Exhibit
      10.1

     

    EMPLOYMENT
      AGREEMENT 

     

    This
      EMPLOYMENT AGREEMENT (this “Agreement”), dated as of February 15, 2006
      (“Effective Date”), is between Competitive Technologies, Inc., a Delaware
      corporation (the “Company”) and Dr. Michael E. Kiley (the “Executive”). In
      consideration of the mutual covenants contained in this Agreement, and other
      good and valuable consideration, the receipt and sufficiency of which is
      acknowledged, the parties agree as follows: 

     

    1.  Employment.
      The
      Company hereby employs the Executive, and the Executive hereby accepts such
      employment with the Company, upon all the terms and conditions set forth below.
      Executive represents and warrants that: (a) he has full power and authority
      to
      enter into this Agreement, (b) he is not restricted in any manner whatsoever
      from performing the duties described below, and (c) no agreement, covenant
      or
      other matter prohibits or limits his ability or authority to enter into this
      Agreement or perform all of the duties described below. Executive's employment
      with the Company shall include service for the Company's direct and indirect
      subsidiaries and affiliated entities (the “Subsidiaries”). 

     

    2.  Employment
      Term.
      The
“Employment Term” and Executive's employment under this Agreement shall commence
      on the Effective Date and shall continue until the date on which the Agreement
      is terminated in accordance with the provisions of Section 7 below. The Company
      and the Executive acknowledge that the Executive's employment is at will and
      can
      be terminated by either party at any time and for any reason. If the Executive's
      employment terminates for any reason, with or without Cause, the Executive
      shall
      not be entitled to any payments, benefits, damages, awards, or compensation
      other than as provided in Section 7 below. The parties acknowledge that certain
      obligations under this Agreement survive the end of Executive's employment.
      

     

    3.  Position
      and Duties.
      

     

    (a)  Executive
      Vice-President and Chief Technology Officer.
      The
      Company shall employ the Executive as its Executive Vice-President and Chief
      Technology Officer. Executive shall report to the President and Chief Executive
      Officer (the “CEO”). Executive shall have such responsibilities and duties as
      are commensurate with the position of chief technology officer in an entity
      comparable to the Company, including, without limitation, developing and
      implementing an overall strategic technology plan for the Company and annual
      strategic plans, and supervising day-to-day technology operations of the
      Company. The CEO shall have the right to modify Executive's duties and
      responsibilities from time to time as the CEO may deem necessary or appropriate.
      

     

    (b)  Manner
      of Employment.
      Executive shall faithfully, diligently and competently perform his
      responsibilities and duties. The Executive shall devote his exclusive and full
      business efforts and time to the Company. This Section 3(b), however, shall
      not
      preclude the Executive, outside normal business hours, from engaging in
      appropriate civic or charitable activities, or from serving as a director of
      any
      not-for profit entity, as long as such activities do not interfere or conflict
      with his responsibilities to the Company. With the Board's consent, Executive
      may serve as a director of a for-profit entity. 

     

    
      
         

      

      
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    4.  Base
      Compensation.
      The
      Company shall pay the Executive base compensation in the gross amount of $
      225,000.00 per year, subject to reviews and increases recommended by the CEO
      and
      approved by the Compensation Committee of the Board (“Base Compensation”). Base
      Compensation shall be paid periodically in accordance with normal Company
      payroll practices. 

     

    5.  Employment
      Benefits.
      Executive shall be entitled to the following benefits during the Employment
      Term: 

     

    (a)  Expense
      Allowance.
      Executive shall be reimbursed for business related expenses reasonably and
      necessarily incurred and advanced by Executive in performing his duties for
      the
      Company, subject to and in accordance with Company policy as it exists from
      time
      to time. 

     

    (b)  Other
      Benefits.
      Executive may participate in all other employee benefit plans and programs
      as
      the Company may, from time to time, offer to its executive employees, subject
      to
      the same terms and conditions as such benefits are generally provided by the
      Company and, if applicable, the discretion of the CEO. All such benefits are
      subject to plan documents (where applicable) and the Company's policies and
      procedures. Nothing in this Section 5(b) guarantees that any specific benefit
      will be provided or offered by the Company which has the right to add, modify,
      or terminate benefits at any time. 

     

    6.  Bonus.
      For the
      period from the Effective Date through July 31, 2006 (the end of the 2006 fiscal
      year), and in each fiscal year during the Employment Term thereafter, Executive
      shall be eligible to participate in the Company’s Annual Incentive Plan receive
      a bonus based upon the Company's and the Executive's performance of objectives
      during those time periods, all as provided in the Annual Incentive Plan. The
      Company has the right to add, modify, or terminate the Annual Incentive Plan
      at
      any time. 

     

    7.  Termination
      and Severance Benefits.
      

     

    (a)  Death.
      The
      death of Executive shall automatically terminate the Company's obligations
      under
      this Agreement; provided however, that: (i) the Company shall pay to Executive's
      estate Executive's Base Compensation and accrued benefits through the date
      of
      termination; and (ii) any unvested Plan Options granted under this Agreement
      will upon such termination become fully vested and immediately exercisable.
      

     

    (b)  Disability.
      If
      Executive is unable, in the reasonable determination of the Board, to render
      services of substantially the kind and nature, and to substantially the extent,
      required to be rendered by Executive under this Agreement due to illness,
      injury, physical or mental incapacity or other disability, for ninety (90)
      days,
      whether consecutive or not, within any twelve (12) month period, Executive's
      employment may be terminated by the Company and: (i) the Company's sole
      obligation shall be to pay to Executive his Base Compensation and accrued
      benefits through the date of termination; and (ii) any unvested Plan Options
      granted under this Agreement will upon such termination become fully vested
      and
      immediately exercisable. 

     

    (c)  Resignation.
      If
      Executive resigns his employment during the Employment Term other than for
      Good
      Reason (as defined below), the Company shall have no liability to Executive
      except to pay Executive's Base Compensation and any accrued benefits through
      his
      last day worked, and Executive shall not be entitled to receive severance or
      other benefits. 

     

    
      
         

      

      
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    (d)  Resignation
      for Good Reason.
      If
      Executive resigns his employment for Good Reason (as defined below), he shall
      be
      entitled to receive all accrued but unpaid salary and benefits through the
      date
      of termination plus the Severance Benefit (as defined below). 

     

    (e)  Termination
      By Company for Cause.
      If the
      Executive's employment is terminated for Cause (as defined below), the Company
      shall have no liability to Executive except to pay Executive Base Compensation
      and any accrued benefits through his last day worked and Executive shall not
      be
      entitled to receive severance or other benefits. 

     

    (f)  Termination
      By Company Without Cause.
      If the
      Company terminates Executive's employment during the Employment Term without
      Cause (and for reasons other than death or Disability), Executive shall be
      entitled to receive all accrued but unpaid salary and benefits through the
      date
      of termination plus the Severance Benefit. 

     

    (g)  Termination
      Due to Change in Control.
      If the
      Company terminates Executive's employment without Cause (and for reasons other
      than death or Disability) in conjunction with a Change in Control (as defined
      below), Executive shall be entitled to receive all accrued but unpaid salary
      and
      benefits through the date of termination plus the Change in Control Benefit
      (as
      defined below). 

     

    (h)  Cause.
      The
      following acts by Executive, as determined by the Board in its reasonable
      discretion, shall constitute “Cause” for termination: 

     

    (i)  theft
      or
      embezzlement, or attempted theft or embezzlement, of money or material tangible
      or intangible assets or property of the Company or its employees or business
      relations; 

     

    (ii)  a
      violation of any law or any act or acts of moral turpitude which negatively
      affects the interests, property, business, operations or reputation of the
      Company; 

     

    (iii)  other
      than as a result of a disability, a material failure to carry out effectively
      Executive's duties and obligations to the Company, or failure to devote to
      the
      Company's business the time required in Section 3(b) above, upon not less than
      ten (10) days' advance written notice of the asserted problem and a reasonable
      opportunity to cure; 

     

    (iv)  gross
      negligence or willful misconduct in the performance of Executive's duties;
      

     

    (v)  Executive's
      material breach of this Agreement which, after written notice by the Company
      of
      such breach, is not cured within ten (10) days of such notice. 

     

    
      
         

      

      
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    (i)  Resignation
      for Good Reason.
      Resignation by Executive of his employment for “Good Reason” shall mean a
      resignation by Executive within sixty (60) days after the following events
      which
      occur without Executive's consent: 

     

    (i)  a
      material diminution in Executive's position, duties or responsibilities;


     

    (ii)  a
      relocation of the Company's headquarters more than fifty (50) miles from its
      present location; 

     

    (iii)  a
      reduction in Executive's then Base Compensation; or 

     

    (iv)  the
      Company's material breach of this Agreement. 

     

    Prior
      to
      a Resignation for Good Reason, Executive shall give the Company written notice
      of the basis for his claim that he has Good Reason to terminate his employment
      and ten (10) days to cure. 

     

    (j)  Change
      in Control.
      For
      purposes of this Agreement, a “Change in Control” shall mean the occurrence of
      any of the following events: 

     

    (i)  a
      merger
      or consolidation involving the Company or any subsidiary of the
      Company
      after
      the completion of which: (A) in the case of a merger (other than a triangular
      merger) or a consolidation involving the Company, the stockholders of the
      Company immediately prior to the completion of such merger or consolidation
      beneficially own (within the meaning of Rule 13d-3 promulgated under the
      Securities Exchange Act of 1934, as amended (the “Exchange Act”), or comparable
      successor rules), directly or indirectly, outstanding voting securities
      representing less than fifty percent (50%) of the combined voting power of
      the
      surviving entity in such merger or consolidation, and (B) in the case of a
      triangular merger involving the Company or a subsidiary of the Company, the
      stockholders of the Company immediately prior to the completion of such merger
      beneficially own (within the meaning of Rule 13d-3 promulgated under the
      Exchange Act, or comparable successor rules), directly or indirectly,
      outstanding voting securities representing less than fifty percent (50%) of
      the
      combined voting power of the surviving entity in such merger and less than
      fifty
      percent (50%) of the combined voting power of the parent of the surviving entity
      in such merger; 

     

    (ii)  an
      acquisition by any person, entity or “group” (within the meaning of Section
      13(d) or 14(d) of the Exchange Act or any comparable successor provisions),
      other than any employee benefit plan, or related trust, sponsored or maintained
      by the Company or an affiliate of the Company and other than in a merger or
      consolidation of the type referred to in clause “(i)” of this Section 7(j), of
      beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
      Exchange Act, or comparable successor rules) of outstanding voting securities
      of
      the Company representing more than fifty percent (50%) of the combined voting
      power of the Company (in a single transaction or series of related
      transactions); or 

     

    
      
         

      

      
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    (iii)  in
      the
      event that the individuals who, as of the Effective Date, are members of the
      Board (the “Incumbent Board”), cease for any reason to constitute at least fifty
      percent (50%) of the Board. (However, if the subsequent election, or nomination
      by the Board for election by the Company's stockholders, of any new member
      of
      the Board is approved by a vote of at least fifty percent (50%) of the Incumbent
      Board, such new member of the Board shall be considered as a member of the
      Incumbent Board.) 

     

    (k)  Severance
      Benefit.
      The
“Severance Benefit” shall mean: 

     

    (i)
      continuation of Executive's Base Compensation in effect immediately prior to
      such termination or resignation for a period of six (6) months (“Severance
      Benefit Period”), such compensation to be paid according to the Company’s
      regular payroll schedule for Executive; (ii) continuation of Executive's group
      insurance benefits (to the extent such can be continued under the terms of
      the
      governing plans) for the Severance Benefit Period; and (iii) continued vesting
      of the Plan Options through the end of the Severance Benefit Period or the
      next
      employment anniversary date, whichever is longer. 

     

    (l)  Change
      in Control Benefit.
      The
“Change in Control Benefit” shall mean: (i) continuation of Executive's Base
      Compensation in effect immediately prior to such termination or resignation
      for
      a period of twelve (12) months (“Change in Control Benefit Period”), such
      compensation to be paid according to the Company’s regular payroll schedule for
      Executive; (ii) continuation of Executive's group insurance benefits (to the
      extent such can be continued under the terms of the governing plans) for the
      Change in Control Benefit Period; and (iii) any unvested Plan Options granted
      under this Agreement will become fully vested and immediately exercisable.
      

     

    (m)  Six-Month
      Delay in Payment.
      Notwithstanding anything contained herein to the contrary, in the event that
      payment of any Severance Benefit or Change in Control Benefit hereunder is
      subject to section 409A(2)(b)(i) of the Internal Revenue Code of 1986, as
      amended, or any successor provision thereto (the “Code”), and if Executive is a
“Specified Employee”, then payment of such benefit shall be made no earlier than
      6 months after Executive’s termination of employment by accumulating
      all payments which would otherwise be payable during the first six (6) months
      following the termination of employment and shall instead be paid on the date
      that immediately follows the end of such six-month period, or as soon as
      administratively practicable thereafter.
      Any
      payments which would otherwise have been made after the end of such six-month
      period, shall be paid at the time provided for herein. For purposes of this
      section, a “Specified Employee” is a key employee as defined in section 416(i)
      of the Code (without regard to paragraph (5) thereof), for purposes of the
      top-heavy provisions applicable to tax-qualified plans.

     

    (n)  Resignations.
      Upon
      the end of Executive's employment for any reason, Executive shall be deemed
      to
      have resigned from any positions which he holds as a director or officer of
      the
      Company and any of its Subsidiaries or affiliates. 

     

    (o)  Release.
      Payment
      of the Severance Benefit or the Change in Control Benefit will be subject to
      Executive signing an agreement reconfirming his post-employment obligations
      contained in this Agreement and releasing the Company and all Subsidiaries
      and
      related parties from any claims, such agreement to be prepared by the Company
      or
      its designee. 

     

    
      
         

      

      
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    8.  Key
      Executive Insurance.
      The
      Company, at its discretion, may apply for and procure in its own name for its
      own benefit life and/or disability insurance on Executive in any amount
      specified by the Company. Executive agrees to cooperate in any medical or other
      examination, supply information and execute such applications as may be
      reasonably necessary to obtain and continue such insurance at the Company's
      expense. Executive represents that he has no reason to believe his life is
      not
      insurable at prevailing rates for men of his age. 

     

    9.  Confidential
      and Proprietary Information.
      

     

    (a)  Executive
      agrees that he will not use or disclose to any person, entity, association,
      firm
      or corporation, any of the Company's Confidential Information (as defined
      below), except with the written authorization of the Board or as necessary
      to
      perform his duties under this Agreement. The term “Confidential Information”
means information and data not generally known outside of the Company (unless
      as
      a result of Executive's breach of any of the obligations imposed by this
      Agreement or the duties imposed by any then existing statute, regulation,
      ordinance or common law) concerning the Company's business and technical
      information, and includes, without limitation, information relating to: (i)
      the
      identities of clients and the Company's other Business Relations (as defined
      below) and their purchasing habits, needs, business information, contact
      personnel and other information; (ii) suppliers' and vendors' costs, products,
      contact personnel and other information; and (iii) the Company's trade secrets,
      products, research and development, financial and marketing information,
      personnel and compensation information, and business plans. Executive
      understands that this Section 9 applies to computerized as well as written
      information and to other information, whether or not in written form. It is
      expressly understood, however, that the obligations of this Section 9 shall
      only
      apply for as long as and to the extent that the Confidential Information has
      not
      become generally known to or available for use by the public other than by
      Executive's act or omission in violation of this Agreement. 

     

    (b)  Executive
      agrees that upon the end of his employment with the Company for any reason,
      he
      will not take with him any Confidential Information that is in written,
      computerized, machine readable, model, sample, or other form capable of physical
      delivery, without the prior written consent of the Board. The Executive also
      agrees that upon the end of his employment with the Company for any reason
      or at
      any other time that the Company may request, he will deliver promptly and return
      to the Company all such documents and materials in his possession or control,
      along with all other property and documents of the Company or relating to the
      Company's employees, suppliers, customers, and business, including but not
      limited to keys or key cards to Company property, Company credit cards, cell
      phones, computers, supplier and customer lists, etc. 

     

    10.  Non-Solicitation.
      Executive agrees that he will not through the date one (1) year after the end
      of
      his employment with the Company for any reason, directly or indirectly, on
      his
      own behalf or on behalf of any other person or entity, without the express
      written permission of the Board: (a) solicit or attempt to solicit any employee
      or representative of the Company to terminate or modify his or her relationship
      with the Company or to work for or provide services to another person or entity;
      or (b) solicit or attempt to solicit, any client, vendor, service provider
      or
      other business relation of the Company (each a “Business Relation”), about whom
      he learned or with whom he came into contact during his employment with the
      Company on behalf of any entity or with respect to any service or products
      which
      is or may be competitive with the Company or its services or products.


     

    
      
         

      

      
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    11.  Non-Competition.
      

     

    (a)  Executive
      agrees that during the Restrictive Period (as defined below), he will not,
      without the express written consent of the Board, be associated with or engage
      in, directly or indirectly, as employee, consultant, proprietor, stockholder,
      partner, agent, representative, officer, or otherwise, the operation of any
      business that directly competes with the Company in business activities that
      are
      the same or substantially similar to the business activities engaged in by
      the
      Company within the United States or any other geographic area in which the
      Company does business during the Restrictive Period (the “Restricted
      Territory”). 

     

    (b)  The
      term
“Restrictive Period” shall mean the Employment Term plus a period of twelve (12)
      months after the end of the Employment Term; provided that the twelve (12)
      month
      period following the end of the Employment Term shall apply if Executive's
      employment is terminated by reason of voluntary resignation, Disability, Cause,
      or Change of Control, and shall instead be a six (6) month period if Executive’s
      employment is terminated by the Company without Cause or Employee resigns his
      employment for Good Reason. 

     

    (c)  Passive
      investment in less than two percent (2%) of the outstanding equity securities
      of
      an entity which is listed on a national or regional securities exchange shall
      not, in itself, constitute a violation of this Section 11. 

     

    12.  Intellectual
      Property Rights.
      Executive will, during the period of his employment, disclose to the Company
      promptly and fully all Intellectual Property (as defined below) made or
      conceived by Executive (either solely or jointly with others) including but
      not
      limited to Intellectual Property which relate to the business of the Company
      or
      the Company's actual or anticipated research or development, or result from
      work
      performed by him for the Company. All Intellectual Property and all records
      related to Intellectual Property, whether or not patentable, shall be and remain
      the sole and exclusive property of the Company. “Intellectual Property” means
      all copyrights, trademarks, trade names, trade secrets, proprietary information,
      inventions, designs, developments, and ideas, and all know-how related thereto.
      Executive hereby assigns and agrees to assign to the Company all his rights
      to
      Intellectual Property and any patents, trademarks, or copyrights which may
      be
      issued with respect to Intellectual Property. Executive further acknowledges
      that all work shall be work made for hire. During and after the Employment
      Term,
      Executive agrees to assist the Company, without charge to the Company but at
      its
      request and expense, to obtain and retain rights in Intellectual Property,
      and
      will execute all appropriate related documents at the request of the Company.
      

     

    Executive
      understands that this Section 12 shall not apply to any Intellectual Property
      for which no equipment, supplies, facilities, trade secret, or other
      confidential information of the Company was used and which was developed
      entirely on his own time, and does not relate to the business of the Company,
      its actual or anticipated research, and does not result from any work performed
      by him for the Company. 

     

    
      
         

      

      
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    13.  Employment
      and Income Taxes.
      All
      payments made to Executive by the Company will be subject to withholding of
      income and employment taxes and other lawful deductions, as applicable.


     

    14.  Section
      409A Compliance.
      To
      the
      extent applicable, it is intended that this Agreement comply with the provisions
      of section 409A of the Code. The Agreement shall be administered in a manner
      consistent with this intent, and, if either party determines that any provision
      would cause the Agreement to fail to satisfy section 409A of the Code, the
      parties shall cooperate in preparing an amendment to comply with section 409A
      of
      the Code (which amendment may be retroactive to the extent permitted under
      section 409A of the Code).

     

    15.  Successors
      and Assignees.
      This
      Agreement may be assigned by the Company to any successor or assignee of a
      substantial portion of the business of the Company (whether by transfer of
      assets or stock, merger or other business combination). Executive may not assign
      his rights or obligations under this Agreement. 

     

    16.  Binding
      Effect.
      This
      Agreement shall inure to the benefit of and be binding upon the parties and
      their respective heirs, successors, legal representatives and permitted assigns.
      

     

    17.  Notices.
      Any
      notice required or permitted to be given under this Agreement shall be
      sufficient if in writing and either delivered in person by reputable messenger
      or overnight delivery service, by telecopy (with confirmation of receipt) or
      sent by certified mail, postage prepaid, if to the Company at the Company's
      principal place of business, c/o Chairman of the Board, and if to the Executive,
      at his home address most recently filed with the Company, or to such other
      address as either party shall have designated in writing to the other party.
      

     

    18.  Law
      Governing.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Connecticut for contracts to be performed in that State. 

     

    19.  Severability
      and Construction.
      If any
      provision of this Agreement is declared void or unenforceable or against public
      policy, such provision shall be deemed severable and severed from this Agreement
      and the balance of this Agreement shall remain in full force and effect. If
      a
      court of competent jurisdiction determines that any restriction in this
      Agreement is overbroad or unreasonable under the circumstances, such restriction
      shall be modified or revised by such court to include the maximum reasonable
      restriction allowed by law. 

     

    20.  Reasonable
      Restrictions/Remedies.
      Executive acknowledges that the provisions contained in Sections 9 through
      12 of
      this Agreement are reasonable in scope, area and duration and are necessary
      for
      the Company to protect its legitimate business interests, including its
      Confidential Information and business relationships. Executive and Company
      acknowledge and agree that damages would not adequately compensate Company
      if
      Executive were to breach any of his covenants contained in Sections 9 through
      12
      above. Consequently, Executive agrees that in the event of any such breach,
      Company shall be entitled to enforce this Agreement by means of an injunction
      or
      other equitable relief, in addition to any other remedies including without
      limitation monetary damages, set off against any amounts due Executive by
      Company and termination of Executive's employment for Cause. 

     

    
      
         

      

      
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    21.  Waiver.
      Failure
      to insist upon strict compliance with any of the terms, covenants or conditions
      hereof shall not be deemed a waiver of such term, covenant or condition.


     

     

    22.  Entire
      Agreement;
      Modifications. This Agreement constitutes the entire agreement of the parties
      with respect to its subject matter and supersedes all prior agreements, oral
      and
      written, between the parties with respect to the subject matter of this
      Agreement. This Agreement may be modified or amended only by an instrument
      in
      writing signed by both parties. 

     

    
      	EXECUTIVE  	COMPETITIVE TECHNOLOGIES,
              INC.


    

     

    
      	 By:
              /s/ Michael E. Kiley	 By:
              /s/ Donald J. Freed  
	 Michael E. Kiley, Ph.D.	 Donald J. Freed, Ph.D.
	 	 President and
              CEO


    

    


        

    
      
         

      

      
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