Effective January 1, 1990, the Company established the Spherix Incorporated 401(k) Retirement Plan.  The Plan is a discretionary defined contribution plan and covers substantially all employees who have attained the age of 21, have completed six months of service, and have worked a minimum of 500 hours.  The Company matches an amount equal to 50% of the employees’ contribution, up to 5% of the employees’ eligible compensation.  No Spherix stock has been bought by this fund or issued to it by the Company in lieu of cash contributions.

On February 17, 2005, the Board of Directors approved the termination of Spherix’s Employee Stock Purchase Plan, effective as of July 1, 2005.

Equity Compensation Plan Information

The following table provides information about the Company’s Common Stock that may be issued upon the exercise of options and rights under all of the Company’s existing equity compensation plans as of December 31, 20032004 (all of which have been approved by the Company’s stockholders)Stockholders), as well as rights to acquire shares of the Company’s Common Stock granted to an unaffiliated investor pursuant to a warrant issued by the Company in connection with a private placement of securities and rights to acquire shares of Company Common Stock granted to the non-employee members of the Board of Directors of the Company.

(1)          Consists of stock options issued to the Board of Directors.

(2)          Consists of warrant issued to an unaffiliated institutional investor in connection with a private placement of securities.

COMMITTEES

Committees are appointed annually by the Chair.

Report of the Compensation Committee

The following report of the Compensation Committee and the performance graphs included elsewhere in this proxy statement do not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this report or the performance graphs by reference therein.

The Company’s compensation program for Executives consists of five key elements:

•                  a base industry competitive salary;

•                  a car allowance;

•                  an annual review of the salary by the Board;

•                  a Company-performance-based annual bonus opportunity; and

•                  stock options based on individual performance.

The Compensation Committee believes that this multi-part approach serves the interests of the Company and its Stockholders.  It enables the Company to meet the requirements of the highly competitive environment in which the Company operates, while ensuring that Executive Officers are compensated in a way that advances both the short-term and long-term interests of Stockholders.  Under this approach, compensation for these Executive Officers involves a high proportion of pay that is “at risk” – namely, the annual bonus and stock options.  The annual bonus is based on Company performance in meeting or exceeding its Annual Business Plan and Critical Success Factors as determined by the Board.

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On the basis of these reviews and discussions, the Committee recommended to the Board of Directors that the Board approve the inclusion of the Company’s audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003,2004, for filing with the Securities and Exchange Commission.

This report is submitted by the Audit Committee of the Board of Directors:

Grant Thornton LLP Fees For Fiscal 20032004

The following table sets forth the fees paid by the Company to Grant Thornton LLP for audit and other services provided for 20032004 and 2002:2003:

applicable rules and regulations governing ISOs.  All other Option terms will be determined by the Committee/ Board in its sole discretion.  Options may be transferable to recipients’ family members if authorized by the Committee/Board.

Stock Awards

Shares of Common Stock may be issued pursuant to the provisions of the Plan.  Such issuances may be on an unrestricted or a restricted basis.  Restricted stock shall be subject to such terms and conditions as the Committee/Board determines, including without limitation, restrictions on the sale or the disposition of the stock and the possible forfeiture of such stock upon failure to meet certain requirements.

Shares Subject to the Plan

Up to 1,000,000 shares of Common Stock may be issued under the Plan.  Except as set forth below, shares of Common Stock issued in connection with the exercise of, or as other payment for, an Award will be charged against the total number of shares issuable under the Plan.  If any Award granted terminates, expires or lapses for any reason other than as a result of being exercised, Common Stock subject to such Award will be available for further Awards to participants.

In order to reflect such events as stock dividends, stock splits, recapitalization, mergers, consolidations or reorganizations by the Company, the Committee/Board may, in its sole discretion, adjust the number of shares subject to each outstanding Award, the exercise price and the aggregate number of shares from which grants or awards may be made.

As of the date of this proxy statement, 348,400 shares of Common Stock remain issuable under the Plan.

Change in Control

In order to maintain all the participants’ rights in the event of a change in control of the Company (that term being defined under the Plan), the Committee/Board, as constituted before such change in control, in its sole discretion, may, as to any outstanding Award either at the time an Award is made or any time thereafter, take any one or more of the following actions:  (i) provide for the acceleration of any time periods relating to the exercise or realization of any such Award so that such Award may be exercised or realized in full on or before a date initially fixed by the Committee/Board; (ii) provide for the purchase or settlement of any Award by the Company, upon the participant’s request, for an amount of cash equal to the amount which could have been obtained upon the exercise of such Award or realization of such participant’s rights had such Award been currently exercisable or payable; (iii) make such adjustment to any such Award then outstanding as the Committee/Board deems appropriate to reflect such change in control; or (iv) cause any such Award then outstanding to be assumed, or new rights substituted therefor, by the acquiring or surviving corporation in such change in control.

Certain Federal Income Tax Consequences

Incentive Stock Options.  An optionee generally will not recognize income on the grant of an ISO, and an optionee generally will not recognize income on the exercise of an ISO.  Under these circumstances, no deduction will be allowable to the Company in connection with either the grant of such Options or the issuance of shares upon exercise thereof.

However, if the exercise of an ISO occurs more than three months after the optionee ceased to be an employee for reasons other than death or disability (or more than one year thereafter if the optionee ceased to be an employee by reason of permanent and total disability), the exercise will not be treated as the exercise of an ISO, and the optionee will be taxed in the same manner as on the exercise of a NQSO, as described below.

To the extent the aggregate fair market value (determined at the time the Options are granted) of shares subject to an ISO that become exercisable for the first time by any optionee in any calendar year exceeds $100,000, the Options will be treated as Options which are not ISOs, and the optionee will be taxed upon exercise of those excess Options in the same manner as on the exercise of a NQSO, as described below.

Gain or loss from the sale or exchange of shares acquired upon exercise of an ISO generally will be treated as capital gain or loss.  If, however, shares acquired pursuant to the exercise of an ISO are disposed of within two years

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after the Option was granted or within one year after the shares were transferred pursuant to the exercise of the Option, the optionee generally will recognize ordinary income at the time of the disposition equal to the excess over the exercise price of the lesser of the amount realized or the fair market value of the shares at the time of exercise.  If, however, such disposition is not a sale or exchange with respect to which a loss (if sustained) would be recognized, the ordinary income is the excess of the fair market value of the shares at the time of exercise over the exercise price.  Gain recognized on the disposition in excess of the ordinary income resulting therefrom will be capital gain and any loss recognized on the disposition will be capital loss.  If an optionee recognizes ordinary income as a result of a disposition as described in this paragraph, the Company will be entitled to a deduction of the same amount.

The exercise of an ISO may result in a tax to the optionee under the alternative minimum tax because as a general rule the excess of the fair market value of stock received on the exercise of an ISO over the exercise price is defined as an item of “tax preference” for purposes of determining alternative minimum taxable income.

Non-qualified Options.  A participant will not recognize income on the grant of a NQSO, but generally will recognize income upon the exercise of a NQSO.  The amount of income recognized upon the exercise of a NQSO will be measured by the excess, if any, of the fair market value of the shares at the time of exercise over the exercise price, provided that the shares issued are either transferable or not subject to a substantial risk of forfeiture.

If shares received on the exercise of a NQSO are nontransferable and subject to a substantial risk of forfeiture then, unless the optionee elects to recognize income at the time of receipt of such shares, the optionee will not recognize ordinary income until the shares become either transferable or not subject to a substantial risk of forfeiture.

In the case of ordinary income recognized by an optionee as described above in connection with the exercise of a NQSO, the employer corporation will be entitled to a deduction in the amount of ordinary income so recognized by the optionee.

Stock Awards.  Participants who receive unrestricted shares of Common Stock will generally recognize taxable income equal to the then fair market value for the Common Stock and the Company will generally be entitled to a corresponding deduction.  Participants who receive shares of restricted stock will generally not recognize taxable income until expiration of the restricted period and the satisfaction of any other conditions applicable to the restricted stock.  At that time, the participants will generally recognize taxable income equal to the then fair market value of Common Stock and the Company will generally then be entitled to a corresponding deduction.  However, under Section 83(b) of the Code, the participant may elect to recognize ordinary income as of the date of grant and the Company would then be entitled to a corresponding deduction at that time.

Section 162(m).  Compensation of persons who are named Executive Officers of the Company is subject to the tax deduction limits of Section 162(m) of the Code.  Stock options and stock awards that qualify as “performance-based compensation” are exempt from Section 162(m), thus allowing the Company the full tax deduction otherwise permitted for such compensation.  If approved by the Company’s shareholders, the Plan will enable the Committee/Board to grant stock options and stock awards that will be exempt from the deduction limits of Section 162(m).

General.  The rules governing the tax treatment of Awards that may be granted under the Plan are quite technical, so that the above description of tax consequences is necessarily general in nature and does not purport to be complete.  Moreover, statutory provisions are, of course, subject to change, as are their interpretations, and their application may vary in individual circumstances.  Finally, the tax consequences under applicable state laws may not be the same as under the federal income tax laws.

Vote Required

The affirmative vote of the holders of a majority of the Common Stock represented in person or by proxy at the Annual Meeting, assuming a quorum is present, is required to ratify and approve the amendment and restatement of the Plan.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 1997 STOCK OPTION PLAN

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ATTACHMENT A

SPHERIX INCORPORATED
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
AMENDED AND RESTATED CHARTER

I.1997 STOCK OPTION PLAN                                         PURPOSE

The primary functionARTICLE 1

Establishment, Purpose and Duration

1.1Establishment of the Audit Committee isPlan.  Spherix Incorporated hereby establishes a stock plan to assistbe known as the “Amended and Restated 1997 Stock Option Plan” (the “Plan”), as set forth in this document. Unless otherwise defined herein, all capitalized terms shall have the meanings set forth in Section 2.1 herein.  The Plan was initially adopted by the Board of Directors in fulfilling its oversight responsibilities by reviewing the financial reportson November 17, 1997, and other financial information providedwas subsequently approved by the Corporation to any governmental body orStockholders of the public;Company in accordance with applicable law.  In 2001, the Corporation’s systemsPlan was amended by action of internal controls regarding finance, accounting, legal compliance and ethics that managementthe Board of Directors and the Stockholders to increase the maximum number of shares issuable under the Plan.  On February 17, 2005, the Board have established;of Directors amended and restated the Corporation’s auditing, accounting and financial reporting processes generally. Consistent with this function,Plan, subject to approval by the Audit Committee should encourage continuous improvementStockholders.  Awards may be granted prior to Stockholder approval of and should foster adherencethe Plan, subject to the Corporation’s policies, procedures and practices at all levels. The Audit Committee’s primary duties and responsibilities are to:approval of the Plan by the Stockholders.

•1.2                                 Serve as an independentPurpose of the Plan.  The purpose of the Plan is to promote the success of the Company and objective partyits Subsidiaries by providing incentives to monitorSelect Employees and Directors that will promote the Corporation’sidentification of their personal interest with the long-term financial reporting processsuccess of the Company and internal control system.with growth in Stockholder value.  The Plan is designed to provide flexibility to the Company in its ability to motivate, attract and retain the services of Select Employees and Directors upon whose judgment, interest and special effort the successful conduct of its operation is largely dependent.

•1.3                                 Appoint, compensate, retain and overseeDuration of the Corporation’s independent accountants.

•                       Provide an open avenuePlan.  The Plan shall remain in effect, subject to the right of communication among the independent accountants, financial and senior management, the internal auditing department, if established in the future, and the Board of Directors.

The Audit Committee will primarily fulfill these responsibilities by carrying outDirectors to terminate the activities enumeratedPlan at any time pursuant to Article 10 hereof, until December 31, 2010 (the “Term”), at which time it shall terminate, except with respect to Awards made prior to, and outstanding on, that date which shall remain valid in this Charter.accordance with their terms.

II.ARTICLE 2

                                     COMPOSITIONDefinitions

The Audit Committee2.1Definitions.  Except as otherwise defined in the Plan, the following terms shall be comprised of three or more directors as determined byhave the Board, each of whommeanings set forth below:

(a)                                  “Affiliate” and “Associate” shall meethave the independence and experience requirements of NASDAQ,respective meanings ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of 1934, and the rules and regulations of the Securities and Exchange Commission.

The members of the Committee shall be elected by the Board at the annual organizational meeting of the Board following each annual stockholders meeting for a term extending until their successors shall be duly elected and qualified. Unless a Chair is elected by the full Board, the members of the Committee may designate a Committee Chair by majority vote of the full Committee membership.

III.                                 MEETINGS

The Committee shall meet at least four times annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee should meet periodically

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with management and the independent accountants in separate executive sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately.

IV.                                RESPONSIBILITIES AND DUTIES

The Audit Committee shall have the sole authority to appoint or replace the independent accountants (subject, if applicable, to shareholder ratification)amended (the “Exchange Act”).  The Audit Committee shall be directly responsible for the compensation and oversight of the work of the independent accountants (including resolution of disagreements between management and the independent accountants regarding financial reporting) for the purpose of preparing or issuing an audit report or related work.  The independent accountant shall report directly to the Audit Committee.

The Audit Committee shall pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Corporation by its independent accountants.  The Audit Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting for approval.

The Audit Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors.  The Corporation shall provide for appropriate funding, as determined by the Audit Committee, for payment of compensation to the independent accountants for the purpose of rendering or issuing an audit report and to any advisors employed by the Audit Committee.

The Audit Committee shall make at least annual reports to the Board, including review and reassessment of the adequacy of this Charter.  The Audit Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.

The Audit Committee, to the extent it deems it necessary or appropriate, shall:

Documents /Reports Review

1.                                       Review the organization’s annual financial statements, its annual Form 10-K and any other reports or other financial information submitted to any governmental body, or the public, including any certification, report, opinion, or review rendered by the independent accountants. This review should include the nature and extent of any changes in accounting principles or their application.

2.                                       Review with financial management and the independent accountants each of the Corporation’s Forms 10-Q prior to its filing.

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Independent Accountants

3.                                       On an annual basis, the Committee should review and discuss with the accountants all significant relationships the accountants have with the Corporation to determine the accountants’ independence, including non-audit services provided and the related fees for such services.

4.                                       Review the performance of the independent accountants and approve any proposed discharge of the independent accountants when circumstances warrant.

5.                                       Periodically consult with the independent accountants out of the presence of management about internal controls and the fullness and accuracy of the organization’s financial statements.

6.                                       Review and discuss reports from the independent accountants on:

(a)                                  All critical accounting policies and practices to be used.

(b)                                 All alternative treatments“Agreement” means a written agreement implementing the grant of financial information within generally accepted accounting principles that have been discussed with management, ramificationseach Award signed by an authorized Officer of the use of such alternative disclosuresCompany and treatments, and the treatment preferred by the independent accountants.Participant.

(c)                                  Other material written communications between the independent accountants and management, such as any management letter“Award” means, individually or schedulecollectively, a grant under this Plan of unadjusted differences.Incentive Stock Options, Non-Qualified Stock Options or Stock (including, but not limited to, Restricted Stock).

7.(d)                                 Discuss with“Award Date” or “Grant Date” means the independent accountantsdate on which an Award is made by the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit, including any difficulties encountered in the course of the audit work, any restrictions on the scope of activities or access to requested information, and any significant disagreements with management.Committee under this Plan.

8.(e)                                  On an annual basis, review and evaluate“Beneficial Owner” shall have the lead partner ofmeaning ascribed to such term in Rule 13d-3 under the independent accountants team.Exchange Act.

9.(f)                                    On an annual basis, evaluate“Board” or “Board of Directors” means the qualifications, performance and independenceBoard of Directors of the independent accountants, including considering whether the auditor’s quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor’s independence, and taking into account the opinions of management and internal auditors.  The Audit Committee shall present its conclusions with respect to the independent accountants to the Board.Company.

10.(g)                                 Ensure“Change in Control” shall be deemed to have occurred if the rotationconditions set forth in any one of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law.

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Financial Reporting Processesfollowing paragraphs shall have been satisfied:

11.(1)                        In consultation with the independent accountants, reviewacquisition by any Person of beneficial ownership (within the integritymeaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding Shares or (B) the combined voting power of the Corporation’s financial reporting processes, both internalthen outstanding voting

21

securities of the Company entitled to vote generally in the election of Directors (the “Outstanding Voting Securities”).  Notwithstanding the foregoing, the following acquisitions shall not constitute a Change in Control:  (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by, or benefit distribution from, any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, (D) any acquisition pursuant to any compensatory stock option or stock purchase plan for employees or Directors, (E) any acquisition or ownership by Gilbert V. Levin or M. Karen Levin, or (F) any acquisition pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (A), (B), and external.(C) of Subsection (3) of this Section 2.1(g) are satisfied; or

12.(2)                        Consider the independent accountants’ judgments about the quality and appropriatenessIndividuals who, as of the Corporation’s accounting principlesdate hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director subsequent to the date hereof whose election or nomination for election was approved by a vote of at least a majority of the Directors then comprising the Incumbent Board shall be considered as applied in its financial reporting.though such individual were a member of the Incumbent Board (with his or her predecessor thereafter ceasing to be a member); or

13.(3)                        Consider and approve, if appropriate, major changes to the Corporation’s auditing and accounting principles and practices as suggestedApproval by the independent accountantsStockholders of the Company of the reorganization, merger, or management.

14.                                 At least annuallyconsolidation of the Committee should arrange to have our outside auditors present any new accounting, financial and auditing releases to assure thatCompany unless, following such reorganization, merger, or consolidation, (A) more than 60% of the Committee is familiar with new releases that have application to the Corporation’s financial reporting process.

15.                                 Review disclosures made to the Audit Committee by the Corporation’s CEO and CFO during their certification process for the Form 10-K and Forms 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Corporation’s internal controls.

Process Improvement

16.                                 Establish regular reporting to the Audit Committee by managementthen outstanding Shares and the independent accountants regarding any significant judgments made in management’s preparationthen outstanding voting securities of the financial statements and the view of each as to appropriateness of such judgments.

17.                                 Following completionresulting corporation is then beneficially owned by all or substantially all of the annual audit, review with management and the independent accountants any significant difficulties encountered during the coursebeneficial owners, respectively, of the audit, includingStock and Outstanding Voting Securities immediately prior to such reorganization, merger, or consolidation, (B) no Person (excluding (I) the Company, (II) any restrictions on the scope of work or access to required information.

18.                                 Review any significant disagreement among management and the independent accountants in connection with the preparationemployee benefit plan (or related trust) of the financial statements.

19.                                 Review with the independent accountantsCompany or such corporation resulting from such reorganization, merger, or consolidation, and management the extent(III) any Person beneficially owning, immediately prior to which changessuch reorganization, merger, or improvements in financialconsolidation, 20% or accounting practices, as approved by the Audit Committee, have been implemented. (This review should be conducted at an appropriate time subsequent to implementation of changes or improvements, as decided by the Committee.)

20.                                 Review and evaluate if an internal audit function is appropriate. If instituted, review and concur in the appointment, replacement, reassignment, or dismissalmore of the director of internal auditing.

21.                                 ConsiderStock or Outstanding Voting Securities, as the adequacycase may be) beneficially owns 20% or more of the Corporation’s computerized information system controls and security.

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22.                                 Review significant findings and recommendationsthen outstanding shares of common stock or the combined voting power of the independent accountant together with management’s responses thereto.

Ethical and Legal Compliance

23.                                 Review and recommend updates periodically to the Corporation’s code of ethical conduct, if any, and ensure that management has established a system to enforce this code.

24.                                 Review management’s monitoringthen outstanding voting securities of the Corporation’s compliance with the organization’s ethical code,resulting corporation, and ensure that management has the proper review system in place to ensure that Corporation’s financial statements, reports and other financial information disseminated to governmental organizations and the public satisfy legal requirements.

25.                                 Establish procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

26.                                 Review with the Corporation’s counsel legal compliance matters including corporate securities trading policies.

27.                                 Review with the Corporation’s counsel any legal matter that could have(C) at least a significant impact on the organization’s financial statements.

28.                                 Perform any other activities consistent with this Charter, the Corporation’s By-laws and governing law, as the Committee or the Board deems necessary or appropriate.

The duties and responsibilitiesmajority of the members of the Board of Directors of the resulting corporation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger, or consolidation; or

(4)                        Approval by the Stockholders of the Company of (A) a complete liquidation or dissolution of the Company, or (B) the sale or other disposition of all or substantially all of the assets of the Company other than to a corporation with respect to which, following such sale or other disposition, (I) more than 60% of the outstanding shares of common stock and the then outstanding voting securities of such corporation is beneficially owned by all or substantially all of the beneficial owners, respectively, of the Stock and Outstanding Voting Securities immediately prior to such sale or disposition; (II) no Person (excluding (x) the Company, (y) any employee benefit plan (or related trust) of the Company or such corporation, and (z) any Person beneficially owning, immediately prior to such sale or other disposition, 20% or more of the Stock or Outstanding Voting Securities, as the case may be) beneficially owns 20% or more of the then outstanding shares of common stock or the combined voting power of the then outstanding voting securities of such corporation, and (III) at least a majority of the members of the Board of Directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such sale or other disposition of the assets of the corporation.

(h)                                 “Code” means the Internal Revenue Code of 1986, as amended from time to time.

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(i)                                     “Committee” means the Compensation Committee areof the Board as long as such Compensation Committee is composed solely of at least two (2) non-employee Directors; in addition to those duties set out forthe event the Compensation Committee does not have the above-described composition, Board of Directors shall select a separate stock option committee which shall be composed solely of at least two (2) non-employee Directors and such stock option committee shall constitute the “committee” hereunder.

(j)                                     “Company” means Spherix Incorporated, or any successor thereto as provided in Article 12 herein.

(k)                                  “Director” means a non-employee member of the Board of Directors.

21(l)                                     “Fair Market Value” of a Share means the closing sales price of the Stock on the relevant date if it is a trading date, or if not, on the most recent date on which the Stock was traded prior to such date, as reported by NASDAQ, or if, in the opinion of the Committee, this method is inapplicable or inappropriate for any reason, the fair market value as determined pursuant to a reasonable method adopted by the Committee in good faith for such purpose.

(m)                               “Incentive Stock Option” or “ISO” means an option to purchase Stock, granted under Article 6 herein, which is designated as an incentive stock option and is intended to meet the requirements of Section 422 of the Code.

(n)                                 “Non-Qualified Stock Option” or “NQSO” means an option to purchase Stock, granted under Article 6 herein, which is not an Incentive Stock Option.

(o)                                 “Option” means an Incentive Stock Option or a Non-Qualified Stock Option.

(p)                                 “Participant” means a Select Employee or Director who receives an Award under the Plan.

(q)                                 “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

(r)                                    “Plan” means the 1997 Amended and Restated Stock Option Plan, as described herein and as hereafter from time to time amended.

(s)                                  “Restricted Stock” means shares of Stock, or rights to receive such Stock upon certain conditions, issued subject to such restrictions as established by the Committee as authorized by the provisions of Article 7 hereof.

(t)                                    “Select Employee” means an Officer or other employee of the Company or its Subsidiaries, who, in the opinion of the Committee, can contribute significantly to the growth and profitability of, or perform services of major importance to, the Company and its Subsidiaries.

(u)                                 “Stock” or “Shares” means the Common Stock of the Company.

(v)                                 “Subsidiary” shall mean a corporation of which at least 50% of the total combined voting power of all classes of capital stock is owned by the Company, either directly or through one or more of its Subsidiaries.

ARTICLE 3

Administration

3.1The Committee.  Subject to the Board’s right to retain administration of the Plan, the Plan shall be administered by the Committee, which shall have all powers necessary or desirable for such administration.  The express grant in this Plan of any specific power to the Committee shall not be construed as limiting any power or authority of the Committee.  In addition to any other powers and, subject to the provisions of the Plan, the Committee shall have the following specific powers:  (i) to determine the terms and conditions upon which the Awards may be made and exercised; (ii) to determine all terms and provisions of each Agreement, which need not

23

be identical; (iii) to construe and interpret the Agreements and the Plan; (iv) to establish, amend or waive rules or regulations for the Plan’s administration; (v) to accelerate the exercisability of any Award; and (vi) to make all other determinations and take all other actions necessary or advisable for the administration of the Plan.  Notwithstanding the foregoing and any other provision of the Plan, all Awards to Directors shall be made and administered by the Board of Directors.

3.2Delegation of Certain Duties.  The Committee may in its sole discretion delegate all or part of its duties and obligations to designated Officer(s) to administer the Plan with respect to Awards.

3.3Selection of Select Employees.  The Committee shall have the authority to grant Awards under the Plan, from time to time, to such Select Employees as may be selected by it.  Each Award shall be evidenced by an Agreement.  Awards will generally be granted following the achievement by Select Employees of pre-established performance objectives although some Awards may be granted for exemplary performance outside of any pre-established objectives.

3.4Decisions Binding.  All determinations and decisions made by the Board or the Committee pursuant to the provisions of the Plan shall be final, conclusive and binding.

3.5Indemnification.  In addition to such other rights of indemnification as they may have as Directors or as members of the Committee, the members of the Committee shall be indemnified by the Company against reasonable expenses, including attorneys’ fees, actually and reasonably incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted or made hereunder, and against all amounts reasonably paid by them in settlement thereof or paid by them in satisfaction of a judgment in any such action, suit or proceeding, if such members acted in good faith and in a manner which they believed to be in, and not opposed to, the best interests of the Company and its Subsidiaries.

ARTICLE 4

Stock Subject to the Plan

4.1.Number of Shares.  Subject to adjustment as provided in Section 4.4 herein, the maximum aggregate number of Shares that may be issued pursuant to Awards made under the Plan shall not exceed 1,000,000.  Except as provided in Sections 4.2 and 4.3 herein, the issuance of Shares in connection with the exercise of, or as other payment for Awards, under the Plan shall reduce the number of Shares available for future Awards under the Plan.

4.2Lapsed Awards or Forfeited Shares.  If any Award granted under this Plan terminates, expires, or lapses for any reason other than by virtue of exercise of the Award, any Stock subject to such Award again shall be available for the grant of an Award under the Plan.

4.3Delivery of Shares as Payment.  In the event a Participant pays the Option price for Shares pursuant to the exercise of an Option with previously acquired Shares, the number of Shares available for future Awards under the Plan shall be reduced only by the net number of new Shares issued upon the exercise of the Option.

4.4Capital Adjustments.  The number and class of Shares subject to each outstanding Award, the Option price and the aggregate number and class of Shares for which Awards thereafter may be made shall be subject to such adjustment, if any, as the Committee in its sole discretion deems appropriate to reflect such events as stock dividends, stock splits, recapitalizations, mergers, consolidations or reorganizations of or by the Company.

ARTICLE 5

Eligibility

Persons eligible to participate in the Plan include all employees of the Company and its Subsidiaries who, in the opinion of the Committee, are Select Employees, as well as all Directors.

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ARTICLE 6

Stock Options

6.1Grant of Options.  Subject to the terms and provisions of the Plan, Options may be granted to Select Employees or Directors at any time and from time to time as shall be determined by the Committee/Board.  The Committee/Board shall have complete discretion in determining the number of Shares subject to Options granted to each Select Employee or Directors; provided, however, that the aggregate Fair Market Value (determined at the time the Award is made) of Shares with respect to which any Select Employee may first exercise ISOs granted under the Plan during any calendar year may not exceed $100,000 or such amount as shall be specified in Section 422 of the Code and rules and regulations thereunder.

6.2Option Agreement.  Each Option grant shall be evidenced by an Agreement that shall specify the type of Option granted, the Option price, the duration of the Option, the number of Shares to which the Option pertains, any conditions imposed upon the exercisability of Options in the event of retirement, death, disability or other termination of employment, and such other provisions as the Committee/Board shall determine.  The Agreement shall specify whether the Option is intended to be an ISO within the meaning of Section 422 of the Code, or a NQSO not intended to be within the provisions of Section 422 of the Code.

6.3Option Price.  The exercise price per share of Stock covered by an Option shall be determined by the Committee/Board subject to the following limitations.  The Option price shall not be less than 50% of the Fair Market Value of such Stock on the Grant Date; provided, however, that the Option price shall not be less than 100% of the Fair Market Value of such Stock on the Grant Date for all Incentive Stock Options.  In addition, an ISO that is granted to an employee who, at the time of grant, owns (within the meaning of Section 425(d) of the Code) Stock possessing more than 10% of the total combined voting power of all classes of Stock of the Company, shall have an Option price which is at least equal to 110% of the Fair Market Value of the Stock.

6.4Duration of Options.  Each Option shall expire at such time as the Committee/Board shall determine at the time of grant; provided, however, that (i) no ISO shall be exercisable later than the tenth (10th) anniversary date of its Award Date and (ii) no ISO granted to an employee who, at the time of grant, owns (within the meaning of Section 425(d) of the Code) Stock possessing more than 10% of the total combined voting power of all classes of Stock of the Company, shall be exercisable later than the fifth (5th) anniversary date of its Award Date.

6.5Exercisability.  Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Committee/Board shall determine, which need not be the same for all Select Employees or Directors.

6.6Method of Exercise.  An Option shall be exercised by the delivery of a written notice to the Company in the form prescribed by the Committee/Board, setting forth the number of Shares with respect to which the Option is to be exercised, and accompanied by full payment for the Shares which shall be deemed to include arrangements approved by the Committee/Board for the delivery to the Company of the proceeds of a sale or margin loan in the case of a “cashless” exercise.  The Option price shall be payable to the Company in full either in cash (including the proceeds of a cashless exercise in the Committee’s/Board’s discretion), by delivery of Shares of Stock valued at Fair Market Value at the time of exercise, delivery of a promissory note (in the Committee’s/Board’s discretion) or by a combination of the foregoing.  As soon as practicable after receipt of written notice and payment, the Company shall deliver to the Participant, stock certificates in an appropriate amount based upon the number of Options exercised, issued in the Participant’s name.  No Participant who is awarded Options shall have rights as a Stockholder until the date of exercise of the Options.

6.7Restrictions on Stock Transferability.  The Committee/Board shall impose such restrictions on any Shares acquired pursuant to the exercise of an Option under the Plan as it may deem advisable.

6.8Transferability of Options.  The Committee/Board may, in its discretion, authorize all or a portion of the Options to be granted to a Participant to be on terms which permit transfer by such Participant to (i) the spouse, children or grandchildren of the Participant (“Immediate Family Members”), (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members, (iii) a partnership in which such Immediate Family Members are the only partners, or (iv) other persons or entities permitted by the Committee/Board; provided that (x) the agreement pursuant to which such Options are transferred must be approved by the Committee/Board, and must

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expressly provide for transferability in a manner consistent with this Section, and (y) subsequent transfers of transferred Options shall be prohibited except those occasioned by will or the laws of descent and distribution.  Following transfer, any such Options shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer.  The events of termination of employment shall continue to be applied with respect to the original Participant, following which the Options shall be exercisable by the transferee only to the extent, and for the periods specified herein.

ARTICLE 7

Stock/Restricted Stock

7.1Awards.  The Committee/Board may issue Stock (including, but not limited to, Restricted Stock) to Participants at any time, with or without payment therefore, as additional compensation, or in lieu of other compensation, for their services to the Company and/or any Affiliate.  Restricted Stock shall be subject to such terms and conditions as the Committee/Board determines appropriate, including, without limitation, restrictions on the sale or other disposition of the Stock and rights of the Company to reacquire such Restricted Stock upon termination of the Participant’s employment or service within specified periods, all as prescribed by the Committee/Board.

7.2Other Restrictions.  Without limitation, the Committee/Board may provide that Restricted Stock shall be subject to forfeiture if the Company or the Participant fails to achieve certain performance goals established by the Committee/Board over a designated period of time.  In the event the minimum goal established by the Committee/Board is not achieved at the conclusion of a period, all shares of Restricted Stock shall be forfeited.  In the event the maximum goal is achieved, no shares of Restricted Stock shall be forfeited.  Partial achievement of the maximum goal may result in forfeiture corresponding to the degree of non-achievement to the extent specified in writing by the Committee/Board when the Award is made.  The Committee/Board shall certify in writing as to the degree of achievement after completion of the performance period.

7.3Registration.  Any Restricted Stock granted under the Plan to a Participant may be evidenced in such manner as the Committee/Board may deem appropriate, including, without limitation, book-entry registration or issuance of a stock certificate or certificates.  In the event any stock certificate is issued in respect of shares of Restricted Stock granted under the Plan to a Participant, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend (as determined by the Committee/Board) referring to the terms, conditions and restrictions applicable to such Restricted Stock.

7.4Other Rights.  Unless otherwise determined by the Committee/Board, during the period of restriction, Participants holding shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those shares and shall be entitled to receive all dividends and other distributions paid or made with respect to those shares while they are so held; provided, however, that the Committee/Board may provide in any grant of Restricted Stock that payment of dividends thereon may be deferred until termination of the period of restriction and may be made subject to the same restrictions regarding forfeiture as apply to such shares of Restricted Stock.  If any such dividends or distributions are paid in shares of Stock, the shares shall be subject to the same restrictions on transferability as the shares of Restricted Stock with respect to which they were paid.

7.5Forfeiture. Except as otherwise determined by the Committee/Board, upon termination of employment or service of a Participant with the Company (as determined under criteria established by the Committee/Board) for any reason during the applicable period of restriction, all shares of Restricted Stock still subject to restriction shall be forfeited by the Participant to the Company.

ARTICLE 8

Change in Control

The Committee/Board, as constituted before a Change in Control, in its sole discretion may, as to any outstanding Award, either at the time the Award is made or any time thereafter, take any one or more of the following actions with respect to a Change in Control:  (i) provide for the acceleration of any time periods relating to the exercise or realization of any such Award so that such Award may be exercised or realized in full on or before a date initially fixed by the Committee/Board; (ii) provide for the purchase or settlement of any such Award by the Company, upon a Participant’s request, for an amount of cash equal to the amount which could have been obtained

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upon the exercise of such Award or realization of such Participant’s rights had such Award been currently exercisable or payable; (iii) make such adjustment to any such Award then outstanding as the Committee/Board deems appropriate to reflect such Change in Control; or (iv) cause any such Award then outstanding to be assumed, or new rights substituted therefore, by the acquiring or surviving corporation in such Change in Control.

ARTICLE 9

Modification, Extension and Renewals of Awards

Subject to the terms and conditions and within the limitations of the Plan, the Committee may modify, extend or renew outstanding Awards, or, if authorized by the Board, accept the surrender of outstanding Awards (to the extent not yet exercised) granted under the Plan and authorize the granting of new Awards pursuant to the Plan in substitution therefore, and the substituted Awards may specify a longer term than the surrendered Awards or may contain any other provisions that are authorized by the Plan; provided, however, that the substituted Awards may not specify a lower exercise price than the surrendered Awards.  The Committee may also modify the terms of any outstanding Agreement.  Notwithstanding the foregoing, however, no modification of an Award shall, without the consent of the Participant, adversely affect the rights or obligations of the Participant.

ARTICLE 10

Amendment, Modification and Termination of the Plan

10.1Amendment, Modification and Termination.  At any time and from time to time, the Board may terminate, amend, or modify the Plan.  Such amendment or modification may be without Stockholder approval except to the extent that such approval is required by the Code, by NASDAQ or any other exchange or system on which the Stock is then listed or reported, by any regulatory body having jurisdiction with respect thereto or under any other applicable laws, rules or regulations.

10.2Awards Previously Granted.  No termination, amendment or modification of the Plan other than pursuant to Section 4.4 herein shall in any manner adversely affect any Award theretofore granted under the Plan, without the written consent of the Participant.

ARTICLE 11

Withholding

11.1Tax Withholding.  The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, State and local taxes (including the Participant’s FICA obligation) required by law to be withheld with respect to any grant, exercise, or payment made under or as a result of this Plan.

11.2Stock Withholding.  With respect to withholding required upon the exercise of Non-Qualified Stock Options or the Award of Stock, or upon the occurrence of any other similar taxable event, participants may elect, subject to the approval of the Committee/Board, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares of Stock having a Fair Market Value equal to the amount required to be withheld.  The value of the Shares to be withheld shall be based on Fair Market Value of the Shares on the date that the amount of tax to be withheld is to be determined.  All elections shall be irrevocable and be made in writing, signed by the Participant on forms approved by the Committee/Board in advance of the day that the transaction becomes taxable.

ARTICLE 12

Successors

All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company.

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ARTICLE 13

General

13.1Requirements of Law.  The granting of Awards and the issuance of Shares of Stock under this Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies as may be required.

13.2Effect of Plan.  The establishment of the Plan shall not confer upon any Select Employee or Director any legal or equitable right against the Company, a Subsidiary, or the Committee, except as expressly provided in the Plan.  The Plan does not constitute an inducement or consideration for the employment of any Select Employee or the engagement of any Director, nor is it a contract between the Company or any of its Subsidiaries and any Select Employee or any Director.  Participation in the Plan shall not give any Select Employee or Director any right to be retained/engaged in the service of the Company or any of its Subsidiaries.

13.3Creditors.  The interests of any Participant under the Plan or any Agreement are not subject to the claims of creditors and may not, in any way, be assigned, alienated or encumbered.

13.4Governing Law.  The Plan, and all Agreements hereunder, shall be governed, construed and administered in accordance with and governed by the laws of the State of Delaware, and the intention of the Company is that ISOs granted under the Plan qualify as such under Section 422 of the Code.

13.5Severability.  In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

Approved by the Spherix Board of Directors on February 17, 2005.

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ATTACHMENT D

BY-LAWS

OF

INFOSPHERIX INCORPORATED

ARTICLE I

Stockholders

Section 1.1.Annual Meetings.  An Annual Meeting of Stockholders shall be held for the election of Directors at such date, time and place, either within or without the State of Delaware, as may be designated by resolution of the Board of Directors from time to time.  Any other proper business may be transacted at the Annual Meeting.

Section 1.2.Special Meetings.  Special Meetings of Stockholders for any purpose or purposes may be called at any time by the Board of Directors, or by a committee of the Board of Directors that has been duly designated by the Board of Directors, and whose powers and authority, as expressly provided in a resolution of the Board of Directors, include the power to call such Meetings, but such special Meetings may not be called by any other person or persons.

Section 1.3.Notice of Meetings.  Whenever Stockholders are required or permitted to take any action at a Meeting, a written Notice of the Meeting shall be given that shall state the place, date and hour of the Meeting, and, in the case of a special Meeting, the purpose or purposes for which the Meeting is called.  Unless otherwise provided by law, the written Notice of any Meeting shall be given not less than ten (10) or more than sixty (60) days before the date of the Meeting to each Stockholder entitled to vote at such Meeting.  If mailed, such Notice shall be deemed to be given when deposited in the mail, postage prepaid, directed to the Stockholder at his or her address as it appears on the records of the corporation.

Section 1.4.Adjournments.  Any Meeting of Stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and Notice need not be given of any such adjourned Meeting if the time and place thereof are announced at the Meeting at which the adjournment is taken.  At the adjourned Meeting the Corporation may transact any business which might have been transacted at the original Meeting.  If the adjournment is for more than thirty (30) days, or if after the adjournment a new Record Date is fixed for the adjourned Meeting, a Notice of the adjourned Meeting shall be given to each Stockholder of record entitled to vote at the Meeting.

Section 1.5.Quorum.  At each Meeting of Stockholders, except where otherwise provided by law or the certificate of incorporation or these by-laws, the holders of a majority in voting power of the outstanding shares of stock entitled to vote at the Meeting, present in person or by proxy, shall constitute a quorum.  In the absence of a quorum, the Stockholders so present may, by majority vote, adjourn the Meeting from time to time in the manner provided in Section 1.4 of these by-laws until a quorum shall attend.  Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of Directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

Section 1.6.Organization.  Meetings of Stockholders shall be presided over by the Chairman of the Board, if any, or in his or her absence by the Vice Chairman of the Board, if any, or in his or her absence by the President, or in his or her absence by a Vice President, or in the absence of the foregoing persons by a Chairman designated by the Board of Directors, or in the absence of such designation by a Chairman chosen at the Meeting.  The Secretary shall act as Secretary of the Meeting, but in his or her absence the Chairman of the Meeting may appoint any person to act as Secretary of the Meeting.

Section 1.7.Voting; Proxies.  Except as otherwise provided by the certificate of incorporation, each Stockholder entitled to vote at any Meeting of Stockholders shall be entitled to one (1) vote for each share of stock held by him or her that has voting power upon the matter in question.  Each Stockholder entitled to vote at a Meeting of Stockholders may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period.  A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power.  A Stockholder may revoke any proxy that is not

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irrevocable by attending the Meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the Corporation.  Voting at Meetings of Stockholders need not be by written ballot and need not be conducted by inspectors unless the holders of a majority of the outstanding shares of all classes of stock entitled to vote thereon present in person or by proxy at such Meeting shall so determine.  At all Meetings of Stockholders for the election of Directors, a plurality of the votes cast shall be sufficient to elect.  All other elections and questions shall, unless otherwise provided by law or by the certificate of incorporation or these by-laws, be decided by the vote of the holders of a majority of the shares of stock entitled to vote thereon present in person or represented by proxy at such Meeting.

Section 1.8.Fixing Date for Determination of Stockholders of Record.  In order that the Corporation may determine the Stockholders entitled to Notice of or to vote at any Meeting of Stockholders or any adjournment thereof, or to express consent to corporate action in writing without a Meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a Record Date, which Record Date shall not precede the date upon which the resolution fixing the Record Date is adopted by the Board of Directors and which Record Date: (1) in the case of determination of Stockholders entitled to vote at any Meeting of Stockholders or adjournment thereof, shall not be more than sixty (60) or less than ten (10) days before the date of such Meeting; (2) in the case of determination of Stockholders entitled to express consent to corporate action in writing without a Meeting, shall not be more than ten (10) days from the date upon which the resolution fixing the Record Date is adopted by the Board of Directors; and (3) in the case of any other action, shall not be more than sixty (60) days prior to such other action.  If no Record Date is fixed: (a) the Record Date for determining Stockholders entitled to Notice of or to vote at a Meeting of Stockholders shall be at the close of business on the day next preceding the day on which Notice is given, or, if Notice is waived, at the close of business on the day next preceding the day on which the Meeting is held; (b) the Record Date for determining Stockholders entitled to express consent to corporate action in writing without a Meeting when no prior action of the Board of Directors is required by law, shall be the first date on which any signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, or, if prior action by the Board of Directors is required by law, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action; and (c) the Record Date for determining Stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.  A determination of Stockholders of record entitled to Notice of or to vote at a Meeting of Stockholders shall apply to any adjournment of the Meeting; provided, however, that the Board of Directors may fix a new Record Date for the adjourned Meeting.

Section 1.9.List of Stockholders Entitled to Vote.  The Secretary shall prepare and make, at least ten (10) days before every Meeting of Stockholders, a complete list of the Stockholders entitled to vote at the Meeting, arranged in alphabetical order, and showing the address of each Stockholder and the number of shares registered in the name of each Stockholder.  Such list shall be open to the examination of any Stockholder, for any purpose germane to the Meeting, during ordinary business hours, for a period of at least ten (10) days prior to the Meeting, either at a place within the city where the Meeting is to be held, which place shall be specified in the Notice of the Meeting, or, if not so specified, at the place where the Meeting is to be held.  The list shall also be produced and kept at the time and place of the Meeting during the whole time thereof and may be inspected by any Stockholder who is present.  Upon the willful neglect or refusal of the Directors to produce such a list at any Meeting for the election of Directors, they shall be ineligible for election to any office at such Meeting.  The stock ledger shall be the only evidence as to who are the Stockholders entitled to examine the stock ledger, the list of Stockholders or the books of the Corporation, or to vote in person or by proxy at any Meeting of Stockholders.

Section 1.10.Action by Consent of Stockholders.  Unless otherwise restricted by the certificate of incorporation, any action required or permitted to be taken at any annual or special Meeting of the Stockholders may be taken without a Meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a Meeting at which all shares entitled to vote thereon were present and voted.  Prompt notice of the taking of the corporate action without a Meeting by less than unanimous written consent shall be given to those Stockholders who have not consented in writing.

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ARTICLE II

Board of Directors

Section 2.1.Number; Qualifications.  The business and affairs of the Corporation shall be managed by the Board of Directors, except as may be otherwise provided by law or in the certificate of incorporation.  The Board of Directors shall consist of one or more members, the number thereof to be determined from time to time by the vote of the holders of a majority of the outstanding shares of the Corporation’s stock at any Annual Meeting of Stockholders or at a special Meeting of Stockholders called for that purpose.  Directors need not be Stockholders.

Section 2.2.Election; Resignation; Removal; Vacancies.  At each Annual Meeting of Stockholders, the Stockholders shall elect Directors, each of whom shall hold office for a term of one (1) year or until his or her successor is elected and qualified.  Any Director may be removed at any time, with or without cause, upon the affirmative vote of the holders of a majority of the outstanding shares of the Corporation’s stock at any Annual Meeting of Stockholders or at a special Meeting of Stockholders called for that purpose.  Any vacancy in the Board of Directors caused by any such removal may be filled at such Meeting by a plurality of the votes of the Stockholders cast at such Meeting.  If the Stockholders do not fill such vacancy at such Meeting (or in the written instrument effecting such removal, if such removal was effected by consent without a Meeting), such vacancy may be filled by the remaining members of the Board of Directors in the manner hereinafter provided in this Section 2.2.  Any Director may resign at any time upon notice to the Corporation.  Any newly created Directorship or any vacancy occurring in the Board of Directors for any reason may be filled by a majority of the remaining members of the Board of Directors, provided that such majority is a quorum, or by a plurality of the votes cast at a Meeting of Stockholders, and each Director so elected shall hold office until the expiration of the term of office of the Director whom he or she has replaced or until his or her successor is elected and qualified.

Section 2.3.Regular Meetings.  Regular Meetings of the Board of Directors may be held at such places, within or without the State of Delaware, and at such times as the Board of Directors may from time to time determine, and if so determined, notices thereof need not be given.

Section 2.4.Special Meetings.  Special Meetings of the Board of Directors may be held at any time or place, within or without the State of Delaware, whenever called by the President, any Vice President, the Secretary, or by any member of the Board of Directors. Notice of any special Meeting of the Board of Directors shall be given in advance of such Meeting by the person or persons calling such Meeting in writing or by telegram, facsimile transmission, electronic mail transmission or telephone (including notice provided to a voice mail message system or a telephone answering service), and any such notice shall be considered received by the Director to whom addressed when deposited in the mail, if so deposited not less than 48 hours before such special Meeting, or when otherwise sent or transmitted, if so sent or transmitted not less than two (2) hours before such special Meeting, to such Director at the last mailing address, facsimile number, electronic mail address or telephone number, as the case may be, provided by such Director to the Corporation, whether or not such notice is actually received by such Director prior to such special Meeting.

Section 2.5.Telephonic Meetings Permitted.  Members of the Board of Directors, or any committee designated by the Board, may participate in a Meeting of the Board or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the Meeting can hear each other, and participation in a Meeting pursuant to this by-law shall constitute presence in person at such Meeting.

Section 2.6.Quorum; Vote Required for Action.  At all Meetings of the Board of Directors a majority of the whole Board shall constitute a quorum for the transaction of business.  Except in cases in which the certificate of incorporation or these by-laws otherwise provide, the affirmative vote of not less than a majority of the whole Board shall be required to constitute the act of the Board of Directors.

Section 2.7.Organization.  Meetings of the Board of Directors shall be presided over by the Chairman of the Board, if any, or in his or her absence by the Vice Chairman of the Board, if any, or in his or her absence by the President, or in their absence by a Chairman chosen at the Meeting.  The Secretary shall act as Secretary of the Meeting, but in his or her absence the Chairman of the Meeting may appoint any person to act as Secretary of the Meeting.

Section 2.8.Action by Consent.  Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any Meeting of the Board of Directors, or of any committee

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thereof, may be taken without a Meeting if all members of the Board or such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or such committee.

ARTICLE III

Committees

Section 3.1.Committees.  The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation.  The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any Meeting of the committee.  Except as otherwise provided in the Board of Directors resolution designating a committee, in the absence or disqualification of a member of such committee, the member or members thereof present at any Meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the Meeting in place of any such absent or disqualified member.  Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation, adopting an agreement of merger or consolidation under Sections 251 or 252 of the General Corporation Law of the State of Delaware, recommending to the Stockholders the sale, lease or exchange of all or substantially all of the Corporation’s property and assets, recommending to the Stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending these by-laws; and unless the resolution or the certificate of incorporation expressly so provides, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock, or to adopt a certificate of ownership and merger pursuant to Section 253 of the General Corporation Law of the State of Delaware.

Section 3.2.Committee Rules.  Unless the Board of Directors otherwise provides, and subject to any requirement or restriction contained in the Board of Directors resolution designating a committee, each committee designated by the Board may make, alter and repeal rules for the conduct of its business.  In the absence of such rules, each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article II of these by-laws.

ARTICLE IV

Officers

Section 4.1.Executive Officers; Election; Qualifications; Term of Office; Resignation; Removal; Vacancies.  The Board of Directors shall elect a President and Secretary, and it may, if it so determines, choose a Chairman of the Board and a Vice Chairman of the Board from among its members.  The Board of Directors may also choose one or more Vice Presidents, one or more Assistant Secretaries, a Treasurer, one or more Assistant Treasurers and such other Officers as it deems advisable.  Each such Officer shall hold office until the first Meeting of the Board of Directors after the Annual Meeting of Stockholders next succeeding his or her election, and until his or her successor is elected and qualified or until his or her earlier resignation or removal.  Any Officer may resign at any time upon written notice to the Corporation.  The Board of Directors may remove any Officer with or without cause at any time, but such removal shall be without prejudice to the contractual rights of such Officer, if any, with the Corporation.  Any number of offices may be held by the same person.  Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board of Directors at any regular or special Meeting.

Section 4.2.Powers and Duties of Executive Officers.  The Officers of the Corporation shall have such powers and duties in the management of the Corporation as may be prescribed by the Board of Directors and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board of Directors.  The Board of Directors may require any Officer, agent or employee to give security for the faithful performance of his or her duties.

ARTICLE V

Stock

Section 5.1.Certificates.  Every holder of stock shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman or Vice Chairman of the Board of Directors, if any, or the President or a

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Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the Corporation, certifying the number of shares owned by him or her in the Corporation.  Any of or all the signatures on the certificate may be a facsimile.  In case any Officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such Officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such Officer, transfer agent, or registrar at the date of issue.

Section 5.2.Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates.  The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or his or her legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

ARTICLE VI

Indemnification

Section 6.1.Right to Indemnification.  The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a Director, Officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a Director, Officer, employee, fiduciary or agent of another Corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person.  The Corporation shall be required to indemnify a person in connection with a proceeding initiated by such person only if the proceeding was authorized by the Board of Directors of the Corporation.

Section 6.2.Prepayment of Expenses.  The Corporation shall pay the expenses incurred in defending any proceeding in advance of its final disposition; provided, however, that the payment of expenses incurred by a Director or Officer in his or her capacity as a Director or Officer in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Director or Officer to repay all amounts advanced if it should be ultimately determined that the Director or Officer is not entitled to be indemnified under this Article or otherwise.

Section 6.3.Claims.  If a claim for indemnification or payment of expenses under this Article is not paid in full within ninety (90) days after a written claim therefore has been received by the Corporation, the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim.  In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law.

Section 6.4.Non-Exclusivity of Rights.  The rights conferred on any person by this Article VI shall not be exclusive of any other rights that such person may have or hereafter acquire under any statute, provision of the certificate of incorporation, these by-laws, agreement, vote of Stockholders or disinterested Directors or otherwise.

Section 6.5.Other Indemnification.  The Corporation’s obligation, if any, to indemnify any person who was or is serving at its request as a Director, Officer, employee, fiduciary or agent of another corporation, partnership, joint venture, trust, enterprise or non-profit entity shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.

Section 6.6.Amendment or Repeal.  Any repeal or modification of the foregoing provisions of this Article VI shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.

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