Exhibit 10.2


 


Exhibit B


 


STOCK UNIT AWARD AGREEMENT


 


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


  


This Stock Unit Award Agreement is entered into
as of the 15th day of February, 2022 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, as amended (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 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 Target Award and the Exceptional Award.


 


2.        Change in Control.   Notwithstanding
the vesting schedule set forth in Schedule A: if there is a Change in Control of the Company (as defined in the Plan) 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 Schedule A of any applicable Performance Objective 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.


 



     


     


    




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.


 


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).


 


 


 



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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.


 


(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, in its sole discretion,
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,
or in addition, if permissible under applicable law, the Company may, in its sole discretion, (i) sell or arrange for the sale of shares
of Common Stock to be issued to satisfy the withholding obligation, and/or (ii) withhold in shares of Common Stock, provided that the
Company shall withhold only the amount of shares necessary to satisfy the minimum withholding amount. 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, or the conversion
of SUAs to shares of Common Stock that cannot be satisfied by the means previously described. Except where applicable legal or regulatory
provisions prohibit, the standard process for the payment of an Awardee’s Tax Related Items shall be for the Company to withhold
in shares of Common Stock only to the amount of shares necessary to satisfy the minimum withholding amount. 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.


 









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(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.


 


(f)        Adjustments
and other matters relating to stock dividends, stock splits, recapitalizations, reorganizations, Corporate Events and the like shall be
made and determined in accordance with Section 6 of the Plan, as in effect on the date of this Agreement.


 


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;


 



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(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 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.


 



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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. In addition, the Awardee acknowledges that the Award and rights granted to the Awardee
hereunder shall be subject to forfeiture to the Company in accordance with any policy that may hereafter be promulgated by the Company
to comply with the requirements of Section 10D(b)(2) of the Securities Exchange Act of 1934, as amended.


 


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 



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


 


 


 


 


 


 


 


 


 






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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
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 (if applicable) is satisfied.


 


The Performance Objective established by the Committee with respect
to the Target Performance Award and Exceptional Performance Award is Adjusted Operating Income** for 2022


 


	 	Performance 

Objective	Performance 

Cycle	Number
         of 

Shares of 

Common 

Stock	  Vesting Dates:
         March 1 of:
	 	 	 	 	  */2023  



[1/3]	  */2024

  

[1/3]	  */2025  



[1/3]
	a. Threshold Award 

[50%
of total]	 none	 n/a	 _____	 ___	 ___	 ___
	b. Target  Performance
Award 

[25% of total]	 $32,821,000 of Adjusted Operating Income**	 Calendar Year 2022	 ___ 

(in addition to 

(a) above)	 ___	 ___	 ___
	c. Exceptional  Performance
 Award 

[25% of total]	 $37,744,000 of Adjusted Operating Income**	 Calendar Year 2022	 ___ 

*** 

(in addition to 

(a) and (b) above)	 ___	 ___	 ___



 


*Vesting is subject to the Compensation Committee’s
determination of satisfaction of any applicable performance target for 2022 (for Target and Exceptional Performance Awards), and subject
to continued employment on each such vesting date (for all Awards).


 


** Adjusted Operating Income is defined herein as Operating Income
on the Company’s 10-K, excluding the effect of (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 $32,821,000 and $37,744,000
the number of shares of Common Stock issuable under the Exceptional Performance Award (in addition to the shares issuable upon attainment
of the Target Performance Award) would range from 0, representing the number of shares issuable upon attainment of $32,821,000 of Adjusted
Operating Income, to the full number of shares otherwise issuable under the Exceptional award, based on straight line interpolation rounded
up or down to the nearest whole share (not to exceed $37,744,000 of Adjusted Operating Income for purposes of this calculation).