EXHIBIT 10.1

RULE 10B5-1 REPURCHASE PLAN

This Rule 10b5-1 Repurchase Plan, dated September 15, 2008 (this “Repurchase
Plan”), is between Omega Flex, Inc., with principal executive offices located at
213 Court St., Suite 701, Middletown, CT, 06457 (the “Issuer”), and Hunter
Associates, Inc., with principal executive offices at 436 Seventh Avenue,
Koppers Building, Fifth Floor, Pittsburgh, PA, 15219 (“Hunter”).

WHEREAS, on September 10, 2007, the Board of Directors of the Issuer approved a
stock repurchase program for the repurchase of shares of the Issuer’s common
stock, $0.01 par value per share (the “Common Stock”) for up to $5,000,000, over
a period of twenty-four months (the “Repurchase Program”); and

WHEREAS, the Issuer has effected repurchases of 59,824 shares of Common Stock to
date for an aggregate of $898,923.00; and

WHEREAS, the Issuer desires to engage Hunter to effect future repurchases within
the safe harbor afforded by Rule 10b5-1 of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”) and in accordance with the terms and conditions
set forth in this Repurchase Plan and Hunter desires to be so engaged;

 

NOW, THEREFORE, the Issuer and Hunter hereby agree as follows:

1.            (a)         Subject to the Issuer’s continued compliance with
Section 2 hereof, and subject to Section 4, Hunter will effect purchases (each,
a “Purchase”) of shares of the Common Stock on each day on which the NASDAQ
Global Market (the “NASDAQ”) is open for trading and the Common Stock trades
regular way on the NASDAQ at a price not to exceed the price per share
determined by the special committee of the Issuer’s board of directors and
communicated in writing to Hunter concurrently with this Agreement, up to an
aggregate expenditure of $4,101,077 (the “Total Plan Amount”).

(b)          Hunter may make Purchases in the open market or through privately
negotiated transactions. Hunter shall not make Purchases that are (1) the
opening purchase in the consolidated reporting system, and/or (2) executed
within 30 minutes of the opening or closing of the applicable daily trading
system. The Issuer agrees not to take any action that would cause Purchases not
to comply with Rule 10b5-1 of the Exchange Act.

2.            The Issuer agrees to pay to Hunter a commission of $0.15 per share
of Common Stock repurchased pursuant to this Repurchase Plan. In accordance with
Hunter’s customary procedures, Hunter will deposit shares of Common Stock
purchased hereunder into an account established by Hunter for the Issuer against
payments to Hunter of the purchase price therefore and commissions and other
amounts in respect thereof payable pursuant to this Section. The Issuer will be
notified of all transactions pursuant to customary trade confirmations.

3.            (a)         This Repurchase Plan shall become effective on October
13, 2008 and shall terminate upon the first to occur of the following:

 

(1)

the one year anniversary of the date hereof;

(2)          the purchase of the Total Plan Amount pursuant to this Repurchase
Plan;

(3)          the end of the second business day following the date of receipt by
Hunter of notice of early termination by Issuer of this Agreement substantially
in the form of Exhibit A hereto;

(4)          the end of the second business day following the date of receipt by
Issuer of notice of early termination by Hunter of this Agreement substantially
in the form of Exhibit B hereto;

(5)          the commencement of any voluntary or involuntary cause or other
proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or similar law or seeking the appointment of a trustee,
receiver or other similar official, or the taking of any corporate action by the
Issuer to authorize or commence any of the foregoing;

(6)          the public announcement of a tender or exchange offer for the
Common Stock or of a merger, acquisition, recapitalization or other similar
business combination or transaction as a result of which the Common Stock would
be exchanged for or converted into cash, securities or other property; or

 

(7)

the failure of the Issuer to comply with Section 2 hereof.

(b)          The provisions of Sections 2 and 13 of this Repurchase Plan shall
survive any termination of this Repurchase Plan. In addition, the Issuer’s
obligation under Section 2 (as same relates to the Issuer’s obligation to
compensate Hunter) in respect of any shares of Common Stock purchased prior to
any termination hereof shall survive any termination hereof.

4.            The Issuer understands that Hunter may not be able to effect a
Purchase due to a market disruption or a legal, regulatory or contractual
restriction or internal policy applicable to Hunter or otherwise. If any
Purchase cannot be executed as required by Section 1 due to a market disruption,
a legal, regulatory or contractual restriction or internal policy applicable to
Hunter or any other event, such Purchase shall be cancelled and shall not be
effective pursuant to this Repurchase Plan. Hunter agrees to effect such
Purchase as promptly as practicable after the cessation or termination of such
market disruption, applicable restriction or other event.

5.            The Issuer represents and warrants that: (a) the repurchase of
Common Stock pursuant to this Repurchase Plan has been duly authorized by the
Issuer, is consistent with the Issuer’s publicly announced Repurchase Program
and is not prohibited or restricted by any legal regulatory or contractual
restriction or undertaking binding on the Issuer; (b) it is not aware of
material, nonpublic information with respect to the Issuer or any securities of
the Issuer (including the Common Stock); (c) it is entering into this Repurchase
Plan in good faith and not as part of a plan or scheme to evade the prohibitions
of Rule 10b5-1 under the Exchange Act or

 

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other applicable securities laws; and (d) its execution of this Repurchase Plan,
and the Purchases contemplated hereby do not and will not violate or conflict
with the Issuer’s certificate of incorporation or by-laws or, if applicable, any
similar constituent document, or any law, rule, regulation or agreement binding
on or applicable to the Issuer or any of its subsidiaries or any of its or their
property or assets. The Issuer shall immediately notify Hunter if the Issuer
becomes subject to a legal, regulatory or contractual restriction or undertaking
that would prevent Hunter from making Purchases pursuant to this Repurchase Plan
and, in such case, the Issuer and Hunter will cooperate to amend or otherwise
revise this Repurchase Plan to take into account such legal, regulatory or
contractual restriction or undertaking provided that neither party shall be
required to take any action that would be inconsistent with the requirements of
Rule 10b5-1.

6.            It is the intent of the parties that this Repurchase Plan comply
with the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act, and
this Repurchase Plan shall be interpreted to comply with the requirements
thereof.

7.            At the time of the Issuer’s execution of this Repurchase Plan, the
Issuer has not entered into a similar agreement with respect to the Common
Stock. The Issuer agrees not to enter into any such agreement while this
Repurchase Plan remains in effect.

8.            Except as specifically contemplated hereby, the Issuer shall be
solely responsible for compliance with all statutes, rules and regulations
applicable to the Issuer and the transactions contemplated hereby, including,
without limitation, reporting and filing requirements.

9.            This Repurchase Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania and may be modified
or amended only by a writing signed by the parties hereto.

10.          Except as contemplated by Section 3(a)(3) of this Repurchase Plan,
the Issuer acknowledges and agrees that it does not have authority, influence or
control over any Purchase effected by Hunter pursuant to this Repurchase Plan
and the Issuer will not attempt to exercise any authority, influence or control
over Purchases. Notwithstanding any provision contained herein to the contrary,
the Issuer may suspend or terminate this Repurchase Plan at any time so long as
the determination to suspend or terminate this Repurchase Plan is made in good
faith and not as part of a plan or scheme to evade its prohibitions of Rule
10b-5 under the Exchange Act or any other U.S. Securities laws. Hunter agrees
not to seek advice from the Issuer with respect to the manner in which it
effects Purchases under this Repurchase Plan.

11.          The Issuer agrees to indemnify and hold harmless Hunter and its
affiliates, principals, officers, directors, employees, agents and
representatives against any losses, claims, damages or liabilities, including
reasonable legal fees and expenses, arising out of any action or proceeding
relating to this Repurchase Plan or any Purchase effected pursuant hereto,
except to the extent that any such loss, claim, damage or liability is the
result of the negligence or willful misconduct of them to or any of its
principals, officers, directors, employees, agents or representatives. Hunter
shall provide to the Issuer proper and timely notice with regard to any such
threatened loss, claim, damage or liability.

 

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12.          All notices, requests or restrictions hereunder shall be in writing
and delivered personally or sent by registered or certified mail, postage
prepaid to the parties at the addresses set forth in the preamble of this
Repurchase Plan.

13.          This Repurchase Plan constitutes the entire agreement between the
parties hereto with respect to the matters contemplated hereby and no
modification hereof shall e effective unless in writing and signed by the party
against which it is sought to be enforced.

14.          This Repurchase Plan may be executed in any number of counterparts,
all of which, taken together, shall constitute one and the same agreement.

 

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                IN WITNESS WHEREOF, the undersigned have signed this Repurchase
Plan as of the date first written above.

 

 

OMEGA FLEX, INC.

 

 

 

By: /s/ Kevin R. Hoben__________________

 

Name:  Kevin R. Hoben

 

Title:    President and Chief Executive Officer

 

 

 

 

 

HUNTER ASSOCIATES, INC.

 

 

 

By: /s/ David W. Hunter_________________

 

Name:  David W. Hunter

 

Title:    Chairman

 

 

 

 

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Exhibit A

REQUEST FOR EARLY TERMINATION OF REPURCHASE PLAN

via fax (412) 471-2993

To: Hunter Associates, Inc.

 

As of the date hereof, Omega Flex, Inc. hereby requests termination of the
Repurchase Plan, dated September __, 2008, in good faith and not as part of a
plan or scheme to evade the prohibitions of Rule 10b5-1 or other applicable
securities laws.

IN WITNESS WHEREOF, the undersigned has signed this Request for Early
Termination of Plan as of the date specified below.

 

 

Omega Flex, Inc.

 

 

 

By:______________________________

 

Name:

 

Title:

 

 

(Date)

 

 

 

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Exhibit B

REQUEST FOR EARLY TERMINATION OF REPURCHASE PLAN

via fax (860) 704-6830

To: Omega Flex, Inc.

 

As of the date hereof, Hunter Associates, Inc. hereby requests termination of
the Repurchase Plan, dated September __, 2008.

IN WITNESS WHEREOF, the undersigned has signed this Request for Early
Termination of Plan as of the date specified below.

 

 

Hunter Associates, Inc.

 

 

 

By:______________________________

 

Name:

 

Title:

 

 

(Date)

 

 

 

 

 

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