Document:

Exhibit 10.4

 

Spherix
Incorporated

 

May 25, 2010

 

Katherine M. Brailer

Director of
Administrative Services

and Corporate Secretary

Spherix Incorporated

6430 Rockledge Drive, Suite 503

Bethesda, MD  20817

 

Dear Katherine:

 

On behalf of the Board of
Directors (the “Board”) of Spherix Incorporated (the “Company”), I am pleased to
confirm your continued employment as Director of Administrative Services and
Corporate Secretary.

 

1.             POSITIONS; START DATE

 

As Director of Administrative Services and Corporate Secretary of the
Company, you shall report to the CEO/COO of the Company and perform such other
duties as may be assigned to you by the Board. 
You agree not to actively engage in any other employment, occupation or
consulting activity that conflicts with the interests of the Company.

 

2.             SALARY

 

Your base salary will be $10,000.00 per month ($120,000.00 annualized),
payable monthly in accordance with the Company’s standard payroll practice and
subject to applicable withholding taxes. 
Because your position is exempt from overtime pay, your salary will
compensate you for all hours worked. 
Your salary will be reviewed annually by the Board, or its Compensation
Committee, and any adjustments will be effective as of the date determined by
the Board, or its Compensation Committee.

 

3.             BONUS

 

In addition to your salary, you will be eligible to earn an annual
bonus of up to twenty-five percent (25%) of salary if you meet or exceed
certain performance standards which will be mutually determined by you and the
Compensation Committee and approved by the Board.  The performance standards will be determined
and approved prior to the beginning of each calendar year.  You will be eligible for an annual bonus for
any calendar year only if you remain employed as Director of Administrative
Services and Corporate Secretary as of December 31 of such calendar
year.  The bonus will be payable within
thirty (30) days of the filing by the Company of its Form 10-K for the
relevant calendar year.  The bonus will
be payable in cash, subject to applicable withholding taxes.

 

6430 Rockledge Drive, Suite 503

Bethesda, MD 
20817

Tel.:  (301)
897-2540; Fax:  (301) 897-2567

http://spherix.com

 

 

4.             BENEFITS

 

You will also be entitled, during the term of your employment, to such
employee benefits as the Company may offer from time to time, subject to
applicable eligibility requirements.  You
will also be entitled, during the term of your employment, to paid time off in
accordance with the Company’s policies.

 

5.             TERMINATION OF EMPLOYMENT

 

5.1.          Your employment shall terminate
automatically upon your death.  The
Company shall be entitled to terminate your employment because of your
Disability (as herein defined).  A
termination of your employment by the Company for Disability shall be
communicated to you by written notice, and shall be effective on the thirtieth
(30th) day after receipt of such notice by you
(“Disability Effective Date”) at which time your employment shall end, unless
you return to full-time performance of your duties before the Disability
Effective Date.  For purposes of this letter
agreement, “Disability” means that you have been unable, for the period
specified in the Company’s disability plan for senior executives, but not less
than a period of sixty (60) consecutive business days, to perform your duties
with or without reasonable accommodation under this letter agreement, as a
result of physical or mental illness or injury.

 

5.2.          The Company may terminate your employment
hereunder for Cause or without Cause at which time your employment shall end,
as set forth herein.  “Cause” means termination
due to (i) an act or acts of personal dishonesty taken by you and intended
to result in your substantial personal enrichment at the expense of the Company;
(ii) your continued failure to substantially perform your employment
duties (other than any such failure resulting from your incapacity due to
physical or mental illness) which are not remedied in a reasonable period of
time (to be no less than thirty (30) days after receipt of the “Notice of
Termination for Cause”); or (iii) conviction of, or a plea of guilty or no
contest by you to, a crime that constitutes a felony involving moral turpitude.

 

5.3.          You may terminate your employment
hereunder without the Company’s approval at any time without Good Reason upon
not less than sixty (60) nor more than ninety (90) days advance written notice
to the Company stating the date on which your employment shall end (the “Notice
of Termination without Good Reason”).  A
termination of your employment by you without Good Reason shall be effected by
giving the Company written notice of the termination and setting forth the date
of such termination.  Notwithstanding the
foregoing, the Company may elect to have any such termination become effective
immediately or at such other date, not later than the date specified in the
Notice of Termination without Good Reason, as the Company may determine;
provided, however, that the Company will continue your base salary, benefits
and perquisites through the date specified by you for your termination in the
Notice of Termination without Good Reason.

 

5.4.          You may terminate your employment
hereunder for Good Reason by giving the Company written notice (“Notice of
Termination for Good Reason”) of the termination, setting forth in reasonable
detail the specific conduct of the Company that constitutes Good Reason and

 

Spherix
Incorporated

6430 Rockledge
Drive, Suite 503, Bethesda, MD 20817

Tel.: 301-897-2540
·
Fax: 301-897-2567

 

2

 

the specific
provision(s) of this letter agreement on which you rely.  The failure by you to set forth in the Notice
of Termination for Good Reason any fact or circumstance which contributes to a
showing of Good Reason shall not waive any right of yours hereunder or preclude
you from asserting such fact or circumstance in enforcing your rights
hereunder.  “Good Reason” means (i) a
Change of Control as defined in Section 5.5 or (ii) a “material
breach” (as herein defined) by the Company of any provision of this letter agreement
which is not cured within thirty (30) days after written notice by you to the
Company of such breach (the “Cure Period”). 
If you elect to terminate your employment for Good Reason due to a
Change of Control, such notice shall be provided no later than the end of the
Change in Control Period set forth in Section 5.5.  For purposes of this paragraph, a “material
breach” shall include, (a) any action by the Company which results in a
diminution in position, authority, comparable duties or responsibilities,
excluding for these purposes an isolated, insubstantial or inadvertent action
not taken in bad faith and which is remedied by the Company within the Cure
Period; or (b) any failure by the Company to comply with any of the material
provisions of Sections 2, 3 or 4 of this letter agreement other than an
isolated, insubstantial or inadvertent failure not occurring in bad faith and
which is remedied by the Company within the Cure Period.

 

5.5.          Change of Control and Change of Control
Period Defined.

 

“Change of Control” means:

 

(a)           if any one person, or more than one
person acting as a group, acquires ownership of stock of the Company that,
together with stock held by such person or group, constitutes more than fifty
percent (50%) of the total fair market value or total voting power of the stock
of such Company; or

 

(b)           if a majority of members of the Company’s
Board of Directors is replaced during any twelve (12) month period by directors
whose appointment or election is not endorsed by a majority of the members of
the Company’s Board of Directors before the date of the appointment or
election; or

 

(c)           if there is a change in the ownership of
a substantial portion of the Company’s assets occurring on the date that any
one person, or more than one person acting as a group, acquires (or has
acquired during the twelve (12) month period ending on the date of the most
recent acquisition by such person or persons) assets from the Company that have
a total gross fair market value equal to or more than forty percent (40%) of
the total gross fair market value of all of the assets of the Company
immediately before such acquisition or acquisitions (for this purpose, gross
fair market value means the value of the assets of the Company, or the value of
the assets being disposed of, determined without regard to any liabilities
associated with such assets).

 

“Change of Control Period” means the three (3) months period
following a Change of Control; provided, that for purposes of this letter agreement
there can be no more than one Change of Control Period.

 

3

 

6.             PAYMENTS UPON TERMINATION OF EMPLOYMENT

 

6.1.          If your employment is terminated by death,
the Company terminates your employment for Disability or for Cause, or, except
as set forth in Section 6.2(ii) hereof, you terminate your employment
without Good Reason, the Company shall:

 

(a)           pay to you (or in the event of
termination of employment by reason of your death, your legal representative or
your estate if no representative has been appointed) in a lump sum in cash,
within thirty (30) days after the date of termination, or as otherwise provided
in this Section 6.1, any portion of your base salary through the date of termination
that has not been paid plus any outstanding expenses due to you; and

 

(b)           make available to you (or your eligible
dependents) any rights to continued health and welfare benefits provided by law
at your (or your eligible dependents) expense (i.e., COBRA) or payable to you
under the terms of such plans and programs in effect immediately prior to your
death or Disability.

 

6.2.          If your employment is terminated: (i) by
the Company other than for Cause; (ii) by either the Company or you
contemporaneously with or during the Change of Control Period; (iii) by
the Company and it is reasonably demonstrated that such termination of
employment (a) was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (b) otherwise arose
in connection with or in anticipation of a Change of Control; or (iv) by
you for Good Reason, the Company shall:

 

(a)           pay to you, in accordance with the
Company’s payroll procedures, an amount equal to twelve (12) months of your
then-existing base salary in lieu of any severance under the Company’s
Severance Plan, payable over the twelve (12) month period following the date of
termination; and

 

(b)           pay twelve (12) months of health and
welfare (COBRA) benefits that provide you with coverage comparable to other
executives that are employed by the Company during that time.

 

7.             CONFIDENTIALITY AND OTHER AGREEMENTS

 

With your employment comes the responsibility that you will honor any
confidentiality or other agreements you have signed with other entities.  If you have any confidential information or
trade secrets, written, or otherwise known by you, you agree not to bring them
to the Company, and you agree not to use them in any way.  You attest that you have not signed a “non-competition”
agreement or any other agreement that would prohibit you from working here and
that you will fully comply with the provisions of all agreements with prior
employers.

 

4

 

8.             ADDITIONAL PROVISIONS

 

The terms described in this letter agreement will be the terms of your
employment, and this letter supersedes any previous discussions or offers.  Any additions or modifications of these terms
would have to be in writing and signed by you and the Chairman of the
Compensation Commission.

 

The validity, interpretation, construction and performance of this
letter agreement shall be governed by the laws of the State of Delaware (except
their provisions governing the choice of law).

 

If you agree that this letter agreement evidences our agreement
concerning your employment as Director of Administrative Services and Corporate
Secretary, please indicate so by signing both copies of this letter retaining
one for your files.

 

I look forward to a productive and mutually beneficial working
relationship.  Please let me know if I
can answer any questions for you about any of the matters outlined in this
letter agreement.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Aristides
  Melissaratos

  
	
   

  	
  Aristides Melissaratos

  
	
   

  	
  Chairman of Compensation
  Committee

  

 

 

ACCEPTANCE

 

I confirm the
continuation of my employment as Director of Administrative Services and
Corporate Secretary of Spherix Incorporated under the terms set forth in this
letter agreement:

 

 

	
  /s/ Katherine M.
  Brailer

  	
   

  	
   

  
	
  Katherine M.
  Brailer

  	
   

  	
   

  

 

5Exhibit 10.5

 

Spherix Independent Board
of Directors Compensation

(Approved by the Board on 5/25/10)

 

Below
is the Compensation Committee’s recommendation regarding annual compensation
for outside, independent Board of Directors:

 

	
  Annual
  Retainer

  	
   

  	
  $

  	
  5,000

  	
   

  	
  To
  be paid in cash at May Board Meeting annually.

  
	
  Stock
  Options

  	
   

  	
  $

  	
  10,000

  	
   

  	
  To
  be calculated by dividing $10,000 by the closing stock price the day the
  Stock Options are awarded; and at the May Board Meeting annually
  thereafter. The Options will vest in full on the day of award and will be
  exercisable for a period of five (5) years.

  
	
  Board
  Meeting Fees

  	
   

  	
  $

  	
  2,500

  	
   

  	
  To
  be paid for all in-person Board Meetings. Members must be present to be paid.

  
	
  Committee
  Meeting Fees

  	
   

  	
  $

  	
  800

  	
   

  	
  To
  be paid for all in-person Committee Meetings. Members must be present to be
  paid.

  
	
  Teleconference
  Fees

  	
   

  	
  $

  	
  300

  	
   

  	
  To
  be paid for all teleconferences called by either the Chairman of the Board,
  the President, or by the Chairman of the relevant Committee. Members must be
  on-line to be paid.

  
	
  Additional
  Retainer

  	
   

  	
  $

  	
  1,000

  	
   

  	
  To
  be paid to the Chairman of the Audit Committee.

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