Exhibit 10.1

               COMPETITIVE TECHNOLOGIES, INC.
             ANNUAL INCENTIVE COMPENSATION PLAN

1.   DEFINITIONS

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

       (a) "Plan" - This Annual Incentive Compensation
  Plan, as amended from time to time.

       (b) "Company" - Competitive Technologies, Inc., a
  Delaware corporation, and its subsidiaries.

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

       (d) "Compensation Committee" - The Compensation
  Committee of the Board.

       (e) "Participant" - Employees of the Company who, in
  the opinion of the Compensation Committee, serve in key
  executive, administrative, professional or technical
  capacities with the Company.

       (f) "Plan Year" - Each fiscal year of the Company
  beginning after July 31, 2002.

2.   PURPOSE

  The purpose of the Plan is to attract and keep in the
  employ of the Company personnel of experience and ability
  by providing additional 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 the successful results of such operations
  through participation in the Plan.

3.   ADMINISTRATION

  (a)  The Plan shall be administered by the Compensation
     Committee, composed of not less than two independent
     directors of the Company. No member of the Compensation
     Committee shall be eligible to participate in the Plan.

  (b)  The Compensation Committee shall have the power to
     interpret the Plan 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 Plan's administration.

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

4.   ELIGIBLE POSITIONS TO PARTICIPATE

  (a)  From the positions eligible to participate in the Plan
     (and those positions to be added), the Company's Chief
     Executive Officer (the "CEO") shall annually make
     recommendations to the Compensation Committee for those
     positions that will participate in the Plan.

  (b)  In the Compensation Committee's discretion when an
     employee shall have died during the Plan Year, the Annual
     Incentive Compensation Award, if any, granted to him or her
     for the Plan Year by the Compensation Committee shall be
     paid to his or her spouse or legal representatives, as may
     be directed by the Compensation Committee.

5.   RANGE OF ANNUAL INCENTIVE COMPENSATION AWARDS

  (a)  At the beginning of each Plan Year, the CEO will obtain
     from Participants goals and objectives for the Plan Year
     which relate to CTT's annual operating plan. Each
     Participant will prepare quantitative and qualitative
     objectives and review these with the CEO who will further
     review them with the Compensation Committee. Once goals and
     objectives are agreed upon, the Participants Annual
     Incentive Compensation award will be allocated with up to
     70% of the award tied to Company financial performance
     metrics and up to 30% tied to individual performance. The
     CEO's performance metrics and results achieved will be
     reviewed and approved by the Compensation Committee.

  (b)  Should the Company achieve below 80% of the Company's
     financial performance metrics, there may be no Annual
     Incentive Compensation Award for this portion, 70%, of the
     award.

  (c)  Should the Company achieve above 115% of the Company's
     financial performance metrics, the Annual Incentive
     Compensation Award may increase to 150% of the Plan Year's
     Annual Incentive Compensation Award based on the
     recommendation of the CEO with approval of the Compensation
     Committee.

  (d)  The 30% portion of a Participant's Annual Incentive
     Compensation Award that is directed to individual
     performance may be paid out regardless of whether the
     company achieves its financial performance metrics, so long
     as a Participant meets his or her individual performance
     goals. The award will be based on the recommendation of the
     CEO with approval of the Compensation Committee.

  (e)  The following table outlines the targeted range of
     Annual Incentive Compensation Award as a percentage of the
     Participant's annual salary as of December 31st of Each Plan
     Year:
                                        Cash Bonus
          i)   President and CEO             50%
          ii)  Professional Staff            30%
          iii) Administrative Staff          10%

  (f)  The CEO may make recommendations for special awards in
     addition to the bonus described above, outside the
     parameters described above and the Compensation Committee
     may make such awards in their sole discretion.

6.   Integration with Commission Plan

  The Company also has a Commission Plan for Professional,
  Support Staff and consultants that sets aside a pool of
  funds up to 10% of new business revenue (less direct
  costs, other than personnel costs). This pool of funds
  shall be allocated among employees who participated in
  generating the new business by the lead professional
  staff responsible for the overall project. The allocation
  shall be subject to review and approval by the Company's
  Chief Executive Officer.

  The Commission earned on new business shall be paid for a
  maximum of five (5) years from the signing of the license
  agreement and shall be payable to the allocated pool of
  employees and consultants in their pro-rata share. Should
  the employee or consultant die while the commission is
  being paid, his or her pro rata share would be paid to
  his or her estate. Employees no longer with the Company
  may be able to receive the remaining portion of their
  award based on recommendations made by the CEO with
  approval by the Compensation Committee.

  Participants have the opportunity to earn the greater of
  the Commission or the Cash Bonus Incentive Compensation.

7.   AWARD OF ANNUAL INCENTIVE COMPENSATION

  (a)  As soon as practicable after the end of each Plan Year,
     but no later than three months after the end of the Plan
     Year, the CEO shall review the Company's annual results as
     well as the individual goals and objectives of each
     Participant, and shall recommend to the Compensation
     Committee the amount of award for each Participant. The CEO
     may recommend exclusion of extraordinary expenses or income
     from the annual results for Plan purposes with approval of
     the Compensation Committee.

  (b)  The CEO's recommendations will be in accordance with
     the Plan. Upon receipt of the CEO's recommendations with
     respect to each Participant, the Compensation Committee
     shall review and determine the amount of the award for each
     Participant. The decision of the Compensation Committee
     shall be final and conclusive, and nothing in the Plan shall
     be deemed to give any Participant, his or her legal
     representatives or assigns, any rights over and above those
     specified in the Plan.

8.   FORM OF INCENTIVE AWARD

  Incentive and commission awards shall be in the form of
  cash.

9.   SETTLEMENT OF INCENTIVE AWARDS AND COMMISSIONS

  The Compensation Committee shall instruct the CEO to have
  the Annual Incentive Compensation Awards and Commissions
  paid promptly after approval, in no event later than 30
  days after approval.

10.  DEATH OF PARTICIPANT

  In case of death of a Participant before or after
  determination of an award, should the Compensation
  Committee make such award, it shall be paid to the
  Participant's spouse or legal representatives at the same
  time as other awards are paid out.

11.  POWERS OF THE BOARD OF DIRECTORS

  The Board may suspend or terminate this Plan, in whole or
  in part, and may amend the Plan at any time or from time
  to time in such respects as the Board may deem advisable.