Document:

Exhibit 10.1

 

MANHATTAN BANCORP

 

2010 EQUITY  INCENTIVE PLAN

Adopted March 25, 2010

 

Section 1.              Purpose

 

The
purpose of the Manhattan Bancorp 2010 Equity Incentive Plan (the “Plan”) is to (i) encourage
selected employees and directors of Manhattan Bancorp (the “Company”) and its
subsidiaries to acquire a proprietary and vested interest in the growth and
performance of the Company; (ii) generate an increased incentive to
contribute to the Company’s future success and prosperity, thus enhancing the
value of the Company for the benefit of shareholders; and (iii) enhance
the ability of the Company and its subsidiaries to attract and retain
individuals of exceptional talent upon whom, in large measure, the sustained
progress, growth and profitability of the Company depend.

 

Section 2.              Definitions

 

For
purposes of the Plan, the following terms have the following meanings:

 

(a)                                  “Award” means any award under the Plan,
including any Option, Tandem SAR, Stand-Alone SAR, Restricted Stock Award, or
share of Phantom Stock.

 

(b)                                 “Award Agreement” means, with respect to
each Award, the signed written agreement between the Company and the
Participant setting forth the terms and conditions of the Award.

 

(c)                                  “Code” means the Internal Revenue Code of
1986, as amended from time to time, and any successor statute.

 

(d)                                 “Fair Market Value” means the fair market
value of the Common Stock as determined by the Board of Directors in good faith
in accordance with any reasonable valuation method, consistent with all
applicable requirements under the Code or other applicable laws, and
regulations promulgated thereunder.

 

(e)           “Holder” means the holder of a Restricted Stock Award
granted under Section 7.

 

(f)                                    “Incentive Option” means any Option
intended to be and designated as an “incentive stock option” within the meaning
of Section 422 of the Code.

 

(g)                                 “Issue Date” shall mean the date
established by the Board of Directors on which Certificates representing shares
of Restricted Stock shall be issued by the Company pursuant to the terms of Section 7(b).

 

(h)           “Nonqualified Stock Option” means any Option that is
not an Incentive Option.

 

 

(i)            “Option” means an option granted under Section 6.

 

(j)            “Optionee” means the holder of an Option granted under
Section 6.

 

(k)                                  “Participant” means an employee or
director who is selected by the Board of Directors to receive an Award under
the Plan.

 

(l)                                     A share of “Phantom Stock” shall mean the
right, granted pursuant to Section 10, to receive in cash the Fair Market
Value of a share of Stock.

 

(m)                               “Restricted Stock” or “Restricted Stock
Award” means an Award of Stock subject to restrictions, as more fully described
in Section 7.

 

(n)                                 “Restriction Period” means the period
determined by the Board of Directors under Section 7(b).

 

(o)                                 “Stand-Alone SAR” shall mean a stock
appreciation right granted pursuant to Section 9, which is not related to
any Option.

 

(p)                                 “Stock” means the Common Stock, no par
value, of the Company, and any successor security.

 

(q)                                 “Tandem SAR” shall mean a stock
appreciation right granted pursuant to Section 8, which is related to an
Option.

 

(r)                                    “Terminating Event” means: (i) the
acquisition of more than fifty percent (50%) of the value or voting power of
the Company’s stock or that of its wholly owned subsidiary,  Bank of Manhattan, N.A. (the “Bank”) by a
person (including an entity) or group; (ii) the acquisition in a period of
twelve (12) months or less of at least thirty-five percent (35%) of the Bank’s
or the Company’s stock by a person or group; (iii) the replacement of a
majority of the Bank’s or the Company’s board of directors in a period of
twelve (12) months or less by directors who were not endorsed by a majority of
the current board members; or (iv) the acquisition in a period of twelve
(12) months or less of forty percent (40%) or more of the Company’s assets by
an unrelated entity.

 

(s)                                  “Termination” means, for purposes of the
Plan, with respect to a Participant, that (a) if the Participant is a
director of the Company, he or she has ceased to be, for any reason, a director
and (b) if the Participant is an employee, he or she has ceased to be, for
any reason, employed by the Company or a subsidiary.

 

(t)                                    “Termination for Cause” in the case of an
employee, shall mean termination for malfeasance or gross misfeasance in the
performance of duties, conviction of illegal activity in connection therewith,
any conduct seriously detrimental to the interests of the Company or a
subsidiary corporation, or removal pursuant to the exercise of regulatory
authority by the Board of Governors of the Federal Reserve System (the “FRB”)
or any applicable bank supervisory agency; and, in any event, the determination
of the Board of Directors with respect thereto shall be 

 

 

final and
conclusive.  In the case of a director,
Termination for Cause shall mean removal pursuant to Sections 302 or 304 of the
California Corporations Code or removal pursuant to the exercise of regulatory
authority by the FRB or any applicable bank supervisory agency.

 

(u)                                 “Vesting Date” means, for an Option or a
portion of an Option, the first date on which the Option or such portion may be
exercised by the Optionee and, for shares of Restricted Stock, the date on
which the shares cease to be forfeitable and become freely transferable shares
in the hands of the Participant.

 

Section 3.              Administration

 

(a)           General.  This Plan shall be administered by the Board
of Directors of the Company (the “Board of Directors”).  The Board of Directors may, in its sole
discretion, from time to time, delegate such power and authority over the
administration of the Plan as the Board of Directors deems appropriate to a
committee composed of not fewer than three (3) directors of the
Company.  Nothing contained herein shall
prevent the Board of Directors from delegating to such Committee full power and
authority over the administration of the Plan. 
As used herein, the term “Board of Directors” shall refer either to the
Board of Directors itself or to a duly authorized committee thereof, as
appropriate.

 

Any
action of the Board of Directors with respect to administration of the Plan
shall be taken pursuant to a majority vote of its members; provided, however,
that with respect to action by the Board of Directors in granting an option or
other award to an individual director, such action must be authorized by the
required number of directors without counting the interested director, who
shall abstain as to any vote on his or her option or award.  An interested director may be counted in
determining the presence of a quorum at a meeting of the Board of Directors
where such action will be taken.

 

(b)           Authority.  The Board of Directors shall grant Awards to
eligible Participants.  In particular and
without limitation, the Board of Directors, subject to the terms of the Plan,
shall:

 

(i)            select the eligible Participants to whom
Awards may be granted;

 

(ii)                                  determine whether and to what extent
Awards are to be granted under the Plan;

 

(iii)                               determine the number of shares to be covered by each
Award granted under the Plan; and

 

(iv)                              determine the terms and conditions of any
Award granted under the Plan based upon factors determined by the Board of
Directors.

 

(c)           Board of Directors Determinations Binding. 
Subject to the express provisions of the Plan, the Board of Directors
shall have the authority to construe and interpret the Plan, any Award and any
Award Agreement; to define the terms used therein; to prescribe, amend, and
rescind rules and regulations relating to administration of the Plan, to
determine the duration and purposes of leaves of absence which may be granted
to Participants without constituting a 

 

 

termination of their employment for purposes of the
Plan; and to make all other determinations necessary or advisable for
administration of the Plan.  Any
determination made by the Board of Directors pursuant to the provisions of the
Plan with respect to any Award shall be made in its sole discretion at the time
of the grant of the Award or, unless in contravention of any express term of
the Plan or Award, at any later time. 
Determinations of the Board of the Directors on matters referred to in
this section shall be final and conclusive, and shall be binding on all
persons, including the Company and Participants.

 

Section 4.              Stock Subject to Plan

 

(a)           Shares Available for Awards.  The total
number of shares of the Company’s authorized but unissued Stock reserved and
available for issuance pursuant to Awards under this Plan shall be 444,348
subject to adjustment as provided in Section 4(b).  If any Option terminates or expires without
being exercised in full, or if any shares of Stock subject to a Restricted
Stock Award are forfeited, or if an Award otherwise terminates without a
payment being made to the Participant in the form of Stock, the shares issuable
under such Option or Award shall again be available for issuance in connection
with Awards.  Any Award under this Plan
shall be governed by the terms of the Plan and any applicable Award Agreement.

 

(b)           Adjustments.  In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split or other change in
corporate structure affecting the Stock without receipt of consideration by the
Company, such substitution or adjustments shall be made in the aggregate number
of shares of Stock reserved for issuance under the Plan, in the number and
exercise price of shares subject to outstanding Options, and in the number of
shares subject to other outstanding Awards, as may be determined to be
appropriate by the Board of Directors, in its sole discretion; provided,
however, that no fractional shares of Stock shall be issued under the Plan on
account of any such adjustment.

 

Section 5.              Eligibility

 

Awards
may be granted to all employees, officers (whether or not they are also
directors) and non-employee directors of the Company and its subsidiaries.  However, directors of the Company or a
subsidiary corporation who are not also officers or employees of the Company or
a subsidiary corporation are not eligible to receive Incentive Options under
the Plan, but only other types of Awards.

 

Section 6.              Stock Options

 

(a)           Types.  Any Option granted under the Plan shall be in
such form as the Board of Directors may from time to time approve.  The Board of Directors shall have the
authority to grant to any eligible Participant Incentive Options, Nonqualified
Stock Options or both types of Options.

 

(b)           Incentive Options.  Incentive
Options may be granted only to employees of the Company or a Subsidiary.  Any portion of an Option that is not
designated as, or does not qualify as, an Incentive Option shall constitute a
Nonqualified Stock Option.

 

 

(c)           Terms and Conditions.  Options
granted under the Plan shall be subject to the following terms and conditions:

 

(i)            Option Term. 
Each Option and all rights or obligations thereunder shall expire on
such date as the Board of Directors may determine, but not later than ten (10) years
from the date such Option is granted, and shall be subject to earlier
termination as provided elsewhere in the Plan. 
As to any Incentive Option granted to an Optionee who, immediately
before the option is granted, owns beneficially more than ten percent (10%) of
the outstanding stock of the Company (whether acquired upon exercise of Options
or otherwise), such option must not be exercisable by its terms after five (5) years
from the date of its grant.

 

(ii)           Grant Date. 
The time an Option is granted, sometimes referred to as the date of
grant, shall be the day of the action of the Board of Directors described in Section 3(a) hereof,
provided that Optionees do not have the ability to further negotiate the terms
of their grants, and provided further that the material terms of the grants are
communicated to Optionees within a relatively short period of time following
the Board’s action.  In addition, if
appropriate resolutions of the Board of Directors indicate that an Option is to
be granted as of and on some future date, the time such Option is granted shall
be such future date.  If action by the
Board of Directors is taken by the unanimous written consent of its members, the
action of the Board of Directors shall be deemed to be at the time the last
Board member signs the consent, subject to the same requirements concerning
communication with Optionees set forth in the first sentence of this Section 6(a)(ii).  In addition, if required by applicable
accounting rules, the date of grant will not be deemed to occur unless any
shareholder approvals required for the grant of an option under the Plan or
applicable amendments thereto have been obtained.

 

(iii)          Exercise Price.  The exercise price per share of
stock subject to each Option shall be determined by the Board of Directors but
shall not be less than one hundred percent (100%) of the Fair Market Value of
such stock at the time such Option is granted. 
As to any Incentive Option granted to an Optionee who, immediately
before the Option is granted, owns beneficially more than ten percent (10%) of
the outstanding stock of the Company, the purchase price must be at least one
hundred ten percent (110%) of the Fair Market Value of the stock at the time
when such Option is granted.  The
purchase price of any shares purchased shall be paid in full in cash at the
time of each such purchase.

 

(iv)          Exercisability. 
Each Option shall be exercisable in such installments, which need not be
equal, and upon such conditions as the Board of Directors shall determine;
provided, however, that if an Optionee shall not in any given installment
period purchase all of the shares which such Optionee is entitled to purchase
in such installment period, such Optionee’s right to purchase any shares not
purchased in such installment period shall continue until the expiration of
such Option.  No Option or installment
thereof shall be exercisable except with respect to whole shares, and
fractional share interests shall be disregarded except that they may be
accumulated in accordance with the next preceding sentence.

 

(v)           Limit on Exercisability. 
The aggregate fair market value (determined as of the time the Option is
granted) of the stock for which any officer or employee may be granted
Incentive Options which are first exercisable
during any one calendar year (under all Incentive 

 

 

Stock Option Plans of the
Company and its subsidiaries) shall not exceed One Hundred Thousand Dollars
($100,000).

 

(vi)          Method of Exercise; Payment. 
Options may be exercised by ten (10) days written notice delivered
to the Company stating the number of shares with respect to which the Option is
being exercised, together with cash in the amount of the purchase price for
such shares.  No fewer than ten (10) shares
may be purchased at one time unless the number purchased is the total number
which may be purchased under the Option.

 

If the shares of Stock to be issued upon the exercise
of the Option have been registered under a currently effective registration
statement filed under the Securities Act of 1933, as amended (the “Act”),
Options may also be exercised by delivering to the Company (i) an exercise
notice instructing the Company to deliver the certificates for the shares
purchased to a designated brokerage firm which shall sell the stock in the
market as soon as the Option is exercised; and (ii) a copy of irrevocable
instructions delivered to the brokerage firm to sell the shares acquired upon
exercise of the Option and to deliver to the Company from the sale proceeds
sufficient cash to pay the exercise price and applicable withholding taxes
arising as a result of the exercise, with the balance of the sales proceeds, if
any, after payment of any broker’s commission, to be credited to the Optionee’s
brokerage account.

 

The Company may require any Optionee, or any person to
whom an Option is transferred under Section 6(c)(x) hereof, as a
condition of exercising any such Option, to give written assurances
satisfactory to the Company stating that such person is acquiring the stock
subject to the Option for such person’s own account and not with any present
intention of selling or otherwise distributing the stock.  The requirement of providing written
assurances, and any assurances given pursuant to the requirement, shall be
inoperative if (i) the shares to be issued upon the exercise of the Option
have been registered under the Act, or (ii) a determination is made by
counsel for the Company that such written assurances are not required in the
circumstances under the then applicable state or federal securities laws.

 

(vii)         Compliance With Applicable Laws.  No shares of
Common Stock shall be issued upon exercise of any Option, and an Optionee shall
have no right or claim to such shares, unless and until: (i) payment in
full as provided hereinabove has been received by the Company; (ii) in the
opinion of the counsel for the Company, all applicable requirements of law and
of regulatory bodies having jurisdiction over such issuance and delivery have
been fully complied with; and (iii) if required by federal or state law or
regulation, the Optionee shall have paid to the Company the amount, if any,
required to be withheld on the amount deemed to be compensation to the Optionee
as a result of the exercise of his or her Stock Option, or made other
arrangements satisfactory to the Company, in its sole discretion, to satisfy
applicable income tax withholding requirements.

 

(viii)        Cessation of Employment; Disability.  Except as
provided in Subsections 6(c)(i) above, if an Optionee ceases to be
employed by or to serve as a director of the Company or a subsidiary
corporation for any reason other than death, disability, or cause such Optionee’s
Option shall expire thirty (30) days thereafter, and during such period after
such Optionee ceases to be an employee or director, such Option shall be
exercisable only as to those shares with respect to which installments, if any,
had accrued as of the date on which the 

 

 

Optionee ceased to be
employed by or ceased to serve as a director of the Company or such subsidiary
corporation.  Except as provided in
Subsections 6(c)(i) above or 6(c)(ix) below, if an Optionee ceases to
be employed by or ceases to serve as a director of the Company or a subsidiary
corporation by reason of disability (within the meaning of Section 22(e)(3) of
the Code), such Optionee’s Option shall expire not later than one (1) year
thereafter, and during such period after such Optionee ceases to be an employee
or director such Option shall be exercisable only as to those shares with
respect to which installments, if any, had accrued as of the date on which the
Optionee ceased to be employed by or ceased to serve as a director of the
Company or such subsidiary corporation.

 

(ix)           Termination of Employment for
Cause.  If an Optionee’s employment by or service as
a director of the Company or a subsidiary corporation is terminated for Cause,
such Optionee’s Option shall expire immediately; provided, however, that the
Board of Directors may, in its sole discretion, within thirty (30) days of such
termination, waive the expiration of the Option by giving written notice of
such waiver to the Optionee at such Optionee’s last known address.  In the event of such waiver, the Optionee may
exercise the Option only to such extent, for such time, and upon such terms and
conditions as if such Optionee had ceased to be employed by or ceased to serve
as a director of the Company or such subsidiary corporation upon the date of
such termination for a reason other than Cause, disability, or death.

 

(x)            Death of Optionee. 
Except as provided in Subsection 6(c)(i) above, if any Optionee
dies while employed by or serving as a director of the Company or a subsidiary
corporation or during the 30-day or one-year period referred to in Subsection
6(c)(viii) above, such Optionee’s Option shall expire one (1) year
after the date of such death.  After such
death but before such expiration, the persons to whom the Optionee’s rights
under the Option shall have passed by Will or by the applicable laws of descent
and distribution shall have the right to exercise such Option to the extent
that installments, if any, had accrued as of the date of such Optionee’s death.

 

Section 7.              Restricted Stock Awards

 

(a)           General.  Restricted Stock Awards may be issued
hereunder to Participants, for no cash consideration or for such amount as the
Board of Directors in its discretion shall determine, either alone or in
addition to other Awards granted under the Plan. The provisions of Restricted
Stock Awards need not be the same with respect to each recipient.  The Board of Directors may provide upon grant
of a Restricted Stock Award that any shares of Restricted Stock that may be
purchased by the Holder in cash and are subsequently forfeited by the Holder
prior to the Vesting Date therefor shall be reacquired by the Company at the
purchase price originally paid therefor by the Holder, if applicable.

 

(b)           Issue Date, Vesting Date and Conditions to Vesting. 
At the time of the grant of a Restricted Stock Award, the Board of
Directors shall establish an Issue Date or Issue Dates and a Vesting Date or
Vesting Dates with respect to such shares as well as any vesting
conditions.  The Board of Directors may
provide upon grant of a Restricted Stock Award that different numbers or
portions of the shares subject to the Award shall have different Vesting
Dates.  The Board of Directors also may
provide that the Vesting Dates will be accelerated upon the subsequent
occurrence of such event (e.g., early retirement of the Holder) as the Board of

 

 

Directors may specify. 
The Board of Directors also may establish upon grant of a Restricted
Stock Award that some or all of the shares subject thereto shall be subject
after the Vesting Date to additional restrictions upon transfer or sale,
although not to forfeiture.  The Board
may impose such restrictions or conditions to the vesting of a Restricted Stock
Award as it, in its absolute discretion, deems appropriate.  By way of example and not by way of
limitation, the Board of Directors may require, as a condition to the vesting
of a Restricted Stock Award, that the Participant or the Company achieves such
performance goals as the Board of Directors may specify.

 

(c)           Issuance of Certificates.  Reasonably
promptly after the Issue Date with respect to shares of Restricted Stock, the
Company shall cause to be issued a stock certificate, registered in the name of
the Participant to whom such shares were granted, evidencing such shares;
provided, that the Company shall not cause such a stock certificate to be issued
unless it has received a stock power duly endorsed in blank with respect to
such shares.  Each such stock certificate
shall bear the following legend:

 

“The
transferability of this certificate and the shares of stock represented hereby
are subject to the restrictions, terms and conditions (including forfeiture
provisions and restrictions against transfer) contained in the Manhattan
Bancorp 2010 Stock Incentive Plan and related Award Agreement, and such rules,
regulations and interpretations as Manhattan Bancorp’s Board of Directors may
adopt.  Copies of the Plan, Award
Agreement and rules, regulations and interpretations, if any, are on file at
the principal executive office of Manhattan Bancorp, 2141 Rosecrans Avenue, Suite 1160,
El Segundo, California  90425.”

 

Such
legend shall not be removed until such shares vest pursuant to the terms
hereof.

 

Each
certificate issued pursuant to this Section 7(c) together with the
stock powers relating to the shares of Restricted Stock evidenced by such
certificate, shall be held by the Company unless the Board of Directors
determines otherwise.

 

(d)           Consequences of Vesting.  Upon the
vesting of a share of Restricted Stock pursuant to the terms of the Plan and
the applicable Award Agreement, the restrictions on transfer described in Section 7(c) shall
cease to apply to such share.  Reasonably
promptly after a share of Restricted Stock vests, the Company shall cause to be
delivered to the Participant to whom such shares were granted, a certificate
evidencing such shares, free of the legend set forth in Section 7(c).  Notwithstanding the foregoing, such share
still may be subject to restrictions on transfer as a result of applicable
securities laws.  If a Restricted Stock
Award is partially vested, the Company may continue to hold the originally
issued certificate until fully vested unless the Participant specifically
requests the issuance of a certificate for just the vested shares.  Reasonably promptly after any such request,
the Company shall cause the certificates to be issued separately for the
restricted and unrestricted shares, and shall deliver the unrestricted
certificate to the Participant. 
Notwithstanding the foregoing, such shares shall be subject to
restrictions on transfer as a result of applicable securities laws.

 

(e)           Dividends.  If and to the extent the Board of Directors
so specifies upon grant, the Holder of shares of Restricted Stock shall be
entitled to receive from the Company, after the grant date and until the
Vesting Date, dividends or other distributions with respect to the shares 

 

 

identical or comparable in financial value to the
dividends and other distributions that would have been received by the Holder
had the shares not been subject to the restrictions on Restricted Stock imposed
under the Plan, and the Holder shall not be required to return any such
distributions to the Company in the event of forfeiture of the Restricted
Stock; provided that any such dividends or distribution payable to the Holder
that constitute Stock or other equity securities of the Company shall be issued
in the same manner and subject to the same restrictions and conditions as apply
to the shares of Restricted Stock as to which such dividends and distributions
are paid.  The Board of Directors in its
discretion may require that any dividends paid on shares of Restricted Stock
shall be held in escrow until all restrictions on such shares have lapsed.

 

(f)            Voting Rights.  If and to the extent the Board
of Directors so specifies upon grant, the Holder of shares of Restricted Stock
shall be entitled to vote or direct the voting of such shares after the grant
date and until the Vesting Date.

 

(g)           Termination.  Except to the extent otherwise provided in
the Award Agreement and pursuant to this section, in the event of a Termination
of employment or directorship during the Restriction Period, all shares still
subject to restriction shall be forfeited by the Participant.  If the recipient has paid cash for the Award,
the stock will be repurchased at the same price originally paid by the
Participant.  In the event that the
Company requires such a return of shares, it also shall have the right to
require the return of all dividends paid on such shares, whether by termination
of any escrow arrangement under which such dividends are held or otherwise,
unless otherwise specified in the applicable Award Agreement.

 

Section 8.              Tandem SARs

 

The
Board of Directors may grant in connection with any Option granted hereunder
one or more Tandem SARs relating to a number of shares of Stock less than or
equal to the number of shares of Stock subject to the related Option.  A Tandem SAR may be granted at the same time
as, or, in the case of a Non-Qualified Stock Option, subsequent to the time
that its related Option is granted.

 

(a)           Benefit Upon Exercise.  The exercise
of a Tandem SAR with respect to any number of shares of Stock shall entitle the
Participant to a payment, for each such share, equal to the excess of (i) the
Fair Market Value of a share of Stock on the exercise date over (ii) the
option exercise price of the related Option. Such payment shall be made as soon
as practicable after the effective date of such exercise.  The Board of Directors shall specify at the
time of grant that the value of the SAR shall be paid in cash, in Stock reserved
under the Plan, or a combination of both, or that the Participant can choose
the method of payment at the time of exercise.

 

(b)           Term and Exercise of Tandem SARs.

 

(i)            A Tandem SAR shall be exercisable only if
and to the extent that its related Option is exercisable.

 

(ii)           The exercise of a Tandem SAR with respect
to a number of shares of Stock shall cause the immediate and automatic
cancellation of its related 

 

 

Option with respect to an equal number of shares. The
exercise of an Option, or the cancellation, termination or expiration of an
Option (other than pursuant to this Section 8(b)(ii)), with respect to a
number of shares of Stock shall cause the automatic and immediate cancellation
of any related Tandem SARs to the extent that the number of shares of Stock
remaining subject to such Option is less than the number of shares subject to
such Tandem SARs.

 

Tandem SARs shall be cancelled in the order in which
they became exercisable.

 

(iii)          A
Tandem SAR may be exercised for all or any portion of the shares as to which it
is exercisable; provided, that no partial exercise of a Tandem SAR shall be for
an aggregate exercise price of the related Option of less than $1,000.  The partial exercise of a Tandem SAR shall
not cause the expiration, termination or cancellation of the remaining portion
thereof.

 

(iv)          No Tandem SAR shall be assignable or
transferable otherwise than together with its related Option.

 

(v)           A Tandem SAR shall be exercised by
delivering notice to the Company’s principal office, to the attention of its
Secretary (or the Secretary’s designee), no less than two (2) business
days in advance of the effective date of the proposed exercise. Such notice
shall be accompanied by the applicable Award Agreement, shall specify the
number of shares of Stock with respect to which the Tandem SAR is being
exercised and the effective date of the proposed exercise and shall be signed
by the Participant or other person then having the right to exercise the Option
to which the Tandem SAR is related. Such notice may be withdrawn at any time
prior to the close of business on the business day immediately preceding the
effective date of the proposed exercise.

 

(c)           Effect of Termination of Employment.  The provisions
set forth in Section 6(vi) through (viii) with respect to the
exercise of Options following cessation or termination of employment or service
as a director shall apply as well to the exercise of Tandem SARs.

 

Section 9.              Stand-Alone SARs

 

(a)           Exercise Price.  The exercise price per share of
a Stand-Alone SAR shall be determined by the Board of Directors at the time of
grant, but shall in no event be less than the Fair Market Value of a share of
Stock on the date of grant.

 

(b)           Benefit Upon Exercise.  The exercise
of a Stand-Alone SAR with respect to any number of shares of Stock shall
entitle the Participant to a payment, for each such share, equal to the excess
of (i) the Fair Market Value of a share of Stock on the exercise date over
(ii) the exercise price of the Stand-Alone SAR. Such payments shall be
made as soon as practicable.  The Board
of Directors shall specify at the time of grant that the value of the SAR shall
be paid in cash, in Stock reserved under the Plan, or a combination of both, or
that the Participant can choose the method of payment at the time of exercise.

 

 

(c)           Term and Exercise of Stand-Alone SARs.

 

(i)            A Stand-Alone SAR shall become
cumulatively exercisable as provided in the applicable Award Agreement.  The Board of Directors shall determine the
vesting schedule and expiration date of each Stand-Alone SAR.

 

(ii)           A Stand-Alone SAR may be exercised for
all or any portion of the shares as to which it is exercisable; provided, that
no partial exercise of a Stand-Alone SAR shall be for an aggregate exercise
price of less than $1,000.  The partial
exercise of a Stand-Alone SAR shall not cause the expiration, termination or
cancellation of the remaining portion thereof.

 

(iii)          A
Stand-Alone SAR shall be exercised by delivering notice to the Company’s
principal office, to the attention of its Secretary (or the Secretary’s
designee), no less than two (2) business days in advance of the effective
date of the proposed exercise.  Such
notice shall be accompanied by the applicable Plan Agreement, shall specify the
number of shares of Stock with respect to which the Stand-Alone SAR is being
exercised, and the effective date of the proposed exercise, and shall be signed
by the Participant.  The Participant may
withdraw such notice at any time prior to the close of business on the business
day immediately preceding the effective date of the proposed exercise.

 

(d)           Effect of Termination of Employment.  The provisions
set forth in Section 6(vi) through (viii) with respect to the
exercise of Options following cessation or termination of employment or service
as a director shall apply as well to the exercise of Stand-Alone SARs.

 

Section 10.  Phantom Stock

 

(a)           Vesting Date.  At the time of the grant of
shares of Phantom Stock, the Board of Directors shall establish a Vesting Date
or Vesting Dates with respect to such shares. 
The Board of Directors may divide such shares into classes and assign a
different Vesting Date for each class. Provided that all conditions to the
vesting of a share of Phantom Stock imposed pursuant to Section 10(c) are
satisfied, and except as provided in Section 10(d), upon the occurrence of
the Vesting Date with respect to a share of Phantom Stock, such share shall
vest.

 

(b)           Benefit Upon Vesting.  Upon the
vesting of a share of Phantom Stock, the Participant shall be entitled to
receive in cash, within 30 days of the date on which such share vests, an
amount equal to the sum of (i) the Fair Market Value of a share of Stock
on the date on which such share of Phantom Stock vests and (ii) the
aggregate amount of cash dividends paid with respect to a share of Stock during
the period commencing on the date on which the share of Phantom Stock was
granted and terminating on the date on which such share vests.

 

(c)           Conditions to Vesting.  At the time of
the grant of shares of Phantom Stock, the Board of Directors may impose such
restrictions or conditions to the vesting of such shares as it, in its absolute
discretion, deems appropriate. By way of example and not by way of limitation,
the Board of Directors may require, as a condition to the vesting of any class
or classes of shares 

 

 

of Phantom Stock, that the Participant or the Company
achieves such performance goals as the Board of Directors may specify.

 

(d)           Effect of Termination of Employment.  Unless the
applicable Award Agreement or the Board of Directors provides otherwise, shares
of Phantom Stock that have not vested, together with any dividends credited on
such shares, shall be forfeited upon the Participant’s termination of
employment for any reason.

 

(e)           Compliance with Section 409A.  In the event
the Board of Directors shall grant any shares of Phantom Stock, the Company
shall takes such steps as may be necessary to insure that such award complies
with the provisions of Section 409A of the Code.

 

Section 11.            Terminating Events

 

(a)           Impact of Event.  In the event of a “Terminating
Event” as defined in Section 2(r), any surviving corporation or entity or
acquiring corporation or entity, or affiliate of such corporation or entity,
may assume any Options, Restricted Stock Awards or any other Awards outstanding
under the Plan or may substitute similar awards for those outstanding under the
Plan.  In the event any surviving
corporation or entity or acquiring corporation or entity in a Terminating Event
does not assume such Options or Awards or does not substitute similar Options
or other Awards for those outstanding under the Plan, then (i) the vesting
of such Options or other Awards outstanding under the Plan shall be accelerated
and made fully exercisable and all restrictions thereon shall lapse ten (10) days
prior to the closing of the Terminating Event; and (ii) upon the closing
of the Terminating Event, any Options outstanding under the Plan shall be
terminated if not exercised prior to the closing, unless the Board of Directors
in its sole discretion determines prior to the effective date of the
Terminating Event that all outstanding Options and the Plan itself should
continue in full force and effect.  In
the case of such a determination by the Board of Directors, or in the event that
any pending Terminating Event does not occur, the Plan and all outstanding
Options and other Awards thereunder shall continue in force with all original
vesting schedules in effect.

 

(b)           Notice to Participants of Terminating Event. 
Not less than thirty (30) days prior to a Terminating Event, the Board
of Directors shall notify each Participant of the pendancy of the Terminating
Event.  With respect to Holders of
Restricted Stock or Participants with Stand-Alone SARs or Phantom Stock, the
notice shall simply inform such Participants of the pendancy of the Terminating
Event and of the fact that the restrictions on their Restricted Stock will
lapse, or that they will become entitled to their payments pursuant to their
Stand-Alone SARs or Phantom Stock, on the closing of the Terminating
Event.  In the case of Optionees, the
notice shall inform such Optionees that their Options shall, notwithstanding
the provisions of Sections 6(c)(iv) hereof, become exercisable in full and
not only as to those shares with respect to which installments, if any, have
then accrued, subject, however, to earlier expiration or termination as
provided elsewhere in the Plan, and further subject to the condition that the
Terminating Event in fact occurs. 
Optionees shall then be entitled to exercise any Options or portions
thereof commencing on the tenth (10th) day, and ending on the third (3rd) day,
prior to the Terminating Event, or at such other times as may be specified by
the Board of Directors in connection with the Terminating Event.  In the case of Participants with Tandem SARs,
the notice shall inform such Participant of the need to choose between the
exercise of the SAR or the 

 

 

underlying Option and of the fact that any remaining
unexercised portion of the Option or the Tandem SAR shall lapse if not
exercised within the required time period.

 

Section 12.            Acceleration of Options or other Awards.

 

Notwithstanding
the provisions of Sections 6(c)(iv), 7(b), 8(b)(i), 9(c)(i) or 10(a) 
hereof or any provision to the contrary contained in any Award Agreement, the
Board of Directors, in its sole discretion, may accelerate the vesting of all
or any Award then outstanding.  The
decision by the Board of Directors to accelerate an Award or to decline to
accelerate an Award shall be final.  In
the event of the acceleration of Options or SARs as the result of a decision by
the Board of Directors pursuant to this Section 12, each outstanding
Option or SAR so accelerated shall be exercisable for a period from and after
the date of such acceleration and upon such other terms and conditions as the
Board of Directors may determine in its sole discretion, provided that such
terms and conditions (other than terms and conditions relating solely to the
acceleration of exercisability and the related termination of an Option or SAR)
may not adversely affect the rights of any Participant without the consent of
the Participant so adversely affected. 
Any outstanding Option or SAR which has not been exercised by the holder
at the end of such period shall terminate automatically at that time.

 

Section 13.            General Provisions

 

(a)           Award Grants.  Any Award may be granted either
alone or in addition to other Awards granted under the Plan.  Subject to the terms and restrictions set
forth elsewhere in the Plan, the Board of Directors shall determine the
consideration, if any, payable by the Participant for any Award and, in
addition to those set forth in the Plan, any other terms and conditions of the
Awards.  The Board of Directors may
condition the grant or payment of any Award upon the attainment of specified
performance goals or such other factors or criteria, including vesting based on
continued service on the Board or employment, as the Board of Directors shall
determine.  Performance objectives may
vary from Participant to Participant and among groups of Participants and shall
be based upon such Company, subsidiary, group or division factors or criteria
as the Board of Directors may deem appropriate, including, but not limited to,
earnings per share or return on equity. 
The other provisions of Awards also need not be the same with respect to
each recipient.  Unless specified
otherwise in the Plan or by the Board of Directors, the date of grant of an
Award shall be the date of action by the Board of Directors to grant the Award,
provided that Participants do not have the ability to further negotiate the
terms of their awards, and provided further than the awards will be
communicated to Participants within a relatively short period of time following
the Board’s action.

 

(b)           Award Agreement.  As soon as practicable after
the date of an Award grant, the Company and the Participant shall enter into a
written Award Agreement identifying the date of grant, and specifying the terms
and conditions of the Award.  Options and
SARs are not exercisable until after execution of the Award Agreement by the
Company and the Participant, but a delay in execution of the Award Agreement
shall not affect the validity of the Option or SAR grant.

 

(c)           Certificates; Transfer Restrictions.  All
certificates for shares of Stock or other securities delivered under the Plan
shall be subject to such stock transfer orders, legends and 

 

 

other restrictions as the Board of Directors may deem
advisable under the rules, regulations and other requirements of the SEC, any
market in which the Stock is then traded and any applicable federal, state or
foreign securities law.

 

(d)           Tax Withholding.  Whenever shares of Stock are
issued or to be issued pursuant to Awards, the Company shall have the right to
require the Participant to remit to the Company an amount sufficient to satisfy
federal, state, local or other withholding tax requirements if, when, and to
the extent required by law (whether so required to secure for the Company an
otherwise available tax deduction or otherwise) prior to the delivery of any
certificate or certificates for such shares. 
The obligations of the Company under the Plan shall be conditional on
satisfaction of all such withholding obligations and the Company shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Participant.  With the approval of the Board, which it
shall have sole discretion to grant, the Participant may elect to satisfy an
applicable withholding requirement, in whole or in part, by having the Company
withhold from delivery shares of Stock having a value equal to the amount of
tax to be withheld. Such shares shall be valued at their fair market value on
the date as of which the amount of tax to be withheld is determined.  Fractional share amounts shall be settled in
cash.

 

(e)           Notification of Election Under Section 83(b) of the Code. 
If any Participant shall, in connection with the acquisition of shares
of Restricted Stock under the Plan, make the election permitted under Section 83(b) of
the Code (i.e., an election to include in gross income in the year of transfer
the amounts specified in Section 83(b)), such Participant shall notify the
Company of such election within ten days of filing notice of the election with
the Internal Revenue Service, in addition to any filing and notification
required pursuant to regulations issued under the authority of Section 83(b).

 

(f)            Transferability.  No Award shall be assignable or
otherwise transferable by the Participant other than by will or by the laws of
descent and distribution.  During the
life of a Participant, an Award shall be exercisable, and any elections with
respect to an Award may be made, only by the Participant or the Participant’s
guardian or legal representative.

 

(g)           Adjustment of Awards; Waivers.  The Board of
Directors may adjust the performance goals and measurements applicable to
Awards (i) to take into account changes in law and accounting and tax
rules, (ii) to make such adjustments as the Board of Directors deems
necessary or appropriate to reflect the inclusion or exclusion of the impact of
extraordinary or unusual items, events or circumstances in order to avoid
windfalls or hardships, and (iii) to make such adjustments as the Board of
Directors deems necessary or appropriate to reflect any material changes in
business conditions.  In the event of
hardship or other special circumstances of a Participant and otherwise in its
discretion, the Board of Directors may waive in whole or in part any or all
restrictions, conditions, vesting, or forfeiture with respect to any Award
granted to such Participant.

 

(h)           Non-Competition.  The Board of Directors may
condition its discretionary waiver of a forfeiture, the acceleration of vesting
at the time of Termination of a Participant holding any unexercised or unearned
Award, the waiver of restrictions on any Award, or the extension of the
expiration period to a period not longer than that provided by the Plan upon
such 

 

 

Participant’s agreement (and compliance with such
agreement) (i) not to engage in any business or activity competitive with
any business or activity conducted by the Company and (ii) to be available
for consultations at the request of the Company’s management, all on such terms
and conditions (including conditions in addition to (i) and (ii)) as the
Board of Directors may determine.

 

(i)            Regulatory Compliance.  Each Award
under the Plan shall be subject to the condition that, if at any time the Board
shall determine that (i) the listing, registration or qualification of the
shares of Stock upon any securities exchange or for trading in any securities
market or under any state or federal law, (ii) the consent or approval of
any government or regulatory body, or (iii) an agreement by the
Participant with respect thereto, is necessary or desirable, then such Award
shall not be consummated in whole or in part unless such listing, registration,
qualification, consent, approval or agreement shall have been effected or
obtained free of any conditions not acceptable to the Board.

 

(j)            Rights as Shareholder.  Unless the
Plan or the Board of Directors expressly specifies otherwise, an Optionee shall
have no rights as a shareholder with respect to any shares covered by an Option
until the stock certificates representing the shares are actually delivered to
the Optionee.  Except as specified in Section 4(b),
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date the certificates are delivered.  The rights of Holders shall be as specified
in their Award Agreements, as determined by the Board of Directors in
accordance with Section 7 hereof.

 

(k)           Beneficiary Designation.  The Board of
Directors, in its discretion, may establish procedures for a Participant to
designate a beneficiary to whom any amounts payable in the event of the
Participant’s death are to be paid.

 

(l)            Additional Plans.  Nothing contained in the Plan
shall prevent the Company or a subsidiary from adopting other or additional
compensation arrangements for its directors and employees.

 

(m)          No Employment Rights; No Right to Directorship. 
Neither the adoption of this Plan nor the grant of any Award hereunder
shall (i) confer upon any employee any right to continued employment nor
shall it interfere in any way with the right of the Company or a subsidiary to
terminate the employment of any employee at any time; or (ii) confer upon
any Participant any right with respect to continuation of the Participant’s
membership on the Board or interfere in any way with provisions in the Company’s
Articles of Incorporation and Bylaws relating to the election, appointment,
terms of office, and removal of members of the Board.

 

(n)           Governing Law.  The Plan and all Awards shall
be governed by and construed in accordance with the laws of the State of
California.

 

(o)           Use of Proceeds.  All cash proceeds to the
Company under the Plan shall constitute general funds of the Company.

 

(p)           Assumption by Successor.  The
obligations of the Company under the Plan and under any outstanding Award may
be assumed by any successor corporation, which for purposes of the Plan shall
be included within the meaning of “Company.”

 

 

Section 14.            Amendments and Termination

 

The
Board may amend, alter or discontinue the Plan or any Award, but no amendment,
alteration or discontinuance shall be made which would impair the rights of a
Participant under an outstanding Award without the Participant’s consent.  No amendment, alteration or discontinuance
shall require shareholder approval unless it would:

 

(a)           increase in the total number of shares reserved for
issuance pursuant to Awards under the Plan;

 

(b)           change the minimum option price for Options;

 

(c)           increase the maximum term of Awards provided for
herein;

 

(d)           expand the types of awards which may be issued under
the Plan; or

 

(e)           permit Awards to be granted to anyone other than a
director or an officer or employee of the Company or a subsidiary corporation.

 

Any
amendment or modification requiring shareholder approval shall be deemed
adopted as of the date of the action of the Board of Directors effecting such
amendment or modification and shall be effective immediately, unless otherwise
provided therein, subject to approval thereof within twelve (12) months before
or after the effective date by (i) a majority of the shares of the Company’s
Stock represented and voting in person or by proxy at a duly held shareholders’
meeting or (ii) the written consent of the holders of a majority of the
Company’s outstanding shares of Stock.

 

Section 15.            Effective Date of Plan

 

The Plan shall be deemed
adopted as of the date first shown herein and shall be effective immediately,
subject to approval hereof within twelve (12) months of said date by (i) a
majority of the shares of the Company’s Stock represented and voting in person
or by proxy at a duly held shareholders’’ meeting; or (ii) the written
consent of the holders of a majority of the Company’s outstanding shares of
Stock.

 

Section 16.            Term of Plan

 

No
Award shall be granted on or after March 25, 2020, but Awards granted
prior to March 25, 2020 may extend beyond that date.Exhibit 10.54

 

STOCK UNIT
AWARD AGREEMENT

 

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

 

This Stock Unit Award Agreement is entered into as of the 19th day of February, 2010 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 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
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
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
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

 

(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.

 

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.  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). 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.

 

 

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.

 

 

 

	
   

  	
   

  
	
  [name of Awardee]

  	
   

  

 

 

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 Adjusted
Operating Income** for 2010

 

	
   

  	
   

  	
  Performance

  	
   

  	
  Performance

  	
   

  	
  Number of

  Shares of

  	
   

  	
  Vesting

  
	
   

  	
   

  	
  Objective

  	
   

  	
  Cycle

  	
   

  	
  Common Stock

  	
   

  	
  */2012

  	
   

  	
  */2013

  	
   

  	
  */2014

  
	
  a. Threshold  Performance  Award

  	
   

  	
   

  of Adjusted Operating
  Income**

  	
   

  	
  Calendar Year 2010

  	
   

  	
   

   

  	
   

  	
  33.33%

  	
   

  	
  33.33%

  	
   

  	
  33.34%

  
	
  b. Target  Performance  Award

  	
   

  	
   

  of Adjusted Operating
  Income**

  	
   

  	
  Calendar Year 2010

  	
   

  	
   

  (in addition to
  (a) above)

  	
   

  	
  33.33%

  	
   

  	
  33.33%

  	
   

  	
  33.34%

  
	
  c. Exceptional  Performance  Award

  	
   

  	
   

  of Adjusted Operating
  Income**

  	
   

  	
  Calendar Year 2010

  	
   

  	
   

  *** (in addition to
  (a) and (b) above)

  	
   

  	
  33.33%

  	
   

  	
  33.33%

  	
   

  	
  33.34%

  

 

* 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, 2011.

 

**Adjusted Operating
Income is defined herein as Operating Income on the Company’s 10-K, excluding (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
                    
and
                    ,
the number of shares of Common Stock to which the Awardee shall be entitled
under the Exceptional Performance Award (in addition to the shares issuable
upon attainment of the Threshold and Target Performance Award) shall range from
0 to the amount stated under the column entitled “Exceptional” based on straight
line interpolation in increments of one fifth the total number of shares
otherwise issuable for achievement of the Exceptional Award  for each full
                    
of Operating Income in excess of
                    
 (not to exceed
                    ).

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}]]