<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. .)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
UFP Technologies, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
UFP TECHNOLOGIES, INC.
172 EAST MAIN STREET
GEORGETOWN, MASSACHUSETTS 01833-2107 USA
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
UFP TECHNOLOGIES, INC.
TO BE HELD ON JUNE 9, 2000
The Annual Meeting of Stockholders of UFP Technologies, Inc. (the "Company")
will be held on June 9, 2000 at 10:00 a.m., local time, at the Ferncroft Tara
Hotel, 50 Ferncroft Road, Danvers, Massachusetts 01923, for the following
purposes:
1. To elect two (2) Class I directors to serve until the 2003 Annual
Meeting of Stockholders and until their successors are duly elected.
2. To consider and act upon a proposal to amend the Company's 1993 Stock
Option Plan.
3. To consider and act upon any matters incidental to the foregoing
purposes and any other matters which may properly come before the Meeting
or any adjourned session thereof.
The Board of Directors has fixed April 21, 2000 as the record date for
determining the stockholders entitled to notice of, and to vote at, the Meeting.
You are cordially invited to attend the Meeting.
By Order of the Board of Directors
RICHARD L. BAILLY,
SECRETARY
Boston, Massachusetts
May 1, 2000
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO VOTE, SIGN, DATE AND RETURN THE ACCOMPANYING ENCLOSED PROXY
AS PROMPTLY AS POSSIBLE IN THE POSTAGE-PAID ENVELOPE ENCLOSED FOR THAT PURPOSE.
EVEN IF YOU HAVE GIVEN YOUR PROXY, THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO
THE EXERCISE BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION,
BY EXECUTING A PROXY WITH A LATER DATE, OR BY ATTENDING AND VOTING AT THE
MEETING.
<PAGE>
UFP TECHNOLOGIES, INC.
172 EAST MAIN STREET
GEORGETOWN, MASSACHUSETTS 01833-2107 USA
------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 9, 2000
------------------------
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of UFP Technologies, Inc., a Delaware
Corporation (the "Company") with its principal executive offices at 172 East
Main Street, Georgetown, Massachusetts 01833, for use at the Annual Meeting of
Stockholders to be held on June 9, 2000, and at any adjournment or adjournments
thereof (the "Meeting"). The enclosed proxy relating to the Meeting is solicited
on behalf of the Board of Directors of the Company and the cost of such
solicitation will be borne by the Company. It is expected that this proxy
statement and the accompanying proxy will be mailed to stockholders on or about
May 1, 2000. Certain of the officers and regular employees of the Company may
solicit proxies by correspondence, telephone or in person, without extra
compensation. The Company may also pay to banks, brokers, nominees and certain
other fiduciaries their reasonable expenses incurred in forwarding proxy
material to the beneficial owners of securities held by them.
Only stockholders of record at the close of business on April 21, 2000 will
be entitled to receive notice of, and to vote at, the Meeting. As of that date,
there were outstanding and entitled to vote 4,372,221 shares of Common Stock,
$.01 par value (the "Common Stock"), of the Company. Each such stockholder is
entitled to one vote for each share of Common Stock so held and may vote such
shares either in person or by proxy.
The enclosed proxy, if executed and returned, will be voted as directed on
the proxy or, in the absence of such direction, in favor of (i) the election of
the nominees as directors; and (ii) amendment of the 1993 Stock Option Plan. If
any other matters shall properly come before the Meeting, the enclosed proxy
will be voted by the proxies in accordance with their best judgment. The proxy
may be revoked at any time prior to exercise by filing with the Secretary of the
Company a written revocation, by executing a proxy with a later date, or by
attending and voting at the Meeting.
1
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Meeting, two Class I directors are to be elected to serve until the
2003 Annual Meeting of Stockholders and until their successors have been elected
and qualified.
The Company's Certificate of Incorporation, as amended, and By-Laws provide
that the Board of Directors shall be divided into three classes. At each Annual
Meeting of Stockholders following the initial classification, the directors
elected to succeed those whose terms expire shall be identified as being the
same class as the directors they succeed and shall be elected to hold office for
a term to expire at the third Annual Meeting of Stockholders after this
election, and until their respective successors are duly elected and qualified,
unless an adjustment in the term to which an individual director shall be
elected is made because of a change in the number of directors.
The Certificate of Incorporation, as amended, provides that the number of
directors which shall constitute the whole Board of Directors shall be fixed by,
or in the manner provided in, the By-Laws. The terms of R. Jeffrey Bailly and
William C. Curry expire at the Meeting. Messrs. Bailly and Curry are being
nominated for election as Class I directors, each to hold office until the 2003
Annual Meeting of Stockholders and until their successors have been elected and
qualified.
It is the intention of the persons named as proxies to vote for the election
of the nominees. In the unanticipated event that any such nominee should be
unable to serve, the persons named as proxies will vote the proxy for such
substitutes, if any, as the present Board of Directors may designate. The
nominees have not been nominated pursuant to any arrangement or understanding
with any person.
The following table sets forth certain information with respect to the
nominees and each of the directors whose term extends beyond this Meeting,
including the year in which the nominees' terms would expire, if elected. When
used below, positions held with the Company include positions held with the
Company's predecessors and subsidiaries:
<TABLE>
<CAPTION>
YEAR TERM
DIRECTOR EXPIRES, IF
NAME AGE POSITION SINCE ELECTED, AND CLASS
- ---- -------- --------------------------------- -------- ------------------
<S> <C> <C> <C> <C> <C>
R. Jeffrey Bailly................. 38 President, Chief Executive 1995 2003, Class I
Officer and Director
William H. Shaw(1)................ 72 Chairman of the Board of 1963 2001, Class II
Directors
Richard L. Bailly................. 66 Secretary and Director 1963 2002, Class III
William C. Curry (1)(2)........... 66 Director 1990 2003, Class I
Kenneth L. Gestal................. 51 Director 1996 2001, Class II
Peter R. Worrell (1)(2)........... 43 Director 1997 2002, Class III
Michael J. Ross (2)............... 45 Director 1998 2002, Class III
</TABLE>
- ------------------------
(1) Member of the Company's Audit Committee
(2) Member of the Company's Compensation Committee
Mr. R. Jeffrey Bailly has served as the President, Chief Executive Officer
and a director of the Company since January 1, 1995. He joined the Company in
1988 and served as a Division Manager from 1989 to 1992, General Manager
Northeast Operations from 1992 to 1994 and as its Vice President of Operations
from 1994 to 1995. From 1984 through 1988, Mr. Bailly, a certified public
accountant, was employed by Coopers & Lybrand. Mr. Bailly is a director of
Children's Friends and Family Services, a not for profit organization located in
Salem, Massachusetts. Mr. Bailly is the son of Richard L. Bailly, a cofounder
and a director of the Company.
Mr. Shaw, a cofounder of the Company and its Chairman of the Board, served
as the Chief Executive Officer, President and Treasurer of the Company from its
organization in 1963 through his retirement at
2
<PAGE>
the end of 1994. Mr. Shaw has also served as a director of the Company since
1963. Mr. Shaw is a member of the Board of Directors of Re-Source
America, Inc., a package recycling company.
Mr. Richard Bailly, a cofounder of the Company, has served as a director of
the Company since its organization in 1963. Mr. Bailly served as the Executive
Vice President of the Company from 1963 to June 1, 1999. Mr. Bailly is the
author of many of the Company's patents, including patents covering the forming
and lamination of foam plastics, packaging, conversion technology and moisture
transmission.
Mr. Curry has served as a director of the Company since 1990. From 1986 to
March 1994, Mr. Curry, now semiretired, was the president, chief executive
officer and a director of Discom, Inc., which was acquired by TDK USA Corp. in
1988 and has been a wholly owned subsidiary of TDK since that date. Mr. Curry is
a director of several privately owned companies.
Mr. Gestal has served as a director of the Company since 1996. Mr. Gestal is
a general partner at Durabo Asset Management, L.P., a money management group.
From November 1997 through December 1998, Mr. Gestal served as president of the
Alternative Asset Management Group at Swiss Bank Corporation. Prior to that,
Mr. Gestal was Chairman of Institutional Global Finance Corp., a money
management firm from 1996 through October 1997. From 1991 to 1995, Mr. Gestal
served Swiss Bank Corporation, a securities firm, first as president of SBCI
Futures, then as president of SBC Government Securities Inc. and as a director
of both firms. Prior to joining Swiss Bank Corporation, Mr. Gestal served as the
president of Sanwa-BGK, a securities firm, and as chairman of its futures
operations. Mr. Gestal is the brother-in-law of R. Jeffrey Bailly, the
President, Chief Executive Officer and a director of the Company.
Mr. Worrell has served as a director of the Company since 1997. Mr. Worrell
is the Managing Director of The Bigelow Company, LLC, a private investment bank
with offices in Portsmouth, NH, and Seattle, WA. Mr. Worrell is a director of
several privately owned companies.
Mr. Ross has served as a director of the Company since 1998. Mr. Ross is
chairman, president and CEO of Espanol.com, a multicategory e-commerce website
for the Latino market. Since 1996, Mr. Ross has served as the chairman and
president of Glassbox Inc., which advises large organizations in the UK on
corporate and public issues. From 1992 to 1996, Mr. Ross was international
executive director and a board member of The Body Shop International, PLC, a
cosmetics manufacturer and retailer.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held six meetings during 1999. Each
director attended at least 75% of the aggregate number of all meetings of the
Board of Directors and committees of which he was a member during such fiscal
year.
The Board of Directors has an Audit Committee, which met three times in 1999
and is currently composed of Messrs. Curry, Shaw and Worrell. The functions
performed by this Committee include recommending to the Board of Directors the
engagement of the independent auditors, reviewing the scope of internal controls
and reviewing the implementation by management of recommendations made by the
independent auditors. In December 1999, the Securities Exchange Commission
("SEC") adopted new rules relating to Audit Committees. In response to the new
rules, the Board of Directors is currently reviewing an Audit Committee Charter,
which will specifically define the responsibilities and obligations of the Audit
Committee. The Board of Directors expects to adopt an Audit Committee Charter
prior to June 9, 2000, which will be in compliance with the new SEC rules.
The Board of Directors has a Compensation Committee, which met on two
occasions in 1999 and is currently composed of Messrs. Curry, Ross and Worrell.
The functions of the Compensation Committee include determining salaries,
individuals to whom stock options are granted and the terms upon which option
grants are made, incentive plans, benefits and overall compensation.
3
<PAGE>
The Board of Directors does not have a nominating committee. Nominations of
directors are considered by the whole Board of Directors.
COMPENSATION OF DIRECTORS
In 1999, nonemployee directors of the Company were entitled to receive
(i) an annual $5,000 fee, (ii) if applicable, an annual committee membership fee
of $1,500 per year (with a maximum fee of $3,000) and (iii) a fee of $750 plus
reimbursement of expenses for each meeting physically attended. Messrs. Curry,
Gestal, Ross and Worrell elected to receive stock options in lieu of their
respective annual Board of Directors' fees and committee membership fees
pursuant to the Company's 1998 Director Stock Option Incentive Plan (the "1998
Plan"). Mr. Shaw received $13,500 for his services as Chairman of the Board and
$50,000 in retirement benefits pursuant to a letter agreement with the Company
dated January 1, 1995 and an agreement with the Company dated September 1993.
Richard L. Bailly received $25,000 in consulting fees pursuant to an agreement
with the Company dated September 1993. See "Consulting Contracts." In addition,
each nonemployee director is eligible to receive stock options pursuant to the
1998 Plan.
The chart below lists the annual Board of Directors fees, the annual
committee membership fees and the attendance fees received by each nonemployee
director in 1999:
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON
STOCK UNDERLYING
ANNUAL COMMITTEE STOCK OPTIONS
ANNUAL BOARD OF MEMBERSHIP ATTENDANCE GRANTED IN LIEU
DIRECTOR DIRECTORS FEES ($) FEES ($) FEES ($) OF ANNUAL FEES(1)
- -------- ------------------ ---------------- ---------- -----------------
<S> <C> <C> <C> <C>
William C. Curry.................. -- -- 3,750 6,400(2)
Kenneth L. Gestal................. -- -- 3,750 4,000(3)
Peter R. Worrell.................. -- -- 4,500 6,400(4)
Michael J. Ross................... -- -- 3,750 4,600(5)
Richard L. Bailly................. 2,500 -- 3,000 --
William H. Shaw................... 13,500 -- -- --
</TABLE>
- ------------------------
(1) These options have an exercise price of $3.75, the fair market value of the
Common Stock on the date of grant. The options are immediately exercisable,
pursuant to the terms of the 1998 Plan.
(2) Granted in lieu of additional annual fees of $8,000 to which the director
was entitled.
(3) Granted in lieu of additional annual fees of $5,000 to which the director
was entitled.
(4) Granted in lieu of additional annual fees of $8,000 to which the director
was entitled.
(5) Granted in lieu of additional annual fees of $5,570 to which the director
was entitled.
1998 DIRECTOR STOCK OPTION INCENTIVE PLAN. In June 1999, the Company
adopted the 1998 Director Stock Option Incentive Plan (the "1998 Plan") to
facilitate the ownership of Common Stock by nonemployee directors by providing
for the grant of nonqualified stock options to nonemployee directors. Only
nonemployee directors of the Company are eligible to receive grants of options
under the 1998 Plan. The 1998 Plan provides for options for the issuance of up
to 150,000 shares of Common Stock. On July 1 each year, each person who is at
the time serving as a nonemployee director is automatically granted an option to
purchase 2,500 shares of Common Stock. These options become exercisable in full
on the date of grant and expire ten years from the date of grant. The exercise
price is the fair market value of the Common Stock on the date of grant. The
1998 Plan further provides that each nonemployee director may elect to receive
all or a portion of his annual director fees or fees for serving as a member of
any committee of the Board of Directors earned during the calendar year in the
form of an option. The number of shares of Common Stock into which such elective
options are exercisable is determined based on an independent appraisal for the
year of the intrinsic value of the options granted and the amount of fees
covered by the
4
<PAGE>
director's election for the year. The elective options become exercisable in
full on the date of grant, expire ten years from the date of grant and have an
exercise price equal to the fair market value of the Common Stock on the date of
grant of the option. In addition, the Compensation Committee of the Board of
Directors may grant options to nonemployee directors from time to time in its
discretion subject to the provisions of the 1998 Plan. The Compensation
Committee establishes the terms of such discretionary options, including the
time to expiration, vesting schedule and exercise price (which may be greater
than, but not less than, the fair market value of the Common Stock on the date
of grant). In 1999, Messrs. Curry, Gestal, Ross, Worrell and Shaw each received,
automatically and in addition to any stock options granted in lieu of annual
fees, options to purchase 2,500 shares of Common Stock with an exercise price of
$3.50 per share under the 1998 Plan.
CONSULTING CONTRACTS. William H. Shaw retired as the Company's President,
Chief Executive Officer and Treasurer on December 31, 1994. Pursuant to an
agreement between the Company and Mr. Shaw entered into in September 1993,
Mr. Shaw received an automobile and served as a consultant to the Company from
January 1, 1995 to December 31, 1997 for $50,000 per year. Thereafter,
Mr. Shaw, or his heirs or beneficiaries, will receive a retirement benefit of
$50,000 per year for an additional 12 years. Mr. Shaw has agreed that he will
not compete with the Company while he is receiving any of these payments.
Richard L. Bailly retired as the Company's Executive Vice President on
June 1, 1999. Pursuant to an agreement between the Company and Mr. Bailly
entered into in September 1993 and amended in February 1999, Mr. Bailly will
serve as a consultant to the Company until June 2002 for $50,000 per year.
Thereafter, Mr. Bailly, or his heirs or beneficiaries, will receive a retirement
benefit of $50,000 per year for an additional 12 years. Mr. Bailly has agreed
that he will not compete with the Company while he is receiving any of these
payments.
INDEMNIFICATION AGREEMENTS. The Company has entered into indemnification
agreements with each of its directors and anticipates that it will enter into
similar agreements with any future directors. Generally, the indemnification
agreements attempt to provide the maximum protection permitted by Delaware law
with respect to indemnification of directors.
The indemnification agreements provide that the Company will pay certain
amounts incurred by a director in connection with any civil or criminal action
or proceeding and specifically including actions by or in the name of the
Company (derivative suits) where the individual's involvement is by reason of
the fact that he is or was a director. Such amounts include, to the maximum
extent permitted by law, attorney's fees, judgments, civil or criminal fines,
settlement amounts, and other expenses customarily incurred in connection with
legal proceedings. Under the indemnification agreements, a director will not
receive indemnification if he is found not to have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company.
SECURITY OWNERSHIP OF DIRECTORS, OFFICERS AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as of April 21, 2000,
with respect to the beneficial ownership of the Company's Common Stock by each
director, each nominee for director, each named executive officer in the Summary
Compensation Table under "Executive Compensation" below, all executive officers
and directors as a group, and each person known by the Company to be the
beneficial
5
<PAGE>
owner of 5% or more of the Company's Common Stock. This information is based
upon information received from or on behalf of the named individuals.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
NAME BENEFICIALLY OWNED (1) PERCENT OF CLASS
- ---- ---------------------- ----------------
<S> <C> <C>
William H. Shaw(2)(5)..................................... 566,202 12.9%
c/o UFP Technologies, Inc.
172 East Main Street
Georgetown, MA 01833
Richard L. Bailly(4)(5)................................... 424,871 9.7%
c/o UFP Technologies, Inc.
172 East Main Street
Georgetown, MA 01833
R. Jeffrey Bailly(3)(8)................................... 691,355 14.6%
c/o UFP Technologies, Inc.
172 East Main Street
Georgetown, MA 01833
Michael J. Ross(5)........................................ 7,100 *
Richard LeSavoy(3)........................................ 23,910 *
Wayne G. Williams(3)...................................... 43,021 1.0%
William C. Curry(5)(6).................................... 70,272 1.6%
Kenneth L. Gestal(5)...................................... 56,200 1.3%
Peter R. Worrell(5)(9).................................... 55,900 1.3%
Ronald J. Lataille(3)(8).................................. 153,592 3.5%
James J. Cramer(7)........................................ 470,000 10.7%
100 Wall Street, 8th Floor
New York, NY 10005
Eliot H. Sherman.......................................... 273,634 6.3%
14 Timber Ledge Dr.
Holliston, MA 01746
All executive officers and directors as a group (10 2,039,341 41.6%
persons) (2)(3)(4)(5)(6)(8)(9)..........................
</TABLE>
- ------------------------
* Less than one percent.
(1) Unless otherwise noted, each person identified possesses sole voting and
investment power with respect to the shares listed.
(2) Includes 67,003 shares owned by the estate of William Shaw's spouse and
51,025 shares owned by a trust for the benefit of Mr. Shaw's children as to
both of which Mr. Shaw disclaims beneficial ownership.
(3) Includes shares issuable pursuant to currently exercisable stock options
under the 1993 Plan as follows: 374,722 for R. Jeffrey Bailly, 6,500 for
Mr. Williams, 20,000 for Mr. Lataille, and 17,500 for Mr. LeSavoy.
(4) Includes 175,924 shares owned by the wife of Mr. Bailly as to which
Mr. Bailly disclaims beneficial ownership. Excludes 691,355 shares
attributable to R. Jeffrey Bailly, a son of Richard Bailly, as to which he
disclaims beneficial ownership.
6
<PAGE>
(5) Includes shares issuable pursuant to currently exercisable stock options as
follows: 12,500 for William Shaw, 2,500 for Richard Bailly, 24,600 for
William Curry, 16,000 for Kenneth Gestal, 16,500 for Peter Worrell, and
7,100 for Michael Ross.
(6) Includes 38,920 shares owned by the wife of William Curry, as to which he
disclaims beneficial ownership.
(7) Represents an investment group consisting of James J. Cramer, Karen L.
Cramer, J.J. Cramer & Co., Inc., Cramer Partners L.P., and Cramer Capital
Corporation.
(8) Includes 120,090 shares owned by the Company's Profit Sharing Trust as to
which Messrs. Bailly and Lataille disclaim beneficial interest in excess of
their respective pecuniary interests in the trust. Messrs. Bailly and
Lataille are co-trustees of the trust.
(9) Includes 10,000 shares owned by the Bigelow Company, LLC Profit Sharing Plan
as to which Mr. Worrell disclaims beneficial interest in excess of his
pecuniary interest in the Plan. Mr. Worrell is one of two trustees of the
Plan. Includes 4,400 shares held by Mr. Worrell's spouse.
MANAGEMENT
The names of the Company's executive officers and significant employees who
are not directors of the Company, and certain biographical information furnished
by them, are set forth below:
<TABLE>
<CAPTION>
NAME AGE TITLE
- ---- -------- ------------------------------------------
<S> <C> <C>
Charles W. Casey.......................... 60 Vice President
Ronald J. Lataille........................ 38 Vice President, Treasurer and Chief
Financial Officer
Richard LeSavoy........................... 44 Vice President
Wayne G. Williams......................... 57 Vice President
</TABLE>
Mr. Casey joined the Company in 1981 and has served as a Vice President
since 1992. Prior to serving as Vice President, Mr. Casey served as division
manager from 1985 through 1994 and as plant manager from 1981 through 1985.
Mr. Lataille joined the Company in November 1997 as its Chief Financial
Officer. Prior to joining the Company, Mr. Lataille served as Vice President,
Treasurer and Chief Financial Officer of Little Switzerland, Inc. from 1991
through October 1997. He also served as interim President and Chief Executive
Officer of Little Switzerland from October 1994 through October 1995.
Mr. Lataille is a director of Seacoast United Soccer Club, a not for profit
organization located in Hampton, NH.
Mr. LeSavoy initially joined the Company in 1983 and served as Materials
Manager and then Operating Manager through 1987. From 1988 through 1995
Mr. LeSavoy served as Purchasing Manager and then Manufacturing Manager for the
USCI Division of C.R. Bard, Inc., a multi-national developer, manufacturer and
marketer of healthcare products. Mr. LeSavoy rejoined the Company in 1995 as
Director of Operations for the Northeast Region and was appointed Vice President
in December 1999.
Mr. Williams initially joined the Company in 1981 and served as sales
manager, division manager and then as Vice President of Technology from 1992
through October 1993. From 1993 through 1994 Mr. Williams served as an executive
officer of Re-Source America. Mr. Williams rejoined the Company as a Vice
President in January 1994. Prior to joining the Company, Mr. Williams was
employed by The Dow Chemical Company (1966-1981) where he held various
technical, sales and project management positions.
Executive officers are chosen by and serve at the discretion of the Board of
Directors of the Company.
7
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the compensation during
the last three fiscal years of each of the executive officers of the Company
whose annual salary and bonus, if any, exceeded $100,000 during the last fiscal
year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
---------------------------------- -----------------------------
OTHER ANNUAL RESTRICTED SECURITIES ALL OTHER
FISCAL YEAR SALARY BONUS COMPENSATION STOCK AWARDS UNDERLYING COMPENSATION
NAME & PRINCIPAL POSITION ENDED ($) ($) ($)(2) ($)(3) OPTIONS (#)(4) ($)(5)
- ------------------------- ----------- -------- -------- ------------ ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
R. Jeffrey Bailly....... 12/31/99 175,000 71,000 77,625 92,125 74,444 13,033
President and Chief 12/31/98 160,000 0 142,000 144,000 20,000 12,763
Executive Officer (1) 12/31/97 150,000 95,000 23,750 0 0 12,717
Ronald J. Lataille...... 12/31/99 130,000 13,000 5,750 9,900 10,000 6,918
Vice President, 12/31/98 125,800 0 15,000 24,000 20,000 5,999
Treasurer and Chief 12/31/97 20,800 0 0 0 20,000 0
Financial Officer (6)
Wayne G. Williams....... 12/31/99 105,000 18,000 0 0 5,000 5,963
Vice President 12/31/98 100,000 20,000 0 0 5,000 5,473
12/31/97 95,000 15,000 0 0 0 4,891
Richard LeSavoy......... 12/31/99 101,052 15,000 8,000 14,987 20,000 6,014
Vice President
</TABLE>
- ------------------------
(1) See "Employment Contracts" below.
(2) The Company granted R. Jeffrey Bailly 5,000 shares Common Stock in
April 1997 and 1998 and 1999 at a market price of $4.75, $4.00 and $3.63 per
share, respectively, in each case based on the closing price of the
Company's Common Stock on the Nasdaq Market on the date of grant. Includes
for Mr. Bailly $77,625 paid in compensation for the taxes attributable to
his grant of 33,500 shares of the Company's Common Stock on January 1, 2000.
Includes for Mr. Lataille $5,750 paid in compensation for the taxes
attributable to his grant of 3,600 shares of the Company's Common Stock on
January 1, 2000. Includes for Mr. LeSavoy $8,000 paid in compensation for
the taxes attributable to his grant of 5,450 shares of the Company's Common
Stock on January 1, 2000.
(3) On January 1, 2000, the Company granted Messrs. R. Jeffrey Bailly, Lataille
and LeSavoy 33,500, 3,600 and 5,450 shares of the Company's Common Stock,
respectively. These shares are fully vested. Based on $2.75 per share, the
closing price of the Company's Common Stock on the Nasdaq National Market on
the date immediately preceeding the date of grant, the value of these shares
is $92,125 for Mr. Bailly, $9,900 for Mr. Lataille and $14,987 for
Mr. LeSavoy. These shares have not been registered under the Securities Act
of 1933. Dividends will be paid on these shares only if and to the extent
dividends are paid on the Company's Common Stock.
(4) The Company did not grant any stock appreciation rights or make any
long-term incentive payments during fiscal 1997, 1998 or 1999.
(5) Represents Company contributions to the above-named employees' accounts
under the Company's Profit Sharing Retirement Plan and Trust and, for R.
Jeffrey Bailly, life insurance premiums paid by the Company of $5,400 in
each of fiscal 1997, 1998 and 1999.
(6) Mr. Lataille joined the Company in November 1997.
8
<PAGE>
EMPLOYMENT CONTRACTS
In April 2000 the Company entered into an employment agreement with R.
Jeffrey Bailly, its President and Chief Executive Officer, which is terminable
by either party at any time, except as provided below. The Agreement provides
that Mr. Bailly will receive a minimum annual salary of $200,000 and
consideration for discretionary bonuses. Mr. Bailly's agreement prohibits him
from competing with the Company during the term of his employment and for a
period of eighteen months thereafter. Pursuant to the agreement, the Company
agreed to grant Mr. Bailly 10,000 shares of its Common Stock on January 1, 2001,
provided that Mr. Bailly remains employed with the Company. Further, pursuant to
the agreement, the Company agreed to grant Mr. Bailly immediately exercisable
nonqualified stock options to acquire 125,000 shares of Common Stock. The
employment agreement provides Mr. Bailly with certain other benefits, including
the opportunity to participate in the Company's stock option plans, insurance
plans and other employment benefits as may be generally available to senior
executives of the Company.
Under the terms of the employment agreement, if Mr. Bailly's employment with
the Company is terminated by the Company without cause, or if Mr. Bailly
terminates his employment with the Company for good reason (a reduction in his
base salary, removal from his position as president or chief executive officer,
required relocation outside the greater Boston, Massachusetts area or a material
reduction in his overall level of responsibility) or due to a change in control
of the Company, (i) the Company is required to pay Mr. Bailly a lump sum amount
equal to three times his average annual compensation for the two years
preceding, (ii) all of Mr. Bailly's shares and options granted pursuant to the
employment agreement will vest in full and (iii) the Company will continue to
pay Mr. Bailly's health insurance.
In September 1993, the Company entered into an agreement with Richard L.
Bailly that, among other things, included provisions for his retirement. This
agreement was amended in February 1999, to reflect that upon his retirement he
would continue as a consultant to the Company for three additional years for
$50,000 per year. Thereafter, Mr. Bailly, or his heirs or beneficiaries, will
receive a retirement benefit of $50,000 per year for an additional 12 years.
Mr. Bailly has agreed that he will not compete with the Company while he is
receiving any of these payments. Mr. Bailly retired from his position as
Executive Vice President of the Company in June 1999. Pursuant to the agreement,
Mr. Bailly will continue as a consultant to the Company until June, 2002.
SEVERANCE PLANS
In September 1993, the Company adopted a policy that all executive officers
of the Company not otherwise a party to an employment arrangement with the
Company will receive a severance benefit should the employee's employment with
the Company be terminated by the Company other than for cause in connection with
a change in control of the Company, in the form of a base salary continuation
for a period equal to the sum of (i) four months plus (ii) one month for each
year of service with the Company.
STOCK OPTIONS
The following table sets forth certain information with respect to stock
options granted to the named executive officers during the year ended
December 31, 1999 and the aggregate number and value of options exercisable and
unexercisable held by the named executive officers at December 31, 1999.
9
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
NUMBER OF SHARES PERCENT OF TOTAL STOCK PRICE APPRECIATION FOR
OF COMMON OPTIONS GRANTED EXERCISE OPTION TERM(4)
UNDERLYING OPTIONS TO EMPLOYEES PRICE EXPIRATION -----------------------------
NAME GRANTED (#) IN FISCAL YEAR (%) ($/SH)(3) DATE 5% ($) 10% ($)
- ---- ------------------ ------------------ --------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
R. Jeffrey Bailly.......... 20,000(1) 13.8 3.00 1/7/09 37,734 45,625
10,000(1) 6.9 3.688 3/15/09 23,206 58,809
44,444(2) 30.8 4.50 4/20/09 125,778 318,745
Ronald J. Lataille......... 10,000(1) 6.9 3.50 7/1/04 9,670 21,368
Richard LeSavoy............ 10,000(1) 6.9 3.50 7/1/04 9,670 21,368
10,000(1) 6.9 2.81 12/16/04 7,764 17,155
Wayne G. Williams.......... 5,000(1) 3.5 3.50 07/1/04 4,835 10,684
</TABLE>
- ------------------------
(1) Options vest at the rate of 25% per year.
(2) Options vest at the rate of 25% per year commencing on the date of grant.
(3) The exercise price is equal to the fair market value of the Common Stock on
the date of grant.
(4) The 5% and 10% assumed rate of annual compounded stock price appreciation
are mandated by the rules of the Securities and Exchange Commission and do
not represent the Company's estimate or projection of future Common Stock
prices.
OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED IN-
UNEXERCISED OPTIONS THE-MONEY OPTIONS AT
SHARES ACQUIRED VALUE REALIZED AT FISCAL YEAR-END(#) FISCAL YEAR-END($)(2)
NAME ON EXERCISE ($)(1) EXERCISABLE/ UNEXERCISABLE EXERCISABLE/ UNEXERCISABLE
- ---- --------------- -------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
R. Jeffrey Bailly............. 100,000 250,000 266,111 78,333 58,500 0
Ronald J. Lataille............ 0 0 20,000 30,000 0 0
Wayne G. Williams............. 5,000 3,725 5,250 9,750 0 0
Richard LeSavoy............... 0 0 15,250 24,750 0 0
</TABLE>
- ------------------------
(1) Value represents the difference between the closing price of the Common
Stock on the date of exercise and the exercise price, multiplied by the
number of shares acquired on exercise.
(2) Represents the fair market value of the Company's Common Stock on
December 31, 1999 ($2.75 per share based on the closing price on the Nasdaq
Stock Market) minus the exercise price per share, of the in-the-money
options, multiplied by the number of shares subject to each option.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Decisions regarding executive compensation are made by the Compensation
Committee of the Board of Directors, which in 1999 was composed of
Messrs. Curry, Worrell and Ross. Neither Mr. Curry, Mr. Worrell nor Mr. Ross is
a former or current officer or employee of the company.
COMPENSATION COMMITTEE AND BOARD OF DIRECTORS REPORT
The primary objectives of the Compensation Committee in developing executive
compensation policies are to attract, motivate and retain superior talent to
enable the Company to achieve its business objectives and to align the financial
interests of its executive officers with the stockholders of the Company.
10
<PAGE>
The compensation of executive officers consists of base compensation, bonus,
the grant of options and participation in benefit plans generally available to
employees. In setting compensation, the Compensation Committee strives to
maintain base compensation for the Company's executive officers at levels which
the Compensation Committee believes are competitive with the compensation of
comparable executive officers in similarly situated companies, while relying
upon stock options and the bonus plan to provide significant performance
incentives.
Executive officers are eligible to participate in the bonus plan which is
administered by the Compensation Committee. Under the plan, executive officers
may receive bonuses derived from a formula tied to the Company's income. In
addition, executive officers, including R. Jeffrey Bailly, may receive
discretionary bonuses payable in cash or the Company's common stock based upon a
subjective evaluation of the performance of the Company and their contributions
to the Company.
Each of the executive officers and all key employees are eligible to receive
grants of options under the 1993 Stock Option Plan. The 1993 Stock Option Plan
is used to align a portion of the officer's compensation with the stockholders'
interests and the long-term success of the Company. In determining the number of
options to be granted to each executive officer, the Compensation Committee
reviews recommendations provided by R. Jeffrey Bailly and makes a subjective
determination regarding those recommendations based upon the following criteria:
(i) the individual performance and position of responsibility of the executive
officer, (ii) the number of options held by the executive officer, and
(iii) the financial performance of the Company. No particular weight is given to
any of these factors, rather each executive officer's total compensation package
is reviewed as a whole. During the fiscal year ended December 31, 1999, the
Company granted options to purchase 114,444 shares to executive officers as a
group under the 1993 Stock Option Plan.
In 1999, R. Jeffrey Bailly received a bonus consisting of 33,500 fully
vested shares of the Company's Common Stock and $77,625 in compensation for the
taxes attributable to the grant of these shares. Mr. Bailly also received a
salary of $175,000, and cash bonus of $71,000. This compensation, including the
discretionary bonus, was based upon the employment agreement negotiated with
Mr. Bailly in conjunction with his promotion to Chief Executive Officer and
President of the Company in January 1995. In April 2000, the Company entered
into a new employment agreement with Mr. Bailly. See "Employee Contracts." The
Board has conducted a survey of salaries of chief executive officers. Based upon
that information and its experience, the Company believes that Mr. Bailly's
compensation was comparable to the compensation of chief executive officers of
similar companies.
<TABLE>
<S> <C>
COMPENSATION BOARD OF DIRECTORS
WILLIAM C. CURRY WILLIAM H. SHAW
PETER R. WORRELL R. JEFFREY BAILLY
MICHAEL J. ROSS RICHARD L. BAILLY
WILLIAM C. CURRY
KENNETH L. GESTAL
PETER R. WORRELL
MICHAEL J. ROSS
</TABLE>
11
<PAGE>
PERFORMANCE GRAPH
The following graph compares the semiannual change in the Company's
cumulative total shareholder return for the five years ending December 31, 1999
based upon the market price of the Company's Common Stock with the cumulative
total return on the CRSP Index for the Nasdaq Stock Market (U.S. companies) and
the CRSP Index for NYSE/AMEX/Nasdaq (SIC 3080-3089 U.S.) Miscellaneous Plastics
Products for that period.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR UFP TECHNOLOGIES, INC.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
12/1994 12/1995 12/1996 12/1997 12/1998 12/1999
<S> <C> <C> <C> <C> <C> <C>
UFP Technologies, Inc. 100 133.3 170.8 139.6 104.2 91.7
Nasdaq Stock Market (US Companies) 100 141.3 173.9 213.1 300.2 545.7
NYSE/AMEX/NASDAQ Stocks 100 109.7 151.8 154.3 144.5 162.8
(SIC 3080-3089 US Companies)
Miscellaneous Plastics Products
</TABLE>
<TABLE>
<CAPTION>
SYMBOL CRSP TOTAL RETURNS INDEX FOR: 12/1994 12/1995 12/1996 12/1997 12/1998
- ------ --------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
. . . . . . UFP Technologies, Inc........................ 100 133.3 170.8 139.6 104.2
______ Nasdaq Stock Market (US Companies)........... 100 141.3 173.9 213.1 300.2
- -- - - - NYSE/AMEX/NASDAQ Stocks...................... 100 109.7 151.8 154.3 144.5
(SIC 3080-3089 US Companies) Miscellaneous
Plastics Products
<CAPTION>
SYMBOL 12/1999
- ------ --------
<S> <C>
. . . . . . 91.7
______ 545.7
- -- - - - 162.8
</TABLE>
Notes: A. The lines represent monthly index levels derived from compounded
daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.00 on 12/30/1994.
Assumes $100 invested on December 31, 1994 in the Company's Common Stock, the
CRSP Index for the Nasdaq Stock Market (U.S. companies) and the CRSP Index for
NYSE/AMEX/Nasdaq (SIC 3080-3089 U.S.) Miscellaneous Plastics Products, and the
reinvestment of any and all dividends.
12
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
UNITED DEVELOPMENT COMPANY LIMITED. The Company owns an approximate 26.3%
limited partnership interest in United Development Company Limited, a real
estate limited partnership ("United Development"), which owns and leases to the
Company the Kissimmee, Florida and Decatur, Alabama properties. William H. Shaw
and Richard L. Bailly, both directors and stockholders of the Company, each own
an approximately 21% general partnership interest in United Development. Each of
Charles W. Casey and Wayne G. Williams who are officers and stockholders of the
Company, own an approximately 5.3% limited partnership interest in this entity.
The Company made a series of loans to United Development from time to time
prior to September 30, 1993 in the total principal amount of approximately
$210,000. As of September 30, 1993, these loans were consolidated into one term
note (the "Original Note") which bore interest at the prime rate of interest as
announced by The First National Bank of Boston, plus 2%. The principal amount of
the Original Note amortized on a ten year basis and the outstanding principal
amount on the Original Note was scheduled to be repaid on September 30, 1998. On
December 31, 1998, United Development refinanced the Original Note. United
Development made a note (the "New Note") in favor of the Company in the
principal amount of $99,750, of which $83,333 remained outstanding as of
December 31, 1999. The New Note bears interest at the rate of 9.75% per year.
The principal amount of the New Note amortizes on a four year basis with the
balance of the outstanding principal amount repayable on December 31, 2002. The
New Note is secured by a second priority mortgage on United Development's
Decatur, Alabama facilities.
KISSIMMEE, FLORIDA PROPERTY. On August 26, 1998, the Company extended the
lease with United Development of the Company's Kissimmee, Florida manufacturing
facility to December 31, 2001. Monthly rent for the lease is $10,800 plus the
payment of certain expenses and taxes. The Company believes that the terms of
its lease are comparable to those available in the market for real estate in
Kissimmee, Florida.
DECATUR, ALABAMA PROPERTY. On August 26, 1998, the Company extended the
lease with United Development of the Company's Decatur, Alabama manufacturing
facility to December 31, 2001. Under the lease, the Company pays annual rent of
$119,813 plus the payment of certain expenses and taxes. The Company believes
that the terms of this lease are comparable to those available in the market for
real estate in Decatur, Alabama.
REPURCHASE OF STOCK FROM JAMES J. CRAMER. On December 23, 1999, the Company
repurchased an aggregate of 570,000 shares of its Common Stock held by an
investment group consisting of James J. Cramer, J.J. Cramer & Co., Karen L.
Cramer, Cramer Partners, L.P. and Cramer Capital Corporation for $2.8125 per
share or an aggregate of $463,125 in cash. The investment group agreed, subject
to certain exceptions, that it would not sell the balance of its shares of the
Company's Common Stock until June 14, 2000. The investment group currently owns
10.7% of the Company's Common Stock.
PROPOSAL NO. 2
PROPOSAL TO AMEND THE COMPANY'S
1993 STOCK OPTION PLAN
GENERAL
Effective October 1993, the Company adopted the 1993 Stock Option Plan (the
"1993 Plan"). The purpose of the 1993 Plan is to benefit the Company through the
maintenance and development of its businesses by offering certain present and
future key individuals a favorable opportunity to become holders of stock in the
Company over a period of years, thereby giving them a permanent stake in the
growth and prosperity of the Company. The Board of Directors has approved an
amendment to the 1993 Plan, subject to stockholder approval, to increase the
number of shares of Common Stock available for issuance under
13
<PAGE>
the 1993 Plan from 1,050,000 to 1,550,000 shares. The following is a summary
description of the 1993 Plan and is qualified in its entirety by reference to
the 1993 Plan, which is attached hereto as Exhibit A.
DESCRIPTION OF THE 1993 PLAN
ADMINISTRATION. The 1993 Plan may be administered by the Board of Directors
of the Company or by a committee appointed by the Board of Directors. Subject to
the express provisions of the 1993 Plan, the Board of Directors has full
authority to interpret the terms of the 1993 Plan and may take action as
necessary to ensure that options granted under the 1993 Plan qualify as
"qualified performance-based compensation" under Section 162(m) of the Internal
Revenue Code of 1986.
ELIGIBILITY. Employees of the Company (including officers and directors of
the Company who are also employees), as well as certain consultants and advisors
of the Company, are eligible to receive grants of options under the 1993 Plan.
As of the date of this proxy statement, the Company's employee director eligible
to receive grants under the 1993 Plan is Mr. R. Jeffrey Bailly.
AVAILABLE SHARES. Under the 1993 Plan, 1,050,000 shares of Common Stock are
currently available for the grant of stock options, subject to adjustment in the
event of stock split, stock dividend or changes in corporate structure affecting
Common Stock. If the amendment is approved, a total of 1,550,000 shares of
Common Stock will be available under the 1993 Plan. To the extent a stock option
granted under the 1993 Plan expires or is terminated or cancelled unexercised,
such shares may again be optioned. Shares subject to options may be made
available from unissued or reacquired shares of Common Stock.
EFFECTIVE DATE, TERMINATION AND AMENDMENT. The 1993 Plan, as originally
adopted, became effective October 15, 1993. The 1993 Plan may be amended by
either the Board of Directors or the stockholders of the Company. Stockholder
approval is required for any amendment which would (i) materially increase the
benefits accruing to participants under the 1993 Plan, (ii) increase the number
of securities which may be issued under the 1993 Plan or (iii) materially modify
the requirements as to eligibility for participation in the 1993 Plan. No
amendment of the 1993 Plan may, except as described in the 1993 Plan,
(i) affect the rights of an option holder without the holder's consent or
(ii) extend the term of the 1993 Plan.
No options may be granted under the 1993 Plan after April 12, 2010. No
option under the 1993 Plan may be exercised subsequent to ten years from the
date of grant (five years after the date of grant for incentive stock options
granted to holders of more than 10% of the Common Stock). Options granted under
the 1993 Plan are exercisable during an optionee's lifetime only by the
optionee. No stock option granted pursuant to the 1993 Plan may be exercised
more than three months after the relationship between the Company and the option
holder ceases, except that in the event of death, permanent disability or
retirement, the option may be exercised by the optionee or, if he is not living,
by his heirs, legatees or legal representative for a period of up to one year
after the date of death, permanent disability or retirement. Options granted
under the 1993 Plan are not transferable by the optionee other than by court
order, will or the laws of descent and distribution.
STOCK OPTIONS. Under the 1993 Plan, the Company may grant both incentive
stock options intended to qualify under Section 422 of the Internal Revenue Code
of 1986 ("incentive stock options") and other options which are not qualified as
incentive stock options ("nonqualified stock options"). Incentive stock options
may only be granted to persons who are employees of the Company at the time of
grant. Currently, all employees of the Company may be determined to be entitled
to grants of options under the 1993 Plan. Nonqualified stock options may be
granted at an exercise price greater than or lesser than the fair market value
of the Common Stock on the date of grant, in the discretion of the committee or
the Board of Directors. Incentive stock options, however, may not be granted at
less than the fair market value of the Common Stock and may be granted to
holders of more than 10% of the Common Stock only at an exercise price of at
least 110% of the fair market value of the Common Stock on the date of grant.
14
<PAGE>
Unless otherwise determined by the Board of Directors or the committee, all
options granted under the 1993 Plan vest at the rate of 25% per year, with the
first installment vesting at the end of one year from the date of grant. The
exercise price of an option granted under the 1993 Plan may be paid in cash or
with previously owned shares of Common Stock, by a combination of these methods,
or, in the discretion of the committee or the Board of Directors, by any other
means which the committee or the Board or Directors determines to be consistent
with the purposes of the 1993 Plan and applicable law.
As of March 31, 2000, options to purchase 756,944 shares of Common Stock had
been granted under the 1993 Plan, including options to purchase 404,444 shares
of Common Stock to R. Jeffrey Bailly, the Company's chief executive officer,
options to purchase 50,000, 40,000 and 45,000 shares of Common Stock to each of
Messrs. Ronald J. Lataille, Richard LeSavoy and Wayne G. Williams, respectively,
and options to purchase 554,444 shares to all current executive officers as a
group. Employees who are not executive officers were granted options to purchase
202,500 shares as a group. The closing price of the Common Stock on April 20,
2000 was $2.625.
FEDERAL TAX CONSEQUENCES OF THE 1993 PLAN. The following general discussion
of the federal income tax consequences of the issuance and exercise of options
granted under the 1993 Plan is based upon the provisions of the Code, current
regulations thereunder and existing administrative rulings of the Internal
Revenue Service. It is not intended to be a complete discussion of all of the
federal income tax consequences of the 1993 Plan or of the requirements that
must be met in order to qualify for the described tax treatment. Changes in the
law and regulations may modify the discussion, and in some cases the changes may
be retroactive. No information is provided as to the state tax laws. The 1993
Plan is not qualified under Section 401 of the Code and is not subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended.
NONQUALIFIED OPTIONS. The recipient of a nonqualified stock option under
the 1993 Plan will not recognize any taxable income at the time the stock option
is granted. Upon exercise, the option holder will generally recognize ordinary
taxable income in an amount equal to the excess of the fair market value of the
shares of Common Stock received on the date of exercise over the option exercise
price. Upon a subsequent sale of the shares, long-term or short term capital
gain or loss (depending on the holding period) will generally be recognized
equal to the excess of the difference between the amount realized over the fair
market value of the shares on the date of exercise.
The Company will generally be entitled to a compensation deduction for
federal income tax purposes in an amount equal to the taxable income recognized
by the option holder, provided the Company reports the income on a timely
provided and filed From W-2 or 1099, whichever is applicable.
An option holder who pays the option price, in whole or in part, by
delivering shares of Common Stock already owned by him will generally recognize
no gain or loss for federal income tax purposes on the shares surrendered, but
otherwise will be taxed according to the rules described above. To the extent
the shares acquired upon exercise are equal to the basis of the shares
surrendered, the basis of the shares received will be equal to the basis of the
shares surrendered. The basis of the shares received in excess of the shares
surrendered upon exercise will be equal to the fair market value of the shares
on the date of exercise, and the holding period for the shares received will
commence on that date.
INCENTIVE STOCK OPTIONS. Incentive stock options granted under the 1993
Plan are intended to qualify as incentive stock options under Section 422 of the
Code.
A recipient will not recognize taxable income upon the grant or exercise of
an incentive stock option. If an option holder does not make a "disqualifying
disposition" (as defined below), then the option holder will not recognize any
taxable income until shares are sold or exchanged, and any gain recognized upon
distribution of shares will be taxable as long term capital gain. A
"disqualifying disposition" means any disposition of shares acquired on the
exercise of an incentive stock option within two years of the date the option
was granted or within one year of the date the shares were transferred to the
option holder.
15
<PAGE>
If the option holder makes a disqualifying disposition, then the difference
between (i) the option exercise price and (ii) the lesser of the fair market
value of the shares on the date of exercise or the price received upon
disposition of the shares, will be taxable to the option holder as ordinary
income. In the case of a gift or certain other transfers, the amount of taxable
ordinary income is not limited to the gain that would have resulted from a sale.
Instead, it is equal to the excess of the fair market value of the shares on the
date of exercise over the option exercise price.
In the case of a disqualifying disposition, if the amount realized on
disposition of the shares exceeds the fair market value of the shares on the
date of exercise, the excess will be taxed as either long-term or short-term
capital gain depending on the option holder's holding period for the shares.
In general, the fair market value of the shares on the date of exercise,
less the exercise price, will be included in the option holder's alternative
minimum taxable income in the year the option is exercised. However, if in the
same year, the shares are disposed of at a lower price, then alternative minimum
taxable income is calculated using this lower price instead of the shares' fair
market value on the date of exercise.
The Company will not be entitled to any deduction with respect to the grant
or exercise of incentive stock options. In addition, no deduction will be
allowed to the Company upon the disposition of stock acquired upon the exercise
of an incentive stock option, unless the disposition is a disqualifying
disposition. In the case of a disqualifying disposition, the Company generally
will be entitled to a deduction equal to the amount of compensation income that
is recognized by the employee as a result of the disqualifying disposition.
The affirmative vote of the holders of a majority of the shares present in
person or by proxy at the Meeting and entitled to vote on the proposal to amend
the 1993 Plan is required to amend the 1993 Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF
PROPOSAL NO. 2.
OTHER MATTERS
VOTING PROCEDURES
The votes of stockholders present in person or represented by proxy at the
Meeting will be tabulated by an inspector of elections appointed by the Company.
A quorum, consisting of a majority of shares of all stock issued, outstanding
and entitled to vote at the Meeting, will be required to be present in person or
by proxy for consideration of the proposal to elect directors and for the
proposal to amend the 1993 Plan. If a quorum is not present, a vote of a
majority of the votes properly cast will adjourn the Meeting.
The nominees for director of the Company who receive the greatest number of
votes cast by stockholders present in person or represented by proxy at the
Meeting and entitled to vote thereon will be elected directors of the Company.
The affirmative vote of the holders of a majority of shares of Common Stock
present in person or represented by proxy at the Meeting and entitled to vote
thereon is required to approve the amendment of the 1993 Plan.
Abstentions will have no effect on the outcome of the vote for the election
of directors, but will have the effect of being cast against the proposal to
amend the 1993 Plan even though the stockholder so abstaining intends a
different interpretation. Shares of Common Stock held of record by brokers who
do not return a signed and dated proxy will not be considered present at the
Meeting, will not be counted towards a quorum and will not be voted in the
election of directors or on the proposal to amend the 1993 Plan. Shares of
Common Stock held of record by brokers who return a signed and dated proxy but
who fail to vote (a "broker nonvote") on the election of directors or the
proposal to amend the 1993 Plan will count toward the quorum but will have no
effect on those proposals not voted.
16
<PAGE>
INDEPENDENT AUDITORS
The Board of Directors has appointed Arthur Andersen LLP, independent
accountants, to audit the consolidated financial statements of the Company for
the year ending December 31, 2000. The Company is advised that no member of
Arthur Andersen LLP has any direct financial interest or material indirect
financial interest in the Company since the date of their engagement, May 21,
1999 or, has had any connection with the Company in the capacity of promoter,
underwriter, voting trustee, director, officer or employee since such date.
KPMG Peat Marwick LLP ("KPMG") served as the independent auditors of the
Company for the fiscal years ended December 31, 1997 and 1998. During the past
two fiscal years and through and including March 31, 1999, there have been no
disagreements between the Company and KPMG on any matters of accounting
principles or practices, financial statement disclosure or auditing scope or
procedures, which disagreements, if not resolved to the satisfaction of KPMG,
would have caused it to make reference to the subject matter of the
disagreements in connection with its report. Further, the audit reports of KPMG
on the financial statements as of and for the years ended December 31, 1997 and
1998, did not contain any adverse opinion or disclaimer of opinion, nor were
they qualified or modified as to uncertainty, audit scope, or accounting
principles.
The Company requested that KPMG furnish a letter addressed to the SEC
stating that it agreed with the above statements relating to KPMG. A copy of
such letter dated May 27, 1999 was filed as Exhibit 16 to the Company's Report
on Form 8-K, dated May 27, 1999.
A representative of Arthur Andersen LLP is expected to be present at the
Meeting and will be given the opportunity to make a statement if so desired. The
representative will be available to respond to appropriate questions.
REPORTING UNDER SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10% of the
Company's Common Stock, to file reports of ownership and changes in ownership on
Forms 3, 4 and 5 with the Securities and Exchange Commission and the Nasdaq
National Market. Executive officers, directors and greater than 10% stockholders
are required to furnish the Company with copies of all Forms 3, 4 and 5 they
file.
Based solely on the Company's review of the copies of such Forms it has
received and written representations from certain reporting persons that they
were not required to file Forms 5 for specified fiscal years, the Company
believes that all of its executive officers, directors and greater than 10%
stockholders complied with all Section 16(a) filing requirements applicable to
them during the Company's fiscal year ended December 31, 1999.
OTHER PROPOSED ACTION
The Board of Directors knows of no matters which may come before the Meeting
other than the election of directors and the proposal to amend the 1993 Plan.
However, if any other matters should properly be presented to the Meeting, the
persons named as proxies shall have discretionary authority to vote the shares
represented by the accompanying proxy in accordance with their own judgment.
STOCKHOLDER PROPOSALS
Proposals which stockholders intend to present at the Company's 2001 Annual
Meeting of Stockholders and wish to have included in the Company's proxy
materials pursuant to Rule 14a-8 promulgated under the Securities and Exchange
Act of 1934, as amended, must be received by the Company no later than
January 1, 2001. If a proponent fails to notify the Company by March 15, 2001 of
a non-Rule 14a-8 stockholder proposal which it intends to submit at the
Company's 2001 Annual Meeting of Stockholders,
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the proxy solicited by the Board of Directors with respect to such meeting may
grant discretionary authority to the proxies named therein to vote with respect
to such matter.
INCORPORATION BY REFERENCE
To the extent that this Proxy Statement has been or will be specifically
incorporated by reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the
sections of the Proxy Statement entitled "Compensation Committee and Board of
Directors Report" and "Performance Graph" shall not be deemed to be so
incorporated, unless specifically otherwise provided in any such filing.
ANNUAL REPORT ON FORM 10-K
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1999 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ARE
AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST ADDRESSED TO
INVESTOR RELATIONS, UFP TECHNOLOGIES, INC. AT 172 EAST MAIN STREET, GEORGETOWN,
MASSACHUSETTS 01833.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
ARE URGED TO FILL IN, SIGN AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE
ENCLOSED ENVELOPE.
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EXHIBIT A
UFP TECHNOLOGIES, INC.
(A DELAWARE CORPORATION)
1993 STOCK OPTION PLAN
(AS AMENDED ON APRIL 12, 2000)
1. Statement of Purpose. The purpose of this Stock Option Plan (the "Plan")
is to benefit UFP TECHNOLOGIES, INC., a Delaware corporation (the "Company"),
through the maintenance and development of its businesses by offering certain
present and future key individuals a favorable opportunity to become holders of
stock in the Company over a period of years, thereby giving them a permanent
stake in the growth and prosperity of the Company and encouraging the
continuance of their involvement with the Company and/or its subsidiaries.
2. Administration. a. The Plan shall be administered by the Board of
Directors of the Company (the "Board") or, subject to Section 2(b) hereof, by a
committee appointed by the Board (the "Committee"). Hereinafter, all references
in this Plan to the "Committee" shall mean the Board if no Committee has been
appointed. The Committee shall have full and plenary authority to interpret the
terms and provisions of the Plan.
b. The Board, in its discretion, may take such action as may be necessary to
ensure that Options granted under the Plan qualify as "qualified
performance-based compensation" within the meaning of Section 162(m) of the Code
and applicable regulations promulgated thereunder ("Performance-Based
Compensation"). Such action may include, in the Board's discretion, some or all
of the following (i) if the Board determines that Options granted under the Plan
generally shall constitute Performance-Based Compensation, the Plan shall be
administered, to the extent required for such Options to constitute
Performance-Based Compensation, by a Committee consisting solely of two or more
"outside directors" (as defined in applicable regulations promulgated under
Section 162(m) of the Code), and (ii) Options granted under the Plan may be
subject to such other terms and conditions as are necessary for compensation
recognized in connection with the exercise or disposition of such Option or the
disposition of Common Stock acquired pursuant to such Option, to constitute
Performance-Based Compensation.
3. Eligibility. Options shall be granted only to employees of the Company
and its subsidiaries (including officers, and including directors of the Company
and its subsidiaries who are also employees), and consultants and advisors of
the Company and its subsidiaries (where bona fide services were rendered and
such services were not in connection with the offer and sale of securities in a
capital raising transaction), but excluding the Directors of the Company who are
not employees of the Company, selected initially and from time to time
thereafter by the Committee on the basis of their importance to the business of
the Company or its subsidiaries.
4. Granting of Options. (a) The Committee may grant options under which a
total of not in excess of 1,550,000 Shares of the $.01 par value Common Stock of
the Company ("Common Stock") may be purchased from the Company, subject to
adjustment as provided in Section 12 hereof. The Committee may, in its
discretion grant under the Plan either non-qualified stock options or incentive
stock options as defined in Section 422 of the Internal Revenue Code of 1986
(the "Code"), provided, however, that incentive stock options may only be
granted to employees of the Company or its subsidiaries. The grant of a
non-qualified stock option shall be evidenced by a written Non-Qualified Stock
Option Agreement, executed by the Company and the holder of a non-qualified
stock option, stating the number of shares of Common Stock subject to such
non-qualified stock option evidenced thereby and in such form as the Committee
may from time to time determine. The grant of an incentive stock option shall be
evidenced by a written Incentive Stock Option Agreement, executed by the Company
and the holder of the incentive
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stock option, stating the number of shares of Common Stock subject to such
incentive stock option evidenced thereby and in such form as the Committee may
from time to time determine.
(b) In the event that an option expires or is terminated or cancelled
unexercised as to any shares, such released shares may again be optioned
(including a grant in substitution for a cancelled option). Shares subject to
options may be made available from unissued or reacquired shares of Common
Stock.
(c) No employee of the Company or any Related Corporation may be granted
Options to acquire, in the aggregate, more than 250,000 shares of Common Stock
under the Plan during any fiscal year of the Company. If any Option granted
under the Plan shall expire or terminate for any reason without having been
exercised in full or shall cease for any reason to be exercisable in whole or in
part or shall be repurchased by the Company, the shares subject to such Option
shall be included in the determination of the aggregate number of shares of
Common Stock deemed to have been granted to such employee under the Plan.
(d) Nothing contained in the Plan or in any option granted pursuant thereto
shall confer upon any optionee any right to be continued in the employment of
the Company or any subsidiary of the Company, or interfere in any way with the
right of the Company or its subsidiaries to terminate an employee's employment
at any time, or interfere in any way with the right of the Company or its
subsidiaries to terminate any consulting or other compensation arrangement
between the Company or any subsidiary of the Company, and any consultant or
advisor of the Company or such subsidiary.
5. Exercise Price. The exercise price shall be determined by the Committee
in its discretion, and may be greater than, or less than the fair market value,
at the time the option is granted, of the shares of Common Stock subject to the
option, provided, however, that the exercise price of an incentive stock option
shall be not less than the fair market value, at the time the option is granted,
of the shares of Common Stock subject to the option. If one or more incentive
stock options are granted to an employee who, at the time of grant, owns more
than ten percent (10%) of the total voting power of all classes of stock of the
Company (a "10% Owner"), the exercise price under such incentive stock option
shall be not less than 110% of said fair market value. Such fair market value
shall be deemed to be the last trading price of the Common Stock on the trading
day next preceding the date of the grant of the option except that if the Common
Stock is then listed on any national exchange, fair market value shall be the
mean between the high and low sales price on the trading day next preceding the
date of grant of the option. If shares of the Common Stock shall not have been
traded on any national exchange or interdealer quotation system for more than
10 days immediately preceding the date of grant of such option or if deemed
appropriate by the Committee for any other reason, the fair market value of
shares of Common Stock shall be determined by the Committee in such other manner
as it may deem appropriate. In no event shall the exercise price of any share of
Common Stock be less than its par value.
6. Duration of Options, Increments, and Extensions. Subject to the
provisions of Section 8 hereof, each option shall be for a term of not more than
ten years, provided, however, that incentive stock options granted to employees
who, at the time of the grant, are 10% Owners shall be for a term of not more
than five years. Each option shall become exercisable with respect to 25% of the
total number of shares subject to the option twelve months after the date of its
grant and, with respect to each additional 25%, at the end of each twelve-month
period thereafter during the succeeding three years. Notwithstanding the
foregoing, the Committee may, in its discretion (i) specifically provide at the
date of grant of another time or times of exercise; (ii) accelerate the
exercisability of such option subject to such terms as the Committee deems
necessary and appropriate to effectuate the purpose of the Plan, including,
without limitation, a requirement that the optionee grant to the Company an
option to repurchase all or a portion of the number of shares acquired upon
exercise of the accelerated option for their fair market value on the date of
grant; or (iii) at any time prior to the expiration or termination of any
non-qualified stock option previously granted, extend the term of any such
option (including such non-qualified stock options held by officers or
directors) for such period as the Committee in its discretion shall determine.
In no event, however, shall
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the aggregate option period with respect to any option, including the original
term of the option and any extensions thereof, exceed ten years. Subject to the
foregoing, all or any part of the shares to which the right to purchase has
accrued may be purchased at the time of such accrual or at any time or times
thereafter during the option period.
7. Exercise of Option. a. Each stock option agreement shall set forth the
procedure governing the exercise of the stock option granted thereunder, and
shall provide that, upon such exercise in respect of any shares of common Stock
subject thereto, the optionee shall pay the Company, in full, the option price
for such shares with cash or its equivalent or with previously owned shares of
Common Stock, or by a combination of these methods of payment. In the discretion
of the Committee, payment may also be made by delivery (including delivery by
facsimile transmission) to the Company or its designated agent of an executed
irrevocable option exercise form together with irrevocable instructions to a
broker-dealer to sell a sufficient portion of the shares and deliver the sale
proceeds directly to the Company to pay for the exercise price, or by any other
means which the Committee determines to be consistent with the Plan's purpose
and applicable law. Alternatively the option may provide that the optionee may
elect to direct the Company to withhold such number of shares issuable upon
exercise of the option as is necessary to fund the exercise price. For the
purpose of this paragraph, the per share value of the Common Stock of the
Company shall be the fair market value on the date of exercise. Any optionee
holding two or more options that are partially or wholly exercisable at the same
time may exercise said options (to the extent they are then exercisable) in any
order the optionee chooses, regardless of the order in which said options were
granted.
b. At the time of exercise of any option, the Company may, if it shall
determine it necessary or desirable for any reason, require the optionee (or his
heirs, legatees, or legal representative, as the case may be) as a condition
upon the exercise thereof to deliver to the Company a written representation of
present intention to purchase the shares for investment and not for
distribution. In the event such representation is required to be delivered, an
appropriate legend may be placed upon each certificate delivered to the optionee
upon his exercise of part or all of the option and a stop transfer order may be
placed with the transfer agent. Each option shall also be subject to the
requirement that, if at any time the Company determines, in its discretion, that
the listing, registration or qualification of the shares subject to the option
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory body is necessary or desirable as a
condition of or in connection with, the issue or purchase of shares thereunder,
the option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.
8. Termination of Relationship--Exercise Thereafter. a. In the event the
relationship between the Company and a director, officer, other employee,
consultant or advisor who is an optionee is terminated for any reason other than
death, permanent disability or retirement, such optionee's option may be
exercised (to the extent exercisable by the optionee on the date of such
termination) by the optionee, or if he or she is not living, by his or her
heirs, legatees or legal representatives, as the case may be, during its
specified term but not later than three (3) months after the date of such
termination, and in any event not later than ten (10) years after the date the
option was granted. Temporary absences because of illness, vacation, approved
leaves of absence, and transfers among the Company and its subsidiaries, shall
not be considered to terminate the employment or consulting relationship with
the optionee or to interrupt continuous employment.
b. In the event of termination of said relationship because of death,
permanent disability (as that term is defined in Section 22(e)(3) of the Code,
as now in effect or as subsequently amended), or retirement (at age 65 or
earlier as may be permitted by the Company), the option may be exercised in
full, without regard to any installments established under Section 6 hereof, by
the optionee or, if he is not living, by his heirs, legatees, or legal
representative, as the case may be, during its specified term, but not later
than one
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(1) year after the date of death, permanent disability, or retirement, and in
any event not later than ten (10) years after the date the option was granted.
9. Withholding Taxes. Whenever the Company is required to issue or transfer
shares of Common Stock under the Plan, the Company shall have the right to
require the grantee to remit to the Company an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior to the delivery
of any certificate or certificates for such shares. In the discretion of the
Committee, payment of such withholding taxes may be made by delivery (including
delivery by facsimile transmission) to the Company or its designated agent of
irrevocable instructions to a broker-dealer to sell a sufficient portion of the
shares and deliver the sale proceeds directly to the Company to pay for the
withholding taxes. Alternatively, the Company may, in its discretion, issue or
transfer such shares of Common Stock net of the number of shares sufficient to
satisfy the withholding tax requirements. For withholding tax purposes, the
shares of Common Stock shall be valued on the date the withholding obligation is
incurred.
10. Non-Transferability of Options. No option shall be transferable by the
optionee otherwise than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by Code, Title I of
the Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder, and each option shall be exercisable during an optionee's lifetime
only by the optionee.
11. Limitation on Amounts of Incentive Stock Options Granted. The aggregate
fair market value (determined as of the date of grant) of stock for which
incentive stock options granted to an optionee under this Plan become first
exercisable shall not exceed One Hundred Thousand Dollars ($100,000) during any
calendar year.
12. Adjustment. The number of shares subject to the Plan and to options
granted under the Plan shall be adjusted as follows: (a) in the event that the
outstanding shares of Common Stock of the Company is changed by any stock
dividend, stock split or combination of shares, the number of shares subject to
the Plan and to options granted thereunder shall be proportionately adjusted;
(b) in the event of any merger, consolidation or reorganization of the Company
with any other corporation or corporations, there shall be substituted, on an
equitable basis as determined by the Committee, for each share of Common Stock
then subject to the Plan, whether or not at the time subject to outstanding
options, the number and kind of shares of Stock or other securities to which the
holders of shares of Common Stock of the Company will be entitled pursuant to
the transaction; and (c) in the event of any other relevant change in the
capitalization of the Company, the Committee shall provide for an equitable
adjustment in the number of shares of Common Stock then subject to the Plan,
whether or not then subject to outstanding options. In the event of any such
adjustment, the purchase price per share shall be proportionately adjusted.
13. Notice to Company of Disqualifying Disposition. By accepting an ISO
granted under the Plan, each optionee agrees to notify the Company in writing
immediately after such optionee makes a Disqualifying Disposition (as described
in Sections 421, 422 and 424 of the Code and regulations thereunder) of any
stock acquired pursuant to the exercise of ISOs granted under the Plan. A
Disqualifying Disposition is generally any disposition occurring on or before
the later of (a) the date two years following the date the ISO was granted or
(b) the date one year following the date the ISO was exercised.
14. Termination and Amendment of Plan. This Plan shall terminate on
April 12, 2010, and an option shall not be granted under the Plan after that
date. The Plan may at any time or from time to time be terminated, modified, or
amended by the affirmative vote of a majority in interest of the voting stock of
the Company. The Board of Directors may at any time and from time to time modify
or amend the Plan in respects as it shall deem advisable to conform to any
change in the law, or in any other respect, provided that any amendment by the
Board of Directors which would (a) materially increase the benefits accruing to
participants under the Plan, (b) increase the number of securities which may be
issued under the plan (other than an increase pursuant to Section 12 hereof), or
(c) materially modify the requirements as to eligibility for participation in
the plan must be approved by a majority vote of the stockholders within twelve
months before or after the effective date of such increase or change. In no
event shall any
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amendment of the Plan (i) change or impair any options previously granted
without the consent of the optionee, or (ii) extend the term of the plan.
15. Effective Date. This Plan as originally adopted, became effective on
October 15, 1993. The Plan was amended on April 4, 1995, April 16, 1998 and
April 12, 2000.
16. General.
a. Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
b. Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
c. Requirements of Law. The granting of Options and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.
d. Governing Law. To the extent not preempted by federal law, the Plan, and
all agreements hereunder, shall be construed in accordance with and governed by
the laws of the Commonwealth of Massachusetts.
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<PAGE>
PROXY UFP TECHNOLOGIES, INC. PROXY
The undersigned hereby appoints R. Jeffrey Bailly and Ronald J.
Lataille, and each of them, acting singly, with full power of substitution,
attorneys and proxies to represent the undersigned at the 2000 Annual Meeting of
Stockholders of UFP Technologies, Inc. to be held on Friday, June 9, 2000, and
at any adjournment or adjournments thereof, with all power which the undersigned
would possess if personally present, and to vote all shares of stock which the
undersigned may be entitled to vote at said meeting upon the matters set forth
in the Notice of and Proxy Statement for the Meeting in accordance with the
instructions and with discretionary authority upon such other matters as may
come before the Meeting. All previous proxies are hereby revoked.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT WILL BE VOTED AS
DIRECTED BY THE UNDERSIGNED AND IF NO DIRECTION IS INDICATED, IT WILL BE VOTED
FOR THE ELECTION OF THE NOMINEES AS DIRECTORS AND FOR THE PROPOSAL TO AMEND THE
1993 STOCK OPTION PLAN.
Continued, and to be signed, on reverse side
(Please fill in the reverse side and mail in enclosed envelope)
<PAGE>
/ X / PLEASE MARK VOTES AS IN THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES AS DIRECTORS.
1. Election of Directors:
Nominees: R. Jeffrey Bailly and William C. Curry
/ / FOR ALL NOMINEES (except as marked to the contrary)
/ / WITHHOLD AUTHORITY to vote for all nominees
FOR except vote withheld from the following nominee(s):
- -------------------------------------------------
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE WRITE THAT NOMINEE'S NAME IN THE
SPACE PROVIDED ABOVE.)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 2.
FOR AGAINST ABSTAIN
2. To amend the 1993 Stock Option Plan as / / / / / /
described in the accompanying Proxy Statement.
MARK HERE FOR
ADDRESS CHANGE
AND NOTE AT LEFT / /
(Signatures should be the same as the name printed hereon. Executors,
administrators, trustees, guardians, attorneys, and officers of corporations
should add their titles when signing.)
Signature: Date:
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Signature: Date:
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