EXHIBIT 10.9
STOCK OPTION AGREEMENT
OF
TTR TECHNOLOGIES, INC.
STOCK OPTION AGREEMENT (this "Agreement") entered into as of January 28, 2004,
between TTR TECHNOLOGIES, INC., a Delaware corporation (the "Corporation"), and
JUDAH XXXXXX XXXXXXXXXX (the "Optionee," which term as used herein shall be
deemed to include any successor to the Optionee by will or by the laws of
descent and distribution, unless the context shall otherwise require).
The Board of Directors of the Corporation approved the issuance to the Optionee,
effective as of the date set forth above, of a nonqualified stock option to
purchase up to an aggregate of 164,406 shares of the common stock, par value
$.001 per share, of the Corporation (the "Common Stock"), at an exercise price
of $0.56 per share (the "Option Price"), upon the terms and conditions
hereinafter set forth.
The Option (as defined below) hereunder is being granted pursuant to the terms
of the Settlement and Termination Agreement dated as of January 28, 2004,
between the Parties. The Option and the rights under this Agreement are
expressly subject to all the terms and conditions set forth in [FOR INITIAL
OPTION ONLY - SECTION 5] [FOR THE ADDITIONAL OPTIONS ONLY - SECTION 16] of the
said Settlement and Termination Agreement.
NOW, THEREFORE, in consideration of the mutual premises and undertakings
hereinafter set forth, the parties hereto agree as follows:
1. OPTION; OPTION PRICE. The Board of Directors hereby grants as of the date of
this Agreement to the Optionee the option (the "Option") to purchase, subject to
the terms and conditions of this Agreement, 164,406 shares of the Common Stock
of the Corporation at an exercise price per share equal to the Option Price.
2. [Intentionally Omitted]
3. TERM. The term (the "Option Term") of the Option shall commence on the date
of this Agreement and shall terminate on January 27, 2009, unless such Option
shall theretofore have been terminated in accordance with the terms hereof.
4. VESTING. (a) The Option shall be exercisable in full upon issuance as of the
date first written above.
(b) The shares as to which the Option is exercisable may be purchased at any
time prior to the expiration or termination of the Option.
5. TERMINATION OF OPTION. The unexercised portion of the Option shall
automatically and without notice terminate, be cancelled and become null and
void at the expiration date of the Option Term.
6. PROCEDURE FOR EXERCISE.
(a) Subject to the requirements of Section 9, the Option may be exercised, from
time to time, in whole or in part (but for the purchase of a whole number of
shares only), by delivery of a written notice (the "Notice") from the Optionee
to the Secretary of the Corporation, which Notice shall:
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(i) state that the Optionee elects to exercise the Option;
(ii) state the number of shares with respect to which the Option is being
exercised (the "Optioned Shares");
(iii) state the date upon which the Optionee desires to consummate the purchase
of the Optioned Shares (which date must be prior to the termination of such
Option and no later than thirty (30) days after the date of receipt of such
Notice);
(iv) include any representations of the Optionee required under Section 9(c);
and
(v) if the Option shall be exercised pursuant to Section 10 by any person other
than the Optionee, include evidence to the reasonable satisfaction of the Board
of Directors of the right of such person to exercise the Option.
(b) Payment of the Option Price for the Optioned Shares may be made (i) in U.S.
dollars by personal or company check, bank draft or money order payable to the
order of the Corporation or by wire transfer or (ii) by delivery of such other
consideration as the Board of Directors may reasonably deem acceptable.
(c) In lieu of the exercise procedures noted above, Optionee may elect a
cashless exercise. If the Notice of Exercise form elects a "cashless" exercise,
the Optionee shall thereby be entitled to receive a number of shares of Common
Stock determined by the following formula:
(X-Y) Z
Where X = the Market Price of the Common Stock (as defined below)
Y = the Option Price
Z = number of shares of Common Stock specified in such Notice of
Exercise Form
For the purposes of this Option, the term "Market Price of the Common Stock"
shall be the closing price of the Common Stock as of the trading day immediately
prior to the Option exercise date, as reported by the Reporting Service for the
relevant date. "Reporting Service" means Bloomberg LP or if that service is not
then reporting the relevant information regarding the Common Stock, a comparable
reporting service of national reputation selected by the Corporation.
(d) The Corporation shall issue a stock certificate in the name of the Optionee
(or such other person exercising the Option in accordance with the provisions of
Section 10) for the Optioned Shares as soon as practicable, but not later than 5
business days after receipt of the Notice and payment of the aggregate Option
Price for such shares.
7. NO RIGHTS AS A STOCKHOLDER. The Optionee shall have no rights as a
stockholder of the Corporation with respect to any Optioned Shares until the
date the (i) Optionee, (ii) if Optionee is a natural person, his nominee, (iii)
guardian or (iv) legal representative has exercised the Option in accordance
with the terms hereof.
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8. ADJUSTMENTS.
(a) If at any time while the Option is outstanding, there shall be any increase
or decrease in the number of issued and outstanding shares of Common Stock
through the declaration of a stock dividend, stock split, combination of shares
or through any recapitalization resulting in a stock split-up, spin-off,
combination or exchange of shares of Common Stock, then and in each such event
appropriate adjustment shall be made in the number of shares and the exercise
price per share covered by the Option, so that the same proportion of the
Corporation's issued and outstanding shares of Common Stock shall remain subject
to purchase at the same aggregate exercise price.
(b) Except as otherwise expressly provided herein, the issuance by the
Corporation of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in connection with
a direct sale or upon the exercise of rights (issued for adequate consideration)
or warrants (issued for adequate consideration) to subscribe therefor, or upon
conversion of shares or obligations (issued for adequate consideration) of the
Corporation convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number of
or exercise price of shares of Common Stock covered by the Option.
(c) Without limiting the generality of the foregoing, the existence of the
Option shall not affect in any manner the right or power of the Corporation to
make, authorize or consummate (i) any or all adjustments, recapitalizations,
reorganizations or other changes in the Corporation's capital structure or its
business; (ii) any merger or consolidation of the Corporation; (iii) any issue
by the Corporation of debt securities, or preferred or preference stock that
would rank above the shares of Common Stock covered by the Option; (iv) the
dissolution or liquidation of the Corporation; (v) any sale, transfer or
assignment of all or any part of the assets or business of the Corporation; or
(vi) any other corporate act or proceeding, whether of a similar character or
otherwise.
(d) If the Corporation shall consummate any merger, consolidation, business
combination or other reorganization in which holders of shares of Common Stock
are entitled to receive in respect of such shares any securities, cash and/or
other consideration (including a different number of shares of Common Stock)
(collectively, a "Reorganization"), this Option shall thereafter be exercisable,
in accordance with this Agreement, only for the kind and amount of securities,
cash and/or other consideration receivable upon such Reorganization had the
Optionee exercised the Option immediately prior to such Reorganization, and any
adjustments will be made to the terms of this Option, and this Agreement, to
give effect to the Reorganization.
9. ADDITIONAL PROVISIONS RELATED TO EXERCISE.
(a) The Option shall be exercisable only in accordance with this Agreement,
including the provisions regarding the period when the Option may be exercised
and the number of shares of Common Stock that may be acquired upon exercise.
(b) The Option may not be exercised as to less than one hundred (100) shares of
Common Stock at any one time unless less than one hundred (100) shares of Common
Stock remain to be purchased upon the exercise of the Option.
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(c) To exercise the Option, the Optionee shall follow the provisions of Section
6 hereof. Upon the exercise of the Option at a time when there is not in effect
a registration statement under the Securities Act of 1933, as amended (the
"Securities Act") relating to the shares of Common Stock issuable upon exercise
of the Option, the Board of Directors in its discretion may, as a condition to
the exercise of the Option, require the Optionee to represent in writing that
the shares of Common Stock received upon exercise of the Option are being
acquired for investment and not with a view to distribution.
(d) Stock certificates representing shares of Common Stock acquired upon the
exercise of the Option that have not been registered under the Securities Act
shall, if required by the Board of Directors, bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."
10. RESTRICTION ON TRANSFER. (a) The Option may not be assigned or transferred
(which shall be deemed to include with respect to an Optionee that is an entity,
a reorganization or merger or consolidation with any other person, entity or
corporation) except, if Optionee is a natural person, by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined in the Code, and may be exercised during the lifetime or existence of
the Optionee, as applicable, only by the Optionee or, if Optionee is a natural
person, the Optionee's guardian or legal representative or assignee pursuant to
a qualified domestic relations order. If the Optionee (who is a natural person)
dies, the Option shall thereafter be exercisable, during the period specified in
Section 5(a), by his executors or administrators or by a person who acquired the
right to exercise the Option by bequest or inheritance to the full extent to
which the Option was exercisable by the Optionee at the time of his death. The
Option shall not be subject to execution, attachment or similar process. Any
attempted assignment or transfer of the Option contrary to the provisions
hereof, and the levy of any execution, attachment or similar process upon the
Option, shall be null and void and without effect.
11. NOTICES. All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if (i) personally delivered, (ii)
sent by nationally-recognized overnight courier or (iii) sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
if to the Optionee, to the address set forth on the signature page hereto; and
if to the Corporation, to:
TTR Technologies, Inc.
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx, 00000
Attention: Secretary
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or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered, if
personally delivered, (ii) on the first Business Day (as hereinafter defined)
after dispatch, if sent by nationally-recognized overnight courier and (iii) on
the third Business Day following the date on which the piece of mail containing
such communication is posted, if sent by mail. As used herein, "Business Day"
means a day that is not a Saturday, Sunday or a day on which banking
institutions in the city to which the notice or communication is to be sent are
not required to be open.
12. NO WAIVER. No waiver of any breach or condition of this Agreement shall be
deemed to be a waiver of any other or subsequent breach or condition, whether of
like or different nature.
13 TAXES. All taxes, withholdings and deductions payable or due in respect of
the Option will be borne by Optionee.
14. MODIFICATION OF RIGHTS. The rights of the Optionee are subject to
modification and termination in certain events as provided in this Agreement.
15. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts made
and to be wholly performed therein.
16. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
17. ENTIRE AGREEMENT. This Agreement, together with the Settlement Agreement,
constitute the entire agreement between the parties with respect to the subject
matter hereof, and supersede all previously written or oral negotiations,
commitments, representations and agreements with respect thereto.
18. CORPORATION REPRESENTATION. The Corporation hereby warrants and represents
that (i) it will, at all times this Option is outstanding, reserve for issuance
that number of shares of the Corporation's Common Stock into which this Option
is exercisable; and (ii) at the time this Option is exercised, whether in whole
or in part, the shares of Common Stock to be issued upon such exercise, will be
authorized, fully paid, issued, outstanding and non-assessable shares of capital
stock of the Corporation.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
TTR TECHNOLOGIES, INC.
By: /s/ XXX XXXXX
Name: Xxx Xxxxx
Title: Chief Operating Officer
OPTIONEE:
/s/ JUDAH XXXXXX XXXXXXXXXX
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Judah Xxxxxx Xxxxxxxxxx
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