SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, For Use of the
[_] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
TTR INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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1) Title of each class of securities to which transaction 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 forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
[X] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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TTR INC.
1841 Broadway
New York, New York 10023
Notice of Annual Meeting of Stockholders
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NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of TTR INC.
(the "Company") will be held in New York City, New York, at 10 A.M., on December
21, 1998, at the offices of the Company's counsel, Baer Marks & Upham, LLP, at
805 Third Avenue, New York, New York 10022, 20th Floor Conference Room A, for
the following purposes:
(i) for the election of directors of the Company to hold office until the
next annual meeting of the stockholders and until their respective successors
shall have been duly chosen and qualified,
(ii) to change the Company's name to "TTR Technologies, Inc.",
(iii) to amend the Certificate of Incorporation of the Company to authorize
the issuance of Preferred Stock as provided in Exhibit A to the Proxy Statement,
(iv) to repeal the By-Laws of the Company and to adopt, in lieu thereof,
new By-Laws in the form attached to the Proxy Statement as Exhibit B,
(v) to increase the total number of shares reserved for issuance upon
exercise of stock options granted under the 1996 Stock Option Plan to 750,000
shares and to otherwise amend the 1996 Stock Option Plan as provided in Exhibit
C attached to the Proxy Statement,
(vi) to approve the adoption by the Board of Directors of the 1998
Non-Executive Directors' Stock Option Plan in the form attached to the Proxy
Statement as Exhibit D;
(vii) to ratify the selection of BDO Almagor & Co, as independent public
accountants of the Company for the year ending December 31, 1998, and
(viii) to transact such other business as may properly come before the
meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on November 12, 1998
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting or any adjournment thereof.
If you do not expect to be personally present at the meeting but wish your
stock to be voted for the business to be transacted thereat, the Board of
Directors requests that you complete, sign and date the enclosed proxy and
promptly return it by mail in the enclosed postage paid envelope provided.
By Order of the Board of Directors
M.D. Tokayer
Chairman of the Board
November 23, 1998
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PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE
ENVELOPE PROVIDED. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
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3
TTR INC.
1841 Broadway
New York, New York, 10023
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PROXY STATEMENT
For the Annual Meeting of Stockholders
to be held on December 21, 1998
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Introduction
This Proxy Statement is sent to shareholders of TTR Inc., a Delaware
corporation (the "Company"), in connection with the solicitation of proxies by
the Board of Directors of the Company for use at the Annual Meeting of
Shareholders of the Company to be held at offices of the Company's counsel, Baer
Marks & Upham, LLP, at 805 Third Avenue, New York, New York 10022, 20th Floor
Conference Room A, on Thursday, December 21, 1998 at 10:00 a.m., and any
adjournment(s) thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders. Solicitation of proxies may be made in person or
by mail, telephone, or telecopy by directors, officers, and employees of the
Company. The Company may also engage the services of others to solicit proxies
in person or by telephone or telecopy. In addition, the Company may also request
banking institutions, brokerage firms, custodians, nominees, and fiduciaries to
forward solicitation material to the beneficial owners of common stock of the
Company held of record by such persons, and the Company will reimburse such
persons for the costs related to such services. The Company will pay the cost of
the solicitation of proxies. This Proxy Statement is being mailed to
shareholders on or about November 23, 1998.
Annual Report
Enclosed is the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1997, including audited Financial Statements. Such Annual
Report on Form 10-KSB does not form any part of the material for the
solicitation of the proxies.
Revocation of Proxy
Any shareholder returning the accompanying proxy may revoke such proxy at
any time prior to its exercise by filing with the Secretary of the Company (i) a
duly executed copy bearing a later date or (ii) a written instrument revoking
the proxy or (iii) personally appearing at the scheduled meeting.
Voting Rights
All voting rights are vested exclusively in the holders of the Common Stock
of the Company. Only stockholders of record at the close of business on November
12, 1998 will be entitled to receive notice of and to vote at the meeting. As of
November 12, 1998, the Company had outstanding a total of 4,014,659 shares of
Common Stock. Each holder of Stock is entitled to one vote for each share held.
Quorum; Voting
The holders of a majority of the issued and outstanding Common stock,
present in person or by proxy, will constitute a quorum for the transaction of
business at the Annual Meeting or any adjournment thereof. Abstentions are
counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. Assuming a quorum is present, the
affirmative vote of a majority of the shares present in person or by proxy and
voting on a matter is required for approval.
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4
PROPOSAL NO. 1 -- Election of Directors
The Board of Directors of the Company currently consists of three (3)
members. At the Annual Meeting, the named three persons have been nominated by
the Board of Directors for election to hold office until the next annual meeting
and until their successors are elected and have been qualified. The election of
Directors requires the affirmative vote of a plurality of the shares cast of
Common Stock voting together either present or represented at a meeting by proxy
at which a quorum is present or represented. Abstention and Broker non-votes are
counted for the purposes of determining whether a quorum is present, but do not
represent votes cast with respect to any proposal.
It is the intention of the persons named in the accompanying proxy to vote
FOR the election of the three persons named in the table below as Directors of
the Company, unless authority to do so is withheld. Proxies cannot be voted for
a greater number of persons than the nominees named. If events not now known or
anticipated make any of the nominees unwilling or unable to serve, the proxies
will be voted (in the discretion of the holders of such proxies) for other
nominees not named herein in lieu of those unwilling or unable to serve. The
Board of Directors is not aware of any circumstances likely to cause any nominee
to become unavailable for election.
The following table sets forth the name, age and position of each current
Director, and Director nominee:
Name Age Position
- ---- --- --------
M.D. Tokayer 41 Chairman of the Board, President, Treasurer
and Director
Arik Shavit 48 Vice-President - International New Business
Development and Director
Baruch Sollish, Ph.D. 51 Vice President - Research and Development,
Chief Technology Officer and Director
Marc. D. Tokayer has been Chairman of the Board of Directors, President,
and Treasurer of the Company since he founded the Company in July, 1994 and
served as Chief Executive Officer of the Company until July 6, 1998. He has
served as President and Chairman of the Board of Directors of TTR Technologies
Ltd., the Company's Israeli subsidiary ("TTR-Israel") since its inception in
December 1994. From September 1992 to July 1994, Mr. Tokayer worked as an
independent consultant primarily in the areas of business applications. From
October 1990 through August 1992, Mr. Tokayer was employed by Yael Ltd., an
Israeli company, where he managed the development of the Central Inventory
Control System.
Arik Shavit, has been a Director and Vice President of the Company and a
Director and Chief Executive Officer of TTR Technologies Ltd., the Company's
wholly owned Israeli subsidiary ("TTR Israel") since September 1996. From August
1994 to September 1996, Mr. Shavit was a Manager of Business Development, Smart
Card Services at IBM Israel Ltd. From August 1990 to July 1994, Mr. Shavit
founded and managed Silvaco (Israel) Ltd., an Israeli subsidiary of SILVACO
International, Inc., a California based software company which develops
state-of-the-art computer assisted engineering (CAE) software applications and
provided marketing and support services. Mr. Shavit also served as Corporate
Vice-President and Director of Silvaco.
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Baruch Sollish, Ph.D, has been a Director of the Company since December
1994 and has served as Vice President - - Research and Development and Secretary
of the Company since September 1996. From June 1987 through December 1994, Dr.
Sollish founded and managed Peletronics Ltd., an Israel software company,
engaged primarily in the field of smart cards and software design for personnel
administration, municipal tax authorities and billing procedures at bank
clearance centers. Dr. Sollish hold six United States patents in the fields of
electro optics, ultrasound and electronics and has published and lectured
extensively.
Following (and subject to) the adoption of the Proposed new By-Laws for the
Company, the Board intends to hold its first meeting following the Annual
Meeting and elect Steven L. Barsh, the Company's Chief Executive Officer, to the
Board. Set forth below is certain information relating to Mr. Barsh. The Board
intends to elect to the Board of Directors an additional one (1) to three (3)
individuals who are not employed or otherwise affiliated with the Company. At
the present time the Company has not identified any such independent directors.
Steven L. Barsh joined the Company as Chief Executive Officer on July 6,
1998. From April 1996 to January 1998, Mr. Barsh was a Vice President of MCI
Systemhouse, where he led a commercial software unit that developed and sold
products that enabled organizations to deliver complex software projects more
quickly. From 1987 to April 1996, Mr. Barsh served as President of SECA, Inc., a
software development and consulting company prior to its acquisition by MCI
Systemhouse.
RECOMMENDATATION AND VOTE
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF
ALL OF THE NOMINEES TO THE BOARD OF DIRECTORS.
Stock Ownership of Management and Certain
Beneficial Holders
The following table sets forth certain information, as of September 30,
1998, concerning the ownership of the Common Stock by (a) each person who, to
the best of the Company's knowledge, beneficially owned on that date more than
5% of the outstanding Common Stock, (b) each of the Company's directors and (c)
all current directors, officers and significant employees of the Company as a
group. Except as otherwise indicated, the stockholders listed in the table have
the sole voting and investment power with respect to the shares indicated.
Name and Address of Shares of Common Stock Percent of Class(1)
Beneficial Owner Beneficially Owned
Marc D. Tokayer(2) 618,547 15.4%
c/o TTR Ltd.
2 Hanagar Street
Kfar Saba, Israel
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(1) Unless otherwise noted, the Company believes that the persons named in the
table have sole voting and investment power with respect to all of the shares of
Common Stock beneficially owned by them. A person is deemed to be a beneficial
owner of securities that can be acquired by such persons within 60 days from the
date hereof upon exercise of warrants or options. Each beneficial owner's
percentage ownership is determined by assuming that options or warrants is
determined by assuming that options or warrants that are held by such person
(but not those held by any other person) and which are exercisable within 60
days from the date hereof have been exercised.
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Steven L. Barsh 250,000 6.23%
C/o TTR Inc.
1841 Broadway
New York, NY
Baruch Sollish 100,000 2.5%
c/o TTR Ltd.
2 Hanagar Street
Kfar Saba, Israel
Arik Shavit(4) 120,819 3.0%
c/o TTR Technologies Ltd.
2 Hanagar Street
Kfar Saba, Israel
All directors and officers as
a group (4 persons) 1,089,366 27.13%
- ----------
(2) Includes 324,274 shares held by the Tokayer Family Trust (the "Trust"). The
wife of Mr. Tokayer is the trustee for the Trust and the income beneficiaries of
the trust are Mr. Tokayer's children. Mr. Tokayer does not have or share any
voting power or investment power with respect to the securities held by the
Trust, and accordingly, disclaims beneficial ownership of all such securities.
In June 1998, Mr. Tokayer and the Tokayer Family Trust waived their right to
750,000 shares of Common Stock which has been placed in escrow and which has
been subject to release upon the Company achieving certain revenue or stock
prices levels. Such shares of Common Stock have been returned to treasury and
cancelled.
(3) Represents options to purchase 250,000 shares of Common Stock at 15/16 per
share issued to Mr. Barsh pursuant to his employment agreement. The options are
fully vested. See "Executive Compensation -- Employment Arrangements.
(4) Represents options to purchase Common Stock at $0.01 per share, of which
120,819 vested as of September 1998. Excludes options for 96,654 shares, half of
which will vest in September 1999 and September 2000.
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Directors; Compensation of Directors
The Board of Directors held 4 meetings during 1997, at which all directors
were present. No compensation was paid to any director for his services to the
Board of Directors or any committee.
The Company has no standing audit, nominating or compensation committee of
the Board of Directors.
At its meeting following the Annual Meeting, the Board of Directors
anticipates establishing an audit committee (the "Audit Committee"). The Audit
Committee will be established to make recommendations concerning the engagement
of independent public accountants, review with the independent public
accountants the plans and results of the audit engagement, approve professional
services provided by the independent public accountants, review the independence
of the independent public accountants, consider the range of audit and non-audit
fees and review the adequacy of the Company's internal accounting controls.
Section 16 Filings
Compliance with Section 16(a) of The Exchange Act. Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires
officers and directors of the Common Stock Company and persons who own more than
ten percent of the Common Stock , to file initial statements of beneficial
ownership (Form 3), and statements of changes in beneficial ownership (Forms 4
or 5), of Common Stock with the Securities and Exchange Commission (the "SEC").
Officers, directors and greater than ten-percent stockholders are required by
SEC regulation to furnish the Company with copies of all such forms they file.
To the Company's knowledge, based solely on its review of the copies of
such forms received by it or written representations from certain reporting
persons that no additional forms were required for those persons during 1996,
all filing requirements applicable to its officers, directors, and greater than
ten-percent beneficial owners were complied with.
EXECUTIVE COMPENSATION
The following table sets forth all compensation earned by the Company's
Chairman of the Board of Directors and President, and the other two most highly
compensated executive officers of the Company whose total annual salaries and
bonuses exceeded $100,000 for the year ended December 31, 1997 (the "Named
Executive Officers"):
Summary Compensation Table:
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards
------
Restricted Securities
---------------------
Name and Principal Stock Underlying
Position Year Salary Bonus Other Awards Options(#)
- -------- ---- ------ ----- ----- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Marc D. Tokayer 1997 $73,850 $7,647 $26,307(1) -- --
Chairman and 1996 $66,686 $12,876 $19,278 -- --
President 1995 $74,939 -- $15,729 -- --
</TABLE>
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8
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Baruch Sollish 1997 $99,931 50,000(2) $24,875(1) -- --
Vice-President- 1996 $69,517 -- $14,037 -- --
Research & Development 1995 $50,388 -- $9,920 -- --
Arik Shavit 1997 $102,931 -- $31,085(1) -- 217,473(3)
Vice-President 1996 $33,441 -- $13,457 -- --
1995 -- -- -- -- --
</TABLE>
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(1) Includes contributions to insurance premiums, car allowance and car
expenses.
(2) In consideration of Dr. Sollish's waiver of incentive bonus payments due to
him under his employment agreement based on the Company's revenues of
certain products, Dr. Sollish received in 1997 a one-time bonus payment of
$50,000.
(3) Pursuant to the employment agreement, Mr. Shavit was issued warrants to
purchase an aggregate of 217,473 shares of Common Stock pursuant to a
four-year vesting schedule. The options are exercisable at $0.01 per share.
For information concerning the compensation of Steven L. Barsh, Chief
Executive Officer, See "Employment Agreements."
Options Granted During Year Ended December 31, 1997
Option Grants in 1997
The following table sets forth certain information concerning the
individual option grants during the year ended December 31, 1997, to each of the
Named Executive Officers:
Name Number of Percentage of Exercise Expiration
Securities Total Options Price Per Date
Underlying Granted to Share
Options Employees in
Granted (#) 1997
- --------------------- ----------- ------------- --------- ----------
Arik Shavit.......... 217,473 55.3% $.01 9/8/2006
Aggregated Option and Warrant Exercises in 1997 and Year End Option Values
The following table provides certain information regarding stock option
ownership and exercises by the Named Executive Officers, as well as the number
and assumed value of exercisable options held by those persons at December 31,
1997:
<TABLE>
<CAPTION>
Name Number of Value Number of Un-exercised Value of Unexercised
Shares Realized Options at December 31, 1997 In-the-money Options at
Acquired on Exercised/Unexercised Dec. 31, 1997(1)
Exercise Exercised/Unexercised
----------- -------- ---------------------------- -----------------------
<S> <C> <C> <C> <C> <C>
Arik Shavit........ -- -- -- 217,473 $-0/1,261,343.90
</TABLE>
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See Employment Agreements for a discussion of such options
Employment Arrangements
TTR Israel entered into an employment agreement with Marc Tokayer, pursuant
to which Mr. Tokayer is employed as the President and General Manager for a term
of three years commencing in August 1994, which term is automatically renewable
unless one of the parties' decides otherwise. Mr. Tokayer currently receives an
annual salary of $74,232, subject to adjustment pursuant to the employment
agreement. If Mr. Tokayer is terminated without cause, as defined in the
agreement, then he shall be entitled to continue to receive his salary and
benefits for an additional 12 months subject to certain limitations. Mr.
Tokayer's agreement contains standard confidentiality and noncompete provisions
that prohibit him from competing with the Company or soliciting its employees
for one year following the termination of his employment.
On July 6, 1998, pursuant to an employment agreement Steven L. Barsh
commenced employment with the Company as its Chief Executive Officer. The
agreement is for a term of eighteen months and is automatically renewable for
additional periods of one year each, unless terminated in accordance with the
provisions of the agreement. The Company will pay to Mr. Barsh an annual salary
of $210,000 and pursuant to the 1996 Stock Option Plan (the "Plan"), the Company
issued to him 250,000 stock options which were to vest equally over a five-year
period, and have an exercise price of $2 15/16 per share (the Option Shares").
If the Company terminates Mr. Barsh's employment other than for cause or Mr.
Barsh terminates the agreement for good reason, as defined in the employment
agreement, then Mr. Barsh will receive a lump sum equal to one year's salary
plus benefits for one year. If such termination takes place within the first
year of Mr. Barsh's employment agreement, then Mr. Barsh will receive an amount
equal to six month's salary plus benefits for one year. Mr. Barsh's agreement
contains standard confidentiality and non-compete provisions that prohibit him
from competing with the Company or soliciting its employees for one year
following the termination of his employment with the Company. Notwithstanding
the above, on October 20, 1998, Mr. Barsh and the Company agreed that until such
time as the Company shall have raised a minimum of $3,000,000 in equity or debt
financing, Mr. Barsh will draw a salary at the reduced annual rate of $70,000
and the unpaid salary is to accrue for Mr. Barsh's benefit on an interest-free
basis (the "Accrued Salary"). Upon the raising of said funds, Mr. Barsh is to
resume drawing his annual salary of $210,000 and the Company will remit to Mr.
Barsh, in one or more installments as will not materially interfere with the
orderly operations of the Company, the Accrued Salary. In connection with the
salary adjustment, Mr. Barsh returned to the Plan the Option Shares, and the
Company issued to Mr. Barsh, on October 20, 1998, options for 250,000 shares of
Common Stock, which options were issued outside the Plan and were fully vested
upon issuance, with an exercise price of $15/16 per share.
TTR Israel entered into an employment agreement with Dr. Baruch Sollish,
pursuant to which Dr. Sollish is employed as the Vice President -- Research and
Development for a term of one year commencing in December 1995 and renewable for
additional one year periods. The agreement has been amended to provide for an
additional 3 year term terminating in July 2001. Dr. Sollish currently receives
an annual salary of $109,560. In March 1997, in consideration of Dr. Sollish's
waiver of incentive bonus payments due to him under the agreement based on the
Company's revenues from certain products, Dr. Sollish received a one-time bonus
payment of $50,000. Dr. Sollish's agreement contains standard confidentiality
and non-compete provisions that prohibit him from competing with the Company for
a period of one year, or soliciting the Company's employees for a period of six
months, following the termination of his employment with the Company.
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TTR Israel entered into an employment agreement with Arik Shavit, pursuant
to which Mr. Shavit is employed as the Chief Executive Officer for a term of
three years commencing in September 1996. Mr. Shavit currently receives an
annual salary of $110,628, subject to adjustment pursuant to the employment
agreement Mr. Shavit was issued options to purchase an aggregate of 217,473
shares of Common Stock. The options are exercisable at $.01 per share until
September 2006, subject to a four-year vesting schedule, pursuant to which the
first 72,491 options vested in September 1997, 48,328 vested in September 1998,
and 48,327 will vest in each of September 1999 and September 2000. See "Certain
Transactions." Mr. Shavit's agreement contains standard confidentiality and
non-compete provisions that prohibit him from competing with the Company or
soliciting its employees for one year following the termination of his
employment.
Transactions with Management
Mr. Tokayer and the Tokayer Family Trust have waived their rights to
750,000 shares of Common Stock which had been placed in escrow and which has
been subject to release upon the Company achieving certain revenue or stock
price levels. Such shares have been returned to treasury and cancelled.
For information relating to the compensation paid to Messrs. Shavit and Barsh,
see "Employment Agreements".
PROPOSAL NO. 2 -- Name Change
At the Annual Meeting, stockholders will be asked to approve an amendment
to the Company's Certificate of Incorporation changing the Company's name to
"TTR Technologies, Inc."
The Board of Directors is of the view that the Company's current corporate
name does not reflect the current business operations of the Company. The
Company designs, develops, markets and distributes unique and proprietary
software anti-piracy products and the Company's proposed new corporate name
reflects the Company's involvement in the technology industry.
RECOMMENDATION AND VOTE
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL
OF THE NAME CHANGE.
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PROPOSAL NO. 3 -- Amend the Certificate of Incorporation to
authorize the Issuance of Preferred Stock
At the Annual Meeting, the stockholders will be asked to approve an
amendment to the Company's Certificate of Incorporation in the form attached
hereto as Exhibit A to authorize the issuance, from time to time and in one or
more series, of Preferred Stock, as determined from time to time by the Board of
Directors, and stated in resolution or resolutions adopted by the Board of
Directors pursuant to authority vested in it. Shares in such series of Preferred
Stock shall have such voting powers, full or limited, or no voting powers, and
shall have such designations, preferences and relative, participating, optional,
or other special rights, and qualifications, limitations, or restrictions
thereof, permitted by law, as shall be stated in the resolution or resolutions
providing for the issuance of such shares adopted by the Board of Directors.
The Board of Directors believes that the proposed amendment to the
Certificate of Incorporation will afford the Company greater flexibility in the
future in raising necessary capital to meet the Company's financing needs.
RECOMMENDATION AND VOTE
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL
OF THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION.
PROPOSAL NO. 4 -- Adopt New By-Laws
At the Annual Meeting, the stockholders will be asked to approve the repeal
of the Company's By-Laws and the adoption of the new By-Laws in the form
attached hereto as Exhibit B.
The Board of Directors believes that the Company's proposed By-Laws are
more suitable for a public corporation and further afford the Board greater
flexibility in addressing the Company's changing needs. Principally, the
proposed By-Laws, if approved by the stockholders, would enable a majority of
the directors then in office to take the following actions, without prior
stockholder approval:
(i) fix, on a periodic basis as it deems appropriate, the number of
directors serving on the board;
(ii) fill vacancies on the Board of Directors by the vote of a majority of
the directors in office; and
(iii) amend the By-Laws.
RECOMMENDATION AND VOTE
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE REPEAL OF
THE EXISTING BY-LAWS AND THE ADOPTION OF THE NEW BY-LAWS ATTACHED AS EXHIBIT B.
PROPOSAL NO. 5 -- Amend the Stock Option Plan
At the Annual Meeting, the stockholders will be asked to approve an
amendment to the Company's Stock Option Plan (the "Option Plan") to increase by
THREE HUNDRED
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12
THOUSAND (300,000) the number of shares of Common Stock reserved for issuance
under the Option Plan to SEVEN HUNDRED AND FIFTY THOUSAND (750,000) shares.
Additionally, the stockholders will be asked to approve an amendment to the
Option Plan deleting Paragraph 7 in its entirety and substituting therefor the
text of new Paragraph 7, as provided in Exhibit C attached hereto.
The amendments and the Option Plan are summarized below. A copy of the
Option Plan is available upon written request to the Company at 1841 Broadway,
New York, New York, 10022 Attention: Secretary.
Description of the Amendment
The amendment increases by THREE HUNDRED THOUSAND (300,000) the number of
shares of Common Stock reserved for issuance under the Option Plan to an
aggregate of SEVEN HUNDRED AND FIFTY THOUSAND (750,000) shares. The amendment
deleting the existing Paragraph 7 of the Option Plan and substituting therefor
the new Paragraph 7 attached in Exhibit C hereto is intended to provide the
Board with the flexibility in respect of accelerating the vesting of options or
extending the exercisability thereof, all in the discretion of the Board.
If approved by stockholders, the amendment will be effective immediately.
Reason For the Amendment
The Board of Directors believes that stock options are an important
incentive for attracting, retaining and motivating employees and officers
through the opportunity of equity participation in the Company. The Board of
Directors further believes that stock option grants have been a key element in
the Company's growth. The amendment to increase the number of shares of Common
Stock under the Option Plan is intended to enable the Company to continue to
have an adequate number of shares of Common Stock available for the grant of
stock options to attract new employees, as well as retain current employees.
As of July 21, 1998, the Company had outstanding options to purchase
426,100 shares of the Company's Common Stock under the Plan. Based on the number
of shares remaining under the Option Plan, and the shares anticipated to be
needed for the granting of options to attract and retain key employees,
sufficient shares are not expected to be available for the grant of stock
options without increasing the number of shares available under the Option Plan.
Description of the Option Plan
The Company established its Incentive and Non-Qualified Stock Option Plan
(the "1996 Option Plan"). The 1996 Option Plan provides for the grant to
qualified employees (including officers and directors) of the Company of options
to purchase shares of Common Stock. A total of 450,000 shares of Common Stock
have been reserved for issuance upon exercise of stock options granted under the
1996 Option Plan.
The 1996 Option Plan is administered by a Stock Option Committee (the
"Committee"). The Committee consists of the Chairman of the Company; however,
the Board intends to expand the Committee to include three outside Directors
(upon the election of the new Board of Directors at the Company's Annual
Meeting). The Committee has complete discretion to select the optionee and to
establish the terms and conditions of each option, subject to the provisions of
the 1996 Option Plan. Options granted under the 1996 Option Plan may be
non-qualified
<PAGE>
13
stock options or 'incentive stock options' as defined in Section 422 of the
Internal Revenue Code ('Incentive Options') but in any case the exercise price
of options granted may not be less than 100% of the fair market value of the
Common Stock as of the date of grant (110% of the fair market value if the grant
is an Incentive Option to an employee who owns more than 10% of the outstanding
Common Stock). Options may not be exercised more than 10 years after the grant
(five years if the grant is an Incentive Option to any employee who owns more
than 10% of the outstanding Common Stock). Options granted under the 1996 Option
Plan are not transferable and may be exercised only by the respective grantees
during their lifetimes or by their heirs, executors or administrators in the
event of death. Under the 1996 Option Plan, shares subject to canceled or
terminated options are reserved for subsequently granted options. The number of
options outstanding and the exercise price thereof are subject to adjustment in
the case of certain transactions such as mergers, recapitalizations, stock
splits or stock dividends. On July 21, 1998, the Company had outstanding options
to purchase 426,100 shares of the Company's Common Stock under the 1996 Option
Plan.
RECOMMENDATION AND VOTE
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE AMENDMENT TO THE STOCK OPTION PLAN
PROPOSAL NO. 6 -- Approval of the 1998 Non-Executive Directors Stock Option Plan
At the Annual Meeting, stockholders will be asked to approve the 1998
Non-Executive Director Stock Option Plan (the "Director Plan"), which was
adopted by the Board on July 27, 1998, in the form annexed hereto as Exhibit D.
The Board believes that stock options are an important incentive for attracting
and retaining on the Company's Board the service of individuals of stature who
are not otherwise employed by the Company or any subsidiary.
Description of the Plan
The Directors Plan will be administered by the entire Board of Directors.
25,000 shares of Common Stock will be reserved under the Directors Plan for
issuance upon the exercise of stock options. Options will be exercisable upon
the date of grant and will expire five years from the date of grant. Upon
termination of any director, the options will expire within 2 months of such
termination. The exercise price of the option will be the fair market value of
the Common Stock on the date of the grant of the option. The number of options
and prices at which they are exercisable are subject to adjustment in the case
of certain transactions such as mergers, recapitalizations, stock splits or
stock dividends.
RECOMMENDATION AND VOTE
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE TO
APPROVE THE 1998 NON-EXECUTIVE DIRECTOR STOCK OPTION PLAN.
PROPOSAL NO. 7 -- Ratification of Independent Public Accountants
The Board of Directors has appointed the firm of BDO Almagor & Co. as
independent auditors to audit the Company's consolidated financial statements
for the fiscal year ending December 31, 1998, subject to ratification by the
stockholders.
<PAGE>
14
Change of Auditors
On June 30, 1998, the Company appointed BDO Almagor & Co. ("Almagor") to
re-issue a report on the Company's consolidated financial statements for the
year ended December 31, 1997, and stockholders will be voting at the Annual
Meeting to ratify the Board's selection of Almagor as the Company's independent
accountants for the fiscal year ending December 31, 1998. On July 3, 1998,
Schneider Ehrlich & Wengrover LLP ("SE&W") resigned as independent auditors of
the Company by mutual agreement.
During the fiscal years ended December 31, 1997 and 1996 and the period
between January 1, 1998, up to and including the day of its resignation, there
were no disagreements between the Company and SE&W on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedures which if not resolved to SE&W's satisfaction would have caused them
to make reference in connection with their opinion to the subject matter of the
disagreement. SE&W's report on the financial statements of the Company for such
fiscal years indicated that substantial doubt exists regarding the Company's
ability to continue as a going concern.
The audit of Almagor as the Company's independent accountants did not
result in any changes to such financial statements, and the related audit report
of Almagor also states that substantial doubt exists regarding the Company's
ability to continue as a going concern.
RECOMMENDATION AND VOTE
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE APPROVAL OF THE INDEPENDENT AUDITORS PROPOSAL.
OTHER MATTERS
Management does not intend to present to the meeting any matters other than
matters referred to herein, and as of this date Management does not know of any
matter that will be presented by other persons named in the attached proxy to
vote thereon in accordance with their best judgment on such matters.
1999 STOCKHOLDER PROPOSALS
Undre the rules of the Securities and Exchange Commission, proposals of
security holders intended to be presented at the 1999 Annual Meeting of
Stockholders must be received by the Company, at its principal executive
offices, for inclusion in the Company's proxy statement for that meeting, no
later than January 15, 1999. The Company's Board of Directors will review any
stockholder proposals that are filed as required and will determine whether such
proposals meet applicable criteria for inclusion in its 1999 proxy statement.
SOLICITATION OF PROXIES
The expense of this solicitation, expected to be nominal, will be borne by
the Company. Solicitation will be made only by the use of the mails, except
that, if necessary, officers, directors and regular employees of the Company may
make solicitations of proxies by telephone or telecopier. The Company may also
request brokers and other custodians, nominees and fiduciaries to forward proxy
soliciting material to the beneficial owners of shares held of record by such
persons, and the Company may reimburse them for their expenses in so doing.
<PAGE>
15
ADITIONAL INFORMATION
A copy of the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1997, filed with the Securities and Exchange Commission is
available on request by writing to Mr. Robert Friedman of the Company, TTR Inc,
1841 Broadway, New York, New York 10023.
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18
Exhibit A
Proposed Amendment to the Company's Certificate of Incorporation
Paragraph 4 of the Certificate of Incorporation of TTR Inc. is hereby
amended in its entirety to read as follows:
"4. The aggregate number of shares of stock which the corporation
shall have the authority to issue is 25,000,000, 20,000,000 of which are
shares of Common Stock, each with a par value of $0.001, each entitled to
one vote per share, and 5,000,000 of which are shares of Preferred Stock.
The shares of Preferred Stock may be issued from time to time in one
or more series, in any manner permitted by law, as determined from time to
time by the Board of Directors, and stated in the resolution or resolutions
providing for the issuance of such shares adopted by the Board of Directors
pursuant to authority vested in it. Without limiting the generality of the
foregoing, shares in such series shall have voting powers, full or limited,
or no voting powers, and shall have such designations, preferences and
relative, participating, optional, or other special rights, and
qualifications, limitations, or restrictions thereof, permitted by law, as
shall be stated in the resolution or resolutions providing for the issuance
of such shares adopted by the Board of Directors pursuant to authority
hereby vested in it. The number of shares of any such series so set forth
in the resolution or resolutions may be increased (but not above the total
number of authorized shares of Preferred Stock) or decreased (but not below
the number of shares thereof then outstanding) by further resolution or
resolutions adopted by the Board of Directors pursuant to authority hereby
vested in it.
No holder of any of the shares of the stock of the corporation,
whether now or hereafter authorized and issued, shall be entitled as of
right to purchase or subscribe for any unissued stock of any class, or any
additional shares of any class to be issued by reason of any issuances of
capital stock of the Corporation or any increase of the authorized capital
stock of any class of the corporation, or bonds, certificates of
indebtedness, debentures, or other securities convertible into stock of any
class of the corporation, or carrying any right to purchase stock of any
class of the corporation, but any such unissued stock or any such
additional authorized issue of any stock or other securities convertible
into stock, or carrying any right to purchase stock, may be issued and
disposed of pursuant to resolution of the Board of Directors to such
persons, firms, corporations, or associations, and upon such terms, as may
be deemed advisable by the Board of Directors in the exercise of its
discretion."
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19
Exhibit B
Proposed By-Laws of the Company
<PAGE>
BY-LAWS
of
TTR Inc.
(a Delaware corporation)
Article I
Offices
1.1 The Board of Directors (the "Board") of the corporation shall fix the
location of the principal executive office of the corporation at any place
within or outside the State of Delaware.
1.2 The Board may at any time establish branch or subordinate offices at
any place or places.
Article II
Meetings of Stockholders
2.1 All meetings of the stockholders for the election of directors shall be
held at the principal office of the corporation , at such place as may be fixed
from time to time by the Board or at such other place either within or without
the State of Delaware as shall be designated from time to time by the Board and
stated in the notice of the meeting. Meetings of stockholders for any other
purpose may be held at such time and place, within or without the State of
Delaware, as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof.
2.2 Annual Meeting. Annual meetings of stockholders shall be held at such
other date and time as shall be designated from time to time by the Board and
stated in the notice of the meeting, at which they shall elect by a Board, and
transact such other business as may properly be brought before the meetings.
2.3 Special Meetings. Special meetings of the stockholders may be called
for any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, at the request of the Board, the Chairman of the
Board, the President or the stockholders owning a majority in amount of the
entire capital stock of the corporation issued and outstanding and entitled to
vote. Such request shall state the purpose or purposes of the meeting.
2.4 Notice of Meetings. Written notice of stockholders' meetings, stating
the place, date and time of the meeting and the purpose or purposes for which
the meeting is called, shall be given to each stockholder entitled to vote at
such meeting on not less than ten (10) nor more than sixty (60) days prior to
the meeting.
When a meeting is adjourned to another place, date or time, written notice
need not be furnished of the adjourned meeting if the place, date and time
thereof are announced at the meeting at which the adjournment is taken,
provided, however, that if the date of any adjourned meeting is more than thirty
(30) days after the date for which the meeting was originally noticed, or if a
new record date is fixed for the adjourned meeting, written notice
<PAGE>
2
of the place, date and time of the adjourned meeting shall be furnished in
conformity herewith. At any adjourned meeting, any business may be transacted
which might have been transacted at the original meeting.
2.5 Business Matter of a Special Meeting. Business transacted at a special
meeting of stockholders shall be limited to the purposes stated in the notice.
2.6 List of Stockholders. The officer who has charge of the stock ledger of
the corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place, if other than the place of the meeting,
shall be specified in the notice of the meeting. The list shall also be produced
and kept at the time and place of the meeting during the whole time thereof, and
may be inspected by any stockholder who is present.
2.7 Organization and Conduct of Business. The Chairman of the Board, or in
his or her absence, the President of the corporation or, in their absence, such
person as the Board may have designated or, in the absence of such person, such
person as may be chosen by the holders of a majority of the shares entitled to
vote who are present, in person or by proxy, shall call to order any meeting of
the stockholders and act as Chairman of the meeting. In the absence of the
Secretary of the corporation, the Secretary of the meeting shall be such person
as the Chairman appoints.
The chairman of any meeting of the stockholders shall determine the order
of the business and the procedure at the meeting, including such regulation of
the manner of voting and the conduct of the discussion as seems to him or her in
order.
2.8 Quorum and Adjournments. Except where otherwise provided by law or by
the Certificate of Incorporation or these By-Laws, the holders of a majority of
the stock issued and outstanding and entitled to vote thereat, present in person
or represented by proxy, shall constitute a quorum at all meetings of the
stockholders. The stockholders present at a duly called or held meeting at which
a quorum is present may continue to do business until adjournment,
notwithstanding the withdrawal of enough stockholders to have less than a quorum
if any action taken (other than adjournment) is approved by at least a majority
of the shares required to constitute a quorum. At such adjourned meeting at
which a quorum shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally notified. If,
however, such quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented.
2.9 Voting Rights. Unless otherwise provided in the Certificate of
Incorporation, each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder.
2.10 Majority Vote. When a quorum is present at any meeting, the vote of
the holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or
the Certificate of Incorporation or these
<PAGE>
3
By-Laws, a different vote is required in which case such express provision shall
govern and control the decision of such question.
2.11 Record Date for Stockholder Notice and Meeting. For purposes of
determining the stockholders entitled to notice of any meeting or to vote, or
entitled to receive payment of any divided or other distribution, or entitled to
exercise any right in respect of any change, conversion or exchange of stock for
the purpose of any other lawful action, the Board may fix, in advance, a record
date, which shall not be more than sixty (60) nor less than ten (10) days before
any other action.
If the Board does not fix a record date, the record date of determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the business day next preceding the day on which
notice is given or, if notice is waived, at the close of the business on the
business day next preceding the day on which the meeting is held.
2.12 Proxies. Every person entitled to vote for directors or any other
matter shall have the right to do so either in person or by one or more agents
authorized by written proxy signed by the person and filed with the Secretary of
the corporation. A proxy shall be deemed signed if the stockholder's name is
placed on the proxy (whether by manual signature, typewriting, telecopier
transmission or otherwise) by the stockholder or the stockholder's
attorney-in-fact. A validly executed proxy which does not state that it is
irrevocable shall continue in full force and effect unless (i) revoked by the
person executing it before the vote pursuant to that proxy, by a writing
delivered to the corporation stating that such proxy is revoked or by a
subsequent proxy executed by, or attendance at the meeting and voting in person
by, the person executing the proxy; or (ii) written notice of the death or
incapacity of the maker of the proxy is received by the corporation before the
vote pursuant to that proxy is counted; provided, however, that no proxy shall
be valid after the expiration of eleven months from the date of the proxy,
unless otherwise provided in the proxy.
2.13 Action Without a Meeting by Written Consent. Except for the removal of
a director, all actions required to be taken at any annual or special meeting of
stockholders of the corporation, or any action which may be taken at any annual
or special meeting of such stockholders, may be taken without a meeting, without
prior notice and without a vote, if consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take that action at a meeting at which all shares entitled to vote
thereon were present and voted and shall be delivered to the corporation by
delivery to its registered office, its principal place of business, or an
officer of the corporation having custody of the book in which proceedings of
meetings of stockholders are recorded.
Article III
Directors
3.1 Number; Qualification. The number of directors shall be determined from
time to time by resolution of the Board and the initial Board shall consist of
three (3) directors. All directors shall be elected et the annual meeting or any
special meeting of the stockholders, except as provided in Section 3.2 of this
Article, and each director so elected shall hold office until his successor is
elected and qualified or until his earlier resignation or removal. Directors
need not be stockholders.
<PAGE>
4
3.2 Resignation and Vacancies. A vacancy or vacancies in the Board shall be
deemed to exist in the case of the death, resignation or removal of any
director, or if the authorized number of directors be increased. Vacancies may
be filled by a majority of the directors then in office, though less than a
quorum, or by a sole remaining director, unless otherwise provided in the
Certificate of Incorporation. If the Board accepts the resignation of a director
tendered to take effect at a future time, the Board shall have the power to
elect a successor to take office when the resignation is to become effective. If
there are no directors in office, then an election of the directors may be held
in the manner provided by law.
3.3 Removal of Directors. Unless otherwise restricted by statute, the
Certificate of Incorporation or these By-Laws, any director or the entire board
of directors may be removed, with or without cause, by the holders of a majority
of shares entitled to vote at an election of directors at the annual meeting or
any special meeting of the stockholders. In addition, an employee-director whose
employment with the Company is terminated for whatsoever reason shall,
automatically and without any further action, cease to be a director.
3.4 Powers. The business of the corporation shall be managed by or under
the direction of its board of directors which may exercise all such powers of
the corporation and do all such lawful acts and things as are not by statute or
by the Certificate of Incorporation or by these By-Laws directed or required to
be exercised or done by the stockholders.
Without prejudice to these general powers, and subject to the same
limitations, the directors shall have the power to
(a) Select and remove all officers, agents and employees of the
corporation; prescribe any powers and duties for them that are consistent with
law, with the Certificate of Incorporation and with these By-Laws; fix their
compensation; and require from them security for faithful service;
(b) Confer upon any office the power to appoint, remove and suspend
subordinate officers, employees and agents;
(c) Change the location of the principal executive office or the principal
business office; cause the corporation to be qualified to do business in any
state, territory, dependency or country and conduct business within or without
the State of Delaware for the holding of any stockholder meetings, including
annual meetings;
(d) Adopt, make and use a corporate seal; prescribe the forms of
certificate of stock; and alter the form of the seal and certificate;
(e) Authorize the issuance of shares of stock of the corporation on any
lawful terms, in consideration of money paid, labor done, service actually
rendered, debt or securities canceled, tangible or intangible property actually
received;
(f) Borrow money and incur indebtedness on behalf of the corporation, and
cause to be executed and delivered for the corporation's purposes, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecation and other evidences of debt and securities;
(g) Declare dividends from time to time in accordance with law;
<PAGE>
5
(h) Adopt from time to time such stock option, stock purchase, bonus or
other compensation plans for directors, officers, employees and agents of the
corporation and its subsidiaries as it may determine; and
(i) Adopt from time to time regulations not inconsistent with these By-Laws
for the management of the corporation's business and affairs.
3.5 Place of Meetings. The Board may hold meetings, both regular and
special, either within or without the State of Delaware.
3.6 Annual Meetings. The annual meeting of the Board shall be held
immediately following the annual meeting of the stockholders and no notice of
such meeting shall be necessary to the Board, provided, a quorum shall be
present. The annual meeting shall be the purposes of organization, and an
election of officers and the transaction of other business.
3.7 Regular Meetings. Regular meetings of the Board may be held without
notice at such time and at such place as shall from time to time be determined
by the Board.
3.8 Special Meetings. Special meetings of the Board may be called by the
Chairman of the Board, the President, or a majority of the Board upon one (1)
day's notice to each director.
3.9 Quorum and Adjournments. At all meetings of the Board, a majority of
the directors shall constitute a quorum for the transaction of business and the
act of a majority of the directors present at any meeting at which there is a
quorum shall be the act of the Board, except as may be otherwise specifically
provided by statute or by the Certificate of Incorporation. If a quorum is not
present at any meeting of the Board, the directors present thereat may adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present. A meeting at which a quorum is
initially present may continue to transact business notwithstanding the
withdrawal of directors, if any action is approved by at least a majority of the
required quorum for that meeting.
3.10 Action Without a Meeting. Unless otherwise restricted by the
Certificate of incorporation or these By-Laws, any action required or permitted
to be taken at any meeting of the Board or of any committee thereof may be taken
without a meeting, if all members of the Board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
3.11 Telephone Meetings. Unless otherwise restricted by the Certificate of
Incorporation or these by-laws, members of the Board, or any committee
designated by the Board, may participate in a meeting of the Board, or any
committee, by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and such participation in a meeting shall constitute presence in person at the
meeting.
3.12 Waiver of Notice. Notice of a meeting need not be given to any
director who signs a waiver of notice or a consent to holding the meeting or an
approval of the minutes thereof, whether before or after the meeting, or who
attends the meeting without protesting, prior thereto or its commencement. Al
such waivers, consents and approvals shall be filed with the corporate records
or made a part of the minutes of the meeting.
<PAGE>
6
3.13 Fees and Compensation of Directors. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, the Board shall have the
authority to fix the compensation of directors. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board and may be paid a
fixed for attendance at each meeting of the Board or a stated salary as director
or other compensation. No such payment shall preclude any director from serving
the corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like compensation for
attending committee meetings.
3.14 Rights of Inspection. Every director shall have the absolute right at
any reasonable time to inspect and copy all books, records and documents of
every kind and to inspect the physical properties of the corporation and also of
its subsidiary corporations, domestic or foreign. Such inspection by a director
may be made in person or by agent or attorney and includes the right to copy and
obtain abstracts.
Article IV
Committees of Directors
4.1 Selection. The Board may, by resolution passed by a majority of the
entire board, designate one or more committees, each committee to consist of one
or more of the directors of the corporation. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee.
In the absence or disqualification of a member of a committee, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or she or they constitute a quorum, may unanimously appoint
another member of the Board to act at the meeting in the place of any such
absent or disqualified member.
4.2 Powers. Any such committee, to the extent provided in the resolution of
the Board, shall have and may exercise all the powers and authority of the
directors in the management of the business and affairs of the corporation, and
may authorize the seal of the corporation to be affixed to all papers which may
require it; but no such committee shall have the power or authority in reference
to amending the Certificate of Incorporation, (except that a committee may, to
the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the board of directors as provided in
Section 151(a) of the General Corporation Law of Delaware, fix any of the
preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any other series of the same or any other class or classes of stock of the
corporation), adopting an agreement of merger or consolidation, recommending to
the stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
By-Laws of the corporation; and, unless the resolution or the Certificate of
Incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock or to
adopt a certificate of ownership and merger. Such committee or committees shall
have such name or names as may be determined from time to time by resolution
adopted by the Board.
4.3 Committee Minutes. Each committee shall keep regular minutes of its
meetings and report the same to the Board when required.
<PAGE>
7
Article V
Officers
5.1 Officers Designated. The officers of the corporation shall be chosen by
the Board and shall be a President, a Chief Executive Officer, a Secretary and a
Treasurer. The Board may also choose a Chairman of the Board, one or more
vice-presidents, and one or more assistant Secretaries and Treasurers. Any
number of offices may be held by the same person, unless the Certificate of
Incorporation or these By-Laws otherwise provide.
5.2 Appointment of Officers. The Officers of the corporation, except such
officers as may be appointed in accordance with the provisions of Section 5.3 or
5.5 of this Article, shall be appointed by the Board, and each shall serve at
the pleasure of the Board, subject to the rights, if any, of an officer under
any contract of employment.
5.3 Subordinate Officers. The Board may appoint, and may empower the
President to appoint, such other officers and agents as the business of the
corporation may require, each of whom shall hold for such period, have such
authority and perform such duties as are provided in the By-Laws or as the Board
may from time to time determine.
5.4 Removal and Resignation of Officers. Subject to the rights, if any, of
any officer under any contract or employment, any officer may be removed, either
with or without cause, by an affirmative vote of the majority of the Board, at a
special meeting of the Board, or, except in the case of an officer chosen by the
Board, by any officer upon whom power of removal may be conferred by the Board.
Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.
5.5 Vacancies in Office. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these By-Laws for regular appointment to that office.
5.6 Compensation. The salaries of all officers of the corporation shall be
fixed from time to time by the Board and no officer shall be prevented from
receiving a salary because he or she is also a director of the corporation.
5.7 Chairman of the Board. The Chairman of the Board, if such an officer be
elected, shall, if present, perform such other powers and duties as may be
assigned to him from time to time by the Board.
5.8 The President. Subject to such supervisory powers, if any, as may be
given to the Chairman of the Board, if there be such an officer, the President
or the Chief Executive Officer of the corporation, as the Board shall decide,
shall preside at all meetings of the stockholders and the Board, shall have
general and active management of the business of the corporation and shall see
that all orders and resolutions of the board of directors are carried into
effect. The President shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the Board to some
other officer or agent of the corporation.
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8
5.9 The Vice President. The Vice-President (or in the event there be more
than one vice-president, the vice-presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall, in the absence of the President or the Chief Executive Officer
or, in the event of the President's or Chief Executive Officer's disability or
refusal to act, perform the duties of the President or the Chief Executive
Officer, and when so acting, shall have all the powers of and be subject to all
the restrictions upon the President or the Chief Executive Officer, as the case
may be. The vice-presidents shall perform such other duties and have such other
powers as may from time to time be prescribed for them by the Board, the
President, the Chief Executive Officer, the Chairman of the Board or these
By-Laws.
5.10 The Secretary. The Secretary shall attend all meetings of the Board
and all meetings of the stockholders and record all the proceedings of the
meetings of the corporation and of the Board in a book to be kept for that
purpose and shall perform like duties for the standing committee when required.
The Secretary shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board, and shall perform such other
duties as may be prescribed by the Board, the Chairman of the Board or the
President, under whose supervision he or she shall act. The Secretary shall have
custody of the corporate seal of the corporation and he or she, or an assistant
secretary, shall have authority to affix the same to any instrument requiring
it, and when so affixed, the seal may be attested by his or her signature or by
the signature of such assistant secretary. The Secretary shall keep, or cause to
be kept, at the principal executive office or at the office of the corporation's
transfer agent or registrar, as determined by a resolution of the Board, a share
register, or a duplicate share register, showing the names of all the
stockholders and their addresses, the number and classes of shares held by each,
the number and date of the certificates issued for the same and the number and
date of cancellation of every certificate surrendered for cancellation.
5.11 The Assistant Secretary. The assistant Secretary, or if there be more
than one, the assistant secretaries in the order determined by the Board (or if
there be no such determination, then in the order of their election) shall, in
the absence of the Secretary or in the event of his or her inability or refusal
to act, perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the Board may from time
to time prescribe.
5.12 The Treasurer. The Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the Board. The Secretary shall
disburse the funds of the corporation as may be ordered by the Board, taking
proper vouchers for such disbursements, and shall render to the President and
the Board, at its regular meetings, or when the Board so requires, an account of
all his or her transactions as Treasurer and of the financial condition of the
corporation.
5.13 The Assistant Treasurer. The assistant Treasurer, or if there shall be
more than one, the assistant Treasurers in the order determined by the Board (or
if there be no such determination, then in the order of their election) shall,
in the absence of the Treasurer or in the event of his or her inability or
refusal to act, perform the duties and exercise the powers of the Treasurer and
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
<PAGE>
9
Article VI
Certificates for Shares
6.1 Certificates for Shares. The shares of the corporation shall be
represented by a certificate or shall be uncertificated. Certificates shall be
signed by, or in the name of the corporation by, the Chairman of the board of
directors, or the President or a Vice-President, and by the Treasurer or an
assistant Treasure, or the Secretary or an assistant Secretary of the
corporation.
Within a reasonable time after the issuance or transfer of uncertificated
stock, the corporation shall send to the registered owner thereof a written
notice containing the information required by the General Corporation Law of the
State of Delaware or a statement that the corporation will furnish without
charge to each stockholder who so requests the powers, designations, preferences
and relative participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights.
6.2 Signature on Certificates. Any of or all the signatures on a
certificate may be facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
6.3 Transfer of Stock. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books. Upon receipt of proper transfer instructions from
the registered owner of uncertificated shares such uncertificated shares shall
be cancelled and issuance of new equivalent uncertificated shares or
certificated shares shall be made to the person entitled thereto and the
transaction shall be recorded upon the books of the corporation.
6.4 Registered Stockholders. The corporation shall be entitled to recognize
the exclusive right of a person registered on its books as the owner of shares
to receive dividend, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
6.5 Record Date. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board may fix, in advance, a record date, which shall
not be more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting: provided,
however, that the Board may fix a new record date for the adjourned meeting.
<PAGE>
10
6.6 Lost Certificates. The Board may direct a new certificate or
certificates be issued to replace any certificate or certificates theretofore
issued by the corporation alleged to have been lost, stolen or destroyed, upon
the making of an affidavit of that face by the person claiming the certificate
of stock to be lost, stolen or destroyed. When authorizing such issue of a new
certificate or certificates or uncertificated shares, the Board may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
Article VII
Notices
7.1 Notices. Whenever, under the provisions of the statutes or the
Certificate of Incorporation or these By-Laws, notice is required to be given to
any director or stockholder it shall be construed to mean personal notice, but
such notice may be given in writing, by mail, addressed to such director or
stockholder, at his or her address as it appears on the records of the
corporation, with the postage thereon prepaid, and such notice shall be deemed
to be given at the time when the same shall be deposited in the United States
mail. Notice to directors may also be given by telegram, telephone or facsimile.
7.2 Waiver. Whenever any notice is required to be given under the
provisions of the statutes or the Certificate of Incorporation or these By-Laws,
a waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
Article VIII
General Provision
8.1 Dividends. Dividends upon the capital stock of the corporation, subject
to the provisions of the Certificate of Incorporation, if any, may be declared
by the Board at any regular or special meeting, pursuant to law. Dividends may
be paid in cash, in property, or in shares of the capital stock, subject to the
provisions of the Certificate of Incorporation.
8.2 Dividend Reserve. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall think conductive to the interests
of the corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.
8.3 Annual Statement. The Board shall present at each annual meeting, and
at any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
corporation.
8.4 Checks. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the Board may from time to time designate.
<PAGE>
11
8.5 Corporate Seal. The Board shall provide a suitable corporate seal,
containing the name of the corporation, which seal shall be in the care of the
Secretary.
8.6 Execution of Corporate Contracts and Instruments. The Board, except as
otherwise provided in these By-Laws, may authorize any officer, or agent or
agents, to enter into any contract or execute any instrument in the name of and
on behalf of the corporation; such authority may be general or confined to
specific instances. Unless so authorized or ratified by the Board or within the
agency power of an officer, no officer or agent shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
Article IX
Amendments
In addition to the right of the stockholders of the corporation to make,
alter, amend, change, add to or repeal the By-Laws of the corporation, the Board
shall have the power (without the assent or vote of the stockholders) to make,
alter, amend, change add to or repeal the By-laws of the corporation.
<PAGE>
12
Exhibit D
Non-Executive Directors Stock Option Plan
<PAGE>
Non-Executive Director
Stock Option Plan of
TTR INC.
1. Purpose
The purpose of this Non-Executive Director Stock Option Plan (the "Director
Plan") is to provide a means by which each director of TTR INC. (the "Company")
who is not an employee of the Company or any subsidiary of the Company (each
such person being hereafter referred to as a "Non-Executive Director") will be
given an opportunity to purchase Common Stock, par value $0.001, of the Company
("Common Stock"). The Company, by means of the Director Plan, seeks to attract
and retain the services of qualified independent persons to serve as
Non-Executive Directors of the Company and to provide incentives for such
persons to exert maximum efforts for the success of the Company.
2. Administration
(a) The Director Plan shall be administered by the Board of Directors (the
"Board") of the Company.
(b) All option awards under the Director Plan shall be in the Board's
discretion. All questions of interpretation of the Director Plan or of any
option issued under it shall be determined by the Board and such determination
shall be final and binding upon all persons having an interest in the Director
Plan. All determinations shall be made by a majority of the Board. Any
determination reduced to writing and signed by all of the members of the Board
shall be fully effective as if it had been made by a majority vote at a meeting
duly called and held.
3. Shares Subject to Plan
Subject to the provisions of Section 10 hereof, the shares that may be
acquired pursuant to options granted under the Director Plan shall not exceed in
the aggregate 25,000 shares of the Company's Common Stock.
The Common Stock subject to the Director Plan may be in whole or in part
authorized and unissued shares of Common Stock or issued shares of Common Stock
which shall have been reacquired by the Company. If any option shall expire or
terminate for any reason without having been exercised in full, the unissued
shares subject thereto shall again be available for purposes of the Director
Plan.
4. Eligibility
Options shall be granted to Non-Executive Directors serving on the Board of
Directors of the Company.
<PAGE>
2
5. Limitation on Grants
In no event will the grant amount, that is, the amount determined by
multiplying the number of shares with respect to which options have been granted
by the Fair Market Value (as defined in Section 6) of the Company's Common Stock
on the date of grant, exceed $100,000 with respect to an annual grant to a
Non-Executive Director. To the extent the grant amount exceeds the foregoing
limitations, the number of shares subject to the Option to be granted to the
Non-Executive Director will be reduced accordingly.
6. Option Provisions
Each Option shall be evidenced by a written agreement ("Stock Option
Agreement") and shall contain the following terms and conditions:
(a) The term of each option commences on the date it is granted and, unless
sooner terminated as set forth herein, expires on the date ("Expiration Date")
five years from the date of grant. The term of each option may terminate sooner
than such Expiration Date if the optionee's service as a Non-Executive Director
of the company terminates for any reason whatsoever. In the event of such
termination of service, the option shall terminate for Non-Executive Directors,
on the earlier of the Expiration Date or the date two (2) months following the
date of termination of service as a Director. In any and all circumstances, an
option may be exercised following termination of the optionee's service as a
Non-Executive Director only as to that number of shares as to which it was
exercisable on the date of termination of such service, in accordance with the
provisions hereunder.
(b) The exercise price of each option shall be one hundred percent (100%)
of the Fair Market Value of the shares subject to such option on the date such
option is granted. "Fair Market Value" of a share of common stock shall mean (i)
if the common stock is traded on a national securities exchange or on the NASDAQ
National Market System ("NMS"), the per share closing price of the Common Stock
on the principal securities exchange on which they are listed or on NMS, as the
case may be, on the date of grant (or if there is no closing price for such date
of grant, then the last preceding business day on which there was a closing
price); or (ii) if the Common Stock is traded in the over-the counter market and
quotations are published on the NASDAQ quotations system (but not on NMS), the
per share closing bid price of the Common Stock on the date of grant as reported
by NASDAQ (or if there is no closing bid price for such date of grant, then the
last preceding business day on which there was a closing bid price); or (iii) if
the Common Stock is traded in the over-the-counter market but bid quotations are
not published on NASDAQ, the closing bid price per share for the Common Stock as
furnished by a broker - dealer which regularly furnishes price quotations for
the Common Stock; or (iv) if the Common Stock is not traded on a securities
exchange or the over-the-counter market, the valuation accorded to each share by
the Company's Board.
(c) The optionee may elect to make payment of the exercise price under one
of the following alternatives:
<PAGE>
3
(i) Payment of the exercise price per share in cash at the time of
exercise; or
(ii) Payment by delivery of shares of Common Stock of the Company
already owned by the optionee, which Common Stock shall be valued at Fair
Market Value on the date of exercise; or
(iii) Payment by a combination of the methods of payment specified in
subsections 6-(c) (i) and 6-(c) (ii) above.
(d) An option shall not be transferable except by will or by the laws of
descent and distribution and shall be exercisable during the lifetime of the
person to whom the option is granted only by such person or by his guardian or
legal representative.
(e) All options granted under the Director plan shall be non-qualified
stock options, which do not qualify as incentive stock options within the
meaning of Section 422, or any successor section, of the Internal Revenue Code
of 1986, as amended.
7. Right of the Company to Terminate Services as a Non-Executive Director
Nothing contained in the Director Plan or in any instrument executed
pursuant hereto shall confer upon any Non-Executive Director any right to
continue in the service of the company or any of its subsidiaries or interfere
in any way with the right of the Company or a subsidiary to terminate the
service of any Non- Executive Director at any time, with or without cause or
entitle the Non-Executive Director to be nominated for re-election as a
director.
8. Nonalienation of Benefits
No right or benefit under the Director Plan shall be subject to alienation,
sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance or
charge, and any attempt to alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be void. No right or
benefit hereunder shall in any manner be liable for or subject to the debts,
contracts, liabilities or the person entitled to such benefit.
9. Adjustments Upon Changes in Capitalization
The stock option Agreements evidencing options may contain such provisions
as the Board shall determine to be appropriate for the adjustment of the number
and class of shares subject to all outstanding options and the option prices
thereof in the event of changes in the outstanding Common Stock of the Company
by reason of any stock dividend, distribution, split-up, recapitalization,
combination or exchange of shares, merger, consolidation or liquidation and the
like, and, in the event of any such change in the outstanding common stock, the
aggregate number and class of shares available under the Director plan and the
number of shares subject to grants pursuant to Section 6 hereof shall be
appropriately adjusted by the Board, whose determination shall be conclusive and
binding on all persons.
<PAGE>
4
10. Termination and Amendment
Unless the Director plan shall theretofore have been terminated as
hereinafter provided, no grant of Options may be made under the Director Plan
after July, 2008. The Board may at any time, but not more than once every six
months except to comply with the changes in applicable law, amend, alter,
suspend or terminate the Director Plan; provided, however, that the Board may
not, without the requisite vote of the stockholders of the Company approving
such action (i) materially increase (except as provided in Section 9 hereof) the
maximum number of shares which may be issued under the Director Plan; (ii)
extend the term of the Director Plan; (iii) materially increase the requirements
as to eligibility for participants under the Director Plan or (iv) materially
change the benefits accruing to participants under the Director Plan. No
termination, modification or amendment of the Director Plan or any outstanding
stock option agreement may, without the consent of the Non-Executive Director to
whom any option shall theretofore have been granted, adversely affect the rights
of such Director with respect to such option.
11. Effectiveness of the Plan
The Director Plan shall become effective upon the requisite vote of the
stockholders of the Company approving such action, and upon the approvals, if
required, of any other public authorities. Any grant of options under the
Director Plan prior to such approval shall be expressly subject to the condition
that the Director Plan shall have been so approved. Unless the Director Plan
shall be so approved, the Director Plan and all options theretofore granted
thereunder shall be and become null and void.
12. Government and Other Regulations
The obligation of the Company with respect to options shall be subject to
(i) all applicable laws, rules and regulations and approvals by the governmental
agencies as may be required, including, without limitation, the effectiveness of
a registration statement under the Securities Act of 1933, as amended, and (ii)
the rules and regulations of any stock exchange on which the Common Stock may be
listed.
13. Governing Law
The Director Plan Shall be governed by, and construed in accordance with,
the laws of the State of New York.
<PAGE>
20
Exhibit C
Proposed Amendment to the 1996 Stock Option Plan
The text of existing Paragraph 7 of the 1996 Stock Option Plan, a copy of
which is provided below, is hereby deleted in its entirety and in place thereof,
a new text of Paragraph 7 as provided below is inserted:
TEXT OF PARAGRAPH 7 TO BE DELETED
" 7. Restrictions on Exercise; Termination of Employment; Death: No option shall
be exercisable in whole or in part prior to 12 months from the date it was
granted. Subject to the rights of cumulation provided in the last sentence of
this subdivision, each Option shall be exercisable as to not more than one
fourth of the total number of shares covered thereby during each 12 month period
commencing 12 months from the date of the granting of the Option until the
shares covered by the Option shall have been purchased. The Board of Directors
may, however, provide for the exercise of Option after the initial 12 month
period, either as to an increased percentage of shares per year or as to all
remaining shares, if the option holder shall, with the approval of the Company,
retire. No Option shall be exercisable after the expiration of 10 years from the
date it was granted. During the lifetime of the option holder, the Option shall
be exercisable only by the option holder and shall not be assignable or
transferable by the option holder and no other person shall acquire any rights
therein. To the extent not exercised, installments shall accumulate and be
exercisable, in whole or in part, in any subsequent period but not later than 10
years from the date the Option is granted.
In the event that an option holder shall cease to be employed by the
Company or its subsidiaries for any reason other than his death and shall no
longer be in the employ of any of them, subject to the condition that no Option
shall be exercisable after the expiration of 10 years from the date it is
granted, such option holder shall have the right to exercise the Option at any
time within 3 months after such cessation to the extent his rights to exercise
such Option had accrued pursuant to the provisions of the Plan and had not
previously been exercised at the date of such termination. If the option holder
shall die while in the employ of the Company or a subsidiary or within a period
of three months after the termination of all employment with the Company and its
subsidiaries and shall have not fully exercised the Option, an Option may be
exercised, subject to the condition that no Option shall be exercisable after
the expiration of ten years from the date it was granted, to the extent that
such option holder's right to exercise such Option had accrued pursuant to this
Plan at the time of his death and had not previously been exercised, at any time
within 6 months after the option holder's death, by the executors or
administrators of the option holder or by any person or persons who shall have
acquired the Option directly from the option holder by bequest or inheritance.
No Option shall be transferable by the option holder otherwise than by will or
the laws of descent and distribution."
TEXT OF NEW PARAGRAPH 7 TO BE INSERTED
" 7. Acceleration, Extension, Etc.; Effect of Termination of Employment or other
Relationship. The Board of Directors or the Committee may, in its sole
discretion (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised, or (ii) extend the
dates during which all, or any particular, option or options granted under the
Plan may be exercised, provided, however, that no such extension shall be
permitted if it would cause the Plan to fail to comply with Section 422 of the
Code or with Rule 16b-3 of the 1934 Exchange Act (if applicable to such Option).
<PAGE>
21
Except as otherwise determined by the Board of Directors or the Committee
at the date of the grant of the Option, and subject to the provisions of the
Plan, an optionee may exercise an Option at any time within one (1) year (or
within such lesser period as may be specified in the applicable option
agreement) following termination of the optionee's employment or other
relationship with the Company if such relationship was due to the death or
Disability of the optionee but in no event later than the expiration date of the
Option. Except as otherwise determined by the Board of Directors or the
Committee at the date of the grant of an Option, if the termination of the
optionee's employment or other relationship is for any other reason the Option
shall expire immediately upon such termination. For all purposes of the Plan and
any option granted hereunder, "Disability" shall have the meaning set forth in
the employment agreement between the optionee and the Company, and if no such
agreement shall exist or if such term is not defined in such agreement, the term
"Disability" shall mean the determination by a physician selected by the Company
that the optionee is unable, by reason of physical or mental illness, to perform
his duties and responsibilities to the Company for a period of 60 consecutive
days or a period in excess of 120 days (whether or not consecutive) during any
calendar year during the term of the optionee's employment, or if a court of
competent jurisdiction declares the optionee is of unsound mind or otherwise
incapable of carrying out his duties and responsibilities to the Company.
<PAGE>
TTR INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS ON December 21, 1998
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Steven L. Barsh and Marc D. Tokayer, and each of
them, with full power of substitution and power to act alone, as proxies to vote
all the shares of Common Stock which the undersigned would be entitled to vote
if personally present and acting at the Annual Meeting of Stockholders of TTR
INC., to be held on December 21, 1998, and at any adjournment or adjournments
thereof, on the matters set forth on the reverse side and such other matters as
may properly come before the meeting.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as name appears hereon, date and return in the enclosed
business reply envelope. Joint owners should each sign personally. Corporation
proxies should be signed by an authorized officer. Executors, administrators,
trustees, etc., should so indicate when signing.
Please provide new address, if applicable.
- -------------------------------
- -------------------------------
- -------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:
1. Election of Directors: FOR ALL WITH- FOR ALL
NOMINEES HOLD EXCEPT
Marc D. Tokayer [ ] [ ] [ ]
Arik Shavit
Dr. Baruch Sollish
IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE(S), MARK THE
"FOR ALL EXCEPT" BOX ABOVE AND STRIKE A LINE THROUGH THE NAME(S) OF THE
NOMINEE(S) YOU DO NOT WISH TO VOTE FOR. YOUR SHARES WILL BE VOTED FOR THE
REMAINING NOMINEE(S).
2. Approval of the Proposal to
change the Company corporate name
to "TTR Technologies Inc." FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of the Proposal to
amend the Company's Certificate of
Incorporation as provided in
Exhibit A hereto. FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Approval of the Proposal
to repeal the Company's By-Laws
and adopt the proposed By-Laws
attached as Exhibit B. FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. Approval of proposal to amend
the 1996 Option Plan to increase
shares reserved thereunder and as
provided in Exhibit C. FOR AGAINST ABSTAIN
[ ] [ ] [ ]
6. Approval of the Non-Executive
Directors Stock Option Plan. FOR AGAINST ABSTAIN
[ ] [ ] [ ]
7. Ratification of the selection
of BDO Alamgor as independent
auditors. FOR AGAINST ABSTAIN
[ ] [ ] [ ]
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING. THIS PROXY WHEN PROPERLY EXECUTED WILL
BE VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 2, 3, 4 ,5, 6 AND 7 AND FOR THE
ELECTION OF THE PERSONS NOMINATED FOR DIRECTORS.
Mark box at right if an address change has been noted on the reverse side of
this card.
[ ]
---------------------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
Stockholder sign here Co-owner sign here
