*
*****
**-----**
**----- COMPETITIVE
****---- TECHNOLOGIES
**===== Unlocking the Potential of Innovation (R)
**=====**
*****
* (R)
Dear Shareholder:
You are cordially invited to attend the Competitive Technologies, Inc.
Annual Meeting of Shareholders on April 18, 2008 at 11:00 a.m. local time. The
meeting will be held at the American Stock Exchange, 86 Trinity Place, New York,
New York.
The matters to be acted upon are described in the accompanying notice of
Annual Meeting and proxy statement. At the meeting, we will also report on our
company's operations and respond to any questions you may have.
YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the Annual
Meeting of Shareholders, we urge you to vote and submit your proxy via the
Internet, telephone or mail in order to ensure the presence of a quorum.
On behalf of the Board of Directors, I express our appreciation for your
continued support toward the profitable growth of CTT. We look forward to seeing
you at the Annual Meeting.
Very truly yours,
\s\ John B. Nano
John B. Nano
Chairman, President and CEO
Fairfield, Connecticut
March 19, 2008
COMPETITIVE TECHNOLOGIES, INC.
777 COMMERCE DRIVE
FAIRFIELD, CONNECTICUT 06825
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Competitive Technologies, Inc. will
be held at the American Stock Exchange, 86 Trinity Place, New York, New York
10006 on Friday, April 18, 2008, at 11:00 a.m. local time. The purposes of the
meeting are:
1. To elect six Directors to serve until the next Annual Meeting of
Shareholders or until their respective successors have been elected
and qualified, and
2. To ratify the selection of Mahoney Cohen & Company, CPA, P.C. as
our independent registered public accounting firm for the fiscal year
ending July 31, 2008, and
3. To transact such other business as may properly come before the
meeting and any adjournments thereof.
Our board of directors recommends a vote FOR Items 1 and 2. Only
shareholders of record at the close of business on March 14, 2008 will be
entitled to notice of and to vote at the Annual Meeting of Shareholders and any
adjournments thereof.
A copy of our Annual Report on Form 10-K for the fiscal year ended July 31,
2007 was mailed on November 16, 2007 to those who were shareholders on that
date, or is included with this notice for those who became shareholders after
that date.
WE URGE YOU TO VOTE YOUR SHARES PROMPTLY. TO VOTE YOUR SHARES, PLEASE
COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY. YOU MAY BE
ABLE TO VOTE YOUR SHARES VIA THE INTERNET, OR BY TELEPHONE. PLEASE REFER TO THE
ENCLOSED PROXY CARD FOR SPECIFIC VOTING INSTRUCTIONS.
By Order of the Board of Directors,
\s\ John B. Nano
JOHN B. NANO
Chairman, President and CEO
Fairfield, Connecticut
March 19, 2008
*
*****
**-----**
**----- COMPETITIVE
****---- TECHNOLOGIES
**===== Unlocking the Potential
**=====** of Innovation (R)
*****
* (R)
COMPETITIVE TECHNOLOGIES, INC.
-------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
-------------------
The Board of Directors is furnishing shareholders this proxy statement to
solicit proxies to be voted at the Annual Meeting of Shareholders of Competitive
Technologies, Inc. (CTT), a Delaware corporation. The meeting will be held on
Friday, April 18, 2008, at 11:00 a.m. local time at the American Stock Exchange,
86 Trinity Place, New York, New York 10006.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Record Date. The record date for the Annual Meeting is the close of
business on March 14, 2008. Only shareholders of record on that date will be
entitled to notice of, and to vote at, the Annual Meeting.
Quorum. The Company's bylaws provide that the holders of a majority of the
Common Stock issued and outstanding and entitled to vote generally in the
election of directors, present in person or represented by proxy, shall
constitute a quorum for the transaction of business at the Annual Meeting.
Abstentions and broker non-votes will be counted as present for the purpose of
determining the presence of a quorum.
Voting Your Proxy. If you complete and properly sign the accompanying
proxy and return it to us, or vote via the Internet or by telephone, it will be
voted as you direct. In the event no directions are specified, such proxies and
voting instructions will be voted (1) FOR the election of the nominees named
below as directors; (2) FOR the ratification of the selection of Mahoney Cohen &
Company, CPA, P.C.; and at the discretion of the designated proxy holders as to
other matters that may properly come before the Annual Meeting.
IF YOU ARE A SHAREHOLDER OF RECORD, holding a stock certificate registered
in your name on the books of our transfer agent, American Stock Transfer & Trust
Company, as of the close of business on March 14, 2008, and attend the meeting,
you may deliver your completed proxy in person, or vote in person at the meeting
on proxies available at the meeting for that purpose, or revoke a previously
submitted proxy and complete a new proxy.
IF YOUR SHARES ARE HELD IN A STOCK BROKERAGE ACCOUNT WITH YOU AS A
BENEFICIAL OWNER, your broker may vote your shares on your behalf unless you
have previously informed your broker not to do so, otherwise,
- you must return your voting instructions to your broker or
nominee, the holder of record, OR
- you must vote your shares through your broker or nominee via the
internet or by phone, OR
- if you wish to vote in person at the meeting, you must obtain
from the record holder and bring to the meeting a proxy SIGNED BY THE
RECORD HOLDER identifying you as the beneficial owner of the shares
and giving you the right to vote the shares at the meeting. (You may
NOT use the voting instruction form provided by your broker or nominee
to vote in person at the meeting.)
Revoking Your Proxy. You may revoke your proxy at any time before the
voting by notifying us; no formal procedure is required. Votes are tabulated by
an independent agent and the results will be reported at the Annual Meeting.
We intend to mail or give to our shareholders this proxy statement,
including the Notice of Annual Meeting of Shareholders, and the accompanying
proxy, on or about March 20, 2008.
Holders of common stock and of preferred stock at the close of business on
the record date of March 14, 2008, are entitled to vote at the meeting:
Common stock: 8,179,872 shares outstanding, one vote per share
Preferred stock: 2,427 shares outstanding, one vote per share
If you abstain from voting, your shares will be counted as shares present
and entitled to vote in determining the presence of a quorum for the meeting,
but will not be voted in determining approval of any matter submitted to
shareholders for a vote. An abstention will have the same effect as a negative
vote on a matter submitted to shareholders for a vote. If a broker indicates on
the proxy that it does not have discretionary authority to vote on a particular
matter, broker non-votes, those shares will be counted as shares present in
determining the presence of a quorum for the meeting but will not be considered
present or entitled to vote with respect to that particular matter.
1. ELECTION OF DIRECTORS
At the Annual Meeting, shareholders will elect a Board of six directors by
a plurality of the votes cast. Our Board of Directors proposes the six nominees
named below. We recommend voting FOR the six named nominees.
All of the nominees named below currently are directors of CTT. No
director, executive officer or nominee is related by family to any other
director, executive officer or nominee. Based on its review of the relationships
between its existing directors, as director nominees, and CTT, the Board of
Directors has affirmatively determined that if these nominees are elected, a
majority of our directors will be independent under the rules of the American
Stock Exchange and CTT's Corporate Governance Principles.
If any nominee is unable to serve, we solicit discretionary authority to
vote to elect another person unless we reduce the size of the Board. Each
director will serve until the next Annual Meeting of Shareholders, or until his
or her successor has been elected and qualified, or until his or her earlier
resignation or removal. We believe that all nominees will be available for
election as a director for the prescribed term.
The following table sets forth information regarding each nominee for
director according to the information furnished to us by each such nominee:
POSITIONS CURRENTLY COMMITTEE DIRECTOR OF
NAME AGE HELD WITH CTT MEMBERSHIPS CTT SINCE
------------------------ --- ------------------- ----------- -------------
Joel M. Evans, M.D. 47 Director A, N February 2007
Richard D. Hornidge, Jr. 62 Director A, C* February 2007
Rustin Howard 51 Director C, N* October 2007
Chairman of the
Board of Directors,
President and Chief
John B. Nano 63 Executive Officer -- February 2007
William L. Reali 65 Director A*, N February 2007
Ralph S. Torello 69 Director C February 2007
A - Audit Committee
C - Compensation and Stock Option Committee
N - Nominating and Corporate Governance Committee
* - Committee Chair
JOEL M. EVANS, M.D. Dr. Evans founded The Center for Women's Health in
Stamford, Connecticut in June 1996 and since then has been its Director. From
November 1996 to present, Dr. Evans has been a lecturer and senior faculty
member of The Center for Mind Body Medicine in Washington, D.C. Dr. Evans has
been featured in magazines as well as interviewed on television and radio shows
across the country. Dr. Evans is an Assistant Clinical Professor at the Albert
Einstein College of Medicine in New York City and helped create a clinical study
at Columbia University Medical Center for use of the herb, black cohosh, in
breast cancer. From November 2005 to present, Dr. Evans has been a member of
the Scientific Advisory Board for Metagenics Incorporated, a nutritional
supplement manufacturer. Dr. Evans brings key nutriceutical experience to the
Company.
Dr. Evans completed his undergraduate and medical studies at the Sophie
Davis School of Biomedical Education of the City College of New York and the Mt.
Sinai School of Medicine. He fulfilled his residency at the Albert Einstein
College of Medicine.
RICHARD D. HORNIDGE, JR. Mr. Hornidge has been a tennis professional at Willows
Racquet Club in North Andover, Massachusetts since February 2005. Prior to that
he was an independent consultant. From June
1984 through June 1989, Mr. Hornidge was President of Travis Associates, an
employment agency. Mr. Hornidge was a program coordinator for Raytheon from
1973 through 1984, where he was involved in the Patriot Missile test equipment
program.
Mr. Hornidge received a BA from Boston University.
RUSTIN HOWARD. Mr. Howard is principal of Whitesand Investments LLC, an angel
investment organization that operates as a traditional venture fund.
In 1990, he founded and served as CEO and Chairman of Phyton, Inc., a world
leader in the use of proprietary plant cell fermentation technology, including
the production of paclitaxel, the active ingredient of Bristol-Myers Squibb's
multi-billion dollar anticancer drug, Taxol(R). Phyton was sold to DFB
Pharmaceuticals, Inc. in 2003.
Additionally, Mr. Howard is the Chairman of DeepGulf, Inc., and a co-owner
and officer of Silver Bullet Technology. DeepGulf builds underwater pipelines
and associated facilities in deep and ultra-deep offshore oil and gas production
fields. Silver Bullet Technology, where he has been primarily responsible for
corporate and financial oversight as well as strategic planning, manufactures
and sells software for the banking and payment processing industry. Previously,
he served as president and CEO of BioWorks Inc., a biotechnology company he
founded to develop, produce, and sell products that replace chemical pesticides.
He earned his MBA from Cornell University's Johnson Graduate School of
Management, where he focused his studies on Entrepreneurship, and managing
innovation and technology.
JOHN B. NANO. Mr. Nano is President and Chief Executive Officer of Competitive
Technologies, Inc. and Chairman of the Board of Directors. In January 2006, Mr.
Nano became President and Chief Executive Officer of Articulated Technologies,
LLC, a company involved in creating and commercializing patented light emitting
diode technologies for global solid state lighting applications. He is
currently a member of its Board of Directors. Mr. Nano served as President and
CEO, and a member of the Board of CTT from June 2002 through June 2005. He has
a broad background in domestic and international operating experience with
technology-based companies focusing on life sciences, physical sciences, digital
technology and electronics. Prior to joining CTT in 2002, Mr. Nano held various
executive leadership positions in operations, strategic planning, business
development, M&A and finance, including at Stonehenge Network Holdings, N.V. as
a Principal, at ConAgra Trade Group, Inc., a subsidiary of ConAgra, Inc., as
Executive VP and Chief Financial Officer; at Sunkyong America, a subsidiary of
the Sunkyong Group, a Korean conglomerate, as Executive VP and Chief Financial
Officer, and as President of an Internet Startup Division of Sunkyong America.
Mr. Nano is a graduate of MIT's Sloan School Executive Program, holds an
MBA in Finance from Northeastern University, and a BS in Chemical Engineering
from Worcester Polytechnic Institute.
WILLIAM L. REALI. Mr. Reali is a Certified Public Accountant with the firm of
Reali, Giampetro and Scott in Canfield, Ohio. The firm provides auditing and
other related accounting and tax services to a diverse group of business
clients. Over the past five years, Mr. Reali's primary responsibility with the
firm has been business consulting, working with large and small national and
multinational clients. He has worked with distressed companies assisting them
with cost reduction, turn-around programs and re-organization.
Serving as Chairman of various community associations, Mr. Reali donates a
great deal of time to local organizations.
Mr. Reali received his BA from Youngstown State University.
RALPH S. TORELLO. Mr. Torello has been an independent financial consultant for
the past five years. With over 45 years' experience in the financial and venture
capital field, he advises various companies on their financial strategies.
Included among the companies and individuals that Mr. Torello has performed
consulting services for are Goodnight Audio, a full service recording studio,
Patriot American Mortgage, a commercial and home mortgage company, DDS
Technologies, Inc., an organic waste processor, and Coit Medical, a medical
accessory marketer.
During the eighties and nineties he handled personal ventures in oil
exploration, real estate and the development of bio-organic products. During the
seventies and eighties, Mr. Torello was Managing Partner of his own venture
capital and development firm. During the sixties, he was Director of Financial
Analysis for The Singer Company, Assistant to the President of Illinois Tool
Works, Vice President of Laird Industries, and head of Investment Banking for
Bay Securities in San Francisco.
Mr. Torello received a BS from Fordham University, and holds an MBA from
Harvard University.
VOTE REQUIRED
The affirmative vote of a plurality of the shares our common stock
represented in person or by proxy at the Annual Meeting is necessary for the
election of the individuals named above. There is no cumulative voting in
elections of directors. Unless otherwise specified, proxies will be voted in
favor of the six nominees described above.
RECOMMENDATION
Our Board of Directors recommends that shareholders vote FOR the election
of each of the individuals named above.
CORPORATE GOVERNANCE
CTT's Corporate Governance Principles, Corporate Code of Conduct, the
Committee Charters for the Audit, Compensation and Stock Option, and Nominating
and Corporate Governance Committees of the Board of Directors, the unofficial
restated Certificate of Incorporation and the By-Laws are all available on our
website at www.competitivetech.net/investors/governance.html.
BOARD MEETINGS AND COMMITTEES
The Board has three committees, as follows:
Nominating
Compensation and and Corporate
Audit Committee Stock Option Committee Governance Committee
------------------------ ------------------------- --------------------
William L. Reali, Richard D. Hornidge, Jr., Rustin Howard,
Chairman Chairman Chairman
Joel M. Evans, M.D. Rustin Howard Joel M. Evans, M.D.
Richard D. Hornidge, Jr. Ralph S. Torello William L. Reali
All directors attended the Annual Meeting of Shareholders held on January
16, 2007, as well as the reconvened meeting of February 2, 2007 at which their
installation was supported by the shareholders, except Evans and Howard. This
Board has held nine (9) meetings from February 2, 2007 through February 29,
2008. During the same period, the Audit Committee met four (4) times, the
Compensation Committee met three (3) times, and the Nominating Committee met
once. All of the directors standing for re-election attended at least 90% of
the aggregate number of meetings of the Board and committees of which the
director was a member.
Audit Committee
The function of the Audit Committee is to assist the Board in fulfilling
its responsibility to the shareholders relating to our corporate accounting
matters, financial reporting practices, and the quality and integrity of our
financial reports. The Audit Committee's purpose is to assist the Board with
overseeing:
- the reliability and integrity of our financial statements,
accounting policies, internal controls and disclosure practices;
- our compliance with legal and regulatory requirements, including
our disclosure controls and procedures;
- our independent auditor's qualifications, engagement,
compensation, and independence;
- the performance of our independent auditor; and
- the production of an annual report of the Audit Committee for
inclusion in our annual proxy statement.
The Audit Committee is to be composed of not less than three of our
independent directors. The Board has determined that each member of the Audit
Committee is an independent director in accordance with the applicable rules of
the American Stock Exchange and any other applicable legal or regulatory
requirements. It has also determined that each member is financially literate
and has identified Mr. Reali, who is a certified public accountant, as an audit
committee financial expert as defined by the Securities and Exchange Commission.
Compensation and Stock Option Committee
The purpose of the Compensation Committee is to:
- review and approve corporate goals and objectives relevant to CEO
compensation, evaluate the CEO's performance in light of those goals
and objectives, and determine and approve the CEO's compensation level
based on this evaluation;
- review and approve the compensation of our other officers based
on recommendations from the CEO;
- review, approve and make recommendations to the Board with
respect to incentive compensation plans or programs, or other
equity-based plans or programs, including but not limited to our
Annual Incentive Plan, our 1997 Employees' Stock Option Plan, and our
401(k) Plan; and
- produce an annual report of the Compensation Committee on
executive compensation for inclusion in our annual proxy statement.
The Compensation Committee is to be composed of not less than three of our
independent directors. The Board has determined that each member of the
Compensation Committee is an independent director in accordance with the
applicable rules of the American Stock Exchange and any other applicable legal
or regulatory requirements.
Nominating and Corporate Governance Committee
The purpose of the Nominating Committee is to:
- identify individuals qualified to become members of the Board,
consistent with criteria approved by the Board;
- recommend to the Board candidates for all directorships to be
filled by the Board or our shareholders;
- in consultation with the Chairman of the Board, recommend to the
Board, members of the Board to be appointed to committees of the Board
and the chairpersons thereof, including filling any vacancies;
- develop and recommend to the Board a set of corporate governance
principles applicable to us;
- oversee, evaluate and monitor the Board and its individual
members, and our corporate governance principles and procedures; and
- fulfill such other duties and responsibilities as may be set
forth in its charter or assigned by the Board from time to time.
The Nominating Committee is to be composed of not less than three of our
independent directors. The Board has determined that each member of the
Nominating Committee is an independent director in accordance with the
applicable rules of the American Stock Exchange and any other applicable legal
or regulatory requirements.
The Nominating Committee will consider nominees recommended by shareholders
but it has not designated any special procedures shareholders need to follow in
submitting those recommendations. The Nominating Committee has not designated
any such procedures because as discussed below under the heading "Shareholder
Communications to the Board," shareholders are free to send communications in
writing directly to the Board, committees of the Board, and/or individual
directors, at our corporate address in care of our Secretary.
SHAREHOLDER COMMUNICATIONS TO THE BOARD
Shareholders may send communications in writing to the Board, committees of
the Board, and/or to individual directors, at our corporate address in care of
our Secretary. Written communications addressed to the Board are reviewed by
the Chairman of the Board for appropriate handling. Written communications
addressed to an individual Board member are forwarded to that person directly.
BENEFICIAL OWNERSHIP OF SHARES
The following information indicates the beneficial ownership of our Common
Stock by each director and nominee, and by each person known to us to be the
beneficial owner of more than 5% of our outstanding Common Stock. The indicated
owners furnished such information to us as of March 14, 2008, except as
otherwise indicated in the footnotes.
AMOUNT
NAMES OF BENEFICIAL OWNERS BENEFICIALLY PERCENT
(AND ADDRESS, IF OWNERSHIP IS MORE THAN 5%) OWNED(1) (%)
------------------------------------------- ------------- --------
Directors, nominees and executive officers
-------------------------------------------
Joel M. Evans, M.D. 23,500(2) *
Richard D. Hornidge, Jr. 93,500(2) 1.1
Rustin Howard 27,000(2) *
John B. Nano 214,172(2)(3) 2.6
William L. Reali 28,500(2) *
Ralph S. Torello 22,500(2) *
Directors, nominees and
executive officers as a group 409,172 5.0
-------------------------------------------
Five percent beneficial owner
-------------------------------------------
ROI Capital Management, Inc.
300 Drakes Landing Road, Suite 175
Greenbrae, CA 94904 420,600(4) 5.1
* Less than 1%
(1) Except as indicated in notes that follow, designated person or group has
sole voting and investment power.
(2) The number of shares shown as beneficially owned for the persons listed
below includes the right to acquire the following listed number of shares
upon exercise of stock options:
NAME RIGHT TO ACQUIRE
------------------------------------------- ----------------
Joel M. Evans, M.D. 20,000
Richard D. Hornidge, Jr. 20,000
Rustin Howard 20,000
John B. Nano 200,000
William L. Reali 20,000
Ralph S. Torello 20,000
----------------
Directors and Executive Officers as a Group 300,000
================
(3) Includes 4,150 shares as beneficially owned within employee 401(k) plan.
(4) Share information from Schedule 13G/A reported by the Securities and
Exchange Commission March 5, 2008.
On March 14, 2008, the stock transfer records maintained by us with respect
to our Preferred Stock showed that the largest holder of Preferred Stock owned
500 shares. No directors own Preferred Stock.
DIRECTOR COMPENSATION
The following table summarizes the total compensation awarded to, earned by
or paid by us for services rendered to the non-employee Board of Director
members from August 1, 2006 through February 29, 2008. Fees earned by current
Board reflect 13 months of service from February 2, 2007 through February 29,
2008. Fees earned by former Board reflect six months service from August 1, 2006
though February 1, 2007.
FEES OTHER
EARNED EQUITY
OR PAID OPTION COMPEN-
NAME IN CASH AWARDS SATION TOTAL
---------------------------------- -------- -------------- --------- -------
Current Board (13 months):
Joel M. Evans, M.D. (5) $ 19,500 $25,960(1)(9) $3,775(3) $49,235
Richard D. Hornidge, Jr. (5) 22,500 25,960(1)(9) 3,775(3) 52,235
Rustin Howard (6) 6,000 23,850(9)(10) - 29,850
Ben Marcovitch (5) (7) 9,500 - - 9,500
William L. Reali (5) 27,500 25,960(1)(9) 3,775(3) 57,235
Ralph S. Torello (5) 20,500 25,960(1)(9) 3,775(3) 50,235
Former Board (six months):
Richard E. Carver (8) 37,500 $ 3,172(2) $5,913(4) 46,585
George W. Dunbar, Jr. (8) 13,500 3,172(2) 5,913(4) 22,585
Maria-Luisa Maccecchini, Ph.D.(8) 15,000 3,172(2) 5,913(4) 24,085
Charles J. Philippin (8) 16,000 3,172(2) 5,913(4) 25,085
John M. Sabin (8) 18,000 3,172(2) 5,913(4) 27,085
(1) Each director serving as such received 10,000 stock options on August 2,
2007, at $2.58 per share. We estimated the fair value of the awards at
$1.671 per share using the Black-Scholes option valuation model with
expected life of five years, risk free interest rate of 4.62%, volatility
of 75.746% and a dividend yield of 0.
(2) Each director serving as such on January 3, 2007 received a stock option
for 2,000 shares of common stock at $2.37 per share. We estimated the fair
value of the awards at $1.586 per share using the Black-Scholes option
valuation model with expected life of five years, risk free interest rate
of 4.66%, volatility of 79.678% and dividend yield of 0. See Note 16 in
Notes to
Consolidated Financial Statements in Part II, Item 8 of Annual Report on
Form 10-K dated July 31, 2007, filed October 29, 2007.
(3) Each director serving as such on January 2, 2008 received 2,500 shares of
stock under the 1996 Directors' Stock Participation Plan. The fair market
value of the stock was $1.51 per share.
(4) Each director serving as such on January 3, 2007 received 2,500 shares of
stock under the 1996 Directors' Stock Participation Plan. The fair market
value of the stock was $2.37 per share.
(5) Elected to office on February 2, 2007.
(6) Appointed by the Board on October 5, 2007.
(7) Removed from the Board by Board vote on August 8, 2007.
(8) Not reelected on February 2, 2007.
(9) Each director serving as such on January 2, 2008 received 10,000 stock
options at $1.51 per share. We estimated the fair value at $0.925 per share
using the Black-Scholes option valuation model with expected life of five
years, risk free interest rate of 3.281%, volatility of 71.909% and a
dividend yield of 0.
(10) Mr. Howard received 10,000 stock options at $2.29 per share on October 5,
2007, the date he accepted membership to the Board of Directors. We
estimated the fair value at $1.46 per share using the Black Scholes option
valuation model with expected life of five years, risk free interest rate
of 4.65%, volatility of 74.408% and a dividend yield of 0.
Each of our non-employee directors is paid an annual cash retainer of
$10,000, paid quarterly in arrears, for their services to the Company. In
addition, directors are issued shares of common stock pursuant to our 1996
Directors' Stock Participation Plan, as amended, and are granted stock options
to purchase common stock pursuant to our 2000 Directors Stock Option Plan, both
as described below. In addition, effective in fiscal year 2005, the Chairman of
the Board, if a non-employee, and the Chairman of the Audit Committee are paid
annual stipends for the additional responsibilities and time commitments
required of them. Mr. Nano, as an employee of the Company, has not been paid
any compensation for serving as Chairman of the Board. Mr. Carver received
stipends of $24,000 and $48,000 in 2007 and 2006, respectively. Mr. Reali has
served as Chairman of the Audit Committee since February 2, 2007 and he has
received a $3,000 stipend in 2007. Mr. Sabin served as Chairman of the Audit
Committee until February 2, 2007 and received a $3,000 and $6,000 stipend in
2007 and 2006, respectively.
Each non-employee director is also paid $1,000 for each Board meeting
attended and $500 for each committee meeting attended. All directors are
reimbursed for out-of-pocket expenses incurred to attend Board and committee
meetings.
Pursuant to our 1996 Directors' Stock Participation Plan, as amended, on
the first business day of January, each non-employee director who has been
elected by the shareholders and has served at least one full year as a director
is issued a number of shares of common stock equal to the lesser of $15,000
divided by the per share fair market value of such stock on the issuance date,
or 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, shares
of common stock will be issued to the director on a pro-rata basis up to the
termination date. Common stock may not be issued pursuant to this plan after
January 3, 2011. Each of our non-employee directors was issued 2,500 shares of
common stock effective January 2, 2008.
Pursuant to our 2000 Directors Stock Option Plan, non-employee directors
are granted 10,000 fully vested, non-qualified stock options to purchase our
common stock on the date the individual is first elected as a director, whether
by the shareholders or by the Board, and is granted 10,000 options on the first
business day of January thereafter, provided the individual is still a director.
The stock options granted are at an exercise price not less than 100% of the
fair market value of the common stock at the grant date and have a term of ten
years from date of grant. If an individual's directorship terminates because of
death or permanent disability, the stock options may be exercised within one
year after termination. If the termination is for any other reason, the stock
options may be exercised within 180 days after termination. However, the Board
has the discretion to amend previously granted stock options to provide that
such stock options may continue to be exercisable for specified additional
periods following
termination. In no event may a stock option be exercised after the expiration of
its ten-year term. Stock options may not be granted under this plan after the
first business day of January 2010. Each of our non-employee directors was
granted 10,000 options on August 2, 2007 reflecting their election to the Board,
and was granted 10,000 options each on January 2, 2008 pursuant to the Plan.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires our directors and officers, and persons who own more than five percent
of the Common Stock to file reports of ownership and changes in ownership with
the Securities and Exchange Commission ("SEC") and the American Stock Exchange.
SEC regulations require reporting persons to furnish us with copies of all
Section 16(a) forms they file.
Based solely on a review of copies of such reports received or written
representations from certain reporting persons, we believe all reporting persons
complied with all applicable reporting requirements.
CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, DIRECTOR INDEPENDENCE
Our Board of Directors determined that when a director's services are
outside the normal duties of a director, we compensate the director at the rate
of $1,000 per day, plus expenses, which is the same amount we pay a director for
attending a one-day Board meeting. We classify these amounts as consulting
expenses, included in personnel and other direct expenses relating to revenues.
We incurred charges for consulting services, including expenses and use taxes,
provided by on former director of $0, $1,000 and $25,000, in 2007, 2006 and
2005, respectively. We also incurred a charge of $17,000 in 2006 for consulting
services provided by a relative of a former President and CEO, and of $22,000 in
2007 for consulting services provided by a relative of our current President and
CEO.
CTT's Board of Directors is composed of six members. Directors Evans, Hornidge,
Howard, Reali and Torello are considered to be independent directors. Director
Nano is not considered an independent director, as he is an employee of the
Company.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
CTT's compensation program consists of base salary, bonus, stock options,
other incentive awards and other benefits, which the Committee generally reviews
annually. The Committee's overall philosophy is to align compensation with our
business strategy and to support achievement of our long-term goals. In order
to attract and retain competent executives, we believe that it is essential to
maintain an executive compensation program that provides overall compensation
competitive with that paid to executives with comparable qualifications and
experience.
The new Board of Directors is reviewing all compensation plans to assure
effectiveness and fiduciary responsibility.
COMPENSATION AND STOCK OPTION COMMITTEE REPORT:
We have reviewed and discussed with management certain Executive
Compensation and Compensation Discussion and Analysis provisions to be included
in the Company's Annual Report on Form 10-K, filed pursuant to the Securities
Exchange Act of 1934, as amended. Based on the reviews and discussions referred
to above, we recommend to the Board of Directors that the Executive Compensation
and Compensation Discussion and Analysis provisions referred to above be
included in the Company's Annual Report.
Submitted by the Compensation and Stock Option Committee of the Board of
Directors
Richard D. Hornidge, Jr. (Chairman)
Rustin Howard
Ralph S. Torello
REPORT OF THE AUDIT COMMITTEE
The Audit Committee reviewed and discussed with management our audited
financial statements as of and for the year ended July 31, 2007, as well as our
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q for the year ended
July 31, 2007, before those reports were filed.
The Audit Committee discussed with our independent accountants, Mahoney
Cohen & Company, CPA, P.C. (effective February 20, 2007) and BDO Seidman, LLP,
(terminated effective February 12, 2007) (see also "Independent Public
Accountants" below) the matters required to be discussed by Statement on
Auditing Standards No. 61, "Communication with Audit Committees," as issued,
modified or supplemented.
The Audit Committee received the written disclosures from both BDO and
Mahoney Cohen required by Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees," as issued, modified or
supplemented. The Audit Committee discussed with both BDO and Mahoney Cohen
their independence from management and from CTT.
The Audit Committee discussed with both BDO and Mahoney Cohen the overall
scope, plans and budget for its audit. In addition, the Audit Committee met
with BDO and now meets with Mahoney Cohen regularly, with or without management
present, to discuss the results of Mahoney Cohen's examination, evaluation of
CTT's internal controls, and the overall quality of CTT's financial reporting.
Based on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements as
of and for the year ended July 31, 2007, be included in our Annual Report on
Form 10-K for the year ended July 31, 2007.
AUDIT COMMITTEE:
William L. Reali (Chairman)
Joel M. Evans, M.D.
Richard D. Hornidge, Jr.
EXECUTIVE OFFICERS
On February 2, 2007, at the Annual Meeting of the Shareholders of the
Company, shareholders supported the installation of a completely new Board. The
new Board met and elected John B. Nano to his current position with the company,
and replaced previous Executive Officers.
NAME AGE POSITION WITH CTT
--------------------------- --- --------------------------------------
Current Executive Officer:
Chairman of the Board of Directors,
President and Chief Executive Officer,
John B. Nano 63 Interim Chief Financial Officer
Former Executive Officers:
Former President and
Donald J. Freed (1) 65 Chief Executive Officer
Former Executive Vice President
Michael E. Kiley (2) 51 and Chief Operating Officer
Michael D. Davidson (3) 48 Former Chief Financial Officer
(1) Dr. Freed's employment with the company terminated on February 4, 2007.
(2) Mr. Kiley resigned on November 27, 2006.
(3) Mr. Davidson's employment with the company terminated on February 6, 2007.
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
We have a standing compensation committee on our Board. Our President
makes recommendations to the committee as to employee benefit programs and
officer and employee compensation.
Annual Base Salary. The base salary for former executive officers was set in
agreements that we entered into with each officer in 2005. The base salary for
John B. Nano was set in a three-year employment agreement effective February 2,
2007.
Annual cash bonus. In addition to the competitive annual base salary, we intend
to reward executive officers each year for the achievement of specific goals,
which may be financial, operational or technological. We consider objectively
measurable goals, such as obtaining new investment capital, negotiating valuable
contracts and achieving research and regulatory milestones, and more subjective
goals, such as quality of management performance and consistency of effort.
CTT's objectives include operating, strategic and financial goals that the board
considers to be critical to CTT's overall goal of building shareholder value.
Our recommendations for cash bonuses also take into account CTT's liquidity and
capital resources in any given year.
The following table identifies our principal executive officer, who is also
the interim principal financial officer and our former officers and executives.
The table also includes the two highest paid reportable employees, who were not
executive officers, at July 31, 2007. The table summarizes the total
compensation awarded to, earned by or paid by us for services rendered during
fiscal year 2007 to the named executive officers during the year ended July 31,
2007.
ALL
OTHER
STOCK OPTION COMPEN-
NAME AND POSITION YEAR SALARY BONUS AWARDS AWARDS SATION TOTAL
------------------------------ ---- -------- ------ ------ -------- -------- --------
Current Executive Officer and
Reportable Employees:
John B. Nano
Chairman of the Board
of Directors, President
and Chief Executive
Officer, Interim Chief
Financial Officer 2007 $161,538 (1) $ - - $226,985 $ 23,084 (2)(3) $411,607
Aris D. Despo
Executive Vice President,
Business Development 2007 189,139 - - 991 216,169 (3)(5) 406,299
Paul A. Levitsky
Vice President and
General Counsel (7) 2007 182,862 - - 237 164,169 (3)(5) 347,268
Former Executive Officers:
Donald J. Freed
President and Chief
Executive Officer (6) 2007 189,231 - - 210,515 20,969 (2)(3) 420,715
Michael E. Kiley
Vice President and
Chief Operating
Officer (4) 2007 96,538 - - 24,616 63,379 (4) 184,533
Michael D. Davidson
Chief Financial Officer (8) 2007 129,365 5,000 - 98,329 - 232,964
(1) Represents salary since February 2, 2007. Mr. Nano does not receive
additional compensation for serving as Chairman of the Board.
(2) Represents payment of $13,787 auto lease for Mr. Nano; $8,800 auto
allowance for Dr. Freed.
(3) Represents accrual for discretionary contribution to 401(k) plan for year
ended July 31, 2007 of $9,297 for Mr. Nano, $12,169 for Mr. Despo $12,169
for Mr. Levitsky and $12,169 for Dr. Freed.
(4) Mr. Kiley resigned on November 27, 2006. We recognized $31,550 in
compensation expense for modification of terms of his vested stock options
outstanding, and reversed $6,934 of compensation expense related to stock
options accrued, but not vested. Mr. Kiley received $63,379 for a
consulting agreement with CTT from November 28, 2006 through February 21,
2007.
(5) Represents severance payments paid by the former Board of $204,000 for Mr.
Despo and $152,000 for Mr. Levitsky. For additional details, see Note 18 of
Notes to Consolidated Financial Statements in Part II, Item 8 of Annual
Report on Form 10K dated July 31, 2007, filed October 29, 2007.
(6) Dr. Freed's employment with the Company terminated on February 4, 2007.
(7) Mr. Levitsky's employment with the Company terminated on August 7, 2007.
(8) Mr. Davidson's employment with the Company terminated on February 6, 2007.
GRANTS OF PLAN BASED AWARDS
The following table shows equity awards granted to named executive officers
two highly paid reportable employees during 2007. Equity awards granted in 2007
identified in the table below are also reported in the Outstanding Equity Awards
at 2007 Year End Table.
OPTION
AWARDS: CLOSING GRANT DATE
NUMBER OF MARKET FAIR VALUE
SECURITIES EXERCISE PRICE ON OF STOCK
UNDERLYING PRICE GRANT OPTION GRANTS
NAME GRANT DATE OPTIONS(1) ($/SHARE) DATE ($) ($)(2)
------------------ ----------- ---------- --------- --------- -------------
Current Executive Officer and Reportable Employees:
John Nano 02/02/07(3) 400,000 2.52 2.50 662,800
Aris Despo 08/16/06(4) 10,000 2.33 2.35 15,890
Paul Levitsky 08/16/06(4) 12,000 2.33 2.35 19,068
Former Executive Officers:
Donald Freed 08/16/06(5) 18,000 2.33 2.35 28,602
Michael Kiley 08/16/06(4) 15,000 2.33 2.35 23,835
Michael Davidson 08/16/06(5) 12,000 2.33 2.35 19,068
(1) Granted pursuant to our 1997 Employees' Stock Option Plan.
(2) These amounts reflect the fair value as of the option grant date as
determined by SFAS 123(R) for accounting purposes. For a description of the
assumptions used to determine the grant date fair value, see Note 16 in
Notes to Consolidated Financial Statements in Part II, Item 8 of Annual
Report on Form 10-K dated July 31, 2007, filed October 29, 2007. Pursuant
to SEC rules, the amounts shown exclude the impact of estimated forfeitures
related to service-based vesting conditions.
(3) These stock options vest 25% on issuance and 25% annually for three
additional years.
(4) These stock options, granted by the former Board, as issued would have
vested 25% on the first anniversary of the grant and 25% annually
thereafter. However, these employees resigned prior to the first
anniversary of the grant and none of these options vested. Mr. Despo was
subsequently rehired. Mr. Levitsky was subsequently rehired but his
employment with the Company was terminated August 7, 2007. See Footnote (2)
above.
(5) These stock options, granted by the former Board, as issued would have
vested 25% on the first anniversary of the grant and 25% annually
thereafter. However, due to the change in control on February 2, 2007,
these options vested 100% on that date.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
NUMBER OF NUMBER OF
SECURITIES SECURITIES
UNDERLYING UNDERLYING
UNEXERCISED UNEXERCISED
OPTIONS (#) OPTIONS (#) OPTION EXPIR-
NAME EXERCISABLE(1) UNEXERCISABLE(1) OPTION PRICE ATION DATE
--------- -------------- ---------------- ------------- -------------
John Nano 200,000(2) 200,000(3) $ 2.52 02/02/17
(1) Option awards under our 1997 Employees' Stock Option Plan.
(2) Vesting schedule: 50% on February 2, 2007 and 50% on February 2, 2008.
(3) Vesting schedule: 50% on February 2, 2009 and 50% on February 2, 2010.
OPTION EXERCISES DURING FISCAL YEAR 2007
The following table sets forth information with respect to the named
executive officers and employees concerning exercises of options during fiscal
year 2007.
OPTION AWARDS
-----------------------------------
NUMBER OF
SHARES ACQUIRED VALUE REALIZED
NAME OR EXERCISED ON EXERCISE ($)(1)
---------------- --------------- ------------------
Michael Davidson 12,000 15,360
Paul Levitsky 10,000 6,650
(1) The value realized on exercise is calculated as the difference between the
closing price of the shares underlying the options exercised and the
applicable exercise price of those options.
EMPLOYMENT, SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTS
John B. Nano signed an employment agreement with the Company on February 2,
2007. The agreement provides for his employment for a period of three years from
the effective date, ending at the close of business on February 1, 2010. The
agreement states that the Company employs Mr. Nano as its President and Chief
Executive Officer, and that he reports to the Company's Board of Directors. The
agreement also states that Mr. Nano was appointed to the Board as its Chairman,
without additional compensation. The agreement established his starting annual
base salary at $350,000, subject to reviews and increases at the sole discretion
of the Board.
Mr. Nano's responsibilities and duties are appropriate to the position of
Chief Executive Officer the Company, including, without limitation, developing
and implementing an overall strategic plan and annual business plans, raising
new capital, and supervising day-to-day operations. The agreement entitles Mr.
Nano to receive a yearly bonus of up to 50% of his base compensation, based upon
the Company's performance and his performance of objectives during that time
period as determined by the Compensation Committee of the Board. Mr. Nano's
agreement provides for reimbursement of business related expenses, a leased car,
and participation in employee benefit programs and plans.
The Company granted Mr. Nano ten year options ("Plan Options") for the
purchase of an aggregate of 400,000 shares of the Company's common stock at the
mean average of the high and low share price on the effective date of the
agreement. The Plan Options vest 25% immediately upon employment, and an
additional 25% on each successive one-year anniversary of the date of
employment.
If Mr. Nano resigns his employment for good reason, as defined in the
employment agreement, or the Company terminates his employment without cause, he
will be entitled to receive all accrued but unpaid salary and benefits through
the date of termination plus severance benefits. In the event Mr. Nano resigns
from the Company without good reason, or if the Company terminates his
employment with
cause, the Company has no liability to him except to pay his base compensation
and any accrued benefits through his last day worked, and he will not be
entitled to receive severance or other benefits.
In the event of Mr. Nano's death, or if he is unable to fulfill his
obligations to the Company due to illness, injury, physical or mental incapacity
or other disability, for any 120 days within any 12 month period, all
obligations under the agreement are terminated; except that: the Company will
pay his base compensation and accrued benefits to him or to his estate, and any
unvested Plan Options granted under this agreement will become fully vested and
immediately exercisable for a period of one year by him or his estate. In the
event of his death, any post-retirement benefits shall be paid to Executive's
estate. In the event of his disability, he will be reimbursed for one-time
premium post-retirement health coverage not to exceed $120,000.
If the Company terminates Mr. Nano's employment without cause in
conjunction with a Change in Control, he will be entitled to receive all accrued
but unpaid salary and benefits through the date of termination plus the Change
in Control benefit.
The agreement's severance benefit granted to Mr. Nano provides for no less
than twelve months continuation of his base compensation, his employment
benefits, vesting of Options granted, and reimbursement for post retirement
health coverage.
The agreement's Changes in Control benefit granted to Mr. Nano provides for
continuation of compensation in effect to be paid for a period of either twice
the amount of the severance benefit period, or the remainder of his employment
term, whichever is longer; continuation of his employment benefits and
reimbursement for post-retirement health care benefits; and full and immediate
vesting of any unvested but outstanding Options
The following table summarizes the value of benefits payable to Mr. Nano
pursuant to the arrangements described above:
SUMMARY OF POTENTIAL PAYMENTS AT JULY 31, 2007 FOR JOHN B. NANO EMPLOYMENT
CONTRACT (1)
POST
RETIREMENT
SEVERANCE BENEFITS OPTIONS HEALTHCARE
($) SUMMARY($) VESTING($) ($) TOTAL ($)
---------- ---------- ---------- ----------- ----------
Resignation - - - - -
Termination
- cause - - - - -
Death or disability - - 434,324(4) 120,000 554,324
Resignation
- good reason 875,000(2) 130,890(3) 434,324(4) 120,000 1,560,214
Termination
- w/o cause 875,000(2) 130,890(3) 434,324(4) 120,000 1,560,214
Change of control 875,000(2) 130,890(3) 434,324(4) 120,000 1,560,214
(1) Calculated based on the termination, resignation or change of control
taking place as of July 31, 2007, the last day of our most recent fiscal
year.
(2) Reflects continued base salary for remaining term of the agreement.
(3) Reflects continued benefits of auto, medical, dental, vision and life
insurance plan coverage for remaining term of the agreement.
(4) Reflects accelerated vesting of the unamortized cost of the options, as if
the officer continued employment for the remaining term of the agreement.
OTHER ARRANGEMENTS
401(K) RETIREMENT SAVINGS PLAN
We have an employee defined contribution plan qualified under section
401(k) of the Internal Revenue Code for all our employees who have attained the
age of 21 and meet certain service requirements. The Plan has been in effect
since January 1, 1997. Participation in the Plan is voluntary. Employees may
defer compensation up to a specific dollar amount determined by the Internal
Revenue Service for each calendar year. We do not make matching contributions,
and employees are not allowed to invest in our stock under the Plan.
We may make discretionary contributions to the Plan solely by authorization
of our directors, who may authorize a contribution of a dollar amount to be
allocated to participants according to the provisions of the Plan, and payable
in shares of our common stock valued as of the date the shares are contributed.
Our directors authorized and we expensed $140,000, $125,000, and $100,000 in
2007, 2006, and 2005, respectively, for such discretionary contributions.
Related shares of our common stock have been contributed to the Plan for 2007,
2006 and 2005.
ANNUAL INCENTIVE PLAN
The Competitive Technologies, Inc. Annual Incentive Plan was approved by
our Board on November 22, 2005, replacing a prior plan. The Compensation
Committee administers the Incentive Plan. The Compensation Committee may
suspend or amend the Incentive Plan at any time from time to time, and the Board
may terminate the Incentive Plan.
The Incentive Plan provides for eligible employees to earn an annual bonus
incentive in cash. The targeted annual bonus incentive award is a percentage of
the participant's salary earned during the plan year, as defined in the
Incentive Plan, and is comprised of two parts, 50% of which is dependent upon
attainment of financial performance metrics that serve as our company wide goals
and objectives and are set at the beginning of the year, the Company Component;
and 50% of which is dependent upon the individual's performance compared to each
individual's pre-established goals and objectives, the Individual Component. If
our financial performance is less than 70% of its goal, there will be no award
for the Company Component. If our financial performance is more than 120% of
its goal, then the Company Component award will increase to 125% of the award,
and may, under certain conditions, as defined, increase up to a maximum of 200%
of the award. If a participant meets his or her individual goals, we may pay
the Individual Component regardless of whether the Company Component is met.
For the years ended July 31, 2007, 2006, and 2005, we charged $0, $143,608,
and $291,423, respectively, to expense for annual bonus incentive awards to
employees other than the Named Executive Officers. In addition, for the year
ended July 31, 2005, $800,000 was charged to expense for commissions paid under
our terminated prior annual incentive plan.
1997 EMPLOYEES' STOCK OPTION PLAN
The 1997 Employees' Stock Option Plan provides for the granting of stock
options to purchase our Common Stock. The stock options may be incentive stock
options pursuant to Section 422 of the Internal Revenue Code or non-statutory
stock options. Stock options granted under the Stock Option Plan must be granted
at not less than 100% of the fair market value on the date of grant. The
Compensation Committee determines the vesting period for the stock options.
Stock options expire upon termination of the grantee's employment, or ten years
after the grant date. In certain instances stock options which are vested or
become vested upon the occurence of an event or events specified by the
Compensation Committee, may continue to be exercisable through up to ten years
after the grant date, irrespective of the termination of the optionee's
employment with us. No options were allowed to be granted pursuant to this plan
after September 30, 2007.
NUMBER OF
SECURITIES
REMAINING
NUMBER OF WEIGHTED- AVAILABLE
SECURITIES TO AVERAGE FOR FUTURE
BE ISSUED UPON EXERCISE ISSUANCE
EXERCISE OF PRICE OF (EXCLUDING
OUTSTANDING OUTSTANDING OPTIONS
PLAN CATEGORY OPTIONS OPTIONS OUTSTANDING)
--------------------- -------------- ------------ ------------
Equity compensation
plans approved by
security holders 960,825 $ 4.19 436,723
2. ELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Effective February 12, 2007, the accounting firm BDO Seidman, LLP resigned
as the Company's independent registered public accountants. Effective February
20, 2007, the Company engaged Mahoney Cohen & Company, CPA, P.C. as their
independent registered public accountants.
Fees Billed by Principal Accountants - The following table presents fees
for professional services rendered by Mahoney Cohen and BDO for the years ended
July 31, 2007 and 2006:
2007 2006
---------------------------- ------------
Mahoney Cohen BDO Seidman BDO Seidman
-------------- ------------ ------------
Audit fees $ 129,056 $ 17,375 $ 117,000
Audit related fees (1) 2,355 8,580 -
All other fees -
TOTAL $ 131,411 $ 25,955 $ 117,000
(1) Fees for review of work papers and proxy consultation.
AUDIT COMMITTEE PRE-APPROVAL OF SERVICES OF PRINCIPAL ACCOUNTANTS
The Audit Committee has sole authority and responsibility to select,
evaluate, determine the compensation of, and, where appropriate, replace the
independent auditor. After determining that providing the non-audit services is
compatible with maintaining the auditor's independence, the Audit Committee
pre-approves all audit and permitted non-audit services to be performed by the
independent auditor, except for de minimus amounts. If it is not practical for
the Audit Committee to meet to approve fees for permitted non-audit services,
the Audit Committee has authorized its chairman, currently Mr. Reali, to approve
and review such pre-approvals with the Audit Committee at its next meeting.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The persons named in the enclosed proxy will vote to ratify the selection of
Mahoney Cohen as independent public accounts for the year ending July 31, 2008,
unless otherwise directed by the shareholders. Shareholder ratification of
Mahoney Cohen as the Company's independent public accountants is not required by
the Company's bylaw or otherwise. However, the Company is submitting selection
of Mahoney Cohen to the shareholders for ratification as a matter of good
corporate practice. If the shareholders do not ratify the selection of Mahoney
Cohen as the Company's independent public accountants, the Audit Committee will
reconsider the selection of such independent public accountants. If the
selection is ratified, the Audit Committee may, in it discretion, direct the
appointment of a different independent public account at any time during the
year if it determines that such a change would be in the best interest of the
Company and its shareholders.
VOTE REQUIRED
The affirmative vote of a majority of the shares of Common Stock present or
represented by proxy at the Annual Meeting is necessary for the ratification of
Mahoney Cohen as independent public accountants for the fiscal year ended July
31, 2008.
RECOMMENDATION
Our Board of Directors recommends that shareholders vote FOR the
ratification of Mahoney Cohen as independent public accountants for the fiscal
year ended July 31, 2008.
PROPOSALS OF SHAREHOLDERS
Shareholders who wish to present proposals under SEC Rule 14a-8 to be
included in our Proxy Statement and form of proxy in connection with next year's
Annual Meeting of Shareholders, must submit those proposals so that we receive
them no later than 120 days before the mailing date of our Proxy Statement in
connection with the upcoming April 18, 2008 Annual Meeting. If we meet this
year's expected mailing date of March 21, 2008, we must receive such proposals
for next year's Annual Meeting no later than November 21, 2008
Shareholders who wish to present matters outside the processes of SEC Rule
14a-8 to be included in our Proxy Statement and form of proxy in connection with
this year's Annual Meeting of Shareholders, must submit notice of those matters
so that we receive them no later than 45 days before the mailing date of our
Proxy Statement in connection with the April 18, 2008 Annual Meeting. If we meet
this year's expected mailing date of March 21, 2008, we must receive notice of
such matters for next year's Annual Meeting no later than February 4, 2009.
Notice received after February 4, 2009 will be untimely and subject to the
discretionary authority described in the last sentence of this Proxy Statement.
GENERAL
We will pay the cost of soliciting proxies and may make arrangements
with brokerage houses, custodians, nominees and other fiduciaries to send proxy
material to beneficial owners of our common stock. We will reimburse these
third-parties for reasonable out-of-pocket expenses. In addition to solicitation
by mail, our directors, officers and employees may solicit proxies by telephone,
electronic transmission and personally. Our directors, officers and employees
will not receive compensation for such services other than regular employee
compensation. We have retained Morrow & Co. for an estimated fee of $5,000, plus
out of pocket expenses, to assist in distributing proxy materials and soliciting
proxies.
Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, any amendments to those reports and any other
reports filed with or furnished to the SEC also are available on or through our
website at www.competitivetech.net as soon as reasonably practicable after they
are filed with or furnished to the SEC.
Upon written request, we will provide without charge (except for exhibits)
to any shareholder of record or beneficial owner of our securities, a copy of
our Annual Report on Form 10-K filed with the SEC for the year ended July 31,
2007, including the financial statements and schedules thereto. Exhibits to said
report will be provided upon payment of fees limited to our reasonable expenses
in furnishing such exhibits. Written requests should be addressed to: Secretary,
Competitive Technologies, Inc., 777 Commerce Drive, Fairfield, Connecticut,
06825.
Some brokers and other nominee record holders may be participating in the
practice of "householding" corporate communications to shareholders, such as
proxy statements and annual reports. This means that only one copy of this
Proxy Statement may have been sent to multiple shareholders in your household.
We promptly will deliver a separate copy of this Proxy Statement to you if you
call or write us at the following address or phone number: Secretary,
Competitive Technologies, Inc., 777 Commerce Drive, Fairfield, Connecticut,
06825, telephone: (203) 368-6044. If in the future you want to receive
separate copies of our corporate communications to shareholders, such as proxy
statements and annual reports, or if you are receiving multiple copies and would
like to receive only one copy for your household, you should contact your broker
or other nominee record holders, or you may contact us at the above address and
phone number.
The Board of Directors is not aware of any matter that 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 shareholders 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 CTT.
By Order of the Board of Directors,
\s\ John B. Nano
JOHN B. NANO
Chairman, President and CEO
Dated: March 19, 2008
*
*****
**-----**
**----- COMPETITIVE
****---- TECHNOLOGIES
**===== Unlocking the Potential of Innovation (R)
**=====**
*****
* (R)