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


 

















 


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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