TTR INC. INCENTIVE & NON-QUALIFIED STOCK OPTION PLAN 1. Purpose: The Stock Option Plan (hereinafter the "Plan") is intended to provide a method whereby employees (including officers and directors) of TTR Inc. (the "Company") and its subsidiaries who are making and are expected to continue making substantial contributions to the successful management and growth of the Company and its subsidiaries may be offered an opportunity to acquire Common Stock, par value $0.001 per share (the "Common Stock"), of the Company, in order to increase their proprietary interests in the Company and their incentive to remain in and advance in the employ of the Company and its subsidiaries, and to attract and retain personnel of experience and ability by granting such persons an opportunity to acquire a proprietary interest in the Company. Accordingly, the Comqany may, from time to time, grant to such persons as may be selected in the manner hereinafter provided, incentive stock options, as defined in Section 422A of the Internal Revenue Code of 1986 (the "Code") ("Incentive Stock Options"), and restricted stock options ("Restricted Stock Options") to purchase shares of Common Stock of the Company on the terms and conditions hereinafter established. The Incentive Stock Options and Restricted Stock Options sometimes are referred to herein individually as an "Option" and collectively as the "Options". 2. Administration: The Plan shall be administered by a Stock Option Committee (the "Committee") appointed by the Board of Directors of the Company, which Committee membership may consist of one member. Committee members are to be members of the Board of Directors of the Company and are eligible to participate in the Plan. Subject to the terms and conditions of the Plan and relevant commitments of the Company, the Committee shall have full discretion, from time to time, to select the individuals or persons to whom Options shall be granted, to determine the number of shares to covered by each Option, the time at which the Option shall be granted, the terms and conditions of Option Agreements (as hereinafter defined), and except as hereinafter provided, the option exercise price and the terms during which the Option may be exercised. The Committee may exercise its authority hereunder by meeting or by unanimous written consent. The Board of Directors may at any time appoint or remove members of the Committee and may fill vacancies, however caused, in the Committee. The Committee shall select one of its members as Chairman, and shall hold its meetings at such time and place as it shall deem advisable. A majority of its members shall constitute a quorum. All actions of the Committee shall be taken by a majority of its members and may be taken by written consent in lieu of a meeting. The Committee shall make such rules and regulations for the conduct of its business as it shall deem advisable. 3. Interpretation & Amendment: The interpretation, construction or determination of any provision of the Plan by the Committee shall be final and conclusive. No member of the Board of Directors or the Committee shall be liable for any action or determination made in good faith with respect to the Plan. 4. Participants: Options may be granted under the Plan to key employees of the Company and its subsidiaries (including employees who are also directors or officers of the Company or its subsidiaries and non-employee directors). Solely for the purpose of granting Restricted Stock Options under the Plan, the term "employees" shall also include officers and directors of and consultants to the Company or any subsidiary. The status of the Option as either Incentive Stock Option or Restricted Stock Option shall be set forth in the Option Agreements. The term "subsidiary" shall mean "subsidiary corporation" as defined in Section 425 of the Code. No Incentive Stock Option shall be granted to an employee who, at the time of the grant of the Incentive Stock Option, owns stock possessing more than 10% of the total combined voting power of all classes of capital stock of the Company or any subsidiary of the Company; provided, however, that an Incentive Stock Option may be granted to such employee if, at the time that such Incentive Stock Option is granted, the option exercise price is at least 110 percent (110%) of the fair market value of the Common Stock subject to the Incentive Stock Option, and such Incentive Stock Option is by its terms not exercisable after the expiration of five (5) years from the date such Incentive Stock Option is granted. 5. Common Stock: The number of shares of Common Stock which may be issued and sold pursuant uo the Options granted under the Plan from time to time shall not exceed in the aggregate 450,000 shares of Common Stock of the Company, which shares may be issued and sold pursuant to Incentive Stock Options or Restricted Stock Options, as the Committee, in its sole discretion, may determine. Should any Options expire or terminate for any reason without having been exercised in full, the unsold shares covered thereby shall be added to the shares otherwise available for Options hereunder. 6. Terms and Conditions of Options: Options granted pursuant to the Plan shall be in such form and on such terms as the Committee shall, from time to time, approve, but subject, nevertheless, to the following terms and conditions: (i) The Options shall state the total number of shares of Common Stock to which it relates and no fractional shares of Common Stock shall be issued. (ii) The exercise price per share of Common Stock issuable upon exercise of an Incentive Stock Option shall be not less than one hundred percent (100%) of the fair market value of the Common Stock covered by such Option at the date such option is granted, or, in the case of an employee who at the time the Incentive Stock Option is granted owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of capital stock of the Company or any subsidiary of the Company, the option exercise price shall be not less than one hundred and ten percent (110%) of the fair market value of the Common Stock covered by such Option. (iii) The option exercise price per share of Common Stock issuable upon the exercise of a Restricted Stock Option shall be determined by the Committee but shall be not less than the par value of the Common Stock. (iv) Notwithstanding any other provision of the Plan, the term of an Incentive Stock Option and the term of a Restricted Stock Option shall be for a period of not more than ten (10) years from the date the Plan is adopted by the Board of Directors. (v) An Option must be granted within ten years of the earlier of the date the Plan is adopted or the date this Plan is approved by the Company's stockholders. (vi) No individual shall be given the opportunity, under the Plan, to exercise Incentive Stock Options for the purchase of Common Shares valued (at the time of grant of the Incentive Stock Options) in excess of $100,000, in any calendar year, unless and to the extent that said Options shall have first become exercisable in the preceding year. No Incentive Stock Option shall be granted hereunder in such a manner as would cause the foregoing restrictions to be violated. 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. 8. Notice of Election Under Section 83 (b): With respect to the exercise of a Restricted Stock Option, each employee making an election under Section 83 (b) of the Code and the Regulations and Rulings promulgated thereunder will provide a copy thereof to the Company within 30 days of the filing of such election with the Internal Revenue Service. Any insider acquiring Options after the Company becomes subject to Rule 16b-3 who elects the election under Section 83 (b) of the Code and Regulations promulgated thereunder, shall notify the Company within 30 days of the filing of such election. 9. Stock Splits, Mergers, Etc.: In the case of any stock split, stock dividend or similar transaction applicable to all of the outstanding shares of the Company equally which increases or decreases the number of outstanding shares of Common Stock pari passu, appropriate adjustment shall be made by the Board of Directors, whose determination shall be final, to the number of Shares of Common Stock which may be purchased under the Plan, as well as to the number of Common Stock which may be purchased under the Option so as to maintain the relative share interests offered thereby and to the Option exercise price per share of Common Stock. In the case of a merger, sale of assets or similar transaction which results in a replacement of the Company's Common Stock with stock of another corporation, the Company will be required to replace any outstanding Options granted under the Plan with comparable options to purchase the stock of such other corporation. The Company may provide for immediate maturity of all outstanding Options prior to the effectiveness of such merger, sale of assets or similar transaction, with all Options not being exercised within the time period specified by the Board of Directors being terminated. 10. Exercise of Options: An option holder electing to exercise an Option shall give written notice to the Company of such election and the number of shares of Common Stock that he has elected to acquire. An option holder of a Restricted Stock Option shall have no rights of a stockholder with respect to shares of Common Stock covered by an Option until after the date of issuance of a stock certificate to him upon partial or complete exercise of his Option. A holder of an Incentive Stock Option shall have the rights of a stockholder with respect to shares of Common Stock upon exercise of the Option. 11. Written Option Agreement: Agreements granting Options under the Plan ("Option Agreements") shall be in writing, duly executed and delivered by or on behalf of the Company and the option holder, shall contain such terms and conditions as the committee deems advisable, and shall specify its application as to a Restricted Stock Option or an Incentive Stock Option. If there is any conflict between the terms and conditions of any Option Agreement and the Plan, the terms and conditions of the Plan shall control. 12. Payment: The Option Exercise Price shall be payable upon the exercise of the Option in cash, by certified check or by tender of the shares of Common Stock or, at the discretion of the Board of Directors, by paying cash, at the minimum, the par value of the shares of Common Stock being acquired and executing a promissory for the balance of the Option exercise Price, provided that said note shall bear interest in the case of Incentive Stock Options, at a rate which is no less than the lowest applicable U.S. federal rate required to be charged to preclude the re characterization of any amount of stated principal interest for U.S. federal tax purposes. In the case of Restricted Stock Options, the rate of interest will be determined by the Committee. If the shares of Common Stock are tendered as payment of the option exercise price, the value of such shares shall be their fair market value as of the date of exercise. 13. Restrictions on Issuing Shares: The exercise of each Option shall be subject to the condition that if at any time the Company shall determine in its discretion that the satisfaction of withholding tax or other withholding liabilities, or that the listing, registration or qualification of any shares otherwise deliverable upon such exercise upon any securities exchange or under any state or federal law, or that the consent or approval of any regulatory body is necessary or desirable as a condition of, or in connection with, such exercise in the delivery or purchase of shares pursuant thereto, then in any such event, such exercise shall not be effective unless such withholding, listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the company. The Company shall use its best efforts to effect or secure the necessary withholding, listing, registration, qualification, consent or approval so as to effect the exercise of each option and issue and deliver the shares purchased thereunder. 14. Term of the Plan: The Plan shall terminate ten (10) years after the Plan is adopted by the Board of Directors, and no Option shall be granted pursuant to the Plan after that date. 15. Application of the Funds: The proceeds received by the Company from the sale of the Common Stock pursuant to the exercise of the Options granted under the Plan shall be used for general corporate purposes. 16. Continuation of Employment: Neither the Plan nor any Option Agreement shall impose any obligation on the Company or any subsidiary of the Company to continue the employment of an option holder, and nothing in the Plan or in any Option Agreement shall confer upon any option holder any right to continue in the employ of the Company or the subsidiary of the Company or conflict with the right of either to terminate such employment at any time. 17. Effectiveness of the Plan: The Plan shall become effective on the date of its adoption by the Board of Directors, but subject, nevertheless, to (i) approval, within 12 months thereof, by the stockholders representing at least a majority of the voting stock of the Company or by such greater percentage as may from time to time be required under the laws of he State of Delaware, and (ii) such approvals as may be required by any other public authorities. Options under this Plan may be granted but not exercised until it is approved by the Company's shareholders. In the event the Plan is not approved, the Plan shall terminate and all Options granted shall be void and have no force or effect.