Exhibit 10.19
**TUFCO TECHNOLOGIES, INC.**
**2003 NON-QUALIFIED STOCK OPTION PLAN**
**1.** **Purposes of the Plan**
     The purposes of the Plan are to foster and promote the long-term financialsuccess of the Company by (a) attracting and retaining officers, directors andother key management personnel of outstanding ability by the granting of stockoptions as a separate incentive apart from salary or other compensation; (b)strengthening the Company’s ability to develop and maintain a competentmanagement team; (c) providing incentive compensation opportunities that arecompetitive with those of other corporations; and (d) enabling such officers,directors and other key personnel to participate in such financial success ofthe Company by encouraging them to become owners of the Common Stock of theCompany.
**2.** **Definitions**
     (a)  “Board” means the Board of Directors of the Company.
     (b)  “Change in Control” shall mean the transfer of at least 51% of thevoting equity interests in the Company (or any parent company thereof) whetherby sale, merger or otherwise, to or with one or more persons or entities otherthan Overseas Equity Investor Partners, Bradford Venture Partners L.P., or anyaffiliate thereof.
     (c)  “Code” means the Internal Revenue Code of 1986, as amended.
     (d)  “Committee” means the committee designated by the Board to administerthe Plan under Section 3. The Committee shall have at least two members, eachof whom shall be a member of the Board, a Non-Employee Director and an OutsideDirector.
     (e)  “Common Stock” means the shares of Common Stock of the Company, parvalue $.01 per share. Unless specified otherwise, references to Common Stockshall not include any Common Stock that may be issuable upon the conversion orexercise of any rights to acquire Common Stock, such as the Stock Options andany convertible indebtedness.
     (f)  “Company” means Tufco Technologies, Inc., a Delaware corporation,and/or one or more of its Subsidiaries.
     (g)  “Effective Date” means April 1, 2003.
     (h)  “Employee” means any person (including any officer of the Company, andany member of the Board and of the board of directors of any Subsidiary) who isemployed by the Company.
     (i)  “Exchange Act” means the Securities Exchange Act of 1934, as amended.
 

 

     (j)  “Exercise Period” means the period during which a Participant isentitled to exercise a Stock Option granted to such Participant under the Plan.
     (k)  “Fair Market Value” means, on any given date, the closing price of ashare of Common Stock on the principal national securities exchange on whichthe Common Stock is listed on such date or, if Common Stock was not traded onsuch date, on the last preceding day on which the Common Stock was traded. Ifthe shares of Common Stock are not listed on a stock exchange or included in asystem that provides a closing sales price, but are traded in theover-the-counter market without the availability of closing sales priceinformation, such determination shall be made on the basis of the average ofthe bid and offer prices for such shares on the over-the-counter market forsuch day. If the shares of Common Stock are not traded in the over-the-countermarket, the Fair Market Value shall be the fair value of such Common Stock asdetermined in good faith by the Committee, in its sole discretion.
     (l)  “Non-Employee Director” means a member of the Board who meets thedefinition of a “non-employee director” under Rule 16b-3(b)(3) promulgated bythe Securities and Exchange Commission under the Exchange Act.
     (m)  “Outside Director” means a member of the Board who meets thedefinition of an “outside director” under Section 162(m) of the Code and theregulations thereunder.
     (n)  “Participant” means any Employee who is selected by the Committee toreceive a Stock Option.
     (o)  “Plan” means the Tufco Technologies, Inc. 2003 Non-Qualified StockOption Plan.
     (p)  “Reorganization Transaction” means a merger, consolidation orcombination of the Company with another corporation or entity or any similarreorganization of the Company, the complete liquidation of the Company or thesale of all or substantially all of the assets of the Company.
     (q)  “Retirement” means a Termination of Employment by reason of aParticipant’s retirement (other than by reason of disability) as determinedpursuant to and in accordance with the then current regular retirement planapplicable to such Participant; provided, however, that the Participant must beat least age 65 at the time of such Termination of Employment.
     (r)  “Rule 16b-3” means Rule 16b-3 under the Exchange Act.
     (s)  “Securities Act” means the Securities Act of 1933, as amended.
     (t)  “Shares” means shares of Common Stock reserved for issuance ortransfer by the Company upon the exercise of outstanding Stock Options.
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     (u)  “Stock Option” means an option to purchase Shares granted underSection 7 hereof.
     (v)  “Subsidiary” means any corporation the majority of the outstandingvoting stock of which is owned, directly or indirectly, by the Company.
     (w)  “Termination of Employment” means the time when the employee-employerrelationship between the Participant and the Company is terminated for anyreason, including, but not limited to, a termination by resignation, discharge,death, Total Disability, or Retirement, but excluding any such terminationwhere there is simultaneous reemployment by the Company.
     (x)  “Total Disability” means a Termination of Employment by reason of theParticipant’s total disability as determined pursuant to and in accordance withthe then current regular long-term disability insurance plan applicable to suchParticipant. All determinations as to the date and extent of disability of anyEmployee shall be made by the Committee, in its absolute discretion, upon thebasis of such evidence as it deems necessary or desirable.
**3.** **Administration of the Plan**
     (a)  The Plan shall be administered by the Committee**,**which shall have fullpower to interpret and administer the Plan and full authority to act inselecting the Employees who are to be Participants under Section 5 hereof, indetermining the times at which Stock Options will be granted, in determiningthe amount of Stock Options to be granted to each such Employee, in determiningthe terms and conditions of Stock Options granted under the Plan and the termsof Agreements which will be entered into with Participants. The Committeeshall have the power to establish different terms and conditions with respectto different Participants.
     (b)  A majority of the Committee shall constitute a quorum, and the acts ofa majority of the members of the Committee present at any meeting at which aquorum is present, or acts approved in writing by all members of the Committeewithout a meeting, shall be the acts of the Committee. Additionally, when theBoard exercises the powers reserved to it under Section 12 or Section 14 of thePlan, the provisions of the by-laws of the Company governing the number ofDirectors of the Board required for action to be taken by the Board at ameeting and the requirements for voting by Directors at a meeting at which aquorum is present, or for acting by their written consent, shall be compliedwith by the Board in order to take valid actions.
     (c)  The Committee shall have the authority to interpret the Plan,establish and revise rules and regulations relating to the Plan, and make anyother determinations that it believes necessary or advisable for theadministration of the Plan. Decisions, interpretations and determinations bythe Committee shall be final and binding upon all persons, including, but notlimited to, the Company, its stockholders, Participants and their personalrepresentatives, heirs and assigns, and other Employees.
     (d)  All expenses and liabilities incurred by the Committee in theadministration of the Plan shall be borne by the Company. The Committee mayemploy attorneys, consultants,
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accountants, or other persons to render services in connection with thePlan, and the Company, the Board, the Committee, and members of the Board andthe Committee shall be entitled to rely upon the advice, opinions, orvaluations of any such persons. Neither the Company, the Board, the Committee,nor any member of the Board or Committee shall be personally liable for anyaction, determination, or interpretation taken or made in good faith withrespect to the Plan, and all members of the Board and Committee shall beindemnified by the Company with respect to any such liability to the fullestextent permitted by the laws of the State of Delaware.
**4.** **Common Stock Subject to the Plan**
     (a)  Subject to adjustment as provided in Section 12, the maximum number ofshares of Common Stock that may be issued or transferred by the Company underthe Plan, and which shall be reserved for such issuance or transfer, shall be300,000.
     (b)  The Board may authorize the purchase of Shares by the Company in theopen market to be held in treasury and reserved for issuance under the Plan,and may reserve authorized but unissued Shares, not otherwise reserved orrestricted, for issuance under the Plan.
     (c)  The approval of the Plan by the Board shall constitute the Board’sconclusive judgment and determination that, if Shares are issued to aParticipant in accordance with the terms and conditions of the Plan, suchShares shall be considered to be issued for full and adequate consideration andshall be fully paid and non-assessable Common Stock, and that suchconsideration shall be credited to the Company’s stated and paid-in capitalaccounts in accordance with the Company’s standard accounting practice.
     (d)  The maximum number of shares of Common Stock subject to Stock Optionsthat may be granted to any Employee shall not exceed 100,000 during anycalendar year (the “Individual Limit”). Subject to Section 14 and Section15(d) hereunder, any Stock Option that is canceled or repriced by the Committeeshall count against the Individual Limit. Notwithstanding the foregoing, theIndividual Limit may be adjusted to reflect the effect on the Stock Options ofany transaction or event described in Section 12.
**5.** **Eligibility**
     The Committee shall from time to time, in its absolute discretion, selectParticipants to whom Stock Options shall be granted from among those Employeeswho are officers, directors and other key executive personnel of the Company.
**6.** **Agreement**
     Each Participant granted a Stock Option under the Plan shall enter into anAgreement with the Company, in form approved by the Committee, which shall setforth the terms and conditions of the Stock Options granted to the Participantas set forth in Section 7 and 8 hereof and such other terms and conditions asthe Committee shall, in its sole discretion, determine.
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The Agreement shall not become effective until the conditions set forth inSection 10 hereof have been satisfied.
**7.** **Terms of Stock Option**
     At the time a Stock Option is granted, the Committee shall specify in theAgreement referred to in Section 6 the following terms and conditions withrespect to the Stock Option:
     (a)  *Number of Shares*. The number of Shares issuable or transferable tothe Participant upon the exercise of the Stock Option. Notwithstanding theforegoing, in no event shall the number of Stock Options issued to any oneParticipant exceed the Individual Limit as set forth in Section 4(d) above.
     (b)  *Price*. The price per share at which Common Stock may be purchasedupon exercise of a Stock Option shall be determined by the Committee, but shallbe not less than the Fair Market Value of a share of Common Stock on the dateof grant.
     (c)  *Payment of the Stock Option Price.*The Committee shall establish thetime and the manner in which a Stock Option may be exercised. The option priceof the shares of Common Stock received upon the exercise of a Stock Optionshall be paid on the date of exercise: (i) in cash or, (ii) by check, or (iii)by any other such method that the Committee, in its sole discretion, mayconsent to in writing.
     (d)  *Term*. The Agreement shall specify when Stock Options granted becomevested and/or exercisable, subject to Section 10, and shall specify the lengthof the Exercise Period. Notwithstanding the above, upon the occurrence of aChange in Control of the Company, all Stock Options outstanding at such timeshall become one hundred percent (100%) vested and exercisable. Unlessotherwise specified by the Committee in the Agreement, the term of a StockOption shall be 10 years.
     (e)  *Withholding*. Participants shall be responsible to make appropriateprovision for all taxes required to be withheld in connection with a StockOption, the exercise thereof and the transfer of shares of Common Stockpursuant to this Plan. Such responsibility shall extend to all applicableFederal, state, local or foreign withholding taxes. Upon the exercise of aStock Option, the Company shall have the right to retain the number of sharesof Common Stock whose Fair Market Value equals the minimum amount legallyrequired to be withheld in satisfaction of the applicable withholding taxes.
     (f)  *Other*. Such other terms and conditions not inconsistent with the Planas the Committee shall specify.
**8.** **Termination of Employment**
     Unless the Committee specifies otherwise in the Agreement, the followingterms and conditions shall apply to each Stock Option granted under the Plan:
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     (a)  *Termination For Cause*. If a Participant’s employment is terminatedby the Company for cause, such determination to be made by the Committee in itssole discretion, all Stock Options granted to such Participant shall terminateat the time employment is terminated.
     (b)  *Death*. If the Participant dies while an Employee, any Stock Optionheld by such Participant at the date of such Participant’s death shall beexercisable in its entirety by such Participant’s personal representatives,heirs or legatees at any time prior to the expiration of one year after thedate of the Participant’s death or until the expiration of the term of theStock Option, whichever period is shorter.
     (c)  *Retirement or Total Disability*. If there is a Termination ofEmployment of a Participant by reason of Retirement or Total Disability, anyStock Option held by the Participant shall be exercisable in its entirety atany time prior to the expiration of three months in the case of Retirement andone year in the case of Total Disability after the date of such Termination ofEmployment or until the expiration of the term of the Stock Option, whicheverperiod is shorter.
     (d)  *Other Termination*. If there is a Termination of Employment of aParticipant for any reason other than those specified in Sections 8(a), 8(b)above, such Participant shall be permitted, for a 45-day period following thedate of termination or until the expiration of the term of the Stock Option,whichever period is shorter, to exercise any Stock Option which was exercisableas of such termination date.
**9.** **Leave of Absence**
     If a Participant is granted a leave of absence by the Company, theCommittee may make such provision respecting continuance of any Stock Optionheld by such Participant while such Participant continues as an Employee as itmay deem advisable, except that in no event shall any Stock Option becomeexercisable after the expiration of the Exercise Period applicable to suchStock Option.
**10.** **Compliance with Applicable Laws**
     (a)  No Stock Options shall be granted, and no Shares shall be issued ortransferred, by the Company to a Participant pursuant to the Plan unless theCommittee, in its sole discretion, shall have first determined that allregistrations, approvals, exemptions, and any other action required by law tobe taken with respect to the Plan shall have been accomplished, including, butnot limited to, such action, if any, as is then required to comply with theprovisions of the Securities Act, the Exchange Act, any applicable state BlueSky laws, and the requirements of any exchange or other system on which theCommon Stock may, at the time, be listed or quoted.
     (b)  Each certificate for Shares issued or transferred pursuant to the Planshall be registered in the name of the Participant or in such other name as theParticipant shall designate. If so required by the Committee upon the adviceof counsel, the Company shall place a stop transfer order with its transferagent with respect to such Shares, the Participant shall furnish arepresentation that the Shares are being acquired as an investment and not witha view to the
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distribution thereof, and such certificate shall bear an appropriatelegend restricting the transfer of such Shares. Any such stop transfer order,investment representation or legend shall apply only so long as necessary, inthe opinion of the Committee, to insure that the resale or other disposition ofthe Shares of the Participant would not involve a violation of the provisionsof the Securities Act or applicable state Blue Sky laws.
**11.** **Employment**
     No Employee or other person shall have any claim or right to be granted aStock Option under the Plan. Nothing herein contained shall at any time bedeemed to give to any Employee the right to be retained in the employ of theCompany, interfere with the right of the Company to discharge any Employee,give to the Company the right to require any Employee to remain in its employ,or interfere with any Employee’s right to terminate employment.
**12.** **Corporate Changes**
     (a)  If any change in the outstanding shares of Common Stock occurs byreason of a stock split or recapitalization, any pro rata distribution to allstockholders of property in respect to or in exchange for their outstandingshares of Common Stock, or other similar corporate change occurs, the number ofShares issuable or transferable to Participants upon the exercise ofoutstanding Stock Options, the exercise price of such Stock Options or whatParticipants shall be entitled to receive in substitution for Shares issuableor transferable to them upon the exercise of outstanding Stock Options, may beappropriately adjusted by the Board, whose determination in such regard shallbe conclusive.
     (b)  If the Company becomes a party to a Reorganization Transaction, theBoard shall either: (i) determine what Participants shall be entitled toreceive, in substitution for Shares issuable or transferable to them upon theexercise of outstanding Stock Options, in the form of stock, securities, cashor other property to be received by owners of Common Stock of the Company as aresult of such Reorganization Transaction; provided, however, that the excessof the aggregate fair market value of the stock, securities or other propertysubject to the Stock Options immediately after such substitution or theaggregate value of such cash over the exercise price of the Stock Options shallnot be less than the excess of the aggregate Fair Market Value of the Sharessubject to such Stock Options immediately before such substitution over theexercise price of the Stock Options; or (ii) upon written notice toParticipants, provide that the Participants’ Stock Options shall be terminatedunless exercised in accordance with the Plan within 30 days after the date ofsuch notice. In either such case, the Board, in its absolute discretion, maydetermine whether and to what extent the Exercise Periods applicable to suchStock Options shall continue to apply, but in no event shall any such Boarddetermination increase the length of such Exercise Periods.
**13.** **Indemnification of Board**
     In addition to and without affecting such other rights of indemnificationas they may have as members of the Board or otherwise, each member of theCommittee or of the Board shall be
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indemnified by the Company to the extent legally possible againstreasonable expenses, including attorneys’ fees, actually and reasonablyincurred in connection with the defense of any action, suit or proceeding, orin connection with any appeal therein, to which he or she may be a party byreason of any action taken or failure to act under or in connection with thePlan, or any option granted thereunder, and against all judgments, fines andamounts paid by him or her in settlement thereof; provided that such payment ofamounts so indemnified is first approved by a majority of the members of theBoard who are not parties to such action, suit or proceeding, or by independentlegal counsel selected by the Company, in either case on the basis of adetermination that such member acted in good faith and in a manner he or shereasonably believed to be in or not opposed to the best interests of theCompany; and except that no indemnification shall be made in relation tomatters as to which it shall be adjudged in such action, suit or proceedingthat such Committee member or Board member is liable for misconduct in his orher duties; and provided further that the Committee member or Board Membershall in writing offer the Company the opportunity, at its own expense, tohandle and defend the same.
**14.** **Effective Date, Termination and Amendment**
     The Plan shall become effective on the Effective Date. The Plan shallremain in full force and effect until the earlier of 10 years from theEffective Date, or the date it is terminated by the Board. The Board shallhave the power to amend, suspend or terminate the Plan at any time.Termination of the Plan pursuant to this Section 14 shall not affect StockOptions outstanding under the Plan at the time of termination.
**15.** **Miscellaneous**
     (a)  *Effect Upon Other Plans*. The adoption of the Plan shall not affectany stock option or other compensation or incentive plan in effect for theCompany, and the Plan shall not preclude the Board from establishing any otherforms of incentive, bonus or other compensation for Employees.
     (b)  *Assignability*. No Stock Option shall be pledged, assigned ortransferred for any reason during the Participant’s lifetime and any attempt todo so shall be void and the relevant Stock Option shall be forfeited. Duringthe life of the Participant, Stock Options shall be exercisable only by suchParticipant. No Participant shall have any rights as a stockholder withrespect to any Shares covered by a Stock Option until date of issuance of stockcertificates to such Participant for such Shares. Except as otherwiseexpressly provided herein, no adjustment shall be made for dividends or otherstockholder rights for which the record date is prior to the date such stockcertificates are issued.
     (c)  *Binding Effect*. Any delivery of Shares upon the exercise of StockOptions to any Participant or former Participant or such Participant’s legalrepresentative or to any beneficiary of such Participant in accordance with theprovisions of the Plan shall be in full satisfaction of all claims with respectto such Stock Options which such Participant, representative or beneficiary mayhave against the Company, the Committee or any member of the Committee. ThePlan shall
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be binding upon the beneficiaries, heirs, executors, administrators,distributees and assigns of the Participants and the successors and assigns ofthe Company.
     (d)  *Amendment of Outstanding Stock Options.*The Committee shall have thepower unilaterally and without approval of a Participant to amend an existingStock Option in any manner; provided that (i) such an amendment does notmaterially adversely affect such previously granted Stock Option and (ii) theamended Stock Option is consistent with the terms of the Plan. In addition,the Committee may amend any outstanding Stock Option in any manner, even ifsuch amendment materially adversely affects such Stock Option, provided that(i) such Participant consents to the amendment and (ii) the amended StockOption is consistent with the terms of the Plan.
     (e)  *Governing Law*. To the extent that Federal laws (such as the 1934 Act,the Code or the Employee Retirement Income Security Act of 1974) do nototherwise control, the Plan and all determinations made and actions takenpursuant hereto shall be governed by the law of the State of Delaware andconstrued accordingly.
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