SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [x]
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Check the appropriate box:
[ ] Preliminary Proxy Statement
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Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Competitive Technologies, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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applies:
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computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and
state how it was determined):
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Notes:
COMPETITIVE TECHNOLOGIES, INC.
1960 Bronson Road
Fairfield, Connecticut 06430
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on February 12, 1999
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 Sheraton Stamford Hotel, 2701 Summer Street, Stamford,
Connecticut 06905 on Friday, February 12, 1999 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;
2. Considering and acting upon a proposal to approve the
1999 Directors' Stock Option Plan and reserve 400,000
shares of Common Stock for option grants under the Plan;
and
3. 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
December 28, 1998 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
s/ Frank R. McPike, Jr.
Frank R. McPike, Jr.
Secretary
January 4, 1999
PROXY STATEMENT
COMPETITIVE TECHNOLOGIES, INC.
1960 Bronson Road
Fairfield, Connecticut 06430
--------------------------------------
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 February 12,
1999. 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; and FOR approval of the 1999
Directors' Stock Option Plan. 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
January 11, 1999.
Only the holders of record of the Company's 5,972,303
outstanding shares of Common Stock and 2,427 outstanding shares of
Preferred Stock at the close of business on December 28, 1998, 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
("broker non-votes"), 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 five directors is to be elected by
plurality vote. The five nominees proposed by the Board of
Directors are named below.
All of the nominees named below are currently directors of the
Company. 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.
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 Currently During Past Five Director of
Held with Years; Other Public Company
Company Directorships Since
George C.J. Bigar, Professional Investor. December,
42 1996
Michael G. Bolton, Managing Director, Pennsylvania September,
55 Early Stage Partners (a 1994
Safeguard Scientifics, Inc.
venture capital fund), since
September, 1997; prior thereto
Vice President, Lehigh
University.
Robert H. Brown, Jr., President and CEO, RHB Capital, March, 1998
45 LLC (a private investment
company), since July, 1998;
prior thereto Executive Vice
President, Director of Corporate
Finance, Dain Rauscher
Incorporated (an investment
banking firm). Also a Director
of Emerson Radio Corporation,
Stevens Graphics Corporation
and Claimsnet.com.
Samuel M. Fodale, President, Central Maintenance October, 1998
55 Services, Inc. (a service and
warehousing corporation serving
the automobile industry).
John M. Sabin, Executive Vice President and December,
Chairman of Chief Financial Officer of 1996
the Board, Hudson Hotels Corporation
44 (a limited service hotel
development and management
company) since May, 1998;
Senior Vice President
and Treasurer, Vistana, Inc.
(a developer of vacation
timeshares) February, 1997
to May, 1998; Vice President,
Finance, Choice Hotels
International, Inc. October,
1996 to February, 1997; Vice
President-Mergers and Acquisi-
tions, Choice Hotels International,
Inc. June, 1995 to October, 1996;
Vice President-Finance and
Assistant Treasurer, Manor
Care, Inc. and Choice Hotels
International, Inc. December, 1993
to October, 1996; Vice President-
Corporate Mergers and Acquisitions,
Marriott Corporation, 1988 to
December, 1993.
Messrs. Brown and Sabin (Chairman) are members of the audit
committee. Mr. Fodale was appointed to the Audit Committee in October,
1998. Messrs. Bolton (Chairman), Brown and Sabin are members of the
nominating committee. Messrs. Bigar, Bolton, Brown (Chairman) and Sabin
are members of the compensation and stock option committee. The
compensation committee also serves as the incentive compensation
committee.
The following table sets forth information with respect to the
Company's sole executive officer:
Name and Age Positions and Offices with the Company
Frank R. McPike, Jr., President and Chief Operating Officer of the
49 Company since October, 1998; Interim Chief
Executive Officer of the Company from August to
October, 1998; Secretary of the Company since
August, 1989; Treasurer of the Company since
July, 1988; Vice President, Finance and Chief
Financial Officer of the Company since December,
1983; Director of the Company from July, 1988 to
March, 1998.
The terms of all officers of the Company are until the first
meeting of the newly elected Board of Directors following the
forthcoming annual meeting of stockholders of the Company and until
their respective successors shall have been duly elected and shall have
qualified, subject to employment agreements. Mr. McPike has an
employment contract with the Company; this contract is described in
Executive Compensation - Employment Agreements below.
BENEFICIAL OWNERSHIP OF SHARES
The following information indicates the beneficial ownership of the
Company's Common Stock by each director and nominee, by the sole current
executive officer 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 January 4, 1999 except as
otherwise indicated in the footnotes.
Name (and Address if more
than 5%) of Beneficial Amount Beneficially
Owners Owned (A) Percent (B)
Directors and Nominees
George C.J. Bigar 14,918 --
Michael G. Bolton 10,512 --
Robert H. Brown, Jr. 3,500 --
Samuel M. Fodale 162,325 (C) 2.7%
John M. Sabin 4,918 --
Executive Officer
Frank R. McPike, Jr. 86,323 (D) 1.4%
All directors and executive
officers as a group 282,496 (E) 4.7%
Additional 5% Owners
Dimensional Fund Advisors, Inc. 311,800 (F) 5.2%
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) Includes 99,100 shares of Common Stock held by Central Maintenance
Services, Inc., 9,000 shares of Common Stock held by Missouri
Recycling - St. Louis, Inc., 3,200 shares of Common Stock held by
children and 2,000 shares of Common Stock held by spouse. Mr.
Fodale has full voting and investment power for all shares
included.
(D) Consists of 17,781 shares of Common Stock, plus 68,542 stock
options deemed exercised solely for purposes of showing total
shares owned by Mr. McPike. Includes 4,423 shares of Common Stock
held by Webster Trust as Trustee under the Company's Employees'
Common Stock Retirement Plan, as to which Mr. McPike has shared
investment power. Does not include 8,781 shares of Common Stock
allocated to Mr. McPike under said Retirement Plan; Trustee has
sole voting and investment power with regard thereto.
(E) Consists of 213,954 shares of Common Stock plus 68,542 stock
options to purchase shares of Common Stock deemed exercised solely
for purposes of showing total shares owned by such group.
(F) Information taken from Schedule 13G which states that the
information is as of December 31, 1997 and shows sole voting power
as to 199,700 shares and sole power of disposition as to 311,800
shares. The Schedule 13G states that all securities reported on
the schedule are owned by advisory clients of Dimensional Fund
Advisors, Inc. and Dimensional Fund Advisors, Inc. disclaims
beneficial ownership of all such securities.
At January 4, 1999, 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 the sole current executive officer
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 January 4, 1999.
Shares of Common Percent
Name Stock of UOP (A) of Class (B)
George C.J. Bigar None --
Michael G. Bolton None --
Robert H. Brown, Jr. None --
Samuel M. Fodale None --
John M. Sabin None --
Frank R. McPike, Jr. 14,000 --
All directors and executive
officers of the Company
as a group 14,000 --
(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 accrued,
earned or paid by the Company for services rendered during each of the
fiscal years ended July 31, 1998, 1997 and 1996 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,
1998 in excess of $100,000 (the "Specified Executives"):
SUMMARY COMPENSATION TABLE
Annual Compensation (A)
Long Term
Compensation
Awards
Securities All Other
Name and PrincipalFiscal Underlying Compensation
Position Year Salary ($)Bonus ($) Options (#) ($)
George M. Stadler, 1998 $197,000 -- 20,000 $318,245 (B)
President and 1997 197,808 18,000 20,000 15,105 (C)
Chief Executive 1996 172,923 -- 30,000 15,874 (C)
Officer
Frank R. McPike, 1998 167,000 -- 20,000 17,460 (C)
Jr., Vice Presi- 1997 167,712 12,000 12,000 14,320 (C)
dent, Finance and 1996 149,076 -- 15,000 14,977 (C)
Chief Financial
Officer
(A) 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.
(B) Includes $300,000 accrued in the fiscal quarter ended July 31,
1998, to settle Mr. Stadler's employment contract which ran until
July 31, 1999. On October 15, 1998, Mr. Stadler resigned from all
positions with the Company. See Employment Agreements below. Also
includes amounts contributed for Mr. Stadler to Competitive
Technologies, Inc.'s Employees' Common Stock Retirement Plan. The
Company contributed shares of its Common Stock valued at the mean
between its high and low prices on the American Stock Exchange on
July 31, 1998. Also includes premiums paid for term life insurance
policy (see below).
(C) Consists principally of amounts contributed for each executive
officer to Competitive Technologies, Inc.'s Employees' Common Stock
Retirement Plan. The Company contributed shares of its Common
Stock valued at the mean between its high and low prices on the
American Stock Exchange on July 31 of each year. Also includes
premiums paid for term life insurance policies (see below).
Option Grants
The following table summarizes the stock options granted by the
Company during the fiscal year ended July 31, 1998 to the Specified
Executives:
OPTION GRANTS IN LAST FISCAL YEAR
Individuals Grants
% of
Total
Number Options
of Granted
Securities to
Underlying Employees Grant
Options in Exercise Date
Granted Fiscal Price Expiration Present
Name (#) Year ($/Sh) Date Value ($) (C)
George M. Stadler 20,000 (A) 24% $11.094 (A) $62,207
Frank R. McPike, 20,000 (B) 24% 11.094 7/31/07 $62,207
Jr.
(A) The expiration date at time of grant was July 31, 2007. Options
for 5,000 shares became exercisable on August 1, 1998. The
remaining options as originally granted were to vest as shown in
note (B) below. Under the terms of the Voluntary Release and Exit
Agreement between the Company and Mr. Stadler described below,
options for another 5,000 shares became exercisable on October 15,
1998 and Mr. Stadler forfeited options for 10,000 shares. Under
the terms of the Voluntary Release and Exit Agreement, all
exercisable options may be exercised on or before July 31, 2001.
(B) Options become exercisable as follows:
25% August 1, 1998;
25% August 1, 1999;
50% August 1, 2000.
(C) The fair value of each option grant was estimated on the grant date
of August 1, 1997, using the Black-Scholes option-pricing model
with the following assumptions: (1) divided yield, 0.0%; (2)
expected volatility, 42.1%; (3) risk-free interest rate, 6.39%; and
(4) expected life, 4 years. These amounts have not been adjusted
for any changes noted in note (A) above subsequent to the grant
date.
Option Exercises and Year End Value
The following table summarizes the stock options exercised during
the fiscal year ended July 31, 1998 and stock options held at the end of
the fiscal year ended July 31, 1998 by the Specified Executives:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION
VALUES
Number of
Securities Value of
Underlying Unexercised
Shares Unexercised In-the-Money
Acquired Options Options at
on Value at FY-End (#) FY-End ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) $ Unexercisable Unexercisable
George M. Stadler None -- 180,000/20,000 $152,500/N/A
Frank R. McPike, Jr. 10,958 $51,278 83,542/20,000 54,574/N/A
Employment Agreements
On October 15, 1998, Mr. Stadler and the Company entered into a
Voluntary Release and Exit Agreement under which Mr. Stadler resigned
from his employment, positions, offices and directorships with the
Company, including his employment under an employment contract dated
August 1, 1995 which had provided for a term of employment through July
31, 1999. The Voluntary Release and Exit Agreement provided, among
other things, that (i) the Company will continue to pay Mr. Stadler his
base salary at the rate of $197,000 per year through July 31, 1999; (ii)
at Mr. Stadler's request received after March 20, 1999, the Company will
pay the remaining balance of the salary continuation in a lump sum
payment; (iii) the Company will pay Mr. Stadler the gross sum of $25,000
to cover unused vacation pay; (iv) the Company will pay the costs of
outplacement assistance for Mr. Stadler up to six months at up to $2,000
per month; (v) the Company will make additional payments in connection
with maintenance of health, life and dental insurance and car expenses
through July 31, 1999; and (vi) 190,000 currently vested options held by
Mr. Stadler under the Company's stock option plans will remain vested
through July 31, 2001.
On January 7, 1997, the Company entered into an employment contract
with Frank R. McPike, Jr. providing for his employment as Chief
Financial Officer of the Company through January 6, 2000 and for payment
of compensation to him at a minimum rate of $167,000 per year with such
rate to be reviewed annually by the Board of Directors. The agreement
provides for automatic one-year renewals beginning in 2000 unless
terminated by either party and for noncompetition by Mr. McPike for two
years following termination. 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 $500,000 for Mr.
Stadler and $250,000 for Mr. McPike. Premiums of $1,245 for Mr.
Stadler's policy in each of 1998, 1997 and 1996 and $460 for Mr.
McPike's policy in each of 1998, 1997 and 1996 were paid by the Company.
Through December 31, 1996, the Company maintained a simplified
employee pension ("SEP") plan for its employees pursuant to the Internal
Revenue Code. Effective January 1, 1997, the Company established a 401-
K plan. Under both the SEP plan and the 401-K plan, an eligible
employee may elect a salary reduction up to 15% of his compensation as
defined in the plan, to be contributed by the Company to the plan for
the employee. Employee contributions for any calendar year are limited
to a specific dollar amount determined by the Internal Revenue Service
($9,500 for 1997 and $10,000 for 1998). For fiscal 1998, the Company
contributed $13,768 for Mr. Stadler and $13,768 for Mr. McPike. The
amounts contributed for Messrs. Stadler and McPike in fiscal 1998
covered two annual calendar years and did not exceed the Internal
Revenue Service limitation.
Effective August 1, 1990, the Company adopted the Competitive
Technologies, Inc. Employees' Common Stock Retirement Plan (the
"Retirement Plan"). The Retirement Plan is a qualified stock bonus plan
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 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 generally will
be twice as large in proportionate terms as the contribution made with
respect to compensation below that 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 may be contributed
to the Retirement Plan in any year is the number of shares with a fair
market value equal to 15% of that year's compensation reduced by the
401-K plan contributions made for 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 his 401-K plan contributions.
Participants become entitled to distributions of the vested shares
allocated to their accounts upon disability, death or other termination
of employment. Participants obtain a 100% vested interest in the shares
allocated to 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 contributed to the Retirement Plan is held in the
custody of the Retirement Plan's trustee, Webster Trust in Westport,
Connecticut. The trustee has the power to vote Company shares owned by
the Retirement Plan. For the fiscal year ended July 31, 1998, the Board
authorized a contribution of 11,594 shares. Shares allocated to Messrs.
Stadler and McPike under the Retirement Plan for the year ended July 31,
1998, were 1,971 and 1,971, respectively, and were 3,942 shares for all
executive officers as a group. See also Summary Compensation Table -
"All Other Compensation" for dollar values ascribed to contributions for
Messrs. Stadler and McPike.
The Company has an incentive compensation plan pursuant to which an
amount equal to 10% of the operating income of the Company (defined and
adjusted as provided in said plan) shall be credited each year to an
incentive fund from which cash awards are to 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 and a
1997 Employees' Stock Option Plan ("the Company Option Plans") with
respect to its Common Stock, $.01 par value, which provide for granting
either incentive stock options under Section 422 of the Internal Revenue
Code or nonqualified options. (Incentive options under both Company
Option Plans and non-qualified options granted under the 1997 Employees'
Stock Option Plan must be granted at not less than 100% of fair market
value on the grant date. Nonqualified options under the Key Employees'
Stock Option Plan may be granted at not less than 85% of fair market
value on the grant date.) Stock appreciation rights may also be granted
under the Key Employees' Stock 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
granted, 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 $750 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. Directors who participate in telephonic board and/or committee
meetings are paid one half the fee for attendance at such meetings.
Out-of-pocket expenses involved in attendance are also reimbursed.
Commencing January 1, 1997, in addition to meeting fees, outside
directors are paid an annual cash retainer of $5,000, payable in
quarterly installments.
The Company has a 1996 Directors' Stock Participation Plan pursuant
to which, on the first business day of January from January 1997 through
January 2006, the Company issues, to each non-employee 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) $15,000 divided by the per share fair market value of such stock on
the issuance date, or (ii) 2,500 shares. If a non-employee director
were to leave the Board after serving at least one full year but prior
to the January issuance date, the annual stock compensation described
above would be payable in shares on a pro-rata basis up to the
termination date. In January, 1998 an aggregate of 10,908 shares were
issued under this plan (1,818 each to Messrs. Bigar, Bolton and Sabin
and three directors who did not stand for re-election at the last annual
meeting). On April 1, 1998 an aggregate of 1,098 shares were issued
under this plan to three (3) directors who did not stand for re-
election. On January 4, 1999, an aggregate of 7,500 shares were issued
under this plan (2,500 each to Messrs. Bigar, Bolton and Sabin). The
shares issued under this plan have been registered under the Securities
Act of 1933.
On January 4, 1999, pursuant to Board approval in December, 1998,
the Company issued 2,500 shares of Common Stock to Mr. Brown and 625
shares of Common Stock to Mr. Fodale as special grants. These grants
were outside of the 1996 Directors' Stock Participation Plan since
neither of these two directors had served a full year. The Board felt,
however, that it was equitable to grant these shares in recognition of
the important contributions which both directors have made during a time
when the affairs of the Company have required a high level of commitment
on the part of all of the directors. The shares to Messrs. Brown and
Fodale were not registered and certificates for these shares will
contain restrictive legends.
If the proposal described below to approve the 1999 Directors'
Stock Option Plan is adopted, the 1996 Directors' Stock Participation
Plan will be terminated.
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 compensation program that consists of salary and
performance bonus (which are generally reviewed in December of each
year) 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 pages 11 and 12). In addition, the Committee
from time to time may award individual executives bonuses based upon
specific events that enhance the value of the Company. In August, 1998,
the Committee awarded a salary increase to Mr. McPike in recognition of
his increased responsibilities in connection with Mr. Stadler's leave of
absence and subsequent resignation.
The Committee determines options to be granted under the Company
Option Plans. These plans provide additional incentive to maximize
stockholder value. The plans may also utilize vesting periods to
encourage option recipients 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:
George C.J. Bigar
Michael G. Bolton
Robert H. Brown, Jr.
John M. Sabin
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, 1993 in the Company's Common Stock, the American Stock Exchange
Market Index and a published SIC code index of public companies.
(I N S E R T G R A P H)
Fiscal Year Ending July 31,
1993 1994 1995 1996 1997 1998
Competitive
Technologies,
Inc. $100.00 $ 89.55 $ 72.39 $122.39 $131.34 $101.49
Industry Index
6794 $100.00 $107.59 $205.81 $407.71 $440.44 $494.74
Broad Market
AMEX $100.00 $102.49 $124.30 $127.22 $151.19 $165.02
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Mr. Bigar failed to file on a timely basis one report required by
Section 16(a) of the Securities Exchange Act of 1934 with regard to one
transaction in the company's securities.
BOARD MEETINGS AND COMMITTEES
During the last full fiscal year, ten (10) meetings of the Board
of Directors of the Company were held. During the same period the audit
committee met twice, the nominating committee met once and a special
committee formed to address the concerns of the 13-D group described in
the proxy statement for the prior annual meeting of the Company held
March 31, 1998, and consisting of Messrs. Bolton, Sabin and Stadler, met
six 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.
The function of the audit committee is to review with the Company's
auditors the scope and adequacy of the audit and the Company's
accounting practices, procedures and policies and to advise 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 Plans 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.)
PROPOSAL TO APPROVE THE
1999 DIRECTORS' STOCK OPTION PLAN
The Board of Directors has adopted, subject to stockholder
approval, the 1999 Directors' Stock Option Plan (the "1999 Option
Plan"). The 1999 Option Plan, if approved by the stockholders, will
replace the 1996 Directors' Stock Participation Plan (the "1996
Participation Plan"), which is currently in effect as described above
under "Director Compensation."
Reasons for Adoption of the 1999 Option Plan
As stated in the proxy statement for last year's annual meeting,
the Board elected at that meeting was to undertake a review of the
compensation structure of the Company, including directors, with a view
to structuring compensation to better relate it to the financial
performance of the Company and the market performance of the Company's
stock.
The Board believes that replacing the 1996 Participation Plan with
the 1999 Option Plan is an important step toward that goal:
- Under the 1996 Participation Plan, the shares of the Company's
Common Stock which were granted annually to directors had the same
economic effect as a cash retainer.
- Under the 1999 Option Plan, initial option grants will be at
120% of fair market value on the grant date and subsequent grants will
be at 100% of fair market value on the grant date. There will be no
economic benefit to directors from the grant of such options unless and
until the market price of the Company's Common Stock rises above the
respective option exercise prices. The option compensation to directors
under the new plan, in contrast to the stock grants under the existing
plan, will better relate to the future financial performance of the
Company and the market performance of its stock.
An additional purpose of the 1999 Option Plan will be to assist the
Company in attracting and retaining qualified directors.
Description of the 1999 Option Plan
The persons who will be eligible to receive options under the 1999
Option Plan will be directors of the Company who are not employees of
the Company or any subsidiary. All of the five current directors of the
Company will be eligible to receive options.
If the current directors are re-elected at the forthcoming annual
meeting, each director will receive an initial option grant to purchase
50,000 shares of the Company's Common Stock at an exercise price of 120%
of the fair market value of such stock on the meeting date. If a new
person who is eligible to receive options is elected a director after
the forthcoming annual meeting, whether by the stockholders or by the
Board, such new director will also receive an initial option grant to
purchase 50,000 shares of the Company's Common Stock at an exercise
price of 120% of the fair market value of such stock on the date the new
director is first elected to the Board.
Each eligible director holding office on the first business day of
January of each year subsequent to the date on which the director
received the initial option grant will receive an additional option
grant to purchase 5,000 shares of the Company's Common Stock. The
exercise price of these subsequent option grants will be 100% of the
fair market value of such stock on the grant date.
The term of each option will be five years from the grant date.
Options will vest 50% on the grant date and 25% each on the first and
second anniversaries of the grant date. The Board will have authority
to provide that options will become vested upon the happening of an
event or events specified by the Board. If a person's directorship is
terminated for any reason, the option may be exercised for a period of
two years after termination, but only to the extent that it was vested
on the termination date. In addition, no option may be exercised after
expiration of its five-year term.
Payment for shares purchased on exercise of an option will be in
cash or shares of Common Stock owned at least six months prior to
exercise and valued at fair market value on the exercise date.
An aggregate of 400,000 shares of the Company's Common Stock will
be reserved for issuance under the 1999 Option Plan. If the current
directors are re-elected at the forthcoming annual meeting, an aggregate
of 250,000 initial option grants will be made to those directors on the
meeting date. Any shares covered by options which expire or are
terminated may be re-optioned under the Plan.
The Company expects to register under the Securities Act of 1933
the shares issuable under the 1999 Option Plan.
Provision is made in the 1999 Option Plan for adjustments by the
Board for such matters as stock splits and reorganizations to prevent
substantial dilution or enlargement of the rights covered or to be
covered by option grants. Generally, options will not be transferable,
but the Board will have the authority, in its discretion, to permit
limited family transfers.
At any time the Board may amend or discontinue the 1999 Option
Plan, except that no amendment will be made, except with stockholder
approval, that will increase the number of shares reserved for options
or reduce the option prices below those stated (except for adjustments
as described above) or change the requirements for participation under
the Plan. No options may be granted under the Plan after February 29,
2004.
A complete copy of the 1999 Option Plan is attached to this Proxy
Statement as Exhibit A, and we urge you to read the Exhibit for a more
complete understanding.
Had the 1999 Option Plan been in effect on March 31, 1998, the date
of last year's annual meeting of stockholders, options would have been
granted as follows:
Number of Option Exercise
Name and Position Options Price per Share
Specified Executives 0 N/A
Specified Executives as a Group 0 N/A
Current Non-Executive Directors:
Four directors on
March 31, 1998 200,000 $ 11.7000
One director elected
October 26, 1998 50,000 $ 4.3125
Five directors on
January 4, 1999 25,000 $ 4.84375
Non-Executive Officers and
Employees as a Group 0 N/A
On January 4, 1999, the last reported sale price of the Company's
Common Stock on the American Stock Exchange, on which the Company's
Common Stock is listed, was $4.875 per share.
Federal Income Tax Consequences
The grant of options under the 1999 Option Plan will have no
immediate tax consequences to the Company or the optionee. On exercise
the difference between the option price and the fair market value of the
shares on the measuring date (normally the exercise date of the option)
will be taxable as ordinary income to the optionee and will be
deductible by the Company. A portion of the excess of the deduction
allowed the Company over the value of the option when issued may be
subject to the alternative minimum tax imposed upon corporations. Gain
or loss on the subsequent sale of the shares will be eligible for
capital gain or loss treatment by the optionee and will have no federal
income tax consequences to the Company. The optionee will have a tax
basis in the shares equal to the exercise price of the option plus the
amount taxable as ordinary income to the optionee upon the acquisition
of the shares.
If the optionee pays the exercise price of the options by tendering
shares that the optionee already owns, the exchange will constitute a
tax-free exchange to the optionee to the extent that the same number of
shares are received as tendered. The new shares will retain the basis
and holding period of the tendered shares. If the optionee receives
additional shares (representing the excess of the fair market value of
all shares received as a result of exercising the option over the option
price), the fair market value of the additional shares will be taxable
as ordinary income to the optionee and the optionee will have a basis in
these shares equal to their fair market value. The Company will receive
an income tax deduction equal to the fair market value of these shares
to the same extent that they are taxable to the optionee.
The described tax consequences are based on current laws,
regulations and interpretations thereof, all of which are subject to
change. In addition, the discussion is limited to federal income taxes
and does not attempt to describe state and local tax effects which may
accrue to participants or the Company.
Vote Required for Approval; Board Recommendation
The vote required for approval of the 1999 Option Plan is a
majority of the shares of holders of Common and Preferred Stock (voting
as a single class) present or represented and entitled to vote on the
matter at a meeting at which a quorum (the holders of a majority of the
Company's outstanding shares of Common and Preferred Stock) is present
in person or by proxy.
Awards made pursuant to the 1999 Option Plan will be in addition
to the cash fees paid to non-employee directors. If the 1999 Option
Plan is approved by the stockholders, the 1996 Participation Plan will
be terminated. If stockholder approval is not obtained, the 1996
Participation Plan will continue in effect. See "Director Compensation"
above.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL
OF THE 1999 OPTION PLAN.
INFORMATION REGARDING INDEPENDENT PUBLIC
ACCOUNTANTS
PricewaterhouseCoopers LLP and its predecessor firm, Coopers &
Lybrand L.L.P., served as independent public accountants for the fiscal
year ended July 31, 1998, and PricewaterhouseCoopers has been selected
by the Board of Directors to serve for the current year. A
representative of PricewaterhouseCoopers is expected to be present at
the annual meeting to make a statement if he desires to do so and to be
available to respond to appropriate questions.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the next
annual meeting (expected to be held in early January, 2000) under SEC
Rule 14a-8 must be received by the Company for inclusion in the
Company's proxy statement and form of proxy relating to that meeting
(expected to be mailed in late November, 1999) not later than August 2,
1999.
Notice of stockholder matters intended to be submitted at the next
annual meeting outside the processes of Rule 14a-8 will be considered
untimely if not received by the Company a reasonable time before the
Company mails its proxy materials for its next annual meeting. Since
the Company expects to mail its proxy materials in late November, 1999,
the Company intends to take the position that notice of such matters is
untimely if not received by October 18, 1999. The discretionary
authority described in the last sentence of this proxy statement will be
conferred with respect to any such untimely matters.
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,
1998, 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 1960 Bronson Road, Post Office Box 340, Fairfield,
Connecticut 06430.
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: January 4, 1998
EXHIBIT A
COMPETITIVE TECHNOLOGIES, INC.
1999 DIRECTORS' STOCK OPTION PLAN
1. Purpose
This Stock Option Plan ("the Plan") is intended to assist
Competitive Technologies, Inc., a Delaware corporation (the "Company"),
in attracting and retaining qualified directors ("Directors") and to
promote the best interests of the Company by giving its Directors a
proprietary interest in and closer identity with the Company through
increased stock ownership.
2. Eligibility
The persons who shall be eligible to receive options under the Plan
("Options") shall be Directors of the Company who are not employees of
the Company or any subsidiary of the Company (the "Eligible Directors"
or "Grantees").
3. Stock
Subject to the provisions of Section 10, an aggregate of 400,000
shares of the Company's common stock, $.01 par value ("Common Stock")
will be reserved for issuance upon the exercise of Options to be granted
from time to time under the Plan. In the event that any outstanding
Option under the Plan for any reason expires or is canceled or
terminated, the shares of Common Stock allocable to the unexercised
portion of such Option may again be subject to an Option under the Plan.
4. Administration
The Board of Directors (the "Board") will administer and interpret
the Plan, prescribe, amend and rescind any rules or regulations
necessary or appropriate for administration of the Plan and make such
other determinations and take such other actions it deems necessary or
advisable. All decisions, determinations, interpretations and other
actions by the Board shall be final and binding on all Grantees of
Options granted under the Plan and all persons deriving their rights
from a Grantee. No member of the Board shall be liable for any action
taken or failed to be taken in good faith or determination made pursuant
to the Plan.
5. Terms and Conditions of Options
Options granted pursuant to the Plan shall be evidenced by option
agreements in such form as the Board shall from time to time approve
("Option Agreements"), which Option Agreements shall comply with and be
subject to the following terms and conditions:
(a) Grant Date. On the day of the next annual meeting of
stockholders, expected to be held in February 1999, each Eligible
Director who is elected as a Director at such meeting shall receive
an Option for 50,000 shares of the Company's Common Stock and on
the date each new Eligible Director is elected to office during the
term of this Plan, whether by the stockholders or by the Board,
such new Eligible Director shall receive an Option for 50,000
shares of the Company's Common Stock (in each case an "Initial
Director Grant"). Each Eligible Director holding office on the
first business day of January of each subsequent year from the date
on which such Director received his or her Initial Director Grant
will receive an additional Option for 5,000 shares of the Company's
Common Stock ("Subsequent Grant").
(b) Fair Market Value. The fair market value for purposes of the
Plan is defined as the average of the high and the low sales prices
as of a specified date as reported on the principal exchange on
which the Company's Common Stock is traded, or if such sales price
is not available, as determined in good faith (using customary
valuation methods) by resolution of the Board ("Fair Market
Value").
(c) Option Price. Each Option Agreement shall state the price at
which the Option shares therein may be exercised. For each Initial
Director Grant the Option price shall be equal to 120% of the Fair
Market Value on the grant date. For each Subsequent Grant the
Option price shall be equal to 100% of the Fair Market Value on the
grant date.
(d) Term. The term of any Option shall be five (5) years from its
grant date.
(e) Exercisability. Each Option shall vest 50% on the grant date
and 25% each on the first and second anniversaries of the grant
date; provided, however, that the Board shall have authority to
award Options and to amend Options previously granted to provide
that Options will become vested upon the happening of an event or
events specified by the Board.
(f) Transferability. The Board shall retain authority and
discretion to permit an 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 Transferees?), 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.
(g) Termination of Option. An Option shall terminate and shall
not be exercisable if the person to whom it is granted ceases to
be a Director of the Company, except that, subject to the
limitation hereafter stated in this paragraph 5(g), if his
directorship is terminated for any reason, including his death, he,
or his successors or assigns, may at any time within two years
after termination of his office exercise his Option but only to the
extent that it was exercisable by him on the date of termination
of his office. The limitation mentioned above is that an Option
may not be exercised to any extent by anyone after the expiration
of its term.
(h) Minimum. The minimum number of shares with respect to which
an Option may be exercised in part at any time is 100.
6. Restrictions on Shares
Prior to the issuance or delivery of any shares of Common Stock
under the Plan, the person exercising the Option may be required to:
(a) represent and warrant that the shares of Common 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 Securities Act of 1933, as amended, ("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 be reasonably required
by the Board upon exercise of the Option or any part thereof,
including but not limited to any stock restriction agreement that
the Board may choose to require.
Nothing in this Plan shall assure any Grantee 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 Common 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 Common 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.
If the Company should elect in the future to register under the
1933 Act shares issuable under this Plan, the Board may modify or
eliminate each of the foregoing representations and warranties as the
Board may deem appropriate.
7. Payment for Shares
(a) Cash. Payment in full for shares purchased under an Option
may 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 a Grantee may make payment for Common
Stock purchased under an Option, in whole or in part, by tendering
to the Company in good form for transfer, shares of Common Stock
valued at Fair Market Value on the date the Option is exercised.
Such shares must have been owned by the Grantee or the Grantee?s
representative for a period of at least six months prior to
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. No Implied Covenants
Neither this Plan nor any action taken hereunder shall be construed
as giving any Director any right to be retained in office.
10. Adjustments
Changes or adjustments in the Option price, number of shares
subject to an Option or other specifics as the Board should decide will
be considered or made pursuant to the following rules:
(a) Upon Changes in Common Stock. If the outstanding Common 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, recapitalizations, 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 Board
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 Grantees. No adjustment provided for
in this Section 10 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 10 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.
(c) Further Limitations. Nothing in this Section will entitle the
Grantee to adjustment of his Option in the following circumstances:
(i) The issuance or sale of additional shares of Common
Stock, through public offering or otherwise, except as
provided in section 10(a);
(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 Common Stock; and
(iv) The payment of dividends except as provided in
Section 10 (a).
The grant of an Option shall not affect in any way the Company's
right or power 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.
11. 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 by another
corporation or person of stock representing more than eighty percent
(80%) of the voting power of the stock of the Company then outstanding,
the Plan will terminate and all Options will lapse. The result
described above will not occur if a 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, or options covering the stock of a successor corporation
or a parent or a subsidiary thereof, with appropriate adjustments as to
the number of shares and prices, in which event the Plan and Options
theretofore granted will continue in the manner and under the terms so
provided.
12. Rights as a Stockholder
A Grantee shall have no rights as a stockholder with respect to any
Common 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 10 hereof,
no adjustments will be made for dividends, whether ordinary or
extraordinary, whether in cash, securities, or other property, for
distributions for which the record date is prior to the date on which
the Option is exercised.
13. Legal Requirements
(a) Compliance with All Laws. The Company will not be required
to issue or deliver any certificates for shares of Common Stock
prior to (a) the listing of any such Common Stock to be acquired
pursuant to the exercise of any Option on any stock exchange on
which the Common 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
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) Plan Subject to Delaware Law. All questions arising with
respect to provisions of the Plan will be determined by the laws
of the state of Delaware except to the extent that Delaware laws
are preempted by any federal law.
14. Modification, Extension and Renewal
(a) Options. Subject to the conditions of and within the
limitations prescribed in the Plan herein, the Board may modify,
cancel or renew outstanding Options. Notwithstanding the
foregoing, no modification will, without the prior written consent
of the Grantee, alter, impair or waive any rights or obligations
associated with any Option earlier granted under the Plan.
(b) Plan. At any time and from time to time, the Board may
interpret, amend or discontinue the Plan, subject to the
limitation, however, that, except as provided in Section 10, no
amendment shall be made, except upon stockholder approval, which
will:
(i) Increase the number of shares reserved for Options
under the Plan; or
(ii) Reduce the Option price below that which is stated
in this Plan for any Option granted to a Director covered
by this Plan; or
(iii) Change the requirements for eligibility for
participation under the Plan.
15. Plan Date and Duration
This Plan shall become effective on the date that stockholders
approve the Plan at the forthcoming annual meeting of stockholders
expected to be held in February, 1999. Options may not be granted under
the Plan after February 29, 2004.
APPENDIX
PROXY
COMPETITIVE TECHNOLOGIES, INC.
This Proxy is Solicited on Behalf of the Board of Directors for the
Annual Meeting of Stockholders, February 12, 1999
The undersigned stockholder of COMPETITIVE TECHNOLOGIES, INC.
hereby appoints and FRANK R. McPIKE, JR. and MICHAEL R. NOVACK, 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, February 12, 1999 at 9:00 A.M. local time at the Sheraton
Stamford Hotel, 2701 Summer Street, Stamford, Connecticut 06905, 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 January 4, 1999 Proxy
Statement for said meeting:
1. Election of Directors:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all
(except as marked to the nominees
contrary below)
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through nominee's name in the list below.
George C.J. Bigar, Michael G. Bolton, Robert H. Brown, Jr., Samuel M. Fodale,
John M. Sabin
2. Approval of 1999 Directors' Stock Option Plan and reserving 400,000
shares of Common Stock for option grants under the Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued and to be signed on reverse side)
(continued from other side)
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) and
FOR proposal (2) as 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)
DATE: __________________________, 1999
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.
