As filed with Securities and Exchange Commission on April 1, 1998
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
COMPETITIVE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-2664428
(State or other Jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1960 Bronson Road
P.O. Box 340, Fairfield, CT 06430
(Address of Principal Executive Offices) (Zip Code)
1997 EMPLOYEES' STOCK OPTION PLAN
(Full title of the Plan)
FRANK R. McPIKE, JR.
Vice President, Finance
Competitive Technologies, Inc.
1960 Bronson Road, P.O. Box 340,
Fairfield, CT 06430
(Name and address of agent for service)
Telephone number, including area code, of agent
for service: (203) 255-6044
Copy to:
Allan J. Reich
D'Ancona & Pflaum
30 North LaSalle Street
Chicago, IL 60602
Telephone: (312) 580-2111
[FACING PAGE CONTINUED ON NEXT PAGE]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum Amount of
securities Amount offering aggregate regis-
to be to be price per offering tration
registered registered share price fee
Common Stock 275,000 shares $10.50 (1) $2,887,500 (1) $851.81
($.01 par
value)
(1) Estimated solely for the purpose of computing the registration
fee, based on the average of the high and low prices of the
registrant's Common Stock on the American Stock Exchange as
reported in the consolidated reporting system on March 27, 1998.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed in (a) through (c) below are incorporated
by reference in this registration statement; and all documents
subsequently filed by the registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to
the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference
in this registration statement and to be a part thereof from the date
of filing of such documents:
(a) The registrant's annual report on Form 10-K for the fiscal
year ended July 31, 1997.
(b) The registrant's quarterly reports on Form 10-Q for the
quarters ended October 31, 1997 and January 31, 1998.
(c) The description of the registrant's Common Stock which is
contained in the registration statement on Form 8-A filed
on April 2, 1984, File No. 1-8696, including any amendments
or reports filed for the purpose of updating such
description.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law authorizes
a corporation, under certain circumstances, to indemnify its directors
and officers (including reimbursement for expenses incurred). The
registrant has provided for indemnification to the extent permitted
by the provisions of the Delaware statute in its charter and by-laws.
The registrant also maintains directors and officers' liability
insurance (subject to certain exclusions and limitations) against
certain liabilities, including certain liabilities under the
Securities Act of 1933. See Item 9, "Undertakings."
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
See Exhibit Index immediately preceding exhibits.
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represents a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
Provided, however, that paragraphs (1)(i) and 1(ii) do
not apply if the registration statement is on Form S-3 or
Form S-8 and the information required to be included in a
post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for the
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Town of Fairfield, State of Connecticut,
on this 31st day of March, 1998.
COMPETITIVE TECHNOLOGIES, INC.
(Registrant)
By: s/ Frank R. McPike, Jr.
Frank R. McPike, Jr.
Vice President, Finance
and Treasurer
Each person whose signature appears below appoints George M. Stadler
and Frank R. McPike, Jr. and each of them, as their true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her stead, in any capacities
to sign this Registration Statement on Form S-8 and any and all
amendments, including post-effective amendments to this Registration
Statement and to file the same, with all exhibits thereto and all other
documents in connection herewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated and on the 31st day of March, 1998.
Name Title
s/ George M. Stadler President and Director
(George M. Stadler) (Principal Executive
Officer)
s/ Frank R. McPike, Jr. Vice President, Finance
(Frank R. McPike, Jr.) Secretary and Treasurer
(Principal Financial and
Accounting Officer)
s/ George C.J. Bigar Director
(George C.J. Bigar)
s/ Michael G. Bolton Director
(Michael G. Bolton)
s/ Robert H. Brown, Jr. Director
(Robert H. Brown, Jr.)
s/ John M. Sabin Director
(John M. Sabin)
EXHIBIT INDEX
Exhibit
Number Description Page
4.1 Unofficial restated certificate of
incorporation of the registrant. 8-12
4.2 By-laws of the registrant, as amended,
filed as Exhibit 3.1 to the registrant's
Form 10-Q for the quarter ended
October 31, 1997 and hereby incorporated
by reference.
4.3 1997 Employees' Stock Option Plan. 13-24
5.1 Opinion of D'Ancona & Pflaum. 25
23.1 Consent of Coopers & Lybrand. 26
24.1 Power of Attorney (included in signature
section of this registration statement).
Exhibit 4.1
UNOFFICAL RESTATED CERTIFICATE OF INCORPORATION
OF
COMPETITIVE TECHNOLOGIES, INC.
as Amended to March 31, 1998
COMPETITIVE TECHNOLOGIES, INC., a corporation organized and
existing under the laws of the State of Delaware, hereby certifies
as follows:
1. The name of the corporation is COMPETITIVE TECHNOLOGIES,
INC., and the name under which the corporation was originally
incorporated is U.P. Inc. The date of filing of its original
Certificate of Incorporation with the Secretary of State was August
12, 1971.
2. This Restated Certificate of Incorporation only restates
and integrates and does not further amend the provisions of the
Certificate of Incorporation of this corporation as heretofore
amended or supplemented and there is no discrepancy between those
provisions and the provisions of this Restated Certificate of
Incorporation.
3. The text of the Certificate of Incorporation as amended
or supplemented heretofore is hereby restated without further
amendments or changes to read as herein set forth in full:
FIRST: The name of the corporation (hereinafter called
the "Corporation") is Competitive Technologies, Inc.
SECOND: The registered office of the Corporation is to
be located at 100 West Tenth Street, in the City of
Wilmington, in the County of New Castle, in the State of
Delaware. The name of its registered agent at that address is
The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in
any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
FOURTH: The total number of shares of stock of all
classes of stock which the Corporation shall have authority to
issue is 20,035,920 shares, of which 35,920 shares, with a par
value of $25.00 each, are to be Preferred Stock, and
20,000,000 shares, with a par value of $.01 each, are to be
Common Stock.
The designations and the powers, preferences and rights,
and the qualifications, limitations or restrictions of the
classes of stock of the Corporation are as follows:
1. Dividends: The holders of the Preferred Stock
shall be entitled to receive, out of any funds of the
Corporation lawfully available for dividends under the
laws of the State of Delaware, if, as and when declared
by the Board of Directors in its discretion, preferential
dividends at the rate of 5% of the par value of the
Preferred Stock, per share per annum, and no more,
payable quarterly on the 30th day of January, April, July
and October, respectively, in each year, before any
dividends shall be declared or paid upon or set apart
for, or other distribution shall be ordered or made in
respect of, any shares of Common Stock; provided,
however, that dividends on the Preferred Stock shall be
noncumulative, so that if such dividends on the Preferred
Stock are not declared or paid in whole or in part, the
unpaid dividends shall not accumulate.
2. Preference Upon Liquidation: In the event of
any liquidation, dissolution or winding up of the
Corporation or any reduction of its capital resulting in
any distribution of its assets to its stockholders,
whether voluntary or involuntary, the holders of the
Preferred Stock shall be entitled to receive, for each
share thereof, out of the assets of the Corporation,
whether from capital, surplus or earnings available for
distribution to its stockholders, $25.00 per share in
cash, before any distribution of assets of the
Corporation shall be made to the holders of the Common
Stock; but the holders of the Preferred Stock shall be
entitled to no further participation in such
distribution. If, upon any such liquidation,
dissolution, winding up or reduction, the assets of the
Corporation distributable as aforesaid among the holders
of the Preferred Stock shall be insufficient to permit
the payment to them of the full preferential amount
aforesaid, then the entire assets of the Corporation to
be distributed shall be distributed ratably among the
holders of the Preferred Stock in proportion to the full
preferential amount to which they are respectively
entitled. A consolidation or merger of the Corporation,
or a sale or transfer of all or substantially all of its
assets as an entirety, shall not be regarded as a
voluntary liquidation, dissolution or winding up of the
Corporation.
3. Voluntary Redemption: The Corporation may, at
its option, expressed by resolution of its Board of
Directors, at any time or from time to time, redeem the
whole or any part of the Preferred Stock at a redemption
price for each share thereof equal to $25.00. Notice of
any proposed redemption of shares of Preferred Stock
shall be given by the Corporation by mailing a copy of
such notice at least 30 days prior to the date fixed for
such redemption to the holders of record of the shares of
Preferred Stock to be redeemed, at their respective
addresses appearing on the books of the Corporation. If
less than all the shares of Preferred Stock are to be
redeemed as herein provided, the redemption shall be made
in such amount, at such place, by such method, either by
lot or pro rata, and subject to such provisions of
convenience as shall from time to time be determined by
resolution of the Board of Directors. From and after the
date fixed in any such notice as the date of redemption,
unless default shall be made by the Corporation in
providing moneys at the time and place specified for the
payment of the redemption price pursuant to said notice,
all rights of the holders of said shares of Preferred
Stock so called for redemption as stockholders of the
Corporation, except only the right to receive the
redemption price, shall cease and determine and such
shares shall be deemed no longer to be outstanding.
4. Voting Power: The holders of the Preferred
Stock and of the Common Stock shall possess full voting
power for the election of directors and for all other
purposes. Holders of stock of whatever class entitled to
vote shall have one vote for each share of stock held by
them.
5. No Preemptive Rights: No holder of any class
of stock of the Corporation, whether now or hereafter
authorized, shall have any preemptive, preferential or
other rights to subscribe for or purchase or acquire any
shares of any class of stock or any other securities of
the Corporation, whether now or hereafter authorized, and
whether or not convertible into, or evidencing or
carrying the right to purchase, shares or any other
securities now or hereafter authorized, and whether the
same shall be issued for cash, services or property, or
by way of dividend or otherwise.
FIFTH: The name and mailing address of the incorporator
is as follows:
Name Address
Jesse J. Holland 208 South LaSalle Street
Chicago, Illinois 60604
SIXTH: Whenever the vote of stockholders at a meeting
thereof is required or permitted to be taken for or in
connection with any corporate action, the meeting and vote of
stockholders may be dispensed with and such action may be
taken with the written consent of stockholders having not less
than the minimum percentage of the total vote required by
statute for the proposed corporate action, and provided that
prompt notice be given to all stockholders of the taking of
corporate action without a meeting and by less than unanimous
consent.
SEVENTH: The Corporation shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of
Delaware, indemnify any and all persons whom it shall have
power to indemnify under said section from and against any and
all of the expenses, liabilities or other matters referred to
in or covered by said section.
EIGHTH: The Board of Directors shall have power, without
stockholder action:
1. To make By-laws for the Corporation, and to
amend, alter or repeal any By-laws.
2. To set apart out of any of the funds of the
Corporation available for dividends a reserve or reserves
for any proper purpose and to abolish any such reserve or
reserves.
In addition to the powers and authorities herein or by
statute expressly conferred upon it, the Board of Directors
may exercise all such powers and do all such acts and things
as may be exercised or done by the Corporation, subject,
nevertheless, to the provisions of the laws of the State of
Delaware, of this Certificate of Incorporation and of the By-
laws of the Corporation.
NINTH: No director of the Corporation shall be
personally liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty by such director
as a director; provided, however, that this Article NINTH
shall not eliminate or limit the liability of a director to
the extent provided by applicable law (i) for any breach of
the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the General Corporation Law of
the State of Delaware, or (iv) for any transaction from which
the director derived an improper personal benefit. No
amendment to or repeal of this Article NINTH shall apply to or
have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or
omissions of such director occurring prior to such amendment
or repeal.
4. This Restated Certificate of Incorporation was duly
adopted by the Board of Directors in accordance with Section 245 of
the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said COMPETITIVE TECHNOLOGIES, INC. has
caused this Certificate to be signed by GEORE M. STADLER, its
President, and attested by FRANK R. MCPIKE, JR., its Secretary,
this 31st day of March, 1998.
COMPETITIVE TECHNOLOGIES, INC.
By: s/ George M. Stadler
President
ATTEST:
By: s/ Frank R. McPike, Jr.
Secretary
EXHIBIT 4.3
COMPETITIVE TECHNOLOGIES, INC.
1997 EMPLOYEES' STOCK OPTION PLAN
1. Purpose of the 1997 Employees' Stock Option Plan
The purpose of the Plan is to enable the Company to attract,
retain and motivate its employees by providing for or increasing
the proprietary interests of such employees in the Company
through increased stock ownership.
The Plan provides for options which either (i) qualify as
incentive stock options ("Incentive Options") within the meaning
of that term in Section 422 of the Internal Revenue Code of 1986,
as amended, or (ii) do not so qualify under Section 422 of the
Code ("Nonstatutory Options") (collectively "Options"). Any
Option granted under this Plan will be clearly identified at the
time of grant as to whether it is intended to be either an
Incentive Option or a Nonstatutory Option.
2. Definitions.
The following terms, when appearing in the text of this Plan
in capitalized form, will have the meanings set out below:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as
heretofore or hereafter amended.
(c) "Committee" means the committee appointed by the Board
pursuant to Section 3 below.
(d) "Company" means Competitive Technologies, Inc. or any
parent or "subsidiary corporation," as that term is defined by
Section 424(f) of the Code, thereof, unless the context requires
it to be limited to Competitive Technologies, Inc.
(e) "Disabled Grantee" means a Grantee who is disabled
within the meaning of Section 422(c)(6) of the Code.
(f) "Employees" means the class of employees consisting of
individuals regularly employed by the Company on a full-time
salaried basis who are identified as key employees, or such other
employees as the Committee shall so determine.
(g) "Executive Officer" means those individuals who, on the
last day of the taxable year at issue: (i) served as the
Company's chief executive officer or was acting in a similar
capacity, regardless of compensation level; and (ii) the four
most highly compensated executive officers (other than the chief
executive officer) all as determined pursuant to Treasury
Regulation 1.162-27(c)(2).
(h) "Fair Market Value" means, with respect to the common
stock of the Company, the price at which the stock would change
hands between an informed, able and willing buyer and seller,
neither of which is under a compulsion to enter into the
transaction. Fair Market Value will be determined in good faith
by the Committee in accordance with a valuation method which is
consistent with the guidelines set forth in Treasury Regulation
1.421-7 (e) (2) or any applicable regulations issued pursuant to
Section 422(a) of the Code. Fair Market Value will be determined
without regard to any restriction other than a restriction which,
by its terms, will never lapse.
(i) "Grantee" means an eligible Employee under this Plan
who has been granted an Option.
(j) "Incentive Option" means an Option that qualifies for
the benefit described in Section 421 of the Code, by virtue of
compliance with the provisions of Section 422 of the Code.
(k) "Nonstatutory Option" means an Option that is not an
Incentive Option.
(l) "Option" means either an Incentive Option or a
Nonstatutory Option granted under this Plan.
(m) "Option Agreement" means the agreement entered into
between the Company and an individual Grantee and specifying the
terms and conditions of the Option granted to the Grantee, which
terms and conditions will recite or incorporate by reference: (i)
the provisions of this Plan which are not subject to variation;
and (ii) the variable terms and conditions of each Option granted
hereunder which will apply to that Grantee.
(n) "Optionee" means a Grantee, and, under the appropriate
circumstances, his guardian, representative, heir, distributee,
legatee or successor in interest, including any transferee.
(o) "Plan" means this 1997 Employees' Stock Option Plan, as
the same may from time to time be amended.
(p) "Stock" means the Company's common stock.
3. Administration of the Plan.
(a) Committee Membership. The Plan shall be administered
by a committee appointed by the Board, to be known as the
Compensation Committee (the "Committee"). The Committee shall be
not less than two members and comprised solely of Non-employee
Directors, as defined by Rule 16b-3(b)(3)(i) of the Securities
Exchange Act of 1934 ("1934 Act"), or any successor definition
adopted by the Securities and Exchange Commission, and who shall
each also qualify as an Outside Director for purposes of Section
162(m) of the Code. Any vacancy occurring on the Committee may
be filled by appointment by the Board. The Board at its
discretion may from time to time appoint members to the Committee
in substitution of members previously appointed, may remove
members of the Committee and may fill vacancies, however caused,
in the Committee.
(b) Committee Procedures. The Committee shall select one
of its members as chairman and shall hold meetings at such times
and places as it may determine. A quorum of the Committee shall
consist of a majority of its members, and the Committee may act
by vote of a majority of its members present at a meeting at
which there is a quorum, or without a meeting by written consent
signed by all members of the Committee. If any powers of the
Committee hereunder are limited or denied by the Board or under
applicable law, the same powers may be exercised by the Board.
(c) Committee Powers and Responsibilities. The Committee
will interpret the Plan, prescribe, amend and rescind any rules
or regulations necessary or appropriate for the administration of
the Plan, and make such other determinations and take such other
actions it deems necessary or advisable, except as otherwise
expressly reserved for the Board. Subject to the limitations
imposed by the Board or under applicable law and the terms of the
Plan, the Committee may periodically determine which Employees
should receive Options under the Plan, whether the options shall
be Incentive Options or Nonstatutory Options, the number of
shares covered by such Options, the per share purchase price for
such shares, and the terms thereof, including but not limited to
transferability of such Options, and shall have full power to
grant such Options. In making its determinations, the Committee
shall consider, among other relevant factors, the importance of
the duties of the Grantee to the Company, his or her experience
with the Company, and his or her future value to the Company.
All decisions, interpretations and other actions of the Committee
shall be final and binding on all Grantees, Optionees and all
persons deriving their rights from a Grantee or Optionee. No
member of the Board or the Committee shall be liable for any
action taken or failed to be taken in good faith or for any
determination made pursuant to the Plan.
4. Stock Subject to Plan.
This Plan authorizes the Committee to grant Options to
Employees up to the aggregate amount of 275,000 shares of Stock,
subject to eligibility and any limitations specified herein.
Adjustment in the shares subject to the Plan shall be made as
provided in Section 9. Any shares covered by an Option which,
for any reason, expires, terminates or is canceled may be
reoptioned under the Plan.
5. Eligibility
(a) General Rule. All Employees defined in Section 2(f)
shall be eligible.
(b) Ten Percent Stockholders. An employee who owns more
than ten percent (10%) of the total combined voting power of all
classes of outstanding Stock shall not be eligible for
designation as a Grantee of an Incentive Option unless (i) the
exercise price for each share of Stock subject to such Incentive
Option is at least one hundred ten percent (110%) of the Fair
Market Value of a share of Stock on the date of grant, and (ii)
such Incentive Option, by its terms, is not exercisable after the
expiration of five (5) years from the date of grant.
(c) Attribution Rules. For purposes of Subsection (b)
above, in determining stock ownership, an Employee shall be
deemed to own the Stock owned, directly or indirectly, by or for
his brothers, sisters (whether by whole or half blood), spouse,
ancestors and lineal descendants. Stock owned, directly or
indirectly, by or for a corporation, partnership, estate or trust
shall be deemed to be owned proportionately by or for its
stockholders, partners or beneficiaries.
(d) Outstanding Stock. For purposes of Subsection (b)
above, "Outstanding Stock" shall include all Stock actually
issued and outstanding immediately after the grant. "Outstanding
Stock" shall not include shares authorized for issuance under
outstanding options held by the Employee or by any other person.
(e) Individual Limits of Executive Officers. Subject to the
provisions of Section 9 hereof, the number of option shares
granted in a fiscal year to each Executive Officer shall not
exceed 100,000 shares for any fiscal year in which such person
serves as an Executive Officer
(f) Incentive Option Limitation. The aggregate Fair Market
Value of the stock for which Incentive Options granted to any one
eligible Employee under this Plan and under all incentive stock
option plans of the Company, its parent(s) and subsidiaries, may
by their terms first become exercisable during any calendar year
shall not exceed $100,000, determining Fair Market Value of the
stock subject to any Option as of the time that Option is
granted. If the date on which one or more Incentive Options
could be first exercised would be accelerated pursuant to any
other provision of the Plan or any Stock Option Agreement
referred to in Section 6(a), or an amendment thereto, and the
acceleration of such exercise date would result in a violation of
the restriction set forth in the preceding sentence, then
notwithstanding any such other provision the exercise date of
such Incentive Options shall be accelerated only to the extent,
if any, that is permitted under Section 422 of the Code and the
exercise date of the Incentive Options with the lowest option
prices shall be accelerated first. Any exercise date which
cannot be accelerated without violating the $100,000 restriction
of this section shall nevertheless be accelerated, and the
portion of the Option becoming exercisable thereby shall be
treated as a Nonstatutory Option.
6. Terms and Conditions of All Options Under the Plan.
(a) Option Agreement. All Options granted under the Plan
shall be evidenced by a written Option Agreement and shall be
subject to all applicable terms and conditions of the Plan and
may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Committee deems
appropriate for inclusion in an Option Agreement.
(b) Number of Shares. Each Option Agreement shall specify
the number of shares of the Stock each such Employee will be
entitled to purchase pursuant to the Option and shall provide for
the adjustment of such number in accordance with Section 9. Each
Option Agreement shall state the minimum number of shares which
must be exercised at any time, if any.
(c) Nature of Option. Each Option Agreement shall specify
the intended nature of the Option as an Incentive Option, a
Nonstatutory Option or partly of each type.
(d) Exercise Price. Each Option Agreement shall specify
the exercise price. The exercise price of either the Incentive
Option or the Nonstatutory Option shall not be less than one
hundred percent (100%) of the Fair Market Value of a share of
Stock on the date of grant. Subject to the foregoing, the
exercise price under any Option shall be determined by the
Committee in its sole discretion. The exercise price shall be
payable in the form described in Section 7.
(e) Term of Option. The Option Agreement shall specify the
term of the Option. The term of any Option granted under this
Plan is subject to expiration, termination, and cancellation as
set forth within this Plan.
(f) Exercisability. Each Option Agreement shall specify
the date when all or any installment of the Option is to become
exercisable. Such Option shall not be exercisable after the
expiration of such term which shall be fixed by the Committee,
but in any event not later than ten years from the date such
Option is granted. Subject to the provisions of the Plan, the
Committee may grant Options which are vested, or which become
vested upon the happening of an event or events as specified by
the Committee.
(g) Withholding Taxes. Upon exercise of any Nonstatutory
Option (or any Incentive Option which is treated as a
Nonstatutory Option because it fails to meet the requirements set
forth in the Code for Incentive Options), the Optionee must
tender full payment to the Company for any federal income tax
withholding required under the Code in connection with such
exercise ("Withholding Tax"). If the Optionee fails to tender to
the Company the Withholding Tax, the Committee, at its
discretion, shall withhold from the Optionee any and all shares
subject to such Option, and accordingly, subject to Withholding
Tax until such time as either of the following events has
occurred:
(i) the Employee tenders to the Company payment in
cash to pay the Withholding Tax; or
(ii) the Company withholds from the Employee's wages an
amount sufficient to pay the Withholding Tax.
(h) Termination and Acceleration of Option.
For Incentive Options:
(i) If the employment of a Grantee who is not a
Disabled Grantee is terminated without cause, or such
Grantee voluntarily quits or retires under any
retirement plan of the Company, any then outstanding
and exercisable stock option held by such a Grantee
shall be exercisable, in accordance with the provisions
of the Option Agreement, by such Grantee at any time
prior to the expiration date of such Option or within
three months after the date of termination of
employment or service, whichever is the shorter period.
(ii) If the employment of a Grantee who is a Disabled
Grantee is terminated without cause, any then
outstanding and exercisable Option held by such a
Grantee shall be exercisable, in accordance with the
provisions of the Option Agreement, by such a Grantee
at any time prior to the expiration date of such Option
or within one year after the date of such termination
of employment or service, whichever is the shorter
period.
For all Options issued hereunder:
(i) If the Company terminates the employment of a
Grantee for cause, all outstanding stock options held
by the Grantee at the time of such termination shall
automatically terminate unless the Committee notifies
the Grantee that his or her options will not terminate.
A termination "for cause" shall be defined under each
written Option Agreement. The Company assumes no
responsibility and is under no obligation to notify a
Permitted Transferee (as hereafter defined in section
13) of early termination of an Option on account of a
Grantee's termination of employment.
(ii) Whether termination of employment or other service
is a termination "for cause" or whether a Grantee is a
Disabled Grantee shall be determined in each case, in
its discretion, by the Committee and any such
determination by the Committee shall be final and
binding.
(iii) Following the death of a Grantee during
employment, any outstanding and exercisable Options
held by such Grantee at the time of death shall be
exercisable, in accordance with the provisions of the
Option Agreement, by the person or persons entitled to
do so under the Will of the Grantee, or, if the Grantee
shall fail to make testamentary disposition of the
stock option or shall die intestate, by the legal
representative of the Grantee at any time prior to the
expiration date of such Option or within one year after
the date of death, whichever is the shorter period.
(iv) The Committee may grant Options, or amend Options
previously granted, to provide that such Options
continue to be exercisable up to ten years after the
date of grant irrespective of the termination of the
Grantee's employment with the Company, and which vest
upon grant or become vested upon the happening of an
event or events specified by the Committee, although
the exercise of such vested Options in the case of
Incentive Options more than three months after
termination of employment may convert such Options to
Nonstatutory Options with respect to the income tax
consequences of such exercise.
7. Payment for Shares
(a) Cash. Payment in full for shares purchased under an
Option shall be made in cash (including check, bank draft or
money order) at the time that the Option is exercised.
(b) Stock. In lieu of cash an Optionee may, with the
consent of the Committee, make payment for Stock purchased under
an Option, in whole or in part, by tendering to the Company in
good form for transfer, shares of Stock valued at Fair Market
Value on the date the Option is exercised. Such shares will have
been owned by the Optionee or the Optionee's representative for
the time specified by the Committee but in no case shall the
Optionee or his representative have held a beneficial interest in
such tendered shares for a period less than six months prior to
the exercise of the Option.
8. Use of Proceeds from Stock.
Cash proceeds from the sale of Stock pursuant to Options
granted under the Plan shall constitute general funds of the
Company.
9. Adjustments.
Changes or adjustments in the Option price, number of shares
subject to an Option or other specifics as the Committee should
decide will be considered or made pursuant to the following
rules:
(a) Upon Changes in Stock. If the outstanding Stock is
increased or decreased, or is changed into or exchanged for a
different number or kinds of shares or securities, as a result of
one or more reorganizations, recapitalization, stock splits,
reverse stock splits, split-up, combination of shares, exchange
of shares, change in corporate structure, or otherwise,
appropriate adjustments will be made in the exercise price and/
or the number and/or kind of shares or securities for which
Options may thereafter be granted under this Plan and for which
Options then outstanding under this Plan may thereafter be
exercised. The Committee will make such adjustments as it may
deem fair, just and equitable to prevent substantial dilution or
enlargement of the rights granted to or available for Optionees.
No adjustment provided for in this Section 9 will require the
Company to issue or sell a fraction of a share or other security.
Nothing in this Section will be construed to require the Company
to make any specific or formula adjustment.
(b) Prohibited Adjustment. If any such adjustment provided
for in this Section 9 requires the approval of stockholders in
order to enable the Company to grant or amend Options, then no
such adjustment will be made without the required stockholder
approval. Notwithstanding the foregoing, if the effect of any
such adjustment would be to cause an Incentive Option to fail to
continue to qualify under Section 422 of the Code or to cause a
modification, extension or renewal of such stock option within
the meaning described in Section 424 of the Code, the Committee
may elect that such adjustment not be made but rather shall use
reasonable efforts to effect such other adjustment of each then
outstanding Option as the Committee, in its sole discretion,
shall deem equitable and which will not result in any
disqualification, modification, extension or renewal (within the
meaning of Section 424 of the Code) of such Incentive Option.
(c) Further Limitations. Nothing in this Section will
entitle the Optionee to adjustment of his Option in the following
circumstances:
(i) The issuance or sale of additional shares of the
Stock, through public offering or otherwise;
(ii) The issuance or authorization of an additional
class of capital stock of the Company;
(iii) The conversion of convertible preferred stock or
debt of the Company into Stock; and
(iv) The payment of dividends except as provided in
Section 9 (a).
The grant of an Option shall not affect in any way the right or
power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure,
to merge or consolidate or to dissolve, liquidate, sell or
transfer all or any part of its business or assets.
10. Legal Requirements:
(a) Compliance with All Laws. The Company will not be
required to issue or deliver any certificates for shares of Stock
prior to (a) the listing of any such Stock to be acquired
pursuant to the exercise of any Option on any stock exchange on
which the Stock may then be listed, and (b) the compliance with
any registration requirements or qualification of such shares
under any federal securities laws, including without limitation
the Securities Act of 1933, as amended ("1933 Act"), the rules
and regulations promulgated thereunder, or state securities laws
and regulations, the regulations of any stock exchange or
interdealer quotation system on which the Company's securities
may then be listed, or obtaining any ruling or waiver from any
government body which the Company may, in its sole discretion,
determine to be necessary or advisable, or which, in the opinion
of counsel to the Company, is otherwise required.
(b) Compliance with Specific Code Provisions. It is the
intent of the Company that the Plan and its administration
conform strictly to the requirements of Section 422 of the Code
with respect to Incentive Options. Therefore, notwithstanding
any other provision of this Plan, nothing herein will contravene
any requirement set forth in Section 422 of the Code with respect
to Incentive Options and if inconsistent provisions are otherwise
found herein, they will be deemed void and unenforceable or
automatically amended to conform, as the case may be.
(c) Plan Subject to Delaware Law. All questions arising
with respect to the provisions of the Plan will be determined by
application of the Code and the laws of the state of Delaware
except to the extent that Delaware laws are preempted by any
federal law.
11. Rights as a Stockholder.
An Optionee shall have no rights as a stockholder with
respect to any Stock covered by his Option until the date of
issuance of the stock certificate to him after receipt of the
consideration in full set forth in the Option Agreement. Except
as provided in Section 9 hereof, no adjustments will be made for
dividends, whether ordinary or extraordinary, whether in cash,
securities, or other property, or for distributions for which the
record date is prior to the date on which the Option is
exercised.
12. Restrictions on Shares.
Prior to the issuance or delivery of any shares of the Stock
under the Plan, the person exercising the Option may be required
to:
(a) represent and warrant that the shares of the Stock to
be acquired upon exercise of the Option are being acquired for
investment for the account of such person and not with a view to
resale or other distribution thereof;
(b) represent and warrant that such person will not,
directly or indirectly, sell, transfer, assign, pledge,
hypothecate or otherwise dispose of any such shares unless the
sale, transfer, assignment, pledge, hypothecation or other
disposition of the shares is pursuant to the provisions of this
Plan and effective registrations under the 1933 Act and any
applicable state or foreign securities laws or pursuant to
appropriate exemptions from any such registrations; and
(c) execute such further documents as may reasonably be
required by the Committee upon exercise of the Option or any part
thereof, including but not limited to any stock restriction
agreement that the Committee may choose to require.
Nothing in this Plan shall assure any Optionee that shares
issuable under this Option are registered on a Form S-8 under
the 1933 Act or on any other Form. The certificate or
certificates representing the shares of the Stock to be issued or
delivered upon exercise of an Option may bear a legend evidencing
the foregoing and other legends required by any applicable
securities laws. Furthermore, nothing herein or any Option
granted hereunder will require the Company to issue any Stock
upon exercise of any Option if the issuance would, in the opinion
of counsel for the Company, constitute a violation of the 1933
Act, applicable state securities laws, or any other applicable
rule or regulation then in effect. The Company shall have no
liability for failure to issue shares upon any exercise of
Options because of a delay pending the meeting of any such
requirements.
13. Transferability.
The Committee shall retain the authority and discretion to
permit a Nonstatutory Option, but in no case an Incentive Option,
to be transferable as long as such transfers are made only to one
or more of the following: family members, limited to children of
Grantee, spouse of Grantee, or grandchildren of Grantee, or
trusts for the benefit of Grantee and/or such family members
("Permitted Transferee"), provided that such transfer is a bona
fide gift and accordingly, the Grantee receives no consideration
for the transfer, and that the Options transferred continue to be
subject to the same terms and conditions that were applicable to
the Options immediately prior to the transfer. Options are also
subject to transfer by will or the laws of descent and
distribution. Options granted pursuant to this Plan shall not be
otherwise transferred, assigned, pledged, hypothecated or
disposed of in any way, whether by operation of law or otherwise.
A Permitted Transferee may not subsequently transfer an Option.
The designation of a beneficiary shall not constitute a transfer.
14. No Right to Continued Employment.
This Plan and any Option granted under this Plan will not
confer upon any Optionee any right with respect to continued
employment by the Company nor shall they alter, modify, limit or
interfere with any right or privilege of the Company under any
employment agreement heretofore or hereafter executed with any
Optionee, including the right to terminate any Optionee's
employment at any time for or without cause, to change his level
of compensation or to change his responsibilities or position.
15. Corporate Reorganizations.
Upon the dissolution or liquidation of the Company, or upon
a reorganization, merger or consolidation of the Company as a
result of which the outstanding securities of the class then
subject to Options hereunder are changed into or exchanged for
cash or property or securities not of the Company's issue, or
upon a sale of substantially all the property of the Company to,
or the acquisition of stock representing more than eighty percent
(80%) of the voting power of the stock of the Company then
outstanding by another corporation or person, the Plan will
terminate and all Options will lapse. The result described above
will not occur if provision is made in writing in connection with
such transaction for the continuance of the Plan and/or for the
assumption of Options earlier granted, or the substitution for
such Options of options covering the stock of a successor
employer corporation, or a parent or a subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and
prices, in which event the Plan and Options theretofore granted
will continue in the manner and under the terms so provided. If
the Plan and unexercised Options shall terminate pursuant to the
foregoing, all persons holding any unexercised portions of
Options then outstanding shall have the right, at such time prior
to the consummation of the transaction causing the termination as
the Company shall designate, to exercise the unexercised portions
of their options, including the portions thereof which would but
for this Section 15 not yet be exercisable.
16. Modification, Extension and Renewal.
(a) Options. Subject to the conditions of and within the
limitations prescribed in the Plan herein, the Committee may
modify, extend, cancel or renew outstanding Options.
Notwithstanding the foregoing, no modification will, without the
prior written consent of the Optionee, alter, impair or waive any
rights or obligations associated with any Option earlier granted
under the Plan.
(b) Plan. The Board may at any time and from time to time
interpret, amend or discontinue the Plan, subject to the
limitation, however, that, except as provided in Section 9
(relating to adjustments upon changes in stock), no amendment
shall be made, except upon stockholder approval, which will:
(1) Increase the number of shares reserved for
Options under the Plan; or
(2) Reduce the Option price below 100% of Fair
Market Value at the time an Option is granted;
or
(3) Change the requirements for eligibility for
participation under the Plan.
17. Plan Date and Duration.
The Plan shall take effect on the date it is adopted by the
Board subject to approval by the stockholders. Options may not
be granted under this Plan after September 30, 2007.
D'ANCONA & PFLAUM
Suite 2900
30 North LaSalle Street
Chicago, Illinois 60602
Telephone (312)580-2000
Fax (312)580-0923
EXHIBIT 5.1
March 31, 1998
Competitive Technologies, Inc.
1960 Bronson Road
Fairfield, CT 06430
Gentlemen:
In connection with the proposed registration under the
Securities Act of 1933, as amended, by Competitive Technologies,
Inc., a Delaware corporation (the "Company"), on Form S-8 (the
"Registration Statement") of 275,000 shares of its Common Stock,
$.01 par value (the "Shares"), issuable in connection with the 1997
Employees' Stock Option Plan (the "1997 Plan"), we hereby advise
you that as counsel for the Company we have examined the Restated
Certificate of Incorporation of the Company and all amendments
thereto, the By-laws of the Company, certain minutes of the
Company, and such other documents and records as we have deemed
necessary for the purposes of this opinion.
Based upon such examination, it is our opinion that:
(1) The Company is a validly organized and existing
corporation under the laws of the State of Delaware.
(2) The Shares are duly authorized and, when issued pursuant
to the terms of the 1997 Plan, will be legally issued, fully paid
and non-assessable.
Very truly yours,
D'ANCONA & PFLAUM
By: s/ Merrill A. Freed
Merrill A. Freed
242975/1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statement of Competitive Technologies, Inc. on Form S-8 pertaining
to the 1997 Employees' Stock Option Plan, of our report dated
October 15, 1997, on our audits of the consolidated financial
statements of Competitive Technologies, Inc. as of July 31, 1997
and 1996, and for each of the three years in the period ended July
31, 1997, which report is included in the Annual Report on Form 10-
K.
s/ COOPERS & LYBRAND L.L.P.
Stamford, Connecticut
March 31, 1998
