Exhibit 10.55

 

STOCK UNIT AWARD AGREEMENT

 

(Granted under the UFP Technologies, Inc. 2003 Incentive Plan)

 

This Stock Unit Award Agreement is entered into as of the 18th day of February,
2011 by and between UFP Technologies, Inc. (hereinafter the “Company”) and
                           (the “Awardee”).  Capitalized terms used but not
defined herein shall have the meanings assigned to them in the Company’s 2003
Incentive Plan (the “Plan”).  Stock Unit Awards (SUA’s represent the Company’s
unfunded and unsecured promise to issue shares of Common Stock at a future date,
subject to the terms of this Award Agreement, including, without limitation, the
performance objectives set forth in Schedule A hereto, and the Plan.  Awardee
has no rights under the SUAs other than the rights of a general unsecured
creditor of the Company.

 

1.                                       Grant of Stock Unit Awards; Performance
Objectives; Vesting.

 

(a)                                  The Company, in the exercise of its sole
discretion pursuant to the Plan, does hereby award to the Awardee the number of
SUAs set forth on Schedule A hereto upon the terms and subject to the conditions
hereinafter contained.  The SUA’s shall consist of a Threshold Award, a Target
Award and an Exceptional Award.  The Threshold Award, The Target Award and the
Exceptional Award are each awarded subject to attainment during the Performance
Cycle described on Schedule A of the Performance Objectives set forth on
Schedule A.

 

(b)                                 Subject to attainment of any applicable
Performance Objectives, payment with respect to vested SUA’s shall be made
entirely in the form of shares of Common Stock of the Company on each respective
vesting date as set forth on Schedule A.

 

(c)                                  As soon as possible after the end of the
Performance Cycle, the Committee will certify in writing whether and to what
extent the Performance Objectives have been met for the Performance Cycle.  The
date of the Committee’s certification pursuant to this subsection (c) shall
hereinafter be referred to as the “Certification Date”.  The Company will notify
the Awardee of the Committee’s certification following the Certification Date
(such notice, the “Determination Notice”).  The Determination Notice shall
specify (i) the Performance Objective, as derived from the Company’s audited
financial statements; and (ii) the extent, if any, to which the Performance
Objectives were satisfied with respect to the Threshold Award, the Target Award
and the Exceptional Award.

 

2.                                       Change in Control.

 

(a)                                  Notwithstanding the vesting schedule set
forth in Schedule A: if there is a Change in Control of the Company (as defined
below) following the end of the Performance Cycle, and the Awardee’s Continuous
Status as an employee, as contemplated by Section 4 hereof, shall not have been
terminated as of the date immediately prior to the effective date of such Change
in Control, then subject to attainment during the Performance Cycle described on

 

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Schedule A of the Performance Objectives set forth on Schedule A, and subject to
the provisions of Section 21 of this Award Agreement, any SUA’s representing the
Threshold, Target and the Exceptional Award, which are not already vested shall
become vested in full as of the effective date of such Change in Control.

 

(b)                                 For the purpose of this Agreement, a “Change
in Control” shall mean  (i) the consummation of a reorganization, merger or
consolidation or sale or disposition of all or substantially all of the assets
of the Company (a “Business Combination”), unless, in each case following such
Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners of the Common Stock of the Company
immediately before the consummation of such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation that as a result of
the transaction owns the Company or all or substantially all of the assets of
the Company either directly or indirectly through one or more subsidiaries); and
(B) no person or group (as defined in Section 13(d) or 14(d)(2) of the
Securities Exchange Act of 1934) of the Company or the corporation resulting
from the Business Combination) beneficially owns, directly or indirectly, more
than 50% of the then outstanding shares of the common stock of the corporation
resulting from the Business Combination;  (ii) Individuals who, as of the date
of this Agreement, constitute the Board of Directors of the Company (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board of Directors of the Company, provided, however, that any individual’s
becoming a director after the date of this Agreement whose election, or
nomination for election by the stockholders of the Company, was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board
will be considered as though the individual were a member of the Incumbent
Board, but excluding, for this purpose, any individual whose initial assumption
of office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or (iii) any person (as defined in Section 13(d) or 14(d)(2) of the
Securities Exchange Act of 1934) shall become at any time or in any manner the
beneficial owner of capital stock of the Company representing more than 50% of
the voting power of the Company.

 

3.                                       Termination.   Unless terminated
earlier under Section 4, 5 or 6 below, an Awardee’s rights under this Award
Agreement with respect to the SUAs issued under this Award Agreement shall
terminate at the time such SUAs are converted into shares of Common Stock.

 

4.                                       Termination of Awardee’s Continuous
Status as an Employee.   Except as otherwise specified in Section 5 and 6 below,
in the event of termination of Awardee’s Continuous Status as an employee of the
Company, Awardee’s rights under this Award Agreement in any unvested SUAs shall
terminate.  For purposes of this Award Agreement, an Awardee’s Continuous Status
as an employee shall mean the absence of any interruption or termination of
service as an employee.  Continuous Status as an employee shall not be
considered interrupted in the case of sick leave or leave of absence for which
Continuous Status is not considered interrupted as determined by the Company in
its sole discretion.

 

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5.                                       Disability of Awardee.  
Notwithstanding the provisions of Section 4 above, in the event of termination
of Awardee’s Continuous Status as an employee as a result of disability (within
the meaning of Section 409A of the Internal Revenue Code, and hereinafter
referred to as “Disability”), the SUAs which would have vested during the twelve
(12) months following the date of such termination, set out in Schedule A, shall
become vested as of the date of such termination, subject, however, to the
provisions of Section 21 of this Award Agreement.  If Awardee’s Disability
originally required him or her to take a short-term disability leave which was
later converted into long-term disability, then for the purposes of the
preceding sentence the date on which Awardee ceased performing services shall be
deemed to be the date of commencement of the short-term disability leave.  The
Awardee’s rights in any unvested SUAs that remain unvested after the application
of this Section 5 shall terminate at the time Awardee ceases to be in Continuous
Status as an employee.

 

6.                                       Death of Awardee.   Notwithstanding the
provisions of Section 4 above, in the event of the death of Awardee:

 

(a)                                  If the Awardee was, at the time of death,
in Continuous Status as an employee, the SUAs which would have vested during the
twelve (12) months following the date of death of Awardee, set out in Schedule
A, shall become vested as of the date of death.

 

(b)                                 The Awardee’s rights in any unvested SUAs
that remain after the application of Section 6(a) shall terminate at the time of
the Awardee’s death.

 

7.                                       Value of Unvested SUAs.   In
consideration of the award of these SUAs, Awardee agrees that upon and following
termination of Awardee’s Continuous Status as an employee for any reason
(whether or not in breach of applicable laws), and regardless of whether Awardee
is terminated with or without cause, notice, or pre-termination procedure or
whether Awardee asserts or prevails on a claim that Awardee’s employment was
terminable only for cause or only with notice or pre-termination procedure, any
unvested SUAs under this Award Agreement shall be deemed to have a value of zero
dollars ($0.00).

 

8.                                       Conversion of SUAs to shares of Common
Stock; Responsibility for Taxes.

 

(a)                                  Provided Awardee has satisfied the
requirements of Section 8(b) below, and subject to the provisions of Section 21
below, on the vesting of any SUAs, such vested SUAs shall be converted into an
equivalent number of shares of Common Stock that will be distributed to Awardee
or, in the event of Awardee’s death, to Awardee’s legal representative, as soon
as practicable.  The distribution to the Awardee, or in the case of the
Awardee’s death, to the Awardee’s legal representative, of shares of Common
Stock in respect of the vested SUAs shall be evidenced by a stock certificate,
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company, or other appropriate means as determined by the Company.

 

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(b)                                 Regardless of any action the Company takes
with respect to any or all income tax (including federal, state and local
taxes), social security, payroll tax or other tax-related withholding (“Tax
Related Items”), Awardee acknowledges that the ultimate liability for all Tax
Related Items legally due by Awardee is and remains Awardee’s responsibility and
that the Company (i) makes no representations or undertakings regarding the
treatment of any Tax Related Items in connection with any aspect of the SUAs,
including the grant of the SUAs, the vesting of SUAs, the conversion of the SUAs
into shares of Common Stock, the subsequent sale of any shares of Common Stock
acquired at vesting and the receipt of any dividends; and (ii) does not commit
to structure the terms of the grant or any aspect of the SUAs to reduce or
eliminate the Awardee’s liability for Tax Related Items.  Prior to the issuance
of shares of Common Stock upon vesting of SUAs as provided in
Section 8(a) above, Awardee shall pay, or make adequate arrangements
satisfactory to the Company to satisfy all withholding obligations of the
Company.  In this regard, Awardee authorizes the Company to withhold all
applicable Tax Related Items legally payable by Awardee from Awardee’s wages or
other cash compensation payable to Awardee by the Company.  Alternatively, the
Awardee may elect to satisfy an applicable withholding requirement, in whole or
in part, by having the Company withhold shares of Common Stock to satisfy such
tax obligations.  The Awardee may only elect to have such shares withheld having
a Market Value on the date the tax is to be determined equal to the minimum
statutory total tax which could be imposed on the transaction. All elections
shall be irrevocable, made in writing and signed by the Awardee.  Awardee shall
pay to the Company any amount of Tax Related Items that the Company may be
required to withhold as a result of Awardee’s receipt of SUAs, the vesting of
SUAs, or the conversion of vested SUAs to shares of Common Stock that cannot be
satisfied by the means previously described.  The Company may refuse to deliver
shares of Common Stock to Awardee if Awardee fails to comply with Awardee’s
obligation in connection with the Tax Related Items as described herein.

 

(c)                                  In lieu of issuing fractional shares of
Common Stock, on the vesting of a fraction of a SUA, the Company shall round the
shares to the nearest whole share and any such share which represents a fraction
of a SUA will be included in a subsequent vest date.

 

(d)                                 Until the distribution to Awardee of the
shares of Common Stock in respect to the vested SUAs is evidenced by a stock
certificate, appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company, or other appropriate means, Awardee
shall have no right to vote or receive dividends or any other rights as a
shareholder with respect to such shares of Common Stock, notwithstanding the
vesting of SUAs.  Subject to the provisions of Section 21 below, the Company
shall cause such distribution to Awardee to occur promptly upon the vesting of
SUAs.  No adjustment will be made for a dividend or other right for which the
record date is prior to the date Awardee is recorded as the owner of the shares
of Common Stock, except as provided in Section 8 of the Plan.

 

(e)                                  By accepting the Award of SUAs evidenced by
this Award Agreement, Awardee agrees not to sell any of the shares of Common
Stock received on account of vested SUAs at a time when applicable laws or
Company policies prohibit a sale.  This restriction shall apply so long as
Awardee is an Employee, Consultant or outside director of the Company or a
Subsidiary of the Company.

 

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9.                                       Non-Transferability of SUAs.  
Awardee’s right in the SUAs awarded under this Award Agreement and any interest
therein may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner, other than by will or by the laws of descent or
distribution, prior to the distribution of the shares of Common Stock in respect
of such SUAs.  SUAs shall not be subject to execution, attachment or other
process.

 

10.                                 Acknowledgment of Nature of Plan and SUAs.  
In accepting the Award, Awardee acknowledges that:

 

(a)                                  the Plan is established voluntarily by the
Company, it is discretionary in nature and may be modified, amended, suspended
or terminated by the Company at any time, as provided in the Plan;

 

(b)                                 the Award of SUAs is voluntary and
occasional and does not create any contractual or other right to receive future
awards of SUAs, or benefits in lieu of SUAs even if SUAs have been awarded
repeatedly in the past;

 

(c)                                  all decisions with respect to future
awards, if any, will be at the sole discretion of the Company;

 

(d)                                 Awardee’s participation in the Plan is
voluntary;

 

(e)                                  the future value of the underlying shares
of Common Stock is unknown and cannot be predicted with certainty;

 

(f)                                    if Awardee receives shares of Common
Stock, the value of such shares of Common Stock acquired on vesting of SUAs may
increase or decrease in value;

 

(g)                                 notwithstanding any terms or conditions of
the Plan to the contrary and consistent with Section 4 and Section 7 above, in
the event of involuntary termination of Awardee’s employment (whether or not in
breach of applicable laws), Awardee’s right to receive SUAs and vest under the
Plan, if any, will terminate effective as of the date that Awardee is no longer
actively employed and will not be extended by any notice period mandated under
applicable law; furthermore, in the event of involuntary termination of
employment (whether or not in breach of applicable laws), Awardee’s right to
receive shares of Common Stock pursuant to the SUAs after termination of
employment, if any, will be measured by the date of termination of Awardee’s
active employment and will not be extended by any notice period mandated under
applicable law.  The Committee shall have the exclusive discretion to determine
when Awardee is no longer actively employed for purposes of the award of SUAs;
and

 

(h)                                 Awardee acknowledges and agrees that,
regardless of whether Awardee is terminated with or without cause, notice or
pre-termination procedure or whether Awardee asserts or prevails on a claim that
Awardee’s employment was terminable only for cause or only with notice or
pre-termination procedure, Awardee has no right to, and will not bring any legal
claim or

 

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action for, (a) any damages for any portion of the SUAs that have been vested
and converted into Common Shares, or (b) termination of any unvested SUAs under
this Award Agreement.

 

11.                                 No Employment Right.   Awardee acknowledges
that neither the fact of this Award of SUAs nor any provision of this Award
Agreement or the Plan or the policies adopted pursuant to the Plan shall confer
upon Awardee any right with respect to employment or continuation of current
employment with the Company, or to employment that is not terminable at will. 
Awardee further acknowledges and agrees that neither the Plan nor this Award of
SUAs makes Awardee’s employment with the Company for any minimum or fixed
period, and that such employment is subject to the mutual consent of Awardee and
the Company, and subject to any written employment agreement that may be in
effect from time to time between the Company and the Awardee, may be terminated
by either Awardee or the Company at any time, for any reason or no reason, with
or without cause or notice or any kind of pre- or post-termination warning,
discipline or procedure.

 

12.                                 Administration.   The authority to manage
and control the operation and administration of this Award Agreement shall be
vested in the Committee (as such term is defined in Section 2 of the Plan), and
the Committee shall have all powers and discretion with respect to this Award
Agreement as it has with respect to the Plan.  Any interpretation of the Award
Agreement by the Committee and any decision made by the Committee with respect
to the Award Agreement shall be final and binding on all parties.

 

13.                                 Plan Governs.   Notwithstanding anything in
this Award Agreement to the contrary, the terms of this Award Agreement shall be
subject to the terms of the Plan, and this Award Agreement is subject to all
interpretations, amendments, rules and regulations promulgated by the Committee
from time to time pursuant to the Plan.

 

14.                                 Notices.   Any written notices provided for
in this Award Agreement which are sent by mail shall be deemed received three
business days after mailing, but not later than the date of actual receipt. 
Notices shall be directed, if to Awardee, at the Awardee’s address indicated by
the Company’s records and, if to the Company, at the Company’s principal
executive office.

 

15.                                 Electronic Delivery.   The Company may, in
its sole discretion, decide to deliver any documents related to SUAs awarded
under the Plan or future SUAs that may be awarded under the Plan by electronic
means or request Awardee’s consent to participate in the Plan by electronic
means.  Awardee hereby consents to receive such documents by electronic delivery
and agrees to participate in the Plan through an on-line or electronic system
established and maintained by the Company or another third party designated by
the Company.

 

16.                                 Acknowledgment.   By Awardee’s acceptance as
evidenced below, Awardee acknowledges that Awardee has received and has read,
understood and accepted all the terms, conditions and restrictions of this Award
Agreement and the Plan.  Awardee understands and agrees that this Award
Agreement is subject to all the terms, conditions, and restrictions stated in
this Award Agreement and the Plan, as the latter may be amended from time to
time in the Company’s sole discretion.

 

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17.                                 [Intentionally Omitted]

 

18.                                 Governing Law.   This Award Agreement shall
be governed by the laws of the State of Delaware, without regard to Delaware
laws that might cause other law to govern under applicable principles of
conflicts of law.

 

19.                                 Severability.   If one or more of the
provisions of this Award Agreement shall be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby and
the invalid, illegal or unenforceable provisions shall be deemed null and void;
however, to the extent permissible by law, any provisions which could be deemed
null and void shall first be construed, interpreted or revised retroactively to
permit this Award Agreement to be construed so as to foster the intent of this
Award Agreement and the Plan.

 

20.                                 Complete Award Agreement and Amendment.  
This Award Agreement and the Plan constitute the entire agreement between
Awardee and the Company regarding SUAs.  Any prior agreements, commitments or
negotiations concerning these SUAs are superseded.  This Award Agreement may be
amended only by written agreement of Awardee and the Company, without consent of
any other person.  Awardee agrees not to rely on any oral information regarding
this Award of SUAs or any written materials not identified in this Section 20.

 

21.                                 Section 409A.  This Award Agreement is
intended to be in compliance with the provisions of Section 409A of the Internal
Revenue Code to the extent applicable, and the Regulations issued thereunder.
Anything in this Agreement to the contrary notwithstanding, if at the time of
the Awardee’s separation from service within the meaning of Section 409A of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder (the
“Code”), the Company determines that the Awardee is a “specified employee”
within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent
any payment or benefit that the Awardee becomes entitled to under this Agreement
would be considered deferred compensation subject to the 20 percent additional
tax imposed pursuant to Section 409A(a) of the Code as a result of the
application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be
payable and such benefit shall not be provided until the date that is the
earlier of (A) six months and one day after the Awardee’s separation from
service, or (B) the Awardee’s death.  The determination of whether and when a
separation from service has occurred shall be made in accordance with the
presumptions set forth in Treasury Regulation Section 1.409A-1(h). To the extent
that any provision of this Agreement is ambiguous as to its compliance with
Section 409A of the Code, the provision shall be read in such a manner so that
all payments hereunder comply with Section 409A of the Code.  The parties agree
that this Agreement may be amended, as reasonably requested by either party, and
as may be necessary to fully comply with Section 409A of the Code and all
related rules and regulations in order to preserve the payments and benefits
provided hereunder without additional cost to either party. Solely for the
purposes of Section 409A of the Code, the share increments issuable on each
vesting date on Schedule A shall be considered a separate payment.   The Company
makes no representation or warranty and shall have no liability to the Awardee
or any other person if any provisions of this Agreement are determined to

 

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constitute deferred compensation subject to Section 409A of the Code but do not
satisfy an exemption from, or the conditions of, such Section.

 

EXECUTED the day and year first above written.

 

 

 

UFP TECHNOLOGIES, INC.

 

 

 

 

 

By:

 

 

 

R. Jeffrey Bailly

 

 

Chief Executive Officer

 

AWARDEE’S ACCEPTANCE:

 

I have read and fully understood this Award Agreement and, as referenced in
Section 16 above, I accept and agree to be bound by all of the terms, conditions
and restrictions contained in this Award Agreement and the other documents
referenced in it.

 

 

 

 

[name of Awardee]

 

 

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SCHEDULE A

 

The SUA’s issuable under this Agreement shall consist of a Threshold Performance
Award, a Target Performance Award and an Exceptional Performance Award, each in
the amounts set forth below, each such award issuable in one-third increments on
the vesting dates set forth below, provided the respective performance objective
is satisfied.

 

The Performance Objective established by the Committee with respect to the
Threshold Performance Award, the Target Performance Award and Exceptional
Performance Award is Adjusted Operating Income** for 2011

 

 

 

Performance

 

Performance

 

Number of
Shares of
Common

 

Vesting

 

 

 

Objective

 

Cycle

 

Stock

 

*/2013

 

*/2014

 

*/2015

 

a. Threshold Performance Award

 

of Adjusted Operating Income**

 

Calendar Year 2011

 

 

 

33.33

%

33.33

%

33.34

%

b. Target Performance Award

 

of Adjusted Operating Income**

 

Calendar Year 2011

 

(in addition to (a) above)

 

33.33

%

33.33

%

33.34

%

c. Exceptional Performance Award

 

of Adjusted Operating Income**

 

Calendar Year 2011

 

***
(in addition to (a) and (b) above)

 

33.33

%

33.33

%

33.34

%

 

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* this date shall be the anniversary date of the date of determination by the
Compensation Committee of satisfaction of the Performance Objectives.  Such
determination date is expected to be in February 2012.

 

**Adjusted Operating Income is defined herein as Operating Income on the
Company’s 10-K, excluding (i) non-recurring restructuring charges related to
plant closings and consolidations; and (ii) the impact of acquired or disposed
of operations during such year.

 

***Between Adjusted Operating Income
of                        and                        , the number of shares of
Common Stock to which the Awardee shall be entitled under the Exceptional
Performance Award (in addition to the shares issuable upon attainment of the
Threshold and Target Performance Award) shall range from 0 to the amount stated
under the column entitled “Exceptional” based on straight line interpolation in
increments of one fifth the total number of shares otherwise issuable for
achievement of the Exceptional Award  for each full                        of
Adjusted Operating Income in excess of                        (not to
exceed                        ).

 

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