SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Competitive Technologies, Inc.
(Name of Registrant as Specified in Its Charter)
Frank R. McPike, Jr.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11.*
(4) Proposed maximum aggregate value of transaction:
* Set forth the amount on which the filing is calculated
and state how it was determined.
[ ] 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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Notes:
COMPETITIVE TECHNOLOGIES, INC.
1465 Post Road East
Post Office Box 901
Westport, Connecticut 06881
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on December 15, 1995
To the Stockholders of
COMPETITIVE TECHNOLOGIES, INC.
Notice is hereby given that the Annual Meeting of Stockholders
of COMPETITIVE TECHNOLOGIES, INC. (the "Company") will be held at
the Norwalk Inn, 99 East Avenue, Norwalk, Connecticut 06851 on
Friday, December 15, 1995 at 9:00 A.M. local time for the following
purposes:
1. Electing a Board of Directors to serve until
the next annual meeting of stockholders and
until their respective successors have been
elected and qualified; and
2. Transacting such other business as may
properly come before the meeting or any
adjournments thereof.
The Board of Directors has fixed the close of business on
November 1, 1995 as the record date for determination of the
stockholders entitled to notice of and to vote at said meeting
and/or adjournments thereof.
If you do not expect to be present personally at the meeting,
please complete, date, sign and return the accompanying proxy
without delay.
By Order of the Board of Directors
Frank R. McPike, Jr.
Secretary
November 10, 1995
PROXY STATEMENT
COMPETITIVE TECHNOLOGIES, INC.
1465 Post Road East
Post Office Box 901
Westport, Connecticut 06881
--------------------------------------
This Proxy Statement is being furnished to stockholders in
connection with the solicitation by the Board of Directors of
Competitive Technologies, Inc., a Delaware corporation (the
"Company"), of proxies in the form enclosed herewith for the
Company's annual meeting of stockholders to be held December 15,
1995. Each proxy received will be voted as directed. If no
direction is indicated, the proxy will be voted FOR the election of
the nominees named below as directors. Any proxy may be revoked at
any time prior to the voting thereof by notifying the Company,
there being no formal procedure required. The approximate date on
which this Proxy Statement and the form of proxy enclosed herewith
are first to be sent or given to the Company's stockholders is
intended to be November 10, 1995.
Only the holders of record of the Company's 5,815,365
outstanding shares of Common Stock and 2,427 outstanding shares of
Preferred Stock at the close of business on November 1, 1995, will
be entitled to vote at the meeting. Each share of Common Stock and
each share of Preferred Stock is entitled to one vote on each
matter to be voted upon. Abstentions will be treated as shares
present and entitled to vote for purposes of determining the
presence of a quorum but as not voted for purposes of determining
the approval of any matters submitted to the stockholders for a
vote. Abstentions will have the same effect as negative votes. If
a broker indicates on the proxy that it does not have discretionary
authority as to certain shares to vote on a particular matter,
those shares will not be considered as present and entitled to vote
with respect to that matter.
ELECTION OF DIRECTORS
At the meeting a Board of seven directors is to be elected by
plurality vote. All of the nominees named below are currently
directors of the Company. A. Sidney Alpert and Arthur M. Lieberman
are not standing for reelection. There is no family relationship
between any director or executive officer of the Company or any
person nominated by the Company to become a director or executive
officer. In the event that any of the nominees for director should
be unable to serve, discretionary authority is solicited to vote
for the election of other persons. Each director will hold office
until the next annual meeting of stockholders and until his
successor has been elected and qualified or until his earlier
resignation or removal. The Company has no reason to believe that
any of the nominees named will not be available for election as
directors for their prescribed terms. Mr. Tobey has advised the Company
that at such time as Berjaya Leisure (Cayman) Ltd.'s ("Berjaya") stock
holding drops below 5% he would resign from the Board. See Beneficial
Ownership of shares and certain transactions. Should Berjaya's holding
be reduced below 5% prior to the annual meeting and Mr. Tobey resign,
the shareholders would elect a Board of six directors.
The following table sets forth information with respect to each
nominee for director according to the information furnished the Company
by him:
Name, Age and Principal Occupation
Positions Presently During Past Five Director of
Held with Years; Other Public Company
Company Directorships Since
Michael G. Bolton Vice President for Admancement September,
52 at Lehigh University. 1994
Bruce E. Langton Retired financial executive; July, 1987
64 prior to August, 1987 Assistant
Treasurer of IBM Corporation
(manufacturer of data process-
ing equipment and systems).
Currently consultant in invest-
ment management and Director of
Institutional Mutual Funds,
Bankers Trust Co.
H.S. Leahey Director, Industrial Contracts March, 1994
46 and Licensing, Washington
University in St. Louis.
Frank R. McPike, Jr. Secretary since August, 1989; July, 1988
46, Vice President, Treasurer since July, 1988;
Finance, Treasurer Vice President, Finance and
and Secretary Chief Financial Officer of the
Company since December, 1983.
George M. Stadler President and Chief Executive December, 1993
48, President and Officer of the Company since
Chief Executive December, 1993; President and
Officer Chief Operating Officer of the
Company since September, 1992;
President, Competitive Techno-
logies of PA, Inc. (a wholly-
owned technology transfer sub-
sidiary of Lehigh University
prior to the sale of 80% of its
stock to the Company in February,
1993) since April, 1991; Managing
Partner of VenTex, a joint venture
involving Texas Research and
Technology Foundation and the
Company from November, 1989 to
April, 1991; Chief Venture Officer,
Texas Research and Technology
Foundation from January, 1989
to April, 1991.
David M. Tobey Manager and Director of Parkway March, 1992
57 M & A Capital Corp. (offshore
financial investing). Also a
Director of DeSoto, Inc.
Harry Van Benschoten Retired accounting executive; July, 1987
67 Vice President, Accounting of
Newmont Mining Corporation from
1967-1986. Also a Director of
Canada Life Insurance Co. of
New York, and Trustee of Bankers
Trust Company Pyramid and Global
Investors Mutual Funds.
Messrs. McPike, Langton and Van Benschoten (Chairman) are members
of the audit committee. Messrs. Bolton (Chairman), Leahey and Stadler
are members of the nominating committee. Messrs. Langton (Chairman),
Tobey and Van Benschoten are members of the compensation and stock
option committee. The compensation committee also serves as the
incentive compensation committee.
BENEFICIAL OWNERSHIP OF SHARES
The following information is furnished to indicate the beneficial
ownership of the Company's Common Stock by each director and nominee, by
certain executive officers of the Company, and by each person known to
the Company to be the beneficial owner of more than 5% of the Company's
outstanding Common Stock. Such information has been furnished to the
Company by the indicated owners as of October 1, 1995 except with
respect to Berjaya Leisure (Cayman) Ltd. for which such information is
as of October 2, 1995.
Name (and Address if more
than 5%) of Benefical Amount Beneficially
Owners Owned (A) Percent (B)
Directors and Nominees
A.S. Alpert 147,669 (C) 2.5%
Michael G. Bolton 100 (D) --
Bruce E. Langton 19,156 (E) --
H.S. Leahey None --
Arthur M. Lieberman 13,225 (F) --
Frank R. McPike, Jr. 73,538 (G) 1.2%
George M. Stadler 130,006 (H) 2.2%
David M. Tobey 3,142 --
Harry Van Benschoten 17,106 (I) --
All directors and executive
officers as a group 403,942 (J) 6.5%
Additional 5% Owners
Berjaya Leisure (Cayman) Ltd. 309,100 (K) 5.3%
Level 18 Shahzan Prudential Tower
Jalan Sultan Ismail
50250 Kuala Lumpur
Malaysia
Dimensional Fund Advisors, Inc. 309,200 (L) 5.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
(A) Except as indicated in the notes which follow, the designated
person or group has sole voting and investment power.
(B) Percentages of less than 1% are not shown.
(C) Consists of 21,269 shares of Common Stock plus 126,400 stock
options deemed exercised solely for purposes of showing total
shares owned by Mr. Alpert.
(D) Does not include 74,302 shares of Common Stock held by Lehigh
University of which Mr. Bolton is a Vice President. Mr. Bolton
disclaims beneficial ownership of all the shares held by Lehigh
University.
(E) Consists of 9,156 shares of Common Stock, plus warrants to purchase
10,000 shares of Common Stock deemed exercised solely for purposes
of showing total shares owned by Mr. Langton.
(F) Consists of 3,225 shares of Common Stock plus warrants to purchase
10,000 shares of Common Stock deemed exercised solely for purposes
of showing total shares owned by Mr. Lieberman.
(G) Consists of 4,538 shares of Common Stock, plus 69,000 stock options
deemed exercised solely for purposes of showing total shares owned
by Mr. McPike. Does not include 8,505 shares of Common Stock
allocated to Mr. McPike under the Company's Employees' Common Stock
Retirement Plan; these shares are held by Sachem Trust as Trustee
and said Trustee has sole voting and investment power with regard
thereto.
(H) Consists of 6 shares of Common Stock plus 130,000 stock options
deemed exercised solely for purposes of showing total shares owned
by Mr. Stadler. Does not include 5,550 shares of Common Stock
allocated to Mr. Stadler under the Company's Employees' Common
Stock Retirement Plan; these shares are held by Sachem Trust as
Trustee and said Trustee has sole voting and investment power with
regard thereto.
(I) Consists of 7,106 shares of Common Stock, plus warrants to purchase
10,000 shares of Common Stock deemed exercised solely for purposes
of showing total shares owned by Mr. Van Benschoten.
(J) Consists of 48,542 shares of Common Stock, plus 325,400 stock
options and 30,000 warrants to purchase shares of Common Stock
deemed exercised solely for purposes of showing total shares owned
by such group.
(K) Consists of 299,100 shares and warrants to purchase 10,000 shares
owned by Berjaya Leisure (Cayman) Limited ("Berjaya Leisure"), a
wholly-owned subsidiary of Berjaya Leisure Berhad. The Company is
advised that at October 2, 1995: (i) Berjaya Leisure has sole
voting and investment power with respect to the shares owned; (ii)
Berjaya Industrial Berhad ("Berjaya Industrial") (previously known
as Berjaya Corporation (Malaysia) Berhad, same address as Berjaya
Leisure) owns approximately 55% of the common shares of Berjaya
Leisure Berhad; (iii) Berjaya Group Berhad ("Berjaya Group")
(previously known as Inter-Pacific Industrial Group Berhad, same
address as Berjaya Leisure) owns approximately 61.4% of the common
shares of Berjaya Industrial; and (iv) Berjaya Leisure, Berjaya
Industrial, and Berjaya Group are incorporated in Malaysia and
listed on the Kuala Lumpur Stock Exchange. The Company is further
advised that Mr. Vincent Tan (same address as Berjaya Leisure) owns
directly and indirectly approximately 38% of the common shares of
Berjaya Group. Mr. Tan has advised the Company that he is group
chief executive officer of Berjaya Leisure, Berjaya Industrial and
Berjaya Group, and disclaims beneficial ownership of all the shares
of Common Stock of the Company held by Berjaya Leisure.
(L) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of
309,200 shares of the Company's Common Stock as of June 30, 1995,
all of which shares are held in portfolios of DFA Investment
Dimensions Group Inc., a registered open-end investment company or
in series of the DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and the DFA Participating Group
Trust, investment vehicles for qualified employee benefit plans,
all of which Dimensional Fund Advisors, Inc. serves as investment
manager. Dimensional disclaims beneficial ownership of such
shares.
At October 1, 1995, the stock transfer records maintained by the
Company with respect to its Preferred Stock showed that the largest
holder of Preferred Stock owned 500 shares.
The following table sets forth information with respect to the
common stock, $.001 par value per share, of University Optical Products
Co. ("UOP"), a subsidiary of the Company, beneficially owned by each
director and nominee for director, by certain executive officers of the
Company, and by each person known to the Company to be the beneficial
owner of more than 5% of the Company's outstanding Common Stock at
October 1, 1995.
Shares of Common Percent
Name Stock of UOP (A) of Class (B)
A.S. Alpert 10,887 --
Michael Bolton None --
Bruce E. Langton None --
H.S. Leahey None --
Arthur M. Lieberman 2,385 --
Frank R. McPike, Jr. 14,000 --
George M. Stadler None --
David M. Tobey None --
Harry Van Benschoten None --
All directors and executive
officers of the Company
as a group 27,272 --
(A) Does not include 1,333,333 shares of UOP class A stock (which have
four votes per share and are convertible into an equal number of
shares of UOP common stock) and 2,757,735 shares of UOP common
stock owned by the Company and 1,927 shares of UOP common stock
owned by Genetic Technology Management, Inc., a wholly-owned
subsidiary of the Company.
(B) Percentages of less than 1% are not shown.
EXECUTIVE COMPENSATION
Summary Compensation
The following table summarizes the total compensation paid by the
Company for services rendered during each of the fiscal years ended July
31, 1995, 1994 and 1993 to the Chief Executive Officer of the Company
and each of the other executive officers of the Company who had annual
compensation for the fiscal year ended July 31, 1995 in excess of
$100,000 (the "Specified Executives"):
SUMMARY COMPENSATION TABLE
Annual Compensation (1)
Long Term
Compensation
Awards
Securities All Other
Name and Principal Fiscal Underlying Compensation
Position Year Salary ($) Bonus ($) Options (#) ($)(2)
George M. Stadler, 1995 $153,845 52,500 $14,799
President and 1994 133,078 27,500 15,857
Chief Executive 1993 102,884 -- 50,000 8,217
Officer (3)
Frank R. McPike, 1995 140,765 20,000 14,136
Jr., Vice Presi- 1994 130,000 7,500 15,875
dent, Finance 1993 124,230 -- -- 11,009
and Chief
Financial
Officer
(1) The aggregate amount of any perquisites or other personal benefits
was less than 10% of the total of annual salary and bonus and is
not included in the above table.
(2) Consists principally of amounts contributed for the above executive
officers to the Competitive Technologies, Inc. Employees' Common
Stock Retirement Plan. The dollar amounts are converted into
shares of Company Common Stock valued at the mean between the high
and the low price on the American Stock Exchange on the last day of
the fiscal year. Also includes premiums paid for term life
insurance policies (see below).
(3) Mr. Stadler became Chief Executive Officer on December 17, 1993.
Prior thereto he was Chief Operating Officer and continues in that
position.
Option Grants
The following table summarizes the stock options granted by the
Company during the fiscal year ended July 31, 1995 to the Specified
Executives:
OPTION GRANTS IN LAST FISCAL YEAR
Individuals Grants
Potential
% of Realizable
Total Value
Number Options at Assumed
of Granted Annual
Securities to Rates of
Underlying Employees Stock Price
Options in Exercise Appreciation
Granted Fiscal Price Expiration for
Name (#)(1) Year ($/Sh) Date Option Term
5% ($) 10% ($)
Frank R. McPike, 20,000 21.6% $ 6.5625 12/30/04 $ 82,550 $209,150
Jr.
George M. Stadler 30,000 32.4% 6.5625 12/30/04 123,825 313,725
George M. Stadler 22,500 24.3% 6.50 7/6/05 92,025 233,100
(1) Options become exercisable six months after date of grant.
Option Exercises and Year End Value
The following table summarizes the stock options held at the end of
the fiscal year ended July 31, 1995 by the Specified Executives (none of such
persons exercised any Company stock options during such fiscal year):
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION
VALUES
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at FY-End (#) at FY-End ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable
George M. Stadler 107,500 / 22,500 N/A / N/A
Frank R. McPike, Jr. 69,000 / - 0 - N/A / N/A
The following table summarizes the University Optical Products Co.
stock options held at the end of the fiscal year ended July 31, 1995 by
the Specified Executives (none of such persons was granted or exercised
any University Optical Products Co. stock options during such fiscal
year):
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at FY-End (#) at FY-End ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable
George M. Stadler -- --
Frank R. McPike, Jr. 7,500 / -0- N/A
Employment Agreements
On August 1, 1995, the Company entered into an employment contract
with George M. Stadler providing for his employment as President and
Chief Executive Officer of the Company for a term ending on August 1,
1999 and for the payment of compensation to him at a minimum rate of
$160,000 per year. The agreement provides for automatic one-year
renewals beginning in 1999 unless terminated by either party and for a
one-year period of noncompetition following termination by Mr. Stadler.
The agreement contains provisions for termination in the event of death
or disability and gives the Company the right to terminate for cause,
which is defined as any criminal act by Mr. Stadler for which he is
convicted.
On September 15, 1993, the Company entered into an employment
contract with Frank R. McPike, Jr. providing for his employment as Vice
President Finance and Chief Financial Officer of the Company for a term
ending on September 14, 1996 and for the payment of compensation to him
at a minimum rate of $130,000 per year. The agreement provides for
automatic one-year renewals beginning in 1996 unless terminated by
either party and for a two-year period of noncompetition following
termination by Mr. McPike. The agreement contains provisions for
termination in the event of death or disability and gives the Company
the right to terminate for cause, which is defined as any criminal act
by Mr. McPike.
Other Arrangements
The Company provides term life insurance for certain of its
officers. The policy amount in the event of death is $250,000 for Mr.
McPike. Premiums of $460 for Mr. McPike's policy in 1993, 1994 and 1995
were paid by the Company.
The Company maintains a simplified employee pension ("SEP") plan
for employees of the Company pursuant to the Internal Revenue Code.
Under the SEP plan, an eligible employee may elect to make a salary
reduction of up to 15% of his compensation as defined in the plan, with
the Company then contributing that amount to the plan for the employee.
Employee contributions for any calendar year are limited to a specific
dollar amount that is indexed to reflect inflation ($9,240 for 1995).
For fiscal 1995, the Company contributed $9,919 for Mr. Stadler; and
$8,168 for Mr. McPike. The amount contributed for Mr. Stadler in fiscal
1995 covered two annual periods and did not exceed the annual limitation
as prescribed by the Internal Revenue Service.
Effective August 1, 1990, the Company adopted the Competitive
Technologies, Inc. Employees' Common Stock Retirement Plan (the
"Retirement Plan"). The Retirement Plan is a "stock bonus plan" that is
intended to be tax qualified under the Internal Revenue Code. All
employees of the Company are eligible to participate in the Retirement
Plan. Annually, a committee of independent directors determines the
number of shares of the Company's Common Stock, if any, to be
contributed to the Retirement Plan. These shares are allocated among
participants who are employed on the last day of the year and who
performed at least 1,000 hours of service during the year in proportion
to their relative compensation in a manner that is integrated with the
Company's Social Security contribution on behalf of employees; that is,
the contribution made with respect to compensation in excess of the
Social Security wage base will generally be twice as large in
proportionate terms as the contribution made with respect to
compensation below the wage base. The Company's contributions are held
in trust with a separate account established for each participant.
The maximum amount of Company Common Stock that can be contributed
to the Retirement Plan in any year is the number of shares with fair
market value equal to 15% of that year's compensation reduced by the SEP
plan contribution paid to Retirement Plan participants, but in no event
more than 1% of the Company's outstanding shares at the end of the
previous year. There is no minimum or required contribution. The
maximum number of shares that can be allocated to any individual
participant's account in any year is the number of shares with a fair
market value equal to the lesser of $30,000 or 25% of his compensation
for that year reduced by the SEP plan contribution.
Participants become entitled to a distribution of the shares
allocated to their accounts upon disability, death or other termination
of employment. They are entitled to receive their vested account
balance. Participants obtain a 100% vested interest in their accounts
upon completing 5 years of service with the Company. If the Retirement
Plan becomes "top heavy" as defined by the Internal Revenue Code,
participants become 20% vested after 2 years of service, 40% vested
after 3 years of service, 60% vested after 4 years of service, and 100%
vested after 5 years of service.
Company stock that is contributed to the Retirement Plan is held in
the custody of the Retirement Plan's trustee, Sachem Trust National
Association in Westport, Connecticut. The trustee has the power to vote
Company shares that are owned by the Retirement Plan. For the fiscal
year ended July 31, 1995, the Board authorized a contribution of 10,996
shares. Shares allocated to Messrs. Stadler and McPike under the
Retirement Plan for the year ended July 31, 1995, were 2,479 and 2,291,
respectively, and were 4,770 shares for all executive officers as a
group. See also Summary Compensation Table - "All Other Compensation"
for dollar values ascribed to Messrs. Stadler and McPike.
The Company has an incentive compensation plan pursuant to which an
amount not to exceed 10% of the operating income of the Company (defined
and adjusted as provided in said plan) may be credited each year to an
incentive fund, from which cash awards may be made to key employees of
the Company by a committee, none of whose members is eligible to receive
awards. No amounts may be credited to the incentive fund until such
time, if ever, as the Company experiences a fiscal year in which
operating income (as defined in said plan) has been earned. No such
operating income has yet been earned.
The Company has in effect a Key Employees' Stock Option Plan
("Company Option Plan") with respect to its Common Stock, $.01 par
value, which provides for the grant of either incentive stock options
under Section 422 of the Internal Revenue Code or nonqualified options.
(Incentive options must be granted at not less than 100% of fair market
value at time of grant. Nonqualified options may be granted at not less
than 85% of fair market value at time of grant.) Stock appreciation
rights may also be granted under the Company Option Plan. In certain
instances, stock options which are vested or become vested upon the
happening of an event or events specified by the Company's Stock Option
Committee, may continue to be exercisable through up to 10 years after
the date of grant, irrespective of the termination of the optionee's
employment with the Company.
DIRECTOR COMPENSATION
The Company pays each director who is not an employee of the
Company or a subsidiary of the Company the sum of $500 for each Board
meeting attended. Directors also receive $250 for attending each
committee meeting that coincides with a Board meeting and $500 for
attendance at a committee meeting that does not coincide with a Board
meeting. Out-of-pocket expenses involved in attendance are also
reimbursed.
The Company has a Director's Stock Participation Plan pursuant to
which, on the first business day of January through January 1996, the
Company issues, to each nonemployee director who has been elected by the
stockholders and has served at least one full year, a number of shares
of the Company's Common Stock equal to the lesser of (i) $10,000 divided
by the per share fair market value of such stock on the date of
issuance, or (ii) 2,000 shares. During fiscal 1995, an aggregate of
7,545 shares were issued under this plan (1,509 shares each to Messrs.
Alpert, Langton, Lieberman, Tobey and Van Benschoten).
The Company has entered into indemnity agreements with each of its
directors indemnifying them against certain possible claims and expenses
and has created an escrow fund in the aggregate sum of $325,000 for the
indemnification of directors, all as authorized by the stockholders at
the 1986 annual meeting. The escrow terminates at July 31, 1997. The
Company does not presently maintain a policy of directors' liability
insurance.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
This report of the Compensation and Stock Option Committee (the
"Committee") shall not be deemed incorporated by reference by any
general statement incorporating the Proxy Statement by reference into
any filing under the Securities Act of 1933 or the Securities Exchange
Act of 1934 (the "Acts"), except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
The Committee is responsible for making recommendations to the
Company's Board of Directors concerning the compensation of the
Company's Chief Executive Officer and, based upon recommendations
received from the Company's Chief Executive Officer, the compensation of
the Company's other executive officers, consistent with employment
contracts.
The Company has a simple compensation program that consists of
salary, performance bonus and stock options. The overall executive
compensation philosophy is based upon the premise that compensation
should be aligned with and support the Company's business strategy and
long-term goals. The Company believes it is essential to maintain an
executive compensation program which provides overall compensation
competitive with that paid executives with comparable qualifications and
experience. This is critical to attract and retain competent
executives.
The Company has an incentive compensation plan which is intended to
provide a pool of dollars and is based upon the Company's achieving
specific levels of profitability; however, no amounts have been paid
pursuant to the plan (see page 9). In addition, the Committee from time
to time may award individual executives bonuses based upon specific
events that enhance the value of the Company.
The Committee determines the granting of options under the
Company's stock option plan. This plan provides additional incentive to
maximize shareholder value. The plan may also utilize vesting periods
to encourage recipients of options to continue in the employ of the
Company. The Company grants stock options to its executive officers and
to a number of additional key employees.
COMPENSATION AND STOCK OPTION COMMITTEE
Bruce Langton, Chairman
David Tobey
Harry Van Benschoten
PERFORMANCE GRAPH
The performance graph below shall not be deemed incorporated by
reference by any general statement incorporating this Proxy Statement by
reference into any filing under the Acts, except to the extent that the
Company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such Acts.
The graph below compares cumulative total return (assuming
reinvestment of dividends, if any) on the Company's Common Stock for the
five year period shown, compared with the American Stock Exchange Market
Index and a SIC code index made up of all public companies whose four-
digit standard industrial code number (6794) includes patent owners and
lessors and who have been public for the period covered by the graph,
all for the fiscal years ended July 31, assuming $100 invested on August
1, 1990 in the Company's Common stock, the American Stock Exchange
Market Index and a published SIC code index of public companies.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG COMPETITIVE TECHNOLOGIES,
AMEX MARKET INDEX AND SIC CODE INDEX
225
200
175
D
O 125
L
L 100
A
R 75
S
50
1990 1991 1992 1993 1994 1995
Fiscal Year Ending July 31,
1990 1991 1992 1993 1994 1995
Competitive
Technologies,
Inc. 100 83.93 151.79 119.64 107.14 86.61
SIC Code 6794
Index 100 90.31 114.77 103.52 111.38 213.06
American Stock
Exchange Market
Index 100 105.82 114.13 124.62 127.72 154.90
CERTAIN TRANSACTIONS
As of April 1, 1992, the Company entered into an employment
agreement with A. Sidney Alpert providing for his employment as
President and Chief Executive Officer of the Company for a term ending
on March 31, 1996. The agreement provided for a two-year period of
noncompetition following termination by Mr. Alpert. The agreement also
provided that at such time as the Company receives Retin-A royalties, a
bonus of $50,000 payable out of 25% of Retin-A royalties would be paid
to Mr. Alpert, whether or not he is still employed by the Company. The
agreement provided for conversion into a consulting agreement at
Alpert's election. Effective December 17, 1993, Mr. Alpert exercised
the conversion. The term of the consulting agreement is three years
during which the Company pays Mr. Alpert $80,000 per year and Mr. Alpert
devotes up to 100 consulting hours per quarter. The agreement contains
provisions for termination in the event of death or disability and gives
the Company the right to terminate for cause, which is defined as any
criminal felony act by Mr. Alpert for which he is convicted. An
individual long-term disability policy has been provided to Mr. Alpert
pursuant to his consulting agreement providing payment of $7,000 per
month in the event of Mr. Alpert's disability. In addition the Company
provides Mr. Alpert with term life insurance which provides $400,000 in
the event of his death. The premium for this policy was $1,506 in 1995,
1994 and 1993.
Following the resignation of Robert Frost as a director of the
Company in September, 1994, the Company granted Mr. Frost a three-year
warrant to purchase 5,000 shares of the Company's Common Stock at a
warrant price of $8.31 per share, being 100% of the fair market value of
the Company's Common Stock on September 16, 1994, the grant date.
Knowledge Solutions, Inc. ("KSI"), a development stage company, was
formed in June, 1994 to develop and deliver interactive multimedia
training using a process model developed at Lehigh University. The
Company has a 35% voting interest in KSI. Messrs. Stadler and McPike
are two of KSI's directors. Mr. Stadler is serving on a part-time
interim basis as the chief executive officer of KSI and Mr. McPike is
serving on a similar basis as the chief financial officer of KSI while
a full-time management team is being sought for KSI. During the first
year of KSI's operations, the Company has agreed to provide management,
administrative, marketing and accounting services for KSI in exchange
for 60,000 shares of Class B common stock of KSI.
The Company's premises at 1465 Post Road East, Westport, CT are
leased from a partnership in which Mr. Alpert (a director of the Company
and former Chief Executive Officer), L.W. Miles, Robert I. Siegel, and
David N. Koffsky (former executive officers of the Company) each owns a
25% interest. Monthly lease rental payments by the Company consist of
basic minimum annual rent in an amount equal to the monthly payment of
principal and interest due under a mortgage note of the landlord in the
amount of $1,890,000, with principal and interest based upon a twenty-
year amortization schedule. In addition, the Company pays additional
rent of $78,000 per year, subject to annual consumer price index
adjustments, and all taxes which may be levied against the premises.
The lease expires in August, 1996. The interest payable on the mortgage
is at 1 1/4% above the prime rate as specified in The Wall Street Journal.
The Company believes that rentals under the lease are lower than the
prevailing rentals for comparable property in the local real estate
market. The Company subleases approximately 14,000 square feet to third
parties.
When the Company has believed it prudent to limit its liability for
legal fees and expenses in connection with litigation, it has entered
into contingent fee arrangements with Mr. Lieberman's firm. Such an
arrangement was entered into in October, 1991 in connection with the
Retin-A litigation. During fiscal 1992, fees of approximately $67,000
were incurred by Mr. Lieberman's firm and are payable only out of
proceeds from the settlement of this litigation. The Company has agreed
to pay one half of the proceeds, if any, up to a limit of three times
the contingent fees incurred, or approximately $202,000. During fiscal
1995, 1994 and 1993, the Company paid $5,500, $6,000 and $26,800 to Mr.
Lieberman's firm pursuant to this arrangement.
Pursuant to a private placement agreement entered into in July,
1989, by and among Berjaya Leisure (Cayman) Ltd., (then known as Inter-
Pacific (Cayman) Limited), the Company and University Communications,
Inc. ("UCI"), a former subsidiary of the Company, UCI sold to Berjaya
Leisure 130,000 shares of the Company's Common Stock owned by UCI. As
part of the agreement, a designee of Berjaya Leisure, Mr. Vincent Tan
(also known as Mr. Tan Chee Yioun) was elected to the Company's Board of
Directors at the 1989 annual meeting. Mr. Tan subsequently resigned and
Mr. Yong Teck Ming was elected to the Board in February, 1990 at the
suggestion of Mr. Tan to fill the vacancy. Mr. Yong resigned in March
1992 and Mr. David M. Tobey was suggested by Berjaya Leisure to fill the
vacancy. Mr. Tobey is presently a director and is standing for
reelection. See Election of Directors.
In February, 1993, the Company acquired 80% of the stock of
Competitive Technologies of PA, Inc. ("CTI-PA") from Lehigh University
("Lehigh") in exchange for unregistered shares of Common Stock of the
Company. The exchange involved $750,000 worth of the Company's stock,
priced in relation to average market value. An exclusive technology
management contract has been entered into between CTI-PA and Lehigh.
In addition, Lehigh will provide spouses and children of certain employees
of CTI-PA, including Mr. Stadler, with full Lehigh tuition waivers at no
cost to CTI-PA.
BOARD MEETINGS AND COMMITTEES
During the last full fiscal year five (5) meetings (two telephonic)
of the Board of Directors of the Company were held. During the same
period the compensation and stock option committee met two times, the
audit committee met two times, and the nominating committee met two
times. No incumbent director attended fewer than 75% of the aggregate
number of meetings of the Board and committees of which he was a member
other than Mr. Tobey who attended 71%.
The function of the audit committee is to review with the Company's
auditors the scope and adequacy of the audit and the accounting
practices, procedures and policies of the Company and to advise the
management of the Company concerning the purchase, sale and retention of
interest-bearing securities. The function of the compensation and stock
option committee is to make recommendations to the Board of Directors
with respect to compensation of officers and other employees of the
Company and to exercise all of the powers of the incentive compensation
committee as well as to grant options under and administer the Company
Option Plan and to determine the number of shares of the Company's
common stock to be contributed to the Company's Retirement Plan. The
function of the nominating committee is to make recommendations to the
Board with respect to candidates for director of the Company. (The
nominating committee will consider nominees recommended by stockholders;
no special procedures need to be followed in submitting such
recommendations.)
INFORMATION REGARDING INDEPENDENT PUBLIC
ACCOUNTANTS
Coopers & Lybrand L.L.P. served as independent public accountants
for the fiscal year ended July 31, 1995 and has been selected by the
Board of Directors to serve for the current year. It is expected that
a representative of said firm will be present at the annual meeting with
the opportunity to make a statement if he desires to do so and that such
representative will be available to respond to appropriate questions.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the next
annual meeting must be received by the Company for inclusion in the
Company's proxy statement and form of proxy relating to that meeting not
later than July 13, 1996.
GENERAL
The Company will bear the cost of solicitation of proxies. In
addition to being solicited by mail, proxies may be solicited personally
or by telephone or telegraph. The Company will reimburse brokerage
houses and other custodians, nominees and fiduciaries for forwarding
proxy materials to principals in obtaining their proxies.
The Company will provide without charge (except for exhibits) to
any record or beneficial owner of its securities, on written request, a
copy of the Company's annual report on Form 10-K filed with the
Securities and Exchange Commission for the fiscal year ended July 31,
1995, including the financial statements and schedules thereto.
Exhibits to said report will be provided upon payment of fees limited to
the Company's reasonable expenses in furnishing such exhibits. Written
requests should be directed to Frank R. McPike, Jr., Secretary of the
Company, at 1465 Post Road East, Post Office Box 901, Westport,
Connecticut 06881.
The Board of Directors is not aware of any matter which is to be
presented for action at the meeting other than the matters set forth
herein. Should any other matters requiring a vote of the stockholders
arise, the proxies in the enclosed form confer upon the person or
persons entitled to vote the shares represented by such proxies
discretionary authority to vote the same in respect of any such other
matters in accordance with their best judgment in the interest of the
Company.
Frank R. McPike, Jr.
Secretary
Dated: November 10, 1995
COMPETITIVE TECHNOLOGIES, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS, DECEMBER 15, 1995
The undersigned stockholder of COMPETITIVE TECHNOLOGIES, INC.
hereby appoints GEORGE M. STADLER and FRANK R. MCPIKE, JR., each
with full power of substitution, as attorneys and proxies to
vote all of the shares of stock of said Company which the
undersigned is entitled to vote at the Annual Meeting of
Stockholders of said Company to be held on Friday, December 15,
1995 at 9:00 A.M. local time at the Norwalk Inn, 99 East Avenue,
Norwalk, Connecticut 06851, or at any adjournments thereof, with
all powers the undersigned would possess if personally present,
as indicated below, and for the transaction of such other
business as may properly come before said meeting or any
adjournment thereof, all as set forth in the November 10, 1995
Proxy Statement for said meeting:
1. Election of Directors:
FOR all nominees listed below WITHHOLD AUTHORITY to
(except as marked to the vote for all nominees
contrary below) listed below
INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through nominee's name in the list
below.
Michael G. Bolton, Bruce E. Langton, H.S. Leahey, Frank R.
McPike, Jr., George M. Stadler, David M. Tobey, Harry Van
Benschoten.
A majority of the members of said Proxy Committee who shall be
present in person or by substitute at said meeting, or in case but
one shall be present then that one, shall have and exercise all of
the powers of said Proxy Committee.
This proxy will be voted as directed but if no direction is
indicated it will be voted FOR the election of the nominees
named in proposal (1) described herein. On other matters that
may come before said meeting, this proxy will be voted in the
discretion of the above-named Proxy Committee.
_____________________________
_____________________________
(Signature of Stockholder)
Dated:____________________, 1995
Note: Please sign exactly as
your name or names appear
above. If the stock is
registered in the name
of more than one person, the
proxy should be signed
by all named holders. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full
title. If a corporation,
please sign in full corporate
name by president or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
