Exhibit 10.50

 

STOCK UNIT AWARD AGREEMENT

 

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

 

This Stock Unit Award Agreement is entered into as of the 24th day of February,
2009 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

 

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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 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

 

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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.

 

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

 

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authorized transfer agent of the Company, or other appropriate means as
determined by the Company.

 

(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

 

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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.

 

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

 

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(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 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.

 

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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.

 

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.

 

(a)                                  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).

 

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(b)           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.

 

(c)           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.

 

(d)           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 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.

 

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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

 

 

 

Performance

 

Performance

 

Number of
Shares of
Common

 

Vesting

 

 

 

Objective

 

Cycle

 

Stock

 

*/2011

 

*/2012

 

*/2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

a. Threshold Performance Award

 

 

 

Calendar Year 2009

 

 

 

33.33

%

33.33

%

33.34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

b. Target Performance Award

 

 

 

Calendar Year 2009

 

(in addition to (a) above)

 

33.33

%

33.33

%

33.34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

c. Exceptional Performance Award

 

 

 

Calendar Year 2009

 

(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 either February or March, 2010.

 

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