EXHIBIT 10.1

 

 

Exhibit B

 

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

OPTION AGREEMENT made as of the 5th day of June, 2019 between UFP TECHNOLOGIES,
INC., a Delaware corporation (hereinafter called the “Corporation”), and
_____________, a non-employee director of the Corporation (hereinafter called
the “Optionee”).

 

The Corporation desires, by affording the Optionee an opportunity to purchase
shares of its Common Stock, $.01 par value (hereinafter called the “Common
Stock”), as hereinafter provided, to carry out the purpose of the 2009
Non-Employee Director Stock Incentive Plan of the Corporation (the “Director
Stock Plan”). Terms used herein and not defined shall have the meaning set forth
in the Director Stock Plan or in Section 9 below.

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, the parties hereto have agreed,
and do hereby agree as follows:

 

1.        Grant of Option. The Corporation hereby irrevocably grants to the
Optionee the right and option (hereinafter called the “Option”) to purchase all
or any part of an aggregate of _______ shares of the Common Stock (such number
being subject to adjustment as provided in paragraph 6 hereof) on the terms and
conditions herein set forth.

 

2.        Purchase Price. The exercise price of each of the shares of the Common
Stock covered by the Option shall be $_________, representing the fair market
value as of the date hereof.

 

3.       Term of Option; Exercisability. The term of the Option shall be for a
period of ten (10) years from the date hereof. Except as otherwise provided in
paragraph 5 hereof, the Option shall become exercisable in full on May 31, 2020,
provided however, that the Option shall immediately become exercisable in full
immediately prior to a Change in Control consummated on or prior to May 31,
2020. The purchase price of the shares as to which the Option shall be exercised
shall be paid at the time of exercise as provided in paragraph 7 hereof.

 

The Corporation may, in its discretion, require as conditions to the right to
exercise this Option that (a) a Registration Statement under the Securities Act
of 1933, as amended, shall be in effect and current with respect to the shares
issuable upon exercise of this Option, or (b) the Optionee has given to the
Corporation prior to the purchase of any shares pursuant hereto, assurances
satisfactory to it that such shares are being purchased for the purpose of
investment and not with a view to or for sale in connection with any
distribution thereof, including without limitation, a written agreement of the
Optionee that the shares will not be transferred unless registered under the
Securities Act of 1933, as amended, or unless counsel for the Corporation gives
a written opinion that such transfer is permissible under Federal and State law
without registration.

 

 

 

 

Nothing herein contained shall be deemed to require the Corporation to register,
under Federal or any State law, this Option or any shares issuable hereunder.

 

4.       Non-transferability. The Option shall not be transferable otherwise
than by will or the laws of descent and distribution, or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code (the “Code”),
or Title I of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), or the rules thereunder. Subject to the foregoing, and subject to the
provisions of Section 5 below, during the lifetime of the Optionee, the Option
shall be exercisable only by the Optionee. More particularly (but without
limiting the generality of the foregoing), the Option may not be assigned,
transferred (except as provided above), pledged, or hypothecated in any way,
shall not be assignable by operation of law and shall not be subject to
execution, attachment, or similar process. Any attempted assignment, transfer,
pledge, hypothecation, or other disposition of the Option contrary to the
provisions hereof, and the levy of any execution, attachment, or similar process
upon the Option shall be null and void and without effect.

 

5.        Termination Prior to Vesting Date; Continued Exercisability; Exercise
by Heirs, Legatees, Etc. In the event the Optionee ceases to be an employee,
director or independent contractor of the Corporation or one or more of its
subsidiaries (the “Business Relationship”) prior to May 31, 2020 other than on
account of death or permanent disability (as such term is defined in Section
22(e)(3) of the Code), the Option shall thereupon terminate as of the date of
termination of the Business relationship. Subject to the foregoing, the
continued exercisability of this Option shall not require the Optionee to
continue in the service of the Board of Directors of the Corporation for any
particular period beyond such date, and the Option may be exercisable by the
Optionee or by his or her heirs, legatees, or legal representatives, as the case
may be, during its specified term, but in any event not later than ten (10)
years from the date hereof.

 

6.       Changes in Capital Structure. The number of shares subject to the
Option shall be adjusted as follows: (a) in the event that the number of
outstanding shares of Common Stock of the Corporation is changed by any stock
dividend, stock split or combination of shares, the number of shares then
subject to the Option shall be proportionately adjusted; (b) in the event of any
merger, consolidation or reorganization of the Corporation with any other
corporation or corporations, there shall be substituted, on an equitable basis
for each share of Common Stock then subject to the Option, the number and kind
of shares of Stock or other securities to which the holders of shares of Common
Stock of the Corporation will be entitled pursuant to the transaction; and (c)
in the event of any other relevant change in the capitalization of the
Corporation, the Board of Directors of the Corporation shall provide for an
equitable adjustment in the number of shares of Common Stock then subject to the
Option. In the event of any such adjustment, the purchase price per share shall
be proportionately adjusted.

 

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7.        Method of Exercising Option. Subject to the terms and conditions of
this Option Agreement, the Option may be exercised by written notice to the
Corporation at its principal business address attention of the Secretary. Such
notice shall state the election to exercise the Option and the number of shares
in respect of which it is being exercised, and shall be signed by the person or
persons so exercising the Option. At that time, this Option Agreement shall be
turned in to the Corporation for action by the Corporation to reduce the number
of shares to which it applies. Such notice shall be accompanied by payment in
cash, by check, by shares of the Common Stock of the Corporation, or, by a
combination of these methods. Payment may also be made by delivery of a notice
of “net exercise” to the Corporation, pursuant to which the Optionee shall
receive the number of shares of Stock underlying the Option so exercised reduced
by the number of shares of Stock equal to the aggregate exercise price of the
Option divided by the Fair Market Value on the date of exercise of the Option.
Payment may also be made, in the discretion of the Corporation, if in accordance
with applicable law, by delivery (including delivery by facsimile transmission)
to the Corporation or its designated agent of an executed irrevocable option
exercise form together with irrevocable instructions to a broker-dealer to sell
a sufficient portion of the shares and deliver the sale proceeds directly to the
Corporation to pay for the exercise price or by any other means which the
Compensation Committee of the Board of Directors of the Corporation, in its
discretion, determines to be consistent with the Plan’s purpose and applicable
law. In the event that payment is made in shares of the Common Stock, the per
share value of the Common Stock shall be the Fair Market Value of such stock on
the date of exercise. The certificate or certificates for the shares as to which
the Option shall have been so exercised shall be registered in the name of the
person or persons so exercising the Option, (or, if the Option shall be
exercised by the Optionee and if the Optionee shall so request in the notice
exercising the Option, the certificate or certificates shall be registered in
the name of the Optionee and another person jointly, with the right of
survivorship) and shall be delivered as provided above to or upon the written
order of the person or persons exercising the Option. In the event the Option
shall be exercised by any person or persons other than the Optionee (to the
extent permitted under this Non-Qualified Stock Option Agreement), such notice
shall be accompanied by appropriate proof of the right of such person or persons
to exercise the Option.

 

At the time of the exercise of the Option the Corporation may require, as a
condition of the exercise of such Option, the Optionee to pay the Corporation an
amount equal to the amount of tax the Corporation may be required to withhold to
obtain a deduction for federal income tax purposes as a result of the exercise
of the Option by the Optionee.

 

8.       General. The Corporation shall at all times during the term of the
Option reserve and keep available such number of shares of Common Stock as will
be sufficient to satisfy the requirements of this Option Agreement, shall pay
all original issue taxes with respect to the issue of shares pursuant hereto and
all other fees and expenses necessarily incurred by the Corporation in
connection therewith, and will from time to time use its best efforts to comply
with all laws and regulations which, in the opinion of counsel for the
Corporation, shall be applicable thereto. The Corporation makes no
representation or warranty that this Option or shares issued pursuant hereto
qualify under any Federal or State law for any special tax treatment. The terms
of this Option Agreement shall be construed to conform with, and shall be
governed by the provisions of the Director Stock Plan and in the event of any
inconsistency between the provisions of this Option Agreement and such Plan the
provisions of such Plan shall control.

 

9.       Definitions.

 

“Business Combination” 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 Corporation.

 

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“Change in Control” shall mean: (i) 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 Corporation 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 Corporation or all or substantially all of the assets
of the Corporation 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 Corporation 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 hereof constitute the Board of Directors of the Corporation
(the “Incumbent Board”) thereafter cease for any reason to constitute at least a
majority of the Board of Directors of the Corporation, provided, however, that
any individual's becoming a director after the date of grant represented hereby
whose election, or nomination for election by the stockholders of the
Corporation, 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 Corporation representing
more than 50% of the voting power of the Corporation.

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, the Corporation has caused this Option Agreement to be duly
executed by its officer thereunto duly authorized, and the Optionee has hereunto
set his or her hand and seal all as of the day and year first above written.

 

 

  UFP TECHNOLOGIES, INC.             By:         R. Jeffrey Bailly              
      [name of Optionee]                     Address                          

 

 

 

 

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