concurrently with, and in addition to, the benefits
provided under such pension benefit plan, (ii) incentive compensation
(including, but not limited to the right to participate in all of the
Corporation’s profit sharing plans and to receive and exercise stock options and
stock appreciation rights and to receive bonuses and performance awards and
similar incentive compensation benefits) to which he would have been entitled
under this Agreement if he had remained in the employ of the Corporation for the
remainder of the Employment Period, and (iii) employee benefits (including, but
not limited to, coverage under any disability, group life, sickness, accident
and health insurance programs, split-dollar life insurance arrangements or
programs and prerequisite) to which he would have been entitled under this
Agreement if he had remained in the employ of the Corporation for the remainder
of the Employment Period. By accelerating all future payments as described in
this Section 4.2.2., the Executive will have the right to receive an amount
equal to the commuted actuarial value of those payments within sixty (60) days
after the date of Executive’s termination.

 

4.2.3.       In the event of a termination other than an improper termination,
the Executive shall be entitled to any salary accrued to the date of the
termination, but shall not be entitled to any further salary or any further
payments hereunder.

 

4.3.         Definitions. The following terms shall have the specified meanings
when used in the Sections specified:

 

4.3.1.       In this Section 4, the term “improper termination” means
termination (i) by the Corporation of the employment of the Executive with the
Corporation for any reason other than death or Total Disability of the
Executive, or cause; or (ii) of the employment of the Executive by resignation
of the Executive due to (A) a significant change in the nature or scope of his
authorities or duties from those contemplated in Section 1.1.1., (B) a merger or
consolidation of the Corporation or other similar transaction which is likely to
materially and adversely affect the financial ability of the Corporation or any
successor assign thereto that agrees in writing to assume the obligations of the
Corporation hereunder to perform this Agreement, (C) a reduction in total
compensation and benefits from that provided in Section 1.2, or (D) the breach
by the Corporation in any material respect of any other provision of this
Agreement.

 

4.3.2.       In Section 4.3.1. the term “cause” means (i) a final judicial
finding that Executive has been guilty of fraud, misappropriation or intentional
material damage to the property or business of the Corporation or

 

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the commission of a felony; (ii) continuance of willful and repeated failure by
the Executive to perform his duties in compliance with this Agreement after
written notice to the Executive by the Board of Directors specifying such
failure, provided that such “cause” shall have been found by a majority vote of
the Board of Directors of the Corporation after at least 10 days’ written notice
to the Executive specifying the cause proposed to be claimed and after an
opportunity for the Executive to be heard at meetings of such Boards of
Directors; or (iii) a violation of Section 2 of this Agreement.

 

4.3.3.       In Section 4.2., “Employment Period” shall mean the full period for
which the Employment Period would have continued, without any improper
termination, under Section 4.3.1.

 

4.3.4.       In Section 2.2.1., “Employment Period” shall mean the full period
for which the Employment Period would have continued under Section 4.1. in the
event of any termination of the employment of the Executive which is not an
improper termination as defined in Section 4.3.1.

 

5.             Legal Costs.  If the Corporation shall fail to pay or provide for
payment of any amounts required to be paid or provided for hereunder at any
time, the Executive shall be entitled to consult with counsel, and the
Corporation agrees to pay the reasonable fees and expenses of independent
counsel for the Executive in advising him or in bringing any proceedings, or in
defending any proceedings, involving the Executive’s rights under this
Agreement, such right to reimbursement to be immediate upon the presentment by
Executive of written billings for such reasonable fees and expenses. The
Executive shall be entitled to the prime rate of interest established from time
to time at Bank of America, or its successors or successors in interest for any
payments of such expenses, or any other payments under this Agreement, that are
overdue.

 

6.             Notices.  Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing with the Corporation or, in the case of the Corporation, at its
principal executive offices.

 

7.             Binding Agreement.  This Agreement shall be effective as of the
effective date hereof and shall be binding upon and inure to the benefit of the
Executive, his executors, administrators and personal representatives. The
rights and obligations of the Corporation under this Agreement shall inure to
the benefit of and shall be binding upon any successor of the Corporation as
defined in Section 1-101(u) of the Maryland General Corporation Law as now in
effect; provided, that this Agreement may not be assigned by the Corporation
without the consent of the Executive, and in the case of a successor by transfer
of all or substantially all of the assets of the Corporation, or any other
successor in which the Corporation does not cease to exist by operation of the
transaction in question as a matter of law, the Corporation shall not be
relieved of its obligations hereunder.

 

8.             Corollary Agreements.  This Agreement is made as a corollary to
the agreements provided per the Resolution concerning the Executive’s retirement
provisions passed by the Board of Directors on March 23, 2004, and the Revised
Consulting Agreement passed by the Board of Directors on March 23, 2004,
together with which it constitutes the entire understanding of the Executive and
the Corporation with respect to the subject matters therein and supersedes any
and all prior understandings written or oral (including but not limited to the
Employment Agreement dated as of May 15, 2002, as amended, between the
Corporation and the Executive). This Agreement may not be changed, modified, or
discharged orally, but only by an instrument in writing signed by the parties.
This Agreement shall be governed by the laws of the State of Maryland and the
invalidity or unenforceability of any provisions hereof shall in no way affect
the validity or enforceability of any other provision.

 

9.             Indemnification.  In addition to any indemnification rights the
Executive may have by statute, by-law or otherwise, the Corporation to the
fullest extent permitted by, and in accordance with and subject to the
requirements of, the General Corporation Law of the State of Delaware, (i) shall
indemnify the Executive and hold him harmless for all losses, costs, expenses or
liabilities (whether or not arising during the Employment and pay all expenses,
including reasonable attorneys’ fees and court fees, actually and necessarily
incurred by the Executive in connection with the investigation or defense of, or
being a witness in, any such action, suit or proceeding and in connection with
any appeal thereof.

 

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IN WITNESS WHEREOF, the parties have executed, under seal, and delivered this
Agreement the date first above written.

 

 

SPHERIX INCORPORATED

 

Board of Directors

(SEAL)

 

 

 

 

 

ATTEST:

 

 

By:

 

 

 

Katherine M. Brailer

 

Lionel V. Baldwin, Chair

 

Corporate Secretary

 

Compensation Committee

 

 

 

 

WITNESS:

 

 

By:

 

 

 

 

Gilbert V. Levin

 

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