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Annual Incentive Plan

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Title:

Annual Incentive Plan

Entities:

Competitive Technologies Inc.

Date:

2005

Size:

18KB total

Price:

$35

ID:

#868672

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COMPETITIVE TECHNOLOGIES, INC.

ANNUAL INCENTIVE PLAN

The following details the Annual Incentive Plan (AIP) of Competitive Technologies, Inc. (the Company)

1.	DEFINITIONS

Unless the context otherwise requires, the following words as used herein shall have the following meanings:

(a)	AIP or Plan - This Annual Incentive Plan, as may be amended from time to time.

(b)	Company - Competitive Technologies, Inc., a Delaware corporation, and all of its subsidiary (ies).

(c)	Board - The Board of Directors of the Company.

(d)	Business Development - Employees whose primary job function is to find, solicit, and secure new business opportunities and revenues, by bringing to the Company new technologies to license or sublicense, or by licensing or sublicensing technologies.

(e)	Compensation Committee - The Compensation Committee of the Board. No member of the Compensation Committee shall be eligible to participate in the Plan.

(f)

Participant - Any employee of the Company is eligible to participate (and therefore become a Participant) in the AIP regardless of his or her date of hire. The CEO may, at his/her option, recommend to the Compensation Committee a pro rata award, as appropriate, for employees hired after the start of the Plan Year or who may cease to be an employee prior to the end of the Plan Year.

(g)	Plan Year - Each fiscal year of the Company, fiscal year being defined as August 1 through the following July 31st, beginning after July 31, 2005.

2.	PURPOSE OF THE PLAN

The purpose of the Plan is to attract and keep in the employ of the Company personnel of experience and ability by providing an incentive to those who contribute significantly to the successful and profitable operation of the business and affairs of the Company. To that end, the Plan provides an opportunity for such employees to participate in and benefit from the successful results of the Company through participation in the Plan.

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3.	ADMINISTRATION

(a)	The AIP shall be administered by the Compensation Committee. The Compensation Committee may reasonably rely upon information provided and recommendations made to it by senior management of the Company.

(b)	The Compensation Committee shall have the sole power to interpret the AIP and, subject to the provisions herein set forth, to prescribe, amend and rescind rules and regulations and make all other determinations necessary or desirable for the administration of the AIP.

(c)	Changes to the Plan will be communicated to the affected employees by the Companys CEO.

4.	FORM OF INCENTIVE AWARD

Incentive awards under the AIP shall be in the form of cash.

5.	ANNUAL INCENTIVE CASH AWARDS

(a)

Each Participants Plan award will have two components. Fifty percent (50%) of the award will be based on the Companys financial performance compared to pre-established financial performance metrics (Company Component), and Fifty percent (50%) will be based upon an individuals performance compared to each individuals pre-established goals and objectives (Individual Component). The Company Component and the Individual Component together shall be defined as the Annual Award.

(b)	Prior to the beginning of the Plan Year, the CEO will submit for Board approval the proposed Company annual operating plan and shall submit for Compensation Committee approval financial performance metrics which shall serve as the goals and objectives for the Company Component award.

(c)

At the beginning of each Plan Year, the CEO (or the appropriate supervisor), will set each Participants goals and objectives for the Plan Year. Each Participant will have quantitative and qualitative goals and objectives. The CEO, at the request of the Compensation Committee, will review with the Compensation Committee the goals and objectives of senior management (for this purpose, senior management shall be defined as the CEO, the Chief Technology Officer (CTO), the Chief Financial Officer (CFO) and the Vice President and General Counsel (GC)) and the Compensation Committee shall approve the goals and objectives for these senior managers. The achievement of these goals shall form the basis for the Individual Component award. In addition, at the beginning of each Plan Year, the CEO and CTO will review with the Compensation Committee the goals and objectives of the Business Development team.

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