f8k062111_suspect.htm

0001213900-11-003490.txt : 20110630 0001213900-11-003490.hdr.sgml : 20110630 20110630140247 ACCESSION NUMBER: 0001213900-11-003490 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20110621 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20110630 DATE AS OF CHANGE: 20110630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Suspect Detection Systems, Inc. CENTRAL INDEX KEY: 0001391674 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-COMPUTER & COMPUTER SOFTWARE STORES [5734] IRS NUMBER: 980511645 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-52792 FILM NUMBER: 11941548 BUSINESS ADDRESS: STREET 1: 4 NAFCHA STREET CITY: JERUSALEM STATE: L3 ZIP: 95508 BUSINESS PHONE: 011 972 500 1128 MAIL ADDRESS: STREET 1: 4 NAFCHA STREET CITY: JERUSALEM STATE: L3 ZIP: 95508 FORMER COMPANY: FORMER CONFORMED NAME: PCMT CORP DATE OF NAME CHANGE: 20070228 8-K 1 f8k062111_suspect.htm CURRENT REPORT f8k062111_suspect.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): June 21, 2011

SUSPECT DETECTION SYSTEMS INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

333-141211		98-0511645
(Commission File Number)		(IRS Employer Identification No.)

150 West 56th Street, Suite 4005, New York, NY 10019

(Address of Principal Executive Offices, Zip Code)

(212) 977-4126

(Registrant's Telephone Number, Including Area Code)

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 5- Corporate Governance and Management

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On June 21, 2011, the Board of Directors of Suspect Detection Systems Inc. (the “Company”) approved an amended and restated agreement, and on June 29, 2011, the Board of Directors approved certain changes to such agreement (the “Amended Consulting Agreement”) with Yoav Krill, the Company’s current Chairman of the Board which amends and restates Mr. Krill’s prior agreement with the Company dated January 13, 2010, except as otherwise indicated in the Amended Consulting Agreement with respect to certain fees, stock grants and options granted under the prior agreement.

Under the Amended Consulting Agreement, Mr. Krill will serve as the Company’s Chairman of the Board. In consideration of the services to be performed under the Amended Consulting Agreement, Mr. Krill shall receive an annual director’s fee of $25,000 for the first twelve-month period. Thereafter, the parties shall agree in writing prior to November 30th of each calendar year as to the amount to be paid as director’s fees, which amount shall not be less than $25,000 and shall be increased, proportionately, with any increase in the Company’s paid-in capital, sales revenues or net profits. In addition, under the Amended Consulting Agreement, Mr. Krill was granted 2,400,000 shares of common stock of the Company.

Mr. Krill was also granted a ten-year option to purchase 10,500,000 shares of common stock of the Company, exercisable at $0.10 per share, under the Company’s 2009 Global Stock Incentive Compensation Plan, 4,666,660 shares of which vest simultaneously with the execution and delivery of the Amended Consulting Agreement, and the balance shall vest in equal monthly installments of 291,667 shares for 20 months commencing July 1, 2011. Except as described below, all unvested options shall become null and void upon the termination of the Amended Consulting Agreement.

The Amended Consulting Agreement shall continue in effect until either party provides the other with no less than 90 days prior written notice. The Company shall also have the right to terminate the Amended Consulting Agreement in the event of a material breach by Mr. Krill in the performance of his duties under the Amended Consulting Agreement which is not cured or curable in accordance with the terms of the Amended Consulting Agreement. Failure of the Company to maintain directors’ and officers’ liability insurance covering Mr. Krill shall be deemed a material breach of the Amended Consulting Agreement and shall automatically terminate the Amended Consulting Agreement but shall not affect Mr. Krill’s right to the shares or options discussed above.

On June 21, 2011, the Board of Directors of the Company approved an amended and restated employment agreement, and on June 29, 2011, the Board of Directors approved certain changes to such agreement (the “Amended Employment Agreement”) with Gil Boosidan, the Company’s current Chief Executive Officer .

Under the Amended Employment Agreement, Mr. Boosidan will serve as the Company’s Chief Executive Officer. In consideration of the services to be performed under the Amended Employment Agreement, Mr. Boosidan shall receive (i) an aggregate of $30,000 in cash in four equal quarterly installments commencing September 30, 2011, and (ii) 1,200,000 shares of common stock of the Company.

Mr. Boosidan was also granted a ten-year option to purchase 6,000,000 options of common stock of the Company, exercisable at $0.10 per share, under the Company’s 2009 Global Stock Incentive Compensation Plan, 2,666,680 shares of which vest simultaneously with the execution and delivery of the Amended Employment Agreement, and the balance shall vest in equal monthly installments of 166,667 shares for 20 months commencing July 1, 2011. Except as described below, all unvested options shall become null and void upon the termination of the Amended Employment Agreement.

The Amended Employment Agreement shall continue in effect until either party provides the other with no less than 90 days prior written notice. The Company shall also have the right to terminate the Amended Employment Agreement in the event of a material breach by Mr. Boosidan in the performance of his duties under the Amended Employment Agreement which is not cured or curable in accordance with the terms of the Amended Employment Agreement. Failure of the Company to maintain directors’ and officers’ liability insurance covering Mr. Boosidan shall be deemed a material breach of the Amended Employment Agreement and shall automatically terminate the Amended Employment Agreement but shall not affect Mr. Boosidan’s right to the options discussed above. In the event of Mr. Boosidan’s death or substantial disability, payments to Mr. Boosidan under the Amended Employment Agreement shall cease.

The Amended Employment Agreement also contains non-competition and non-solicitation provisions for so long as Mr. Boosidan is employed by or affiliated with the Company.

The foregoing descriptions of the Amended Consulting Agreement and the Amended Employment Agreement do not purport to be complete and are qualified in their entirety by reference to the Amended Consulting Agreement and the Amended Employment Agreement which are annexed hereto as Exhibits 10.14 and 10.16, respectively.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit 10.14

Amended and Restated Agreement, dated June 21, 2011 between Suspect Detection Systems, Inc. and Yoav Krill

Exhibit 10.15

Option Agreement, dated June 21, 2011 between Suspect Detection Systems, Inc. and Yoav Krill

Exhibit 10.16

Amended and Restated Employment Agreement, dated June 21, 2011 between Suspect Detection Systems, Inc. and Gil Boosidan

Exhibit 10.17

Option Agreement, dated June 21, 2011 between Suspect Detection Systems, Inc. and Gil Boosidan

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SUSPECT DETECTION SYSTEMS INC.

	By:	/s/ Gil Boosidan
		Name: Gil Boosidan
		Title: Chief Executive Officer

Date: June 30, 2011

EX-10.14 2 f8k062111ex10xiv_suspect.htm AMENDED AND RESTATED AGREEMENT, DATED JUNE 21, 2011 BETWEEN SUSPECT DETECTION SYSTEMS, INC. AND YOAV KRILL f8k062111ex10xiv_suspect.htm

Exhibit 10.14

AMENDED AND RESTATED AGREEMENT

Between

SUSPECT DETECTION SYSTEMS, INC.

And

YOAV KRILL

THIS AGREEMENT is made and entered into as of this 21st day of June, 2011 by and between Suspect Detection Systems, Inc., a Delaware corporation having an office located at 150 West 56th Street, Suite 4005, New York, New York (“SDS”), and Yoav Krill, an individual having an office located at 150 West 56th Street, Apartment 4005, New York, New York 10019 (“Mr. Krill”).

W I T N E S S E T H:

WHEREAS, SDS desires to engage and to continue the engagement of the services of Mr. Krill as the Chairman of the Board of Directors of SDSS and Mr. Krill desires to accept such engagement subject to the terms and conditions set forth in this Amended and Restated Agreement.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other valuable consideration, the receipt and sufficiency of which hereby is acknowledged, the parties agree as follows:

1. Position. Subject to the provisions of this Amended and Restated Agreement, SDSS hereby appoints and continues the appointment of Mr. Krill as the Chairman of the Board of Directors of SDSS and Mr. Krill hereby accepts such appointment on the terms and conditions hereinafter set forth.

2. Duties. Mr. Krill shall take such actions and fulfill such duties as are required for him to serve as the Chairman of the Board of Directors of SDSS. Mr. Krill agrees to perform such services conscientiously and to the best of his abilities and to use his best efforts to promote the general welfare and interests of SDSS.

3. Standard of Care. The standard of care owed by Mr. Krill to SDSS shall only be to refrain from engaging in gross neglect, negligent or reckless conduct or intentional misconduct. In discharging his duties, Mr. Krill shall be fully protected in relying in good faith upon the records required to be maintained by SDSS and upon such information, opinions, reports or statements by SDSS or its agents, or by any other person, as to matters Mr. Krill reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of SDSS, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, and profits or losses of SDSS.

4. Term. The term of this Amended and Restated Agreement shall commence as of the date set forth above and shall continue until either party provides the other with no less than ninety (90) days prior written notice that such party desires to terminate this Amended and Restated Agreement. Notwithstanding the foregoing and in addition to such rights of termination as are otherwise set forth in this Amended and Restated Agreement, SDSS shall have the additional right to terminate this Amended and Restated Agreement for cause in the event of a material breach by Mr. Krill in the performance of his duties hereunder, as provided in Paragraphs 5 and 6, below.

5. Events of Default and Remedies. The repeated failure, refusal or neglect of Mr. Krill to report or to render his services when and as required hereunder, or to perform any covenant or condition of this Amended and Restated Agreement on his part to be kept or performed, shall be an event of material default hereunder and SDSS may terminate this Amended and Restated Agreement if any such event of material default shall occur and continue during the term hereof, as provided in Paragraph 6, below.

6. Termination. In addition to such rights of termination as are otherwise set forth in this Amended and Restated Agreement, SDSS shall have the additional right to terminate this Amended and Restated Agreement for cause in the event of Mr. Krill’s material breach in the performance of his duties hereunder.

6.1. If Mr. Krill engages in activities or conduct which SDSS contends is a material breach of Mr. Krill’s obligations under this Amended and Restated Agreement, SDSS shall deliver a notice in writing to Mr. Krill to terminate such activities or conduct. If Mr. Krill fails to take affirmative steps to cure or terminate the complained of activities or conduct on or before the expiration of ten (10) days following receipt of said notice, then Mr. Krill shall be deemed in material breach hereunder. In that event, SDSS shall have the right to immediately thereafter terminate this Amended and Restated Agreement. The provisions for notice of default and time to cure prior to termination shall not apply in the case of any cause incapable of being cured, in which event SDSS may terminate this Amended and Restated Agreement immediately and without prior notice. The right of termination contained in this Paragraph 6.1 shall not preclude SDSS from exercising any other right it may have either pursuant to the other terms of this Amended and Restated Agreement or by law.

7. Compensation. In consideration of the services to be performed under this Amended and Restated Agreement, Mr. Krill shall receive an annual Director’s Fee in the amount of $25,000 per annum for the first twelve (12) month period during which this Amended and Restated Agreement remains in force and effect, Prior to November 30, 2011 and to each and every November 30 thereafter, SDSS and Mr. Krill shall agree, in a writing signed by SDSS and Mr. Krill, on the amount of Mr. Krill’s annual Director’s Fee, which amount shall not be less than $25,000 per annum and shall be increased, proportionately, with any increase in SDSS’ paid in capital, sales revenues or net profits during the immediately prior calendar year. Mr. Krill’s annual Director’s Fee shall be paid by SDSS by company or bank check or by wire transfer to a bank account designated by Mr. Krill on or before the end of each and every calendar year during the term of this Amended and Restated Agreement. Mr. Krill shall be responsible for payment of any personal income taxes due or that may become due as a result of his compensation under this Amended and Restated Agreement. In addition, SDSS shall issue 2,400,000 shares of its common stock to Mr. Krill in consideration for his execution of this Amended and Restated Agreement and his full and faithful performance of his obligations and duties hereunder.

7. 1. Notwithstanding anything to the contrary in this Amended and Restated Agreement, paragraph “7” of the Agreement entered into between SDSS and Mr. Krill dated January 12, 2011 (the “2010 Agreement”) shall remain in full force and effect and shall be made part of this Amended and Restated Agreement as though fully set forth herein. Specifically, Mr. Krill shall be entitled to receive payment of any and all annual Director’s Fees that remain unpaid as of the date hereof.

8 Options. Subject to the prior approval of the shareholders of SDSS, SDSS hereby grants to Mr. Krill 10,500,000 options of common stock of SDSS, exercisable at $0.10 per share, from the stock option plan adopted by SDSS. Of the said total of 10,500,000 options, 4,666,660 shares shall vest upon Mr. Krill’s execution of this Amended and Restated Agreement and the balance of 5,833,340 shares shall vest in equal monthly amounts of 291,667 shares during each and every calendar month during the twenty (20) month period commencing on July 1, 2011. The said options shall terminate in accordance with the terms of SDSS’ “2009 Global Incentive Option Plan.” Notwithstanding anything contained herein to the contrary and except as provided for in Paragraph 6, above, if this Amended and Restated Agreement is terminated, any options not previously vested shall become null and void. The options and the shares of stock issuable upon exercise thereof are personal to Mr. Krill and shall be subject to the restrictions of applicable Federal and state securities laws.

8. 1. Notwithstanding anything to the contrary in this Amended and Restated Agreement, paragraph “8” of the 2010 Agreement shall remain in full force and effect and shall be made part of this Amended and Restated Agreement as though fully set forth herein. Specifically, Mr. Krill shall be entitled receive any balance of the 1,500,000 options of common stock of SDSS granted to him in the 2010 Agreement which were to vest after the date hereof and shall be entitled to exercise any options which have vested pursuant to the 2010 Agreement on the terms and subject to the conditions set forth in the 2010 Agreement. As of June 21, 2011, 864,584 of those 1,500,000 options have vested and 635,416 have not yet vested.

9. Business Expenses. SDSS shall reimburse Mr. Krill for all reasonable and necessary business expenses incurred by him in connection with the performance of his duties under this Amended and Restated Agreement, including reasonable travel and accommodation expenses during travel required in connection with the performance of his duties hereunder.

10. Directors’ and Officers’ Liability Insurance. SDSS shall obtain and shall keep in full force directors’ and officers’ insurance covering Mr. Krill’s services as the Chairman of the Board of Directors of SDSS, which insurance shall provide coverage to the fullest extent permitted by applicable law. Any failure by SDSS to obtain or to keep in force such insurance shall be deemed a material breach by SDSS of this Amended and Restated Agreement and shall automatically terminate this Amended and Restated Agreement as of the date when such insurance does not exist, except that Mr. Krill shall thereafter have the right to receive and to exercise all options granted or to be granted to him pursuant to Paragraph 8, above, up to a maximum of 10,500,000 options.

11. No Breaches. Mr. Krill represents that his execution of this Amended and Restated Agreement and the performance of his duties required hereunder will not be a breach of any other agreement to which he is a party.

12. Entire Agreement. This Amended and Restated Agreement constitutes the entire understanding between SDSS and Mr. Krill with respect to the subject matter hereof and except as otherwise set forth herein, replaces and supersedes the 2010 Agreement and any other agreements or understandings with respect to the subject matter hereof. Neither SDSS nor Mr. Krill shall be bound in any manner by any promises, statements, representations or information made, given or furnished by any person representing or purporting to represent SDSS or Mr. Krill except to the extent that such promises, statements, representations or information are expressly set forth in this Amended and Restated Agreement.

13. Successors and Assigns. This Amended and Restated Agreement shall be binding upon and inure to the benefit of the respective heirs, successors, and assigns of the parties.

14. Notices. All notices and other communications required or permitted hereunder shall be delivered personally, sent via facsimile, certified or registered mail, return receipt requested, or next day express mail or overnight, nationally recognized courier, postage prepaid with proof of receipt, to the address or telephone number (in the case of facsimile) set forth above. Such addresses and telephone numbers may be changed by notice given in the manner provided herein. Any such notice shall be deemed given (i) when delivered if delivered personally, (ii) the day after deposit with the express or courier service when sent by next day express mail or courier, (iii) five (5) days after deposit with the postal service when sent by certified or registered mail, or (iv) when sent over a facsimile system with answer back response set forth on the sender's copy of the document.

15. Governing Law. This Amended and Restated Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within New York.

16. Amendment and Modification. This Amended and Restated Agreement may be amended, modified or supplemented only by written agreement executed by SDSS and Mr. Krill.

17. Headings. The headings of the various paragraphs of this Amended and Restated Agreement are inserted for convenience of reference only and are under no circumstances to be a part of, or construed as a part of, this Amended and Restated Agreement.

18. Execution in Counterparts. This Amended and Restated Agreement may be executed in counterparts and by facsimile, each of which shall be deemed to be an original and all of which, when taken together, shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties have entered into this Amended and Restated Agreement as of the day and year first above written.

SUSPECT DETECTION SYSTEMS, INC.

By: /s/Gil Boosidan_____________

Name: Gil Boosidan

Title: Chief Executive Officer

/s/Yoav Krill___________

YOAV KRILL

EX-10.15 3 f8k062111ex10xv_suspect.htm OPTION AGREEMENT, DATED JUNE 21, 2011 BETWEEN SUSPECT DETECTION SYSTEMS, INC. AND YOAV KRILL f8k062111ex10xv_suspect.htm

Exhibit 10.15

Suspect Detection Systems Inc.

2009 GLOBAL INCENTIVE OPTION PLAN

OPTION AGREEMENT

(US)

By and between

Suspect Detection Systems Inc.

A Delaware Corporation

(the “Company”)

Of the first part

and

Yoav Krill

(The “Optionee”)

Chairman of the Board of Directors of

Suspect Detection Systems Inc.

10,500,000 Options of Common Stock

of the second part

Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement (the “Option Agreement”).

I. NOTICE OF OPTION GRANT

Name: Yoav Krill

Address: 150 West 56th Street, Suite 4005, New York, New York 10019

The undersigned Optionee has been granted an Option to purchase Shares, subject to the terms and conditions of the 2009 Global Incentive Option Plan and this Option Agreement, as follows:

Date of Grant June 21, 2011

Purchase Price per Share $0.10

Total Number of Options Granted 10,500,000

Total Purchase Price $1,050,000

Type of Option:	o	Option intended to qualify as an incentive stock option ("ISO") within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended ("Code").

	x	Option not intended to qualify as an Incentive Stock Option ("NSO").

Term/Expiration Date:	Ten (10) years from Date of Grant, unless terminated earlier in accordance with Section 10 of the Plan

Vesting Dates:

The Options shall be exercisable in numbers of whole shares, subject to Optionee’s continuing to be a Service Provider on such dates, according to the following vesting schedule:

· The Options shall vest as follows: 4,666,660 shares shall vest upon the Optionee’s execution of his Amended and Restated Agreement with the Company and the balance of 5,833,340 shares shall vest in equal monthly amounts of 291,667 shares during each and every calendar month during the twenty (20) month period commencing on July 1, 2011.

II. AGREEMENT

1. Grant of Option

(a)

Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to the Optionee named in the Notice of Grant (the “Optionee”), an option (the “Option”) to purchase the number of Shares set forth in the Notice of Grant, at the Purchase Price per Share set forth in the Notice of Grant (the “Purchase Price”).

(b)

In accordance with the Plan, unless specifically stated otherwise herein, in the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail.

(c)

In the case of an ISO, the Option shall not be considered an ISO to the extent that the Fair Market Value of the Shares, which may be purchased on exercise of the Option for the first time during any calendar year (under all plans of the Company and any Parent or Subsidiary of the Company), exceeds $100,000. For purposes of this Section 1(c), ISOs shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted.

(d)

The Optionee is aware that: (i) the Company intends to issue additional shares and options in the future to various entities and individuals, as the Company in its sole discretion shall determine; and (ii) the Company may increase its share capital by new securities in such amount as it finds expedient; and the Optionee hereby waives any claim and/or demand it has or may have regarding such issuance or increase.

(e)

The Optionee further represents, it is familiar with the Company’s business and financial condition, and has acquired sufficient information regarding the Company in order to reach an informed and knowledgeable decision to participate in the Option Plan and to be allocated with the Options.

2. Exercise of Option

(a)

Right to Exercise. This Option shall be exercisable at any time from the Date of Grant and prior to the Expiration Date of the Term in accordance with the Vesting Schedule set forth in the Notice of Grant and subject to the applicable provisions of the Plan and this Option Agreement.

(b)

Method of Exercise. This Option shall be exercisable by delivery of an exercise notice in the form attached as Exhibit B hereto (the “Exercise Notice”), and such other representations and agreements, as may be required by the Company. The Exercise Notice shall be accompanied by (1) payment of the aggregate Purchase Price for the number of Shares to be purchased and (2) payment of the aggregate withholding taxes due with respect to the exercised Shares, if applicable. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the aggregate Purchase Price and withholding taxes due with respect to the exercised Shares, if applicable.

No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise comply with Applicable Laws. If any law or regulation requires the Company to take any action with respect to the Shares specified in such notice before the issuance thereof, then the date of their issuance shall be extended for the period necessary to take such action. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such Shares.

II. AGREEMENT (CONT.)

2. Exercise of Option (cont.)

(c)

The Options may be exercised only to purchase whole Shares, and in no case may a fraction of a Share be purchased. If any fractional Shares would be deliverable upon exercise, such fraction shall be rounded up or down, to the nearest whole number. Half of a share will be rounded down.

(d)

Voting Rights. Pursuant to the terms set forth in the Plan, and, when applicable, subject to the provisions of Section 422 of the Code, any Shares issued at grant of Options or exercise of Options (and securities of the Company issued with respect thereto) shall be voted by an irrevocable proxy, attached as Exhibit C hereto (the “Proxy”) in the same manner as the votes of the majority of other shareholders of the Company present and voting at the applicable meeting, such Proxy to be assigned to the person or persons designated by the Board and to provide for the power of such designated person(s) to act, instead of the Optionee and on its behalf, with respect to any and all aspects of the Optionee’s shareholdings in the Company. The proxy shall be used to vote in compliance with the vote of the majority of the other members of the board, subject to Applicable Laws and the Company’s Certificate of Incorporation, as amended.

3. Method of Payment

Payment of the aggregate Purchase Price shall be made in U.S. dollars, by any of the following, as shall be determined by the Administrator in its sole discretion: (1) cash, (2) check, (3) a combination thereof.

4. Restrictions on Exercise

This Option may not be exercised until such time the Plan has been approved by the shareholders of the Company or if the issuance of Shares upon such exercise or the method of payment of consideration for such Shares would constitute a violation of Applicable Laws.

5. Non-Transferability of Options and Shares

(a)

Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee.

(b)

Shares sales would be subject to the Company’s Certificate of Incorporation, as amended; Shares shall not be sold or transferred directly or indirectly to a competitor of the Company. The Administrator shall determine, in its sole discretion, whether a certain transfer of Shares is not allowed according to this Section.

6. Term of Option

This Option may be exercised only during the period commencing on the Date of Grant and terminating on the Expiration Date of the Term (the “Term”) set out in the Notice of Grant, unless terminated earlier in accordance with the provisions of the Option Agreement or the Plan, and may be exercised during such term only in accordance with the Plan and the terms of this Option Agreement. In the case of an ISO granted to a Ten Percent Shareholder the term of the Option shall be no more than five (5) years from the date of grant.

II. AGREEMENT (CONT.)

7. Tax Consequences

Any tax consequences arising from the grant or exercise of any Option or from the disposition of the Shares or from any other event or act (whether of the Optionee or of the Company or of its Trustee) hereunder, shall be borne solely by the Optionee. The Company and/or the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source.

Furthermore, such Optionee shall agree to indemnify the Company and/or the Trustee, and/or the Company’s shareholders and/or directors and/or officers if applicable, and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Optionee, provided that they acted in due care. Except as otherwise required by law, the Company shall not be obligated to honor the exercise of any Option by or on behalf of an Optionee until all tax consequences (if any) arising from the exercise of such Options are resolved in a manner reasonably acceptable to the Company.

Set forth below is a brief summary as of the date of the grant of this Option of some of the tax consequences of the grant and exercise of this Option and the disposition of the Shares.

THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THEREFORE, OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

(a)

Exercise of ISO. In the case of an ISO, the exercise of the Option will not be subject to U.S. federal income tax, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Purchase Price will be treated as an adjustment to the alternative minimum tax for federal income tax purposes and may subject the Optionee to the alternative minimum tax in the year of exercise.

(b)

Exercise of NSO. The exercise of an NSO may be subject to U.S. federal income tax liability (at ordinary tax rates) upon the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Purchase Price. If Optionee is an Employee or a former Employee, the Company will be required to withhold from Optionee's compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise.

(c)

Disposition of Shares. In the case of an NSO, if Shares are held for at least one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for U.S. federal income tax purposes. In the case of an ISO, if Shares transferred pursuant to the Option are held for at least one year after exercise and for at least two years after the date of grant, any gain realized on disposition of the Shares will also be treated as long-term capital gain for federal income tax purposes. If Shares purchased under an ISO are disposed of within one year after exercise or two years after the date of grant, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Purchase Price and the lesser of (1) the Fair Market Value of the Shares on the date of exercise, or (2) the sale price of the Shares. Any additional gain will be taxed as capital gain.

II. AGREEMENT (CONT.)

7. Tax Consequences (Cont.)

(d)

Notice of Disqualifying Disposition of ISO Shares. In the case of an ISO, if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (1) the date two years after the date of grant, or (2) the date one year after the date of exercise, Optionee shall immediately notify the Company in writing of such disposition. Optionee agrees that Optionee may be subject to income tax withholding by the Company on the compensation income recognized by Optionee.

Governing Law; Severability

This agreement shall be governed by, and interpreted in accordance with, the laws of the State of Delaware, U.S.A., notwithstanding the conflicts of laws principles of any jurisdiction.

Entire Agreement

The Plan is incorporated herein by reference. The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee's interest except by means of a writing signed by the Company and Optionee.

10.

No Guarantee of Continued Service

Optionee acknowledges and agrees that the vesting of shares pursuant to the Vesting Schedule hereof is earned only by continuing as a Service Provider at the will of the Company. Optionee further acknowledges and agrees that this Agreement, the transactions contemplated hereunder and the Vesting Schedule set forth herein do not constitute an express or implied promise of continued engagement as a Service Provider and shall not interfere in any way with Optionee's right or the Company’s right to terminate Optionee’s relationship as a Service Provider at any time, with or without cause.

11.

Confidentiality

The Optionee agrees and acknowledges that the terms and conditions of this Option Agreement, including without limitation the number of Shares for which Options have been granted, are confidential. The Optionee agrees that he will not disclose these terms and conditions to any third party, except to the Optionee’s financial or legal advisors, tax advisors or family members, unless such disclosure is required by law.

II. AGREEMENT (CONT.)

By affixing his signature hereunder, Optionee acknowledges receipt of a copy of the Plan and represents that Optionee is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option. Optionee further agrees to notify the Company upon any change in the residence address indicated below.

OPTIONEE	SUSPECT DETECTION SYSTEMS INC.
/s/Yoav Krill	/s/ Gil Boosidan
Signature	By Gil Boosidan
Yoav Krill	Chief Executive Officer
Print Name	Title
150 W. 56th St., Apt. 4005, New York, NY 10019
Residence Address

Attachments:

●	Exhibit A: Suspect Detection Systems Inc. 2009 Global Incentive plan

●	Exhibit B: Exercise Notice

●	Exhibit C: Proxy

EXHIBIT B

Suspect Detection Systems Inc.

2009 GLOBAL INCENTIVE OPTION PLAN

EXERCISE NOTICE

Suspect Detection Systems Inc.

150 West 56th Street, Suite 4005, New York, New York 10019

Exercise of Option. Effective as of today, I, _______________, the undersigned (“Optionee”) hereby elects to exercise Optionee’s option to purchase _________________ Shares under and pursuant to the 2009 Global Incentive Option Plan (the “Plan”) and the Option Agreement dated June 21, 2011 (the “Option Agreement”).

2.	Delivery of Payment. Purchaser herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option Agreement.

Rights as Shareholder. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Shares, notwithstanding the exercise of the Option. The Shares shall be issued to Optionee as soon as practicable after the Option is exercised. No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance except as provided in the Plan.

Tax Consultation. Optionee understands that he/she may suffer adverse tax consequences as a result of Optionee's purchase or disposition of the Shares. Optionee represents that he/she has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company or any Parent or Subsidiary for any tax advice.

5.	Additional Representations. The Optionee hereby acknowledges that he has been informed that nothing herein shall obligate the Company to register its shares or any portion of its shares on a stock exchange.

Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Optionee and his or her heirs, executors, Board of Directors, successors and assigns.

Signed by the Company and Optionee.

Submitted by:	Accepted by: Suspect Detection Systems Inc.

Signature	By:

Print Name:	Title:

Address:	Address:

Date Received: ____________________

EXHIBIT C – PROXY

The undersigned, as record holder of securities of Suspect Detection Systems Inc. (the “Company”), hereby irrevocably appoints _____________ and/or ___________, each individually, and/or their successors and assigns, as my proxy, instead of myself and on my behalf, with respect to any and all aspects of my shareholdings in the Company, including, without limiting the foregoing generality (i) receiving any notices the Company may deliver to its shareholders, pursuant to the Company’s Certificate of Incorporation, as amended, any shareholders agreement, applicable law or otherwise, (ii) attending all meetings of the shareholders of the Company and voting such securities at any meeting of the shareholders of the Company (and at any postponements or adjournments thereof) and waiving all minimum notice requirements for such meetings of shareholders, (iii) executing any consents or dissents in writing without a meeting of the shareholders of the Company to any corporate action thereof, (iv) waiving any preemptive right, right of first refusal, right of first offer, co-sale right or any other similar right or restriction to which I will be entitled by virtue of the securities, (v) giving or withholding consent or agreement to any matter which requires my consent or agreement in my capacity as a shareholder of the Company (whether such is required under the Certificate of Incorporation, as amended of the Company, any agreement to which I am a party as a shareholder or otherwise), and/or (vi) joining in making a request to convene a general meeting or class meeting of the shareholders of the Company or to otherwise exercise any and all powers and authorities vested within me in my capacity as a shareholder of the Company (in each of the foregoing cases, to the fullest extent that I will be entitled to act so, and in the same manner and with the same effect as if the undersigned were personally present at any such meeting or voting such securities or personally acting on any matters submitted to shareholders for approval or consent.

This proxy is made pursuant the Suspect Detection Systems Inc. 2009 Global Incentive plan dated __________ (the “Plan”).

The securities shall be voted by the proxy holder in the same manner as the votes of the majority of other shareholders of the Company present and voting at the applicable meeting.

This proxy is irrevocable as it may affect rights of third parties. The proxy holder will have the full power of substitution and revocation. All authority herein conferred shall survive the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

The irrevocable proxy will remain in full force and effect until the consummation of an IPO (as defined in the Plan), or the fourth anniversary of the Date of Grant (as defined in the Plan), upon which it will terminate automatically.

This proxy shall be signed exactly as the shareholder’s name appears on his share certificate. Joint shareholders must each sign this proxy. If signed by an attorney in fact, the Power of Attorney must be attached.


Name & Signature		Date

EX-10.16 4 f8k062111ex10xvi_suspect.htm AMENDED AND RESTATED EMPLOYMENT AGREEMENT, DATED JUNE 21, 2011 BETWEEN SUSPECT DETECTION SYSTEMS, INC. AND GIL BOOSIDAN f8k062111ex10xvi_suspect.htm

Exhibit 10.16

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Between

SUSPECT DETECTION SYSTEMS, INC.

And

GIL BOOSIDAN

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made and entered into as of this 21st day of June, 2011 by and between SUSPECT DETECTION SYSTEMS, INC., a Delaware corporation having its Principal Office located at 150 West 56th Street, Suite 4005, New York, New York 10019 (“SDSS”), and GIL BOOSIDAN, an individual residing at 3333 Henry Hudson Parkway, Apartment 1G, Bronx, New York 10463 (the “Employee”).

W I T N E S S E T H:

WHEREAS, SDSS desires to employ and to continue the employment of the services of the Employee as the Chief Executive Officer of SDSS and the Employee desires to accept such employment, subject to the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged, the parties hereto agree as follows:

1. Employment. Subject to the provisions of this Amended and Restated Employment Agreement, SDSS hereby employs and continues the employment of the Employee as the Chief Executive Officer of SDSS. The Employee agrees to devote so much of his time and effort as are necessary for the faithful performance of his duties, as set forth below, for the management and operation of the business of SDSS.

2. Standard of Care. The Employee’s standard of care to SDSS shall be to refrain from engaging in gross neglect, negligent or reckless conduct or intentional misconduct. In discharging his duties, the Employee shall be fully protected in relying in good faith upon the records required to be maintained by SDSS and upon such information, opinions, reports or statements by SDSS or its agents, or by any other person, as to matters the Employee reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of SDSS, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits or losses of SDSS.

3. Results of the Employee’s Services. SDSS shall own, and the Employee hereby expressly grants to SDSS, exclusively and in perpetuity, all rights in and to results and proceedings of the Employee’s services, including, without limitation, any contracts negotiated by the Employee, all suggestions, ideas, techniques, forms, pamphlets, and other contributions and materials originated or developed by the Employee during the term of this Amended and Restated Employment Agreement, and in and to all earnings derived by reason of the Employee’s services and efforts within the scope of the Employee’s employment hereunder. The Employee hereby waives any and all right, title or interest that he might otherwise have therein or thereto, or in or to the results or proceeds derived by the Employee or others from the use of any thereof.

4. Duties. The services to be performed by the Employee include all of the duties to be performed by the Chief Executive Officer of SDSS including, without limitation, services as may reasonably be directed by the Board of Directors of SDSS; developing and implementing international manufacturing, sales, marketing and distribution strategies; conducting market research and assessing the competitive environment to identify international opportunities; developing business plans for new business development; reviewing current manufacturing, sales and distribution strategies to facilitate growth; developing appropriate marketing strategies; developing strategies to improve operational efficiencies of international manufacturing and distribution; analyzing sales, marketing, and distribution goals; preparing growth forecasting reports and presenting findings to the Board of Directors with respect to domestic and international markets; hiring and firing managers and employees of SDSS; directing the activities of and assigning responsibilities to the managers and employees of SDSS; and engaging and terminating outside professionals retained by SDSS, including attorneys and accountants.

5. Term. The term of this Amended and Restated Employment Agreement shall commence as of the date set forth above and shall continue until either party provides the other with no less than ninety (90) days prior written notice that such party desires to terminate this Agreement. Notwithstanding the foregoing and in addition to such rights of termination as are otherwise set forth in this Agreement, SDSS shall have the additional right to terminate this Agreement for cause in the event of a material breach by the Employee in the performance of his duties hereunder.

6. Compensation. In consideration of the services to be performed under this Amended and Restated Employment Agreement, and conditioned upon the Employee’s dutiful and faithful performance of his required services hereunder, the Employee shall be paid a total of $30,000.00, which shall be paid in cash by SDSS in equal installments on September 30, 2011, December 31, 2011, March 31, 2012 and June 30, 2012 by company or bank check or by wire transfer to a bank account designated by the Employee. In addition, SDSS shall issue 1,200,000 shares of its common stock to Employee in consideration for his execution of this Amended and Restated Employment Agreement and his full and faithful performance of his obligations and duties hereunder.

7. Options. Subject to the prior approval of the shareholders of SDSS, SDSS hereby grants to the Employee 6,000,000 options of common stock of SDSS, exercisable at $0.10 per share, from the stock option plan adopted by SDSS. Of the said total of 6,000,000 options, 2,666,680 shares shall vest upon the Employee’s execution of this Amended and Restated Employment Agreement and the balance of 3,333,320 shares shall vest in equal monthly amounts of 166,667 shares during each and every calendar month during the twenty (20) month period commencing on July 1, 2011. The said options shall terminate in accordance with the terms of SDSS’ “2009 Global Incentive Option Plan.” Notwithstanding anything contained herein to the contrary and except as provided for in Paragraph 12, below, if this Agreement is terminated, any options not previously vested shall become null and void. The options and the shares of stock issuable upon exercise thereof are personal to the Employee and shall be subject to the restrictions of applicable Federal and state securities laws.

8. Additional Benefits. The Employee shall be entitled to all additional benefits provided to the other employees of SDSS.

9. Reimbursement of Expenses. The Employee shall be reimbursed by SDSS for reasonable itemized expenses incurred in the normal performance of the Employee’s duties hereunder.

10. Vacations. During the term of this Amended and Restated Employment Agreement, the Employee shall be entitled to paid annual vacation time of not less than three (3) weeks, at a time or times, during which time the compensation payable under Paragraph 6 of this Amerced and Restated Employment Agreement shall be paid in full as normally paid.

11. Temporary Absences. The compensation payable to the Employee under this Amended and Restated Employment Agreement shall not be reduced or otherwise adjusted as a result of temporary absences for sick or personal days, not exceeding a total of five (5) days each calendar year.

12. Directors’ and Officers’ Liability Insurance. SDSS shall obtain and shall keep in full force directors’ and officers’ insurance covering the Employee’s services as the Chief Executive Officer of SDSS, which insurance shall provide coverage to the fullest extent permitted by applicable law. Any failure by SDSS to obtain or to keep in force such insurance shall be deemed a material breach by SDSS of this Amended and Restated Agreement and shall automatically terminate this Amended and Restated Agreement as of the date when such insurance does not exist, except that the Employee shall thereafter have the right to receive and to exercise all options granted or to be granted to him pursuant to Paragraph 7, above, up to a maximum of 6.000,000 options.

13. Death or Substantial Disability. In the event of the Employee’s death or substantial disability, as hereinafter defined, the compensation payable to him under Paragraph 6 and Paragraph 7 of this Amended and Restated Employment Agreement shall cease as of the end of the week in which death or substantial disability has occurred, and SDSS may (but shall not be required to) terminate this Amended and Restated Employment Agreement. For purposes of this Amended and Restated Employment Agreement, the phrase substantial disability shall mean the incapacity of the Employee to perform his customary services by reason of illness, accident or any other reason (other than breach by the Employee) for a period in excess of thirty (30) consecutive days or sixty (60) days in any rolling twelve month period.

14. Non-Competition and Non-Solicitation. As long as the Employee is employed by or otherwise affiliated with SDSS in any capacity and provided that SDSS is still operating as a commercially viable business, the Employee shall not directly or indirectly:

14.1. Attempt in any manner to persuade any customer of SDSS to cease to do business or to reduce the amount of business which any such customer has customarily done or contemplates doing with SDSS, whether or not the relationship between SDSS and such customer was originally established in whole or in part through the Employee’s efforts.

14.2. Employ or attempt to employ or assist anyone else in employing any person who is in the employ of SDSS.

14.3. Employ or render any services to any person, firm or corporation that is a customer of SDSS or is in a business similar to or competitive with SDSS, or engage in such business on his own account as an individual, partner, shareholder, director, officer, principal, agent or employee, or in any other relationship or capacity whatsoever without the prior written consent of SDSS, which consent may be conditioned upon reasonable assurances by the Employee that “confidential information or trade secret of SDSS,” as defined in Paragraph 16 of this Amended and Restated Employment Agreement, will not be used or disclosed. As used throughout this Paragraph 14, the term “customer” shall mean: (a) anyone or any entity who or that is then a customer of SDSS; (b) anyone or any entity who or that was a customer of SDSS at any time during the one (1) year period immediately preceding the date of this Amended and Restated Employment Agreement, and (c) any prospective customers to which SDSS had made a presentation (or similar offering of services) within a period of ninety (90) days immediately preceding the date of this Amended and Restated Employment Agreement.

14.4. Hold stock in or be otherwise interested (as an employee, director, officer, independent contractor, employee or otherwise) in any other enterprise with an office in the continental United States which engages in any business directly competitive with the current activities of SDSS without the prior written consent of SDSS, which consent may be conditioned upon reasonable assurances by the Employee that “confidential information or trade secret of SDSS,” as defined in Paragraph 16 of this Amended and Restated Employment Agreement, will not be used or disclosed.

15. Corporate Opportunities. The Employee shall not enter into transactions for his own account that may be considered to be competitive with or a business opportunity that may be beneficial to SDSS. The Employee shall account to SDSS and hold as trustee for it any property, profit or benefit received or derived by him from his use or appropriation of the property or the opportunities of SDSS, including, but not limited to, information developed exclusively for and opportunities expressly offered to SDSS.

16. Trade Secrets. At no time, either during the term of his employment or at any time thereafter, shall the Employee disclose to any person, firm or corporation or use, directly or indirectly, for his own benefit or the benefit of any other person, firm or corporation, any confidential information or trade secret of SDSS or any customer of SDSS or utilize such confidential information or trade secret for his own benefit or for the benefit of third parties, except pursuant to a lawful order of a court of competent jurisdiction. The terms “confidential information or trade secret of SDSS” shall include, without limitation, the customer lists, financial reports and projections, business plans, product introductions and test results, processes, sales volume and overall project profits, corporate or trade names, and such other information pertaining to SDSS and its customers as would reasonably be considered confidential or proprietary. The terms “confidential information or trade secret of SDSS” do not include any information which becomes generally available to the public other than by breach of this Amended and restated Employment Agreement.

17. Injunctive Relief. If the Employee commits a breach or threatens to commit a breach of any of the provisions of Paragraphs 15 or 16, above, SDSS shall have the right to have those provisions of this Amended and Restated Employment Agreement specifically enforced by any court having equity jurisdiction without being required to post a bond or other security and without having to prove the inadequacy of the available remedies at law, it being expressly acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to SDSS and that money damages will not provide an adequate remedy to SDSS. In addition, SDSS may take any such other actions and seek other remedies available to it under law or in equity and shall be entitled to any and all damages it can show it has sustained by reason of such breach.

18. No Breaches. The Employee represents that his execution of this Amended and Restated Employment Agreement and the performance of his duties required hereunder will not be a breach of any other agreement to which he is a party.

19. Events of Default and Remedies. The repeated failure, refusal or neglect of the Employee, other than by reason of disability, to report or to render his services when and as required hereunder, or to perform any covenant or condition of this Amended and Restated Employment Agreement on his part to be kept or performed, shall be an event of default hereunder and SDSS may terminate this Amended and Restated Employment Agreement if any such event or default shall occur and continue during the term hereof, as provided in Paragraph 20, below.

20. Termination. In addition to such rights of termination as are otherwise set forth in this Amended and Restated Employment Agreement, SDSS shall have the additional right to terminate this Amended and Restated Employment Agreement for cause in the event of the Employee’s material breach in the performance of his duties hereunder. SDSS shall thereupon be relieved of all obligations to the Employee under this Amended and Restated Employment Agreement accruing from and after the date of the occurrence of such breach.

20.1. If the Employee engages in activities or conduct which SDSS contends is a material breach of the Employee’s obligations under this Amended and Restated Employment Agreement, SDSS shall deliver a notice in writing to the Employee to terminate such activities or conduct. If the Employee fails to take affirmative steps to cure or terminate the complained of activities or conduct on or before the expiration of ten (10) days following receipt of said notice, then the Employee shall be deemed in material breach hereunder. In that event, SDSS shall have the right to immediately thereafter terminate this Amended and Restated Employment Agreement. The provisions for notice of default and time to cure prior to termination shall not apply in the case of fraudulent conduct or dishonesty, or any other cause incapable of being cured, in which event SDSS may terminate this Amended and Restated Employment Agreement immediately and without prior notice. The right of termination contained in this Paragraph 20.1 shall not preclude SDSS from exercising any other right it may have either pursuant to the other terms of this Amended and Restated Employment Agreement or by law.

21. Notices. All non-routine notices which either party is required or may desire to give or make to the other party hereunder shall be in writing. Notice to SDSS shall be considered given when personally delivered and receipted or three (3) days after being mailed by first class mail postage prepaid addressed to the Chairman of the Board of Directors in care of SDSS at the address of the Principal Office. Notice to the Employee shall be considered given when personally delivered and receipted or three (3) days after being mailed by first class mail postage prepaid addressed to the Employee at the address first above written, unless the Employee has given SDSS a notice of a different address.

22. Miscellaneous. This Amended and Restated Employment Agreement constitutes the entire agreement between the parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings of the parties in connection herewith. Neither SDSS nor the Employee shall be bound in any manner by any promises, statements, representations or information made, given or furnished by any person representing or purporting to represent SDSS or the Employee except to the extent that such promises, statements, representations or information are expressly set forth in this Amended and Restated Employment Agreement. This Amended and Restated Employment Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within New York. The headings of the various paragraphs of this Amended and Restated Employment Agreement are inserted for convenience of reference only and are under no circumstances to be a part of, or construed as a part of, this Amended and Restated Employment Agreement. This Amended and Restated Employment Agreement shall be binding upon and inure to the benefit of the respective heirs, successors, and assigns of the parties.

23. Execution in Counterparts. This Amended and Restated Employment Agreement may be executed in counterparts and by facsimile, each of which shall be deemed to be an original and all of which, when taken together, shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have duly executed this Amended and Restated Employment Agreement, in duplicate originals as of the day and year first above written.

SUSPECT DETECTION SYSTEMS, INC.

By: /s/Yoav Krill

Name: Yoav Krill

Title: Chairman of the Board of Directors

/s/ Gil Bosidan

GIL BOOSIDAN

EX-10.17 5 f8k062111ex10xvii_suspect.htm OPTION AGREEMENT, DATED JUNE 21, 2011 BETWEEN SUSPECT DETECTION SYSTEMS, INC. AND GIL BOOSIDAN f8k062111ex10xvii_suspect.htm

Exhibit 10.17

Suspect Detection Systems Inc.

2009 GLOBAL INCENTIVE OPTION PLAN

OPTION AGREEMENT

(US)

By and between

Suspect Detection Systems Inc.

A Delaware Corporation

(the “Company”)

Of the first part

and

Gil Boosidan

(The “Optionee”)

Chief Executive Officer of

Suspect Detection Systems Inc.

6,000,000 Options of Common Stock

of the second part

Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement (the “Option Agreement”).

I. NOTICE OF OPTION GRANT

Name: Gil Boosidan

Address: 3333 Henry Hudson Parkway, Apartment 1G, Bronx, New York 10463

The undersigned Optionee has been granted an Option to purchase Shares, subject to the terms and conditions of the 2009 Global Incentive Option Plan and this Option Agreement, as follows:

Date of Grant June 21, 2011

Purchase Price per Share $0.10

Total Number of Options Granted 6,000,000

Total Purchase Price $600,000

Type of Option:	x	Option intended to qualify as an incentive stock option ("ISO") within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended ("Code").

	o	Option not intended to qualify as an Incentive Stock Option ("NSO").

Term/Expiration Date:	Ten (10) years from Date of Grant, unless terminated earlier in accordance with Section 10 of the Plan

Vesting Dates:

The Options shall be exercisable in numbers of whole shares, subject to Optionee’s continuing to be a Service Provider on such dates, according to the following vesting schedule:

· The Options shall vest as follows: 2,666,680 shares shall vest upon the Optionee’s execution of his Amended and Restated Employment Agreement with the Company and the balance of 3,333,320 shares shall vest in equal monthly amounts of 166,667 shares during each and every calendar month during the twenty (20) month period commencing on July 1, 2011.

II. AGREEMENT

1. Grant of Option

(a)

(b)

(c)

(d)

(e)

2. Exercise of Option

(a)

(b)

II. AGREEMENT (CONT.)

2. Exercise of Option (cont.)

(c)

(d)

3. Method of Payment

4. Restrictions on Exercise

5. Non-Transferability of Options and Shares

(a)

(b)

6. Term of Option

II. AGREEMENT (CONT.)

7. Tax Consequences

Set forth below is a brief summary as of the date of the grant of this Option of some of the tax consequences of the grant and exercise of this Option and the disposition of the Shares.

(a)

(b)

(c)

II. AGREEMENT (CONT.)

7. Tax Consequences (Cont.)

(d)

Governing Law; Severability

This agreement shall be governed by, and interpreted in accordance with, the laws of the State of Delaware, U.S.A., notwithstanding the conflicts of laws principles of any jurisdiction.

Entire Agreement

10.

No Guarantee of Continued Service

11.

Confidentiality

II. AGREEMENT (CONT.)

OPTIONEE	SUSPECT DETECTION SYSTEMS INC.
/s/ Gil Boosidan	/s/ Yoav Krill
Signature	By
Gil Boosidan	Yoav Krill, Chairman of the Board of Directors
Print Name	Title
3333 Henry Hudson Parkway, Bronx, NY 10463
Residence Address

Attachments:

●	Exhibit A: Suspect Detection Systems Inc. 2009 Global Incentive plan

●	Exhibit B: Exercise Notice

●	Exhibit C: Proxy

EXHIBIT B

Suspect Detection Systems Inc.

2009 GLOBAL INCENTIVE OPTION PLAN

EXERCISE NOTICE

Suspect Detection Systems Inc.

150 West 56th Street, Suite 4005, New York, New York 10019

2.	Delivery of Payment. Purchaser herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option Agreement.

5.	Additional Representations. The Optionee hereby acknowledges that he has been informed that nothing herein shall obligate the Company to register its shares or any portion of its shares on a stock exchange.

Signed by the Company and Optionee.

Submitted by:	Accepted by: Suspect Detection Systems Inc.

Signature	By:

Print Name:	Title:

Address:	Address:

Date Received: ____________________

EXHIBIT C – PROXY

This proxy is made pursuant the Suspect Detection Systems Inc. 2009 Global Incentive plan dated __________ (the “Plan”).

The securities shall be voted by the proxy holder in the same manner as the votes of the majority of other shareholders of the Company present and voting at the applicable meeting.


Name & Signature		Date