UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DECEMBER 14, 2010 (DECEMBER 14, 2010)
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
COMPETITIVE TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
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(STATE OR OTHER JURISDICTION OF INCORPORATION)
1-8696 36-2664428
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(COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
777 COMMERCE DRIVE, FAIRFIELD, CONNECTICUT 06825
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)
(203) 368-6044
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
N/A
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On December 2, 2010, the Board of Directors of Competitive Technologies, Inc., a
Delaware corporation (the "Company"), declared a dividend distribution of one
right (each, a "Right") for each outstanding share of common stock, par value
$0.001, of the Company (the "Common Shares"). The dividend is payable to
holders of record as of the close of business on December 2, 2010 (the "Record
Date").
The following is a summary description of the Rights. This summary is intended
to provide a general description only and is subject to the detailed terms and
conditions of the Rights Agreement, dated as of December 2, 2010 and executed on
December 14, 2010, by and between the Company and American Stock Transfer &
Trust Company, LLC as rights agent (the "Rights Agent"), a copy of which is
attached hereto as Exhibit 4.1, which is incorporated herein by reference (the
"Rights Agreement").
On December 2, 2010, the Board of Directors (the "Board") of COMPETITIVE
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), declared a dividend
of one right (collectively, the "Rights") for each outstanding share of Common
Stock, par value $0.001 per share, of the Company (the "Common Shares"). The
Rights will be issued to the holders of record of Common Shares outstanding at
December 2, 2010 (the " Record Date") and with respect to Common Shares issued
thereafter until the Distribution Date (as defined below). Each Right, when it
becomes exercisable as described below, will entitle the registered holder to
purchase from the Company one one-thousandth (1/1,000th) of a share of Series B
Preferred Stock, par value $0.001 per share, of the Company (the "Preferred
Shares") at a price of $100.00 (the "Purchase Price").
Until the earlier of (i) such time as the Company learns that a person or group
(including any affiliate or associate of such person or group), other than any
person or group with beneficial ownership of more than 20% of the outstanding
Common Stock as of December 2, 2010 (only so long as such person or group does
not increase its beneficial ownership of Common Stock, subject to certain
exceptions), has acquired, or obtained the right to acquire, beneficial
ownership of more than 20% of the outstanding Common Shares (any such person or
group being called an "Acquiring Person") and (ii) such date, if any, as may be
designated by the Board following the commencement of, or first public
disclosure of an intention to commence, a tender or exchange offer for
outstanding Common Shares which could result in such person or group becoming
the beneficial owner of more than 20% of the outstanding Common Shares (the
earlier of such dates being called the "Distribution Date"), the Rights will be
evidenced by certificates for Common Shares registered in the names of the
holders thereof, or, in the case of Common Shares held in uncertificated form,
by the transaction statement or other record of ownership of such Common Shares,
and not by separate Right Certificates. With respect to any Common Shares
outstanding as of the Record Date, until the earliest of the Distribution Date,
the Redemption Date or the Expiration Date, (i) in the case of certificated
shares, the Rights associated with the Common Shares represented by a
certificate shall be evidenced by such certificate along with a copy of this
Summary of Rights, and the surrender for transfer of any such certificate shall
also constitute the transfer of the Rights associated with the Common Shares
represented thereby, and (ii) in the case of Common Shares held in
uncertificated form, the Rights associated with the Common Shares shall be
evidenced by the balances indicated in the book-entry account system of the
transfer agent for the Common Shares, and the transfer of any Common Shares in
the book-entry account system of the transfer agent for such Common Shares shall
also constitute the transfer of the Rights associated with such Common Shares.
Therefore, until the Distribution Date, the Rights may be transferred with and
only with the underlying Common Shares.
As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date, and
such separate Right Certificates alone will thereafter evidence the Rights.
The Rights are not exercisable until the Distribution Date and will expire at
5:00 p.m., New York City time, on December 2, 2013 (the "Expiration Date"),
unless earlier redeemed or exchanged by the Company as described below.
The number of Preferred Shares or other securities issuable upon exercise of the
Rights is subject to adjustment by the Board in the event of any change in the
Common Shares or Preferred Shares, whether by reason of stock dividends, stock
splits, reclassifications, recapitalizations, mergers, consolidations,
combinations or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization, any distribution or
issuance of assets, evidences of indebtedness or subscription rights, options or
warrants to holders of Common Shares or Preferred Shares or otherwise. The
Purchase Price and the number of Preferred Shares or other securities issuable
upon exercise of the Rights are subject to adjustment from time to time in the
event of the declaration of a stock dividend on the Common Shares payable in
Common Shares or a subdivision or combination of the Common Shares prior to the
Distribution Date.
The Preferred Shares are authorized to be issued in fractions which are an
integral multiple of one one-thousandth (1/1,000th) of a Preferred Share. The
Company may, but is not required to, issue fractions of shares upon the exercise
of Rights, and in lieu of fractional shares, the Company may make a cash payment
based on the market price of such shares on the first trading date prior to the
date of exercise or utilize a depositary arrangement as provided by the terms of
the Preferred Shares.
Subject to the right of the Board to redeem or exchange the Rights as described
below, at such time as there is an Acquiring Person, the holder of each Right
will thereafter have the right to receive, upon exercise thereof, for the
Purchase Price, that number of one one-thousandths (1/1,000ths) of a Preferred
Share equal to the number of Common Shares which at the time of such transaction
would have a market value of twice the Purchase Price. Any Rights that are or
were beneficially owned by an Acquiring Person on or after the Distribution Date
will become null and void and will not be subject to the "flip-in" provision.
In the event the Company is acquired in a merger or other business combination
by an Acquiring Person that has common shares publicly traded in the United
States or 50% or more of the Company's assets or assets representing 50% or more
of the Company's earning power are sold, leased, exchanged or otherwise
transferred (in one or more transactions) to an Acquiring Person that has common
shares publicly traded in the United States, proper provision must be made so
that each Right will entitle its holder to purchase, for the Purchase Price,
that number of common shares of such entity which at the time of the transaction
would have a market value of twice the Purchase Price. In the event the Company
is acquired in a merger or other business combination by an Acquiring Person
that does not have common shares publicly traded in the United States or 50% or
more of the Company's assets or assets representing 50% or more of the earning
power of the Company are sold, leased, exchanged or otherwise transferred (in
one or more transactions) to an Acquiring Person that does not have common
shares publicly traded in the United States, proper provision must be made so
that each Right will entitle its holder to purchase, for the Purchase Price, at
such holder's option, (i) that number of common shares of the surviving
corporation in the transaction with such entity which at the time of the
transaction would have a
book value of twice the Purchase Price, (ii) that number of common shares of
such entity which at the time of the transaction would have a book value of
twice the Purchase Price or (iii) if such entity has an affiliate which has
common shares publicly traded in the United States, that number of common shares
of such affiliate which at the time of the transaction would have a market value
of twice the Purchase Price. The "flip-over" provision only applies to a merger
or similar business combination with an Acquiring Person.
ANY RIGHTS THAT ARE OR WERE, AT ANY TIME ON OR AFTER THE DATE AN ACQUIRING
PERSON BECOMES SUCH, BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (OR A TRANSFEREE THEREOF) WILL BECOME NULL
AND VOID AND ANY HOLDER OF ANY SUCH RIGHT (INCLUDING ANY SUBSEQUENT HOLDER) WILL
BE UNABLE TO EXERCISE ANY SUCH RIGHT.
The Rights are redeemable by the Board at a redemption price of $0.001 per Right
(the "Redemption Price") any time prior to the earlier of (i) the Distribution
Date and (ii) the Expiration Date (the date of such redemption being the
"Redemption Date"). Immediately upon the action of the Board electing to redeem
the Rights, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
After there is an Acquiring Person the Board may elect to exchange each Right
(other than Rights owned by an Acquiring Person) for consideration per Right
consisting of (i) one-half of the securities that would be issuable at such time
upon the exercise of one Right pursuant to the terms of the Rights Agreement or
(ii) cash in an amount equal to the Purchase Price. Notwithstanding the
foregoing, the Board is not empowered to effect such exchange at any time after
any person (other than the Company, any subsidiary of the Company, any employee
benefit plan of the Company or any such subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan), together with all
affiliates and associates of such person, becomes the beneficial owner of 50% or
more of the Common Shares then outstanding.
At any time prior to such time as there shall be an Acquiring Person, the
Company may, without the approval of any holder of the Rights, supplement or
amend any provision of the Rights Agreement (including the date on which the
Distribution Date will occur, the amount of the Purchase Price or the definition
of "Acquiring Person"), except that no supplement or amendment may be made that
extends the Expiration Date or reduces the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights as
a stockholder of the Company, including, without limitation, the right to vote
or to receive dividends.
ITEM 3.03 MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS.
See the description set out under "Item 1.01 - Entry into a Material Definitive
Agreement," which is incorporated by reference into this Item 3.03.
ITEM 8.01 OTHER EVENTS.
On December 13, 2010, the Company announced the declaration of the dividend of
Rights.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
Exhibit No. Description
3.1 Certificate of Designation, Preferences, and Rights of
Series B Preferred Stock of Competitive Technologies, Inc. (filed
herewith).
4.1 Rights Agreement dated as of December 2, 2010, by and
between the Company and American Stock Transfer & Trust, as
rights agent, which includes as Exhibit B the Form of Rights
Certificate (filed herewith).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COMPETITIVE TECHNOLOGIES, INC.
(Registrant)
Dated: December 15, 2010 By: /s/ Johnnie D. Johnson
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Johnnie D. Johnson
Chief Executive Officer