SCHEDULE 14A INFORMATION

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                PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

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                           FILED BY THE REGISTRANT [X]
                 FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]

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Check the appropriate box:

[X]       Preliminary Proxy Statement
[ ]       Confidential, for use of the Commission Only (as permitted by Rule
          14a-6(e)(2))
[ ]       Definitive Proxy Statement
[ ]       Definitive Additional Materials
[ ]       Soliciting Materials Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12


                            DISTINCTIVE DEVICES, INC.
                            -------------------------
                (Name of Registrant as Specified In Its Charter)


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

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          0-11.
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          2)    Aggregate number of securities to which transaction applies:

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          3)    Per unit price or other underlying value of transaction
                computed pursuant to Exchange Act Rule 0-11 (Set forth
                amount on which the filing fee is calculated and state how
                it was determined):
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          4)    Proposed maximum aggregate value of transaction:
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          5)    Total fee paid:
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[ ]       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:
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          2)    Form, Schedule or Registration Statement No:
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          3)    Filing Party:
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          4)    Date Filed:
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                                                                     PRELIMINARY
                                                                          COPIES


                            DISTINCTIVE DEVICES, INC.

                    NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

                                 ________, 2001

To the Shareholders of DISTINCTIVE DEVICES, INC.

     A Special Meeting of Shareholders (the "Special Meeting") of Distinctive
Devices, Inc., a New York corporation (the "Company"), will be held on _______,
2001 at the offices of Thelen Reid & Priest LLP, 40 West 57th Street, New York,
New York, for the following purposes:

     1.   To elect Sanjay Mody, Earl M. Anderson, Jr., Walter E. Freeman,
          Shrikant C. Mehta and William E. Walles as Directors.

     2.   To approve a change in the state of incorporation of the Company from
          New York to Delaware, to be effected by a merger of the Company with
          and into Distinctive Devices, Inc., a Delaware corporation.

     3.   To ratify the adoption of the 2001 Stock Option Plan.

     4.   To approve an increase in the number of authorized shares of Common
          Stock to 100,000,000 shares and to change the par value to $0.001 per
          share.

     5.   To transact such other business as may properly come before the
          Special Meeting and any adjournment or adjournments thereof.

     Only shareholders of record at the close of business on __________, 2001
are entitled to notice of and to vote at the Special Meeting and any adjournment
or adjournments thereof.

                                         By Order of the Board of Directors,


                                         Earl M. Anderson, Jr.
                                         Secretary

___________, 2001

SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, BUT WISH THEIR
STOCK TO BE VOTED ON MATTERS TO BE PRESENTED TO THE MEETING, ARE URGED TO REVIEW
THE ATTACHED PROXY STATEMENT PROMPTLY AND THEN COMPLETE AND RETURN THE ENCLOSED
PROXY IN THE ACCOMPANYING POSTAGE-PAID, ADDRESSED ENVELOPE. IF YOU ATTEND THE
MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR SHARES PERSONALLY.





                                                                     PRELIMINARY
                                                                          COPIES


                            DISTINCTIVE DEVICES, INC.
                           ONE BRIDGE PLAZA, SUITE 100
                               FORT LEE, NJ 07024

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                                 PROXY STATEMENT

                                   ----------

                                  INTRODUCTION

     This Proxy Statement is furnished with respect to the solicitation of
proxies by the Board of Directors of Distinctive Devices, Inc., a New York
corporation (the "Company"), for the Special Meeting of Shareholders (the
"Special Meeting") of the Company to be held at ____ a.m. on ___________, 2001
and at any adjournment or adjournments thereof, at the offices of Thelen Reid &
Priest LLP, 40 West 57th Street, New York, New York.

     The approximate date on which the Proxy Statement and form of proxy are
intended to be sent or given to shareholders is ________, 2001.

     The expense of the solicitation of proxies for the Special Meeting,
including the cost of mailing, will be borne by the Company. In addition to
mailing copies of the enclosed proxy materials to shareholders, the Company may
request persons, and reimburse them for their expenses with respect thereto, who
hold stock in their names or custody or in the names of nominees for others to
forward copies of such materials to those persons for whom they hold the Common
Stock of the Company and to request authority for the execution of the proxies.
In addition to the solicitation of proxies by mail, it is expected that some of
the officers, directors and regular employees of the Company, without additional
compensation, may solicit proxies on behalf of the Board of Directors by
telephone, telefax and personal interview.

                      VOTING SECURITIES, VOTING AND PROXIES

RECORD DATE

     As of the close of business on ______________, 2001 (the "Record Date"),
the date for determining the shareholders of record entitled to notice of and to
vote at the Special Meeting and any adjournment or adjournments thereof, there
were ______________ issued and outstanding shares of the Company's common stock,
$.05 par value (the "Common Stock"). The holders of the Common Stock are
entitled to one vote per share on all matters to be voted on at the Special
Meeting. The presence at the Special Meeting of a majority of such shares, in
person or by proxy, are required for a quorum. Any shareholder who submits a
proxy, even though the shareholder abstains as to one or more proposals, or who
is present in person, shall be counted for the purpose of determining if a
quorum is present.





VOTING

     Under New York law, (i) a plurality of the votes cast at the Special
Meeting is necessary to elect directors, (ii) the affirmative vote of the
holders of at least two-thirds of the shares of the Company Common Stock
outstanding on the Record Date is required for approval of the proposed
reincorporation in Delaware through the merger (the "Reincorporation"),
(iii) the affirmative vote of a majority of the votes cast is required to ratify
the adoption of the 2001 Stock Option Plan (the "2001 Option Plan"), and
(iv) the affirmative vote of the holders of at least a majority of the
outstanding shares is required for the change in the Common Stock. Broker
"non-votes" and the shares as to which a shareholder abstains from voting are
included for the purposes of determining whether a quorum of shares is present
at the Special Meeting. A broker "non-vote" occurs when a nominee holding shares
for a beneficial owner does not have discretionary voting power with respect to
that item and has not received voting instructions from the beneficial owner. A
broker "non-vote" will have the effect of an AGAINST vote on the proposed
Reincorporation and on the proposed change in the Common Stock.

     At the Special Meeting ballots will be distributed with respect to each
proposal to be voted upon to each shareholder (or the shareholder's proxy if not
the management proxy holders) who is present and did not deliver a proxy to the
management proxy holders or another person. The ballots shall then be tallied,
one vote for each share owned of record, the votes being in three categories:
FOR, AGAINST or ABSTAIN, except in the case of the proposal to elect directors,
the three categories will be, with respect to each director to be elected, FOR
the director nominee, WITHHOLD AUTHORITY from voting FOR the director nominee or
FOR another person to be elected as a director.

PROXIES

     The form of proxy solicited by the Board of Directors affords shareholders
the ability to specify a choice among approval of, disapproval of, or abstention
with respect to, each matter to be acted upon at the Special Meeting. Shares
represented by the proxy will be voted and, where the solicited shareholder
indicates a choice with respect to any matter to be acted upon, the shares will
be voted as specified. If no choice is given, a properly executed proxy will be
voted for the election of the nominated directors, for the Reincorporation and
for the ratification of the 2001 Option Plan, and as to any other matters which
any properly come before the Special Meeting, at the discretion of the persons
designated as proxies.

     Shareholders who execute proxies retain the right to revoke them by
notifying the Company at any time before they are voted. Such revocation may be
effected by execution of a subsequently dated proxy, or by a written notice of
revocation, sent to the attention of the Secretary at the address of the
Company's principal office set forth above in the introductory paragraph to this
Proxy Statement or delivered to him at the Special Meeting. Unless so revoked,
the shares represented by proxies, if received in time, will be voted in
accordance with the directions given therein.


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                SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                                 AND MANAGEMENT

     The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of the Record Date by (i) persons
known to the Company to beneficially own more than 5% of the outstanding Common
Stock, (ii) by each director and nominee and (iii) by all directors and officers
as a group:

                                         Amount and
                                         Nature of
Name and Address of                      Beneficial
Beneficial Owner(1)                      Ownership(2)           Percent of Class
-------------------                      ----------             ----------------


EagleView Technologies, Inc. (3)          _________ shares           ____%
5030 Champion Blvd-PMB 271
Boca Raton, FL  33496

EagleView Properties, Inc. (3)            _________ shares           ____%
5030 Champion Blvd-PMB 271
Boca Raton, FL  33496

Michael Paolini (3)                       _________ shares           ____%
5030 Champion Blvd-PMB 271
Boca Raton, FL  33496

Actifid S.A.                              _________ shares           ____%
Quai Gustave-Ador 20
1211 Geneve 3, Switzerland

Sanjay Mody (4)                           _________ shares           ____%

Earl M. Anderson, Jr.                     _________ shares           ____%

Walter E. Freeman                         _________ shares           ____%

Shrikant C. Mehta                         _________ shares           ____%

William E. Walles                         _________ shares           ____%

James W. Wolff                            _________ shares           ____%

Directors and Officers                    _________ shares           ____%
as a group (___ persons)

-------------------

(1)  Unless otherwise provided, the address is c/o Distinctive Devices, Inc.,
     One Bridge Plaza, Fort Lee, New Jersey 07024.

(2)  Unless otherwise noted, all persons named in the tables have sole voting
     and investment power with respect to all shares owned by them.

(3)  EagleView Properties, Inc. ("Properties"), a Florida corporation, owns
     _____% of the outstanding common stock of Eagle View Technologies, Inc.
     ("Technologies"). Michael Paolini owns ___% of Properties' outstanding
     shares and his wife, Kimberly Paolini, owns ___%. He is a director and
     President of Properties and Technologies. Mr. Paolini, by reason of his


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     ability to control the voting of the Company shares held by Technologies,
     may be deemed to be the beneficial owner of the Company shares held by
     Technologies. Mr. Paolini disclaims beneficial ownership of Properties'
     shares owned by his wife. Further, they each disclaim ownership of the
     Common Stock of the Company deemed to be beneficially owned by Properties.

(4)  Includes ____ shares underlying a proxy granted to Mr. Mody from
     Technologies.


                                   PROPOSAL 1

                              ELECTION OF DIRECTORS

INFORMATION ABOUT NOMINEES

     Five directors will be elected at the Special Meeting. The Company
currently has six directors, five of whom are management nominees. James W.
Wolff, a current director, is not standing for election. As of the Special
Meeting the number of directors will be decreased to five persons. Each nominee
is a member of the current Board of Directors.

     The enclosed proxy, unless otherwise specified, will be voted to elect as
directors the nominees named below. Each director elected at the Special Meeting
will serve until the next Annual Meeting of Shareholders and until his successor
is duly elected and qualified. All nominees have consented to serve as
directors. If a nominee should not be available for election as contemplated,
the management proxy holders will vote for a substitute designated by the
current Board of Directors.

     The following table sets forth certain information, as of the Record Date,
concerning the nominees for election as directors of the Company. For
information as to the shares of the Common Stock held by each nominee, see the
section "Security Ownership of Certain Beneficial Holders and Management"
elsewhere in this Proxy Statement.

                           Age as of     Director     Other Position(s)
Nominee                    Record Date    Since       With Company
-------                    -----------   ------       ------------
Sanjay Mody                43            2000         Chief Executive Officer,
                                                      President, Chief Financial
                                                      Officer and Treasurer

Earl M. Anderson, Jr.      76            1982         Secretary

Walter E. Freeman          76            1983

Shrikant C. Mehta          ?             2001

William E. Walles          40            2001

     Mr. Mody became CEO and CFO of the Company on May 15, 2001, and has been a
director since March 2000. Since March 2000, he has been an active investor in
several technology companies and has headed his firm, Webpulse Consulting, Inc.,
engaged in website and portal development. Prior thereto, he served for four
years as Vice President of Laidlaw Global Securities in New York City. He also
serves as a director of Caprius, Inc., a manufacturer of diagnostic test kits.


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     Mr. Anderson has been an independent management consultant for the past 35
years. He served as the Company's President from 1978 to 1999 and since 1999 he
has been Secretary. He is also a director of Sunair Electronics, Inc., a
manufacturer and provider of high frequency radio communications systems. He
holds B.S. and J.D. Degrees from Northwestern University and is a retired member
of the Illinois Bar.

     Mr. Freeman served as Vice President of the International Bank of
Washington until 1993. During a 30-year tenure, he was President of Bank
subsidiaries engaged in consumer credit, property and casualty insurance and
industrial lending and investments. More recently, he has served as a consultant
to the Bank, to commercial banks and financial services companies. He holds a
Bachelors Degree from the American Institute of Business.

     Mr. Mehta is the founder and has been CEO of Combine International, Inc., a
manufacturer and distributor of fine jewelry, since 1974, and Internet
Operations Center, Inc., a provider of web hosting and Internet professional
services, since 1997. He has also founded other companies, including
Inknowvator, Inc., I*Logic, Inc., POM Group, Inc. and Lenderlive.com. He serves
as a director of these, and other, corporations. He also serves as a director of
Caprius, Inc. He holds Bachelor and Master Degrees in Electronics from Case
Institute of Technology and Wayne State University, respectively.

     Mr. Walles founded VIEWige in 2001, which is a general contractor providing
services to large corporations seeking to fulfill their Internet objectives.
From 1999 to 2001, he served as President of Internet Operations Center, Inc.
and, from 1995 to 1998, he served in advanced technology manufacturing
assignments with Ford Motor Company. He holds a B.S. Degree in Mechanical
Engineering from Michigan State University and a M.S. Degree in Engineering
Management from Wayne State University.

     Mr. Mehta is the uncle of Mr. Mody. There are no other family relations
among the officers and directors.

EXECUTIVE COMPENSATION

     During each of the three fiscal years ended December 31, 2000, no executive
officer of the Company received compensation in an amount exceeding $100,000.

     On May 15, 2001, Sanjay Mody became President and Chief Executive Officer
of the Company at a base compensation of $108,000 per annum. Subject to
shareholder approval of the 2001 Option Plan (see Proposal 3 herein), he was
granted an option to purchase 750,000 shares of Common stock at an exercise
price of $0.15 per share (the then market price) vesting as to one-third the
shares six months from grant assuming shareholder approval of the Plan, and
one-third on each of the first and second anniversary dates of the grant, and
expiring in five years. The Company is currently negotiating a long-term
employment agreement with Mr. Mody.

     Mr. Anderson receives $3,000 per month for the performance of
administrative and corporate services to the Company.

     The Company is authorized to pay to each non-employee the amount of $1,000
for each Board or Committee meeting attended in person (plus reimbursement of
travel expenses) or $500 for each telephonic meeting. During the 2000 fiscal
year, an aggregate of $4,000 was paid to the non-employee directors.


                                       5



BOARD MEETINGS AND COMMITTEES

     During fiscal year 2000, four board meetings were held at which all
directors were present. Other matters requiring board action were taken by the
unanimous written consent of directors, in lieu of a meeting.

     In July 2001, the Board of Directors established a Compensation Committee
and designated Messrs. Anderson, Mehta and Walles as its members. This Committee
will recommend the compensation for the executive officers and administer the
2001 Option Plan.

                                   PROPOSAL 2

                     APPROVAL OF REINCORPORATION IN DELAWARE

GENERAL

     The Board of Directors has approved and declared advisable a proposal to
change the Company's state of incorporation from New York to Delaware. The
Reincorporation will be effected by merging the Company with and into
Distinctive Devices, Inc., a Delaware corporation ("DDI-DE"), a corporation
formed by Mr. Mody for the purpose of the Reincorporation, in accordance with
the terms of an Agreement and Plan of Merger (the "Merger Agreement"). A copy of
the form of Merger Agreement is attached to this Proxy Statement as Exhibit A,
and statements herein regarding such Agreement are qualified by reference to the
complete Merger Agreement.

     Upon the effective date of the Reincorporation, every [____] outstanding
shares of the Company's Common Stock will be automatically exchanged for one
share of the common stock of DDI-DE (the "DDI-DE Common Stock"). The Company
will cease to exist as a New York corporation, and DDI-DE will be the continuing
or surviving corporation of the Reincorporation. Thus, DDI-DE will succeed to
all of the business and operations, own all of the assets and other properties
and will assume and become responsible for all of the liabilities and
obligations of the Company. The Reincorporation, therefore, will not involve any
change in the business, properties or management of the Company. The name of the
surviving company will be Distinctive Devices, Inc. The persons serving as
officers and directors of the Company will serve as the officers and directors
of DDI-DE after the Reincorporation, see Proposal 1, "Election of Directors."

     At the Board's direction, Mr. Mody formed DDI-DE for the purpose of the
Reincorporation. Prior to the closing of the Merger Agreement and effecting the
Reincorporation, Mr. Mody will contribute all of the outstanding capital stock
of DDI-DE to the Company for no consideration whereby DDI-DE would become a
wholly-owned subsidiary of the Company, subject to a dilution not of more than
9.9% by reason of a proposed placement by DDI-DE. The only activities that
DDI-DE will engage in prior to the Reincorporation are formation and
organizational matters and a private placement of units, 80% of the
consideration for the purchase of convertible debentures and 20% of the
consideration for the purchase of DDI-DE Common Stock.

PURPOSE OF MERGER AND REINCORPORATION

     The purpose of the Reincorporation is to change the state of incorporation
and legal domicile of the Company from New York to Delaware. The Board of
Directors believes that this change in the domicile would be in the best
interests of the Company and its shareholders.


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     The Company was incorporated in New York, as its initial operations were
located in New York. Over the years, the Company has moved its operations,
whereby it has ceased any activities in New York and now has its principal
operations in New Jersey. Delaware has long been a leading state in adopting,
construing, and implementing comprehensive and flexible corporate laws that
respond to the legal and business needs of corporations. As a result, the
Delaware General Corporation Law (the "DGCL") is widely regarded to be one of
the best-defined bodies of corporate law in the United States. The Delaware
legislature is particularly sensitive to corporate law issues, and Delaware
courts have developed considerable expertise in construing Delaware's corporate
law. Accordingly, the Board of Directors believes that Delaware law would
provide greater predictability in the Company's legal affairs than is currently
available under New York law.

     The interests of the Company's Board of Directors, management, and
affiliated shareholders in voting on the Reincorporation proposal may not be the
same as those of unaffiliated shareholders. Delaware law does not afford
minority shareholders some of the rights and protections available under New
York law. A discussion of the principal differences between New York and
Delaware law as they affect shareholders is set forth below in the section
entitled "Significant Changes Caused by the Reincorporation."

AUTHORIZED SHARES OF STOCK

     The Company's Certificate of Incorporation authorizes 20,000,000 shares of
Common Stock, par value $.05 per share, and 1,000,000 shares of preferred stock,
par value $1.00 per share (the "Preferred Stock"), of which __________ shares of
Common Stock and no shares of Preferred Stock are issued and outstanding as of
the Record Date. DDI-DE's Certificate of Incorporation authorizes 50,000,000
shares of common stock, par value $.001 per share and 5,000,000 shares of
preferred stock, par value $0.01. No shares of any capital stock will be issued
by DDI-DE in connection with the Reincorporation, other than the shares of
DDI-DE Common Stock to be exchanged for the Company's outstanding Common Stock
and the shares to be issued upon the closing of the Placement, and the grant of
options in exchange for any options then outstanding for the purchase of the
Company's Common Stock.

EXCHANGE OF THE STOCK

     Assuming shareholder approval of this proposal, as soon as the
Reincorporation becomes effective, every [____] outstanding shares of the
Company's Common Stock will automatically convert into and be exchanged for one
share of DDI-DE Common Stock, and the Company shareholders will automatically
become stockholders of DDI-DE. In lieu of issuing fractional shares, any
exchange resulting in fractional shares will be rounded up or down to the
nearest whole share, provided that at least one whole share would be issued to
each record holder.

     In addition, each outstanding option, right or warrant to acquire shares of
the Company's Common Stock outstanding upon the Reincorporation will be
converted into an option, right or warrant to acquire the number of shares of
DDI-DE Common Stock based upon the merger exchange ratio, with a corresponding
exercise price adjustment, under the terms and conditions as the original
options, rights or warrants. At the Record Date, the only outstanding options,
rights or warrants for the purchase of the Company's Common were options for
750,000 shares, which are subject to approval of the 2001 Option Plan, see
Proposal 3. Any Company employee benefit plan in effect will be continued by
DDI-DE following the Reincorporation.

     Shareholders do not need to take any action to exchange their stock
certificates for DDI-DE stock certificates prior to the Special Meeting. Upon
completion of the Reincorporation, DDI-DE will send a notice to all shareholders
of the Company as of the effective date of the Reincorporation, notifying them


                                       7



of the completion and advising them how to exchange their certificates of shares
of the Company's Common Stock for DDI-DE stock certificates. Shareholders should
not destroy their old certificates. After the Reincorporation, shareholders of
the Company may continue to make sales or transfers using their Company stock
certificates. DDI-DE will issue new certificates representing shares of DDI-DE
Common Stock for transfers occurring after the Reincorporation. On request,
DDI-DE will issue new certificates to anyone who holds Company stock
certificates in exchange therefor. Any request for new certificates into a name
different from that of the registered holder will be subject to normal stock
transfer requirements, including proper endorsement and signature guarantee, if
required.

     Shareholders do not have any statutory appraisal rights on the
Reincorporation.

TRANSFERABILITY OF SHARES

     Shareholders whose shares of the Company's Common Stock are freely tradable
before the Reincorporation will own shares of DDI-DE that are freely tradable
after the Reincorporation. Similarly, any shareholders holding securities with
transfer restrictions before the Reincorporation will hold shares of DDI-DE that
have the same transfer restrictions after the Reincorporation. For purposes of
computing the holding period under Rule 144 of the Securities Act, those who
hold DDI-DE stock certificates will be deemed to have acquired their shares on
the date they originally acquired their Company shares.

     After the Reincorporation, DDI-DE will continue to be a publicly held
company, and, like the Company's shares, shares of DDI-DE will be quoted on the
OTC Bulletin Board, however under a different trading symbol and CUSIP number.
DDI-DE will also file with the SEC and provide to its stockholders the same
types of information that the Company has previously filed and provided.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE REINCORPORATION

     The discussion of U.S. federal income tax consequences set forth below is
for general information only and does not purport to be a complete discussion or
analysis of all potential tax consequences that may apply to a shareholder.
Shareholders are urged to consult their tax advisors to determine the particular
tax consequences of the Reincorporation, including the applicability and effect
of federal, state, local, foreign and other tax laws.

     The following discussion sets forth the principal U.S. federal income tax
consequences of the Reincorporation to the Company shareholders who hold their
shares as a capital asset. It does not address all of the federal income tax
consequences that may be relevant to particular shareholders based upon their
individual circumstances or to shareholders who are subject to special rules,
such as financial institutions, tax-exempt organizations, insurance companies,
dealers in securities, foreign holders or holders who acquired their shares
pursuant to the exercise of employee stock options or otherwise as compensation.

     The following disclosure is based on the Internal Revenue Code of 1986, as
amended (the "Code"), laws regulations, rulings and decisions in effect as of
the date of this Proxy Statement, all of which are subject to change, possibly
with retroactive effect, and to differing interpretations. The following
disclosure does not address the tax consequences to our shareholders under
state, local and foreign laws. The Company has neither requested nor received a
tax opinion from legal counsel with respect to the consequences of
reincorporation. No rulings have been or will be requested from the Internal
Revenue Service with to the consequences of reincorporation. There can be no
assurance that future legislation, regulations, administrative rulings or court
decisions would not alter the consequences set forth below.


                                       8



     The Reincorporation provided for in the Merger Agreement is intended to be
a tax-free reorganization under the Code. Assuming the Reincorporation qualifies
as a reorganization, no gain or loss will be recognized to the holders of the
Company's capital stock as a result of consummation of the reincorporation, and
no gain or loss will be recognized by the Company or DDI-DE. Each former holder
of the Company's Common Stock will have the same basis in the capital stock of
DDI-DE received by that holder pursuant to the reincorporation as that holder
has in the Company's Common Stock held by that holder at the time the
Reincorporation is consummated. Each shareholder's holding period with respect
to DDI-DE's Common Stock will include the period during which that holder held
the corresponding Company Common Stock, provided the latter was held by such
holder as a capital asset at the time of consummation of the Reincorporation was
consummated.

ACCOUNTING TREATMENT

     In accordance with generally accepted accounting principles, the Company
expects that the Reincorporation will be accounted for as a reorganization of
entities under common control and recorded at historical cost.

REGULATORY APPROVALS

     The Reincorporation will not be consummated until after shareholder
approval. The Company will obtain all required consents of governmental
authorities, including the filing of a Certificate of Merger with the Secretary
of State of the State of New York and the filing of a Certificate of Ownership
and Merger with the Secretary of the State of Delaware.

SIGNIFICANT CHANGES CAUSED BY THE REINCORPORATION

     Delaware law differs in certain respects from New York law. Although it is
not practical to compare all the differences between the laws of governing
corporations in New York and Delaware, the following discussion provides a
summary of the material differences which may affect the rights of shareholders.
The Company's corporate affairs are governed at present by the Business
Corporation Law of New York (the "New York Law") and by its Certificate of
Incorporation filed in New York (the "New York Certificate") and by the By-laws
adopted pursuant to New York Law (the "New York By-laws"). Following the
Reincorporation, the Company's corporate affairs will be governed by the DGCL
and by the certificate of incorporation of DDI-DE (the "Delaware Certificate")
and by the by-laws of DDI-DE. Both sets of Certificates of Incorporation and
By-laws are available for inspection during business hours at the Company's
principal executive offices. In addition, copies may be obtained by writing to
the Company at Distinctive Devices, Inc., One Bridge Plaza, Suite 100, Fort Lee,
NJ 07024, Attention: Secretary.

     Under New York Law, a person who owns stock of the Company is referred to
as a "shareholder;" while under Delaware Law, such person is known as a
"stockholder." Such terms have the same meaning and are used herein
interchangeably.

     Action by Written Consent of Shareholders in lieu of a Shareholder Vote.
New York Law allows shareholders to act by written consent in lieu of a meeting
only by unanimous written consent of those shareholders who would have been
entitled to vote on a given action at a meeting, unless the certificate of
incorporation permits that action to be taken by the holders of outstanding
shares having at least the minimum number of votes required to authorize the
action at a meeting at which all shares entitled to vote thereon were present
and voted. The New York Certificate does not contain such a provision.
Conversely, Delaware Law states that unless the certificate of incorporation
provides otherwise, stockholders may act by written consent of at least the
minimum number of votes required to authorize that action at a meeting at which


                                       9



all shares entitled to vote thereon were present and voted. The Delaware
Certificate does not contain any provision to the contrary so stockholders may
take action by written consent to the extent permitted by Delaware Law.

     Amendment of By-laws. Delaware Law allows a Board of Directors to recommend
that stockholders amend the certificate of incorporation, and a majority of the
shares entitled to vote at a stockholders' meeting are normally enough to
approve that amendment. Under New York Law, except for certain ministerial
changes to the certificate of incorporation that the Board of Directors may
authorize and except as otherwise required by the certificate of incorporation,
the Board of Directors may recommend an amendment to the certificate of
incorporation for approval by shareholders and a majority of the shares entitled
to vote at a shareholders' meeting is enough to approve that amendment.

     Who May Call a Special Meeting of Shareholders. Under both New York Law and
Delaware Law, the Board of Directors or anyone authorized in the certificate of
incorporation or by-laws may call a special meeting of shareholders. Currently,
the New York By-laws provide that a special meeting can be called by the
President, any two directors or by any officer instructed by the Board to call
the meeting, or shareholders holding at least 25% of the shares entitled to vote
at the meeting. The Delaware By-laws provide that a meeting of stockholders may
be called by the Board of Directors, the Chairman of the Board or the President
of the Company.

     Right of Shareholders to Inspect Shareholder List. Under New York Law, a
shareholder of record may inspect the list of shareholders of record if at least
five days previously he delivered a written demand to do so. A corporation may
deny a shareholder's demand if the shareholder refuses to give an affidavit that
his inspection is not for certain purposes unrelated to company business and
that the shareholder has not been involved in the last five years in selling or
offering to sell a list of record shareholders. Under Delaware Law, any
stockholder may, upon making a demand under oath stating the purpose thereof,
inspect the stockholders' list for any purpose reasonably related to that
person's interest as a stockholder. In addition, for at least ten days prior to
each stockholder's meeting, as well as at the meeting, a Delaware corporation
must make available for examination a list of stockholders entitled to vote at
the meeting.

     Vote Required for Certain Transactions. Until February 1998, New York Law
required the holders of at least two-thirds of the outstanding stock of a New
York corporation to approve certain mergers, consolidations or sales of all or
substantially all the corporation's assets that may occur outside the ordinary
course of business. Since February 1998, a New York corporation then in
existence, which would include the Company, may provide in its certificate of
incorporation that the holders of a majority of the outstanding stock may
approve such transactions. The Company has not, however, adopted such a
provision in its Certificate of Incorporation, and so the holders of at least
two-thirds of the Company's outstanding stock must approve such transactions.

     Under Delaware Law, unless the certificate of incorporation or by-laws
provide otherwise (but in no case may such requirement be less than one-third of
the outstanding stock entitled to vote on such transactions), the holders of a
majority of the outstanding stock entitled to vote on such transactions have the
power to approve a merger, consolidation, or sale of all or substantially all
the assets. The Delaware Certificate does not contain any provision otherwise,
so the holders of a majority of the outstanding stock entitled to vote thereon
may approve a merger, consolidation, or sale of all or substantially all of the
Company's assets. Notwithstanding the foregoing, under Delaware Law the vote of
the stockholders of the surviving corporation is not required to authorize a
merger if these three conditions are met:

     -    the merger agreement does not amend the surviving corporation's
          certificate of incorporation;


                                       10



     -    each share of stock of the surviving corporation that is outstanding
          or in the treasury immediately prior to the effective date of the
          Merger is to be an identical outstanding or treasury share of the
          surviving corporation after the effective date; and

     -    the merger results in no more than a 20% increase in its outstanding
          common stock.

     Special vote requirements may apply to certain business combinations with
interested shareholders. See the discussion of these requirements below under
the heading "Business Combinations with Interested Shareholders."

     Limitation of Directors' Liability. Both New York Law and Delaware Law
permit a corporation to limit a director's personal liability for actions taken
in that director's official capacity. Under New York Law, a director is not
liable to the corporation for the benefit of its creditors or shareholders for
damages if the director has acted in good faith and with the same degree of care
that an ordinarily prudent person would exercise in similar circumstances. New
York Law also permits a corporation to include in its certificate of
incorporation a provision eliminating or limiting the personal liability of a
director, with certain specific exceptions, to the corporation or its
shareholders for damages for any breach of duty in that capacity. The New York
Certificate does not contain such a provision. Under Delaware Law limits on a
director's liability must be addressed in the certificate of incorporation. The
Delaware Certificate limits directors' monetary liability to the fullest extent
permitted by Delaware Law. However, in some cases directors may be liable
despite these limitations. Delaware Law forbids any limitation of liability
where (1) a director breached the duty of loyalty to the corporation or its
stockholders, (2) a director's acts or omissions were not in good faith or
involved intentional misconduct or a knowing violation of law, (3) a director
received an improper personal benefit from a transaction involving the
corporation, or (4) a director authorized an unlawful dividend or stock
repurchase or redemption.

     Indemnification of Directors and Officers. With some variations, both New
York Law and Delaware Law allow a corporation to "indemnify," that is, to make
whole, any person who is or was a director or officer of the corporation if that
person is held liable or incurs costs for something that person did or failed to
do in an official capacity.

     Additionally, each of the two laws permits a corporation to purchase
insurance for its directors and officers against some or all of the costs of
such indemnification or against liabilities arising from actions and omissions
of the insured person, even though the corporation may not have power to
indemnify the person against such liabilities. New York Law, however, restricts
the kinds of claims that may be made under insurance purchased by the
corporation against these liabilities. For example, there would be no insurance
coverage if the person to be indemnified was guilty of deliberate dishonesty and
that dishonesty was material to the event that produced the claim, or if the
person gained some financial profit or other advantage to which he or she was
not legally entitled.

     If the Reincorporation is approved by the Company's shareholders, the New
York Law indemnification provisions will continue to apply to acts and omissions
that occurred prior to the effective date of the Reincorporation.

     Transactions with Interested Directors. New York Law provides several
methods for establishing the validity of transactions between a corporation and
interested directors, including a vote by the uninterested directors. The
comparable provision of Delaware Law provides that no transaction between a
corporation and an interested director is void or voidable solely because such
director is present at or participates in the meeting or because that director's
votes are counted if the material facts of that director's interest are known to
the board of directors and the board of directors in good faith authorizes the


                                       11



transaction by vote of a majority of the disinterested directors, or if that
director's interest is disclosed to stockholders and the stockholders in good
faith approve the transaction.

     Appraisal Rights. Generally, "appraisal rights" entitle dissenting
shareholders to receive the fair value of their shares in a merger or
consolidation of a corporation or in a sale of all or substantially all its
assets. New York Law also extends appraisal rights to an exchange of a
corporation's shares. New York Law provides that dissenting shareholders have no
appraisal rights if their shares are listed on the New York Stock Exchange or
another national securities exchange. However, in the case of shares not listed
on an exchange, appraisal rights under New York Law allow a voting and
dissenting shareholder of a New York corporation, with various exceptions, to
receive fair value for its shares in such transactions. One exception is a
merger between a parent corporation and its subsidiary when the parent owns at
least 90% of the subsidiary. In this case, a shareholder of the parent
corporation has no appraisal rights. When appraisal rights are available, the
shareholder may have to request the appraisal and follow other required
procedures.

     Similarly, under Delaware Law, appraisal rights are not available to a
stockholder if, among other things, the corporation's shares are listed on a
national securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of Securities
Dealers, Inc., held by more than 2,000 stockholders of record, or if the
corporation will be the surviving corporation in a merger that does not require
the approval of the surviving corporation's stockholders. However, regardless of
the foregoing, a dissenting shareholder in a merger or consolidation has
appraisal rights under Delaware Law if the transaction requires the exchange of
shares for anything of value other than one or more of the following:

     -    shares of stock of the surviving corporation or of a new corporation
          that results from the merger or consolidation;

     -    shares of another corporation that will be listed on a national
          securities exchange, designated as a national market system security
          on an interdealer quotation system by the National Association of
          Securities Dealers, Inc., or held by more than 2,000 stockholders of
          record after the merger or consolidation occurs; or

     -    cash instead of fractional shares of the surviving corporation or
          another corporation.

     Business Combinations with Interested Shareholders. Under New York Law, an
interested shareholder is generally prohibited from entering into certain types
of business combinations with a New York corporation for a period of five years
after becoming an "interested shareholder," unless the Board of Directors
approved either the business combination or the acquisition of stock by the
interested shareholder before the interested shareholder acquired its shares. An
"interested shareholder" under New York Law is generally a beneficial owner of
at least 20% of the corporation's outstanding voting stock or is an affiliate or
associate of a corporation who owned at least 20% of the outstanding stock
within the preceding five years. "Business combinations" under New York Law
include the following:

     -    mergers and consolidations between corporations or with an interested
          shareholder;

     -    sales, leases, mortgages, pledges, transfers or other dispositions to
          an interested shareholder of assets with an aggregate market value
          which either equals 10% or more of the corporation's consolidated
          assets or outstanding stock, or represents 10% or more of the
          consolidated earning power or net income of the corporation;


                                       12



     -    issues and transfers to an interested shareholder of stock with an
          aggregate market value of at least 5% of the aggregate market value of
          the outstanding stock of the corporation;

     -    liquidation or dissolution of the corporation proposed by or in
          connection with an interested shareholder;

     -    reclassification or recapitalization of stock that would increase the
          proportionate stock ownership of an interested shareholder; and

     -    the receipt by an interested shareholder of benefit from loans,
          guarantees, pledges or other financial assistance or tax benefits
          provided by the corporation.

     New York Law allows such a business combination to take place five or more
years after the interested shareholder became an interested shareholder if the
transaction is approved by a majority of the voting stock not owned by the
interested shareholder or by an affiliate or associate of the interested
shareholder. Business combinations are also permitted when certain statutory
"fair price" requirements are met and in certain other circumstances.

     Section 203(a) of DGCL generally prohibits an interested stockholder from
entering into certain types of business combinations with a Delaware corporation
for three years after becoming an interested stockholder unless:

     -    before the stockholder became an interested stockholder, the Board of
          Directors approved the business combination or the transaction that
          resulted in the stockholder becoming an interested stockholder;

     -    after the transaction that resulted in the stockholder becoming an
          interested stockholder, the interested stockholder owned at least 85%
          of the voting stock of the corporation outstanding at the time the
          transaction commenced, subject to technical calculation rules; or

     -    on or after the time the interested stockholder became an interested
          stockholder, the board of directors approved the business combination,
          and at least two-thirds of the outstanding voting stock that is not
          owned by the interested stockholder also ratified the business
          combination at a stockholders' meeting.

     An "interested stockholder" under Delaware Law is any person other than the
corporation and its majority-owned subsidiaries who owns at least 15% of the
outstanding voting stock or is an affiliate or associate of the corporation who
owned at least 15% of the outstanding stock within the preceding three years,
and this definition includes affiliates of the corporation. Briefly described,
the prohibited combinations include:

     -    mergers or consolidations;

     -    sales, leases, exchanges, mortgages, pledges, transfers or other
          dispositions of 10% or more of (1) the aggregate market value of all
          assets of the corporation or (2) the aggregate market value of all the
          outstanding stock of the corporation;

     -    any transactions resulting in the issuance or transfer by the
          corporation of stock in the corporation to the interested stockholder
          except in limited instances;


                                       13



     -    receipt by the interested stockholder of the benefit of loans,
          advances, guarantees, pledges or other financial benefits provided by
          the corporation; and

     -    any other transaction, with certain exceptions, that increases the
          proportionate share of the stock owned by the interested stockholder.

     Proxies. Under New York Law, a proxy cannot be voted or acted upon after 11
months from its date unless the proxy provides for a longer period. Under
Delaware Law a proxy cannot be voted or acted upon after three years from its
date unless the proxy provides for a longer period.

     Nomination of Directors. Neither the New York Certificate nor the New York
By-laws contain provisions regarding the nomination of directors. The Delaware
By-laws provide that nominations of directors may be made at annual meetings of
stockholders by or at the direction of the Board of Directors, or by any
stockholder entitled to vote for the election of directors at such annual
meeting who provides timely notice to the Secretary of the Corporation.

     Other Changes to Reflect Technical Differences Between Delaware Law and New
York Law. In addition to the changes described above, certain technical changes
have been made in the Delaware Certificate and Delaware By-laws from the New
York Certificate and New York By-laws to reflect differences between Delaware
Law and New York Law. Such technical changes include designation of a registered
office and registered agent in the State of Delaware for jurisdiction in certain
claims against the Corporation.

BLANK CHECK PREFERRED

     Both the Company and DDI-DE authorize its respective Board of Directors to
issue shares of Preferred Stock in series with such preferences as designated at
the time of issuance. The Board of Directors of DDI-DE does not currently intend
to seek stockholder approval prior to any issuance of shares of its Preferred
Stock if the Reincorporation proposal is approved, except as required by law or
regulation. Frequently, opportunities arise that require prompt action, and the
Board of Directors believes that the delay necessary for stockholder approval of
a specific issuance would be a detriment to DDI-DE and its stockholders. The
Board of Directors does not intend to issue any Preferred Stock except on terms
which the Board of Directors deems to be in the best interests of DDI-DE and its
then existing stockholders. The foregoing has been the policy of the Company's
Board of Directors.

     It should be noted that the voting rights and other rights to be accorded
to any unissued series of Preferred Stock of DDI-DE remain to be fixed by the
Delaware Board. Accordingly, if the Delaware Board so authorizes, the holders of
Preferred Stock may be entitled to vote separately as a class in connection with
approval of certain extraordinary corporate transactions or might be given a
disproportionately large number of votes. Such Preferred Stock could also be
convertible into a large number of shares of common stock of DDI-DE under
certain circumstances or have other terms that might make acquisition of a
controlling interest in DDI-DE more difficult or more costly, including the
right to elect additional directors to the Board of Directors of DDI-DE.
Potentially, Preferred Stock could be used to create voting impediments or to
frustrate persons seeking to effect a merger or otherwise to gain control of
DDI-DE. Also, Preferred Stock could be privately placed with purchasers who
might side with the management of DDI-DE in opposing a hostile tender offer or
other attempt to obtain control.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     There have been no transactions during the past two fiscal years, nor have
any been proposed, to which the Company was or is to be a party and in which any
director, officer, director nominee or five percent security holder had, or is


                                       14



to have, a direct or indirect material interest, except for [the issuance of
_______ shares of Common Stock to Technologies and the issuance of 140,672
shares of Common Stock to James W. Wolff, a director of the Company, for
finder's services rendered with respect to the transaction with Technologies.]

     Currently, [_____]% of our outstanding common stock is held by
Technologies, which in turn, is [_____]% owned by Properties, which in turn is
[____]% owned by Michael Paolini.

FINANCIAL STATEMENTS

     Accompanying this Proxy Statement are the Company's (i) Annual Report on
Form 10-KSB for the fiscal year ended December 31, 2000; and (ii) Quarterly
Report on Form 10-QSB for the quarter ended June 30, 2001. The Form 10-KSB
includes audited financial statements for the two years ended December 31, 2000.

BOARD RECOMMENDATION

     The Board of Directors unanimously recommends that shareholders vote FOR
the Reincorporation.

     A vote FOR the Reincorporation will constitute approval of the merger, the
Delaware Certificate, the Delaware By-laws, and adoption and assumption by
DDI-DE of any Company's stock options, employee benefit plans and agreements.

                                   PROPOSAL 3

                     RATIFICATION OF 2001 STOCK OPTION PLAN

GENERAL

     The Board of Directors of the Company has unanimously approved for
submission to a vote of the shareholders a proposal to ratify the adoption of
2001 Stock Option Plan covering 1,500,000 shares of Common Stock reserved for
issuance pursuant to the exercise of options granted thereunder. It is noted
that DDI-DE has adopted an option plan identical to the Company's 2001 Option
Plan. Assuming approval of the Reincorporation, options granted under the
Company's 2001 Option Plan will be exchanged for options under the DDI-DE plan
on the same ratio as the Common Stock exchange ratio. A copy of the 2001 Stock
Option Plan is attached to this Proxy Statement as Exhibit B, and statements
herein regarding the Plan are qualified by reference to the complete Plan.

     As of the Record Date, stock options to purchase 750,000 shares of Common
Stock under the 2001 Option Plan have been granted subject to shareholder
ratification of the Plan, and were outstanding, all of which were granted to one
executive officer of the Company, and no options have been exercised (see
Proposal 1 -- "Election of Directors -- Executive Compensation"). There are no
other stock options outstanding to purchase shares of the Company's Common
Stock.

PURPOSES OF THE 2001 OPTION PLAN

     The purposes of the 2001 Option Plan are to (i) provide incentives to
certain directors, officers, employees and other persons who perform services on
behalf of the Company and any subsidiaries of the Company by providing them with
opportunities to purchase Common Stock in the Company pursuant to options


                                       15



granted thereunder which qualify as "incentive stock options" under
Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code")
("ISO") or which do not qualify as ISOs ("Non-Qualified Option" or "NQSO") and
(ii) to individuals who are directors but not also employees of the Company and
the subsidiaries ("Non-Employee Directors"), and to individuals who are
independent contractors, or consultants to the Company or its subsidiaries, by
providing them with opportunities to purchase Common Stock pursuant to NQSOs.

ADMINISTRATION

     The 2001 Option Plan is administered by the Compensation Committee (the
"Committee"), each member of which is a Non-Employee Director within the meaning
of Rule 16b-3 or any successor provision under the Exchange Act, or the whole
Board of Directors. The Committee has authority (i) to select the individuals
who are to be granted options from among those eligible to participate in the
Option Plan, (ii) to establish the number of shares which may be issued under
each option, (iii) to determine at what time options may be granted, (iv) to
determine the exercise price of shares subject to each option, (v) to determine
the time at which each option shall be come exercisable and the duration of the
exercise period, (vi) to determine whether restrictions are to be imposed on
shares subject to options and the nature of such restrictions, if any, and
(vii) to interpret the Option Plan and prescribe and rescind rules and
regulations relating to it.

ELIGIBILITY

     Options may be granted only to (i) individuals who are employees of the
Company and its subsidiaries, including officers and directors who are also
employees at the time the Option is granted, (ii) Non-Employee Directors, and
(iii) any other persons who perform services for or on behalf of the Company and
its subsidiaries, affiliates or any entity in which the Company has an interest,
or who are deemed by the Board of Directors to be in a position to perform such
services in the future. Options that constitute ISOs may only be granted to
employees described in clause (i) above, and Non-Employee Directors shall only
be granted NQSOs. No option shall be granted pursuant to the Plan after
October __, 2011.

OPTION PRICE AND TERMS

     Options granted under the 2001 Stock Option Plan may be either ISOs or
NQSOs. The option price of each share of Common Stock subject to an option will
be fixed by the Committee but shall not be less than the fair market value of
the Common Stock on the date of grant of the option, defined as the average bid
and ask price over the prior five days' trading. An option designated as an ISO
is intended to qualify as such under Section 422 of the Code. Thus, the
aggregate fair market value, determined at the time of grant, of the shares with
respect to which ISO's are exercisable for the first time by an individual
during any calendar year may not exceed $100,000. NQSOs are not subject to this
requirement. Certain adjustments in the option price may be made for
extraordinary dividend distributions. The Committee determines the option
period, provided it is not longer than five years, in the case of ISOs granted
to employees who hold 10% of the outstanding stock of the Company, 10 years in
the case of ISOs generally, or 10 years, in the case of NQSOs, subject to
earlier termination, the vesting period and the payment terms. In the event of
termination of employment, the Optionee may exercise his options at any time
within one year of the termination, but in no event later than the expiration
date of the option; however, if the employee is terminated "for cause," the
option expires immediately. All options vest immediately upon a "change of
control" of the Company. Upon exercise of an option, payment for shares may be
made in cash, or, if the option agreement so provides, in shares of Common Stock
calculated based upon their fair market value as of the date of their delivery
or, a combination of stock and cash.


                                       16



TRANSFERABILITY

     Options granted under the 2001 Stock Option Plan are not assignable or
transferable by the Optionee otherwise than (i) by will or the laws of descent
and distribution, (ii) pursuant to a qualified domestic relations order or
Title I of the Employee Retirement Income Security Act or (iii) with respect to
NQSOs, to a spouse or lineal descendant of the optionee. Options are exercisable
during the lifetime of the Optionee only by the Optionee or by the Optionee's
guardian or legal representative.

TERMINATION, SUSPENSION OR MODIFICATION OF THE 2001 STOCK OPTION PLAN

     The Board of Directors may terminate, suspend, or modify the 2001 Stock
Option Plan at any time but may not, without authorization of the Company's
stockholders, effect any change which under Section 16(b) of the Securities
Exchange Act of 1934, as amended, applicable Delaware law or tax law, or the
rules of any national securities exchange or national quotation system on which
the Common Stock is then listed or traded requires the prior approval of
stockholders.

FEDERAL INCOME TAX CONSEQUENCES

     A participant under the 2001 Option Plan does not realize income for
federal income tax purposes as a result of (i) the grant of an ISO under the
2001 Option Plan or (ii) the exercise of an ISO under the 2001 Option Plan. The
Company is not entitled to a federal income tax deduction upon the grant or
exercise of an ISO. Long-term capital gains tax rates will apply to the gain
(excess of the amount received for the shares over the amount paid for the
shares) at the time that the participant disposes of the shares provided that
certain holding requirements discussed below are met. The spread between the
exercise price and the fair market value of the transferred shares at the time
of the exercise of an ISO is included in alternative minimum taxable income
subject to the alternative minimum tax for the taxable year in which such
transfer occurs. If the shares are disposed of in the same taxable year and the
amount realized is less than that fair market value at the time of exercise, the
amount included in the alternative minimum taxable income will not exceed the
amount realized over the adjusted basis of the shares.

     The availability of the income tax treatment discussed in the foregoing
paragraph is subject to two conditions. First, the participant must continue to
be an employee of the Company or a parent or subsidiary of the Company at all
times during the period beginning on the date that the ISO was granted and
ending (with exceptions for disability and death) on the date three months
before the option is exercised. Second, such income tax treatment is available
only if the participant does not dispose of the shares acquired pursuant to the
exercise of the ISO (i) within two years from the date of granting of the option
nor (ii) within one year after the shares were issued pursuant to the exercise
of the option. If the participant disposes of the shares prior to the expiration
of the required holding period, the participant realizes ordinary income in the
year of disposition and the same amount is then deductible by the Company.

     A participant realizes no income as a result of the grant of a NQSO under
the 2001 Option Plan. However, a participant realizes ordinary income upon the
exercise of the NQSO (or at the later date described below) equal to the excess
of the fair market value of the shares at the time of exercise (or at such later
date) over the option exercise price. The Company is not entitled to a federal
income tax deduction upon the grant of the NQSO, but upon transfer of the shares
to such participant upon its exercise (or at the later date described below) an
amount corresponding to the participant's taxable income becomes deductible by
the Company. The amount of income recognized at the time of exercise is added to
the option price to determine the participant's basis in the shares, and any
further appreciation upon ultimate sale of the shares is taxable as short- or
long-term capital gains (with the holding period measured from the date of
exercise). If the shares received upon exercise are not transferable and are


                                       17



subject to a substantial risk of forfeiture, the realization of compensation
income is postponed until the earlier of the lapse of the forfeiture
restrictions or the making of an "IRC 83(b) election." For such purposes,
potential liability by Company insiders under securities laws with respect to
short swing trading constitutes a substantial risk of forfeiture. Where other
shares of stock have been purchased within six months of exercise of the option,
recognition of the compensation attributable to such exercise may be postponed
for a period of six months from the date of purchase of such other shares of
stock due to such liability.

     THE FOREGOING SUMMARY OF THE EFFECT OF UNITED STATES FEDERAL INCOME
TAXATION LAWS UPON THE OPTIONEE OR PURCHASER AND THE COMPANY IN CONNECTION WITH
THE 2001 OPTION PLAN DOES NOT PURPORT TO BE COMPLETE, AND REFERENCE SHOULD BE
MADE TO THE APPLICABLE PROVISIONS OF THE CODE. IN ADDITION, THIS SUMMARY DOES
NOT DISCUSS THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR
FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE.

BOARD RECOMMENDATION

     The Board of Directors unanimously recommends a vote "FOR" of the
ratification to the 2001 Stock Option Plan.


                                   PROPOSAL 4

                  INCREASE IN AUTHORIZED SHARES OF COMMON STOCK

PROPOSAL

     The Company has authorized 20,000,000 shares of Common Stock, $.05 par
value, of which [17,364,824] shares are issued and outstanding. In the event
shareholders do not approve the Reincorporation (see Proposal 2), the Company
will need additional authorized shares of Common Stock to fulfill future needs
for capital raising, option exercises, acquisitions and other corporate
purposes. Management therefore proposed an amendment to the Company's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock to 100,000,000 shares and to decrease the par value to $0.001 per
share.

BACKGROUND

     The Company has authorized 1,000,000 shares of Preferred Stock, $1.00 par
value, none of which are issued or outstanding. The shares of Preferred Stock
may be issued having such preferences and rights as the Board of Directors of
the Company may designate as the time of issuance, including having
anti-takeover provisions. The Board of Directors has no present intention to
issue any shares of Preferred Stock.

     The holders of Common Stock are entitled to one vote for each share held of
record on all matters to be voted on by stockholders. There is no cumulative
voting with respect to the election of directors, with the result that the
holders of more than 50% of the shares voting for the election of directors can
elect all of the directors then up for election. In the event of liquidation,
dissolution or winding up of the Company, the holders of Common Stock are
entitled to share ratably in all assets remaining which are available for
distribution to them after payment of liabilities and after provision has been


                                       18



made for each class of stock, if any, having preference over the Common Stock.
Holders of Common Stock, as such, have no conversion, preemptive or other
subscription rights, and there are no redemption provisions applicable to the
Common Stock. For other rights of the shareholders, see Proposal 2 - "Approval
of Reincorporation in Delaware - Significant Changes Caused by the
Reincorporation."

     Holders of shares of the Common Stock are entitled to receive dividends
when, as and if declared by the Board of Directors from funds legally available
therefore, subject to any preferred or contemporaneous dividend on any
outstanding series of Preferred Stock. Management does not intend to declare
cash dividends on the Common Stock in the foreseeable future.

     The Company desires to have shares of Common Stock available for the
exercise of any options which may be declared under the 2001 Option Plan (see
Proposal 2), acquisition of some related businesses and financings. The change
in the par value from $.05 per share to $.001 per share is needed as the recent
market price of the Company's Common Stock on the OTC Bulletin Board was $0.07
per share. The concept of par value is no longer critical, as evidenced by some
states changing their corporate laws to eliminate the par value concept. By
reducing the par value, the Company would be able to issue Common Stock at
prices reflective of the current market price as determined in good faith by the
Board of Directors. The change in par value would have no effect on the rights
of the Common Stock other than the minimum amount per share the Company may
receive upon the issuance of authorized but unissued shares.

     If the proposed amendment is approved by the stockholders, generally no
further stockholder approval would be required for the issuance of the
authorized shares of Common Stock, unless required by law or the rules of any
national securities exchange or automated quotation system on which the Common
Stock may then be listed. The Common Stock is not presently listed on any
national securities exchange or automated quotation system. Management has no
plans to issue any shares of its Common Stock except to the extent previously
disclosed herein.

RECOMMENDATION

     In the event the Reincorporation proposal is not approved, the Company will
continue as a New York corporation under its present Certificate of
Incorporation but with only 20,000,000 shares of Common Stock authorized, almost
all of which is either outstanding or reserved for issuance. Management believes
that the additional authorized but unissued shares of Common Stock is necessary
to meet its business objectives for the benefit of shareholders.

     The Board of Directors unanimously recommends a vote FOR approval of the
charter amendment for the increase in the number of authorized shares of Common
Stock.


                STOCKHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING

     Shareholders who desire to submit proposals for inclusion in the Company's
proxy statement for the 2002 Annual Meeting of Stockholders of the Company must
submit such proposals to the Secretary of the Company at the Company's principal
executive offices by ________, 2002. Nothing in this paragraph shall be deemed


                                       19



to require the Company to hold a 2002 Annual Meeting upon the anniversary date
of the 2001 Special Meeting or to include in its proxy statement and proxy
relating to any such 2002 Annual Meeting any shareholder proposal that does not
meet the requirements for including in effect at such time.

                                 OTHER BUSINESS

     Management is not aware of any matters to be presented at the Special
Meeting other than those set forth in this Proxy Statement. However, should any
other business properly come before the Special Meeting, or any adjournment or
adjournments thereof, the enclosed proxy confers upon the persons entitled to
vote the shares represented by such proxies, discretionary authority to vote the
same in respect to any such other business in accordance with their best
judgment in the interest of the Company.

                                         By Order of the Board of Directors

                                         Earl M. Anderson, Jr.
                                         Secretary

___________, 2001


                                       20



                                                                       EXHIBIT A


                          AGREEMENT AND PLAN OF MERGER


     AGREEMENT AND PLAN OF MERGER, dated ___________, 2001 (the "Agreement"),
between DISTINCTIVE DEVICES, INC., a New York corporation ("DDI-NY"), and
DISTINCTIVE DEVICES, INC., a Delaware corporation ("DDI-DE") (DDI-NY and DDI-DE
are sometimes referred to herein collectively as the "Constituent
Corporations").

                              W I T N E S S E T H:
                              - - - - - - - - - -


     WHEREAS, DDI-DE was incorporated in the State of Delaware on __________,
2001; and

     WHEREAS, the Board of Directors of DDI-NY believes that it is in the best
interest of DDI-NY to reincorporate in the State of Delaware by merging with and
into DDI-DE pursuant to this Agreement.

     NOW, THEREFORE, in consideration of the foregoing premises, the mutual
agreements and undertakings herein given and other good and valuable
consideration, the parties hereto agree, in accordance with the applicable
provisions of the statutes of New York and Delaware, respectively, which permit
such merger, DDI-NY shall be, and hereby is, merged with and into DDI-DE, at the
Effective Time (as herein defined), and that the terms and conditions of the
merger hereby agreed to (the "Merger") shall be as hereinafter set forth:


                                   ARTICLE ONE
                            Principal Terms of Merger

     Section 1.01. Merger. At the Effective Time (as herein defined), DDI-NY
                   ------
shall merge with and into DDI-DE provided that this Agreement has not been
terminated pursuant to Section 4.02 herein.

     Section 1.02. Effective Time of Merger. The Merger shall become effective
                   ------------------------
as of the completion of all filing requirements specified in Sections 4.03 and
4.04 of this Agreement, and such date and time is hereinafter referred to as the
"Effective Time."


                                   ARTICLE TWO
               Certificate of Incorporation, By-Laws and Directors

     Section 2.01. Certificate of Incorporation. The Certificate of
                   ----------------------------
Incorporation of DDI-DE in effect at the Effective Time of the Merger shall be
the Certificate of Incorporation of DDI-DE, to remain unchanged until amended as
provided by law.

     Section 2.02. By-Laws. The By-Laws of DDI-DE in effect at the Effective
                   -------
Time of the Merger shall be the By-Laws of DDI-DE, to remain unchanged until
amended as provided by law.

     Section 2.03. Directors. DDI-DE, shall cause the directors of DDI-DE as of
                   ---------
the Effective Time to be those individuals elected by the shareholders of DDI-NY
as directors of DDI-NY prior to the Effective Time of the Merger, and such
persons shall serve as directors of DDI-DE until the next annual meeting of the
stockholders of DDI-DE.





                                  ARTICLE THREE
                       Exchange and Cancellation of Shares

     Section 3.01. Exchange. At the Effective Time of the Merger, all issued and
                   --------
outstanding shares of DDI-NY common stock, $.05 par value (the "Old Common
Stock"), shall be canceled and the corporate existence of DDI-NY, shall cease.
Shares of DDI-DE's common stock, par value $.001 per share (the "New Common
Stock"), shall be issued to the shareholders of DDI-NY as a result of the Merger
as herein provided.

     Section 3.02. The Surviving Corporation Stock. Each [__] shares of Old
                   -------------------------------
Common Stock which [are] outstanding prior to the Effective Time of the Merger
shall be converted into one issued and outstanding share of New Common Stock
and, from and after the Effective Time of the Merger, the holders of all of said
issued and outstanding shares of Old Common Stock shall automatically be and
become holders of shares of New Common Stock upon the basis above specified,
whether or not certificates representing said shares are then issued and
delivered.

     Section 3.03. Cancellation of Old Common Stock. After the Effective Time of
                   --------------------------------
the Merger, each holder of record of any outstanding certificate or certificates
theretofore representing shares of Old Common Stock may surrender the same to
the Company's transfer agent and such holder shall be entitled upon such
surrender to receive in exchange therefor a certificate or certificates
representing the number of shares of New Common Stock calculated on the basis
described in Section 3.01. Until so surrendered, each outstanding certificate
which, prior to the Effective Time of the Merger, represented one or more shares
of Old Common Stock shall be deemed for all corporate purposes to evidence
ownership of a number of shares of New Common Stock, calculated on the basis
described in Section 3.01. Upon the surrender of a certificate or certificates
representing shares of Old Common Stock, a proper officer of DDI-DE shall cancel
said certificate or certificates.

     Section 3.04. No Fractional Shares. Upon the exchange, in lieu of issuing
                   --------------------
certificates for fractional shares, fractional shares will be rounded up or
rounded down to the nearest whole share, provided that a record holder must
receive at least one whole share of New Common Stock.


                                  ARTICLE FOUR
                            Adoption and Termination

     Section 4.01. Submission to Vote of Shareholders. This Agreement shall be
                   ----------------------------------
submitted to the shareholders of DDI-NY, as provided by applicable law, and
shall take effect, and be deemed to be the Agreement and Plan of Merger of the
Constituent Corporations, upon the approval or adoption thereof by said
shareholders of DDI-NY in accordance with the requirements of the laws of the
State of New York.

     Section 4.02. Termination of Agreement. Anything herein or elsewhere to the
                   ------------------------
contrary notwithstanding, this Agreement may be abandoned by DDI-NY by an
appropriate resolution of its Board of Directors at any time prior to the
Effective Time of the Merger if such Board of Directors believes that the Merger
is not in the best interests of DDI-NY.

     Section 4.03. Filing of Certificate of Merger in the State of New York. As
                   --------------------------------------------------------
soon as practicable after the requisite shareholder approval referenced in
Section 4.01 herein, the Certificate of Merger to effectuate the terms of this
Agreement shall be executed and signed on behalf of each of the Constituent
Corporations and thereafter delivered to the Department of State (the


                                       2



"Department") of the State of New York for filing and recording in accordance
with applicable law, unless this Agreement has been terminated pursuant to
Section 4.02 herein.

     Section 4.04. Filing of Certificates of Merger in the State of Delaware. As
                   ---------------------------------------------------------
soon as practicable after the requisite shareholder approval referenced in
Section 4.01 herein, a Certificate of Merger to effectuate the terms of this
Agreement shall be executed by each of the Constituent Corporations and
thereafter delivered to the Secretary of State of the State of Delaware for
filing and recording in accordance with applicable law, unless this Agreement
has been terminated pursuant to Section 4.02 herein.


                                  ARTICLE FIVE
                                Effect of Merger

     Section 5.01. Effect of Merger. At the Effective Time of the Merger, the
                   ----------------
Constituent Corporations shall be a single corporation, which shall be DDI-DE,
and the separate existence of DDI-NY shall cease except to the extent provided
by the laws of the States of New York and Delaware. DDI-DE shall thereupon and
thereafter possess all the rights, privileges, immunities and franchises, of
both a public and private nature, of each of the Constituent Corporations; and
all property, real, personal and mixed, and all debts due on whatever account,
including subscriptions to shares, and all other choses in action, and all and
every other interest of, or belonging to, or due to each of the Constituent
Corporations, shall be taken and deemed to be vested in DDI-DE without further
act or deed; and the title to all real estate, or any interest therein, vested
in either of the Constituent Corporations shall not revert or be in any way
impaired by reason of the Merger. DDI-DE shall thenceforth be responsible and
liable for all of the liabilities and obligations of each of the Constituent
Corporations and any claim existing or action or proceeding pending by or
against either of the Constituent Corporations may be prosecuted to judgment as
if the Merger had not taken place, or the Surviving Corporation may be
substituted in its place, and neither the rights of creditors nor any liens upon
the property of either of the Constituent Corporations shall be impaired by the
Merger. DDI-DE shall assume any stock option or similar employee benefits plan
of DDI-NY, and all contractual rights of DDI-NY for the issuance of shares of
the Old Common Stock and Old Preferred Stock, and such issuances or reserves for
issuances shall be of shares of New Common Stock and New Preferred Stock on an
as-converted basis as set forth in Section 3.01 hereof.


                                   ARTICLE SIX
                            Post Merger Undertakings

     Section 6.01  Service of Process. DDI-DE hereby agrees that it may be
                   ------------------
served with process within the State of New York in any proceeding for the
enforcement of any obligation of DDI-NY and in any proceeding for the
enforcement of the rights of any dissenting shareholder of DDI-NY.

     Section 6.02  Authorization of Service of Process. DDI-DE hereby authorizes
                   -----------------------------------
service of process on it pursuant to Section 6.01 herein by registered or
certified mail return receipt requested to its principal office as set forth in
the Certificate of Merger to be filed pursuant to Section 4.03 herein or as
changed by notice to the Department.


                                  ARTICLE SEVEN
                                  Miscellaneous

     Section 7.01  Further Actions. Each of the Constituent Corporations shall
                   ---------------
take or cause to be taken all action, or do, or cause to be done, all things


                                       3



necessary, proper or advisable under the laws of the States of New York and
Delaware to consummate and make effective the Merger following approval of the
Merger by the shareholders of DDI-NY in accordance with the laws of said States.

     Section 7.02. Amendments. At any time prior to the Effective Time of the
                   ----------
Merger (notwithstanding any shareholder approval), if authorized by their
respective Board of Directors, the parties hereto may, by written agreement,
amend or supplement any of the provisions of this Agreement. Any written
instrument or agreement referred to in this section shall be validly and
sufficiently authorized for the purposes of this Agreement if signed on behalf
of each of the Constituent Corporations by a person authorized to sign this
Agreement.

     Section 7.03. Counterparts. This Agreement may be executed in any number of
                   ------------
counterparts, each of which shall be deemed to be an original instrument, but
all such counterparts together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the Constituent Corporations, pursuant to the approval
and authority duly given by resolutions adopted by their respective Board of
Directors have caused this Agreement and Plan of Merger to be executed by an
authorized officer of each party hereto, and the corporate seal affixed on the
date above first written.

                                          DISTINCTIVE DEVICES, INC.
                                          (a Delaware corporation)


                                          By:
                                             -------------------------------
                                               Name:   Sanjay S. Mody
                                               Title:  President


                                          DISTINCTIVE DEVICES, INC.
                                          (a New York corporation)


                                          By:
                                             -------------------------------
                                               Name:   Sanjay S. Mody
                                               Title:  President


                                       4



                                                                       EXHIBIT B


                            DISTINCTIVE DEVICES, INC.

                             2001 STOCK OPTION PLAN


          1     Purpose. This 2001 Stock Option Plan (the "Plan") of Distinctive
                -------
Devices, Inc., a New York corporation (the "Company"), is intended to provide
incentives: (i) to certain directors, officers, employees and other persons who
perform services for or on behalf of the Company and any subsidiaries of the
Company (collectively, the "Subsidiaries") by providing them with opportunities
to purchase capital stock in the Company pursuant to options granted hereunder
which qualify as "incentive stock options" under Section 422(b) of the Internal
Revenue Code of 1986, as amended (the "Code") ("ISO" or "ISOs") or which do not
qualify as ISOs ("Non-Qualified Option" or "Non-Qualified Options"); and (ii) to
individuals who are directors but not also employees of the Company and the
Subsidiaries ("Non-Employee Directors"), and to individuals who are members of
any advisory board or an independent consultant to the Company or its
Subsidiaries, by providing them with opportunities to purchase capital stock in
the Company pursuant to Non-Qualified Options. Both ISOs and Non-Qualified
Options are referred to hereinafter individually as an "Option" and collectively
as "Options," and persons to whom Options are granted are referred to
hereinafter individually as an "Optionee" and collectively as "Optionees." As
used herein, the term "Subsidiary" means "subsidiary corporation" as that term
is defined in Section 424(f) of the Code.

          2     Administration of the Plan. The Plan shall be administered by
                --------------------------
 the Compensation Committee of the Board of Directors of the Company (the
"Committee"), each member of which shall be a "Non-Employee Director" within the
meaning of Rule 16b-3 or any successor provision ("Rule 16b-3") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Committee
shall consist of two or more members. Subject to the terms of the Plan, the
Committee shall have the authority to (i) determine the employees of the Company
and Subsidiaries (from among the class of employees eligible under Section 4
hereof to receive ISOs) to whom ISOs may be granted; (ii) determine the person
and the number of shares which may be issued under each Option; (iii) determine
the time or times at which Options may be granted; (iv) determine the exercise
price of shares subject to each Option, which price shall not be less than the
fair market value as specified in Section 6; (v) determine (subject to
Sections 7 and 9) the time or times when each Option shall become exercisable
and the duration of the exercise period; (vi) determine whether restrictions are
to be imposed on shares subject to Options and the nature of such restrictions,
if any, and (vii) interpret the Plan and prescribe and rescind rules and
regulations relating to it. If the Committee determines to issue a Non-Qualified
Option, it shall take whatever actions it deems necessary, under Section 422 of
the Code and the regulations promulgated thereunder, to ensure that such Option
is not treated as an ISO. The interpretation and construction by the Committee
of any provisions of the Plan or of any Option granted under it shall be final.
The Committee may from time to time adopt such rules and regulations for
carrying out the Plan as it may deem best. No member of the Committee or of the


                                       1



Board of Directors of the Company shall be liable for any action or
determination made in good faith with respect to the Plan or any Option granted
under it.

          3     Stock. The stock delivered under this Plan shall be the
                -----
Company's Common Stock, par value $.05 per share (the "Common Stock"), either
authorized and unissued, treasury stock or shares purchased on the open market.
The aggregate number of shares which may be issued pursuant to the Plan is
1,500,000, subject to adjustment as provided in Section 13. If any Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part, the unpurchased shares subject to such Option shall again be
available for grants of Options under the Plan.

          4     Eligible Employees and Others. ISOs and Non-Qualified Options
                -----------------------------
may be granted to individuals who are employees of the Company and its
Subsidiaries, including officers and directors who are also employees at the
time the Option is granted. Non-Qualified Options may be granted to Non-Employee
Directors and independent contractors and consultants to the Company and its
Subsidiaries, affiliates or any entity in which the Company has an interest, or
who are deemed by the Committee to be in a position to perform such services in
the future. Granting of any Option to any person shall neither entitle that
person to, nor disqualify him from, participation in any other Option grant.

          5     Term of Plan; Granting of Options. The term of the Plan will
                ---------------------------------
commence on the date of adoption of the Plan by the Company's Board of
Directors, subject to approval by stockholders within one year of adoption, and
terminate on the day immediately preceding the tenth anniversary of said
adoption, except as to Options outstanding on that date and subject to earlier
termination as provided in Sections 9 and 10 hereof. Options may be granted
under the Plan at any time during the term of the Plan. The date of grant of an
Option under the Plan shall be the date specified by the Committee at the time
it grants the Option; provided, however, that such date shall not be prior to
the date on which the Committee acts to approve the grant. No Option shall be
granted pursuant to the Plan after October __, 2011.

          6     Minimum Exercise Price; ISO Limitations.
                ---------------------------------------

                6.1     Price for Non-Qualified Options. The exercise price per
                        -------------------------------
share for each Non-Qualified Option granted under the Plan shall not be less
than the fair market value of the Common Stock on the date of grant of the
Option, and in no event shall be less than the minimum legal consideration
required therefor under the laws of the State of Delaware or the laws of any
jurisdiction in which the Company or its successors in interest may be
organized.

                6.2     Price for ISOs. The exercise price per share for each
                        --------------
ISO granted under the Plan shall not be less than the fair market value per
share of Common Stock on the date of such grant. In the case of an ISO to be
granted to an employee owning stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
Subsidiary (a "10% Employee"), the price per share for such ISO shall not be
less than one hundred ten percent (110%) of the fair market value per share of


                                       2



Common Stock on the date of grant. For purposes of determining stock ownership
under this Section, the rules of Section 424(d) of the Code shall apply.

                6.3     $100,000 Annual Limitation on ISO Vesting. To the extent
                        -----------------------------------------
that, in the aggregate under this Plan and all incentive stock option plans of
the Company and any Subsidiary, ISOs become exercisable for the first time by an
employee during any calendar year with respect to stock having a fair market
value (determined at the time the ISOs were granted) in excess of $100,000, such
excess amount of stock shall be deemed to have been granted as a Non-Qualified
Option, and not as an ISO.

                6.4     Determination of Fair Market Value. If at the time an
                        ----------------------------------
Option is granted under the Plan, the Company's Common Stock is publicly traded,
"fair market value" shall be determined as of the last business day for which
the prices or quotes discussed in this sentence are available prior to the date
such Option is granted and shall be (i) the mean (on that date) of the high and
low prices of the Common Stock on the principal national securities exchange on
which the Common Stock is traded, if the Common Stock is then traded on a
national securities exchange; (ii) the average of the last reported sale prices
of the Common Stock on the NASDAQ National Market or Small Cap Market (or other
interdealer quotation system), for the five trading dates immediately preceding
the date of grant, if the Common Stock is not then traded on a national
securities exchange; or (iii) the average of the closing bid prices (or average
of bid prices) last quoted (on that date) by the OTC Electronic Bulletin Board
or other established quotation service for over-the-counter securities for the
five trading dates immediately preceding the date of grant, if the Common Stock
is not reported on the NASDAQ National Market or Small Cap Market (or other
interdealer quotation system); but in no event shall the exercise price be less
than the closing prices on the date of grant. However, if the Common Stock is
not publicly traded at the time an Option is granted under the Plan, the "fair
market value" shall be deemed to be the fair value of the Common Stock as
determined by the Committee in good faith after taking into consideration all
factors which it deems appropriate, including, without limitation, recent sale
and offer prices of the Common Stock in private transactions negotiated at arm's
length.

          7     Option Duration. Subject to earlier termination as provided in
                ---------------
Sections 9 and 10, each Option shall expire on the date specified by the
Committee, but not more than (i) ten (10) years from the date of grant in the
case of Non-Qualified Options, (ii) ten (10) years from the date of grant in the
case of ISOs generally, and (iii) five (5) years from the date of grant in the
case of ISOs granted to a 10% Employee, as determined under Section 6.02.
Subject to earlier termination as provided in Sections 9 and 10, the term of
each ISO shall be the term set forth in the original instrument granting such
ISO, except with respect to any part of such ISO that is converted into a
Non-Qualified Option pursuant to Section 16.

          8     Exercise of Option. Subject to the provisions of Sections 9
                ------------------
through 12, each Option granted under the Plan shall be exercisable as follows:

                8.1     Vesting. The Option shall either be fully exercisable on
                        -------
the date of grant or shall become exercisable thereafter in such installments as


                                       3



the Committee may specify, provided that an Option granted to a director or
executive officer of the Company may not vest earlier than six (6) months from
the date of grant.

                8.2     Full Vesting of Installments. Once an installment
                        ----------------------------
becomes exercisable it shall remain exercisable until expiration or termination
of the Option, unless otherwise specified by the Committee.

                8.3     Partial Exercise. Each Option or installment may be
                        ----------------
exercised at any time or from time to time, in whole or in part, for up to the
total number of shares with respect to which it is then exercisable.

                8.4     Acceleration of Vesting. The Committee shall have the
                        -----------------------
right to accelerate the date of exercise of any installment of any Option,
provided that the Committee shall not, without the consent of an Optionee,
accelerate the exercise date of any installment of any Option granted to any
employee as an ISO if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in
Section 6.03.

          9     Termination of Employment. If an Optionee ceases his employment
                -------------------------
with, or service by, the Company and all Subsidiaries other than by reason of
death or disability as defined in Section 10 or by the Company or any Subsidiary
for cause, no further installments of his Options shall become exercisable, and
his Options shall terminate after the passage of one (1) year from the date of
termination of his employment or service (or three (3) months as to ISOs), but
in no event later than on their specified expiration dates, during which period
he shall have the right to exercise any Options exercisable by him on the date
of termination of employment, subject to exercise for such other periods as
determined by the Committee at the time of grant. Options held by an Optionee
whose termination of employment or service is for cause shall terminate upon
such termination. For purposes of this Section 9 only, employment or service
shall be considered as continuing uninterrupted during any bona fide leave of
absence (such as those attributable to illness, military obligations or
governmental service). A bona fide leave of absence with the written approval of
the Committee shall not be considered an interruption of employment or service
under this Section 9, provided that such written approval contractually
obligates the Company or any Subsidiary to continue the employment or service of
the Optionee after the approved period of absence. Options granted under the
Plan shall not be affected by any change of employment or service within or
among the Company and Subsidiaries, so long as the Optionee continues to be an
employee or independent contractor or advisor of the Company or any Subsidiary.
Nothing in the Plan shall be deemed to give any Optionee the right to be
retained in employment or other service by the Company or any Subsidiary for any
period of time. The Committee may, in its sole discretion, change the
termination period for any Option from the period provided for in this Section 9
or in Section 10 to a period less than the respective periods specified herein.

          10    Death; Disability.
                -----------------

                10.1    Death. If an Optionee ceases his employment with or
                        -----
service by the Company and all Subsidiaries by reason of his death, any Option
may be exercised, to the extent of the number of shares with respect to which he


                                       4



could have exercised it on the date of his death, by his estate, personal
representative or beneficiary who has acquired the Option by will or by the laws
of descent and distribution at any time within one (1) year from the date of the
Optionee's death or such later date as fixed by the Committee as to
Non-Qualified Options, but in no event later than on their specified expiration
dates.

                10.2    Disability. If an Optionee ceases his employment with or
                        ----------
service by the Company and all Subsidiaries by reason of his disability, he
shall have the right to exercise any Option held by him on the date of
termination of employment, to the extent of the number of shares with respect to
which he could have exercised it on that date, at any time prior to one (1) year
from the date of the termination of the Optionee's employment or service or such
later date as fixed by the Committee as to Non-Qualified Options, but in no
event later than on their specified expiration dates. For the purposes of the
Plan, the term "disability" shall mean "permanent and total disability" as
defined in Section 22(e)(3) of the Code or successor statute.

          11    Assignability. No Option shall be assignable or transferable by
                -------------
the Optionee except (i) by will or by the laws of descent and distribution,
(ii) pursuant to a qualified domestic relations order or Title I of the Employee
Retirement Income Security Act or (iii) with respect to Non-Qualified Options,
to a spouse or lineal descendant or lineal ascendant of the Optionee.

          12    Terms and Conditions of Options. Options shall be evidenced
                -------------------------------
instruments (which need not be identical) in such forms as the Committee may
from time to time approve (the "Option Agreements"). The Option Agreements shall
conform to the terms and conditions set forth in Sections 6 through 11 hereof
and may contain such other provisions as the Committee deems advisable which are
not inconsistent with the Plan, including restrictions applicable to shares of
Common Stock issuable upon the exercise of Options. The Committee may from time
to time confer authority and responsibility on one or more of its own members
and/or one or more officers of the Company to execute and deliver the Option
Agreements. The proper officers of the Company are authorized and directed to
take any and all action necessary or advisable from time to time to carry out
the terms of the Option Agreements.

          13    Adjustments. Upon the occurrence of any of the following events,
                -----------
an Optionee's rights with respect to Options granted to him hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
written agreement between the Optionee and the Company relating to such Option:

                13.1    Stock Dividends and Stock Splits. If the shares of
                        --------------------------------
Common Stock shall be subdivided or combined into a smaller or greater number of
shares or if the Company shall issue any shares of Common Stock as a stock
dividend on its outstanding Common Stock, the number of shares of Common Stock
deliverable upon the exercise of Options shall be appropriately decreased or
increased proportionately, and appropriate adjustments shall be made in the
purchase price per share to reflect such subdivision, combination or stock
dividend.


                                       5



                13.2    Consolidations or Mergers. If the Company is to be
                        -------------------------
consolidated with or acquired by another entity in a merger, sale of all or
substantially all of the Company's assets or otherwise (an "Acquisition"), the
Committee or the board of directors of any entity assuming the obligations of
the Company hereunder (the "Successor Board"), shall, as to outstanding Options,
either (i) make appropriate provision for the continuation of such Options by
substituting on an equitable basis for the shares then subject to such Options
the consideration payable with respect to the outstanding shares of Common Stock
in connection with the Acquisition; (ii) upon written notice to the Optionees,
provide that all Options must be exercised, to the extent then exercisable,
within a specified number of days of the date of such notice, at the end of
which period the Options shall terminate; or (iii) terminate all Options in
exchange for a cash payment equal to the excess of the fair market value of the
shares subject to such Options (to the extent then exercisable) over the
exercise price thereof.

                13.3    Recapitalization or Reorganization. In the event of a
                        ----------------------------------
recapitalization or reorganization of the Company (other than a transaction
described in Section 13.02) pursuant to which securities of the Company or of
another corporation are issued with respect to the outstanding shares of Common
Stock, an Optionee upon exercising an Option shall be entitled to receive for
the purchase price paid upon such exercise the securities he would have received
if he had exercised his Option prior to such recapitalization or reorganization.

                13.4    Change in Control. In the event of a change in control
                        -----------------
of the Company, all Options under the Plan which are not fully vested shall vest
100% and shall be immediately exercisable. For purposes of this Plan, a "change
in control" shall mean any of the following events: (a) the Company receives a
report on Schedule 13D filed with the Securities and Exchange Commission
pursuant to Section 13(d) of the Exchange Act disclosing that any person, group,
corporation or other entity is the beneficial owner, directly or indirectly, of
twenty percent (20%) or more of the outstanding Common Stock of the Company;
(b) any person (as such term is defined in Section 13(d) of the Exchange Act),
group, corporation or other entity other than the Company or any Subsidiary,
purchases shares pursuant to a tender offer or exchange offer to acquire any
Common Stock of the Company for cash, securities or any other consideration,
provided that after consummation of the offer, the person, group, corporation or
other entity in question is the beneficial owner (as such term is defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of twenty percent
(20%) or more of the outstanding Common Stock of the Company (calculated as
provided in paragraph (d) of Rule 13d-3 under the Exchange Act in the case of
rights to acquire common stock); (c) the stockholders of the Company approve
(i) any consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of Common Stock
would be converted into cash, securities or other property, or (ii) any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company; or
(d) there shall have been a change in a majority of the members of the Board of
Directors of the Company within a twenty-four (24) month period unless the
election or nomination for election by the Company's stockholders of each new
director was approved by the vote of two-thirds of the directors then still in
office who were in office at the beginning of the twenty-four (24) month period.


                                       6



                13.5    Modification of ISOs. Notwithstanding the foregoing, any
                        --------------------
adjustments made pursuant to Section 13.01, 13.02, 13.03 or 13.04 with respect
to ISOs shall be made only after the Committee, after consulting with counsel
for the Company, determines whether such adjustments would constitute a
"modification" of such ISOs (as that term is defined in Section 424 of the Code)
or would cause any adverse tax consequences for the holders of such ISOs. If the
Committee determines that such adjustments made with respect to ISOs would
constitute a modification of such ISOs, it may refrain from making such
adjustments.

                13.6    Dissolution or Liquidation. In the event of the proposed
                        --------------------------
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at such other
time and subject to such other conditions as shall be determined by the
Committee.

                13.7    Issuances of Securities. Except as expressly provided
                        -----------------------
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares subject to Options. No adjustments shall be made for dividends paid in
cash or in property other than securities of the Company.

                13.8    Fractional Shares. No fractional shares shall be issued
                        -----------------
under the Plan and the Optionee shall receive from the Company cash in lieu of
such fractional shares.

                13.9    Adjustments. Upon the happening of any of the events
                        -----------
described in Section 13.01, 13.02, 13.03 or 13.04 above, the class and aggregate
number of shares set forth in Section 3 hereof that are subject to Options which
previously have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee or the Successor Board shall determine the specific adjustments to
be made under this Section 13 and, subject to Section 2 hereof, its
determination shall be conclusive.

          14    Means of Exercising Options. An Option (or any installment or
                ---------------------------
portion of an installment thereof) shall be exercised by giving written notice
to the Company at its principal office address. The notice shall identify the
Option being exercised and specify the number of shares as to which such Option
is being exercised, accompanied by full payment of the purchase price therefor
either: (a) in United States dollars in cash or by check; (b) at the discretion
of the Committee, through delivery of shares of Common Stock having a fair
market value equal as of the date of the exercise to the cash exercise price of
the Option; or (c) at the discretion of the Committee, by any combination of (a)
and (b) above. If the Committee exercises its discretion to permit payment of
the exercise price of an ISO by means of the methods set forth in clauses (b) or
(c) of the preceding sentence, such discretion shall be exercised in writing at
the time of the grant of the Option in question. An Optionee shall not have the
rights of a stockholder with respect to the shares covered by his Option until
the date of issuance of a stock certificate to him for such shares. Except as
expressly provided above in Section 13 with respect to changes in capitalization
and stock dividends, no adjustment shall be made for dividends or similar rights
for which the record date is before the date such stock certificate is issued.


                                       7



          15    Termination or Amendment of Plan. The Board of Directors may
                --------------------------------
terminate or amend the Plan in any respect at any time; however, without the
approval of the Company's stockholders obtained within twelve (12) months before
or after the Board of Directors adopts a resolution authorizing any such
termination or amendment, the Board of Directors may not so terminate or amend
the Plan if prior stockholder approval is then required by Section 16(b) of the
Exchange Act, applicable Delaware law or tax law, or the rules of any applicable
national securities exchange or national stock quotation system on which the
Common Stock may then be listed or traded. Except as otherwise provided in this
Section 15, in no event may action of the Board of Directors or stockholders
alter or impair the rights of an Optionee, without his consent, under any Option
previously granted to him.

          16    Notice to Company of Disqualifying Disposition. By accepting an
                ----------------------------------------------
ISO granted under the Plan, each Optionee agrees to notify the Company in
writing immediately after making a Disqualifying Disposition, as described in
Sections 421, 422 and 424 of the Code and regulations thereunder, of any stock
acquired under the Plan (or stock received in a transaction described in
Section 424(b) or 424(c)(1)(B) of the Code, relating to distributions of stock
with respect to stock acquired under the Plan and certain tax-free exchanges of
stock acquired under the Plan for other stock or securities). A Disqualifying
Disposition (with certain exceptions) is generally any disposition within two
(2) years of the date the ISO was granted or within one (1) year of the date the
ISO was exercised, whichever period ends later. With respect to stock held
jointly with right of survivorship, a termination of such joint tenancy may
constitute a Disqualifying Disposition. This Section 16 shall be made binding
upon the Optionee and upon any transferee of stock described in this Section to
whom Section 424(c)(4)(B) of the Code applies.

          17    Withholding of Additional Income Taxes. Upon the exercise of a
                --------------------------------------
Non-Qualified Option or the making of a Disqualifying Disposition (as defined in
Section 16), the Company may withhold taxes in respect of amounts that
constitute compensation includible in gross income, whenever the Company
determines that such withholding is required. The Committee in its discretion
may condition the exercise of an Option on the Optionee's making satisfactory
arrangement for such withholding. In addition to tax withholding, government
regulations may impose reporting or other obligations on the Company with
respect to the Plan. For example, the Company may be required to send tax
information statements to employees and former employees that exercise ISOs.

          18    Governing Law, Construction. The validity and construction of
                ---------------------------
the Plan and the agreements evidencing Options shall be governed by the laws of
the State of New York, or the laws of any jurisdiction in which the Company or
its successors in interest may be organized. In construing this Plan, the
singular shall include the plural and the masculine gender shall include the
feminine and neuter, unless the context otherwise requires.


                                       8



                                                                     PRELIMINARY
                                                                          COPIES


                    DISTINCTIVE DEVICES, INC. SPECIAL MEETING
                        TO BE HELD ON ____________, 2001

           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

     The undersigned shareholder of DISTINCTIVE DEVICES, INC., a New York
corporation (the "Company"), acknowledges receipt of the Notice of Special
Meeting of Shareholders and Proxy Statement, dated ___________, 2001, and hereby
constitutes and appoints Sanjay Mody and Earl M. Anderson, Jr., or either of
them acting singly in the absence of the other, with the power of substitution
in either of them, the proxies of the undersigned to vote with the same force
and effect as the undersigned all shares of Common Stock of the Company held by
the undersigned at the Special Meeting of Shareholders of the Company to be held
on ______________, 2001, and at any adjournment or adjournments thereof, hereby
revoking any proxy or proxies heretofore given and ratifying and confirming all
that said proxies may do or cause to be done by virtue thereof with respect to
the following matters:

     The undersigned hereby instructs said proxies or their substitutes:

     1.   Election of five persons nominated by the Board of Directors to serve
          as Directors as indicated below:

          FOR all nominees listed below: [ ] (except as indicated)

          WITHHOLD AUTHORITY to vote for all nominees listed below: [ ]

          NOMINEES: Sanjay Mody, Earl M. Anderson, Jr., Walter E. Freeman,
Shrikant C. Meha and William E. Walles

(INSTRUCTION:  To withhold authority to vote for any individual nominee or
               nominees, write such nominee's or nominees' name(s) in the space
               provided below.)

     2.   Approve a migratory merger of the Company with Distinctive Devices,
          Inc., a Delaware corporation.

               FOR [ ]                   AGAINST [ ]                 ABSTAIN [ ]

     3.   Ratify the adoption of the Company's 2001 Stock Option Plan.

               FOR [ ]                   AGAINST [ ]                 ABSTAIN [ ]

     4.   Approve an increase in the authorized shares of Common Stock and a
          decrease in the par value thereof.

               FOR [ ]                   AGAINST [ ]                 ABSTAIN [ ]

     5.   Upon such other matters as may properly come before the Meeting or any
          adjournment or adjournments thereof





     This Proxy when properly executed will be voted as directed. If no
direction is indicated, this Proxy will be voted FOR the election of the five
named individuals as directors, FOR the migratory merger, FOR the ratification
the 2001 Stock Option Plan and FOR the increase in the Common Stock.

                      PLEASE SIGN, DATE AND MAIL THIS PROXY
                      IMMEDIATELY IN THE ENCLOSED ENVELOPE.

                                             Name
                                                 ------------------------------


                                             Name (if joint)

                                             --------------------------------


                                             Date  _____________, 2001


                                             Please sign your name exactly as it
                                             appears hereon. When signing as
                                             attorney, executor, administrator,
                                             trustee or guardian, please give
                                             your full title as it appears
                                             hereon. When signing as joint
                                             tenants, all parties in the joint
                                             tenancy must sign. When a proxy is
                                             given by a corporation, it should
                                             be signed by an authorized officer
                                             and the corporate seal affixed. No
                                             postage is required if returned in
                                             the enclosed envelope.