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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
UFP Technologies, Inc.
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(Name of Issuer)
Common Stock - $.01 Par Value
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902673102
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(CUSIP Number)
Patrick J. Kinney, Jr.
Lynch, Brewer, Hoffman & Sands, LLP
101 Federal Street, Boston, MA 02110 (617) 951-0800
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
February 3, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
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SCHEDULE 13D
CUSIP No. 902673102
1) Names of Reporting Persons; S.S. or I.R.S. Identification Nos. of Above
Persons
R. Jeffrey Bailly
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) / /
b) / /
3) SEC Use Only
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4) Source of Funds (see instructions) PF
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5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
/ /
6) Citizenship or Place of Organization USA
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7) Sole Voting Power 279,487
Number of Shares -------------------
Beneficially Owned
By Each Reporting 8) Shared Voting Power 0
Person With -----------------
9) Sole Dispositive Power 279,487
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10) Shared Dispositive Power 0
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11) Aggregate Amount Beneficially Owned by Each Reporting Person
279,487
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12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions) / /
13) Percent of Class Represented by Amount in Row (11) 5.7%
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14) Type of Reporting Person (See Instructions) IN
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The reporting person listed on the cover page to this Schedule 13D hereby
makes the following statement pursuant to Section 13(d) of the Securities
Exchange Act of 1934 and the rules and regulations thereunder.
ITEM 1. SECURITY AND ISSUER.
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This statement relates to the common stock, $.01 par value (the "Common
Stock") of UFP Technologies, Inc., a Delaware corporation (the "Issuer"). The
principal executive offices of the Issuer are located at 172 East Main Street,
Georgetown, Massachusetts 01833.
ITEM 2. IDENTITY AND BACKGROUND.
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This statement is being filed by R. Jeffrey Bailly ("Bailly"), whose
business address is 172 East Main Street, Georgetown, Massachusetts 01833.
Bailly is the President and Chief Executive Officer, and a director of the
Issuer. Bailly has not, during the last five years, been convicted in a criminal
proceeding (excluding traffic violations and similar misdemeanors); and Bailly
has not, during the last five years, been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Bailly is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
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Bailly used personal funds in making his purchases of Common Stock
described in this statement. The aggregate amount of funds used in making all of
the purchases by Bailly was $115,796. This amount includes $60,000 attributable
to shares issued to Bailly as compensation, and represents the fair market value
(estimated fair market value with respect to the shares issuable on April 1,
1997) of the shares on the date of issuance.
ITEM 4. PURPOSE OF TRANSACTION.
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The purpose of Bailly's acquisitions of Common Stock and options to acquire
Common Stock is to obtain a favorable return on his investment.
Included in Bailly's holdings are shares of Common Stock, the right to
receive shares of Common Stock and options to acquire shares of the Common
Stock granted to Bailly in connection with his employment, including shares of
Common Stock and options to acquire shares of Common Stock granted in connection
with his appointment as President and Chief Executive Officer of the Issuer in
April, 1995, pursuant to a letter agreement dated April 4, 1995, a copy of which
is attached hereto as Exhibit 1 (the "Employment Agreement"). Pursuant to his
Employment Agreement, Bailly will be issued 5,000 shares of Common Stock on
April 1, 1997, April 1, 1998 and April 1, 1999. In addition, options to acquire
an aggregate of 77,500 shares will become exercisable in 1997 and options to
acquire an aggregate of 50,000 shares will become exercisable in 1998. Bailly
may, in the future, be issued restricted shares of Common Stock and may be
granted options to acquire shares of Common Stock in the discretion of the Board
of Directors of the Issuer. In addition, Bailly may, from time to time purchase
shares of Common Stock in open market transactions as market conditions may,
from time to time, warrant.
Except as described above, Bailly has no plans or proposals to acquire any
additional securities of the Issuer or to dispose of any securities of the
Issuer, or to take any action which relates to or would result in any major
change in the business or corporate structure of the Issuer.
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
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Bailly beneficially owns (i) 44,487 shares of Common Stock, (ii) options to
purchase 10,000 shares of Common Stock exercisable at $5.50 per share, all of
which are presently exercisable, (iii) options to purchase 178,000 shares of
Common Stock exercisable at $2.00 per share, of which options to purchase
133,500 shares are presently exercisable, (iv) options to purchase 122,000
shares of Common Stock exercisable at $3.25 per share, of which options to
purchase 91,500 shares are presently exercisable. Assuming exercise of all of
his presently exercisable options, Bailly would beneficially own an aggregate of
279,487 shares of Common Stock, which would be equal to 5.7% of the total
outstanding shares of Common Stock. Bailly has the sole power to vote or to
direct the vote of his shares of Common Stock. Bailly has no agreement with any
other person with respect to voting of any shares of capital stock of the
Issuer. Bailly has the sole power to dispose or to direct the disposition of his
shares of Common Stock and options to purchase Common Stock.
Other than the deemed acquisition on February 3, 1997 of securities of the
Issuer as a result of (i) the 5,000 shares of Common Stock which will be issued
to Bailly on April 1, 1997, and (ii) options with respect to 50,000 shares of
Common Stock which will become exercisable on April 4, 1997, the reporting
person has not effected any transactions in any securities of the Issuer in the
past 60 days.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIP WITH
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RESPECT TO SECURITIES OF THE ISSUER.
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Except for the Employment Agreement, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) between the reporting
person and any person, with respect to any securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
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(1) Employment Agreement dated April 4, 1995 by and between Bailly and the
Issuer. Page 5
SIGNATURE
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: February 12, 1997
/s/ Jeffrey Bailly
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R. Jeffrey Bailly
43102.1
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EXHIBIT 1
April 4, 1995
Mr. R. Jeffrey Bailly
12 Boyd Drive
Newburyport, MA 01950
Dear Mr. Bailly:
This letter agreement constitutes the entire agreement between UFP
Technologies, Inc. (the "Company") and you regarding the terms of your
employment with the Company.
1. This Agreement shall be effective as of April 4, 1995.
2. You shall serve as President and Chief Executive Officer of the
Company on a full- time basis subject to the supervision and direction
of the Board of Directors of the Company. You shall receive an annual
base salary of not less than $125,000.00 payable in equal monthly
installments and be eligible for an annual incentive bonus based on an
annual bonus plan approved by the Board of Directors of the Company
and keyed to achievement of such fiscal year financial and strategic
objectives of the Company as the Board may from time to time
determine. Subject to the provisions hereof, your employment by the
Company may be terminated by the Company at any time. You shall not be
required to relocate from the Greater Boston, Massachusetts area to
discharge your responsibilities in the event the executive offices of
the Company are moved outside of such area.
3. The Company shall issue to you an aggregate of 25,000 shares of the
$.01 par value Common Stock of the Company in installments as follows:
5,000 shares on each of April 1, 1995, April 1, 1996, April 1, 1997,
April 1, 1998, and April 1, 1999, PROVIDED, HOWEVER, that you shall
not be entitled to receive such shares if you are not employed by the
Company on such dates, PROVIDED FURTHER, HOWEVER, that in the event of
(a) a "change in control" of the Company as hereinafter defined, or
(b) the termination of your employment by the Company without "Cause"
as hereinafter defined, or the voluntary termination of your
employment for "Good Reason" as hereinafter defined, the balance of
such shares not issued to you shall be immediately issued to you. No
payment for such shares will be required. The number of shares shall
be subject to adjustment for stock splits, stock dividends and the
like in the same manner as provided for incentive stock options under
Section 12 of the Company's 1993 Stock Option Plan. In connection with
the issuance of such shares the Company shall have the right to
require you to remit to the Company an amount sufficient to satisfy
the federal, state and/or local withholding tax requirements with
respect to the issuance of such shares prior to the delivery of any
certificate or certificates for such shares. You acknowledge that such
shares will be acquired for investment and not with a view to
distribution and that the certificates for such shares shall bear an
appropriate legend. A "change in control"
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of the Company shall be deemed to have occurred if, after the date
hereof 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 30% of the voting power of the Company.
4. The Company shall grant to you options to acquire 200,000 shares of
the $.01 par value Common Stock of the Company as follows: (a) 78,000
shares at an exercise price of $3.25 per share in the form of a
non-qualified stock option, (b) 78,000 shares at an exercise price of
$2.00 per share in the form of a non-qualified stock option, and (c)
44,000 shares at an exercise price of $3.25 per share in the form of
an incentive stock option. Such options shall be exercisable at the
rate of 25% per year on a cumulative basis commencing on the date
hereof but no later than ten (10) years from the date of grant;
PROVIDED, HOWEVER, that such options will be fully exercisable in the
event of (i) a "change in control" of the Company or (ii) the
termination of your employment by the Company without "Cause", or
termination of your employment for "Good Reason". Such options shall
be issued under the Company's 1993 Stock Option Plan (the "Plan") and
shall be subject to the approval of the amendment of the Plan by the
shareholders of the Company to increase the number of shares subject
to the Plan to 1,050,000 shares.
5. You shall be entitled to participate in such fringe benefit plans and
employee benefit plans as are maintained by the Company from time to
time for its employees generally, or for its senior executives in
particular, on the same basis and subject to the same requirements and
limitations as may be made applicable to other senior executive
employees of the Company. Also, the Company will arrange for, and
maintain in effect, while you are employed by the Company, at its
expense, a whole-life insurance policy on your life payable to your
designated beneficiary in the face amount of $500,000.00. In addition,
the Company will include you under the director and officer liability
insurance coverage maintained by the Company.
6. If after the effective date hereof, your employment is terminated
without "Cause", or you voluntarily terminate your employment for
"Good Reason", you will continue to be paid monthly an amount equal to
your average monthly compensation for the two full fiscal years
preceding the date of such termination ("Termination Pay") for a
period of eighteen (18) months from the date of such termination. For
purposes of the foregoing sentence, average monthly compensation for
such fiscal years shall be determined with reference to the aggregate
base salary and bonus compensation earned by you in such fiscal years
(including any bonus compensation accrued for such fiscal years but
not paid as of the date of such termination), PROVIDED, HOWEVER, that
the amount of bonus compensation for a fiscal year shall be included
only to the extent of fifty percent (50%) of your base salary for such
fiscal year. Your Termination Pay will be subject to normal deductions
for taxes, benefit plan contributions, other payroll deductions and
any amount due the Company as a result of cash advances. "Good Reason"
shall mean (a) reduction in your base salary below $125,000.00 or such
higher base salary as is in effect immediately prior to such
reduction, or the elimination of the annual bonus plan referred to in
Paragraph 2 above, (b) removal from your positions as President or
Chief Executive Officer of the Company, or failure to re-elect or
reappoint you to such positions, (c) a material decrease in your
duties or responsibilities or the assignment to you of duties and
responsibilities, which are materially inconsistent with such
positions, (d) the Company's requiring you to relocate your permanent
residence outside the Greater Boston, Massachusetts area, or (e) the
failure of the Company to obtain the
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assumption in writing of its obligations to perform this Agreement by
any successor entity pursuant to Paragraph 13 below (which failure
shall be a basis for "Good Reason" but shall not give rise to any
additional liability). "Cause" shall mean (i) conviction of, or the
entry of a pleading of nolo contendere by you to, a felony or a
misdemeanor involving fraud, embezzlement or similar act of dishonesty
committed by you against the Company, with all appeals relating
thereto having been successfully exhausted, (ii) the material breach
of your obligations under any confidentiality agreement with the
Company executed by you, or (iii) your willful and continued failure
to perform your employment duties and obligations, unless any of such
acts or omissions were done or omitted to be done in good faith and
with the reasonable belief that such act or omission was in the best
interests of the Company. Termination for "Cause" shall not take
effect unless you are given prior written notice of the Company's
intention to terminate you for "Cause" specifying in reasonable detail
the acts or omissions constituting the alleged "Cause" and a period of
thirty (30) days from the date of such notice to correct the matter
described by the Company as constituting such alleged "Cause". You
agree to give the Company at least sixty (60) days prior written
notice of the termination of your employment for any reason and the
giving of such notice shall be a condition precedent to payment to you
of Termination Pay hereunder. You shall not be entitled to Termination
Pay as a result of termination by reason of your death, disability (as
defined in Paragraph 7) or retirement.
7. In the event of your "disability" as defined herein, your employment
shall automatically terminate. The term "disability" shall mean your
inability because of physical or mental incapacity to perform your
usual duties as President and Chief Executive Officer of the Company
for a period of one hundred eighty (180) days in any consecutive
twelve (12) month period. During such 180 day period you shall
continue to receive your full salary and bonus compensation and all
other benefits as provided herein.
8. In the event of termination of your employment for any reason, you
shall be entitled to (i) salary through the date of termination and
any bonus compensation accrued but not paid as of the date of
termination, (ii) reimbursement for reimbursable expenses incurred
prior to the date of termination, (iii) payment under any benefit plan
maintained for your benefit prior to the date of such termination,
(iv) indemnification and coverage under director and officer liability
insurance maintained by the Company with respect to your employment
prior to the date of such termination, and (v) benefits under the
option agreements referred to in Paragraph 4 to the extent therein
provided. In addition, your health insurance coverage will continue
for the period permitted by such coverage but not beyond the period
you are receiving Termination Pay (the "Termination Pay Period")
subject to the appropriate contribution from you, if applicable. Upon
the expiration of such coverage during the Termination Pay Period (and
only during such Period) the Company will reimburse you for the cost
of comparable health insurance coverage, PROVIDED HOWEVER, that the
amount of such reimbursement shall be subject to gross-up for federal
and state income taxes so that you will not be out-of pocket on an
after-tax basis with respect thereto. Unless such termination is by
reason of your death, you may also acquire the life insurance policy
referred to in Paragraph 5 hereof upon payment to the Company of an
amount equal to the then cash surrender value thereof.
9. In the event of termination of your employment for any reason (whether
voluntary or involuntary or with or without "Cause"), then for a
period of eighteen (18) months from the date of such termination of
your employment, you shall not,
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directly or indirectly, (a) solicit or pursue, either for yourself or
for the benefit of any entity (including any entity by whom you are
employed) or assist any such entity (including any entity by whom you
are employed) to solicit or pursue, for the purpose of soliciting
business for the design and/or manufacture of products which are
competitive with any products designed or manufactured by the Company
for any customers or clients of the Company who were such at any time
within the twelve (12) month period prior to such date of termination;
or (b) attempt to or assist any such entity (including any entity by
whom you are employed) in attempting to do any of the following: (i)
hire any person who is or was, at any time within the six (6) month
period prior to such date of termination, a director, officer,
employee, or agent of the Company (unless the Company terminated such
relationship), or encourage any such person to terminate such
relationship, (ii) encourage any customer, client, supplier or other
business relationship of the Company or any former customer, client,
supplier or other business relationship of the Company, to terminate
or adversely alter such relationship, whether contractual or
otherwise, to the disadvantage of the Company, or (iii) encourage any
prospective customer or supplier not to enter into a business
relationship with the Company. You agree that your obligations under
this Paragraph 9 are special, unique, and extraordinary and that any
breach by you of such obligations shall be deemed material, and shall
be deemed to cause irreparable injury not properly compensable by
damages in an action at law, and the rights and remedies of the
Company under this Paragraph 9 may, therefore, be enforced both at law
and in equity, by injunction or otherwise. For purposes of this
Paragraph 9, the term "Company" shall include its subsidiaries or
divisions.
10. If at any time a controversy between you and the Company arises as to
the meaning or operation of this Agreement other than a controversy
with respect to Paragraph 9 hereof, such controversy shall be
submitted to arbitration by either party in Boston, Massachusetts,
before an arbitrator to be named by the President of the Boston Branch
of the American Arbitration Association. Such arbitration proceedings
shall be conducted in accordance with the rules and procedures then in
effect of the American Arbitration Association. The decision of the
arbitrator shall be binding upon the parties and judgment on any award
made by the arbitrator may be entered in any court having jurisdiction
thereof. The costs of the arbitrator shall be borne equally by you and
the Company. Each party will bear his or its own legal costs.
11. This Agreement shall be governed by and interpreted in accordance with
the laws of the Commonwealth of Massachusetts without reference to
principles of conflict of laws.
12. This Agreement contains the entire agreement of the parties in respect
of this transaction and supersedes any prior agreement or
understanding relating to your employment by the Company. No amendment
or modification of any provision hereof will be valid unless in
writing signed by both parties. Any waiver must be in writing and
signed by you or an authorized officer of the Company, as the case may
be.
13. This Agreement shall be binding upon and inure to the benefit of: (a)
the Company, and any successors or assigns of the Company, whether by
way of a merger or consolidation, or liquidation of the Company, or by
way of the Company selling all or substantially all of the assets and
business of the Company to a successor entity; and, subject to the
Company's right to terminate your employment at any time, the Company
agrees to require any successor entity to
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expressly assume or unconditionally guarantee the Company's
obligations under this Agreement (unless such obligations are assumed
by operation of law); and (b) you and your heirs, executors and
administrators.
14. Any notice or other communication required hereunder shall be in
writing, shall be deemed to have been given and received when
delivered in person, or, if mailed, shall be deemed to have been given
when deposited in the United States mail, first class, registered or
certified, return receipt requested, with proper postage prepaid, and
shall be deemed to have been received on the third business day
thereafter, and shall be addressed as follows:
If to the Company, addressed to:
172 E. Main Street
Georgetown, MA 01833
If to you, addressed to:
12 Boyd Drive
Newburyport, MA 01950
or such other address as to which any party hereto may have notified the other
in writing.
If this letter correctly sets forth our understanding and agreement, please
indicate your acceptance by signing both copies of this letter and returning one
copy.
Very truly yours,
/s/ William H. Shaw
William H. Shaw, Chairman
Agreed To: April 4, 1995
/s/ R. Jeffrey Bailly
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Jeffrey Bailly
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