Exhibit 10.2

 

Spherix Incorported

 

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AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

 

This AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT (this
“Agreement”), made and entered into this 15th day of May, 2002, between SPHERIX
INCORPORATED, a corporation organized under the laws of the state of Delaware
(hereinafter referred to as the “Corporation”), and M. Karen Levin (hereinafter
referred to as the “Employee”).

 

Witnesseth

 

WHEREAS, the Corporation is engaged in research, development, products and
services in the areas of chemistry, biology, microbiology, occupational health,
air and water pollution control, toxicology, wastewater treatment, environmental
and medical products, writing, editing, word processing, graphics arts, and
information services; and

 

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

 

WHEREAS, the Employee is presently Vice President, Communications; and

 

WHEREAS, during the period of the Employee’s employment, the Corporation has
greatly enhanced its activities and prestige largely as a result of the
activities by the Employee on behalf of the Corporation:

 

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 Employee do hereby agree, each with the
other as follows:

 

1.             Employment.         The Employee hereby agrees to remain in the
full-time or part-time employ, as determined by the Board, of the Corporation,
until her retirement, death, or disability, or such other time as the Employee
and the Corporation agree. Until the occurrence of one of the events set forth
above, the employee shall continue to devote her full—time or part-time, as
determined by the Board, attention exclusively to the business of the
Corporation. As used herein, the term “retirement” shall mean the time at which
the Employee ceases to provide services to the Corporation.

 

2.             Compensation.

 

(a)           As compensation for rendering full-time or part-time attention
to-the business of the Corporation until the occurrence of an event specified in
Section 1 of this Agreement, the Corporation hereby agrees to

 

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pay the Employee compensation at the rate of compensation now being paid her or
at such other higher rate as may, from time to time, be agreed upon. Any
increase in the rate or change in the method of compensation shall in no way be
deemed a violation or waiver of any of the provisions of this Agreement.

 

(b)           As a Supplemental Executive Retirement Plan (SERP) payment for
services currently being rendered, and in order to assure the Employee of
adequate retirement income, the Corporation hereby agrees to pay the Employee a
monthly SERP payment according to the following formula:

 

Sixty percent (60%) of average total compensation, defined as base salary plus
annual bonus, for the highest three (3) years of full-time employment prior to
retirement, divided by twelve (12), less the sum of the following three (3)
items calculated on a monthly basis: i) fifty percent (50%) of the Social
Security payment received by the Employee; ii) the monthly amount the Employee
would receive if the 401(k) plan lump sum payment attributable to company
contributions received by the Employee upon her retirement, including the value
of any loans or withdrawals, mandatory or voluntary, taken by the Employee prior
to her retirement (which value shall be computed using as the relevant interest
rate, the national average prime rate applied to the loan or distribution from
date of receipt), were used to acquire an annuity which would pay equal monthly
payments commencing on the date of retirement and continuing throughout the
actuarially determined balance of the Employee’s lifetime (which amount shall be
computed using as the relevant interest rate, the average prime rate as
published by the Wall Street Journal or other national daily business
publication for the thirty (30) day period immediately preceding retirement);
and iii) the monthly amount the Employee would receive if the lump sum payment
received by the Employee from the Corporation’s defined benefit pension plan
(which value shall he computed using as the relevant interest rate, the national
average prime rate applied to the lump sum payment from date of receipt) were
used to acquire an annuity which would pay equal monthly payments commencing on
the date of retirement and continuing throughout the actuarially determined
balance of the Employee’s lifetime (which amount shall be computed using as the
relevant interest rate, the average prime rate as published by the Wall Street
Journal or other national daily business publication for the thirty (30) day
period immediately preceding retirement).

 

Payment of the SERP shall commence with the first month following the Employee’s
retirement from the Corporation, and shall be paid monthly for the remainder of
the Employee’s lifetime. In the event the Employee retires from the Corporation
due to a disability, the SERP payment will be calculated according to the
following formula:

 

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Sixty percent (60%) of average total compensation, defined as base salary plus
annual bonus, for the highest three (3) years of full-time employment prior to
retirement, divided by twelve (12), less the sum of the following four (4) items
calculated on a monthly basis: i) fifty percent (50%) of the Social Security
payment received by the Employee; ii) the monthly amount the Employee would
receive if the 401(k) plan lump sum payment attributable to company
contributions received by the Employee upon her retirement, including the value
of any loans or withdrawals, mandatory or voluntary, taken by the Employee prior
to her retirement (which value shall be computed using as the relevant interest
rate, the national average prime rate applied to the loan or distribution from
date of receipt), were used to acquire an annuity which would pay equal monthly
payments commencing on the date of retirement and continuing throughout the
actuarially determined balance of the Employee’s lifetime (which amount shall be
computed using as the relevant interest rate, the average prime rate as
published by the Wall Street Journal or other national daily business
publication for the thirty (30) day period immediately preceding retirement);
iii) the monthly amount the Employee would receive if the lump sum payment
received by the Employee from the Corporation’s defined benefit pension plan
(which value shall be computed using as the relevant interest rate, the national
average prime rate applied to the lump sum payment from date of receipt) were
used to acquire an annuity which would pay equal monthly payments commencing on
the date of retirement and continuing throughout the actuarially determined
balance of the Employee’s lifetime (which amount shall be computed using as the
relevant interest rate, the average prime rate as published by the Wall Street
Journal or other national daily business publication for the thirty (30) day
period immediately preceding retirement); and iv) payment from any
company-provided short or long term disability plan in effect for employees of
the Corporation.

 

In the event disability payments cease because of terms of the insurance
contract specifying duration of benefits, the SERP payment will be recalculated
without the offset of item (iv).

 

(c)           The SERP payment provided for in Section 2(b) shall be adjusted in
the second and subsequent years of payment so that payments are increased or
decreased to reflect the net change in the Consumer Price Index (“CPI”) for the
Washington DC Metropolitan area as prepared by the United States Department of
Labor, Bureau of Labor Statistics, when compared with the first year in which
payments are made. In the event that there is no Consumer Price Index for the
Washington DC Metropolitan area, the Consumer Price Index for the nearest
metropolitan area for which there is such an index shall be used as the basis
for adjusting the SERP payment. If no metropolitan area Consumer

 

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Price Index exists, the national Consumer Price Index for the United States
shall be used as the basis for adjusting the SERP payment. The amount of the
adjustment shall equal one hundred percent (100%) of the change in the CPI up to
and including ten percent (10%) plus seventy-five percent (75%) of any change in
the CPI in excess often percent (10%). In making such adjustments, the calendar
year in which the first payment is made under Section 2(b) shall be treated as
the base year, and all adjustments made shall proportionately reflect subsequent
changes in the CPI as compared with that base year. All adjustments under this
Section 2(c) shall be made commencing with each anniversary date of the first
payment made under Section 2(b). Following the adjustment of the payment amount
on such an anniversary date, payment shall continue to be made at that adjusted
rate until the next such anniversary date, at which time payment shall again be
adjusted to reflect the provisions of this section.

 

(d)           The Board of Directors, at its discretion, may increase the
adjustment above the level of the CPI change, but shall not provide an
adjustment less than the CPI change.

 

(e)           All SERP payments shall be subject to any deductions the
Corporation is required to make under applicable State or Federal law.

 

(f)            This Agreement shall not preclude, in addition to current
compensation or SERP payments as specified herein, the payment to the Employee
of such other or additional amounts as may be payable or distributable during
the term of employment or thereafter, or restrict in any way any benefits
payable under any employee benefit plan of the Corporation now in effect or
hereafter adopted. Neither shall any payment under this Agreement be deemed to
constitute payment in lieu of or in reduction of any compensation or any benefit
under such plans.

 

3.             Merger or Consolidation.   Notwithstanding any provisions in this
Agreement to the contrary, in the event of a merger, consolidation, or
reorganization of the Corporation (whether the Corporation is the continuing or
disappearing entity), the Corporation shall advise the successor organization of
the terms of this Agreement. In any event, however, this Agreement shall be
binding upon the organization that is the successor to the Corporation and the
Corporation shall remain liable subsequent to the consolidation or merger in the
same manner as immediately prior thereto. In the event of any merger or
consolidation of the Corporation or other similar transaction to which the
Employee does not assent as a Director or stockholder due to the Employee’s good
faith determination that such transaction is likely to materially and adversely
affect the financial ability of the surviving entity to perform this

 

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Agreement, the Employee shall have the election to accelerate all future
payments then due and to receive the commuted actuarial value of those remaining
future payments at the time of such transfer.

 

4.1           Non-Competition.

 

(a)           During a period of three (3) years following retirement, the
Employee will not, directly or indirectly, either individually or as owner,
partner, agent, employee, consultant or otherwise, engage in any activity
competitive with the business of the Corporation or its affiliates, nor will
she, in competition with the Corporation or its affiliates, solicit or otherwise
attempt to establish for herself 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 of the Employee with the Corporation, a
customer of the Corporation or one of its affiliates. Any violations of this
provision shall be grounds for termination by the Corporation of this
Supplemental Executive Retirement Plan Agreement.

 

(b)           Nothing in this paragraph 4.1 shall be construed to prevent the
Employee 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.

 

4.2           Trade Secrets.       The Employee will keep confidential any trade
secrets or confidential or proprietary information of the Corporation and its
affiliates which are now known to her or which hereafter may become known to her
as a result of her 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 at all times during
retirement. 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. Any violations of this provision
shall be grounds for termination by the Corporation of this Supplemental
Executive Retirement Plan Agreement.

 

5.             Corporation’s Remedies for Breach. It is recognized that damages
in the event of breach of paragraphs 4.1 or 4.2 by the Employee 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 terminate SERP payments as provided under this Agreement in the
event of breach of paragraphs 4.1 or 4.2. Prior to the termination of SERP
payments, however, the Corporation shall provide summary notice to the Employee
of such action, by registered or certified mail, return receipt requested,
addressed to the Employee at her then principal residence

 

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according to the records of the Corporation. The Employee shall have thirty (30)
days from date of receipt of this summary notice to respond in writing to the
Corporation at its then principal offices. SERP payments shall be terminated if
Employee response is not timely, or if Employee response does not negate
allegations of non-competition and/or confidentiality violations. In addition,
the Corporation shall have the right to seek an injunction or other equitable
relief in any court of competent jurisdiction, enjoining any such breach, and
the Employee hereby waives any and all defenses she 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.

 

6.             Non-Alienation.   This Agreement is personal to the Employee and
may not be assigned by her; further, this Agreement may not be assigned by the
Corporation except in connection with the assignment/transfer of substantially
all of its assets. With respect to SERP payments provided in Section 2 (b) of
this Agreement, the right to receive such payments shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge; and any attempt to so anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall be void. Such rights
shall not in any manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of the Employee.

 

7.             Prohibition Against Funding.            The Corporation’s
obligation to pay benefits under this Agreement is only a contractual obligation
and nothing herein shall be deemed to require the Corporation to segregate
assets or otherwise fund this obligation. Further, nothing contained in this
Agreement and no action taken pursuant to the provisions of this Agreement shall
create or be construed to create a trust of any kind or a fiduciary relationship
between the Corporation and the Employee or any other person.

 

8.             Incompetence or Death.      If the Board of Directors of the
Corporation finds that the Employee is unable to care for her affairs, any
payment due (unless a prior claim therefore shall have been made by a duly
appointed guardian, committee, or other legal representative) may be paid to the
spouse, child, or to any person deemed by the Board to have incurred expenses
for the Employee, in such manner and proportions as the Board may determine. Any
such distribution of the full payment due shall be a complete discharge of the
liabilities of the Corporation under this Agreement.

 

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If the Employee dies, any payment due the Employee shall be made to such persons
as the Employee shall designate in writing before her death, or upon failure to
make such designation, then to the Employee’s surviving spouse, or if none, to
whomsoever she shall appoint by will.

 

9.             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 Employee shall be entitled to consult with counsel, and the
Corporation agrees to pay the reasonable fees and expenses of independent
counsel for the Employee in advising her or in bringing any proceedings, or in
defending any proceedings, involving the Employee’s rights under this Agreement,
such right to reimbursement to be immediate upon the presentment by Employee of
written billings for such reasonable fees and expenses. The Employee shall be
entitled to the prime rate of interest as published in the daily Wall Street
Journal or other national daily business publication for any payments of such
expenses, or any other payments under this Agreement, that are overdue.

 

10.           Waiver.  A waiver of any breach of this Agreement shall not be a
waiver of any subsequent, similar or dissimilar, breach of any provision hereof.

 

11.           Termination for Cause.        In the event the Employee is
terminated for cause, this Supplemental Executive Retirement Plan Agreement
shall be terminated.

 

For purposes of this Agreement, “cause” means (i) fraud, misappropriation or
intentional material damage to the property or business of the Corporation;
commission of a felony; (ii) continuance of (A) willful and repeated failure by
the Employee to perform her duties or (B) violation of a basic policy of the
Corporation concerning the scope of the authority of the Employee, in either
case after written notice to the Employee by the Board of Directors specifying
such failure, providing 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 Employee to be heard at meetings of such Board of Directors;
or (iii) a violation of paragraphs 4.1 or 4.2 of this Agreement.

 

12.           Notices. Any notice required or permitted to be given hereunder
shall be in writing and given personally or by registered or certified mail,
return receipt requested, addressed, in the case of notice to the Employee, at
her then principal residence according to the records of the Corporation, or in
the case of notice to the Corporation, to it at its then principal offices. Any
notice by such mail shall be deemed to have been given when mailed.

 

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13.           Entire Agreement. This Agreement constitutes the entire
understanding of the Employee and the Corporation with respect to the subject
matter hereof and supersedes any and all prior understandings written or oral.
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 lack of
enforceability of any provisions hereof shall in no way affect the validity or
enforceability of any other provision.

 

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on
its behalf and its corporate seal to be hereunto affixed by its duly appointed
officers, and the Employee has set her hand and seal to this Agreement, all as
of the date first above written.

 

 

 

SPHERIX INCORPORATED

(SEAL)

 

 

 

 

 

 

 

Attest

 

 

By

 

 

Katherine M. Brailer

 

Lionel V. Baldwin

 

Corporate Secretary

 

Chairman, Compensation Committee

 

 

 

 

Witness

 

 

 

 

 

 

 

M. Karen Levin

 

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