Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

North South was incorporated on November 9, 2012 in the state of Delaware. North South was formed to seek business opportunities in which to acquire patents from various entities and monetize the disposal of them through sales, litigation or licensing. As North South was formed in November 2012, there are no comparative periods for the prior year.

On April 2, 2013, North South entered into the Merger Agreement with Spherix, Nuta Virginia, and North South’s shareholders Upon closing of the Merger, North South will merge with and into Nuta Virginia with Nuta Virginia as the surviving corporation and the record owner of the North South Intellectual Property. The closing of the Merger is subject to customary closing conditions, including the receipt of a fairness opinion that the Merger Consideration (as defined below) is fair to stockholders and Spherix from a financial point of view, based on, among other things, the North South Intellectual Property assets, and the approval of Spherix’s shareholders holding a majority of the outstanding voting capital of Spherix to issue the Merger Consideration pursuant to NASDAQ listing standards.

Pursuant to the terms and conditions of the Merger, at the closing of the Merger, an aggregate of 500 issued and outstanding shares of North South’s common stock will be converted into the right to receive an aggregate of 118,483 shares of Spherix’s Common Stock and 500 shares of North South’s Series A Preferred Stock and 128 shares of North South’s Series B Preferred Stock issued and outstanding will be converted into the right to receive an aggregate of 1,488,152 shares of Spherix’s Series D Convertible Preferred Stock, which is convertible into shares of Spherix’s Common Stock on a one-for-ten basis (collectively with the 118,483 shares of Common Stock, the “Merger Consideration”).

At the effective time of the Merger, from the Merger Consideration, 150,000 shares of the Series D Preferred Stock (the “Escrow Shares”) shall be delivered to an escrow agent and shall be held pursuant to an escrow agreement to secure Spherix from certain claims that may arise with respect to the representations, warranties, covenants or indemnification obligations of North South’s shareholders for a period of twelve (12) months following the closing of the Merger. The Escrow Shares are the sole remedy for indemnifiable losses payable under the Merger Agreement.

Results of Operations

Three months ended March 31, 2013

During the three months ended March 31, 2013, North South generated no revenues and incurred a net loss of $22,169.

During the three months ended March 31, 2013, North South incurred total operating expenses of $22,169, consisting of amortization expense, legal fees and fees paid to members of its board of directors.

Period from November 9, 2012 (inception) to December 31, 2012

During the period from November 9, 2012 (inception) to December 31, 2012, North South generated no revenues and incurred a net loss of $35,953.

During the period from November 9, 2012 (inception) to December 31, 2012, North South incurred total operating expenses of $35,953, consisting of legal fees and fees paid to members of its board of directors.

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Liquidity and Capital Resources

North South has incurred $58,122 in operating losses for the period from November 9, 2012 (inception) to March 31, 2013. As of March 31, 2013, North South had $508,787 in cash. As of March 31, 2013, North South had working capital of $505,787 to fund operations. Subsequent to March 31, 2013, North South raised an additional $2,234,880 through the issuance and sale of its Series B Convertible Preferred Stock.

Since inception, North South has sold 500 shares of common stock and 1,000 shares of preferred stock to its founders for gross aggregate proceeds of approximately $3.2 million.

North South must raise additional funds or increase revenues in order to fund its continuing operations. Additionally, as a condition to the closing of the Merger, unless waived by Spherix, North South is required to have a minimum of $2 million in cash at closing. North South may not be successful in its efforts to raise additional funds or achieve profitable operations. Even if North South is able to raise additional funds through the sale of its securities or through the issuance of debt securities, or through loans from related parties, its directors or financial institutions, its cash needs could be greater than anticipated in which case North South could be forced to raise additional capital.

At the present time, North South has no commitments for any additional financing, and there can be no assurance that, if needed, additional capital will be available to North South on commercially acceptable terms or at all.

Recent Accounting Pronouncements

There are no recently issued accounting pronouncements that are expected to have a material impact on the consolidated financial statements or notes thereto.

Off Balance Sheet Arrangements

As of the date of this Report, North South did not have any significant off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

Risks Associated with the Merger

On or prior to the closing of the Merger of Nuta Virginia with North South, we intend to engage in a new additional line of business. We intend to become engaged in the commercialization and development of intellectual property assets. Our activities will generally include the acquisition and development of patents through internal or external research and development. In addition, we will seek to acquire existing rights to intellectual property through acquisitions of already issued patents and pending patent applications, both in the United States and abroad. We may alone or in conjunction with others develop products and processes associated with our intellectual property and license our intellectual property to others seeking to develop products or processes or whose products or processes infringe our intellectual property rights through legal processes.

A description of certain risks associated with the Merger and the new additional business we intend to pursue is included in our Current Report on Form 8-K filed with the Securities and Exchange Commission ~~(“SEC”~~on April 4, 2013. Below are certain risk factors contained therein:

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The Company intends to expand the focus of its business to commercializing, developing and monetizing intellectual property, including through licensing and enforcement. The Company may not be able to successfully monetize the patents which it acquires and thus it may fail to realize all of the anticipated benefits of such acquisition.

There is no assurance that the Company will be able to successfully commercialize, acquire, develop or monetize the patent portfolio that it acquires from North South. The acquisition of the patents could fail to produce anticipated benefits, or could have other adverse effects that the Company does not currently foresee. Failure to successfully monetize these patent assets may have a material adverse effect on the Company’s business, financial condition and results of operations.

In addition, the acquisition of the patent portfolio is subject to a number of risks, including, but not limited to the following:

● There is a significant time lag between acquiring a patent portfolio and recognizing revenue from those patent assets. During that time lag, material costs are likely to be incurred that would have a negative effect on the Company’s results of operations, cash flows and financial position; and

● The integration of a patent portfolio will be a time consuming and expensive process that may disrupt the Company’s operations. If its integration efforts are not successful, the Company’s results of operations could be harmed. In addition, the Company may not achieve anticipated synergies or other benefits from such acquisition.

Therefore, there is no assurance that the monetization of the patent portfolios to be acquired will generate enough revenue to recoup the Company’s investment.

The Company’s operating history makes it difficult to evaluate its current business and future prospects.

The Company has, prior to the acquisition of North South, been involved in businesses primarily involving research and development in furtherance of drug and pharmaceutical products and processes, including nutritional supplements and related services. Prior to the consummation of the Merger, the Company’s business has consisted entirely of its biotechnology research and development unit. The Company not only has no operating history in executing its additional new business which includes, among other things, creating, commercializing, prosecuting, licensing, litigating or otherwise monetizing patent assets. The Company’s lack of operating history in this sector makes it difficult to evaluate its additional new business model and future prospects.

The Company will be initially reliant exclusively on the patent assets it acquired from North South. If the Company is unable to commercialize, license or otherwise monetize such assets and generate revenue and profit through those assets or by other means, there is a significant risk that the Company’s business will fail.

Upon closing of the Merger, the Company will acquire a portfolio of patent assets from North South that it plans to commercialize, license or otherwise monetize. If the Company’s efforts to generate revenue from such assets fail, the Company will have incurred significant losses and may be unable to acquire additional assets. If this occurs, the Company’s business will likely fail.

Upon closing of the Merger and commencement of its additional new line of business, the Company may commence legal proceedings against certain companies, and the Company expects such litigation to be time-consuming and costly, which may adversely affect its financial condition and its ability to operate its business.

To license or otherwise monetize its patent assets, which may constitute a significant focus of the Company’s future activities, the Company may be required to commence legal proceedings against certain companies, pursuant to which the Company may allege that such companies infringe on one or more of the Company’s patents. The Company’s viability could be highly dependent on the outcome of this litigation, and there is a risk that the Company may be unable to achieve the results it desires from such litigation, which failure would harm the Company’s business to a great degree. In addition, the defendants in this litigation are likely to be much larger than the Company and have substantially more resources than the Company does, which could make the Company’s litigation efforts more difficult.

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The Company anticipates that these legal proceedings may continue for several years and may require significant expenditures for legal fees and other expenses. Disputes regarding the assertion of patents and other intellectual property rights are highly complex and technical. Once initiated, the Company may be forced to litigate against others to enforce or defend its intellectual property rights or to determine the validity and scope of other parties’ proprietary rights. The defendants or other third parties involved in the lawsuits in which the Company is involved may allege defenses and/or file counterclaims in an effort to avoid or limit liability and damages for patent infringement. If such defenses or counterclaims are successful, they may preclude the Company’s ability to derive licensing revenue from the patents. A negative outcome of any such litigation, or one or more claims contained within any such litigation, could materially and adversely impact the Company’s business. Additionally, the Company anticipates that its legal fees and other expenses will be material and will negatively impact the Company’s financial condition and results of operations and may result in its inability to continue its business.

The Company may seek to internally develop additional new inventions and intellectual property, which would take time and be costly. Moreover, the failure to obtain or maintain intellectual property rights for such inventions would lead to the loss of the Company’s investments in such activities.

Part of the Company’s additional new business may include the internal development of new inventions or intellectual property that the Company will seek to monetize. However, this aspect of the Company’s business would likely require significant capital and would take time to achieve. Such activities could also distract our management team from its present business initiatives, which could have a material and adverse effect on the Company’s business. There is also the risk that the Company’s initiatives in this regard would not yield any viable new inventions or technology, which would lead to a loss of the Company’s investments in time and resources in such activities.

In addition, even if the Company is able to internally develop new inventions, in order for those inventions to be viable and to compete effectively, the Company would need to develop and maintain, and it would heavily rely upon, a proprietary position with respect to such inventions and intellectual property. However, there are significant risks associated with any such intellectual property the Company may develop principally including the following:

● patent applications the Company may file may not result in issued patents or may take longer than the Company expects to result in issued patents;

● the Company may be subject to interference proceedings;

● the Company may be subject to opposition proceedings in the U.S. or foreign countries;

● any patents that are issued to the Company may not provide meaningful protection;

● the Company may not be able to develop additional proprietary technologies that are patentable;

● other companies may challenge patents issued to the Company;

● other companies may have independently developed and/or patented (or may in the future independently develop and patent) similar or alternative technologies, or duplicate the Company’s technologies;

● other companies may design around technologies the Company has developed; and

● enforcement of the Company’s patents would be complex, uncertain and very expensive.

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The Company cannot be certain that patents will be issued as a result of any future applications, or that any of the Company’s patents, once issued, will provide the Company with adequate protection from competing products. For example, issued patents may be circumvented or challenged, declared invalid or unenforceable, or narrowed in scope. In addition, since publication of discoveries in scientific or patent literature often lags behind actual discoveries, the Company cannot be certain that it will be the first to make its additional new inventions or to file patent applications covering those inventions. It is also possible that others may have or may obtain issued patents that could prevent the Company from commercializing the Company’s products or require the Company to obtain licenses requiring the payment of significant fees or royalties in order to enable the Company to conduct its business. As to those patents that the Company may license or otherwise monetize, the Company’s rights will depend on maintaining its obligations to the licensor under the applicable license agreement, and the Company may be unable to do so. The Company’s failure to obtain or maintain intellectual property rights for the Company’s inventions would lead to the loss the Company’s business.

Moreover, patent application delays could cause delays in recognizing revenue from the Company’s internally generated patents and could cause the Company to miss opportunities to license patents before other competing technologies are developed or introduced into the market.

New legislation, regulations or court rulings related to enforcing patents could harm the Company’s new line of business and operating results.

If Congress, the United States Patent and Trademark Office or courts implement new legislation, regulations or rulings that impact the patent enforcement process or the rights of patent holders, these changes could negatively affect the Company’s new business model. For example, limitations on the ability to bring patent enforcement claims, limitations on potential liability for patent infringement, lower evidentiary standards for invalidating patents, increases in the cost to resolve patent disputes and other similar developments could negatively affect the Company’s ability to assert its patent or other intellectual property rights.

In addition, on September 16, 2011, the Leahy-Smith America Invents Act (the “Leahy-Smith Act”), wewas signed into law. The Leahy-Smith Act includes a number of significant changes to United States patent law. These changes include provisions that affect the way patent applications will be prosecuted and may also affect patent litigation. The U.S. Patent Office is currently developing regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act recently became effective. Accordingly, it is too early to tell what, if any, impact the Leahy-Smith Act will have on the operation of the Company’s business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of the Company’s issued patents, all of which could have a material adverse effect on the Company’s business and financial condition.

On February 27, 2013, US Representatives DeFazio and Chaffetz introduced HR845. In general, the bill known as the SHIELD Act (“Saving High-tech Innovators from Egregious Legal Disputes”), seeks to assess legal fee liability to plaintiffs in patent infringement actions for defendants costs. In the event that the bill becomes law, the potential obligation to pay the legal fees of defendants in patent disputes could have a material adverse effect on the Company’s business or financial condition.

On June 4, 2013, the Obama Administration issued executive actions and legislative recommendations. The legislative measures recommended by the Obama Administration include requiring patentees and patent applicants to disclose the “Real Party-in-Interest”, giving district courts more discretion to award attorney’s fees to the prevailing party, requiring public filing of demand letters such that they are ~~providing~~accessible to the public, and protecting consumers against liability for a product being used off-the shelf and solely for its intended use.

The executive actions includes ordering the USPTO to make rules to require the disclosure of the Real Party-in-Interest by requiring patent applicants and owners to regularly update ownership information when they are involved in proceedings before the USPTO (e.g. specifying the “ultimate parent entity”) and requiring the USPTO to train its examiners to better scrutinize functional claims to prevent allowing overly broad claims.

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It is impossible to determine the extent of the impact of any new laws, regulations or initiatives that may be proposed, or whether any of the proposals will become enacted as laws. Compliance with any new or existing laws or regulations could be difficult and expensive, affect the manner in which the Company conducts its business and negatively impact the Company’s business, prospects, financial condition and results of operations.

The Company’s acquisitions of patent assets may be time consuming, complex and costly, which could adversely affect the Company’s operating results.

Acquisitions of patent or other intellectual property assets, which are and will be critical to the Company’s business plan, are often time consuming, complex and costly to consummate. The Company may utilize many different transaction structures in its acquisitions and the terms of such acquisition agreements tend to be heavily negotiated. As a result, the Company expects to incur significant operating expenses and will likely be required to raise capital during the negotiations even if the acquisition is ultimately not consummated. Even if the Company is able to acquire particular patent assets, there is no guarantee that the Company will generate sufficient revenue related to those patent assets to offset the acquisition costs. While the Company will seek to conduct confirmatory due diligence on the patent assets the Company is considering for acquisition, the Company may acquire patent assets from a seller who does not have proper title to those assets. In those cases, the Company may be required to spend significant resources to defend the Company’s interest in the patent assets and, if the Company is not successful, its acquisition may be invalid, in which case the Company could lose part or all of its investment in the assets.

The Company may also identify patent or other intellectual property assets that cost more than the Company is prepared to spend with its own capital resources. The Company may incur significant costs to organize and negotiate a structured acquisition that does not ultimately result in an acquisition of any patent assets or, if consummated, proves to be unprofitable for the Company. These higher costs could adversely affect the Company’s operating results, and if the Company incurs losses, the value of its securities will decline.

In addition, the Company may acquire patents and technologies that are in the early stages of adoption in the commercial, industrial and consumer markets. Demand for some of these technologies will likely be untested and may be subject to fluctuation based upon the rate at which the Company’s licensees will adopt its patents and technologies in their products and services. As a result, there can be no assurance as to whether technologies the Company acquires or develops will have value that it can monetize.

In certain acquisitions of patent assets, the Company may seek to defer payment or finance a portion of the acquisition price. This approach may put the Company at a competitive disadvantage and could result in harm to the Company’s business.

The Company has limited capital and may seek to negotiate acquisitions of patent or other intellectual property assets where the Company can defer payments or finance a portion of the acquisition price. These types of debt financing or deferred payment arrangements may not be as attractive to sellers of patent assets as receiving the full purchase price for those assets in cash at the closing of the acquisition. As a result, the Company might not compete effectively against other companies in the market for acquiring patent assets, many of whom have greater cash resources than the Company has. In addition, any failure to satisfy the Company’s debt repayment obligations may result in adverse consequences to its operating results.

Any failure to maintain or protect the Company’s patent assets or other intellectual property rights could significantly impair its return on investment from such assets and harm the Company’s brand, its business and its operating results.

The Company’s ability to operate its new additional line of business and compete in the intellectual property market largely depends on the superiority, uniqueness and value of the Company’s acquired patent assets and other intellectual property. To protect its proprietary rights, the Company will rely on a combination of patent, trademark, copyright and trade secret laws, confidentiality agreements with its employees and third parties, and protective contractual provisions. No assurances can be given that any of the measures the Company undertakes to protect and maintain its assets will have any measure of success.

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Following the acquisition of patent assets, the Company will likely be required to spend significant time and resources to maintain the effectiveness of those assets by paying maintenance fees and making filings with the United States Patent and Trademark Office. The Company may acquire patent assets, including patent applications, which require the Company to spend resources to prosecute the applications with the United States Patent and Trademark Office. Further, there is a material risk that patent related claims (such as, for example, infringement claims (and/or claims for indemnification resulting therefrom), unenforceability claims, or invalidity claims) will be asserted or prosecuted against the Company, and such assertions or prosecutions could materially and adversely affect the Company’s business. Regardless of whether any such claims are valid or can be successfully asserted, defending such claims could cause the Company to incur significant costs and could divert resources away from the Company’s other activities.

Despite the Company’s efforts to protect its intellectual property rights, any of the following or similar occurrences may reduce the value of the Company’s intellectual property:

● the Company’s applications for patents, trademarks and copyrights may not be granted and, if granted, may be challenged or invalidated;

● issued trademarks, copyrights, or patents may not provide the Company with any competitive advantages when compared to potentially infringing other properties;

● the Company’s efforts to protect its intellectual property rights may not be effective in preventing misappropriation of the Company’s technology; or

● the Company’s efforts may not prevent the development and design by others of products or technologies similar to or competitive with, or superior to those the Company acquires and/or prosecutes.

Moreover, the Company may not be able to effectively protect its intellectual property rights in certain foreign countries where the Company may do business in the future or from which competitors may operate. If the Company fails to maintain, defend or prosecute its patent assets properly, the value of those assets would be reduced or eliminated, and the Company’s business would be harmed.

Weak global economic conditions may cause infringing parties to delay entering into licensing agreements, which could prolong the Company’s litigation and adversely affect its financial condition and operating results.

The Company’s new business plan depends significantly on worldwide economic conditions, and the United States and world economies have recently experienced weak economic conditions. Uncertainty about global economic conditions poses a risk as businesses may postpone spending in response to tighter credit, negative financial news and declines in income or asset values. This response could have a material negative effect on the willingness of parties infringing on the Company’s assets to enter into licensing or other revenue generating agreements voluntarily. Entering into such agreements is critical to the Company’s business plan, and the Company’s failure to do so could cause material harm to its business.

If the Company is unable to adequately protect its intellectual property, the Company may not be able to compete effectively.

The Company’s ability to compete depends in part upon the strength of the Company’s proprietary rights that it will own as a result of the Merger or may hereafter acquire in its technologies, brands and content. The Company intends to rely on a combination of U.S. and foreign patents, copyrights, trademark, trade secret laws and license agreements to establish and protect its intellectual property and proprietary rights. The efforts the Company takes to protect its intellectual property and proprietary rights may not be sufficient or effective at stopping unauthorized use of its intellectual property and proprietary rights. In addition, effective trademark, patent, copyright and trade secret protection may not be available or cost-effective in every country in which the Company’s services are made available. There may be instances where the Company is not able to fully protect or utilize its intellectual property in a manner that maximizes competitive advantage. If the Company is unable to protect its intellectual property and proprietary rights from unauthorized use, the value of the Company’s products may be reduced, which could negatively impact the Company’s new business. The Company’s inability to obtain appropriate protections for its intellectual property may also allow competitors to enter the Company’s markets and produce or sell the same or similar products. In addition, protecting the Company’s intellectual property and other proprietary rights is expensive and diverts critical managerial resources. If any of the foregoing were to occur, or if the Company is otherwise unable to protect its intellectual property and proprietary rights, the Company’s business and financial results could be adversely affected.

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If the Company is forced to resort to legal proceedings to enforce its intellectual property rights, the proceedings could be burdensome and expensive. In addition, the Company’s proprietary rights could be at risk if the Company is unsuccessful in, or cannot afford to pursue, those proceedings. The Company will also rely on trade secrets and contract law to protect some of its proprietary technology. The Company will enter into confidentiality and invention agreements with its employees and consultants. Nevertheless, these agreements may not be honored and they may not effectively protect the Company’s right to its un-patented trade secrets and know-how. Moreover, others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to ~~our proxy materials both by sending you this full set of proxy materials, including a Proxy Card,~~the Company’s trade secrets and ~~by notifying you~~know-how.

If the NASDAQ Stock Market determines that the Merger with North South and the issuance of the ~~availability~~Merger Consideration results in a change of control of the Company, the Company may be required to submit a new application under NASDAQ’s original listing standards and if such application is not approved, the Company’s Common Stock may be delisted from The NASDAQ Capital Market.

In connection with the Merger, the Company will issue 118,483 shares of Common Stock and 1,488,152 shares of Series D Preferred Stock, which are convertible into shares of Common Stock on a one-for-ten basis. The Company does not believe the issuance of the Merger Consideration will result in a change of control of the Company because of, among other things, the significant overlap in ownership between the Company and North South. NASDAQ Rule 5110(a) provides that a Company must apply for initial listing in connection with a transaction whereby a company combines with a non-NASDAQ entity, resulting in a change of control of such company and potentially allowing the non-NASDAQ entity to effectively obtain NASDAQ listing. In determining whether a change of control has occurred, NASDAQ considers all relevant factors including, changes in management, board of directors, voting power, ownership and financial structure of the Company. If The NASDAQ Stock Market determines that a change of control does in fact result from the consummation of the Merger and the issuance of the Merger Consideration and an original listing application has not been approved prior to the consummation of Merger, the Company will be in violation of NASDAQ Rule 5110(a) and the Company’s Common Stock could be delisted from The NASDAQ Capital Market.

PROPOSAL TO APPROVE SPHERIX INCORPORATED 2013 EQUITY INCENTIVE PLAN

Description of Our 2013 Equity Incentive Plan

On April 1, 2013, the Company’s board of directors adopted the Spherix Incorporated 2013 Equity Incentive Plan (the “2013 Plan”), an omnibus equity incentive plan pursuant to which the Company may grant equity and cash and equity-linked awards to certain management, directors, consultants and others. The Company’s board of directors recommends adoption of the 2013 Plan in order to promote the success of the Company by providing a means to offer incentives and to attract, motivate, retain and reward persons eligible to participate in the 2013 Plan. Accordingly, the Company’s board of directors voted unanimously to adopt the 2013 Plan.

Set forth below is a summary of the 2013 Plan, but this summary is qualified in its entirety by reference to the full text of the 2013 Plan, a copy of which is included as Appendix A to this Consent Solicitation Statement.

Shares Available

The 2013 Plan authorizes approximately 15% or our fully-diluted Common Stock (2,800,000 shares) be reserved for issuance under the Plan, after giving effect to the shares of our ~~proxy materials~~capital stock issuable under the Merger. As of August 13, 2013, 2,005,500 options were issued under our 2013 Plan, subject to shareholder approval of the 2013 Plan, and 120,250 options were issued under our previously adopted 2012 Plan and 6,663 options were issued under our previously adopted 1997 Plan.

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Administration

The 2013 Plan will be administered by the board of directors or by one or more committees of directors appointed by the board of directors (the “Administrator”). The board of directors may delegate different levels of authority to different committees with administrative and grant authority under the 2013 Plan. Any committee delegated administrative authority under the 2013 Plan may further delegate its authority under the Plan to another committee of directors, and any such delegate shall be deemed to be an Administrator of the 2013 Plan. Any Administrator may also, within its administrative authority under the 2013 Plan and in accordance with applicable law, delegate to one or more officers of the Company the ability to make awards to Eligible Persons (as defined below) under the 2013 Plan. It is anticipated that the Administrator (either generally or with respect to specific transactions) will be constituted so as to comply, as necessary or desirable, with the requirements of Code Section 162(m) and Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended.

Eligibility

Awards may be granted pursuant to the 2013 Plan only to persons who are eligible persons. Under the 2013 Plan, “Eligible Person” means any person who is either: (a) an officer (whether or not a director) or employee of the Company or one of its subsidiaries; (b) a director of the Company or one of its subsidiaries; or (c) an individual consultant who renders bona fide services to the Company or one of its subsidiaries; provided, however, that ISOs may be granted only to employees. As of the Record Date, the approximate number of Eligible Persons under the 2013 Plan included four officers or employees of the Company, three independent directors of the Company or one of its subsidiaries, and four individual consultants to the Company or one of its subsidiaries.

Awards

The 2013 Plan permits the grant of: (a) stock options, which may be intended as ISOs or as nonqualified stock options (options not meeting the requirements to qualify as ISOs); (b) stock appreciation rights (“SARs”); (c) restricted stock; (d) restricted stock units; (e) cash incentive awards; or (f) other awards, including: (i) stock bonuses, performance stock, performance units, dividend equivalents, or similar rights to purchase or acquire shares, whether at a fixed or variable price or ratio related to the common stock, upon the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or any combination thereof; or (ii) any similar securities with a value derived from the value of or related to the common stock and/or returns thereon.

Option and SAR Awards. Option and SAR awards granted under the 2013 Plan must have an exercise price or base price of no less than 100% of the fair market value of the common stock on the ~~internet.~~date of grant (or 110% of the fair market value on the date of grant, in the case of ISOs granted to certain ten percent stockholders of the Company). Options and SAR awards shall become exercisable upon such conditions (which may include the passage of time or the attainment of certain performance criteria) as the Administrator may establish in its sole discretion. The ~~Proxy Statement~~exercise price of any option shall be paid in cash or by any of the methods set forth below under the heading “Consideration for Awards.” Option and SAR awards are exercisable for a period established by the Administrator, which in no event shall exceed ten years from the date of grant (five years in the case of ISOs granted to certain ten percent stockholders of the Company). If the Administrator does not specify otherwise in an award agreement, upon termination of a participant’s employment or other service to the Company, option and SAR awards shall expire (1) three months after the last day that the participant is employed by or provides services to the Company or any subsidiary (provided; however, that in the event of the participant’s death during this period, those persons entitled to exercise the option or SAR pursuant to the laws of descent and distribution shall have one year following the date of death within which to exercise such option or SAR); (2) in the case of a participant whose termination of employment or services is due to death or disability (as defined in the applicable award agreement), 12 months after the last day that the participant is employed by or provides services to the Company or its subsidiary; and (3) immediately upon a participant’s termination for “cause”.

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Performance Based Compensation

The 2013 Plan provides for the grant of certain awards, the vesting or payment of which may be contingent on the satisfaction of certain performance criteria. Such performance-based awards are designed to be exempt from the limitations of Section 162(m) of the Code, as described below under “Certain Federal Tax Consequences.” The maximum number of shares that may be issued to any single participant pursuant to options and SARs during the term of the 2013 Plan shall not exceed Two Million Eight Hundred Thousand (2,800,000) shares. The maximum number of shares of common stock which may be delivered pursuant to other performance-based equity awards granted during the 162(m) Term (as defined below) may not exceed 2,000,000 shares, and the maximum amount of cash compensation payable pursuant to performance-based cash awards granted during the 162(m) Term (as defined below) may not exceed $1,000,000. The 162(m) Term is the period beginning on the effective date of the 2013 Plan and ending on the date of the first stockholder meeting that occurs in the fifth year following the year in which the Company’s stockholders first approve this 2013 Plan (the “162(m) Term”).

The 2013 Plan includes the following performance criteria that may be used by the Administrator when granting performance-based awards: (1) earnings per share, (2) cash flow (which means cash and cash equivalents derived from either (i) net cash flow from operations or (ii) net cash flow from operations, financing and investing activities), (3) total stockholder return, (4) price per share of common stock, (5) gross revenue, (6) revenue growth, (7) operating income (before or after taxes), (8) net earnings (before or after interest, taxes, depreciation and/or amortization), (9) return on equity, (10) capital employed, or on assets or on net investment, (11) cost containment or reduction, (12) cash cost per ounce of production, (13) operating margin, (14) debt reduction, (15) resource amounts, (16) production or production growth, (17) resource replacement or resource growth, (18) successful completion of financings, or (19) any combination of the foregoing.

Fair Market Value

Under the 2013 Plan, “Fair Market Value” means, unless otherwise determined or provided by the Administrator in the circumstances, the closing price for a share of common stock on the trading day immediately before the grant date, as furnished by the NASDAQ Stock Market or other principal stock exchange on which the Common Stock is then listed for the date in question, or if the Common Stock is no longer listed on a principal stock exchange, then by the Over-the-Counter Bulletin Board or OTC Markets. If the Common Stock is no longer listed on the NASDAQ Capital Market or listed on a principal stock exchange or is no longer actively traded on the Over-the-Counter Bulletin Board or OTC Markets as of the applicable date, the Fair Market Value of the Common Stock shall be the value as reasonably determined by the Administrator for purposes of the award in the circumstances.

Consideration for Awards

The purchase price for any award granted under the 2013 Plan or the common stock to be delivered pursuant to any such award, as applicable, may be paid by means of any lawful consideration as determined by the Administrator, including, without limitation, one or a combination of the following methods:

●

services rendered by the recipient of such award;

●

cash, check payable to the order of the Company, or electronic funds transfer;

●

notice and third party payment in such manner as may be authorized by the Administrator;

●

the delivery of previously owned and fully vested shares of common stock;

●

by a reduction in the number of shares otherwise deliverable pursuant to the award; or

●

subject to such procedures as the Administrator may adopt, pursuant to a “cashless exercise” with a third party who provides financing for the purposes of (or who otherwise facilitates) the purchase or exercise of awards.

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In the event that the Administrator allows a participant to exercise an award by delivering shares of common stock previously owned by such participant and unless otherwise expressly provided by the Administrator, any shares delivered which were initially acquired by the participant from the Company (upon exercise of a stock option or otherwise) must have been owned by the participant at least six months as of the date of delivery. Shares of common stock used to satisfy the exercise price of an option are valued at their fair market value on the date of exercise. The Company will not be obligated to deliver any shares unless and until it receives full payment of the exercise or purchase price for the shares and any related withholding obligations and any other conditions to exercise or purchase, as established from time to time by the Administrator, have been satisfied. Unless otherwise expressly provided in the applicable award agreement, the Administrator may at any time eliminate or limit a participant’s ability to pay the purchase or exercise price of any award or shares by any method other than cash payment to the Company.

All of the reserved shares under our ~~Annual Report on Form 10-K~~2013 Plan are available for issuance under the 2013 Plan may be issued as “incentive stock options” (“ISOs”) under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) or as other type of awards. The Administrator may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments in accordance with the 2013 Plan. Shares shall be counted against those reserved to the extent such shares have been delivered and are no longer subject to a substantial risk of forfeiture. Accordingly, (i) to the extent that an award under the 2013 Plan, in whole or in part, is canceled, expired, forfeited, settled in cash, settled by delivery of fewer shares than the number of shares underlying the award, or otherwise terminated without delivery of shares to the participant, the shares retained by or returned to the Company will not be deemed to have been delivered under the 2013 Plan and will be deemed to remain or to become available under the 2013 Plan; and (ii) shares that are withheld from such an award or separately surrendered by the participant in payment of the exercise price or taxes relating to such an award shall be deemed to constitute shares not delivered and will be deemed to remain or to become available under the 2013 Plan. The foregoing adjustments to the share limit of the 2013 Plan are subject to any applicable limitations under Section 162(m) of the Code with respect to awards intended to qualify as performance-based compensation under Section 162(m).

The number of shares available for issuance under the 2013 Plan (as well as the number of shares that may be issued as ISOs, and the share limitations set forth below under the heading “Performance Based Compensation”) are subject to proportionate adjustment by the Administrator (as defined below) in the event of any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend) or reverse stock split, or upon any merger, arrangement, combination, consolidation, or other reorganization, or upon any spin-off, split-up or similar extraordinary dividend distribution in respect of the common stock, or upon any exchange of common stock or other securities of the Company, or upon any similar unusual or extraordinary corporate transaction in respect of the common stock.

Change in Control

Upon a change in control, each then-outstanding option and SAR shall automatically become fully vested, all restricted shares then outstanding shall automatically fully vest free of restrictions, and each other award granted under the 2013 Plan that is then outstanding shall automatically become vested and payable to the holder of such award unless the Administrator has made appropriate provision for the substitution, assumption, exchange or other continuation of the award pursuant to the change in control. Notwithstanding the foregoing, the Administrator, in its sole and absolute discretion, may choose (in an award agreement or otherwise) to provide for full or partial accelerated vesting of any award upon a change in control (or upon any other event or other circumstance related to the change in control, such as an involuntary termination of employment occurring after such change in control, as the Administrator may determine), irrespective of whether such any such award has been substituted, assumed, exchanged or otherwise continued pursuant to the change in control.

For purposes of the 2013 Plan, “Change in Control” shall be deemed to have occurred if:

(i) a tender offer (or series of related offers) shall be made and consummated for the ownership of 50% or more of the outstanding voting securities of the Company, unless as a result of such tender offer more than 50% of the outstanding voting securities of the surviving or resulting corporation shall be owned in the aggregate by the stockholders of the Company (as of the time immediately prior to the commencement of such offer), and/or by any employee benefit plan of the Company or its subsidiaries, and their affiliates;

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(ii) the Company shall be merged or consolidated with another entity, unless as a result of such merger or consolidation more than 50% of the outstanding voting securities of the surviving or resulting entity shall be owned in the aggregate by the stockholders of the Company (as of the time immediately prior to such transaction), and/or by any employee benefit plan of the Company or its subsidiaries, and their affiliates;

(iii) the Company shall sell substantially all of its assets to another entity that is not wholly owned by the Company, unless as a result of such sale more than 50% of such assets shall be owned in the aggregate by the stockholders of the Company (as of the time immediately prior to such transaction), and/or by any employee benefit plan of the Company or its subsidiaries and their affiliates; or

(iv) a person shall acquire 50% or more of the outstanding voting securities of the Company (whether directly, indirectly, beneficially or of record), unless as a result of such acquisition more than 50% of the outstanding voting securities of the surviving or resulting corporation shall be owned in the aggregate by the stockholders of the Company (as of the time immediately prior to the first acquisition of such securities by such person), and/or by any employee benefit plan of the Company or its subsidiaries, and their affiliates.

Notwithstanding the foregoing, (1) the Administrator may waive the requirement described in paragraph (iv) above that a person must acquire more than 50% of the outstanding voting securities of the Company for a change in control to have occurred if the Administrator determines that the percentage acquired by a person is significant (as determined by the Administrator in its discretion) and that waiving such condition is appropriate in light of all facts and circumstances, and (2) no compensation that has been deferred for purposes of Section 409A of the Code shall be payable as a result of a change in control unless the change in control qualifies as a change in ownership or effective control of the Company within the meaning of Section 409A of the Code.

Certain Federal Tax Consequences

The following summary of the federal income tax consequences of the 2013 Plan transactions is based upon federal income tax laws in effect on ~~http://spherix.com/investors.html.~~the date of this Consent Solicitation Statement. This summary does not purport to be complete, and does not discuss state, local or non-U.S. tax consequences.

Nonqualified Stock Options

. The grant of a nonqualified stock option under the 2013 Plan will not result in any federal income tax consequences to the participant or to the Company. Upon exercise of a nonqualified stock option, the participant will recognize ordinary compensation income equal to the excess of the fair market value of the shares of common stock at the time of exercise over the option exercise price. If ~~you have~~the participant is an employee, this income is subject to withholding for federal income and employment tax purposes. The Company is entitled to an income tax deduction in the amount of the income recognized by the participant, subject to possible limitations imposed by the Code, including Section 162(m) thereof. Any gain or loss on the participant’s subsequent disposition of the shares will be treated as long-term or short-term capital gain or loss, depending on the sales proceeds received and whether the shares are held for more than one year following exercise. The Company does not receive a tax deduction for any ~~questions~~subsequent capital gain.

Incentive Options. The grant of an ISO under the 2013 Plan will not result in any federal income tax consequences to the participant or ~~need assistance voting your~~to the Company. A participant recognizes no federal taxable income upon exercising an ISO (subject to the alternative minimum tax rules discussed below), and the Company receives no deduction at the time of exercise. In the event of a disposition of stock acquired upon exercise of an ISO, the tax consequences depend upon how long the participant has held the shares. If the participant does not dispose of the shares within two years after the ISO was granted, nor within one year after the ISO was exercised, the participant will recognize a long-term capital gain (or loss) equal to the difference between the sale price of the shares and the exercise price. The Company is not entitled to any deduction under these circumstances.

If the participant fails to satisfy either of the foregoing holding periods (referred to as a “disqualifying disposition”), he or she will recognize ordinary compensation income in the year of the disposition. The amount of ordinary compensation income generally is the lesser of (i) the difference between the amount realized on the disposition and the exercise price or (ii) the difference between the fair market value of the stock at the time of exercise and the exercise price. Such amount is not subject to withholding for federal income and employment tax purposes, even if the participant is an employee of the Company. Any gain in excess of the amount taxed as ordinary income will generally be treated as a short-term capital gain. The Company, in the year of the disqualifying disposition, is entitled to a deduction equal to the amount of ordinary compensation income recognized by the participant, subject to possible limitations imposed by the Code, including Section 162(m) thereof.

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The “spread” under an ISO —i.e., the difference between the fair market value of the shares at exercise and the exercise price—is classified as an item of adjustment in the year of exercise for purposes of the alternative minimum tax. If a participant’s alternative minimum tax liability exceeds such participant’s regular income tax liability, the participant will owe the alternative minimum tax liability.

Restricted Stock. Restricted stock is generally taxable to the participant as ordinary compensation income on the date that the restrictions lapse (i.e. the date that the stock vests), in an amount equal to the excess of the fair market value of the shares on such date over the amount paid for such stock (if any). If the participant is an employee, this income is subject to withholding for federal income and employment tax purposes. The Company is entitled to an income tax deduction in the amount of the ordinary income recognized by the participant, subject to possible limitations imposed by the Code, including Section 162(m) thereof. Any gain or loss on the participant’s subsequent disposition of the shares will be treated as long-term or short-term capital gain or loss treatment depending on the sales price and how long the stock has been held since the restrictions lapsed. The Company does not receive a tax deduction for any subsequent gain.

Participants receiving restricted stock awards may make an election under Section 83(b) of the Code (“Section 83(b) Election”) to recognize as ordinary compensation income in the year that such restricted stock is granted, the amount equal to the excess of the fair market value on the date of the issuance of the stock over the amount paid for such stock. If such an election is made, the recipient recognizes no further amounts of compensation income upon the lapse of any restrictions and any gain or loss on subsequent disposition will be long-term or short-term capital gain or loss to the recipient. The Section 83(b) Election must be made within 30 days from the time the restricted stock is issued.

Other Awards. Other awards (such as restricted stock units) are generally treated as ordinary compensation income as and when common stock or cash are paid to the participant upon vesting or settlement of such awards. If the participant is an employee, this income is subject to withholding for income and employment tax purposes. The Company is generally entitled to an income tax deduction equal to the amount of ordinary income recognized by the recipient, subject to possible limitations imposed by the Code, including Section 162(m) thereof.

Section 162(m) of the Internal Revenue Code. Under Code Section 162(m), no deduction is allowed in any taxable year of the Company for compensation in excess of $1 million paid to the Company’s “covered employees.” A “covered employee” is the Company’s chief executive officer and the three other most highly compensated officers of the Company other than the chief financial officer. An exception to this rule applies to “qualified performance based compensation,” which generally includes stock options and stock appreciation rights granted under a stockholder approved plan, and other forms of equity incentives, the vesting or payment of which is contingent upon the satisfaction of certain stockholder approved performance goals. The Company intends that the 2013 Plan allow for the grant of options and stock appreciation rights that may be treated as “qualified performance based compensation” that is exempt from the limitations of Code Section 162(m), and for the grant of other performance-based awards that may be treated as “qualified performance based compensation,” but it makes no assurance that either such type of award will be so treated.

NEW PLAN BENEFITS

SEC rules require us to disclose any amounts that we currently are able to determine will be allocated to our named executive officers, directors and other employees following approval of the 2013 Plan. Set forth below is information on option grants under the 2013 Plan to the Named Executive Officers, all current executive officers as a group, all current directors who are not executive officers as a group, and all employees who are not executive officers as a group. Awards granted under the 2013 Plan will not vest prior to shareholder approval of the 2013 Plan.

Name and Position	Number of Options
Douglas Brown		75,000
Edward Karr		75,000
Harvey Kesner		1,000,000
Robert Vander Zander		75,000
Robert Clayton (resigned on June 28, 2013)		5,000
Executive Group		1,230,000

-45-

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets forth information concerning our equity compensation plans as of December 31, 2012.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)			Weighted average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		7,163	1	$	22.34		2,750	3
Equity compensation plans not approved by securities holders		1,399	2	$	97.27		N/A
Total		8,562					2,750

1. Consists of options to acquire 7,163 shares of our common stock ~~please contact~~issued to our ~~proxy solicitor, Eagle Rock Proxy Advisors LLC, 12 Commerce Drive, Cranford, NJ 07016, by calling toll free 855-816-0624.~~

~~BY ORDER~~key employees and directors.

2. Consists of warrants to purchase 1,399 shares of our common stock issued to our placement agent with respect to the January 2011, October 2011 and February 2012 offerings.

3. Consists of shares of common stock available for future issuance under our equity incentive plan.

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PROPOSAL TO APPROVE AND RATIFY THE RETENTION OF SICHENZIA ROSS FRIEDMAN FERENCE LLP AS SPECIAL COUNSEL TO THE COMPANY AND SUBSIDIARIES AND TO WAIVE ANY POTENTIAL CONFLICT OF INTEREST ARISING FROM OR RELATING TO THE ASSOCIATION OF THE ~~BOARD OF DIRECTORS~~

~~Katherine M. Brailer, Corporate Secretary~~

~~PLEASE EXECUTE~~COMPANY’S CURRENT INTERIM CHIEF EXECUTIVE AND ~~PROMPTLY RETURN THE ENCLOSED PROXY CARD WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING. IF YOU DO ATTEND THE MEETING AND VOTE PERSONALLY, YOUR PROXY WILL AUTOMATICALLY BE REVOKED AT THAT TIME.~~

DIRECTOR WITH SUCH LAW FIRM.

On April 1,

~~PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS~~

~~AUGUST 14,~~ 2013, our board of directors approved Sichenzia Ross Friedman Ference LLP (“SRFF”) to perform services for the Company as counsel after full disclosure of the relationship of such firm with our interim Chief Executive Officer. Harvey Kesner, who has been a member of the Company’s board of directors since November 2012

~~This Proxy Statement~~ and the Company’s interim Chief Executive Officer since February 27, 2013, is ~~being mailed~~a partner of SRFF. The board’s decision was based in part on ~~or about June 18, 2012,~~the alignment between SRFF’s resources and expertise and the Company’s new business focus and experience in similar business ventures. Our board of directors approved the retention of SRFF and determined that no conflict of interest existed as a result of Mr. Kesner’s association with SRFF and was not likely to arise given the nature of the services SRFF would be providing generally as well as the Company’s continued access to, and utilization of, independent outside counsel with long-standing relations with the ~~solicitation~~Company on other matters.

The selection of ~~Proxies~~the Company’s outside legal counsel is not required to be submitted to a vote of our stockholders for ratification. However, we are submitting this matter to the stockholders as a best practices matter in ~~the accompanying form~~order to provide disclosure and seek ratification of such decision by the ~~Board~~stockholders. Even if the retention of ~~Directors~~SRFF is not ratified, the board of ~~Spherix Incorporated,~~directors may, in its discretion, retain SRFF or a Delaware Corporation. The Annual Meeting of its Stockholders will be held on August 14, 2012, at 9:00 a.m. Eastern time, at the Bethesda Marriott Suites, 6711 Democracy Boulevard, Bethesda, Maryland 20817. The cost of solicitation of Proxies will be borne by the Company. The Company will reimburse brokers, banks, and other custodians, nominees, and fiduciaries for reasonable expenses incurred by them in sending Company-supplied Proxy materials to the beneficial owners of the common stock. In addition to solicitations by mail, Directors, Officers, and employees of the Company may solicit Proxies personally or by telegraph or telephone without additional compensation.

All shares represented by Proxy will be voted at the Annual Meeting in accordance with the choices specified on the Proxy, and where no choice is specified, in accordance with the recommendations of the Board of Directors. Thus, where no choice is specified, the Proxies will be voted for the election of Directors, for the authorization to issue securities in one or more non-public offerings, for the amendment of the Amended and Restated 1997 Stock Option Plan, for the amendment to the Company’s Certificate of Incorporation to authorize a reverse stock split, for ratification of the appointment of independent accountants, and for authorization to adjourn the Annual Meeting if necessary or appropriate. A Stockholder giving a Proxy will have the power to revoke itdifferent law firm at any time ~~before it is exercised. A Proxy will~~if they determine that such a change would be ~~revoked automatically if~~in the ~~Stockholder who executed it is present at the Annual Meeting and elects to vote in person.~~

Each Stockholder will be entitled to one vote for each share of common stock, $.01 par value per share (“Common Stock”), held by the Stockholder at the close of business on June 15, 2012. At that time, there were 4,159,776 shares of Common Stock outstanding.

~~In accordance with the laws~~best interests of the State of Delaware and the Company’s Certificate of Incorporation and By-Laws, a majority of the outstanding shares of Common Stock will constitute a quorum at the Annual Meeting. Abstentions and broker non-votes are counted as present and entitled to vote for purposes of determining a quorum for the transaction of business. A broker non-vote occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner. Abstentions and broker non-votes are not counted for purposes of the election of Directors. An abstention will generally be counted as a vote against the approval of any other matter to come before the Annual Meeting. Broker non-votes will not be voted for any other matter scheduled to come before the Annual Meeting.

~~It is anticipated that the Directors and Officers will vote their shares of Common Stock~~ ~~in favor of~~ ~~the Nominees for election to the Board of Directors listed herein;~~ ~~for~~ ~~the authorization to issue securities in one or more non-public offerings;~~ ~~for~~ ~~the amendment of the Amended and Restated 1997 Stock Option Plan;~~ ~~for~~ ~~the amendment to the Company’s Certificate of Incorporation to authorize a reverse stock split;~~ ~~for~~ ~~ratification of the appointment of independent accountants listed herein; and~~ ~~for~~ ~~authorization to adjourn the Annual Meeting if necessary or appropriate.~~Company

~~ELECTION~~

SECURITY OWNERSHIP OF ~~DIRECTORS~~

~~(Item 1 on the Proxy Card)~~

Directors are to be elected at the Annual Meeting to serve until the next Annual Meeting of Stockholders. The Board of Directors has currently fixed the number of Directors at six (6). Unless otherwise instructed, the persons named in the accompanying Proxy intend to vote the shares represented by the Proxy for the election of the six (6) Nominees listed below. Although it is not contemplated that any Nominee will decline or be unable to serve as a Director, in such event, Proxies will be voted by the Proxy holder for such other persons as may be designated by the Board of Directors, unless the Board of Directors reduces the number of Directors to be elected. Election of a Board of Directors requires a plurality of the votes cast at the Meeting.

The current Board of Directors consists of Mr. Douglas T. Brown, Dr. Claire L. Kruger, Dr. Robert A. Lodder, Jr., Mr. Aris Melissaratos, Mr. Thomas B. Peter, and Dr. Robert J. Vander Zanden. The Board of Directors has determined that a majority of its members, being Messrs. Brown, Melissaratos, Peter, and Vander Zanden, are independent Directors within the meaning of the applicable NASD rules.

CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Appendix A

SPHERIX INCORPORATED

2013 EQUITY INCENTIVE PLAN

1.	PURPOSE OF PLAN

1.1 The purpose of this 2013 Equity Incentive Plan (this “Plan”) of Spherix Incorporated, a ~~share of Common Stock and a warrant for~~Delaware corporation (the “Corporation”), is to promote the ~~issuance of up to an additional share of Common Stock) will be equivalent to a discount of 20% below the market price of our Common Stock at the time of issuance;~~

·~~Such offerings will occur, if at all, on or before August 14, 2014; and~~

·~~Such other terms as the board of directors shall deem to be in the best interests~~success of the Corporation and to increase stockholder value by providing an additional means through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons.

2.	ELIGIBILITY

2.1 The Administrator (as such term is defined in Section 3.1) may grant awards under this Plan only to those persons that the Administrator determines to be Eligible Persons. An “Eligible Person” is any person who is either: (a) an officer (whether or not a director) or employee of the Corporation or one of its ~~shareholders, not inconsistent~~Subsidiaries; (b) a director of the Corporation or one of its Subsidiaries; or (c) an individual consultant who renders bona fide services (other than services in connection with the ~~foregoing.~~offering or sale of securities of the Corporation or one of its Subsidiaries in a capital-raising transaction or as a market maker or promoter of securities of the Corporation or one of its Subsidiaries) to the Corporation or one of its Subsidiaries and who is selected to participate in this Plan by the Administrator; provided, however,

~~The issuance~~ that a person who is otherwise an Eligible Person under clause (c) above may participate in this Plan only if such participation would not adversely affect either the Corporation’s eligibility to use Form S-8 to register under the Securities Act of 1933, as amended (the “Securities Act”), the offering and sale of shares ~~of our Common Stock,~~issuable under this Plan by the Corporation, or the Corporation’s compliance with any other applicable laws. An Eligible Person who has been granted an award (a “participant”) may, if otherwise eligible, be granted additional awards if the Administrator shall so determine. As used herein, “Subsidiary” means any corporation or other ~~securities convertible into shares~~entity a majority of ~~our Common Stock, in accordance with any offerings would dilute,~~whose outstanding voting stock or voting power is beneficially owned directly or indirectly by the Corporation; and ~~thereby reduce, each existing shareholder’s proportionate ownership in our Common Stock.~~ “Board” means the Board of Directors of the Corporation.

3.	PLAN ADMINISTRATION

3.1The ~~stockholders do not have preemptive rights~~Administrator. This Plan shall be administered by and all awards under this Plan shall be authorized by the Administrator. The “Administrator” means the Board or one or more committees appointed by the Board or another committee (within its delegated authority) to ~~subscribe to additional shares that~~administer all or certain aspects of this Plan. Any such committee shall be comprised solely of one or more directors or such number of directors as may be ~~issued~~required under applicable law. A committee may delegate some or all of its authority to another committee so constituted. The Board or a committee comprised solely of directors may also delegate, to the extent permitted by ~~the Company in order to maintain their proportionate ownership~~Section 157 of the ~~Common Stock. The board~~Delaware General Corporation Law and any other applicable law, to one or more officers of ~~directors has not yet determined~~ the Corporation, its powers under this Plan (a) to Eligible Persons who will receive grants of awards under this Plan, and (b) to determine the number of shares subject to, and the other terms and conditions of, ~~any offerings. As a result, the level~~such awards. The Board may delegate different levels of ~~potential dilution cannot be determined at~~authority to different committees with administrative and grant authority under this ~~time, but as discussed above, we may not issue more than 10 million shares of Common Stock~~Plan. Unless otherwise provided in the aggregate pursuant to the authority requested from shareholders under this proposal (subject to adjustment for any reverse stock split). It is possible that if we conduct a non-public stock offering, somebylaws of the shares we sell could be purchased by one or more investors who could acquire a large block of our Common Stock. This would concentrate voting power in the hands of a few shareholders who could exercise greater influence on our operationsCorporation or the ~~outcome~~applicable charter of ~~matters put to~~any Administrator: (a) a vote of shareholders in the future. Although we do not anticipate that the issuance of Common Stock pursuant to the offerings will result in a “change in control” (as used in NASDAQ Marketplace Rule 5635), in the event it does, shareholder approvalmajority of the ~~offerings will also constitute approval of any change of control for the purposes of NASDAQ Marketplace Rule 5635 and no additional shareholder approval will be required or sought.~~

~~We cannot determine what the actual net proceeds~~members of the offerings will be until they are completed, but as discussed above, the aggregate dollar amount of the non-public offerings will be no more than $10 million. If all or part of the offerings is completed, the net proceeds will be used for general corporate purposes, including our continuing development efforts and possible acquisitions of other drug candidates or other companies. We currently have no arrangements or understandings regarding any specific transaction with investors, so we cannot predict whether we will be successful should we seek to raise capital through any offerings.

We sought and obtained comparable authority from our Stockholders in 2010 and effected a sale of Company securities in October 2010 based upon this authority. We sought and obtained comparable authority from our Stockholders in late 2011, but did not effect any sales of Company securities pursuant to this authorization, which expired in mid-May 2012.

~~Assuming~~acting Administrator shall constitute a quorum, ~~is present, approval of these prospective securities offerings requires~~and (b) the affirmative vote of a majority of the ~~total votes cast on this matter (in person~~members present assuming the presence of a quorum or ~~by proxy by~~ the ~~shares of Common Stock entitled to vote at the Meeting), in accordance with NASDAQ Marketplace Rule 5635(e)(4).~~

~~THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING “FOR” APPROVAL OF THE AUTHORIZATION TO ISSUE SECURITIES IN ONE OR MORE NON-PUBLIC OFFERINGS IN ACCORDANCE WITH NASDAQ MARKETPLACE RULE 5635.~~

~~AMENDMENT OF AMENDED AND RESTATED 1997 STOCK OPTION PLAN~~

~~(Item 3 on the Proxy Card)~~

~~The Board of Directors recommends that the Stockholders approve an amendment to the Company’s Amended and Restated 1997 Stock Option Plan (the “Plan”).~~

The Plan is designed to promote our success and enhance our value by linking the interests of our Officers, employees and Directors to those of our Stockholders and by providing participants with incentives for performance. The Plan is further intended to provide flexibility in our ability to motivate, attract and retain employees and Directors upon whose judgment, interest and special efforts our business is largely dependent.

The Plan was initially adopted by the Board of Directors in late 1997 and ratified by the Stockholders in May, 1998. The Plan was amended by the Board of Directors and the Stockholders in 2001 to increase the maximum number of shares of Common Stock issuable thereunder. In 2005, the Plan was amended and restated, which included an extensionunanimous written consent of the ~~term of the Plan through December 31, 2010. The Plan has been further extended through December 31, 2015.~~

~~In May 2011, the Company effected a 1 for 10 reverse stock split; all of the numbers of shares of Common Stock below have been restated to reflect this reverse stock split.~~

~~Proposal~~

This amendment of the Plan would increase the maximum number of shares of Common Stock issuable under the Plan from 100,000 shares to 500,000 shares. At present, the Company has no shares available for issuance under the Plan.

The purpose of the Plan is to provide long-term incentives and rewards to relevant individuals, to assist the Company in attracting and retaining individuals with experience and/or ability on a basis competitive with industry practices and to associate the interest of these individuals with those of the Company’s Stockholders by providing for the issuance of stock-based awards (“Awards”). The Company grants Awards to both employees and members of the ~~Board~~Administrator shall constitute due authorization of Directors. Awards are granted to employees to both incent and reward such employees in their pursuits on behalf of the Company. Awards are provided to members of the Board of Directors as a regular component of annual compensation. Stock options, valued at $10,000, are awarded to each non-employee Board member in May of each year; provided, however, that in 2012 the Company did not have sufficient shares available in the Plan to fully compensate the Board members. Accordingly, the Company issued stock options to each non-employee director with a value of $4,278 instead of the $10,000 in stock options as required under its directors’ compensation plan. In such an event, each of the non-employee directors will receive $5,722 of options valued at the date the Stockholders approve the amendment to the Plan. Assuming the Company’s stock price is $0.75 per share at that time, the non-employee directors will be awarded stock options under the Plan as follows:

Name and Position

Dollar Value

Number of Shares

Douglas T. Brown

$
5,722

7,629

Aris Melissaratos

$
5,722

7,629

Thomas B. Peter

$
5,722

7,629

Robert J. Vander Zanden

$
5,722

7,629

All Non-Employee Directors

$
22,888

30,516

If the Stockholders approve this amendment, the Company will award the remaining stock options. If the Stockholders do not approve the amendment, the Company will satisfy this obligation to its Directors in cash.

~~The amendment of the Plan must be approved~~action by the ~~holders~~acting Administrator.

With respect to awards intended to satisfy the requirements for performance-based compensation under Section 162(m) of ~~at least a majority of the outstanding shares of the Company’s Common Stock present, or represented by proxy, and entitled to vote at the annual meeting.~~

Following below is a description of the Plan, as amended. The only material difference between the existing Plan and the amended Plan, assuming it is approved by our Stockholders, is the number of shares available for issuance under the Plan. This description is qualified in its entirety by the terms of the amended Plan, a copy of which is attached to this Proxy Statement as Appendix A and is incorporated herein by reference.

~~Administration~~

The Plan is generally administered by the Compensation Committee. The Compensation Committee has the power to determine the select employees of the Company to whom Awards shall be made (the “Select Employees”). The Plan confirms that the Committee will generally grant Awards to Select Employees following achievement of pre-established performance goals and objectives, although some grants may be made as reward for exemplary performance outside of any pre-established objectives. The Board of Directors also has the power to determine and administer Awards to the Directors.

Each Award under the Plan is made pursuant to a written agreement between the Company and the recipient of the Award (the “Agreement”). In administering the Plan, the Compensation Committee/Board of Directors has the express power, subject to the provisions of the Plan, to determine the terms and conditions upon which Awards may be made and exercised and to determine the terms and provisions of each Agreement.

The members of the Compensation Committee are indemnified by the Company against the reasonable expenses incurred by them, including attorneys’ fees, in the defense of any action, suit or proceeding, or any appeal therein to which they may be a party by reasons of any action taken or failure to act under the Plan.

Subject to the terms, conditions and limitations of the Plan, the Compensation Committee/Board of Directors may modify, extend or renew outstanding Awards, or, if authorized by the Board of Directors, accept the surrender of outstanding Awards and authorize new Awards in substitution therefor, but may not substitute Awards with lower exercise prices than the surrendered Awards. The Compensation Committee/Board of Directors may also modify any outstanding Agreement, provided that no modification may adversely affect the rights or obligations of the recipient without the consent of the recipient.

~~The Board may terminate, amend or modify the Plan from time to time in any respect without Stockholder approval, unless the particular amendment or modification requires Stockholder approval under~~ the Internal Revenue Code of 1986, as amended (the ~~“Code”~~“Code”), or the rules and regulations of the exchange or system on which the Common Stock is listed or reported or pursuant to any other applicable laws, rules or regulations. Currently the Code and regulations governing ISOs (as herein defined) require Stockholder approval of any amendments which would (i) materially increase the benefits accruing to participants, (ii) materially increase the number of securities which may be issued or (iii) materially modify the requirements as to eligibility for participation.

~~The~~this Plan ~~expires on December 31, 2015.~~

~~Eligibility~~

Employees of the Company and its subsidiaries who are deemed to be Select Employees by the Committee or Directors selected by the Board are eligible for Awards under the Plan. Select Employees include Officers or other employees of the Company and its subsidiaries who, in the opinion of the Committee, contribute significantly to the growth and profitability of, or perform services of major importance to, the Company and its subsidiaries. Unless specified below in the description of the particular Awards available under the Plan or in the Plan itself, the prices, expiration dates, consideration to be received by the Company, and other terms of each Agreement shall be ~~determined~~administered by ~~the Committee/Board. Awards to the Directors are likely to be made on an annual basis to supplement cash compensation paid to the Directors.~~

~~Types~~a committee consisting solely of ~~Awards~~

The Plan allows the award of stock options and shares of stock (including but not limited to restricted stock). Stock options granted under the Plan may be either incentive stock options qualifying under Section 422 of the Code (an “ISO”) or non-qualified stock options (a “NQSO”).

~~Stock Options~~

The Plan authorizes the grant of ISOs and NQSOs (collectively, “Options”). The terms applicable to such Options will be determined by the Committee/Board, but an Option generally will not be exercisable after ten years from its grant. All Options granted as ISOs shall comply with all applicable provisions of the Code and all other 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~~

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, no 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 onetwo 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 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 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 (or, in certain circumstances, at the time such shares became either transferable or not subject to a substantial risk of forfeiture). If, however, such dispositionoutside directors (as this requirement 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 (or, in certain circumstances, at the time they became either transferable or not subject to substantial risk of forfeiture) 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~~applied 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).

Code); 16

~~Equity Compensation Plan Information~~

~~The following table provides information as of May 15, 2012 with respect to the shares of our Common Stock that may be issued under our existing equity compensation plans.~~

Plan Category

(a)
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights

(b)
Weighted average exercise
price of outstanding
options, warrants and
rights

(c)
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))

Equity compensation plans approved by security holders

83,621
(1)
$
4.11

0

Equity compensation plans not approved by security holders

60,728
(2)
$
3.20

N/A

Total

144,349

N/A

~~(1)~~Consists of options to acquire 71,021 shares of our Common Stock issued to our key employees and Directors; and warrants to purchase 12,600 shares of our Common Stock issued to our placement agent in connection with the October 2010 offering. On August 31, 2010, our stockholders provided, ~~the Board of Directors the authority to issue securities which led to the October 2010 offering.~~however,

~~(2)Consists of warrants to purchase 60,728 shares of our Common Stock issued to our placement agent with respect to the January 2011, October 2011 and February 2012 offerings.~~

~~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 of the Plan.

~~THE BOARD OF DIRECTORS RECOMMENDS A VOTE~~ ~~FOR~~ ~~AMENDMENT OF THE AMENDED AND RESTATED 1997 STOCK OPTION PLAN~~

~~APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF~~

~~INCORPORATION, AS AMENDED, OF SPHERIX INCORPORATED~~

~~TO AUTHORIZE A REVERSE STOCK SPLIT~~

~~(Item 4 on the Proxy Card)~~

The Company’s Board of Directors has adopted a resolution approving and recommending to the Company’s Stockholders for their approval an amendment to the Company’s Certificate of Incorporation, as amended, accomplishing a reverse stock split of its Common Stock at a ratio within a range of 1:5 to 1:20 and a reduction in the number of authorized shares of Common Stock at a corresponding ratio. If the Company’s Stockholders approve this proposal, the Board of Directors will have the authority to decide, within eighteen (18) months from the Annual Meeting, whether to implement the reverse stock split and the precise ratio of the reverse stock split within a range of 1:5 to 1:20. If the Board of Directors decides to implement the reverse stock split, it will become effective upon the filing of the amendment to the Company’s Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware. If the reverse stock split is implemented, the number of issued and outstanding shares of Common Stock and the total number of authorized shares of Common Stock will be reduced in accordance with the ratio designated by the Board of Directors.

Except for adjustments that may result from the treatment of fractional shares as described below, each Stockholder will hold the same percentage of Common Stock outstanding immediately following the reverse stock split as that Stockholder held immediately before the reverse stock split.

~~The form of the Certificate of Amendment to accomplish the reverse stock split is attached to this proxy statement as~~ ~~Appendix B~~~~. The following discussion is qualified in its entirety by the full text of the Certificate of Amendment, which is hereby incorporated by reference.~~

~~Background~~

The Company’s Common Stock is currently listed on The NASDAQ Capital Market. In April 2012, NASDAQ initiated a process to delist the Company’s stock because the Company’s stock price dropped below the minimum $1.00 per share requirement for continued inclusion on NASDAQ. NASDAQ has advised that the Company has until October 12, 2012, to regain compliance with the minimum price rule or its Common Stock could be delisted from the NASDAQ Capital Market.

The Board of Directors is seeking authority to implement a reverse stock split in the event the Company’s stock price does not rebound in excess of $1.00 per share. The authority sought by the Board of Directors is consistent with the authority granted by the Stockholders at the November 17, 2009 Annual Meeting, which resulted in a 1 for 10 reverse stock split in May 2011.

~~Purpose of the Reverse Stock Split~~

The Board of Directors’ primary objective in proposing the reverse stock split is to raise the per share trading price of the Company’s Common Stock to regain compliance with the NASDAQ $1.00 bid price listing standard. In this event, the Board believes that a higher price per share would better enable the Company to maintain the listing of its Common Stock on NASDAQ. In addition, the Board believes that the reverse stock split could (i) better facilitate higher levels of institutional stock ownership, where investment policies generally prohibit investments in lower-priced securities and (ii) better enable the Company to raise funds to finance its planned operations.

If a delisting from NASDAQ were to occur, the Common Stock would then trade on the OTC Bulletin Board or in the “pink sheets.” The alternative markets are generally considered to be less efficient than, and not as broad as, the NASDAQ Capital Market. The Board has considered the potential harm to the Company of a delisting from NASDAQ and believes that a reverse stock split would help the Company regain compliance with NASDAQ’s minimum bid price listing standard.

However, there can be no assurance that a reverse stock split, if implemented, will have the desired effect of proportionately raising our Common Stock price over the long term, or at all. The effect of a reverse stock split upon the market price of our Common Stock cannot be predicted with any certainty, and the history of similar stock splits for companies in similar circumstances is varied. While the Company’s May 2011 reverse stock split resulted in an increase in the Company’s stock price and allowed the Company to regain compliance with NASDAQ’s $1.00

~~minimum bid price listing standard, the stock price increase was temporary and the stock price has now fallen below the $1.00 minimum price standard.~~

Under applicable NASDAQ rules, in order to regain compliance with the $1.00 minimum bid price requirement and maintain our listing on NASDAQ, the $1.00 bid price must be maintained for a minimum of ten (10) consecutive business days. However, under NASDAQ rules, NASDAQ may, in its discretion, require us to maintain a bid price of at least $1.00 per share for a period in excess of ten (10) consecutive business days, but generally no more than twenty (20) consecutive business days, before determining that we have demonstrated an ability to maintain long-term compliance with the minimum bid price requirement. Accordingly, we cannot assure you that we will be able to maintain our NASDAQ listing after a reverse stock split is effected or that the market price per share after the reverse stock split will exceed or remain in excess of the $1.00 minimum bid price for a sustained period of time. The market price of our Common Stock may vary based on other factors which are unrelated to the number of shares outstanding, including our future performance. We also cannot assure you that our Common Stock will not be delisted due to a failure to ~~meet other continued listing requirements even if after the reverse stock split the market price per share of our Common Stock remains in excess of $1.00.~~

The Board further believes that an increased stock price may encourage investor interest and improve the marketability of our Common Stock to a broader range of investors, thus enhancing its liquidity. Because of the trading volatility often associated with low-priced stocks, many brokerage firms and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. Some of these policies and practices pertain to the payment of brokers’ commissions and to time-consuming procedures that function to make the handling of lower-priced stocks unattractive to brokers from an economic standpoint. Additionally, because brokers’ commissions on lower-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current share price of the Common Stock results in an individual Stockholder paying transaction costs that represent a higher percentage of total share value than would be the case if our share price were substantially higher. This factor may also limit the willingness of institutions to purchase our stock. The Board believes that the anticipated higher market price resulting from a reverse stock split would better enable institutional investors and brokerage firms withsatisfy such ~~policies and practices to invest in our Common Stock.~~

Furthermore, the Board believes that a reverse stock split, if implemented, could facilitate future efforts by the Company to raise capital. As previously disclosed in the Company’s periodic reports filed with the SEC, the Company will need to raise additional capital and will likely elect to do so through the issuance of equity securities. If we are delisted from NASDAQ, we will be ineligible to use SEC Form S-3 to register additional shares of our Common Stock either for issuance by the Company or for resale by others. This will make it more difficult and more expensive for us to register any additional securities, which may adversely affect our ability to raise additional funds.

The purpose of seeking Stockholder approval in the range of exchange ratios from 1:5 to 1:20 (rather than a fixed exchange ratio) is to provide the Board of Directors with the flexibility to achieve the desired results of the reverse stock split. If the Stockholders approve this proposal, the Board would effect a reverse stock split only upon its determination that a reverse stock split would be in the best interests of the Company at that time. If the Board were to effect a reverse stock split, the Board would set the timing for such a split and select the specific ratio within the range of 1:5 to 1:20. No further action on the part of Stockholders would be required to either implement or abandon the reverse stock split. If the Stockholders approve the proposal, and the Board determines to effect the reverse stock split, we would communicate to the public, prior to the effective date, additional details regarding the reverse stock split, including the specific ratio selected by the Board of Directors. If the Board does not implement the reverse stock split within eighteen (18) months from the Annual Meeting, the authority granted in this proposal to implement the reverse stock split will terminate. The Board of Directors reserves its right to elect not to proceed with the reverse stock split if it determines, in its sole discretion, that this proposal is no longer in the best interests of the Company.

~~Determination of Reverse Stock Split Ratio~~

~~In determining the range of reverse stock split ratios listed herein, the Board of Directors considered numerous factors, including:~~

·~~the historical and projected performance of our Common Stock and volume level before and after the reverse stock split;~~

·~~prevailing market conditions;~~

·~~general economic and other related conditions prevailing in our industry and in the marketplace generally;~~

·~~the projected impact of the reverse stock split ratio on trading liquidity in our Common Stock and our ability to continue our Common Stock’s listing on NASDAQ;~~

·~~our capitalization (including the number of shares of our Common Stock issued and outstanding);~~

·~~the prevailing trading price for our Common Stock and the volume level thereof; and~~

·~~potential devaluation of our market capitalization as a result of a reverse stock split.~~

~~The Board of Directors will further consider these issues when it determines the precise reverse stock split ratio.~~

~~Effects of Reverse Stock Split~~

A reverse stock split refers to a reduction in the number of outstanding shares of a class of a corporation’s capital stock, which may be accomplished, as in this case, by reclassifying and combining all of our outstanding shares of Common Stock into a proportionately smaller number of shares. For example, if the reverse stock split is approved by our Stockholders and the Board of Directors elects a 1-for-10 reverse stock split, a Stockholder holding 10,000 shares of our Common Stock before the reverse stock split would hold 1,000 shares of our Common Stock immediately after the reverse stock split. Each Stockholder’s proportionate ownership of our outstanding shares of Common Stock would remain the same, except that Stockholders who would otherwise receive fractional shares as a result of the reverse stock split will receive cash payments for such fractional share. All shares of our Common Stock will remain fully paid and non-assessable.

The primary purpose of the proposed reverse stock split of our Common Stock is to combine the issued and outstanding shares of our Common Stock into a smaller number of shares so that the shares of our Common Stock will trade at a higher price per share than recent trading prices. Although we expect that the reverse stock split will result in an increase in the market price of our Common Stock, the reverse stock split may not increase the market price of our Common Stock in proportion to the reduction in the number of shares of our Common Stock outstanding or result in the permanent increase in the market price, which is dependent upon many factors, including the Company’s performance, prospects and other factors detailed from time to time in our reports filed with the SEC. The history of similar reverse stock splits for companies in like circumstances is varied. If the reverse stock split is accomplished and the market price of our Common Stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of a reverse stock split.

Our Common Stock is currently registered under Section 12(b) of the Exchange Act, and the Company is subject to the periodic reporting and other requirements of the Exchange Act. The proposed reverse stock split willrequirement shall not affect the ~~registration~~validity of the ~~Common Stock under~~action of any committee otherwise duly authorized and acting in the ~~Exchange Act. If the proposed reverse stock split is implemented, the Common Stock will continue~~matter. Award grants, and transactions in or involving awards, intended to be ~~reported on the Nasdaq Capital Market~~exempt under ~~the symbol “SPEX” (although Nasdaq would likely add the letter “D” to the end of the trading symbol for a period of 20 trading days to indicate that the reverse stock split has occurred).~~

~~Effect on Outstanding Options and Rights Agreement~~

The reverse stock split, when implemented, will affect the outstanding options to purchase our Common Stock. Our equity incentive plan includes provisions for appropriate adjustments to the number of shares of Common Stock covered by the plan and by stock options and other grants of stock-based awards under the plan, as well as the per share exercise prices. If our Stockholders approve the reverse stock split, an outstanding stock option to purchase one share of our Common Stock would thereafter evidence the right to purchase a fraction of a share of our Common Stock consistent with the reverse stock split ratio designated by the Board of Directors (rounding any fractional shares up to the nearest whole share), and the exercise price per share would be a corresponding multiple of the previous exercise price (rounded down to the nearest cent). For example, if we effect a 1-for-10 reverse stock

split, a pre-split option for 210 shares of Common Stock with an exercise price of $3.00 per share would be converted post-split into an option to purchase 21 shares of Common Stock with an exercise price of $30.00 per share. Further, the number of shares of our Common Stock reserved for issuance under the plan will be reduced by the same ratio.

In addition the purchase price per share under our Rights Agreement dated February 2001 shall be adjusted to equal the result obtained by multiplying the purchase price immediately prior to implementing the reverse split (currently $160.00 per share) by the corresponding multiple.

~~Effect on Authorized and Outstanding Shares and Shares Subject to Options~~

Currently, we are authorized to issue up to a total of 50,000,000 shares of Common Stock, of which 4,159,776 shares were outstanding as of May 10, 2012. Immediately following the effectiveness of the proposed amendment to our Certificate of Incorporation, as amended, the total authorized number of shares of Common Stock will be reduced consistent with the reverse stock split ratio designated by the Board of Directors.

The following table contains approximate information relating to the outstanding shares of Common Stock under various of the proposed reverse stock split ratios, without giving effect to any adjustments for fractional shares of our Common Stock (in thousands):

Pre-Reverse Split

1-for-5

1-for-10

1-for-20

Authorized

50,000

10,000

5,000

2,500

Outstanding (May 10, 2012)

4,160

832

416

208

Reserved for future issuance pursuant to outstanding stock options (May 10, 2012)

—

—

—

—

Currently we are authorized to issue up to a total of 2,000,000 shares of preferred stock, only one of which is issued and outstanding, and 500,000 of which have been reserved for issuance in connection with our stockholders’ rights agreement. The proposed amendment to our Certificate of Incorporation, as amended, will not impact the total authorized number of shares of preferred stock.

~~No Fractional Shares~~

No fractional shares of Common Stock will be issued in connection with the reverse stock split. If, as a result of the reverse stock split, a Stockholder of record would otherwise hold a fractional share, the Stockholder will receive a cash payment equal to the fraction multiplied by the closing sales price of our Common Stock as reported on the NASDAQ Capital Market as of the effective date of the reverse stock split. No transaction costs will be assessed to Stockholders for the cash payment. Stockholders will not be entitled to receive interest for the period of time between the effective date of the reverse stock split and the date payment is made for fractional shares.

After the reverse stock split, then current Stockholders will have no further interest in the Company with respect to fractional shares. Such Stockholders will only be entitled to receive the cash payment described above. Such cash payments may reduce the number of post-split Stockholders; however, this is not the purpose of the reverse stock split.

Stockholders should be aware that under the escheat laws of the relevant jurisdictions, cash payments not timely claimed after the effective date of the reverse stock split may be required to be paid to designated agents for the relevant jurisdictions.

~~Effect on Par Value~~

~~The proposed amendment to our Certificate of Incorporation, as amended, will not change the par value of our Common Stock, $0.01 per share.~~

~~Accounting Matters~~

Our stated capital, which consists of the par value per share of our Common Stock multiplied by the aggregate number of shares of our Common Stock issued and outstanding, will be reduced on the effective date of the reverse stock split. Correspondingly, our additional paid-in capital, which consists of the difference between our stated capital and the aggregate amount paid to us upon the issuance of all currently outstanding shares of our Common Stock, will be increased by a number equal to the decrease in stated capital. Further, net earnings/loss per share and book value per share will be increased as a result of the reverse stock split because there will be fewer shares of Common Stock outstanding.

~~Implementation of Reverse Stock Split; Certificate of Amendment~~

If our Stockholders approve the reverse stock split, the Board will be authorized but will not be required to proceed with the reverse stock split. In determining whether to proceed with the reverse stock split, the Board will consider a number of factors, including market conditions, existing and expected trading prices of the Company’s Common Stock, the NASDAQ requirements, the Company’s additional funding requirements and the amount of the Company’s authorized but unissued Common Stock. If the Board of Directors decides to effect the reverse stock split, it will designate the reverse stock split ratio within the designated range of 1:5 to 1:20. The Certificate of Amendment attached as ~~Appendix B~~ ~~to this proxy statement will become effective when it is filed with the Secretary of State of the State of Delaware.~~

Notwithstanding approval of the reverse stock split by the Stockholders, our Board of Directors may, in its sole discretion, abandon the proposed amendment and determine prior to the effectiveness of any filing with the Secretary of State of the State of Delaware not to effect the reverse stock split. If the Board fails to implement the amendments prior to the eighteen month anniversary of this Annual Meeting, Stockholder approval again would be required prior to implementing any subsequent reverse stock split.

~~Possible Disadvantages of Reverse Stock Split~~

Even though the Board of Directors believes that the potential advantages of a reverse stock split outweigh any disadvantages that might result, the following are some of the possible disadvantages of a reverse stock split:

·~~The reduced number of outstanding shares of our Common Stock resulting from a reverse stock split could adversely affect the liquidity of our Common Stock.~~

·A reverse stock split could result in a significant devaluation of the Company’s market capitalization and the trading price of our Common Stock, on an actual or an as-adjusted basis, based on the experience of other companies that have accomplished reverse stock splits.

·A reverse stock split may leave certain Stockholders with one or more “odd lots,” which are stock holdings in amounts of fewer than 100 shares of our Common Stock. These odd lots may be more difficult to sell than shares of Common Stock in even multiples of 100. Additionally, any reduction in brokerage commissions resulting from the reverse stock split, as discussed above, may be offset, in whole or in part, by increased brokerage commissions required to be paid by Stockholders selling odd lots created by the reverse stock split.

·There can be no assurance that the market price per new share of our Common Stock after the reverse stock split will remain unchanged or increase in proportion to the reduction in the number of old shares of our Common Stock outstanding before the reverse stock split. For example, if the Board of Directors designates a 1-for-10 reverse stock split ratio when the market price of our stock is $0.70 per share, there can be no assurance that the post-split market price of our Common Stock would be $7.00 per share or greater.

·The total market capitalization of our Common Stock after the proposed reverse stock split may be lower than the total market capitalization before the proposed reverse stock split and, in the future, the market price of our Common Stock following the reverse stock split may not exceed or remain higher than the market price prior to the proposed reverse stock split.

·The amendment to our Certificate of Incorporation, as amended, will reduce the number of authorized shares of Common Stock, and thereby reduce the number of shares we may issue in the future to fund operations.

Although the Company’s Board of Directors believes that a higher stock price may help generate investor interest, there can be no assurance that the reverse stock split will result in a per share price that will attract institutional investors or investment funds or that such share price will satisfy the investing guidelines of institutional investors or investment funds. As a result, the trading liquidity of our Common Stock may not necessarily improve.

~~Effect on Beneficial Holders of Common Stock~~

If the reverse stock split is effected, Stockholders holding certificated shares will be required to exchange their stock certificates for new book entry shares (“New Book-Entry Shares”) representing the appropriate number of shares of our Common Stock resulting from the reverse stock split. Stockholders of record on the effective date will be furnished the necessary materials and instructions for the surrender and exchange of share certificates at the appropriate time by our transfer agent. Stockholders will not have to pay any transfer fee or other fee in connection with such exchange. As soon as practicable after the effective date, the transfer agent will send a letter of transmittal to each Stockholder advising such holder of the procedure for surrendering certificates representing the number of shares of our Common Stock prior to the reverse stock split (“Old Stock Certificates”) in exchange for New Book-Entry shares representing the number of shares of our Common Stock resulting from the reverse stock split. As soon as practicable after the surrender to the transfer agent of any Old Stock Certificate, together with a duly executed letter of transmittal and any other documents the transfer agent may specify, the transfer agent will deliver to the person in whose name such Old Stock Certificate has been issued New Book-Entry Shares registered in the name of such person.

Until surrender as contemplated herein, each Old Stock Certificate shall be deemed at and after the effective date to represent the number of full shares of our Common Stock resulting from the reverse stock split. Until they have surrendered their Old Stock Certificates for exchange, Stockholders will not be entitled to receive any dividends or other distributions, if any, that may be declared and payable to holders of record.

Any Stockholder whose Old Stock Certificate has been lost, destroyed or stolen will be entitled to New Book-Entry Shares only after complying with the requirements that we and the transfer agent customarily apply in connection with lost, stolen or destroyed certificates.

No service charges, brokerage commissions or transfer taxes shall be payable by any holder of any Old Stock Certificate, except that if any New Book-Entry Shares are to be issued in a name other than that in which the Old Stock Certificates are registered, it will be a condition of such issuance that (1) the person requesting such issuance must pay to us any applicable transfer taxes or establish to our satisfaction that such taxes have been paid or are not payable, (2) the transfer complies with all applicable federal and state securities laws, and (3) the surrendered certificate is properly endorsed and otherwise in proper form for transfer.

Stockholders who hold uncertificated shares, either as direct or beneficial owners, will have their holdings electronically adjusted by our transfer agent (and, for beneficial owners, by their brokers or banks that hold in “street name” for their benefit, as the case may be) to give effect to the reverse stock split.

Upon the reverse stock split, the Company intends to treat shares of Common Stock held by Stockholders in “street name,” that is, through a bank, broker or other nominee, in the same manner as Stockholders whose shares of Common Stock are registered in their names. Banks, brokers or other nominees will be instructed to effect the reverse stock split for their beneficial holders holding the Common Stock in “street name.” However, these banks, brokers or other nominees may have different procedures than registered Stockholders for processing the reverse stock split. If a Stockholder holds shares of Common Stock with a bank, broker or other nominee and has any questions in this regard, the Stockholder is encouraged to contact the Stockholder’s bank, broker or other nominee.

~~Stockholders should not destroy any stock certificate(s) and should not submit any stock certificate(s) until requested to do so.~~

~~NASDAQ Capital Market~~

The Company’s Common Stock is currently listed on the NASDAQ Capital Market. NASDAQ requires that listed issuers continuously comply with certain continued listing standards. Even if the reverse stock split causes our stock price to exceed the $1.00 minimum price requirement, there is no assurance that we will continually comply with this or any of the other NASDAQ continued listing standards.

One of the requirements for continued listing on the NASDAQ Capital Market is maintaining stockholders’ equity of not less than $2.5 million. As of March 31, 2012, the Company’s stockholders’ equity was approximately $4.6 million. Given the Company’s ongoing costs of its commercialization plans for its products, unless the Company is successful in raising additional equity, it is expected that at some point the Company’s stockholders’ equity will decrease below $2.5 million. Such action will likely result in a NASDAQ delisting action.

~~Federal Income Tax Consequences~~

The following summary of the federal income tax consequences of a reverse stock split is based on current law, including the Internal Revenue Code of 1986, as amended, and is for general information only. The tax treatment of a Stockholder may vary depending upon the particular facts and circumstances of such Stockholder, and the discussion below may not address all the tax consequences for a particular Stockholder. For example, foreign, state and local tax consequences are not discussed below. Accordingly, notwithstanding anything to the contrary, each Stockholder should consult his, her or its tax advisor to determine the particular tax consequences to him, her or it of a reverse stock split, including the application and effect of federal, state, local and/or foreign income tax and other laws.

Generally, a reverse stock split will not result in the recognition of gain or loss for federal income tax purposes (except to the extent of cash received in lieu of a fractional share). The adjusted basis of the new shares of Common Stock will be the same as the adjusted basis of old shares of Common Stock exchanged for such new shares of Common Stock, reduced by the amount of adjusted basis allocated to the fractional share for which cash is received. The holding period of the new, post-split shares of Common Stock resulting from implementation of the reverse stock split will include the Stockholder’s respective holding period for the pre-split shares of Common Stock exchanged for the new shares of Common Stock. A Stockholder who receives cash in lieu of a fractional share generally will recognize taxable gain or loss equal to the difference, if any, between the amount of cash received and the portion of the adjusted basis in the shares of old Common Stock allocated to the fractional share. If the shares of old Common Stock allocated to the fractional share were held as a capital asset, the gain or loss generally will be taxed as capital gain or loss. Such capital gain or loss will be short term if the pre-reverse stock split shares were held for one year or less and long term if held more than one year.

~~No Dissenters’ Rights~~

The holders of shares of Common Stock will have no dissenters’ rights of appraisal under Delaware law, our Certificate of Incorporation, as amended, or our Bylaws with respect to the Certificate of Amendment effectuating a reverse stock split.

~~Approval Required~~

The affirmative vote of a majority of the shares of Common Stock of the Company outstanding on the record date is required to approve an amendment to the Company’s Certificate of Incorporation, as amended, to accomplish a reverse stock split of the Company’s Common Stock . Abstentions and “broker non-votes” will not be counted as having been voted on the proposal, and therefore will have the same effect as negative votes.

~~THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE~~ ~~FOR~~ ~~PROPOSAL 4.~~

~~RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS~~

~~(Item 5 on the Proxy Card)~~

The Board of Directors has reappointed the firm of Grant Thornton LLP to be the Company’s independent accountants for the year 2012 and recommends that Stockholders vote “FOR” ratification of that appointment. A representative from Grant Thornton LLP will attend the Annual Meeting, will have the opportunity to make a statement if he or she desires to do so, and will be available to answer questions. If the Stockholders, by the affirmative vote of a majority of the shares of Common Stock represented at the Meeting, do not ratify the selection of Grant Thornton LLP, the selection of independent accountants will be reconsidered by the Board of Directors.

~~THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING “FOR” RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS INDEPENDENT ACCOUNTANTS.~~

~~ADJOURNMENT~~

~~(Item 6 On The Proxy Card)~~

At the Annual Meeting, we may ask our stockholders to vote on a proposal to adjourn the Annual Meeting if necessary or appropriate in the sole discretion of our Board of Directors, including to solicit additional proxies in the event that there are not sufficient votes at the time of the Annual Meeting or any adjournment or postponement of the Annual Meeting to approve any of the other proposals.

If at the Annual Meeting the number of shares of our Common Stock present or represented by proxy and voting in favor of a proposal is insufficient to approve such proposal, then our Board of Directors may hold a vote on each proposal that has garnered sufficient votes, if any, and then move to adjourn the Annual Meeting as to the remaining proposals in order to solicit additional proxies in favor of those remaining proposals.

Alternatively, even if there are sufficient shares of our Common Stock present or represented by proxy voting in favor of all of the proposals, our Board of Directors may hold a vote on the adjournment proposal if, in its sole discretion, it determines that it is necessary or appropriate for any reason to adjourn the Annual Meeting to a later date and time. In that event, the Company will ask its stockholders to vote only upon the adjournment proposal and not any other proposal.

Any adjournment may be made without notice (if the adjournment is not for more than thirty days and a new record date is not fixed for the adjourned meeting), other than by an announcement made at the Annual Meeting of the time, date and place of the adjourned meeting.

~~Any adjournment of the Annual Meeting will allow our stockholders who have already sent in their proxies to revoke them at any time prior to their use at the Annual Meeting as adjourned.~~

If we adjourn the Annual Meeting to a later date, we will transact the same business and, unless we must fix a new record date, only the stockholders who were eligible to vote at the original meeting will be permitted to vote at the adjourned meeting.

~~THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING “FOR” AUTHORIZATION TO ADJOURN THE ANNUAL MEETING IF NECESSARY OR APPROPRIATE.~~

~~OTHER BUSINESS~~

~~(Item 7 on the Proxy Card)~~

As of the date of this statement, the management of Spherix Incorporated has no knowledge of any business that may be presented for consideration at the Annual Meeting, other than that described above. As to other business, if any, that may properly come before the Annual Meeting, or any adjournment thereof, it is intended that the Proxy hereby solicited will be voted in respect of such business in accordance with the judgment of the Proxy holders.

~~STOCKHOLDER PROPOSALS~~

Stockholders intending to present a proposal at the 2013 Annual Meeting of Stockholders must submit such proposals to the Company at Spherix Incorporated, ATTN: K. Brailer, Corporate Secretary, 6430 Rockledge Drive, Suite 503, Bethesda, MD 20817, no later than December 31, 2012. The Company’s by-laws provide that any Stockholder wishing to nominate a Director must do so in writing delivered to the Corporate Secretary of the Company at least ten (10) days and not more than thirty (30) days prior to the Annual Meeting. For further details, please see the discussion under Item One hereof.

~~BY ORDER OF THE BOARD OF DIRECTORS,~~

~~Katherine M. Brailer, Corporate Secretary~~

~~APPENDIX A~~

~~AMENDED AND RESTATED~~

~~1997 STOCK PLAN~~

~~(AS AMENDED 2012)~~

~~ARTICLE 1~~

~~Establishment, Purpose and Duration~~

~~1.1Establishment of the Plan~~. Spherix Incorporated hereby establishes a stock plan to be known as the “Amended and Restated 1997 Stock 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 on November 17, 1997, and was subsequently approved by the Stockholders of the Company in accordance with applicable law. In 2001, the Plan was amended by action of the Board of Directors and the Stockholders to increase the maximum number of shares issuable under the Plan. On February 17, 2005, the Board of Directors amended and restated the Plan, and the Stockholders subsequently provided approval. In 2012, the Board of Directors further amended the Plan, subject to Stockholder approval. Awards may be granted prior to Stockholder approval of the Plan, subject to the approval of the Plan by the Stockholders.

~~1.2Purpose of the Plan~~. The purpose of the Plan is to promote the success of the Company and its Subsidiaries by providing incentives to Select Employees and Directors that will promote the identification of their personal interest with the long-term financial success of the Company and 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.

~~1.3Duration of the Plan~~. The Plan shall remain in effect, subject to the right of the Board of Directors to terminate the Plan at any time pursuant to Article 10 hereof, until December 31, 2015 (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 accordance with their terms.

~~ARTICLE 2~~

~~Definitions~~

~~2.1Definitions. Except as otherwise defined in the Plan, the following terms shall have the meanings set forth below:~~

~~(a) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in~~ Rule ~~12b-2~~16b-3 under the Securities Exchange Act of 1934, as amended (the ~~“Exchange Act”~~“Exchange Act”).

~~(b) “Agreement” means~~, must be duly and timely authorized by the Board or a ~~written agreement implementing~~committee consisting solely of two or more non-employee directors (as this requirement is applied under Rule 16b-3 promulgated under the ~~grant~~Exchange Act). To the extent required by any applicable stock exchange, this Plan shall be administered by a committee composed entirely of ~~each Award signed by an authorized officer~~independent directors (within the meaning of the ~~Company~~applicable stock exchange). Awards granted to non-employee directors shall not be subject to the discretion of any officer or employee of the Corporation and shall be administered exclusively by a committee consisting solely of independent directors.

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3.2Powers of the ~~Participant.~~

Administrator. Subject to the express provisions of this Plan, the Administrator is authorized and empowered to do all things necessary or desirable in connection with the authorization of awards and the administration of this Plan (in the case of a committee or delegation to one or more officers, within the authority delegated to that committee or person(s)), including, without limitation, the authority to:

(a) determine eligibility and, from among those persons determined to be eligible, the particular Eligible Persons who will receive awards under this Plan;

(b) grant awards to Eligible Persons, determine the price at which securities will be offered or awarded and the number of securities to be offered or awarded to any of such persons, determine the other specific terms and conditions of such awards consistent with the express limits of this Plan, establish the installments (if any) in which such awards shall become exercisable or shall vest (which may include, without limitation, performance and/or time-based schedules), or determine that no delayed exercisability or vesting is required, establish any applicable performance targets, and establish the events of termination or reversion of such awards;

(c) ~~“Award” means, individually~~approve the forms of award agreements (which need not be identical either as to type of award or ~~collectively, a grant~~among participants);

(d) construe and interpret this Plan and any agreements defining the rights and obligations of the Corporation, its Subsidiaries, and participants under this Plan, further define the terms used in this Plan, and prescribe, amend and rescind rules and regulations relating to the administration of ~~Incentive~~this Plan or the awards granted under this Plan;

(e) cancel, modify, or waive the Corporation’s rights with respect to, or modify, discontinue, suspend, or terminate any or all outstanding awards, subject to any required consent under Section 8.6.5;

(f) accelerate or extend the vesting or exercisability or extend the term of any or all such outstanding awards (in the case of options or stock appreciation rights, within the maximum ten-year term of such awards) in such circumstances as the Administrator may deem appropriate (including, without limitation, in connection with a termination of employment or services or other events of a personal nature) subject to any required consent under Section 8.6.5;

(g) adjust the number of shares of Common Stock ~~Options, Non-Qualified Stock Options~~subject to any award, adjust the price of any or ~~Stock (including~~all outstanding awards or otherwise change previously imposed terms and conditions, in such circumstances as the Administrator may deem appropriate, in each case subject to compliance with applicable stock exchange requirements, Sections 4 and 8.6 and the applicable requirements of Code Section 162(m) and treasury regulations thereunder with respect to awards that are intended to satisfy the requirements for performance-based compensation under Section 162(m), and provided that in no case (except due to an adjustment contemplated by Section 7 or any repricing that may be approved by stockholders) shall such an adjustment constitute a repricing (by amendment, cancellation and regrant, exchange or other means) of the per share exercise or base price of any stock option or stock appreciation right or other award granted under this Plan, and further provided that any adjustment or change in terms made pursuant to this Section 3.2(g) shall be made in a manner that, in the good faith determination of the Administrator will not likely result in the imposition of additional taxes or interest under Section 409A of the Code;

(h) determine the date of grant of an award, which may be a designated date after but not ~~limited to Restricted Stock).~~

~~(d) “Award Date” or “Grant Date” means~~before the date ~~on which an Award is made~~of the Administrator’s action (unless otherwise designated by the ~~Committee~~Administrator, the date of grant of an award shall be the date upon which the Administrator took the action granting an award);

(i) determine whether, and the extent to which, adjustments are required pursuant to Section 7 hereof and authorize the termination, conversion, substitution, acceleration or succession of awards upon the occurrence of an event of the type described in Section 7;

(j) acquire or settle (subject to Sections 7 and 8.6) rights under awards in cash, stock of equivalent value, or other consideration; and

(k) determine the Fair Market Value (as defined in Section 5.6) of the Common Stock or awards under this ~~Plan.~~

~~(e) “Beneficial Owner”~~Plan from time to time and/or the manner in which such value will be determined.

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3.3Binding Determinations. Any action taken by, or inaction of, the Corporation, any Subsidiary, or the Administrator relating or pursuant to this Plan and within its authority hereunder or under applicable law shall ~~have~~be within the ~~meaning ascribed~~absolute discretion of that entity or body and shall be conclusive and binding upon all persons. Neither the Board, the Administrator, nor any Board committee, nor any member thereof or person acting at the direction thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with this Plan (or any award made under this Plan), and all such persons shall be entitled to indemnification and reimbursement by the Corporation in respect of any claim, loss, damage or expense (including, without limitation, legal fees) arising or resulting therefrom to the fullest extent permitted by law and/or under any directors and officers liability insurance coverage that may be in effect from time to time.

3.4Reliance on Experts. In making any determination or in taking or not taking any action under this Plan, the Administrator may obtain and may rely upon the advice of experts, including professional advisors to the Corporation. The Administrator shall not be liable for any such action or determination taken or made or omitted in good faith based upon such advice.

3.5Delegation of Non-Discretionary Functions. In addition to the ability to delegate certain grant authority to officers of the Corporation as set forth in Section 3.1, the Administrator may also delegate ministerial, non-discretionary functions to individuals who are officers or employees of the Corporation or any of its Subsidiaries or to third parties.

4.	SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMIT

4.1Shares Available. Subject to the provisions of Section 7.1, the capital stock available for issuance under this Plan shall be shares of the Corporation’s authorized but unissued Common Stock. For purposes of this Plan, “Common Stock” shall mean the common stock of the Corporation and such other securities or property as may become the subject of awards under this Plan, or may become subject to such ~~term~~awards, pursuant to an adjustment made under Section 7.1.

4.2Share Limit. The maximum number of shares of Common Stock that may be delivered pursuant to awards granted to Eligible Persons under this Plan may not exceed 2,800,000 shares of Common Stock (the “Share Limit”).

The foregoing Share Limit is subject to adjustment as contemplated by Section 4.3, Section 7.1, and Section 8.10.

4.3Awards Settled in ~~Rule 13d-3~~Cash, Reissue of Awards and Shares. The Administrator may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments in accordance with this Section 4.3. Shares shall be counted against those reserved to the extent such shares have been delivered and are no longer subject to a substantial risk of forfeiture. Accordingly, (i) to the extent that an award under the ~~Exchange Act.~~

~~(f) “Board”~~Plan, in whole or ~~“Board~~in part, is canceled, expired, forfeited, settled in cash, settled by delivery of ~~Directors” means~~fewer shares than the ~~Board~~number of ~~Directors~~shares underlying the award, or otherwise terminated without delivery of shares to the participant, the shares retained by or returned to the Corporation will not be deemed to have been delivered under the Plan and will be deemed to remain or to become available under this Plan; and (ii) shares that are withheld from such an award or separately surrendered by the participant in payment of the ~~Company.~~

~~(g) “Change in Control”~~exercise price or taxes relating to such an award shall be deemed to ~~have occurred if~~constitute shares not delivered and will be deemed to remain or to become available under the ~~conditions set forth in~~Plan. The foregoing adjustments to the Share Limit of this Plan are subject to any ~~one~~applicable limitations under Section 162(m) of the ~~following paragraphs shall have been satisfied:~~

~~(1)~~the acquisition by any Person of beneficial ownership (within the meaning 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 then outstanding voting 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 Karen M. 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 (C) of Subsection (3) of this Section 2.1(g) are satisfied; or

~~(2)~~Individuals who, as of the date 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 though such individual were a member of the Incumbent Board (with his predecessor thereafter ceasing to be a member); or

~~(3)~~Approval by the Stockholders of the Company of the reorganization, merger, or consolidation of the Company unless, following such reorganization, merger, or consolidation, (A) more than 60% of the then outstanding Shares and the then outstanding voting securities of the resulting corporation is then beneficially owned by all or substantially all of the beneficial owners, respectively, of the Stock and Outstanding Voting Securities immediately prior to such reorganization, merger, or consolidation, (B) no Person (excluding (I) the Company, (II) any employee benefit plan (or related trust) of the Company or such corporation resulting from such reorganization, merger, or consolidation, and (III) any Person beneficially owning, immediately prior to such reorganization, merger, or consolidation, 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 the resulting corporation, and (C) at least a majority 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 corporationCode with respect to ~~which, following~~awards intended as performance-based compensation thereunder.

4.4Reservation of Shares; No Fractional Shares. The Corporation shall at all times reserve a number of shares of Common Stock sufficient to cover the Corporation’s obligations and contingent obligations to deliver shares with respect to awards then outstanding under this Plan (exclusive of any dividend equivalent obligations to the extent the Corporation has the right to settle such ~~sale~~rights in cash). No fractional shares shall be delivered under this Plan. The Administrator may pay cash in lieu of any fractional shares in settlements of awards under this Plan.

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AWARDS

5.1Type and Form of Awards. The Administrator shall determine the type or types of award(s) to be made to each selected Eligible Person. Awards may be granted singly, in combination or in tandem. Awards also may be made in combination or in tandem with, in replacement of, as alternatives to, or as the payment form for grants or rights under any other ~~disposition, (I) more than 60%~~employee or compensation plan of the ~~outstanding~~Corporation or one of its Subsidiaries. The types of awards that may be granted under this Plan are:

5.1.1Stock Options. A stock option is the grant of a right to purchase a specified number of 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~~Common 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 leastduring 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.~~

(i) “Committee” means the Compensation Committee of the Board as long as such Compensation Committee is composed solely of at least two (2) non-employee Directors; in the 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.~~

(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 valuespecified period 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~~Administrator. An option ~~to purchase Stock, granted under Article 6 herein, which is designated~~may be intended as an incentive stock option ~~and is intended to meet~~within the ~~requirements~~meaning of Section 422 of the ~~Code.~~

~~(n) “Non-Qualified Stock Option”~~Code (an “ISO”) or ~~“NQSO” means~~a nonqualified stock option (an option not intended to be an ISO). The award agreement for an option will indicate if the option is intended as an ISO; otherwise it will be deemed to ~~purchase~~be a nonqualified stock option. The maximum term of each option (ISO or nonqualified) shall be ten (10) years. The per share exercise price for each option shall be not less than 100% of the Fair Market Value of a share of Common Stock ~~granted~~on the date of grant of the option. When an option is exercised, the exercise price for the shares to be purchased shall be paid in full in cash or such other method permitted by the Administrator consistent with Section 5.5.

5.1.2Additional Rules Applicable to ISOs. To the extent that the aggregate Fair Market Value (determined at the time of grant of the applicable option) of stock with respect to which ISOs first become exercisable by a participant in any calendar year exceeds $100,000, taking into account both Common Stock subject to ISOs under ~~Article 6 herein, which is not an Incentive Stock Option.~~

~~(o) “Option” means an Incentive Stock Option~~this Plan and stock subject to ISOs under all other plans of the Corporation or ~~a Non-Qualified Stock Option.~~

~~(p) “Participant” means a Select Employee~~one of its Subsidiaries (or any parent or ~~Director who receives an Award under~~predecessor corporation to the ~~Plan.~~

~~(q) “Person” shall have~~extent required by and within the meaning ~~ascribed to such term in~~of Section ~~3(a)(9)~~422 of the ~~Exchange Act~~Code and ~~used~~the regulations promulgated thereunder), such options shall be treated as nonqualified stock options. In reducing the number of options treated as ISOs to meet the $100,000 limit, the most recently granted options shall be reduced first. To the extent a reduction of simultaneously granted options is necessary to meet the $100,000 limit, the Administrator may, in ~~Sections 13(d)~~the manner and ~~14(d) thereof, including a “group”~~to the extent permitted by law, designate which shares of Common Stock are to be treated as shares acquired pursuant to the exercise of an ISO. ISOs may only be granted to employees of the Corporation or one of its subsidiaries (for this purpose, the term “subsidiary” is used as defined in Section ~~13(d).~~

~~(r) “Plan” means the 1997 Amended and Restated Stock 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~~424(f) of the ~~Company or its Subsidiaries, who, in the opinion~~Code, which generally requires an unbroken chain of ~~the Committee, can contribute significantly to the growth and profitability~~ownership 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~~ at least 50% of the total combined voting power of all classes of ~~capital~~ stock of ~~which is owned by~~each subsidiary in the ~~Company, either directly or through one or more of its Subsidiaries.~~

~~ARTICLE 3~~

~~Administration~~

~~3.1The Committee~~chain beginning with the Corporation and ending with the subsidiary in question). ~~Subject to the Board’s right to retain administration of the Plan, the Plan~~There shall be ~~administered by the Committee which shall have all powers necessary or desirable for~~imposed in any award agreement relating to ISOs 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 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,~~as 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 incurredare required 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 500,000. 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.~~

~~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,~~order that the ~~aggregate Fair Market Value (determined at the time the Award~~option be an “incentive stock option” as that term 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~~defined in Section 422 of the ~~Code and rules and regulations thereunder.~~

~~6.2Option Agreement. Each Option grant shall~~Code. No ISO may 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 Non-Qualified Stock Option 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 granted to ~~an employee~~any person who, at the time ~~of grant,~~the option is granted, owns ~~(within the meaning of~~(or is deemed to own under Section ~~425(d)~~424(d) of the Code) shares of outstanding Common Stock possessing more than 10% of the total combined voting power of all classes of ~~Stock~~stock of the ~~Company, shall have an Option~~Corporation, unless the exercise price ~~which~~of such option is at least ~~equal to~~ 110% of the Fair Market Value of the ~~Stock.~~stock subject to the option and such option by its terms is not exercisable after the expiration of five years from the date such option is granted.

~~6.4~~ 5.1.3 ~~Duration~~Stock Appreciation Rights. A stock appreciation right or “SAR” is a right to receive a payment, in cash and/or Common Stock, equal to the number of ~~Options~~shares of Common Stock being exercised multiplied by the excess of (i) the Fair Market Value of a share of Common Stock on the date the SAR is exercised, over (ii) the Fair Market Value of a share of Common Stock on the date the SAR was granted as specified in the applicable award agreement (the “base price”). ~~Each Option shall expire at such time as the Committee/Board shall determine at the time~~The maximum term of ~~grant; provided, however, that (i) no ISO~~a SAR shall be ~~exercisable later than the tenth (10th) anniversary date~~ten (10) years.

5.1.4Restricted Shares.

(a) Restrictions. Restricted shares are shares 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)~~Common 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 on transferability, risk of forfeiture and ~~conditions~~other restrictions, if any, as the ~~Committee/Board shall~~Administrator may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise, as the Administrator may 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, 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~~grant 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 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 onlythereafter. Except to the extent restricted under the terms of this Plan and ~~for~~ the ~~periods specified herein.~~applicable award agreement relating to the restricted stock, a participant granted restricted stock shall have all of the rights of a shareholder, including the right to vote the restricted stock and the right to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Administrator).

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~~ARTICLE 7~~

~~Stock/~~

(b) Certificates for Shares. 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 therefor, 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~~this 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~~Administrator shall determine. If certificates representing restricted 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~~are registered in the name of the ~~Participant and shall~~participant, the Administrator may require that such certificates bear an appropriate legend ~~(as determined by the Committee/Board)~~ referring to the terms, conditions and restrictions applicable to such ~~Restricted Stock.~~restricted stock, that the Corporation retain physical possession of the certificates, and that the participant deliver a stock power to the Corporation, endorsed in blank, relating to the restricted stock. The Administrator may require that restricted shares are held in escrow until all restrictions lapse

~~7.4~~(c) Dividends and Splits. As a condition to the grant of an award of restricted stock, subject to applicable law, the Administrator may require or permit a participant to elect that any cash dividends paid on a share of restricted stock b~~Other Rights~~.e automatically reinvested in additional shares of restricted stock or applied to the purchase of additional awards under this Plan. Unless otherwise determined by the ~~Committee/Board, during~~Administrator, stock distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the restricted stock with respect to which such stock or other property has been distributed.

5.1.5 Restricted Share Units.

(a) Grant of Restricted Share Units. A restricted share unit, or “RSU”, represents the right to receive from the Corporation on the respective scheduled vesting or payment date for such RSU, one Common Share. An award of RSUs may be subject to the attainment of specified performance goals or targets, forfeitability provisions and such other terms and conditions as the Administrator may determine, subject to the provisions of this Plan. At the time an award of RSUs is made, the Administrator shall establish a period of ~~restriction, Participants holding shares~~time during which the restricted share units shall vest and the timing for settlement of ~~Restricted Stock granted hereunder~~the RSU.

(b) Dividend Equivalent Accounts. Subject to the terms and conditions of the Plan and the applicable award agreement, as well as any procedures established by the Administrator, prior to the expiration of the applicable vesting period of an RSU, the Administrator may ~~exercise full voting~~determine to pay dividend equivalent rights with respect to ~~those shares~~RSUs, in which case, the Corporation shall establish an account for the participant and ~~shall be entitled to receive all dividends and~~reflect in that account any securities, cash or other ~~distributions paid~~property comprising any dividend or ~~made~~property distribution 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~~Common Stock underlying each RSU. Each amount or other property credited to any such ~~dividends or distributions are paid in shares of Stock, the shares~~account shall be subject to the same ~~restrictions on transferability~~vesting conditions as the ~~shares~~RSU to which it relates. The participant shall have the right to be paid the amounts or other property credited to such account upon vesting of ~~Restricted Stock~~the subject RSU.

(c) Rights as a Shareholder. Subject to the restrictions imposed under the terms and conditions of this Plan and the applicable award agreement, each participant receiving RSUs shall have no rights as a shareholder with respect to ~~which they were paid.~~

~~7.5Forfeiture~~.such RSUs until such time as shares of Common Stock are issued to the participant. No shares of Common Stock shall be issued at the time a RSU is granted, and the Company will not be required to set aside a fund for the payment of any such award. Except as otherwise provided in the applicable award agreement, shares of Common Stock issuable under an RSU shall be treated as issued on the first date that the holder of the RSU is no longer subject to a substantial risk of forfeiture as determined for purposes of Section 409A of the Code, and the holder shall be the owner of such shares of Common Stock on such date. An award agreement may provide that issuance of shares of Common Stock under an RSU may be deferred beyond the first date that the RSU is no longer subject to a substantial risk of forfeiture, provided that such deferral is structured in a manner that is intended to comply with the requirements of Section 409A of the Code.

5.1.6Cash Awards. The Administrator may, from time to time, subject to the provisions of the Plan and such other terms and conditions as it may determine, grant cash bonuses (including without limitation, discretionary awards, awards based on objective or subjective performance criteria, awards subject to other vesting criteria or awards granted consistent with Section 5.2 below). Cash awards shall be awarded in such amount and at such times during the term of the Plan as the Administrator shall determine.

5.1.7Other Awards. The other types of awards that may be granted under this Plan include: (a) stock bonuses, performance stock, performance units, dividend equivalents, or similar rights to purchase or acquire shares, whether at a fixed or variable price or ratio related to the Common Stock (subject to the requirements of Section 5.1.1 and in compliance with applicable laws), upon the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or any combination thereof; or (b) any similar securities with a value derived from the value of or related to the Common Stock and/or returns thereon.

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5.2Section 162(m) Performance-Based Awards. Without limiting the generality of the foregoing, any of the types of awards listed in Sections 5.1.4 through 5.1.7 above may be, and options and SARs granted with an exercise or base price not less than the Fair Market Value of a share of Common Stock at the date of grant (“Qualifying Options” and “Qualifying SARs,” respectively) typically will be, granted as awards intended to satisfy the requirements for “performance-based compensation” within the meaning of Section 162(m) of the Code (“Performance-Based Awards”). The grant, vesting, exercisability or payment of Performance-Based Awards may depend (or, in the case of Qualifying Options or Qualifying SARs, may also depend) on the degree of achievement of one or more performance goals relative to a pre-established targeted level or levels using the Business Criteria provided for below for the Corporation on a consolidated basis or for one or more of the Corporation’s subsidiaries, segments, divisions or business units, or any combination of the foregoing. Such criteria may be evaluated on an absolute basis or relative to prior periods, industry peers, or stock market indices. Any Qualifying Option or Qualifying SAR shall be subject to the requirements of Section 5.2.1 and 5.2.3 in order for such award to satisfy the requirements for “performance-based compensation” under Section 162(m) of the Code. Any other Performance-Based Award shall be subject to all of the following provisions of this Section 5.2.

5.2.1Class; Administrator. The eligible class of persons for Performance-Based Awards under this Section 5.2 shall be officers and employees of the Corporation or one of its Subsidiaries. The Administrator approving Performance-Based Awards or making any certification required pursuant to Section 5.2.4 must be constituted as provided in Section 3.1 for awards that are intended as performance-based compensation under Section 162(m) of the Code.

5.2.2Performance Goals. The specific performance goals for Performance-Based Awards (other than Qualifying Options and Qualifying SARs) shall be, on an absolute or relative basis, established based on such business criteria as selected by the Administrator in its sole discretion (“Business Criteria”), including the following: (1) earnings per share, (2) cash flow (which means cash and cash equivalents derived from either (i) net cash flow from operations or (ii) net cash flow from operations, financing and investing activities), (3) total stockholder return, (4) price per share of Common Stock, (5) gross revenue, (6) revenue growth, (7) operating income (before or after taxes), (8) net earnings (before or after interest, taxes, depreciation and/or amortization), (9) return on equity, (10) capital employed, or on assets or on net investment, (11) cost containment or reduction, (12) cash cost per ounce of production, (13) operating margin, (14) debt reduction, (15) resource amounts, (16) production or production growth, (17) resource replacement or resource growth, (18) successful completion of financings, or (19) any combination of the foregoing. To qualify awards as performance-based under Section 162(m), the applicable Business Criterion (or Business Criteria, as the case may be) and specific performance goal or goals (“targets”) must be established and approved by the Administrator during the first 90 days of the performance period (and, in the case of performance periods of less than one year, in no event after 25% or more of the performance period has elapsed) and while performance relating to such target(s) remains substantially uncertain within the meaning of Section 162(m) of the Code. Performance targets shall be adjusted to mitigate the unbudgeted impact of material, unusual or nonrecurring gains and losses, accounting changes or other extraordinary events not foreseen at the time the targets were set unless the Administrator provides otherwise at the time of establishing the targets; provided that the Administrator may not make any adjustment to the extent it would adversely affect the qualification of any compensation payable under such performance targets as “performance-based compensation” under Section 162(m) of Code. The applicable performance measurement period may not be less than 3 months nor more than 10 years.

5.2.3Form of Payment. Grants or awards intended to qualify under this Section 5.2 may be paid in cash or shares of Common Stock or any combination thereof.

5.2.4Certification of Payment. Before any Performance-Based Award under this Section 5.2 (other than Qualifying Options and Qualifying SARs) is paid and to the extent required to qualify the award as performance-based compensation within the meaning of Section 162(m) of the Code, the Administrator must certify in writing that the performance target(s) and any other material terms of the Performance-Based Award were in fact timely satisfied.

5.2.5Reservation of Discretion. The Administrator will have the discretion to determine the restrictions or other limitations of the individual awards granted under this Section 5.2 including the authority to reduce awards, payouts or vesting or to pay no awards, in its sole discretion, if the Administrator preserves such authority at the time of grant by language to this effect in its authorizing resolutions or otherwise.

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5.2.6Expiration of Grant Authority. As required pursuant to Section 162(m) of the Code and the regulations promulgated thereunder, the Administrator’s authority to grant new awards that are intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code (other than Qualifying Options and Qualifying SARs) shall terminate upon the first meeting of the Corporation’s stockholders that occurs in the fifth year following the year in which the Corporation’s stockholders first approve this Plan (the “162(m) Term”).

5.2.7Compensation Limitations. The maximum aggregate number of shares of Common Stock that may be issued to any Eligible Person during the term of this Plan pursuant to Qualifying Options and Qualifying SARs may not exceed 2,800,000 shares of Common Stock. The maximum aggregate number of shares of Common Stock that may be issued to any Eligible Person pursuant to Performance-Based Awards granted during the 162(m) Term (other than cash awards granted pursuant to Section 5.1.6 and Qualifying Options or Qualifying SARs) may not exceed 2,000,000 shares of Common Stock. The maximum amount that may be paid to any Eligible Person pursuant to Performance-Based Awards granted pursuant to Sections 5.1.6 (cash awards) during the 162(m) Term may not exceed $1,000,000.

5.3Award Agreements. Each award shall be evidenced by a written or electronic award agreement in the form approved by the Administrator and, if required by the Administrator, executed by the recipient of the award. The Administrator may authorize any officer of the Corporation (other than the particular award recipient) to execute any or all award agreements on behalf of the Corporation (electronically or otherwise). The award agreement shall set forth the material terms and conditions of the award as established by the Administrator consistent with the express limitations of this Plan.

5.4Deferrals and Settlements. Payment of awards may be in the form of cash, Common Stock, other awards or combinations thereof as the Administrator shall determine, and with such restrictions as it may impose. The Administrator may also require or permit participants to elect to defer the issuance of shares of Common Stock or the settlement of awards in cash under such rules and procedures as it may establish under this Plan. The Administrator may also provide that deferred settlements include the payment or crediting of interest or other earnings on the deferral amounts, or the payment or crediting of dividend equivalents where the deferred amounts are denominated in shares. All mandatory or elective deferrals of the issuance of shares of Common Stock or the settlement of cash awards shall be structured in a manner that is intended to comply with the requirements of Section 409A of the Code.

5.5Consideration for Common Stock or Awards. The purchase price for any award granted under this Plan or the Common Stock to be delivered pursuant to an award, as applicable, may be paid by means of any lawful consideration as determined by the ~~Committee/~~Administrator and subject to compliance with applicable laws, including, without limitation, one or a combination of the following methods:

●

services rendered by the recipient of such award;

●

cash, check payable to the order of the Corporation, or electronic funds transfer;

●

notice and third party payment in such manner as may be authorized by the Administrator;

●

the delivery of previously owned shares of Common Stock that are fully vested and unencumbered;

●

by a reduction in the number of shares otherwise deliverable pursuant to the award; or

●

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In the event that the Administrator allows a participant to exercise an award by delivering shares of Common Stock previously owned by such participant and unless otherwise expressly provided by the Administrator, any shares delivered which were initially acquired by the participant from the Corporation (upon exercise of a stock option or otherwise) must have been owned by the participant at least six months as of the date of delivery (or such other period as may be required by the Administrator in order to avoid adverse accounting treatment). Shares of Common Stock used to satisfy the exercise price of an option shall be valued at their Fair Market Value on the date of exercise. The Corporation will not be obligated to deliver any shares unless and until it receives full payment of the exercise or purchase price therefor and any related withholding obligations under Section 8.5 and any other conditions to exercise or purchase, as established from time to time by the Administrator, have been satisfied. Unless otherwise expressly provided in the applicable award agreement, the Administrator may at any time eliminate or limit a participant’s ability to pay the purchase or exercise price of any award by any method other than cash payment to the Corporation.

5.6Definition of Fair Market Value. For purposes of this Plan “Fair Market Value” shall mean, unless otherwise determined or provided by the Administrator in the circumstances, the closing price for a share of Common Stock on the trading day immediately before the grant date, as furnished by the NASDAQ Stock Market or other principal stock exchange on which the Common Stock is then listed for the date in question, or if the Common Stock is no longer listed on a principal stock exchange, then by the Over-the-Counter Bulletin Board ~~upon~~or OTC Markets . If the Common Stock is no longer listed on the NASDAQ Capital Market or listed on a principal stock exchange or is no longer actively traded on the Over-the-Counter Bulletin Board or OTC Markets as of the applicable date, the Fair Market Value of the Common Stock shall be the value as reasonably determined by the Administrator for purposes of the award in the circumstances.

5.7Transfer Restrictions.

5.7.1Limitations on Exercise and Transfer. Unless otherwise expressly provided in (or pursuant to) this Section 5.7, by applicable law and by the award agreement, as the same may be amended, (a) all awards are non-transferable and shall not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge; (b) awards shall be exercised only by the participant; and (c) amounts payable or shares issuable pursuant to any award shall be delivered only to (or for the account of) the participant.

5.7.2Exceptions. The Administrator may permit awards to be exercised by and paid to, or otherwise transferred to, other persons or entities pursuant to such conditions and procedures, including limitations on subsequent transfers, as the Administrator may, in its sole discretion, establish in writing (provided that any such transfers of ISOs shall be limited to the extent permitted under the federal tax laws governing ISOs). Any permitted transfer shall be subject to compliance with applicable federal and state securities laws.

5.7.3Further Exceptions to Limits on Transfer. The exercise and transfer restrictions in Section 5.7.1 shall not apply to:

(a) transfers to the Corporation,

(b) the designation of a beneficiary to receive benefits in the event of the participant’s death or, if the participant has died, transfers to or exercise by the participant’s beneficiary, or, in the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution,

(c) subject to any applicable limitations on ISOs, transfers to a family member (or former family member) pursuant to a domestic relations order if approved or ratified by the Administrator,

(d) subject to any applicable limitations on ISOs, if the participant has suffered a disability, permitted transfers or exercises on behalf of the participant by his or her legal representative, or

(e) the authorization by the Administrator of “cashless exercise” procedures with third parties who provide financing for the purpose of (or who otherwise facilitate) the exercise of awards consistent with applicable laws and the express authorization of the Administrator.

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5.8 International Awards. One or more awards may be granted to Eligible Persons who provide services to the Corporation or one of its Subsidiaries outside of the United States. Any awards granted to such persons may, if deemed necessary or advisable by the Administrator, be granted pursuant to the terms and conditions of any applicable sub-plans, if any, appended to this Plan and approved by the Administrator.

5.9Vesting. Subject to Section 5.1.2 hereof, awards shall vest at such time or times and subject to such terms and conditions as shall be determined by the Administrator at the time of grant; provided, however, that in the absence of any award vesting periods designated by the Administrator at the time of grant in the applicable award agreement, awards shall vest as to one-third of the total number of shares subject to the award on each of the first, second and third anniversaries of the date of grant.

6.	EFFECT OF TERMINATION OF SERVICE ON AWARDS

6.1Termination of Employment.

6.1.1 The Administrator shall establish the effect of a termination of employment or service on the rights and benefits under each award under this Plan and in so doing may make distinctions based upon, inter alia, the cause of termination and type of award. If the participant is not an employee of the Corporation or one of its Subsidiaries and provides other services to the Corporation or one of its Subsidiaries, the Administrator shall be the sole judge for purposes of this Plan (unless a contract or the award agreement otherwise provides) of whether the participant continues to render services to the Corporation or one of its Subsidiaries and the date, if any, upon which such services shall be deemed to have terminated.

6.1.2 For awards of stock options or SARs, unless the award agreement provides otherwise, the exercise period of such options or SARs shall expire: (1) three months after the last day that the participant is employed by or provides services to the Corporation or a Subsidiary (provided; however, that in the event of the participant’s death during this period, those persons entitled to exercise the option or SAR pursuant to the laws of descent and distribution shall have one year following the date of death within which to exercise such option or SAR); (2) in the case of a ~~Participant with~~participant whose termination of employment is due to death or disability (as defined in the applicable award agreement), 12 months after the last day that the participant is employed by or provides services to the Corporation or a Subsidiary; and (3) immediately upon a participant’s termination for “cause”. The Administrator will, in its absolute discretion, determine the effect of all matters and questions relating to a termination of employment, including, but not by way of limitation, the question of whether a leave of absence constitutes a termination of employment and whether a participant’s termination is for “cause.”

If not defined in the applicable award agreement, “Cause” shall mean:

(i) conviction of a felony or a crime involving fraud or moral turpitude; or

(ii) theft, material act of dishonesty or fraud, intentional falsification of any employment or Company records, or commission of any criminal act which impairs participant’s ability to perform appropriate employment duties for the Corporation; or

(iii) intentional or reckless conduct or gross negligence materially harmful to the Company ~~(as determined under criteria established by~~or 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~~successor to the ~~Company.~~

~~ARTICLE 8~~

~~Change in Control~~

~~The Committee/Board, as constituted before~~Corporation after a Change in Control , including violation of a non-competition or confidentiality agreement; or

(iv) willful failure to follow lawful instructions of the person or body to which participant reports; or

(v) gross negligence or willful misconduct in the performance of participant’s assigned duties. Cause shall not include mere unsatisfactory performance in the achievement of participant’s job objectives.

6.1.3 For awards of restricted shares, unless the award agreement provides otherwise, restricted shares that are subject to restrictions at the time that a participant whose employment or service is terminated shall be forfeited and reacquired by the Corporation; provided that, the Administrator may provide, by rule or regulation or in any award agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to restricted shares shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Administrator may in other cases waive in whole or in part the forfeiture of restricted shares. Similar rules shall apply in respect of RSUs.

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6.2Events Not Deemed Terminations of Service. Unless the express policy of the Corporation or one of its ~~sole discretion~~Subsidiaries, or the Administrator, otherwise provides, the employment relationship shall not be considered terminated in the case of (a) sick leave, (b) military leave, or (c) any other leave of absence authorized by the Corporation or one of its Subsidiaries, or the Administrator; provided that unless reemployment upon the expiration of such leave is guaranteed by contract or law, such leave is for a period of not more than 3 months. In the case of any employee of the Corporation or one of its Subsidiaries on an approved leave of absence, continued vesting of the award while on leave from the employ of the Corporation or one of its Subsidiaries may be suspended until the employee returns to service, unless the Administrator otherwise provides or applicable law otherwise requires. In no event shall an award be exercised after the expiration of the term set forth in the award agreement.

6.3Effect of Change of Subsidiary Status. For purposes of this Plan and any award, if an entity ceases to be a Subsidiary of the Corporation, a termination of employment or service shall be deemed to have occurred with respect to each Eligible Person in respect of such Subsidiary who does not continue as an Eligible Person in respect of another entity within the Corporation or another Subsidiary that continues as such after giving effect to the transaction or other event giving rise to the change in status.

7. ADJUSTMENTS; ACCELERATION

7.1Adjustments. Upon or in contemplation of any of the following events described in this Section 7.1,: any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend) or reverse stock split (“stock split”); any merger, arrangement, combination, consolidation, or other reorganization; any spin-off, split-up, or similar extraordinary dividend distribution in respect of the Common Stock (whether in the form of securities or property); any exchange of Common Stock or other securities of the Corporation, or any similar, unusual or extraordinary corporate transaction in respect of the Common Stock; then the Administrator shall in such manner, to such extent and at such time as it deems appropriate and equitable in the circumstances (but subject to compliance with applicable laws and stock exchange requirements) proportionately adjust any or all of (1) the number and type of shares of Common Stock (or other securities) that thereafter may be made the subject of awards (including the number of shares provided for in this Plan), (2) the number, amount and type of shares of Common Stock (or other securities or property) subject to any or all outstanding awards, (3) the grant, purchase, or exercise price (which term includes the base price of any SAR or similar right) of any or all outstanding awards, (4) the securities, cash or other property deliverable upon exercise or payment of any outstanding awards, and (5) the 162(m) compensation limitations set forth in Section 5.2.7 and (subject to Section 8.8.3(a)) the performance standards applicable to any outstanding ~~Award, either at~~awards (provided that no adjustment shall be allowed to the ~~time~~extent inconsistent with the ~~Award is~~requirements of Code section 162(m)). Any adjustment made ~~or any time thereafter, take any one or more~~pursuant to this Section 7.1 shall be made in a manner that, in the good faith determination of the ~~following actions with~~Administrator, will not likely result in the imposition of additional taxes or interest under Section 409A of the Code. With respect to ~~a Change in Control: (i) provide for~~any award of an ISO, the ~~acceleration of any time periods relating to the exercise or realization of any such Award so that such Award~~Administrator 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 upon the exercise of such Award or realization of such Participant’s rights had such Award been currently exercisable or payable; (iii) make such an adjustment that causes the option to ~~any such Award then outstanding~~cease to qualify 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.

~~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 therefor, 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,~~ISO without the consent of the ~~Participant, adversely affect~~affected participant.

7.2Change in Control. Upon a Change in Control, each then-outstanding option and SAR shall automatically become fully vested, all restricted shares then outstanding shall automatically fully vest free of restrictions, and each other award granted under this Plan that is then outstanding shall automatically become vested and payable to the ~~rights~~holder of such award unless the Administrator has made appropriate provision for the substitution, assumption, exchange or ~~obligations~~other continuation of the ~~Participant.~~

~~ARTICLE 10~~

~~Amendment, Modification~~award pursuant to the Change in Control. Notwithstanding the foregoing, the Administrator, in its sole and ~~Termination~~absolute discretion, may choose (in an award agreement or otherwise) to provide for full or partial accelerated vesting of any award upon a Change In Control (or upon any other event or other circumstance related to the Change in Control, such as an involuntary termination of employment occurring after such Change in Control, as the Administrator may determine), irrespective of whether such any such award has been substituted, assumed, exchanged or otherwise continued pursuant to the Change in Control.

For purposes of this Plan, “Change in Control” shall be deemed to have occurred if:

(i) a tender offer (or series of related offers) shall be made and consummated for the ownership of 50% or more 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~~outstanding voting securities 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 orCorporation, unless as a result of ~~this Plan.~~

~~11.2Stock Withholding. With respect to withholding required upon~~such tender offer more than 50% of the ~~exercise~~outstanding voting securities of ~~Non-Qualified Stock Options~~the surviving or resulting corporation shall be owned in the ~~Award~~aggregate by the stockholders of ~~Stock, or upon~~ the ~~occurrence~~Corporation (as of ~~any other similar taxable event, participants may elect, subject~~the time immediately prior to the ~~approval~~commencement of such offer), any employee benefit plan of the ~~Committee/Board,~~Corporation or its Subsidiaries, and their affiliates;

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(ii) the Corporation shall be merged or consolidated with another entity, unless as a result of such merger or consolidation more than 50% of the outstanding voting securities of the surviving or resulting entity shall be owned in the aggregate by the stockholders of the Corporation (as of the time immediately prior to ~~satisfy~~such transaction), any employee benefit plan of the ~~withholding requirement,~~Corporation or its Subsidiaries, and their affiliates;

(iii) the Corporation shall sell substantially all of its assets to another entity that is not wholly owned by the Corporation, unless as a result of such sale more than 50% of such assets shall be owned in ~~whole~~the aggregate by the stockholders of the Corporation (as of the time immediately prior to such transaction), any employee benefit plan of the Corporation or its Subsidiaries and their affiliates; or

(iv) a Person (as defined below) shall acquire 50% or more of the outstanding voting securities of the Corporation (whether directly, indirectly, beneficially or of record), unless as a result of such acquisition more than 50% of the outstanding voting securities of the surviving or resulting corporation shall be owned in ~~part,~~the aggregate by ~~having~~ the ~~Company withhold Shares~~stockholders of ~~Stock having a Fair Market Value equal~~the Corporation (as of the time immediately prior to the ~~amount required to be withheld. The value~~first acquisition of such securities by such Person), any employee benefit plan of the ~~Shares to be withheld~~Corporation or its Subsidiaries, and their affiliates.

For purposes of this Section 5(c), ownership of voting securities shall ~~be based on Fair Market Value~~take into account and shall include ownership as determined by applying the provisions of ~~the Shares~~Rule 13d-3(d)(I)(i) (as in effect on the date ~~that~~hereof) under the ~~amount of tax to be withheld is to be determined. All elections~~Exchange Act. In addition, for such purposes, “Person” shall ~~be irrevocable and be made~~have the meaning given in ~~writing, signed by the Participant on forms approved by the Committee/Board in advance~~Section 3(a)(9) of the ~~day~~Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; provided, however, 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.~~

~~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~~Person 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 betweeninclude (A) the Company or any of its ~~Subsidiaries and any Select Employee~~Subsidiaries; (B) a trustee or ~~any Director. Participation in the Plan shall not give any Select Employee or Director any right to be retained/engaged in the service~~other fiduciary holding securities under an employee benefit plan of the Company or any of its ~~Subsidiaries.~~Subsidiaries; (C) an underwriter temporarily holding securities pursuant to an offering of such securities; or (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company.

Notwithstanding the foregoing, (1) the Administrator may waive the requirement described in paragraph (iv) above that a Person must acquire more than 50% of the outstanding voting securities of the Corporation for a Change in Control to have occurred if the Administrator determines that the percentage acquired by a person is significant (as determined by the Administrator in its discretion) and that waiving such condition is appropriate in light of all facts and circumstances, and (2) no compensation that has been deferred for purposes of Section 409A of the Code shall be payable as a result of a Change in Control unless the Change in Control qualifies as a change in ownership or effective control of the Corporation within the meaning of Section 409A of the Code.

~~13.3~~7.3 ~~Creditors~~Early Termination of Awards. Any award that has been accelerated as required or permitted by Section 7.2 upon a Change in Control (or would have been so accelerated but for Section 7.4 or 7.5) shall terminate upon such event, subject to any provision that has been expressly made by the Administrator, through a plan of reorganization or otherwise, for the survival, substitution, assumption, exchange or other continuation of such award and provided that, in the case of options and SARs that will not survive, be substituted for, assumed, exchanged, or otherwise continued in the transaction, the holder of such award shall be given reasonable advance notice of the impending termination and a reasonable opportunity to exercise his or her outstanding options and SARs in accordance with their terms before the termination of such awards (except that in no case shall more than ten days’ notice of accelerated vesting and the impending termination be required and any acceleration may be made contingent upon the actual occurrence of the event).

The ~~interests~~Administrator may make provision for payment in cash or property (or both) in respect of awards terminated pursuant to this section as a result of the Change in Control and may adopt such valuation methodologies for outstanding awards as it deems reasonable and, in the case of options, SARs or similar rights, and without limiting other methodologies, may base such settlement solely upon the excess if any of the per share amount payable upon or in respect of such event over the exercise or base price of the award.

7.4Other Acceleration Rules. Any acceleration of awards pursuant to this Section 7 shall comply with applicable legal and stock exchange requirements and, if necessary to accomplish the purposes of the acceleration or if the circumstances require, may be deemed by the Administrator to occur a limited period of time not greater than 30 days before the event. Without limiting the generality of the foregoing, the Administrator may deem an acceleration to occur immediately prior to the applicable event and/or reinstate the original terms of an award if an event giving rise to the acceleration does not occur. Notwithstanding any other provision of the Plan to the contrary, the Administrator may override the provisions of Section 7.2, 7.3, and/or 7.5 by express provision in the award agreement or otherwise. The portion of any ~~Participant~~ISO accelerated pursuant to Section 7.2 or any other action permitted hereunder shall remain exercisable as an ISO only to the extent the applicable $100,000 limitation on ISOs is not exceeded. To the extent exceeded, the accelerated portion of the option shall be exercisable as a nonqualified stock option under the Code.

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7.5Possible Rescission of Acceleration. If the vesting of an award has been accelerated expressly in anticipation of an event and the Administrator later determines that the event will not occur, the Administrator may rescind the effect of the acceleration as to any then outstanding and unexercised or otherwise unvested awards; provided, that, in the case of any compensation that has been deferred for purposes of Section 409A of the Code, the Administrator determines that such rescission will not likely result in the imposition of additional tax or interest under Code Section 409A.

8.	OTHER PROVISIONS

8.1Compliance with Laws. This Plan, the granting and vesting of awards under this Plan, the offer, issuance and delivery of shares of Common Stock, the acceptance of promissory notes and/or the payment of money under this Plan or under awards are subject to compliance with all applicable federal and state laws, rules and regulations (including but not limited to state and federal securities law, federal margin requirements) and to such approvals by any ~~Agreement are not~~applicable stock exchange listing, regulatory or governmental authority as may, in the opinion of counsel for the Corporation, be necessary or advisable in connection therewith. The person acquiring any securities under this Plan will, if requested by the Corporation or one of its Subsidiaries, provide such assurances and representations to the Corporation or one of its Subsidiaries as the Administrator may deem necessary or desirable to assure compliance with all applicable legal and accounting requirements.

8.2Future Awards/Other Rights. No person shall have any claim or rights to be granted an award (or additional awards, as the case may be) under this Plan, subject to any express contractual rights (set forth in a document other than this Plan) to the contrary.

8.3No Employment/Service Contract. Nothing contained in this Plan (or in any other documents under this Plan or in any award) shall confer upon any Eligible Person or other participant any right to continue in the employ or other service of the Corporation or one of its Subsidiaries, constitute any contract or agreement of employment or other service or affect an employee’s status as an employee at will, nor shall interfere in any way with the right of the Corporation or one of its Subsidiaries to change a person’s compensation or other benefits, or to terminate his or her employment or other service, with or without cause. Nothing in this Section 8.3, however, is intended to adversely affect any express independent right of such person under a separate employment or service contract other than an award agreement.

8.4Plan Not Funded. Awards payable under this Plan shall be payable in shares or from the general assets of the Corporation, and no special or separate reserve, fund or deposit shall be made to assure payment of such awards. No participant, beneficiary or other person shall have any right, title or interest in any fund or in any specific asset (including shares of Common Stock, except as expressly otherwise provided) of the Corporation or one of its Subsidiaries by reason of any award hereunder. Neither the provisions of this Plan (or of any related documents), nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Corporation or one of its Subsidiaries and any participant, beneficiary or other person. To the extent that a participant, beneficiary or other person acquires a right to receive payment pursuant to any award hereunder, such right shall be no greater than the right of any unsecured general creditor of the Corporation.

8.5Tax Withholding. Upon any exercise, vesting, or payment of any award, the Corporation or one of its Subsidiaries shall have the right at its option to:

(a) require the participant (or the participant’s personal representative or beneficiary, as the case may be) to pay or provide for payment of at least the minimum amount of any taxes which the Corporation or one of its Subsidiaries may be required to withhold with respect to such award event or payment; or

(b) deduct from any amount otherwise payable in cash to the participant (or the participant’s personal representative or beneficiary, as the case may be) the minimum amount of any taxes which the Corporation or one of its Subsidiaries may be required to withhold with respect to such cash payment.

In any case where a tax is required to be withheld in connection with the delivery of shares of Common Stock under this Plan, the Administrator may in its sole discretion (subject to Section 8.1) grant (either at the time of the award or thereafter) to the participant the right to elect, pursuant to such rules and subject to such conditions as the Administrator may establish, to have the Corporation reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of shares, valued in a consistent manner at their Fair Market Value or at the sales price in accordance with authorized procedures for cashless exercises, necessary to satisfy the minimum applicable withholding obligation on exercise, vesting or payment. In no event shall the shares withheld exceed the minimum whole number of shares required for tax withholding under applicable law.

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8.6Effective Date, Termination and Suspension, Amendments.

8.6.1Effective Date and Termination. This Plan was approved by the Board and became effective on April 1, 2013. Unless earlier terminated by the Board, this Plan shall terminate at the close of business on April 1, 2023. After the termination of this Plan either upon such stated expiration date or its earlier termination by the Board, no additional awards may be granted under this Plan, but previously granted awards (and the authority of the Administrator with respect thereto, including the authority to amend such awards) shall remain outstanding in accordance with their applicable terms and conditions and the terms and conditions of this Plan.

8.6.2Board Authorization. The Board may, at any time, terminate or, from time to time, amend, modify or suspend this Plan, in whole or in part. No awards may be granted during any period that the Board suspends this Plan.

8.6.3Stockholder Approval. To the extent then required by applicable law or any applicable stock exchange or required under Sections 162, 422 or 424 of the Code to preserve the intended tax consequences of this Plan, or deemed necessary or advisable by the Board, this Plan and any amendment to this Plan shall be subject to stockholder approval.

8.6.4Amendments to Awards. Without limiting any other express authority of the Administrator under (but subject to) the express limits of this Plan, the Administrator by agreement or resolution may waive conditions of or limitations on awards to participants that the Administrator in the prior exercise of its discretion has imposed, without the consent of a participant, and (subject to the requirements of Sections 3.2 and 8.6.5) may make other changes to the terms and conditions of awards. Any amendment or other action that would constitute a repricing of an award is subject to the ~~claims~~limitations set forth in Section 3.2(g).

8.6.5Limitations on Amendments to Plan and Awards. No amendment, suspension or termination of ~~creditors and may not,~~this Plan or change of or affecting any outstanding award shall, without written consent of the participant, affect in any ~~way,~~manner materially adverse to the participant any rights or benefits of the participant or obligations of the Corporation under any award granted under this Plan prior to the effective date of such change. Changes, settlements and other actions contemplated by Section 7 shall not be ~~assigned, alienated~~deemed to constitute changes or ~~encumbered.~~amendments for purposes of this Section 8.6.

~~13.4~~8.7 Privileges of Stock Ownership. Except as otherwise expressly authorized by the Administrator or this Plan, a participant shall not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by the participant. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery.

8.8Governing ~~Law~~Law; Construction; Severability.

~~. The~~8.8.1Choice of Law. This Plan, the awards, all documents evidencing awards and all ~~Agreements hereunder,~~other related documents shall be governed ~~construed~~by, and ~~administered~~construed in accordance with ~~and governed by~~ the laws of the State of Delaware

8.8.2Severability. If a court of competent jurisdiction holds any provision invalid and unenforceable, the ~~intention~~remaining provisions of this Plan shall continue in effect.

8.8.3Plan Construction.

(a) Rule 16b-3. It is the intent of the ~~Company~~Corporation that the awards and transactions permitted by awards be interpreted in a manner that, in the case of participants who are or may be subject to Section 16 of the Exchange Act, qualify, to the maximum extent compatible with the express terms of the award, for exemption from matching liability under Rule 16b-3 promulgated under the Exchange Act. Notwithstanding the foregoing, the Corporation shall have no liability to any participant for Section 16 consequences of awards or events under awards if an award or event does not so qualify.

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(b) Section 162(m). Awards under Sections 5.1.4 through 5.1.7 to persons described in Section 5.2 that are either granted or become vested, exercisable or payable based on attainment of one or more performance goals related to the Business Criteria, as well as Qualifying Options and Qualifying SARs granted to persons described in Section 5.2, that are approved by a committee composed solely of two or more outside directors (as this requirement is applied under Section 162(m) of the Code) shall be deemed to be intended as performance-based compensation within the meaning of Section 162(m) of the Code unless such committee provides otherwise at the time of grant of the award. It is the further intent of the Corporation that ~~ISOs~~(to the extent the Corporation or one of its Subsidiaries or awards under this Plan may be or become subject to limitations on deductibility under Section 162(m) of the Code) any such awards and any other Performance-Based Awards under Section 5.2 that are granted to or held by a person subject to Section 162(m) will qualify as performance-based compensation or otherwise be exempt from deductibility limitations under Section 162(m).

(c) Code Section 409A Compliance. The Board intends that, except as may be otherwise determined by the Administrator, any awards under the Plan ~~qualify as such under~~are either exempt from or satisfy the requirements of Section ~~422~~409A of the ~~Code.~~Code and related regulations and Treasury pronouncements (“Section 409A

~~13.5Severability. In~~”) to avoid the ~~event~~imposition of any ~~provision~~taxes, including additional income or penalty taxes, thereunder. If the Administrator determines that an award, award agreement, acceleration, adjustment to the terms of an award, payment, distribution, deferral election, transaction or any other action or arrangement contemplated by the provisions of the Plan ~~shall be held illegal~~would, if undertaken, cause a participant’s award to become subject to Section 409A, unless the Administrator expressly determines otherwise, such award, award agreement, payment, acceleration, adjustment, distribution, deferral election, transaction or ~~invalid for any reason, the illegality~~other action or ~~invalidity~~arrangement shall not ~~affect~~be undertaken and the ~~remaining parts~~related provisions of the Plan and/or award agreement will be deemed modified or, if necessary, rescinded in order to comply with the requirements of Section 409A to the extent determined by the Administrator without the content or notice to the participant. Notwithstanding the foregoing, neither the Company nor the Administrator shall have any obligation to take any action to prevent the assessment of any excise tax or penalty on any participant under Section 409A and neither the Company nor the Administrator will have any liability to any participant for such tax or penalty.

(d) No Guarantee of Favorable Tax Treatment. Although the Company intends that awards under the Plan will be exempt from, or will comply with, the requirements of Section 409A of the Code, the Company does not warrant that any award under the Plan will qualify for favorable tax treatment under Section 409A of the Code or any other provision of federal, state, local or foreign law. The Company shall not be liable to any participant for any tax, interest or penalties the participant might owe as a result of the grant, holding, vesting, exercise or payment of any award under the Plan

8.9Captions. Captions and headings are given to the sections and subsections of this Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof.

8.10Stock-Based Awards in Substitution for Stock Options or Awards Granted by Other Corporation. Awards may be granted to Eligible Persons in substitution for or in connection with an assumption of employee stock options, SARs, restricted stock or other stock-based awards granted by other entities to persons who are or who will become Eligible Persons in respect of the Corporation or one of its Subsidiaries, in connection with a distribution, arrangement, business combination, merger or other reorganization by or with the granting entity or an affiliated entity, or the acquisition by the Corporation or one of its Subsidiaries, directly or indirectly, of all or a substantial part of the stock or assets of the employing entity. The awards so granted need not comply with other specific terms of this Plan, provided the awards reflect only adjustments giving effect to the assumption or substitution consistent with the conversion applicable to the Common Stock in the transaction and any change in the issuer of the security. Any shares that are delivered and any awards that are granted by, or become obligations of, the Corporation, as a result of the assumption by the Corporation of, or in substitution for, outstanding awards previously granted by an acquired company (or previously granted by a predecessor employer (or direct or indirect parent thereof) in the case of persons that become employed by the Corporation or one of its Subsidiaries in connection with a business or asset acquisition or similar transaction) shall not be counted against the Share Limit or other limits on the number of shares available for issuance under this Plan, except as may otherwise be provided by the Administrator at the time of such assumption or substitution or as may be required to comply with the requirements of any applicable stock exchange.

8.11Non-Exclusivity of Plan. Nothing in this Plan shall limit or be deemed to limit the authority of the Board or the Administrator to grant awards or authorize any other compensation, with or without reference to the Common Stock, under any other plan or authority.

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8.12No Corporate Action Restriction. The existence of this Plan, the award agreements and the awards granted hereunder shall not limit, affect or restrict in any way the right or power of the Board or the stockholders of the Corporation to make or authorize: (a) any adjustment, recapitalization, reorganization or other change in the capital structure or business of the Corporation or any Subsidiary, (b) any merger, arrangement, business combination, amalgamation, consolidation or change in the ownership of the Corporation or any Subsidiary, (c) any issue of bonds, debentures, capital, preferred or prior preference stock ahead of or affecting the capital stock (or the rights thereof) of the Corporation or any Subsidiary, (d) any dissolution or liquidation of the Corporation or any Subsidiary, (e) any sale or transfer of all or any part of the assets or business of the Corporation or any Subsidiary, or (f) any other corporate act or proceeding by the Corporation or any Subsidiary. No participant, beneficiary or any other person shall have any claim under any award or award agreement against any member of the Board or the Administrator, or the Corporation or any employees, officers or agents of the Corporation or any Subsidiary, as a result of any such action.

8.13Other Corporation Benefit and Compensation Programs. Payments and other benefits received by a participant under an award made pursuant to this Plan shall not be ~~construed and enforced as if the illegal or invalid provision had not been included.~~

~~APPENDIX B~~

~~CERTIFICATE OF AMENDMENT~~

~~SPHERIX INCORPORATED~~

~~Spherix Incorporated,~~deemed a ~~corporation organized and existing under the Delaware General Corporation Law (the “Corporation”), does hereby certify that:~~

~~FIRST: The name~~part of a participant’s compensation for purposes of the ~~corporation is Spherix Incorporated.~~

~~SECOND: This Certificate~~determination of ~~Amendment was duly adopted~~benefits under any other employee welfare or benefit plans or arrangements, if any, provided by the Corporation or any Subsidiary, except where the Administrator expressly otherwise provides or authorizes in ~~accordance~~writing or except as otherwise specifically set forth in the terms and conditions of such other employee welfare or benefit plan or arrangement. Awards under this Plan may be made in addition to, in combination with, ~~the Secretary~~as alternatives to or in payment of ~~State~~grants, awards or commitments under any other plans or arrangements of the ~~State~~Corporation or its Subsidiaries.

8.14Prohibition on Repricing. Subject to Section 4, the Administrator shall not, without the approval of ~~Delaware~~the stockholders of the Corporation (i) reduce the exercise price, or cancel and reissue options so as to in effect reduce the exercise price or (ii) change the manner of determining the exercise price so that the exercise price is less than the fair market value per share of Common Stock.

As adopted by the Board of Directors ~~and Stockholders~~of Spherix Incorporated on April 1, 2013.

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Appendix B

WRITTEN CONSENT OF STOCKHOLDER OF

SPHERIX INCORPORATED

The undersigned stockholder of Spherix Incorporated (the “Company”) hereby acknowledges receipt of the ~~Corporation. Following action~~Notice of Consent Solicitation and accompanying Consent Solicitation Statement, each dated August 13, 2013. The undersigned hereby consents (by checking the FOR box) or declines to consent (by checking the AGAINST box or the ABSTAIN box) to the adoption of the following recitals and resolutions:

WHEREAS, the board of directors of the Company has determined that it is in the best interests of the Company and its stockholders for the stockholders to approve the issuance of an aggregate of 118,483 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) and 1,488,152 shares of Series D Convertible Preferred Stock (the “Series D Preferred Stock”), which is convertible into shares of Common Stock on a one-for-ten basis, as consideration for the acquisition of North South Holdings, Inc. (“North South”) pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) by and between the Company, Nuta Technology Corp., the Company’s wholly owned subsidiary and North South (the “Merger Consideration”);

WHEREAS, the board of directors of the Company approved the issuance of the Merger Consideration on April 1, 2013 and recommended that the stockholders vote “FOR” the below resolution, which it has deemed is in the best interests of the Company and its stockholders in accordance with NASDAQ listing standards;

WHEREAS, the board of directors of the Company has determined that it is in the best interests of the Company and its stockholders for the stockholders to approve the Spherix Incorporated 2013 Equity Incentive Plan (the “2013 Plan”) attached as Appendix A to the Consent Solicitation Statement that accompanies this Written Consent, and has referred the same to the stockholders of the Company for approval by written consent;

WHEREAS, the board of directors of the Company adopted the 2013 Plan on April 1, 2013 and recommended that the stockholders vote “FOR” the below resolution, which it has deemed is in the best interests of the Company and its stockholders;

WHEREAS, the board of directors of the Company approved the future retention of Sichenzia Ross Friedman Ference LLP (“SRFF”) as the Company’s outside legal counsel and waived any conflict of interest relating to or arising from the association of the Company’s current interim Chef Executive Officer and SRFF;

WHEREAS, on April 1, 2013, the Board of Directors ~~a meeting~~ of the Company approved the future retention of SRFF and recommended that the stockholders vote “FOR” the below resolution, which it has deemed is in the best interests of the Company and its stockholders.

NOW, THEREFORE, IT IS RESOLVED, that the stockholders of ~~said corporation was duly called and held, upon notice in accordance with Section 222~~the Company hereby approve the issuance of the General Corporation Law of the State of Delaware, at which meeting the necessary number of shares as required by statute were voted in favor of the amendment. This Certificate of Amendment was duly adopted at said meeting of the StockholdersMerger Consideration and such Merger Consideration, when issued in accordance with the ~~provisions of Section 242~~Merger Agreement, will be validly issued, fully paid and non-assessable;

[ ] FOR [ ] AGAINST [ ] ABSTAIN

and it is further

RESOLVED, that the stockholders of the ~~General Corporation Law~~Company hereby approve the Spherix Incorporated 2013 Equity Incentive Plan, in the form attached as Appendix A to the Consent Solicitation Statement;

[ ] FOR [ ] AGAINST [ ] ABSTAIN

and it is further

RESOLVED, that the stockholders of the ~~State~~Company hereby approve and ratify the retention of ~~Delaware.~~

~~THIRD: That upon~~SRFF as the ~~effectiveness~~Company’s outside legal counsel and hereby waive any conflict of ~~this Certificate of Amendment,~~interest relating to or arising from the ~~first paragraph of Article FOURTH~~association of the ~~Certificate~~Company’s current interim Chef Executive Officer and SRFF.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

B-1

This Written Consent action may be executed in counterparts. Failure of ~~Incorporation,~~any particular stockholder(s) to execute and deliver counterparts is immaterial so long as ~~amended, is hereby amended and restated in its entirety such that, as amended, said paragraph shall read in its entirety as follows:~~

~~“The total number~~the holders of a majority of the voting power of the outstanding shares of ~~stock of all classes which~~ the ~~Corporation shall have authority to issue~~Company do execute and deliver counterparts.

This Written Consent is Million ( ,000,000.00) shares, consisting of ( ,000,000.00) shares of common stock, $0.01 per share par value, and Two Million (2,000,000) shares of preferred stock, $0.01 per share par value.

Upon this Certificate of Amendment becoming effective pursuant to the General Corporation Law of the State of Delaware (the “Effective Date”), each share of common stock, par value $0.01 per share (the “Old Common Stock”), issued and outstanding immediately before the Effective Date, shall be and hereby is, reclassified as and changed into one- (1/ ) of a share of common stock, par value $0.01 per share (the “New Common Stock”). Each outstanding stock certificate which immediately before the Effective Date represented one or more shares of Old Common Stock shall thereafter, automatically and without the necessity of surrendering the same for exchange, represent the number of whole shares of New Common Stock determined by multiplying the number of shares of Old Common Stock represented by such certificate immediately prior to the Effective Date by one- (1/ ), and shares of Old Common Stock held in uncertificated form shall be treated in the same manner. Stockholders who would otherwise be entitled to receive fractional share interests of Common Stock shall instead receive a cash payment equal to the fraction multipliedsolicited by the ~~closing sales price~~Company’s Board of ~~our Common Stock on the Effective Date.”~~

IN WITNESS WHEREOF, Spherix Incorporated has caused this certificate to be signed by its Chief Executive Officer as of the day of , .

	~~By:~~
		~~Claire L. Kruger, CEO~~

Directors.

~~UNITED STATES~~
~~SECURITIES AND EXCHANGE COMMISSION~~
~~Washington, D.C. 20549~~

~~SCHEDULE 14A~~

~~Proxy Statement Pursuant to Section 14(a) of~~ ~~the Securities Exchange Act of 1934 (Amendment No. )~~

~~Filed by the Registrant~~ x

~~Filed by a Party other than the Registrant~~o

~~Check the appropriate box:~~
o [ ]	Preliminary Proxy Statement


~~SPHERIX INCORPORATED~~
~~(Name of Registrant as Specified In Its Charter)~~


~~(Name of Person(s) Filing Proxy Statement, if other than the Registrant)~~

~~Payment of Filing Fee (Check the appropriate box):~~
x [ ]	No fee required.


		Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		11

BALANCE SHEETS AS OF DECEMBER 31, 2012 AND MARCH 31, 2013 (Unaudited)		12

STATEMENTS OF OPERATIONS FOR THE PERIOD FROM NOVEMBER 9, 2012 (INCEPTION) THROUGH DECEMBER 31, 2012, FOR THE THREE MONTHS ENDED MARCH 31, 2013 (Unaudited), AND FOR THE PERIOD FROM NOVEMBER 9, 2012 (INCEPTION) THROUGH MARCH 31, 2013 (Unaudited)		13

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD FROM NOVEMBER 9, 2012 (INCEPTION) THROUGH DECEMBER 31, 2012, FOR THE THREE MONTHS ENDED MARCH 31, 2013 (Unaudited), AND FOR THE PERIOD FROM NOVEMBER 9, 2012 (INCEPTION) THROUGH MARCH 31, 2013 (Unaudited)		14

STATEMENTS OF CASH FLOWS FOR THE PERIOD FROM NOVEMBER 9, 2012 (INCEPTION) THROUGH DECEMBER 31, 2012, FOR THE THREE MONTHS ENDED MARCH 31, 2013 (Unaudited), AND FOR THE PERIOD FROM NOVEMBER 9, 2012 (INCEPTION) THROUGH MARCH 31, 2013 (Unaudited)		15

NOTES TO FINANCIAL STATEMENTS		16

NORTH SOUTH HOLDINGS INC.
(A COMPANY IN THE DEVELOPMENT STAGE )
BALANCE SHEETS

	March 31,			December
	2013			31,
	(Unaudited)			2012
ASSETS
Current assets:

Cash	$	508,787		$	549,047

Total current assets		508,787			549,047

Patent portfolio, net		436,091			415,000

Total assets	$	944,878		$	964,047

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accrued expenses	$	3,000		$	-

Total current liabilities		3,000			-

Commitments and Contingencies

Stockholders' Equity:

Preferred stock, par value $ 0.0001 per share; 1,000 shares authorized; Series A Convertible Preferred Stock; 500 shares, issued and outstanding with an aggregate liquidation preference of $1,000,000		-			-

Common Stock, par value $0.0001 per share; 75,000 shares authorized, 500 shares issued and outstanding		-			-

Additional paid in capital		1,000,000			1,000,000

Deficit accumulated during the development stage		(58,122	)		(35,953	)

Total stockholders' equity		941,878			964,047

Total liabilities and stockholders' equity	$	944,878		$	964,047

See the accompanying notes which are an integral part of these statements.

NORTH SOUTH HOLDINGS INC.
(A COMPANY IN THE DEVELOPMENT STAGE )
STATEMENTS OF OPERATIONS
	For the Three Months Ended March 31, 2013 (Unaudited)			For the Period from November 9, 2012 through December 31, 2012			For the Period from November 9, 2012 through March 31, 2013 (Unaudited)

Revenue	$	-		$	-		$	-

Operating expenses:

Amortization		12,969			-			12,969
Director's fees		9,000			5,100			14,100
General and administrative		200			30,853			31,053

Total operating expenses		22,169			35,953			58,122

Net loss	$	(22,169	)	$	(35,953	)	$	(58,122	)

See the accompanying notes which are an integral part of these statements.

	(1)	Title of each class of securities to which transaction ~~applies:~~ applies.

	(2)	Aggregate number of securities to which transaction applies:

	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 ~~(set~~(Set forth the amount on which the filing fee is calculated and state how it was determined): Unit price of $8.4650 estimated pursuant to Rules 457(c) under the Securities Act solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the Registrant’s common stock as reported on the NASDAQ Capital Market on May 7, 2013

NORTH SOUTH HOLDINGS INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
	Series A Convertible Preferred Stock				Common Stock				Additional Paid In		Accumulated During theDevelopment			Deficit
	Shares		Amount		Shares		Amount		Capital		Stage			Total

Balance at November 9, 2012		-	$	-		-	$	-	$	-	$	-		$	-

Issuance of shares to founders in exchange for initial capital contributions (500 shares of common stock at $0.0001 per share and 500 shares of convertible preferred stock at $2,000 per share)		500		-		500		-		1,000,000		-			1,000,000

Net loss		-		-		-		-		-		(35,953	)		(35,953	)

Balance at December 31, 2012		500		-		500		-		1,000,000		(35,953	)		964,047

Net loss (unaudited)		-		-		-		-		-		(22,169	)		(22,169	)

Balance at March 31, 2013 (Unaudited)		500	$	-		500	$	-	$	1,000,000	$	(58,122	)	$	941,878

See the accompanying notes which are an integral part of these statements.

NORTH SOUTH HOLDINGS INC.
(A COMPANY IN THE DEVELOPMENT STAGE )
STATEMENTS OF CASH FLOWS
	For the Three Months Ended March 31, 2013 (Unaudited)			For the Period from November 9, 2012 through December 31, 2012			For the Period from November 9, 2012 through March 31, 2013 (Unaudited)
Cash flows from operating activities:

Net loss	$	(22,169	)	$	(35,953	)	$	(58,122	)

Adjustments to reconcile net loss to net cash used in operating activities:
Amortization		12,969			-			12,969
Changes in operating assets and liabilities:
Accrued expenses		3,000			-			3,000

Net cash used in operating activities		(6,200	)		(35,953	)		(42,153	)

Cash flows from investing activities:

Purchase of patent portfolios		(34,060	)		(415,000	)		(449,060	)

Net cash used in investing activities		(34,060	)		(415,000	)		(449,060	)

Cash flows from financing activities:

Issuance of shares to founders in exchange for initial capital contributions		-			1,000,000			1,000,000

Net cash provided by financing activities		-			1,000,000			1,000,000

Net (decrease) increase in cash		(40,260	)		549,047			508,787

Cash, beginning of period		549,047			-			-

Cash, end of period	$	508,787		$	549,047		$	508,787

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the year for:

Interest	$	-		$	-		$	-

Income taxes	$	-		$	-		$	-

See the accompanying notes which are an integral part of these statements.

For the Years Ending December 31	Harris Patent Portfolio		Compufill Patent Portfolio		Total Amortization
2013	$	38,855	$	27,451	$	66,306
2014		48,824		41,176		90,000
2015		48,824		41,176		90,000
2016		48,824		41,176		90,000
2017		48,824		41,176		90,000
Thereafter		201,940		157,845		359,785
Total	$	436,091	$	350,000	$	786,091

Current	December 31, 2012
Federal	$	–
State		–
		–
Deferred
Federal		(12,224	)
State		(1,798	)
		(14,022	)
Change in valuation allowance		14,022
Total income tax provision	$	–


U.S. federal statutory rate			(34)%
State income tax rate, net of federal benefit			(5)
Less: valuation allowance			39
Provision for income taxes			– %

Deferred tax assets:
Net operating loss carryforward	$	2,200
Deferred start-up and organizational expenses		11,822
Valuation allowance		(14,022)
Net deferred tax asset	$	–

	Historical
	Spherix			North South			North South			Spherix			Rockstar			Pro Forma			Pro Forma
ASSETS	Incorporated			Holdings, Inc.			April 2013 (1)			June 2013 (2)			July 2013 (7)			Adjustments (3), (4)			Consolidated
Current assets
Cash and cash equivalents	$	3,448,526		$	508,787		$	2,234,880		$	500,000		$	(2,000,000	)	$	2,000,000		$	3,948,526
								(350,000	)		(500,000	)					(1,893,667	)
Trade accounts receivable		1,315			-			-			-			-						1,315
Other receivables		3,508			-			-			-			-						3,508
Prepaid expenses and other assets		82,206			-			-			-			-						82,206
Total current assets		3,535,555			508,787			1,884,880			-			(2,000,000	)		106,333			4,035,555

Investment in Spherix by North South											500,000			-			(500,000	)		-
Property and equipment, net of accumulated depreciation		7,930			-			-			-			-						7,930
Patent portfolios, net		-			436,091			350,000			-			3,000,000			1,100,000			4,100,000
																	(786,091	)
Deposit		29,504			-			-			-			-						29,504
Total assets	$	3,572,989		$	944,878		$	2,234,880		$	500,000		$	1,000,000		$	(79,758	)	$	8,172,989

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses	$	358,376		$	3,000		$	-		$	-		$	-		$	-		$	358,376
																	(3,000	)
Accrued salaries and benefits		85,277			-			-			-			-						85,277
Liabilities of segment held for sale		10,205			-			-			-			-						10,205
Total current liabilities		453,858			3,000			-			-			-			(3,000	)		453,858

Deferred rent		45,285			-			-			-			-						45,285
Warrant liabilities		215,853			-			-			-			-						215,853
Total liabilities		714,996			3,000			-			-			-			(3,000	)		714,996

Commitments and contingencies

Stockholders' equity
Convertible preferred stock, $0.0001 par value, 500 shares authorized;
Series A: 500 shares issued and outstanding at March 31, 2013;					-
Convertible preferred stock, $0.0001 par value, 5,000,000 shares authorized;
Series B: 1 share issued and outstanding at March 31, 2013;
liquidation preference $1,000 per share		-			-			-			-			-						-
Series C: 229,337 shares issued and outstanding at March 31, 2013;																				-
liquidation preference $0.0001 per share		23			-			-			-			-						23
Series D: no shares issued and outstanding at March 31, 2013;																				-
liquidation preference $0.0001 per share		-			-			-			-			-			149			149
Series E: no shares issued and outstanding at March 31, 2013;																				-
liquidation preference $0.0001 per share											10			-			(10	)		-
Common stock, $0.0001 par value, 50,000,000 shares authorized;																				-
814,114 issued at at March 31, 2013																				-
and 813,713 outstanding at March 31, 2013		82			-			-			-			18			12			112
Paid-in capital in excess of par value		42,330,462			1,000,000			2,234,880			499,990			999,982			3,099,839			46,930,283
																	(499,990	)
																	(2,734,880	)
Treasury stock, at cost, 401 shares at March 31, 2013		(464,786	)		-			-			-			-						(464,786	)
Accumulated deficit		(39,007,788	)		(58,122	)		-			-			-			58,122			(39,007,788	)
Total stockholders' equity		2,857,993			941,878			2,234,880			500,000			1,000,000			(76,758	)		7,457,993
Total liabilities and stockholders' equity	$	3,572,989		$	944,878		$	2,234,880		$	500,000		$	1,000,000		$	(79,758	)	$	8,172,989

	(2)	Form, Schedule or Registration Statement No.:

	(3)	Filing Party:
	~~(3)~~	~~Filing Party:~~

	(4)	Date Filed:

	~~(4)~~	~~Date Filed:~~

		Historical
					North South			Discontinued		Pro Forma
		Spherix Incorporated			Holdings, Inc.			Operations Eliminated		Adjustments (5,8)			Pro Forma Consolidated

Revenue		$	19,922		$	-		$	-	$	-		$	19,922

Operating expense
Amortization of patents			-			-			-		(129,412	)		(868,849	)
											(739,437	)
Research and development expense			(727,091	)		-			-		-			(727,091	)
Selling, general and administrative expense			(2,764,836	)		(35,953	)		-		-			(2,800,789	)
Total operating expense			(3,491,927	)		(35,953	)		-		(868,849	)		(4,396,729	)
Loss from operations			(3,472,005	)		(35,953	)		-		(868,849	)		(4,376,807	)

Other Income from Change in Fair Value of Warrants			1,202,489			-			-		-			1,202,489
Loss on issuance of warrants			(621,983	)		-			-		-			(621,983	)
Interest income			3,466			-			-		-			3,466
(Loss) income from continuing operations before taxes			(2,888,033	)		(35,953	)		-		(868,849	)		(3,792,835	)
Income tax expense			-											-
(Loss) income from continuing operations			(2,888,033	)		(35,953	)		-		(868,849	)		(3,792,835	)

Discontinued operations
Loss from discontinued operations			(968,991	)		-			968,991		-			-
Income tax expense			-			-			-		-			-
Loss from discontinued operations			(968,991	)		-			968,991		-			-
	��
Net (loss) income		$	(3,857,024	)	$	(35,953	)	$	968,991	$	(868,849	)	$	(3,792,835	)

Net loss per share, basic and diluted
Continuing operations		$	(10.56	)	$	(71.91	)	$	-				$	(9.67	)
Discontinued operations		$	(3.54	)	$	-		$	3.54				$	-
Basic and diluted net loss per share		$	(14.10	)	$	(71.91	)	$	3.54				$	(9.67	)

Weighted average number of shares outstanding,
Basic and diluted			273,567			500			273,567					392,050

No dividends declared or paid		$	-		$	-							$	-

Book value per share,
Basic		$	3.12		$	1,928.09							$	11.41
Diluted		$	1.13		$	19.09							$	0.25

Weighted average number of shares outstanding,
book value per share purposes only (10)
Basic			273,567			500								392,050
Diluted			764,388			50,500								17,769,891

	Historical
	Spherix Incorporated			North South Holdings, Inc.			Discontinued Operations Eliminated		Pro Forma Adjustments (6,9)			Pro Forma Consolidated

Revenues	$	5,761		$	-		$	-	$	-		$	5,761

Costs of goods sold		-			-			-		-			-
Gross profit		5,761			-			-		-			5,761

Operating expenses
Amortization of patents		-			(12,969	)				(19,384	)		(217,212	)
										(184,859	)
Research and development		(43,068	)		-			-		-			(43,068	)
Selling, general and administrative		(873,240	)		(9,200	)		-		-			(882,440	)
Total operating expenses		(916,308	)		(22,169	)		-		(204,243	)		(1,142,720	)
Loss from operations		(910,547	)		(22,169	)		-		(204,243	)		(1,136,959	)

Unrealized (loss) gain on the change in fair value
of warrant liabilities		(2,786,395	)		-			-		-			(2,786,395	)
Interest income		372			-			-		-			372
Loss from continuing operations		(3,696,570	)		(22,169	)		-		(204,243	)		(3,922,982	)
Income tax expense		-			-			-		-			-
Loss from continuing operations		(3,696,570	)		(22,169	)		-		(204,243	)		(3,922,982	)

Discontinued operations
Loss from discontinued operations		-			-			-		-			-
Income tax expense		-			-			-		-			-
Loss from discontinued operations		-			-			-		-			-

Net loss	$	(3,696,570	)	$	(22,169	)	$	-	$	(204,243	)	$	(3,922,982	)

Net loss per share, basic and diluted
Continuing operations	$	(5.35	)	$	(44.34	)	$	-				$	(4.85	)
Discontinued operations	$	-		$	-		$	-				$	-
Basic and diluted net loss per share	$	(5.35	)	$	(44.34	)	$	-				$	(4.85	)

Weighted average number of shares outstanding,
Basic and diluted		691,213			500			691,213					809,696

No dividends declared or paid	$	-		$	-							$	-

Book value per share,
Basic	$	4.13		$	1,883.76							$	7.56
Diluted	$	2.54		$	18.65							$	0.41

Weighted average number of shares outstanding,
book value per share purposes only (10)
Basic		691,213			500								986,687
Diluted		1,123,221			50,500								18,305,715

Payment for North South’s Intangible Assets	$	1,100,000
Payment for North South’s Cash Balance		2,000,000
Estimated Purchase Price	$	3,100,000

Fair value of Common Stock	$	26,102
Fair value of Series D Convertible Preferred Stock		3,073,520
Rounding		378
Fair value of consideration for North South	$	3,100,000

	DR		CR
Patent portfolios		350,000
Cash and cash equivalents				350,000

	DR		CR
Cash and cash equivalents		500,000
Series E Convertible Preferred Stock			10
Additional paid in capital				499,990

	DR		CR
Cash and cash equivalents		2,000,000
Intangible assets, net		1,100,000
Series D Convertible Preferred Stock				149
Common Stock				12
Additional paid in capital				3,099,839

	DR		CR
Additional paid in capital		2,734,880
Accounts payable		3,000
Cash and cash equivalents				1,893,667
Intangible assets, net				786,091
Accumulated deficit				58,122

	DR		CR
Amortization expense		129,412
Accumulated amortization				129,412

	DR		CR
Amortization expense		19,384
Accumulated amortization				19,384

	DR		CR
Amortization expense		739,437
Accumulated amortization				739,437

	DR		CR
Amortization expense		184,859
Accumulated amortization				184,859

Spherix	Historical December 31, 2012		Historical March 31, 2013		Pro Forma December 31, 2012		Pro Forma March 31, 2013
Weighted average shares outstanding - basic		273,567		691,213		392,050		986,687
Common Stock Equivalents:
Convertible Preferred Stk. – Series B		1		1		1		1
Convertible Preferred Stk. – Series C				229,337				229,337
Convertible Preferred Stk. – Series D						14,881,520		14,881,520
Warrants		483,657		75,757		483,657		75,757
Restrictive Stock Awards				120,250				120,250
Options		7,163		6,663		7,163		6,663
2013 Option Plan						2,005,500		2,005,500

Weighted-average shares outstanding - Diluted		764,388		1,123,221		17,769,891		18,305,715

	●	each person known by us to beneficially own more than 5.0% of any class of our voting securities;
	●	each of our directors;
	●	each of our named executive officers; and
	●	all of our directors and executive officers as a group.

			Director
Name	Age	Position	Since
Douglas T. Brown	58	Director	2004
Claire L. Kruger	53	Director, and Chief Executive Officer	2007
Robert A. Lodder, Jr.	53	Director, and President	2005
Aris Melissaratos	68	Director	2008
Thomas B. Peter	59	Director	2009
Robert J. Vander Zanden	66	Director, and Chairman of the Board	2004

	Beneficially Owned Amount (1)			% of Class

Principal Stockholders

Four Kids Investment Funds, LLC (5)		69,663	(5)	7.18	%
Hudson Bay IP Opportunities Master Fund L.P. (4)		76,630	(4)	8.28	%
Iroquois Master Fund Ltd. (6)		46,957	(6)	5.21	%
US Commonwealth Life A.I. (7)		110,000		12.21	%

All Principal Stockholders as a Group		303,250		32.88	%

Executive Officers and Directors

Douglas T. Brown		1,353	(2)	*
Edward M. Karr		1,013	(2)	*
Harvey J. Kesner		29,795	(2)(3)	3.27	%
Robert J. Vander Zanden		1,308	(2)	*

All Executive Officers and Directors as a Group (4 persons)		33,469	(2)	3.66	%

~~Name~~	~~Age~~	~~Position~~
~~Robert L. Clayton~~	49	~~CFO and Treasurer~~
~~Claire L. Kruger~~	53	~~Chief Executive Officer and Chief Operating Officer~~
~~Robert A. Lodder~~	53	~~President~~

							Change in
							Pension Value
							and Non-
						Non-Equity	Qualified
				Stock	Option	Incentive Plan	Deferred	All Other
Name and			Bonus	Award	Award	Compensation	Compensation	Compensation
Principal Position	Year	Salary ($)	($)	($)	($)(1)	($)(2)	Earnings ($)	($)	Total ($)
C. Kruger	2011	278,100	—	—	531	139,050	—	—	417,681
CEO and COO	2010	270,000	—	—	—	135,000	—	—	405,000

R. Lodder	2011	226,600	—	—	273	90,640	—	—	317,513
President	2010	220,000	—	—	—	88,000	—	—	308,000

R. Clayton	2011	206,000	—	—	273	72,100	—	—	278,373
CFO and Treasurer	2010	200,000	—	—	118	70,000	—	—	270,118

												Change in
												Pension
												Value
										Non-Equity		and Non-
										Incentive		Qualified		All Other
Name and						Stock		Option		Plan		Deferred		Compen-
Principal Position	Year	Salary ($)		Bonus ($)		Award ($)		Award ($) (1)		Compensation ($) (2)		Compensation Earnings ($)		sation ($) (3)		Total ($)
C. Kruger (3)	2012		262,573		-		-		3,919		143,222		-		286,443		696,157
Former CEO and COO	2011		278,100		-		-		531		139,050		-		-		417,681

R. Lodder	2012		233,398		-		-		2,138		93,359		-		-		328,895
Principal Executive Officer and President	2011		226,600		-		-		273		90,640		-		-		317,513

R. Clayton	2012		212,180		-		-		2,138		74,263		-		-		288,581
CFO, Treasurer and Corporate Secretary	2011		206,000		-		-		273		72,100		-		-		278,373

(1)	On November 15, 2011, C. Kruger, R. Lodder and R. Clayton were granted stock options for 500, 250, and 250 shares, respectively. On February 17, 2006, R. Clayton was granted stock options for 100 shares. Information regarding forfeiture and assumptions made in the valuation are disclosed in Note 10 of the consolidated financial statements included herein.
(2)	Awards pursuant to the Spherix Incorporated Incentive Compensation Plan.