-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EI7E4/6v1yeUbrzJML3YVXkfLrTodnBPenDhR6myzMNkEFih3WcCqg6aaTWGjRpn bkVfbxYMB73ItcUiv28nhQ== 0000102198-02-000010.txt : 20021118 0000102198-02-000010.hdr.sgml : 20021118 20021118150447 ACCESSION NUMBER: 0000102198-02-000010 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020731 FILED AS OF DATE: 20021118 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPETITIVE TECHNOLOGIES INC CENTRAL INDEX KEY: 0000102198 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 362664428 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08696 FILM NUMBER: 02831272 BUSINESS ADDRESS: STREET 1: 1960 BRONSON ROAD STREET 2: BUILDING 1 CITY: FAIRFIELD STATE: CT ZIP: 06824 BUSINESS PHONE: 2032256044 MAIL ADDRESS: STREET 1: 1960 BRONSON ROAD STREET 2: BUILDING 1 CITY: FAIRFIELD STATE: CT ZIP: 06824 FORMER COMPANY: FORMER CONFORMED NAME: UNIVERSITY PATENTS INC DATE OF NAME CHANGE: 19920703 10-K/A 1 f10ka_02.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 AMENDMENT TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended July 31, 2002 Commission file number 1-8696 COMPETITIVE TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Annual Report for the fiscal year ended July 31, 2002 on Form 10-K as set forth in the pages attached hereto: (List all such items, financial statements, exhibits or other portions amended) Item 10. Directors and Executive Officers of the Registrant. Item 11. Executive Compensation. Item 12. Security Ownership of Certain Beneficial Owners and Management. Item 13. Certain Relationships and Related Transactions. Exhibit Index Exhibit Index (Amended) Exhibit 10.20 Registrant's Contingent Promissory Note dated October 28, 2002 in the principal amount of $1,683,348.33 together with its attached Exhibit A. Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned thereunto duly authorized. COMPETITIVE TECHNOLOGIES, INC. COMPETITIVE TECHNOLOGIES, INC. (the Registrant) (the Registrant) By /s/ John B. Nano By /s/ Frank R. McPike, Jr. John B. Nano Frank R. McPike, Jr. President, Chief Executive Executive Vice President, Officer, Director and Chief Financial Officer, Director Authorized Signer and Authorized Signer Date: November 18, 2002 PART III Item 10. Directors and Executive Officers of the Registrant The following table sets forth information with respect to each director and executive officer according to the information furnished the Company by him: Name, Age and Positions Currently Principal Occupation Director of the Held with the During Past Five Company Since Company Years; Other Public Directorships George C.J. Bigar, Professional December 1996 45, Director Investor. Richard E. Carver, President and January 2000 65, Director and Chief Executive Chairman of the Officer, MST Board of Directors America (an international business strategies consultancy) since January 1995; President and Chief Executive Officer, RPP America (a company that sells solid waste wrapping systems) from November 1998 to April 2000; Chairman and Chief Executive Officer, Carver Lumber Company (provider of building materials for new home construction and prefabrications) from May 1988 to December 1999. George W. Dunbar, Chief Executive November 1999 Jr., 56, Director Officer, EPIC Therapeutics, Inc. (a drug delivery technology company) since September 2000; Acting President and Chief Executive Officer of StemCells, Inc. (previously known as Cyto-Therapeutics, Inc.) since February 2000; Acting President of StemCells California, Inc. (a wholly-owned subsidiary of StemCells, Inc.) since November 1999 (companies developing organ- specific, human platform stem cell technologies to treat diseases); President and Chief Executive Officer, Metra BioSystems, Inc. (a developer of products to detect and manage bone and joint diseases) from 1991 to August 1999. Director of Sonus Pharmaceuticals, Inc. Samuel M. Fodale, President, Central October 1998 59, Director Maintenance Services, Inc. (a service and warehousing corporation serving the automobile industry). Frank R. McPike, Executive Vice February 1999 Jr., 53, Executive President of the Vice President, Company since June Chief Financial 2002; Chief Officer, Treasurer, Executive Officer of and Director the Company from November 2000 to June 2002; President of the Company from October 1998 to June 2002; Chief Operating Officer of the Company from October 1998 to November 2000; Interim Chief Executive Officer of the Company from August to October 1998; Secretary of the Company from August 1989 to February 1999; 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 and since February 1999. John B. Nano, 58, President and Chief June 2002 President and Chief Executive Officer of Executive Officer, the Company since Director June 2002; Principal reporting to the Chairman of Stonehenge Networks Holdings, N.V. (a global virtual private network (VPN) provider) with respect to certain operating, strategic planning and finance functions from 2000 to 2001; Executive Vice President and Chief Financial Officer of ConAgra Trade Group, Inc. (a subsidiary of ConAgra, Inc., an international food company) from 1998 to 1999; Executive Vice President and Chief Financial Officer and President of Internet Startup Division of Sunkyong America (a subsidiary of Sunkyong Group, a Korean conglomerate) from 1993 to 1998. Charles J. Partner, GarMark June 1999 Philippin, 52, Advisors (a Director mezzanine investment fund) since May 2002; Chief Executive Officer, Accordia, Inc. (formerly On-Line Retail Partners) (a provider of management and technology resources for branded e- commerce businesses) since June 2000; a member of the management committee of Investcorp International, Inc. (a global investment group that acts as a principal and intermediary in international investment transactions) from July 1994 to May 2000. John M. Sabin, 47, Chief Financial December 1996 Director Officer and General Counsel of NovaScreen Biosciences Corporation (previously known as Oceanix Biosciences Corporation) (a developer of biotechnology- based tools to accelerate drug discovery and development) since January 2000; business consultant from September 1999 to January 2000; Executive Vice President and Chief Financial Officer, Hudson Hotels Corporation (a limited service hotel development and management company) May 1998 to September 1999; 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 Acquisitions, Choice Hotels International, Inc., June 1995 to October 1996. Each director holds 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 terms of all executive officers of the Company are until the first meeting of the newly elected Board of Directors following the forthcoming annual meeting of stockholders and until their respective successors shall have been duly elected and shall have qualified, subject to employment agreements. Mr. Nano and Mr. McPike have employment contracts with the Company; these contracts are described in Item 11, Executive Compensation. There is no family relationship between any director or executive officer of the Company. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 (Exchange Act) requires the Company's directors and officers and persons who own more than ten percent of the Company's Common Stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission and the American Stock Exchange. SEC regulations require reporting persons to furnish the Company with copies of all Section 16(a) forms they file. Based solely on its review of the copies of such reports received or written representations from certain reporting persons with respect to fiscal 2002, the Company believes that all reporting persons complied with all applicable reporting requirements. Item 11. 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, 2002, 2001 and 2000 to the two individuals who served as executive officers of the Company during the fiscal year ended July 31, 2002 (the Specified Executives). SUMMARY COMPENSATION TABLE Annual Compensation (A)
Long Term Compensation Awards ______ Securities All Other Name and Principal Fiscal Underlying Compensation Position Year Salary ($) Bonus ($) Options (#) ($) John B. Nano, 2002 28,846 -- 300,000 -- President and Chief Executive Officer Frank R. McPike, Jr. 2002 233,654 -- 12,500 19,240 (B) Executive Vice 2001 217,500 25,000 25,000 23,773 (B) President and Chief 2000 184,039 25,000 100,000 17,174 (B) Financial Officer; formerly President, Chief Executive Officer, and Chief Operating 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) Consists principally of amounts contributed for Mr. McPike to Competitive Technologies, Inc.'s 401(k) Plan in 2002 and Employees' Common Stock Retirement Plan in 2001 and 2000. 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, 2001 and 2000. 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, 2002 to the Specified Executives. OPTION GRANTS IN LAST FISCAL YEAR Individual Grants
Percent Potential Number of of Total Realizable Securities Options Value at Underlying Granted to Assumed Annual Options Employees Exercise Rates of Stock Granted in Fiscal Price Expiration Appreciation Name (#) Year ($/Sh) Date for Option Term 5% ($) 10% ($) John B. Nano 300,000 (1) 76% $2.15 6/17/2012 $405,637 $1,027,964 Frank R. McPike, Jr. 12,500 (2) 3% $6.50 12/17/2011 $ 51,098 $ 129,492
(1) Options vest 25% per year on June 17, 2003, 2004, 2005 and 2006. (2) Options vest 25% one year from the grant date of December 17, 2001 with the balance to vest pro-rata semi-annually over the subsequent 36 months. Option Exercises and Year End Value For the Specified Executives, the following table summarizes stock options held at July 31, 2002. The Specified Executives exercised no stock options during the fiscal year ended July 31, 2002. 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 John B. Nano 0 $0 0/300,000 $0/$765,000 Frank R. McPike, Jr. 0 $0 153,379/ 29,688 $0/$0 Employment Agreements The Company has entered into an employment agreement with Mr. Nano which provides for his employment as the Company's President and Chief Executive Officer at a base compensation of $250,000 per year, subject to reviews and increases in the sole discretion of the Company's Board of Directors. The employment is at will and can be terminated by either party at any time and for any reason. The agreement also provides, among other things: - From his date of employment through July 31, 2003, and in each following fiscal year, Mr. Nano will be eligible to receive a bonus of up to $100,000, based on the Company's performance and Mr. Nano's performance of objectives to be established by the Board. After fiscal 2003, the Company may adopt an executive bonus plan in lieu of the bonus. - Mr. Nano was granted ten-year options under the Company's 1997 Employees' Stock Option Plan for the purchase of 300,000 shares of the Company's Common Stock at an exercise price of $2.15 per share, vesting 25% on each of the first four anniversaries of his employment date. - If Mr. Nano's employment terminates as a result of his death or disability, any unvested options granted under the agreement will immediately become fully vested. - If Mr. Nano terminates his employment for good reason or the Company terminates it without cause, Mr. Nano will be entitled to receive a severance benefit continuing his base compensation and certain other benefits for a period of six months and continued vesting of stock options for the longer of a period of six months or until the next anniversary of his employment date. - If his employment is terminated without cause in conjunction with a change in control of the Company, Mr. Nano will be entitled to receive his base compensation and certain other benefits for one year, and any unvested options granted under the agreement will immediately become fully vested. - The agreement provides for a one-year period of non-competition with the Company in certain circumstances. Effective December 7, 1999, the Company entered into an employment agreement with Mr. McPike providing for his employment as President and Chief Operating Officer for a three-year term and for base compensation at a minimum rate of $185,000 per year, subject to annual reviews and increases in the sole discretion of the Board of Directors. The employment is at will and can be terminated by either party at any time with or without cause. The agreement also provides, among other things: -- a procedure for annual renewals of the employment term with continuation of pay for six months after non-renewal unless non-renewal is for cause -- severance payments of up to one year's base compensation in certain circumstances -- a period of non-competition covering the remainder of the employment term plus six months in certain circumstances. The employment agreement also confirmed ten-year stock options for the purchase of 100,000 shares of the Company's Common Stock granted to Mr. McPike on December 7, 1999 at a price of $5.5625 per share and vesting on a specified schedule. All options have now vested. Other Arrangements The Company provides term life insurance for certain of its officers. The policy amount in the event of death is $250,000 for Mr. McPike. The Company paid premiums of $1,065 in 2002 and $460 in each of 2001 and 2000 for Mr. McPike's policy. Effective January 1, 1997, the Company established the Competitive Technologies, Inc. 401(k) Plan (the 401(k) plan). All employees of the Company who have attained the age of 21 are eligible to participate in the 401(k) plan. Under the 401(k) plan, an eligible employee may elect a salary reduction of his or her compensation as defined in the plan to be contributed by the Company to the plan. Employee contributions for any calendar year are limited to a specific dollar amount determined by the Internal Revenue Service ($11,000, plus an additional $1,000 for participants over age 50 for 2002 and the lesser of 15% of compensation or $10,500 for 2001 and 2000). The Company may also make discretionary matching contributions. For the fiscal year ended July 31, 2002, CTT's directors authorized a discretionary matching contribution of $80,000 payable in the Company's common stock. CTT charged this amount to expense in fiscal 2002 and expects to contribute shares of Company common stock valued at $80,000 for distribution to eligible employees before December 31, 2002. Subject to compliance with non-discrimination requirements set forth in the Internal Revenue Code, this 2002 discretionary contribution will be allocated to all employees with at least 1,000 hours of service to the Company at July 31, 2002; one-half of this contribution will be allocated equally among them and one-half will be allocated based on a percentage of salary. Mr. McPike's portion of the fiscal 2002 allocation was $12,094. Mr. Nano was not eligible to participate in the fiscal 2002 allocation. The Company made no matching contributions prior to 2002. 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. Beginning with the 2002 plan year, 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 25% of that year's compensation reduced by any matching or employer discretionary contributions made to the 401(k) plan, 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 could be allocated to any individual participant's account in fiscal 2002 is the number of shares with a fair market value equal to $35,000. The maximum number of shares that could be allocated to any individual participant's account in fiscal 2000 and 2001 is the number of shares with a fair market value equal to the lesser of $30,000 or 25% of his or her compensation for that year reduced by his or her 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 New Britain, Connecticut. The trustee has the power to vote Company shares owned by the Retirement Plan. For the fiscal years ended July 31, 2001 and 2000 the Board authorized contributions of 14,814 and 4,274 shares, respectively, to the Retirement Plan. Shares allocated to Mr. McPike, the Company's sole executive officer during fiscal 2001 and 2000, under the Retirement Plan were 3,308 and 1,268 for the fiscal years ended July 31, 2001 and 2000, respectively. For fiscal 2002, no contribution will be made to the Retirement Plan; CTT's directors authorized a discretionary matching contribution of Company common stock to the Company's 401(k) plan rather than to the Employees' Common Stock Retirement Plan. See also Summary Compensation Table - "All Other Compensation" for dollar values ascribed to contributions for Mr. McPike. The Company has an incentive compensation plan pursuant to which an amount equal to 10% of operating income of the Company (defined and adjusted as provided in said plan) shall be credited each year to an incentive fund. A committee, none of whose members is eligible to receive awards, makes cash awards to key employees of the Company from the incentive fund. Amounts may be credited to the incentive fund when the Company earns operating income (as defined in said plan) for a fiscal year. In fiscal 2002 and 2001, no amounts were credited to this fund. In fiscal 2000, the Company credited $86,004 to this incentive fund. In November 2000, the Company paid $86,000 in incentive bonuses to employees, including $25,000 to Mr. McPike. The Company has in effect a 1997 Employees' Stock Option Plan (the Option Plan) with respect to its Common Stock, $.01 par value, which provides for granting either incentive stock options under Section 422 of the Internal Revenue Code or nonqualified options. (Incentive options and non-qualified options granted under the Option Plan must be granted at not less than 100% of fair market value on the grant date). 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 $1,000 for each Board meeting attended. The Company also pays each director $250 for attending each committee meeting that coincides with a Board meeting and $500 for attending a committee meeting that does not coincide with a Board meeting. The Company pays directors who participate in telephonic board and/or committee meetings one half the fee for attending such meetings. The Company reimburses directors for out-of-pocket expenses incurred to attend Board and committee meetings. When a director of the Company represents the Company as a director of an investee company, the Company pays the director for attending investee board meetings the difference, if any, between (a) the amount the investee company pays and (b) the amount the Company pays for attendance at such meetings. During fiscal 2002, the Company paid Mr. Sabin $9,000 for his attendance at investee board meetings. No other director received any such fees. In addition to meeting fees, the Company pays outside directors an annual cash retainer of $7,500 payable in quarterly installments. In August 1999, the Board formed an executive committee with Mr. Bigar as chairman and provided that the Company compensate him at the rate of $8,000 per month due to the substantial commitment of time to be required of Mr. Bigar as chairman. This arrangement continued until August 2000. See Item 13. Certain Relationships and Related Transactions. Under the Company's 1996 Directors' Stock Participation Plan, 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 Company would pay the annual stock compensation described above on a pro-rata basis up to the termination date. In January 2002, the Company issued an aggregate of 15,000 shares under this plan (2,500 each to Messrs. Bigar, Carver, Dunbar, Fodale, Philippin and Sabin). Effective January 27, 2000, the Company adopted the Competitive Technologies, Inc. 2000 Directors Stock Option Plan (the Directors Option Plan) with respect to its Common Stock, $.01 par value. Directors who are not employees of the Company or a subsidiary are eligible for options granted pursuant to this plan. This plan provides that the Company grant an option for 10,000 shares to each new director elected during the term of this plan on the date he or she is first elected to office, whether by the stockholders or by the Board. This plan also provides that the Company grant an additional option for 10,000 shares to each director holding office on the first business day in each subsequent January. Options under this plan will be non-statutory options, have an exercise price of 100% of the fair market value at the grant date, have a term of ten years from the grant date, and fully vest on the grant date. If a person's directorship is terminated because of death or permanent disability, options may be exercised within one year after termination. If the termination is for any other reason, options may be exercised only within 180 days after termination. In no event may an option be exercised after expiration of its ten-year term. The Company may not grant options under the Directors Option Plan after the first business day of January 2010. On January 2, 2002, the Company granted 60,000 options under this plan (10,000 each to Messrs. Bigar, Carver, Dunbar, Fodale, Philippin and Sabin). Item 12. Security Ownership of Certain Beneficial Owners and Management The following information indicates the beneficial ownership of the Company's Common Stock by each director and 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. The indicated owners furnished such information to the Company as of October 1, 2002 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 executive officers George C. J. Bigar 35,331 (C) -- Richard E. Carver 33,220 (D) -- George W. Dunbar, Jr. 35,025 (E) -- Samuel M. Fodale 192,958 (F) 3.1% Frank R. McPike, Jr. 189,071 (G) 3.0% John B. Nano None -- Charles J. Philippin 56,769 (H) -- John M. Sabin 37,226 (I) -- All directors and executive officers as a group 579,600 (J) 8.9% Additional 5% Owner Richard D. Corley 323,200 (K) 5.3% 416 St. Mark Court Peoria, IL 61603 (A) Except as indicated in the notes which follow, the designated person or group has sole voting and investment power. (B) Percentages of less than 1% are not shown. (C) Consists of 5,331 shares of Common Stock plus 30,000 stock options deemed exercised solely for purposes of showing total shares owned by Mr. Bigar. (D) Consists of 9,220 shares of Common Stock plus 24,000 stock options deemed exercised solely for purposes of showing total shares owned by Mr. Carver. (E) Consists of 5,025 shares of Common Stock and 30,000 stock options deemed exercised solely for purposes of showing total shares owned by Mr. Dunbar. (F) Consists of 162,958 shares of Common Stock plus 30,000 stock options deemed exercised solely for purposes of showing total shares owned by Mr. Fodale. 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. (G) Consists of 35,692 shares of Common Stock plus 153,379 stock options deemed exercised solely for purposes of showing total shares owned by Mr. McPike. Includes 1,500 shares of Common Stock held by daughter as to which Mr. McPike disclaims beneficial ownership. Includes 10,958 shares of Common Stock held by Webster Trust as Trustee under the Company's Employee Common Stock Retirement Plan, as to which Mr. McPike has shared investment power. Does not include 9,497 shares of Common Stock allocated to Mr. McPike under said Retirement Plan; Trustee has sole voting and investment power with regard thereto. (H) Consists of 26,769 shares of Common Stock plus 30,000 stock options deemed exercised solely for purposes of showing total shares owned by Mr. Philippin. (I) Consists of 7,226 shares of Common Stock plus 30,000 stock options deemed exercised solely for purposes of showing total shares owned by Mr. Sabin. Includes 200 shares of Common Stock held by spouse. (J) Consists of 252,221 shares of Common Stock plus 327,379 stock options to purchase shares of Common Stock deemed exercised solely for purposes of showing total shares owned by such group. (K) Information taken from Schedule 13D/A filed September 25, 2001, which states that the information is as of September 14, 2001. At October 1, 2002, 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 or executive officer of the Company at October 1, 2002. Shares of Common Percent Name Stock of UOP (A) of Class (B) George C. J. Bigar None -- Richard E. Carver None -- George W. Dunbar, Jr. None -- Samuel M. Fodale None -- John B. Nano None -- Frank R. McPike, Jr. 14,000 -- Charles J. Philippin None -- John M. Sabin None -- All directors and executive officers 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. Item 13. Certain Relationships and Related Transactions From August 2001 through May 2002, the Company compensated George C. J. Bigar, a director of the Company, for consulting services related to the Company's investments and potential investments in development- stage companies. Mr. Bigar received $117,000 for these services from August 2001 through May 2002. CERTIFICATIONS I, John B. Nano, President and Chief Executive Officer of Competitive Technologies, Inc., certify that: 1. I have reviewed this annual report on Form 10-K of Competitive Technologies, Inc.; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report. Date: November 18, 2002 /s/ John B. Nano John B. Nano, President and Chief Executive Officer Competitive Technologies, Inc. I, Frank R. McPike, Jr., Executive Vice President, Chief Financial Officer and Treasurer of Competitive Technologies, Inc. certify that: 1. I have reviewed this annual report on Form 10-K of Competitive Technologies, Inc.; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report. Date: November 18, 2002 /s/ Frank R. McPike, Jr. Frank R. McPike, Jr. Executive Vice President, Chief Financial Officer and Treasurer of Competitive Technologies, Inc. EXHIBIT INDEX (AMENDED) Exhibit No. Description Page 3.1 Unofficial restated certificate of incorpora- tion of the registrant as amended to date filed as Exhibit 4.1 to registrant's Registration Statement on Form S-8, File Number 333-49095 and hereby incorporated by reference. 3.2 By-laws of the registrant as amended to date filed as Exhibit 3.1 to registrant's Form 10-Q for the quarter ended October 31, 1997 and hereby incorporated by reference. 10.1* Registrant's Restated Key Employees' Stock Option Plan filed as Exhibit 4.3 to registrant's Registration Statement on Form S-8, File Number 33-87756 and hereby incorporated by reference. 10.2* Registrant's Incentive Compensation Plan filed as Exhibit 10.2 to registrant's Form 10-K for the year ended July 31, 1997 and hereby incorporated by reference. 10.3* Registrant's 2000 Directors Stock Option Plan filed as Exhibit 4.3 to registrant's Registration Statement on Form S-8, File Number 333-95763 and hereby incorporated by reference; amended Section 5(c) of registrant's 2000 Directors Stock Option Plan filed as Exhibit 10.1 to registrant's Form 10-Q for the quarter ended January 31, 2002 and hereby incorporated by reference. 10.4* Registrant's 1996 Directors' Stock Participation Plan filed as Exhibit 4.3 to registrant's Form S-8, File Number 333-18759 and hereby incorporated by reference. 10.5 Limited Partnership Agreement of Optical Associates, Limited Partnership dated November 3, 1983 filed as Exhibit 19.02 to registrant's Form 10-Q for the quarter ended January 31, 1984 and hereby incorporated by reference. 10.6 Joint Venture Agreement dated April 30, 1984 between Optical Associates, Limited Partnership and University Optical Products Co., filed as Exhibit 19.02 to registrant's Form 10-Q for the quarter ended April 30, 1984 and hereby incorporated by reference; moratorium agreement dated July 20, 1987 between University Optical Products Co. and Optical Associates, Limited Partnership filed as Exhibit 10.14 to registrant's Form 10-K for the fiscal year ended July 31, 1987 and hereby incorporated by reference. 10.7 Asset Purchase Agreement among University Optical Products Co., Unilens Corp. USA, Unilens Optical Corp. and the registrant dated January 23, 1989 filed as Exhibit 19.1 to registrant's Form 10-Q for the quarter ended January 31, 1989 and hereby incorporated by reference. 10.8* Registrant's 1997 Employees' Stock Option Plan as amended January 18, 2002, filed as Exhibit 4.3 to registrant's Form S-8, File Number 333-81456 and hereby incorporated by reference. 10.9 Asset Purchase Agreement between Unilens Corp. U.S.A. and University Optical Products Co. dated November 30, 1989 filed as Exhibit 19.1 to registrant's Form 10-Q for the quarter ended October 31, 1989 and hereby incorporated by reference. 10.10* Employment Agreement between registrant and Frank R. McPike, Jr. dated December 7, 1999 filed as Exhibit 10.1 to registrant's Form 10-Q for the quarter ended January 31, 2000 and hereby incorporated by reference. 10.11 Settlement and Forbearance Agreement dated July 15, 1993 among registrant, Unilens Corp. USA and Unilens Vision Inc. filed as Exhibit 10.47 to registrant's Form 10-K for the year ended July 31, 1993 and hereby incorporated by reference. 10.12 Stock Purchase Agreement dated July 15, 1993 among registrant, Unilens Corp. USA and Unilens Vision Inc. filed as Exhibit 10.48 to registrant's Form 10-K for the year ended July 31, 1993 and hereby incorporated by reference. 10.13 Amendment and Modification Agreement dated September 27, 1993 among registrant, Unilens Corp. USA and Unilens Vision Inc. filed as Exhibit 10.49 to registrant's Form 10-K for the year ended July 31, 1993 and hereby incorporated by reference. 10.14 Lease agreement between registrant and The Bronson Road Group made August 28, 1996 filed as Exhibit 10.34 to registrant's Form 10-K for the year ended July 31, 1996 and hereby incorporated by reference. 10.15 First Amendment of Lease Agreement dated August 9, 2001 between registrant and The Bronson Road Group, LLP. 10.16 Agreement between registrant and Samuel M. Fodale dated June 13, 2001. 10.17* Employment Agreement between registrant and John B. Nano dated June 17, 2002 filed as Exhibit 10.1 to registrant's Form 8-K dated June 17, 2002, filed June 20, 2002 and hereby incorporated by reference. 10.18 Assignment of Promissory Notes, Technology Servicing Agreement, Note Purchase Agreement, Security Interest Agreement, and Intercreditor Agreement between registrant and MRM Acquisitions, LLC effective August 5, 2002 filed as Exhibit 10.1 to registrant's Form 8-K dated July 16, 2002, filed August 6, 2002 and hereby incorporated by reference. 10.19* 1997 Employees' Stock Option Agreement between registrant and John B. Nano dated June 17, 2002. 10.20 Registrant's Contingent Promissory 20-21 Note dated October 28, 2002 in the principal amount of $1,683,348.33 together with its attached Exhibit A. 21.1 Subsidiaries of the registrant. 23.1 Consent of PricewaterhouseCoopers LLP. 99.1 Certification by the Principal Executive Officer of Competitive Technologies, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). 99.2 Certification by the Principal Financial Officer of Competitive Technologies, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). * Management Contract or Compensatory Plan EX-10.20 4 ex10-20.txt EXHIBIT 10.20 PROMISSORY NOTE $1,683,348.33 October 28, 2002 The undersigned, Competitive Technologies, Inc., a Delaware corporation ("Maker"), promises to pay to the order of Foley & Lardner the principal sum of $1,683,348.33, plus simple interest thereon accruing from the date hereof at the rate of 11% per annum, in furtherance of the terms of an Agreement between the Maker and Foley & Lardner dated as of the date hereof attached hereto as Exhibit A. As provided in the aforesaid Agreement, payment hereunder shall be made within 30 days after, and is fully contingent upon, Maker's recovery of legal fee reimbursements or receipt of cash proceeds upon successful resolution of the lawsuit currently pending in the Federal District Court, Northern District of California, against Fujitsu et al. Maker hereby waives all notice, demand for payment, presentment for payment, protest and notice of protest. COMPETITIVE TECHNOLOGIES, INC. By /s/ Frank R. McPike, Jr. EXHIBIT A AGREEMENT Foley & Lardner agrees that Competitive Technologies, Inc.'s obligation to make any further payments beyond those already made for legal fees and disbursements expended in the legal actions brought against or by Fujitsu et al. shall be limited to the payment of $1,683,348.53, plus simple interest thereon accruing from the date of this Agreement at the rate of 11% per annum, solely from the recovery of legal fee reimbursements or proceeds received by Competitive Technologies upon the successful resolution of the action, as awarded by the court or through negotiated settlement. The payment described herein shall be paid within thirty (30) days of the date Competitive Technologies receives good funds representing the proceeds received upon the successful resolution of the action. Other than as stated herein, Foley & Lardner further agrees that Competitive Technologies, Inc. has no obligation to make any payments further to those already made to Foley & Lardner for legal fees and disbursements for any and all services rendered by Foley & Lardner through the date hereof. COMPETITIVE TECHNOLOGIES, INC. FOLEY & LARDNER By: /s/ Frank R. McPike, Jr. By: Richard Phelan Its: Executive Vice President & CFO Its: Managing Partner-Chicago Dated: 10/28/02 Dated: 10/28/02 -----END PRIVACY-ENHANCED MESSAGE-----