UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.         )

 

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UFP TECHNOLOGIES, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

UFP TECHNOLOGIES, INC.
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PRELIMINARY PROXY STATEMENT—STATEMENT -SUBJECTTOCOMPLETION

DATED APRIL 15, 2020

 

UFP TECHNOLOGIES,INC.

100 HALE STREET

NEWBURYPORT, MASSACHUSETTS 01950-350401950‑3504 USA

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

of

UFP TECHNOLOGIES,INC.

 

To Be Held on June 10, 20207, 2023

 

The Annual Meeting of Stockholders of UFP Technologies, Inc. (the(“we,” “us,” “our,” or the “Company”) will be held on June 10, 2020,7, 2023, at 10:00 a.m., Eastern Daylight Time. There will be no physical meeting location. The Annual Meeting will be a virtual stockholder meeting, conducted via live audio webcast, through which you can submit questions and vote online. The Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/UFPT2020UFPT2023 and entering your 16-digit control number included in your proxy materials or on your proxy card. The Annual Meeting will be for the following purposes:

 

1.

To elect the three Class IIIseven directors identified as standing for election in the accompanying proxy statement, each to serve if Proposal No. 2 is approved, until the 20212024 Annual Meeting of Stockholders and if Proposal No. 2 is not approved, until the 2023 Annual Meeting of Stockholders and, in either case, until their successors are duly elected;

 

2.

To amend the Company’s Certificate of Incorporation, as amended to date, to eliminate the classified structure of our Board of Directors and provide for the annual election of directors;

3.To vote on a non-bindingnon‑binding advisory resolution to approve the compensation of our named executive officers;

 

4.

3.

To consider the proposed amendment and restatement of the Company’s Certificate of Incorporation to provide limited exculpation to the Company’s officers, to remove all references to Series A Junior Participating Preferred Stock and to make clarifying technical amendments to certain definitions;

4.

To ratify the appointment of Grant Thornton LLP as the Company’sour independent registered public accounting firm;firm for the fiscal year ended December 31, 2023; and

 

5.

To transact such other business as may properly come before the 20202023 Annual Meeting of Stockholders, and at any adjournment or postponement thereof.

 

The Board of Directors has fixed April 13, 202010, 2023 as the record date for determining the stockholders entitled to notice of, and to vote at, the Annual Meeting. It is expected that this proxy statement and the accompanying proxy will be mailed to stockholders on or about May 4, 2020.3, 2023.

 

You are cordially invited to attend the virtual Annual Meeting.

 

 

By Order of the Board of Directors

 

Christopher P. Litterio
Secretary

 

Newburyport, Massachusetts

April     28, 2020, 2023

1

 

YOUR VOTE IS IMPORTANT

 

YOU ARE URGED TO VOTE, SIGN, DATE, AND RETURN THE ACCOMPANYING ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE POSTAGE-PAIDPOSTAGE‑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 VIRTUAL ANNUAL MEETING.

 

IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE COMPANY’SOUR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD VIRTUALLY ON JUNE 10, 2020:7, 2023: This Proxy Statement, the Company’sour Annual Report for the fiscal year ended December 31, 20192022 and the Proxy Card are available at the Company’sour website,www.ufpt.com/investors/filings.html.

 

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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION

DATED APRIL 15, 2020

UFP TECHNOLOGIES,INC.

100 HALE STREET NEWBURYPORT, MASSACHUSETTS 01950-350401950‑3504 USA

 

PROXY STATEMENT

FOR THE ANNUAL MEETING OF STOCKHOLDERS

 

To Be Held on June 10, 20207, 2023

 

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of UFP Technologies, Inc., a Delaware Corporation (thecorporation (“we,” “us,” “our,” or the “Company”) with its principal executive offices at 100 Hale Street, Newburyport, MA 01950-3504,01950‑3504, for use at the Annual Meeting of Stockholders to be held on June 10, 2020,7, 2023, and at any adjournment or postponement thereof (the “Meeting”). The enclosed proxy relating to the Meeting is solicited on behalf of theour Board of Directors of the Company and the cost of such solicitation will be borne by the Company.us. It is expected that this proxy statement and the accompanying proxy will be mailed to stockholders on or about May 4, 2020.3, 2023. Certain of theour officers and regular employees of the Company may solicit proxies by correspondence, telephone or in person, without extra compensation. The CompanyWe 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 13, 202010, 2023 will be entitled to receive notice of, and to vote at, the Meeting. As of that date, there were outstanding and entitled to vote 7,482,8447,612,970 shares of our Common Stock, $0.01 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.

 

Due to the coronavirus (COVID-19) pandemic and outOut of an abundance of caution to support the health and well-being of our employees, stockholders, and communities, the Meeting will be held as a virtual meeting only, via a live audio webcast. There will be no physical meeting location. You will be able to attend the meeting online and vote your shares electronically during the meeting by visiting www.virtualshareholdermeeting.com/UFPT2020UFPT2023 and entering your 16-digit control number included in your proxy materials or on your proxy card. Even though the Meeting is being held virtually, stockholders will still have the ability to participate in, hear others, and ask questions during the Meeting.

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The meeting webcast will begin promptly at 10:00 a.m. Eastern Daylight Time on June 10, 2020.7, 2023. Online check-in will begin promptly at 9:45 a.m. Eastern Daylight Time on that date, and you should allow ample time for the online check-in procedures. We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during check-in or during the meeting, please call the technical support number that will be posted on the virtual stockholder meeting login page at www.virtualshareholdermeeting.com/UFPT2020.UFPT2023.

 


 

PROPOSAL NO. 1

ELECTION OF DIRECTORS

 

PursuantThe Company currently has a total of seven directors, who were elected to our Certificateserve until the 2023 Annual Meeting of Incorporation, as amended to date, our Board of Directors is “classified” into three classes serving staggered three-year terms, with R. Jeffrey BaillyStockholders and Marc Kozin being designated Class I directors, Thomas Oberdorf and Lucia Luce Quinn being designated Class II directors, and Robert W. Pierce, Jr., Daniel C. Croteau, and Cynthia L. Feldmann being designated Class III directors. The members of our Board of Directors hold office until their successors arehave been duly elected and qualified or until their earlier resignation or removal. The size of our Board of Directors is currently set at seven members.

Class I directorsqualified. Each nominee, if elected, will serve untilfor a one-year term ending at the annual meeting of our stockholders to be held in 2021, and Class II directors will serve until the annual meeting of our stockholders to be held in 2022. The terms of the current Class III directors will expire on the date of the upcoming 20202024 Annual Meeting of Stockholders. Accordingly, three persons are to beStockholders and until his or her successor has been duly elected to serve as Class III directors at the 2020 Annual Meeting of Stockholders. Management’s nominees for election by the stockholders to those three positions are the current Class III members of the Board of Directors, Mr. Pierce, Mr. Croteau, and Ms. Feldmann.

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As explained in further detail in Proposal No. 2 of this proxy statement, the Board of Directors is proposing to amend our Certificate of Incorporation to move to annual elections of all of our directors. This action cannot take place, however, until approved by our stockholders. Accordingly, if the proposed amendment in Proposal No. 2 is not approved by our stockholders, the three Class III nominees will be elected to a three-year term expiring at the 2023 annual meeting of our stockholders. If our stockholders approve Proposal No. 2 to amend our Certificate of Incorporation to move to annual election of all of our directors, then the Class III nominees will be elected to a one-year term expiring at the 2021 annual meeting of our stockholders.qualified.

 

Each nominee has indicated his or her willingness to serve, if elected. It is the intention of the persons named as proxies to vote for the election of the nominees. If any of the nominees declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election, the persons named as proxies will vote the proxy for such substitutes, if any, as the present Board of Directors may designate. We have no reason to believe that any of the Class III nominees will be unable to serve if elected. 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 each of our current directors and nominees for director. When used below, positions held with the Companyus include positions held with the Company’sour predecessors and subsidiaries:

 

 

Board Committees

   

Board Committees

Name

Age

Position

Director
Since

Year Term
Expires/
Will Expire If
Elected, Class*

Audit
Committee

Compensation
Committee

Nominating
Committee

Age

Position

Director
Since

Year Term
Expires/
Will Expire If
Elected

Audit
Committee

Compensation
Committee

Nominating
Committee

R. Jeffrey Bailly58President, Chief Executive Officer and Chairman of the Board of Directors19952021, Class I 

61

President, Chief Executive Officer and Chairman of the Board of Directors

1995

2024

 
Thomas Oberdorf62Director20042022, Class IIX X

65

Director

2004

2024

X

 

X

Marc Kozin†58Director20062021, Class I XX (Chair)
Robert W. Pierce, Jr.66Director20082021 or 2023, Class IIIX X
Lucia Luce Quinn66Director20132022, Class II X (Chair)X
Daniel C. Croteau54Director20152021 or 2023, Class III X

Marc Kozin

61

Director

2006

2024

 

X (Chair)*

X

Daniel C. Croteau†

57

Director

2015

2024

 

X

X (Chair)

Cynthia L. Feldmann67Director20172021 or 2023, Class IIIX (Chair) X

70

Director

2017

2024

X (Chair)

 

X

Joseph John Hassett

65

Director

2022

2024

 

X

Symeria Hudson

55

Director

2022

2024

X

 

X

†         Lead Independent Director

* It is expected that Mr. Hassett will serve as the Chair of the Compensation Committee commencing July 2023.

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*If our stockholders approve Proposal No. 2 to amend our Certificate of Incorporation to move to annual election of all of our directors, then the Class III nominees will be elected to a one-year term expiring at the 2021 annual meeting of our stockholders. If the proposed amendment in Proposal No. 2 is not approved by our stockholders, then the Class III nominees will be elected to a three-year term expiring at the 2023 annual meeting of our stockholders.
†Lead Independent Director

 

Mr. Bailly has served as our Chairman of the Company since October 2006 and as Chief Executive Officer, President, and a director since January 1, 1995. He joined the Company in 1988 and served as a Division Manager (1989-1992)(1989‑1992), General Manager Northeast Operations (1992-1994)(1992‑1994), and as itsour Vice President of Operations (1994-1995)(1994‑1995). From 1984 through 1988, Mr. Bailly, a former certified public accountant, was employed by Coopers & Lybrand. Mr. Bailly is a member of WorldYoung Presidents’ Organization.Organization (YPO Gold). As a result of these and other professional experiences, Mr. Bailly possesses particular knowledge and experience in operations, accounting, finance, mergers and acquisitions, and executive leadership within a manufacturing environment that strengthen the Board’s collective qualifications, skills, and experience.

 

Mr. Kozin has served as a director of the Company since 2006. Mr. Kozin served as President of L.E.K. Consulting from 1997 through 2011 and as a senior Advisor from 2011 through 2018. In January, 2019, Mr. Kozin joined the board of Dicerna Pharmaceuticals, a leading developer of investigational ribonucleic acid interference (RNAi) therapeutics. In 2012, Mr. Kozin joined the board of Endocyte (Nasdaq: ECYT), a small molecule targeted therapeutic company that has since been sold to Novartis. In January 2014 Mr. Kozin joined the board of OvaScience, Inc. (Nasdaq: OVAS), a life sciences company focused on the discovery, development and commercialization of new fertility treatments that has since merged with Millendo Therapeutics. In January 2013, Mr. Kozin joined the Strategic Advisory Board of Healthcare Royalty Partners. Previously, Mr. Kozin served on the boards of directors of Dyax, Flex Pharma, Crunchtime! Information Systems, Medical Simulation Corporation, Brandwise, Lynx Therapeutics, Inc. and Assurance Medical, Inc. As a result of these and other professional experiences, Mr. Kozin possesses particular knowledge and experience in strategic planning and leadership consulting of complex organizations that strengthen the Board’s collective qualifications, skills, and experience.

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Mr. Oberdorf has served as a directorone of the Companyour directors since 2004. Presently Mr. Oberdorf is Chief Executive Officer and Chairman of SIRVA, Inc. a leading global provider of moving and relocation services to corporations, consumers and governments. From August 2010 through March 2011, Mr. Oberdorf consulted for Orchard Brands, a multi-channelmulti‑channel marketer of men’s and women’s apparel for the 55+ market segment. From December 2008 through August 2010, Mr. Oberdorf was Executive Vice President and Chief Financial Officer of infoGROUP, Inc., which provides business and consumer databases for sales leads and mailing lists, database marketing services, data processing services, e-maile‑mail marketing, market research, and sales and marketing solutions. From June 2006 through 2008, Mr. Oberdorf was Senior Vice President, Chief Financial Officer and Treasurer of Getty Images Inc., the world’s leading creator and distributor of still imagery, footage and multi-mediamulti‑media products, as well as a recognized provider of other forms of premium digital content, including music. From March 2002 through June 2006, Mr. Oberdorf was Senior Vice President, Chief Financial Officer and Treasurer of CMGI, Inc., a supply chain management, marketing distribution and ecommerce solutions company, where he served as a consultant from November 2001 through February 2002. From February 1999 through October 2001, Mr. Oberdorf was Senior Vice President and Chief Financial Officer of Bertelsmann AG’s subsidiary, BeMusic Direct, a direct-to-consumerdirect‑to‑consumer music sales company. From January 1981 through January 1999, Mr. Oberdorf served in various capacities at Readers Digest Association, Inc., most recently as Vice President Global Books & Home Entertainment—Finance. As a result of these and other professional experiences, Mr. Oberdorf possesses particular knowledge and experience in manufacturing and accounting, finance, capital markets, and public company experience that strengthen the Board’s collective qualifications, skills, and experience.

 

Mr. PierceKozin has served as a directorone of our directors since 2006. Mr. Kozin served as President of L.E.K. Consulting from 1997 through 2011 and as a senior Advisor from 2011 through 2018. In December 2020, Mr. Kozin joined the Company since June 2008. Mr. Pierce servesBoard of Vascular Biogenics (Nasdaq: VBLT), a late stage oncology company, as Chief Executive Officer,Vice Chairman and Co-Owner of Pierce Aluminum Companies, Inc. Pierce Aluminum supplies aluminum raw stock and finished goodswas appointed Chairman in July 2021. In December 2022, Mr. Kozin transitioned to the marine, aerospace, medical, transportation, and defense industries. Over the last 40 years,Board of Healthcare Royalty Partners from that company’s Strategic Advisory Board where he had been serving as chairperson since January 2013. Previously, Mr. Pierce has overseen the growth of the company from a small operating warehouse in Canton, Massachusetts, to a state of the art 150,000 square foot production facility and distribution center in Franklin, Massachusetts and eleven regional warehouses across the country. Mr. Pierce hasKozin served on the boards of directors of McLean Hospital since 2010, Crohn’sIsleworth Healthcare Acquisition Corporation, Endocyte (sold to Novartis), OvaScience, Inc (merged with Millendo Therapeutics), Dyax (sold to Shire), Frequency Therapeutics, Flex Pharma, Crunchtime! Information Systems, Medical Simulation Corporation, Brandwise, Lynx Therapeutics, Inc. Assurance Medical, Inc., and Colitis Foundation of America—New England Chapter since 2010, Mass General Hospital for Children Business Advisory Board since 2000, and Overseers Marine Biological Laboratory Woods Hole, Massachusetts since 2009. Mr. Pierce is a past board member of the National Association of Aluminum Distributors.Dicerna (sold to Novo Nordisk). As a result of these and other professional experiences, Mr. PierceKozin possesses particular knowledge and experience in manufacturing and design, innovation, engineering, sales and marketing, organizational growth and executive leadership within a manufacturing environment that strengthen the Board’s collective qualifications, skills, and experience.

Ms. Quinn has served as a director of the Company since December 2013. In early 2019, Ms. Quinn accepted a position as Chief People Officer and Head of Corporate Communications at WuXi NextCODE, a leading contract genomics and data-sourcing, analytics and insights organization providing global biopharma partners with deep end-to-end discovery services such as population-scale, disease-specific data sourcing, high quality sequencing, robust analysis software tools for mining massive datasets and statistical analysis, AI and quantum computing. In October 2016, Ms. Quinn accepted the position of Strategic Advisor at Shepley Bulfinch, a national architecture firm. Previously, Ms. Quinn served as Chief People Officer of Forrester Research, Inc., a $340 million global research and advisory firm from June 2013 until 2018. From June 2012 through May 2013, Ms. Quinn consulted with Truepoint Partners, a strategic planning and organization development consulting firm. From June 2010 through April 2012 Ms. Quinn was Senior Vice President, Global Human Resources and Corporate Affairs for Convatec, Inc., a $1.6 billion medical device and products company. From March 2005 through September 2009 Ms. Quinn was Executive Vice President, Global Human Resources at Boston Scientific, an $8 billion medical solutions provider. Prior to that, Ms. Quinn served in various leadership and operations capacities at Quest Diagnostics, Allied Signal/Honeywell, Digital Equipment Corp. and Westinghouse Electric Corp. Ms. Quinn also served as a trustee of Simmons College from 1996 to 2011, including chairing the Technology and Executive Compensation committees and serving as Chair of the Board of Trustees for five years. Ms. Quinn possesses particular knowledge and experience in human resources, strategic planning and leadership consulting forof complex organizations that strengthen the Board’s collective qualifications, skills, and experience.

 

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Mr. Croteau has served as a directorone of the Companyour directors since December 2015.Presently Mr. Croteau is a member of the CEOBoard of Surgical Specialties Corporation,Directors of Corza Medical, a private equity-backed company that specializes in high performance wound closure products, biosurgical products and surgical knives.ophthalmic instrumentation. Mr. Croteau served as the CEO of Corza Medical from January of 2021 to January of 2023, when he retired. His prior company, Surgical Specialties Corporation, has a global saleswas acquired in January 2021 and marketing organization and operates manufacturing facilities inwas simultaneously combined with the United States, China, England, Germany, Puerto Rico, and Mexico.Tachosil Business from Takeda Pharmaceuticals to form Corza Medical. Mr. Croteau was the Chief Executive Officer of Vention Medical from January 2011 until March 2017, when he resigned in connection with the acquisition of Vention Medical by Nordson Corporation and the divestiture of the Vention Device Manufacturing Services business unit to MedPlast Inc. Vention Medical provides component manufacturing, assembly and design services for disposable medical devices, with fourteen facilities across the United States, Central America, Ireland and Israel. Prior to assuming his role with Vention Medical, Mr. Croteau was President of FlexMedical from July 2005 through December 2010. FlexMedical is the medical division of Flex (Nasdaq: FLEX), which provides manufacturing and supply chain services for disposable medical devices, medical equipment, and drug delivery devices. From July 2004 to June 2005, Mr. Croteau served as the Executive Vice President and General Manager of Orthopedics for Accellent (renamed Lake Region Medical in 2014 and now a division of Integer), a manufacturer of specialty components and finished medical devices used in orthopedic, cardiology, and surgical devices. From August 1999 to June 2004, Mr. Croteau served as an executive at MedSource Technologies, which was merged in June 2004 with UTI Corporation to form Accellent. As Senior Vice President at MedSource Technologies, Mr. Croteau was responsible for sales, marketing, strategy and acquisitions. Prior to entering the medical device industry in 1999, Mr. Croteau spent the majority of his career in various roles at General Electric, and working as a consultant for Booz & Company in Sydney, Australia. Mr. Croteau has a Bachelor of Science degree in mechanical engineering from the University of Vermont and a Master of Business Administration from Harvard Business School. Since May 2019, Mr. Croteau has served on the board of directors of Resonetics, a privately held microlaser manufacturing services company providing micro components to global medical device companies. From October 2014 to March 2018 and from July 2020 to present, Mr. Croteau also served as a member of the board of directors of Inventus Power, a privately held, global manufacturer of custom battery packs, chargers and portable power supply systems. As a result of these and other professional experiences, Mr. Croteau possesses knowledge and experience in manufacturing and design, particularly in the medical device industry, that strengthen the Board’s collective qualifications, skills and experience.

 

4

Ms. Feldmann has served as a directorone of the Companyour directors since June 2017. In March 2022, Ms. Feldmann joined the board of Alexandria Real Estate Equities, Inc. (NYSE: ARE), an urban office real estate investing trust focused on collaborative life science, agtech and technology campuses in AAA innovation cluster locations. She serves on the Alexandria board’s Science and Technology Committee. In September 2020, Ms. Feldmann joined the board of Frequency Therapeutics, Inc. (Nasdaq: FREQ), a clinical-stage biotechnology company focused on harnessing the body’s innate biology to repair or reverse damage caused by a broad range of degenerative diseases, and she chairs Frequency’s Audit Committee. Since 2005, Ms. Feldmann has served on the board of directors of STERIS PLC (NYSE: STE), an NYSE-listed $10 billiona provider of infection prevention, decontamination, and health science technologies, products and services. She chairs the STERIS Nominating & Governance Committee and previously chaired and is a current member of STERIS’ Audit Committee and Compliance Committee, and was previously Chair of the Audit Committee. Ms. Feldmann also served from 2003 to January 1, 2018 on the board of directors of Hanger Inc. (NYSE: HNGR), a $500 million provider of orthotic and prosthetic services and products, and the largest orthotic and prosthetic managed care network in the U.S. Ms. Feldmann served on the Audit Committee, including as Chair of the Audit Committee, the Compensation Committee and the Quality and Technology Committee of Hanger. Ms. Feldmann currently serves on the board of directors and is the chaira member of the Finance Committee of Falmouth Academy, an academically rigorous, co-ed college preparatory day school for grades 7 to 12. Ms. Feldmann previously served as a director (and chair of the Audit Committee and as a member of the Nominating and Governance, Compensation, and Quality and Technology Committees) of Heartware International, Inc., a Nasdaq-listed medical device company, from 2012 until its acquisition by Medtronic in August 2016. From 2012 to 2013, Ms. Feldmann served on the board of and chaired the Audit and Compliance Committees of Atrius Health, a non-profit organization comprised of six leading Boston area physician groups representing more than 1,000 physicians serving nearly 1 million adult and pediatric patients. Ms. Feldmann was also a member of the board and served as Chair of the Audit Committee of Hayes Lemmerz International Inc., a worldwide producer of aluminum and steel wheels for passenger cars, trucks and trailers and a supplier of brakes and powertrain components from 2006 to 2009. She was the President and Founder of Jetty Lane Associates, a consulting firm, from 2005 until 2012. Previously, Ms. Feldmann served as Business Development Officer at Palmer & Dodge LLP,had a Boston based law firm, with a specialty29-year career in serving life sciences companies. From 1994 to 2002,public accounting; she was a Partner at KPMG LLP, holding various leadership roles in the firm’s Medical Technology and Health Care & Life Sciences industry groups. Ms. Feldmann alsogroups and was National Partner-in-Charge of the Life Sciences practice for Coopers & Lybrand (now PricewaterhouseCoopers LLP) from 1989 to 1994,, among other leadership positions she held during her 19-year career there. Ms. Feldmann was a founding board member of Mass Medic, a Massachusetts trade association for medical technology companies, where she also served as treasurer and as a member of the board's Executive Committee during her tenure from 1997 to 2001. Ms. Feldmann is a retired CPA and holds a Masters Professional Director Certification from the American College of Corporate Directors.CPA. As a result of these and other professional experiences, Ms. Feldmann possesses particular knowledge and experience in accounting, finance, and capital markets, and public company experience particularly in the medical device industry, that strengthen the Board’s collective qualifications, skills and experience.

 

 

6

Mr. Hassett has served as one of our directors since June 2022. Presently Mr. Hassett is Senior Vice President and Chief Operating Officer for the Maxim Business since August 2021 where he leads Analog Devices Inc.’s (“ADI”) strategic and operational focus to integrate Maxim Inc., a $2.5 billion business acquired by ADI in August 2021. Mr. Hassett brings extensive experience as a business leader having run ADI’s largest revenue-generating business, operational expertise leveraging his previous Global Operations & Technology leadership, in addition to his various engineering management roles with ADI. Previously, Mr. Hassett was Senior Vice President, Corporate Integration Management where he led significant efforts in M&A transactions and was responsible for developing strategies that drove the integration of multi-billion-dollar transactions from due diligence to fully integrated entities from December 2020 to July 2021. Previously, Mr. Hassett was Senior Vice President of Industrial and Consumer Group from November 2019 to December 2020 where he led growth initiatives which leverage its extensive franchise capability in measurement, sensing and testing and was Senior Vice President of Global Operations & Technology from May 2015 to November 2019, where he was instrumental in setting and executing our manufacturing strategy and creating a world-class, scalable supply chain to deliver outstanding quality for our customers. Mr. Hassett joined ADI in 1982 after graduating from the University of Limerick where he earned a Bachelor of Science degree in Manufacturing Engineering. Mr. Hassett also holds a Master of Business Administration from the University of Limerick. As a result of these professional experiences, Mr. Hassett possesses particular knowledge and experience in strategic and operational efforts related to merger and acquisition transactions and extensive experience as a global leader in revenue generation, operations, and engineering management that strengthens the Boards collective qualifications, skills and experience.

Ms. Hudson has served as one of our directors since June 2022. Presently, Ms. Hudson is the President and CEO of United Way Miami. Prior to the United Way Miami role, she served as CEO of Chapman Partnership. Ms. Hudson serves as an executive Board Member and on the Governance Committee for MTF Biologics, an Operating Advisor for Revival Healthcare Partners; and Ms. Hudson served as a Board Member for Baxter Foundation. From April 2016 to January 2018, Ms. Hudson was the President of Global Franchises and Innovation for ConvaTec, a $1.8 Billion international medical products and technologies company. From December 2013 to March 2016, Ms. Hudson served in various strategic leadership roles for Baxter, Inc., a $10.7 billion company that develops, manufactures, and markets products providing a broad portfolio of essential renal hospital products including home, acute and in-center dialysis; sterile IV solutions; and infusion systems and devices. Before joining Baxter, Ms. Hudson was the VP of Continuous Improvement & Transformation for Hospira, Inc (now Pfizer), a $4 billion world leader in specialty generic injectable pharmaceuticals, generic acute-care and oncology injectables, integrated infusion therapy devices and medication management solutions. From May 2005 to July 2013, Ms. Hudson served as General Manager of Medication Management Systems, VP of Global Marketing for On-Market Product Strategies Devices, VP of Marketing – US Region Medication Management Systems, and VP of Continuous Improvement and Transformation. Between August 1999 and February 2005, Ms. Hudson served in various leadership roles for Aon Corporation, an $8 billion risk management, retail, reinsurance & wholesale brokerage, claims management, specialty services and human capital consulting services company; and Household International, an $8 billion financial service provider of consumer loans, credit cards, auto finance and credit insurance products in the US, UK and Canada. Ms. Hudson holds a Master of Business Administration from Harvard Business School and a BS from Alabama A&M University. She was recognized as a Top 50 Business Leader of Color in 2015. As a result of these experiences, Ms. Hudson possesses the knowledge and leadership experience, particularly in the medical products and technologies industries that strengthens the Board’s collective qualifications, skills and experience.

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Vote Required

 

Directors are elected by a plurality of the votes cast by stockholders entitled to vote at the Meeting. Votes withheld and broker non-votesnon‑votes will not have any effect on this proposal. Accordingly, the nominees receiving the highest number of “for” votes at the Meeting will be elected as directors. Proxies solicited by the Board will be voted “for” the nominees listed above unless a stockholder has indicated otherwise in the proxy.

 

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE CLASS III NOMINEES LISTED ABOVE AS STANDING FOR ELECTION AT THE MEETING, TO SERVE UNTIL THE ANNUAL MEETING OF OUR STOCKHOLDERS IN 2021 OR 2023,2024, AS DESCRIBED ABOVE.

5

PROPOSAL NO. 2

PROPOSAL TO AMEND THE COMPANY’S CERTIFICATE OF INCORPORATION TO ELIMINATE THE CLASSIFIED STRUCTURE OF THE BOARD OF DIRECTORS AND PROVIDE FOR THE ANNUAL ELECTION OF DIRECTORS

Our certificate of incorporation (as amended, the “Certificate of Incorporation”) currently provides that the Board of Directors shall be divided into three classes, with each class to consist of approximately the same number of directors, with each class to consist, as nearly as may be possible, of one-third of the total number of directors. Directors in each class are elected to a three-year term on a staggered basis so that a single class of directors is nominated for election at each annual meeting of the Company’s stockholders. After careful consideration, the Board of Directors has unanimously determined that it would be in the best interests of the Company and its stockholders to amend the Certificate of Incorporation to declassify the Board of Directors and provide for the annual election of all directors, as described below. If this Proposal No. 2 is approved by the Company’s stockholders, the Certificate of Incorporation will be amended by making the additions and deletions related to the classification and election of the Board of Directors contained in the Certificate of Amendment of Certificate of Incorporation (the “Certificate of Amendment”), substantially in the form attached hereto asAppendix A.

If this Proposal No. 2 is approved by the Company’s stockholders, then:

·all current directors will continue to serve for the remainder of their existing three-year terms;
·at the 2020 Annual Meeting of Stockholders, nominees for Class III directors will stand for election to a one-year term;
·at the 2021 Annual Meeting of Stockholders, nominees for Class I and Class III directors will stand for election to one-year terms; and
·commencing with the 2022 Annual Meeting of Stockholders, the Board of Directors will cease to be classified and all directors will be elected annually, with nominees standing for election to one-year terms.

Vacancies and newly created directorships that arise during the year may be filled by the Board of Directors and any director so appointed shall serve for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred, and if no such class exists, as shall be the case beginning with the 2022 Annual Meeting of Stockholders if this Proposal No. 2 is approved by the Company’s stockholders, each director so named shall serve for a term that will expire at the next annual meeting of stockholders.

If this Proposal No. 2 is approved by the Company’s stockholders, this proposal will become effective upon the filing of the Certificate of Amendment, substantially in the form attached hereto asAppendix A, with the Secretary of State of the State of Delaware. The Company anticipates that it would cause the filing of the Certificate of Amendment with the Secretary of State of the State of Delaware to occur promptly after it is determined that Proposal No. 2 has been approved by the requisite vote of the Company’s stockholders at the 2020 Annual Meeting of Stockholders. However, at any time prior to the effectiveness of the filing of the Certificate of Amendment with the Secretary of State of the State of Delaware, the Board of Directors reserves the right to abandon the changes to declassify the Board of Directors and not to file the Certificate of Amendment, even if Proposal No. 2 is approved by the Company’s stockholders at the 2020 Annual Meeting of Stockholders.

If this Proposal No. 2 is not approved by the Company’s stockholders, then the Board of Directors will remain classified, and the Class III directors who are elected at the 2020 Annual Meeting of Stockholders will be elected for three-year terms, expiring in 2023. All other directors will continue in office for the remainder of their full three-year terms, subject to their earlier resignation, removal, disqualification, departure or death, and subsequent nominees for seats on the Board of Directors will continue to stand for election for three-year terms.

Our Board of Directors has approved an amendment and restatement of our bylaws to reflect updates to Delaware law that require that directors may be removed by a majority of shares entitled to vote at an election of directors, rather than a super-majority of stockholders, as our bylaws currently provide. As a result of this amendment and restatement, which will become effective as of the date of the Meeting, our bylaws will be changed by making the additions and deletions shown in the text of our amended and restated bylaws attached hereto asAppendix B. These modifications to our bylaws will be effected regardless of the outcome on Proposal No. 2.

The Board of Directors recognizes that a classified board structure may offer several advantages, such as promoting board continuity and stability, encouraging directors to take longer-term perspectives and ensuring that a majority of the Board of Directors will always have prior experience with the Company. Additionally, classified boards may provide protection against unwanted takeovers and proxy contests as they make it more difficult for a stockholder to gain control of the Board of Directors without the cooperation or approval of incumbent directors. However, the Board of Directors also recognizes that a classified structure may reduce directors’ accountability to stockholders because such a structure does not enable stockholders to express a view on each director’s performance by means of an annual vote. Moreover, many institutional investors believe that the election of directors is the primary means for stockholders to influence corporate governance policies and to hold management accountable for implementing those policies.

6

In determining whether to support declassification of the Board of Directors, the Board of Directors considered the arguments in favor of and against continuation of the classified board structure and determined that it would be in the best interests of the Company and its stockholders to declassify the Board of Directors.

Vote Required

This Proposal No. 2 to amend the Company’s Certificate of Incorporation to eliminate the classified structure of the Board of Directors and provide for the annual election of directors will be approved if it receives the affirmative vote of a majority of the shares of common stock entitled to vote on this proposal at the Meeting. Abstentions will have the effect of being cast against Proposal No. 2, even though the stockholder so abstaining may intend a different interpretation. Broker non-votes will not have any effect on this proposal.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” PROPOSAL NO. 2 TO AMEND THE COMPANY’S CERTIFICATE OF INCORPORATION TO ELIMINATE THE CLASSIFIED STRUCTURE OF THE BOARD OF DIRECTORS AND PROVIDE FOR THE ANNUAL ELECTION OF DIRECTORS.

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 


EXECUTIVE OFFICERS

 

The names of the Company’sour current executive officers, who are not also directorsmembers of the Company,our Board of Directors, and certain biographical information furnished by them, are set forth below:

 

Name

Age

Title

Ronald J. Lataille

58

61

Senior Vice President, Treasurer, and Chief Financial Officer

Mitchell C. Rock

52

55

Senior Vice

President, of Sales and Marketing and General Manager of MedicalMedTech

William David Smith57Senior Vice President Operational Excellence and Shared Services

Christopher P. Litterio

57

60

General Counsel, Secretary, and Senior Vice President of Human Resources

Daniel J. Shaw, Jr.

Steven G. Cardin         

59

Vice President, of ResearchChief Operating Officer, MedTech

Jason Holt         

49

Vice President and DevelopmentGeneral Manager, Advanced Components, and Chief Commercial Officer, MedTech

 

Mr. Lataille joined the Company in November 1997 as itsour Chief Financial Officer. Prior to joining the Company,us, 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. From 1984 to 1991, Mr. Lataille, a former certified public accountant, was employed by Coopers & Lybrand.

 

Mr. Rock initially joined the Company in 1991 and served as Director, Sales and Marketing of the Company’swhat was our Moulded Fibre division (now “Molded Fiber”).division. From May 1999 through October 2000, Mr. Rock served as Vice President, Sales and Business Development of Esprocket, an internet start-upstart up company. Mr. Rock rejoined the Companyus in April 2001 as Vice President, Sales and Marketing of the Company’swhat was our Moulded Fibre division and served as our Vice President of Sales and Marketing for the entire Company from May 2002 to June 2014. SinceFrom June 2014 to June 2021, Mr. Rock has served as the Company’sour Senior Vice President of Sales and Marketing. SinceMarketing, and from January 1, 2020 to June 2021, Mr. Rock also servesserved as General Manager, Medical. Since June 2021, Mr. Rock has served as President, UFP MedTech. Since 2016, Mr. Rock has also served on the board of directors of Outlook Amusements, Inc., an entertainment company specializing in advice-based products and services.

 

Mr. Smith joined the Company in August 2013 as Vice President of Operations. Since June 2014, he has served as Senior Vice President of Operations. Since January 1, 2020, Mr. Smith has served as Senior Vice President Operational Excellence and Shared Services. Prior to joining the Company, Mr. Smith spent nearly 25 years at Rogers Corporation, Inc., in various capacities. His most recent role at Rogers was Vice President and General Manager of their $180 million high performance foam division.

Mr. Litterio joined the Company in November 2017 as its first General Counsel and Senior Vice President of Human Resources. From 1989 until 2017, Mr. Litterio was engaged in the private practice of law at Ruberto, Israel & Weiner, PC, a Boston-based law firm, where he focused on complex business litigation and employment law. From 2005 until 2017, he served as the firm’s managing partner, and from 2000 until 2005, he was the chair of the firm’s litigation department.

 

Mr. ShawCardin joined the Company in 19832019 as Chief Operating Officer of the MedTech business. In June of 2021, the Board of Directors promoted him to Vice President. Prior to joining the Company, Mr. Cardin spent 27 years in a variety of leadership positions in the medical device industry for OEMs and contract manufacturers. From 2017 until 2019, Mr. Cardin served as President of Viant Medical, a Tier 1 contract manufacturer of medical components and devices. Before entering the medical manufacturing field, Mr. Cardin, a graduate of the United States Military Academy, served as a Corporate Industrial Engineer through September 1992.Captain in the United States Army.

Mr. Holt joined the Company in 2018 as General Manager and in June of 2021 was appointed Vice President by the Board of Directors. Mr. Holt is responsible for the Advanced Components portion of the Company’s business, and, since January 2023, is also Chief Commercial Officer, MedTech. From October 1992 through September 19962004-2018, Mr. Shaw served asHolt held a number of leadership positions at a Fortune 200 company, Illinois Tool Works, where he ultimately became Vice President and General Manager of Product Development and from October 1996 through May 2000 as Director of Product Development. From June 2000 through May 2002 Mr. Shaw served as a Divisional Vice President of the Specialty Components Division and from May 2002 through June 2014 Mr. Shaw served as corporate Vice President, Engineering. Since June 2014, Mr. Shaw has served as Vice President of Research and Development.$100+ million business unit.

 

Executive officers are chosen by and serve at the discretion of theour Board of Directors.


CORPORATE GOVERNANCE

Corporate Governance Framework

Our Board of Directors has adopted a set of corporate governance guidelines and, as described in further detail below, a Code of Ethics that applies to all directors, officers and employees. The guidelines and Code of Ethics, together with the charters of the Company.

8

CORPORATE GOVERNANCEstanding committees of our Board of Directors, our certificate of incorporation, and bylaws, are the framework of our corporate governance. Our governance materials are available on our website, www.ufpt.com/investors/governance.html.

 

Meetings of the Board of Directors

 

TheOur Board of Directors of the Company held four meetings during 2019.2022. Each director attended at least 75% of the aggregate of all meetings of the Board of Directors and each committee each such director served on during 2019.2022. All of the Company’sour directors are encouraged to attend the Company’sour Annual Meeting of Stockholders. All of the Company’sour directors were in attendance at the Company’s 2019our 2022 Annual Meeting.

 

Independence, Diversity, Leadership Structure and Board Committees

 

Independence

 

The Company’sOur Common Stock is listed on the NASDAQ Stock Market LLC, or Nasdaq, and Nasdaq’s listing standards relating to director independence apply to the Company.us. The Board of Directors has determined that the following current directors are independent under applicable Nasdaq listing standards: Messrs. Croteau, Kozin, Hassett and Oberdorf, and Pierce, as well as Ms. QuinnMses. Feldmann and Ms. Feldmann.Hudson. In making its independence determination with respect to Mr. Croteau, the Board of Directors determined that Mr. Croteau’s position through January 2023 as Chief Executive Officer of a customerone of the Company,our customers, Corza Medical (formerly Surgical Specialties Corporation,Corporation), also did not impair his independence. All of the Company’s transactions with Surgical Specialties Corporation were conducted on arm’s length terms in the ordinary course of business, and the amount involved in transactions in 2018 and 2019 was approximately $30,000 and $72,000, respectively, which represented less than 0.01% and 0.04% of the Company’s revenues, respectively.

10

 

Diversity

 

The Company strivesWe strive to have the members of itsour Board of Directors possess a diverse set of skills and background so as to best provide guidance to the management team and oversight to the Company. While the Nominating Committee does not have a formal policy in this regard, the Nominating Committee views diversity broadly to include a diversity of experience, skills and viewpoint, as well as diversity of gender and race. The Nominating Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. Skills sought include financial, capital markets, manufacturing, engineering, executive leadership, sales and marketing, organizational growth, human resources and strategic planning. The Company believes that itWe believe our Board of Directors has a minimum of one director for each of these skills.

Under Nasdaq’s Board diversity rule, approved by the SEC in August 2021, companies listed on Nasdaq’s U.S. exchange are required, subject to a phase-in period and certain exceptions, to (a) publicly disclose board-level diversity statistics using a standardized matrix and (b) have, or explain why they do not have, at least two directors who are diverse, including at least one diverse director who self-identifies as female and at least one diverse director who self-identifies as an underrepresented minority or LGBTQ+. The new rule is aimed at encouraging a minimum board diversity objective for companies and provide stockholders with consistent, comparable disclosures concerning a company’s current board composition.

Under the phase-in transition rules, the Company is required have, or provide an explanation why it does not have, (x) at least one diverse director by August 6, 2023, and (y) at least two diverse directors by August 6, 2026. The table below highlights certain information regarding the current composition of our Board of Directors, as well as our Board of Directors if our current director nominees are elected, as self-identified by the director or director nominee.

11

Current and Proposed Board Diversity Matrix

Board Size

Total Number of Directors

7

 

Male

Female

Non-Binary

Did not Disclose Gender

Gender Identity

    

Directors

5

2

  

Number of Directors who Identify in Any of the Categories Below

African American or Black

 

1

  

Alaskan Native or Native American

    

Asian

    

Hispanic or Latinx

    

Native Hawaiian or Pacific Islander

    

White

5

1

  

Two or More Races or Ethnicities

    

LGBTQ+

    

Did not Disclose Demographic Background

    

 

Leadership Structure

 

As noted above, our Board of Directors is currently comprised of seven directors, six of whom are independent under applicable standards.

 

Mr. Bailly has served as Chief Executive Officer and member of the Board since January 1, 1995. He has served as Chairman of the Board since 2006.

 

We recognize that different board leadership structures may be appropriate for companies in different situations and believe that no one structure is suitable for all companies. We believe our current board leadership structure is optimal for us because it demonstrates to our employees, suppliers, customers, and other stakeholders that the Company iswe are under strong leadership, with a single person setting the tone and having primary responsibility for managing our operations. Having aA single leader for both the Company and the Board of Directors eliminates the potential for confusion or duplication of efforts and provides us with clear leadership for the Company.leadership.

 

Because the positions of Chairman of the Board and Chief Executive Officer are held by the same person, the Board also believes it is appropriate for the independent directors to elect one independent director to serve as a Lead Independent Director. In addition to presiding at executive sessions of independent directors, the Lead Independent Director has the responsibility to: (1) coordinate with the Chairman of the Board and Chief Executive Officer in establishing the agenda and topic items for Board meetings; (2) retain independent advisors on behalf of the Board as the Board may determine is necessary or appropriate; and (3) perform such other functions as the independent directors may designate from time to time. Mr. KozinCroteau currently serves as the Lead Independent Director, a position he has held since January 2015.July 2021.

 

9

12

 

Our overall leadership structure consists of a single individual serving as Chief Executive Officer and Chairman of the Board, with independent and experienced directors making up the majority of our Board and independent oversight provided by our Lead Independent Director.  We believe that this structure benefits the Companyis beneficial to us and itsour stockholders.

 

Risk Oversight

 

Our Board of Directors is responsible for providing guidance and overseeing the Company’sour strategic objectives and corresponding risk management process. The Board focuses on the Company’sour general risk management strategy, the most significant risks facing the Company,us, and ensures that appropriate risk mitigation strategies are implemented by management. The Board is also apprised of particular risk management matters in connection with its general oversight and approval of corporate matters.

 

The Board of Directors has delegated to the Audit Committee oversight of certain aspects of the Company’sour risk management process. Among its duties, the Audit Committee reviews with management (a) the Company’sour policies with respect to risk assessment and risk management as well as the Company’sour significant areas of financial risk exposure and (b) the Company’ssteps management has taken to monitor and control such exposure, including our system of disclosure controls and procedures and system of internal controls over financial reporting. Our Audit Committee reviews our environmental, social and governance initiatives, as well as the Company’s information security procedures. Our Compensation Committee also considers and addresses risk as it performs its committee responsibilities. Both committees report to the full Board as appropriate, including when a matter rises to the level of a material or enterprise level risk.

 

The Company’sOur management is responsible for day-to-dayday‑to‑day risk management. Our Treasury, Finance, and Internal Audit functions serve as the primary monitoring and testing function for company-widecompany‑wide policies and procedures and manage the day-to-dayday‑to‑day oversight of the risk management strategy for the ongoing business. This oversight includes identifying, evaluating, and addressing potential risks that may exist at the enterprise, strategic, financial, operational, and compliance and reporting levels.

 

We believe the division of risk management responsibilities described above is an effective approach for addressing the risks we face, and our Board leadership structure supports this approach.

 

Code of Ethics

 

Pursuant to Section 406 of the Sarbanes-OxleySarbanes‑Oxley Act of 2002, the Company haswe have adopted a Code of Ethics for Senior Financial Officers that applies to the Company’sour principal executive officer, principal financial officer, principal accounting officer, controller, and other persons performing similar functions. The CompanyWe also hashave in place a Code of Business Conduct and Ethics that is applicable to all of our directors, officers and employees of the Company. The Company requiresemployees. We require all of itsour directors, officers and employees to adhere to this code in addressing legal and ethical issues that they encounter in the course of doing their work. This code requires our directors, officers, and employees to avoid conflicts of interest, comply with all laws and regulations, conduct business in an honest and ethical manner and otherwise act with integrity. The Code of Ethics for Senior Financial Officers, as amended, is available at the Company’sour website,www.ufpt.com/investors/governance.htmlas an attachment to the Company’sour Code of Business Conduct and Ethics. We intend to satisfy the disclosure requirement under Item 5.05 of Current Report on Form 8-K8‑K regarding an amendment to, or waiver from, a provision of this code by posting such information on our website, at the address specified above.

 

13

Environmental, Social & Governance (ESG)

The Company’s Board of Directors unanimously agreed to the establishment of a cross-functional team led by senior executives of the Company to set the sustainability agenda and prioritize Environmental, Social, & Governance (ESG) goals and efforts to where the Company can make the most impact in our communities. The Board further designated oversight responsibility for the Company’s ESG initiatives to the Audit Committee. The Company has an established ESG Committee in response to this directive, and it is working to develop and prioritize the ESG goals and initiatives and incorporate them into the Company’s overall strategy. The Committee is comprised of executives of the Company and a supporting cross-functional team that has worked with external consultants to develop an appropriate ESG framework that identifies appropriate areas of focus and includes metrics that will allow the Company to measure its progress against the ESG goals into the future. Highlights of the Company’s ESG programs, policies and initiatives can be reviewed on the website, https://www.ufpt.com/about/sustainability-esg.html.

Nominating Committee

 

The Board of Directors has a Nominating Committee, which met on one occasion in 2019,2022, and is currently composed of Messrs. Croteau, Hassett, Kozin and Oberdorf, Croteau and Pierce, as well as Ms. QuinnMses. Feldmann and Ms. Feldmann,Hudson, each of whom is an independent director under applicable Nasdaq standards. Mr. KozinCroteau serves as Chair. Director nominees are selected by the Nominating Committee. The Nominating Committee operates pursuant to a written charter (the “Nominating Committee Charter”) that was adopted by the Board of Directors and that complies with applicable Nasdaq listing standards. The Nominating Committee Charter is available at the Company’sour website,www.ufpt.com/investors/governance.html.governance.html. The Nominating Committee may consider candidates recommended by stockholders as well as from other sources such as other directors or officers, third party search firms or other appropriate sources. For all potential candidates, the Nominating Committee may consider all factors it deems relevant, such as a candidate’s independence, character, ability to exercise sound judgment, diversity, age, demonstrated leadership, skills, including financial literacy and experience in the context of the needs of the Board, and concern for the long-termlong‑term interests of the stockholders. The Nominating Committee does not assign any particular weight or importance to any one of these factors but rather considers them as a whole. In general, persons recommended by stockholders will be considered on the same basis as candidates from other sources. If a stockholder wishes to recommend a candidate for election as a director at the 20212024 Annual Meeting of Stockholders, it must follow the procedures described in “Stockholder Proposals and Nominations for Director” below.

 

10

Compensation Committee

 

The Board of Directors has a Compensation Committee, which met on sixfive occasions in 2019,2022, and is currently composed of Messrs. Kozin, and Croteau and Ms. Quinn,Hassett, each of whom is an independent director under applicable Nasdaq standards. Ms. QuinnMr. Kozin serves as the Chair. The Compensation Committee operates pursuant to a written charter (the “Compensation Committee Charter”) that was adopted by the Board of Directors and that complies with applicable Nasdaq listing standards. The Compensation Committee Charter is available at the Company’sour website,www.ufpt.com/investors/governance.html.governance.html. Under the provisions of the Compensation Committee Charter, the primary functions of the Compensation Committee include determining salaries and bonuses for the Company’sour executive officers, individuals to whom stock options, and other equity-basedequity‑based awards are granted, and the terms upon which such grants and awards are made, adopting incentive plans, overseeing risks associated with the Company’sour compensation policies and practices, evaluating the performance of the Company’sour executive officers, reviewing with management compensation disclosures to be included in the Company’sour filings with the Securities and Exchange Commission (“SEC”), and determining director compensation, benefits and overall compensation. The Compensation Committee or the Board of Directors may delegate limited authority to the Chief Executive Officer of the Company or one or more other officers of the Company (each, a “Designated Officer”) to assist the Compensation Committee administer and operate the 2003 Incentive Plan (as amended and restated) and to grant equity-based awards to persons other than a Designated Officer or any person who is an officer (as defined in Rule 16a-1(f)) of the Exchange Act). The Compensation Committee has the sole discretion and express authority to retain and terminate any compensation consultant, including sole authority to approve the consultant’s fees and other retention terms.

 

14

For a further description of the Company’sour determination of executive and director compensation, see “Executive Compensation” below.

 

Audit Committee

 

The Board of Directors has an Audit Committee, which met on seven occasions in 2019,2022, and is currently composed of Messrs. PierceMses. Feldmann and OberdorfHudson and Ms. Feldmann,Mr. Oberdorf, each of whom meets the enhanced independence standards for audit committee members set forth in applicable SEC rules and Nasdaq listing standards. Ms. Feldmann serves as Chair. The Board of Directors had determined that each of Ms. Feldmann and Mr. Oberdorf qualifies as an “audit committee financial expert”, as defined by applicable SEC rules. The Audit Committee operates pursuant to a written charter (the “Audit Committee Charter”) that was adopted by the Board of Directors and that complies with currently applicable SEC rules and Nasdaq listing standards. The Audit Committee Charter is available at theCompany’sour website,www.ufpt.com/investors/governance.html.governance.html. Under the provisions of the Audit Committee Charter, the primary functions of the Audit Committee are to assist the Board of Directors with oversight of (i) the integrity of the Company’sour financial statements, (ii) the Company’sour compliance with legal and regulatory requirements, and (iii) the qualifications, independence, appointment, retention, compensation and performance of the Company’sour registered public accounting firm.firm and (iv) the review and assessment of our system of internal controls and procedures. The Audit Committee is also responsible for theoverseeing management’s maintenance of “whistle-blowing”“whistle‑blowing” procedures, the review and approval of all related-party transactions and the oversight of certain other compliance matters. See “Report of the Audit Committee” below.

 

Report of the Audit Committee

 

The Audit Committee of the Board of Directors is comprised of three independent directors, each of whom meet the enhanced independence standards for audit committee members set forth in applicable SEC rules and Nasdaq listing standards. Ms. Feldmann and Mr. Oberdorf served on the Audit Committee from the beginning of the fiscal year 2022 through the date of this Proxy Statement, with Ms. Feldmann serving as Chair. Mr. Pierce served on the Audit Committee from January 1, 2022 through June 7, 2022. Ms. Hudson served on the Audit Committee from June 8, 2022 through the date of this Proxy Statement. The Board of Directors had determined that each of Ms. Feldmann and Mr. Oberdorf qualifies as an “audit committee financial expert”, as defined by applicable SEC rules.

15

The Audit Committee has:

 

•         Reviewed and discussed with management the Company’sour audited financial statements as of and for the year ended December 31, 2019;

2022;

 

•         Discussed with Grant Thornton, the Company’sour independent registered public accounting firm, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC;

 

•         Received and reviewed the written disclosures and the letter from Grant Thornton required by applicable requirements of the PCAOB regarding Grant Thornton’s communications with the Audit Committee concerning independence, and discussed with Grant Thornton Grant Thornton’s independence; and

 

Based on the review and discussions referred to above, the Audit Committee has recommended to the Board of Directors that the audited financial statements referred to above be included in the Company’sour Annual Report on Form 10-K10‑K for the year ended December 31, 20192022 for filing with the SEC.

 

 

By the Audit Committee of the Board of Directors:

 

Cynthia L. Feldmann,Chair

Thomas Oberdorf
Robert W. Pierce, Jr.

Symeria Hudson

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth certain information as of April 13, 2020,10, 2023, with respect to the beneficial ownership of the Company’sour 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 Companyus to be the beneficial owner of 5% or more of the Company’sour Common Stock. This information is based upon information received from or on behalf of the named individuals. Unless otherwise indicated, (i) each person identified possesses sole voting and investment power with respect to the shares listed and (ii) the address for each person named below is: c/o UFP Technologies, Inc., 100 Hale Street, Newburyport, Massachusetts 01950.

 

Name

Shares of Common Stock
Beneficially Owned

Percentage of
Class(1)

R. Jeffrey Bailly415,3335.55%
Daniel Croteau(2) (3)14,018*
Mitchell C. Rock16,162*
Ronald J. Lataille64,890*
William David Smith7,824*
Thomas Oberdorf(2)(3)77,7501.04%
Marc Kozin(2)(3)43,360*
Cynthia L. Feldmann(2)(3)8,651*
Robert W. Pierce, Jr.(2)(3)77,7481.04%
Lucia Luce Quinn(2)(3)19,666*
Christopher P. Litterio(2)7,120*
Renaissance Technologies LLC(4)542,9567.26%

800 Third Avenue

New York, NY 10022

  

Blackrock, Inc.(5)

55 East 52nd Street
New York, NY 10055

457,5626.11%
All executive officers and directors as a group (12 persons)(2)(6)767,13610.14%
*Less than one percent

Name

Shares of Common Stock
Beneficially Owned

Percentage of
Class(1)

R. Jeffrey Bailly         

366,897

4.82%

Daniel Croteau(2)(3)         

24,735

*

Mitchell C. Rock         

16,902

*

Ronald J. Lataille         

65,501

*

Thomas Oberdorf(2)(3)         

50,287

*

Marc Kozin(2)(3)         

36,327

*

Cynthia L. Feldmann(2)(3)         

16,618

*

Symeria Hudson(2)(3)         

2,293

*

Joseph John Hassett(2)(3)         

2,293

*

Christopher P. Litterio         

11,111

*

Steven G. Cardin         

2,443

*

All executive officers and directors as a group (12 persons)(2)(3)(5)         

599,066

7.80%

   

Neuberger Berman Group LLC(4)         

706,377

9.28%

   1920 Avenues of the Americas

   New York, NY 10104

  

Blackrock, Inc (5)         

459,978

6.04%

55 East 52nd Street
New York, NY 10055		  

Renaissance Technologies LLC(6)         

379,873

4.99%

800 Third Avenue
New York, NY 10022		  

(1)Based upon 7,482,844 shares of Common Stock outstanding as of April 13, 2020.

*         Less than one percent

(2)Includes shares issuable pursuant to stock options currently exercisable or exercisable within 60 days after April 13, 2020, as follows: 10,718 for Daniel Croteau, 25,396 for Thomas Oberdorf, 2,756 for Marc Kozin, 6,536 for Cynthia L. Feldmann, 15,636 for Robert W. Pierce, Jr., 14,986 for Lucia Luce Quinn, and 6,250 for Christopher P. Litterio.

(3)Includes 907 shares issuable to each non-employee director within 60 days of April 13, 2020 pursuant to the vesting of stock unit awards.

(4)Shares of Common Stock beneficially owned and the information in this footnote are based solely upon information contained in a Schedule 13G/A filed with the SEC by Renaissance Technologies LLC on February 13, 2020. As of December 31, 2019, Renaissance Technologies LLC had sole voting power over 525,312 shares, sole dispositive power over 541,584 shares, and voting and dispositive power over 1,372 shares.

(5)Shares of Common Stock beneficially owned and the information in this footnote are based solely upon information contained in a Schedule 13G/A filed with the SEC by Blackrock, Inc. on February 7, 2020. As of December 31, 2019, Blackrock, Inc. had sole voting power over 446,962 shares, and sole disposition power over 457,562 shares.

(6)Includes an aggregate of 87,720 shares that the executive officers and directors have the right to acquire within 60 days after April 13, 2020 pursuant to the exercise of options and the vesting of stock unit awards.

 

(1)         Based upon 7,612,970 shares of Common Stock outstanding as of April 10, 2023.

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(2)         Includes shares issuable pursuant to stock options currently exercisable or exercisable within 60 days after April 10, 2023, as follows: 16,632 for Daniel Croteau, 21,550 for Thomas Oberdorf, 8,670 for Marc Kozin, 12,450 for Cynthia L. Feldmann, 1,646 for Symeria Hudson and 1,646 for Joseph John Hassett.

(3)         Includes 647 shares issuable to each non-employee director within 60 days of April 10, 2023 pursuant to the vesting of stock unit awards.

17

(4)         Shares of Common Stock beneficially owned and the information in this footnote are based solely upon information contained in a Schedule 13G filed with the SEC by Neuberger Berman Group, LLC on February 10, 2023. As of December 31, 2022, Neuberger Berman Group LLC had sole voting power over 0 shares, shared voting power over 698,858 shares, sole dispositive power over 0 shares, and shared dispositive power over 706,377 shares.

(5)         Shares of Common Stock beneficially owned and the information in this footnote are based solely upon information contained in a Schedule 13G filed with the SEC by Blackrock, Inc. on February 1, 2023. As of December 31, 2022, Blackrock, Inc. had sole voting power over 450,667 shares, and sole dispositive power over 459,978 shares.

(6)         Shares of Common Stock beneficially owned and the information in this footnote are based solely upon information contained in a Schedule 13G/A filed with the SEC by Renaissance Technologies LLC on February 13, 2023. As of December 31, 2022, Renaissance Technologies LLC had sole voting power over 344,773 shares, and sole dispositive power over 379,873 shares.

EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

Compensation Discussion and Analysis

 

Introduction and Scope

 

This sectionCompensation Discussion and Analysis (“CD&A”) is intended to provide a context for the disclosures contained in this Proxy Statement with respect to our “named executive officers.” Our named executive officers are determined in accordance with SEC rules. Under such rules, our named executive officers for fiscal 20192022 were Messrs. R. Jeffrey Bailly, Ronald J. Lataille, Mitchell C. Rock, Christopher P. Litterio and William David Smith.Steven G. Cardin. The 20192022 compensation of our named executive officers is detailed in the tables that follow this section.

 

The Company’sOur compensation programs are determined by the Compensation Committee of the Board of Directors, which has the ongoing responsibility for establishing, implementing, and monitoring the Company’sour executive compensation programs. The Compensation Committee operates in accordance with the Compensation Committee Charter that was adopted by the Board of Directors and that complies with applicable Nasdaq listing standards. The Compensation Committee Charter is available at the Company’sour website,www.ufpt.com/investors/governance.html.governance.html.

 

Executive Summary

 

The Company is an innovativeWe are a designer and custom manufacturer of components, subassemblies, productscomprehensive solutions for medical devices, sterile packaging, and packaging utilizingother highly specialized foams, films, and plastics primarily for the medical market. The Company manufactures its products by converting raw materials using laminating, molding, radio frequency and impulse welding and fabricating manufacturing techniques. The Company isengineered custom products. We are an important link in the medical device supply chain and a valued outsource partner to many of the top medical device manufacturers in the world. The Company’sOur single-use and single-patient devices and components are used in a wide range of medical devices disposable wound care products, infection prevention,and packaging for minimally invasive surgery, infection prevention, wound care, wearables, orthopedic soft goods, and orthopedic implant packaging.implants.

 

The Company is diversified by also providing highly engineered products and components to customers in the automotive, aerospace and defense, consumer, electronics and industrial markets. Typical applications of its products include military uniform and gear components, automotive interior trim, athletic padding, environmentally friendly protective packaging, air filtration, abrasive nail files, and protective cases and inserts.

18

 

Our industry is fragmented across numerous competing entities. Our ability to compete effectively depends to a large extent on our ability to identify, recruit, develop and retain key management personnel. We believe this requires a competitive compensation structure as compared to other companies of a similar size in the same or similar industries.

 

The compensation programs for our named executive officers are designed to align compensation objectives with our business strategies and to encourage our executives to focus on creating stockholder value. While it is critical that our compensation programs allow for the recruitment and retention of highly qualified executives, it is also important that these programs are variable in nature such that performance is a key factor in realizing value. Accordingly, our programs combine competitive base salaries with annual cash incentives and long-termlong‑term equity incentives. Specifically, we structure our named executive officer compensation to include:

 

•         Competitive base salary;

 

•         Stock grant (Chief Executive Officer only);

 

Performance-based

•         Performance‑based cash incentive bonus;

 

Long-term

•         Long‑term incentives in the form of time-basedtime‑based and time- and performance-based restricted stock awards; and

 

•         Other common perquisites.

 

The compensation programs for the named executive officers provide equity incentives for a fixed dollar value within equity grants that are used to determine the number of shares being variable.time-based and time- and performance-based restricted stock awards granted to each executive officer at the current market price on the date of grant. The intent of this approach is to limit the amount of compensation variability resulting solely from fluctuations in the Company’sour stock price while still providing variability in paycompensation based upon the achievement of financial and individual objectives.

 

13

Stock Performance Graph

The following graph compares cumulative total stockholder return on our Common Stock since December 31, 2014 with the cumulative total return of the (1) NASDAQ Stock Market (US Companies), (2) SIC Codes 3080-3089 Miscellaneous Plastic Products, (3) SIC Code 3841 Surgical and Medical Instruments and Apparatus, (4) GICS 15103020 Paper Packaging and (5) the Company’s peer group, as determined by Radford, a national compensation consulting company engaged by our Compensation Committee in 2018 to perform a comprehensive comparative market study of the compensation programs offered to peer company executives and directors, as described in “Use of Compensation Consultants” below. This graph assumes the investment of $100 on December 31, 2014 in our Common Stock, and for comparison the companies that comprise each of (1) the NASDAQ Stock Market, (2) SIC Codes 3080-3089 Miscellaneous Plastic Products, (3) SIC Code 3841 Surgical and Medical Instruments and Apparatus, (4) GICS 15103020 Paper Packaging and (5) the Company’s peer group, as described above, and that all dividends were reinvested. Measurement points are the last trading day of each respective fiscal year. The Company’s change to SIC Code 3841 was approved by the SEC on December 4, 2019.

Comparison of 5 Year Cumulative Total Return

Assumes Initial Investment of $100

December 2019

Governance Developments

 

OurThe Compensation Committee and/or the Board of Directors has taken the following steps to promote good corporate governance:

 

•         Expiration of Rights Plan—Through March 2019, we had a stockholder rights plan designed to protect and enhance the value of our outstanding equity interests in the event of an unsolicited attempt to acquire us in a manner or on terms not approved by our Board of Directors and that would prevent stockholders from realizing the full value of their shares of our common stock. However, the rights may have had the effect of rendering more difficult or discouraging ouran acquisition; the rights may have caused substantial dilution to a person or group that attempted to acquire us on terms or in a manner not approved by our Board of Directors. On March 13, 2019, our Board of Directors voted not to replace the rights when they expired on March 19, 2019.


Proposal to Declassify

•         Declassification of our Board of Directors—As explained in further detail in Proposal No. 2,In 2020, our Board of Directors has approved, and recommends that our stockholders approve at the 2020 Annual Meeting of Stockholders,approved an amendment to the Company’sour Certificate of Incorporation to eliminate the classified structure of the Board of Directors and provide for the annual election of directors.

 

In addition, the Compensation Committee and/or the full Board of Directors have previously adopted the following policies and practices to promote good corporate governance:

•         No Tax Gross-upsGross‑ups—the Company doesWe do not provide tax gross-upsgross‑ups to itsour named executive officers.

19

 

Anti-Hedging•         Anti‑Hedging Policy—the CompanyWe established a policy prohibiting insider trading practices including the hedging of the Company’sour stock by itsour employees, including itsour executive officers, and directors.

 

•         Anti-Pledging and Margin Account Policy – the Company—We established a policy prohibiting employees from holding Companyour securities in a margin account or pledging Companyour securities as collateral for a loan.

 

•         No Repricing of Stock Options—the Company’sOur equity incentive plans prohibit the repricing of stock options or other equity awards without the consent of our stockholders.

 

•         Buyouts of Underwater Options—the Company’sOur equity incentive plans prohibit the Companyus from buying out underwater stock options from our executive officers.

 

•         Stock Ownership Guidelines—The Company hasWe have adopted stock ownership guidelines for the named executive officers and independent directors that are described in more detail below.

 

•         Clawback Policy—The Company hasWe have adopted a clawback policy that is described in more detail below.

 

•         Independent Compensation Committee—the Company’sOur Compensation Committee is comprised exclusively of independent directors.

 

•         Independent Consultants—theThe independent consultants who provided benchmarking data with respect to the named executive officers do not provide services to the Companyus other than at the direction of the Compensation Committee.

 

Philosophy and Objectives of the Company’sour Compensation Programs

 

The primary objectives of our compensation programs are to:

 

•         Retain executive talent by offering compensation that is commensurate with pay at other companies of a similar size in similar industries, as adjusted for individual factors, and considering the complexity of the Company’sour business;

 

•         Safeguard theour interests and those of the Company and the Company’sour stockholders;

 

•         Drive executive performance by having certain components of pay at risk and/or tied to Companyour entity-wide and individual goal performance;

 

•         Be fair to employees, management and stockholders; and

 

•         Be well communicated and understood by program participants and stockholders.

 

The Compensation Committee believes that the most effective compensation program is one that provides a reasonable level of fixed income through competitive base salaries, equity grants and retirement benefits as well as additional rewards for achieving performance targets. The Compensation Committee also believes that these rewards should be in the form of both cash and non-cashnon‑cash and have some component subject to time-basedtime‑based vesting as a retention measure. Incentive cash bonuses are included to drive executive performance by having pay at risk so that a significant portion of potential annual cash compensation is tied to profitability targets. We also include time-based and time- and performance-basedperformance‑based restricted stock awards as a significant element of prospective executive compensation, so that the value of a portion of an executive’s compensation is dependent upon both continued, long-term employment and company-widecompany‑wide performance measures.

 

15

20

 

The Company’s Decision-MakingOur Decision‑Making Process

 

The Role of the Compensation Committee—The Compensation Committee oversees the compensation and benefit programs for the named executive officers. The Compensation Committee is comprised solely of independent directors of the Board. The Compensation Committee works closely with management to examine the effectiveness of the Company’sour executive compensation program. Details of the Compensation Committee’s authority and responsibilities are specified in the Compensation Committee Charter, which is available at the Company’sour website,www.ufpt.com/investors/governance.html.governance.html.

 

The Role of Management—The Chief Executive Officer also makes recommendations to the Compensation Committee about the compensation of the Company’sour other named executive officers. The Compensation Committee considers the Chief Executive Officer’s recommendations before making a final determination of the compensation programs for the named executive officers. The Chief Executive Officer and the other named executive officers may not be present during voting or deliberations on his or her compensation.

 

Use of Compensation Consultants—In 2018,2022, the Compensation Committee engaged Radford,Aon, a national compensation consulting firm, (“Radford”), to perform an updated comprehensive comparative market study of the compensation programs offered to peer company executives and directors.directors, and to provide recommendations on the Company’s executive compensation. The Compensation Committee used this information to evaluate and adjust executive and director compensation for fiscal 20192022 and plans to use this information thereafter, as well. The competitive assessment done by RadfordAon included a survey of the following 1514 companies:

 

•         Accuray, Inc.

•         Atrion CorporationAngioDynamics Inc

•         CECO EnvironmentalAnika Therapeutics, Inc.

•         Atrion Corp

•         Avanos Medical, Inc.

•         CryoLife, Inc. (now Artivion)

•         Cutera, Inc.

•         DMC Global, Inc.

•         Graham Corporation

•     Harvard Bioscience, Inc.

•     Hurco Companies, Inc.Integer Holdings Corp

•         Lantheus Holdings, Inc.

•     Lydall, Inc.

•         Meridian Bioscience, Inc.

•         OraSure Technologies, Inc.

•         RTI Surgical,Orthofix Medical, Inc.

•         SeaSpine Holdings Corporation

•     Surmodics, Inc.

 

Principal Elements of the 20192022 Compensation Program

 

There were five principal elements of compensation for the named executive officers during fiscal 2019:2022:

 

•         Base salary;

 

•         Stock grant (Chief Executive Officer only);

 

Performance-based

•         Performance‑based cash incentive bonus;

 

Long-term

•         Long‑term incentives in the form of time-basedtime‑based and time- and performance-based restricted stock awards; and

 

•         Other common perquisites.

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Base Salary—The base salaries established by the Compensation Committee for our named executive officers for fiscal 20192022 are set forth below.

 

Named Executive OfficerAnnual Base
Salary ($)
R. Jeffrey Bailly$580,000
Ronald J. Lataille$345,000
Mitchell C. Rock$330,000
William David Smith$305,000
Christopher P. Litterio$275,000

Named Executive Officer

 

Annual Base
Salary ($)

 

R. Jeffrey Bailly

 $650,000 

Ronald J. Lataille

 $420,000 

Mitchell C. Rock

 $420,000 

Christopher P. Litterio

 $338,000 

Steven G. Cardin

 $310,000 

 

Base salaries were reviewed by the Compensation Committee in light of the market competitive assessment done by RadfordAon in 20182022 and the Company'sour philosophy of positioning executive compensation at or about the 50% percentile as compared to itsour peer group companies. Base salaries are reviewed by the Compensation Committee annually and, if appropriate, are adjusted. As detailed below under footnote 1 to the “Summary Compensation Table,” on February 24, 2020,14, 2023, the Compensation Committee approved increases to each of the above base salaries effective January 1, 2020.2023.

 

16

Stock Grant—for In accordance with the past several years, including fiscal 2019, the Company has grantedterms of his employment agreement, we annually grant to Mr. Bailly, itsour Chief Executive Officer, an award of Common Stock as a component of his overall compensation. The objective of this equity component is to greater align the Chief Executive Officer’s interests with those of the Company’sour stockholders. The stock is typically issued to the Chief Executive Officer in the last two weeks of the fiscal year, assuming we continue to employ the Chief Executive Officer remains employed by the Company on that date. In 2019,2022, consistent with the terms of his employment agreement, the Chief Executive Officer was granted shares valued at $400,000. See “Employment Contract” below.

 

Cash Incentive Bonus—inIn the beginning of each fiscal year,2022, following approval by the Board of Directors of the Company’sour strategic plan and budget, the Compensation Committee establishes,established, at its discretion, performance targets for the named executive officers’ cash incentive bonus. This performance-basedperformance‑based cash bonus iswas based on the achievement of a combination of financial and individual objectives. Targeted payout levels were expressed as a percentage of base salary and established for each participant. An individual’s bonus components were determined by such individual’s title and/or role. Typically, the financial performance portion of the bonus fluctuates down and up based upon a degree by which the Company’sour actual results fall short of or exceed the financial objective.

 

For 2019,2022, the financial objectives, which were established by the Compensation Committee at its meeting on February 15, 2022, were based upon targeted Adjusted Operating Income of $22,010,000.$32,821,000. Adjusted Operating Income is operating income as adjusted to disregard (i) non-recurringnon‑recurring restructuring charges related to plant closings and consolidations and (ii) the impact of acquired or disposed of operations during the fiscal year ended December 31, 2019.2022. Actual Adjusted Operating Income was $24,707,821$45,863,786 for 2019. There were no adjustments to Operating Income in deriving this amount.fiscal year ended December 31, 2022.

 

Individual bonus objectives for the named executive officers, other than Mr. Bailly, were designed to reward the achievement of goals related to, among other things, the following: regulatory compliance, achievement of sales targets from both new and base business,MedTech financial goals, acquisition execution, improved employee engagement, researchdevelopment plans, safety and development,quality systems and compliance, return on invested capital, successful start-up in Mexico and investor relations. Individual bonus objectives for Mr. Bailly were designed to reward the achievement of goals related to acquisitions, revenue growth from new customersreduced manufacturing costs, safety and medical,quality compliance and margin improvement.return on invested capital.          

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For 2019,2022, the following cash incentive bonuses were awarded by the Compensation Committee based upon the Company’sour financial performance as well as the targeted payout levels and individual performance measures for each named executive officer:

 

R. Jeffrey Bailly—Mr. Bailly’s targeted payout level was 83.0%90% of base salary, or $480,000,$585,000, with $280,000$339,300 tied to the Company’sour financial performance and $200,000$245,700 tied to individual goals. The financial component of the incentive bonus for Mr. Bailly fluctuates by 10% of the amount by which the actual Adjusted Operating Income exceeds the targeted Adjusted Operating Income, with a maximum financial component bonus of $700,000. To the extent that actual Adjusted Operating Income is less than 80% of targeted Adjusted Operating Income, the financial component of Mr. Bailly’s incentive bonus is zero. To the extent that actual Adjusted Operating Income equals or exceeds 80% of targeted Adjusted Operating Income but is less than targeted Adjusted Operating Income, the financial component of Mr. Bailly’s incentive bonus is determined as $140,000$169,650 (half of the targeted bonus) plus 3.18%2.58% of the amount by which actual Adjusted Operating Income exceeds 80% of targeted Adjusted Operating Income. Based upon the Company’sour financial performance as well as an assessment of his performance for fiscal 2019,2022, Mr. Bailly was awarded a total performance-based bonus amount of $699,782.$944,800. In addition, based upon the Company’s extraordinary performance in 2022, Mr. Bailly was awarded a discretionary bonus of $300,000, as well as Stock Options with a value of $300,000.

 

Ronald J. Lataille—Mr. Lataille’s targeted payout level was 40%45% of base salary, or $138,000.$189,000. Based upon the Company’sour financial performance as well as an assessment of his performance for fiscal 2019,2022, Mr. Lataille was awarded a total bonus amount of $165,000.$381,542.

 

Mitchell C. Rock—Mr. Rock’s targeted payout level was 40%45% of base salary, or $132,000.$189,000. Based upon the company’sour financial performance as well as an assessment of his performance for fiscal 2019,2022, Mr. Rock was awarded a total bonus amount of $159,000.$384,042.

 

William David SmithChristopher P. Litterio—Mr. Smith’sLitterio’s targeted payout level was 40% of base salary, or $122,000.$135,200. Based upon the Company’sour financial performance as well as an assessment of his performance for fiscal 2019,2022, Mr. SmithLitterio was awarded a total bonus amount of $136,000.$247,321.

 

17

Christopher P. LitterioSteven G. Cardin—Mr. Litterio’sCardin’s targeted payout level was 40%35% of base salary, or $110,000.$108,500. Based upon the Company’sour financial performance as well as an assessment of his performance for fiscal 2019,2022, Mr. LitterioCardin was awarded a total bonus amount of $123,000.$173,064, of which $108,500 was paid in cash and $64,564 was paid in the Company’s common stock.

 

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Long-termLong‑term Incentives—it is theour philosophy and that of the Company and the Compensation Committee to provide executives with long-termlong‑term incentives and, thus, align their financial interests with those of the Company’sour stockholders. The Company maintainsWe maintain a stock unit award program for the named executive officers under the 2003 Incentive Plan, as amended and restated (the “2003 Incentive Plan”). On March 14, 2023, the Compensation Committee of the Company’s approved certain amendments to the 2003 Incentive Plan. The amendments, among other things, increased the aggregate maximum of Cash Performance Awards (as defined in the 2003 Incentive Plan) from $1,000,000 to $2,000,000 that may be paid to any individual pursuant to the 2003 Incentive Plan. The stock unit awards represent a right to receive shares of the Company’sour Common Stock in varying amounts based on theour achievement of certain financial performance objectives by the Company and time-basedtime‑based vesting requirements. For 2019,2022, the following stock unit awards were approved by our Compensation Committee for grant to our named executive officers:

 

  Threshold(1)(2) Target Adjusted
Operating Income of
$22,010,000(1)(2)		 Exceptional Adjusted
Operating Income of
$25,311,500(1)(2)
  Number of
shares		 Grant Date
Value		 Number of
shares		 Grant Date
Value		 Number of
shares		 Grant Date
Value
R. Jeffrey Bailly 6,069 $200,000 6,069 $200,000 6,069 $200,000
Ronald J. Lataille 3,793 $125,000 1,896 $62,500 1,896 $62,500
Mitchell C. Rock 3,793 $125,000 1,896 $62,500 1,896 $62,500
William David Smith 2,276 $75,000 1,138 $37,500 1,138 $37,500
Christopher P. Litterio 2,124 $70,000 1,062 $35,000 1,062 $35,000
  

Threshold(1)(2)

  

Target Adjusted
Operating Income of
$32,821,000(1)(2)

  

Exceptional Adjusted
Operating Income of
$37,744,150(1)(2)

 
  

Number of
shares

  

Grant Date
Value

  

Number of
shares

  

Grant Date
Value

  

Number of
shares

  

Grant Date
Value

 

R. Jeffrey Bailly

  7,075  $526,733   7,075  $526,733   7,075  $526,734 

Ronald J. Lataille

  3,158  $235,150   1,579  $117,575   1,579  $117,575 

Mitchell C. Rock

  3,158  $235,150   1,579  $117,575   1,579  $117,575 

Christopher P. Litterio

  1,478  $110,000   739  $55,000   739  $55,000 

Steven G. Cardin

  1,007  $75,000   504  $37,500   504  $37,500 

(1)

The “Threshold” stock unit awards are subject to time vesting only. The “Target” and “Exceptional” stock unit awards are also subject to financial performance objectives, established by the Compensation Committee as the achievement of 100% and 115%, respectively, of the Company’sour targeted Adjusted Operating Income for fiscal 20192022 of $22,010,000.$38,821,000. Based upon the Company’sour achievement of $24,707,821$45,863,786 in actual Adjusted Operating Income for its 2019 fiscal year,2022, the Compensation Committee determined that both the Target goal had been fully achieved and the Exceptional goal had been partiallyfully achieved. Accordingly, each named executive officer earned the number of stock unit awards set forth next to his name in the “Threshold”, “Target” and “Target”“Exceptional” columns above and 81.7% of the stock unit awards set forth next to his name in the “Exceptional” column.above.

 

(2)

One-third

One‑third of these awards vested on March 1, 2023, one‑third of these awards vest on March 1, 2021, one-third2024 and one‑third of these awards vest on March 1, 2022 and one-third of these awards vest on March 1, 2023,2025, provided that we continuously employ the recipient remains continuously employed by the Company through each such vesting date (except as set forth below) and the corresponding financial performance requirements are met. Except in the case of Mr. Bailly, any unvested stock unit awards shall terminate upon the cessation of a recipient’s employment with the Company.us. With respect to Mr. Bailly, in the event of a cessation of employment by the Companyus without Cause or by Mr. Bailly for Good Reason (as such terms are defined in his stock unit award agreement), all earned but unvested stock unit awards shall become immediately vested, regardless of such cessation of employment. In the event ofwe undergo a Change in Control of the Company (as defined in the stock unit award agreement evidencing the award) all earned but unvested stock unit awards held by each of the named executive officers shall become fully vested immediately prior to the effective date of such Change in Control.

 

Other Practices, Policies& Guidelines

 

Stock Ownership Guidelines—the Company haswe have adopted stock ownership guidelines for the named executive officers and independent directors. Under our stock ownership guidelines the Board has established a goal that (i) within five years after joining the Board, each non-employeenon‑employee director beneficially own Companyshares of our stock valued at three times his or her annual base cash retainer fee, (ii) within five years after being appointed to his or her position, the Chief Executive Officer beneficially own Companyshares of our stock valued at three times his or her base salary, and (iii) within five years after being appointed to his or her position, the other named executive officers beneficially own Companyshares of our stock valued at one times his or her base salary.

 

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Claw-back Policy—the Company haswe have adopted a policy that if the Company iswe are required to prepare an accounting restatement due to theour material noncompliance, of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, within the meaning of Section 304 of the Sarbanes-OxleySarbanes‑Oxley Act of 2002, the Company’sour Chief Executive Officer and Chief Financial Officer shall reimburse the Companyus for any incentive bonus, or other incentive award or any equity award or profit earned from the sale of Companyour securities, during the twelve-monthtwelve‑month period in which the financial statements applied.

 

18

Employee, Officer and Director Hedging—all Companyour personnel are prohibited from engaging in any of the following activities with respect to Companyour securities: (a) hedging or other similar arrangements with respect to the Company’sour securities, including, without limitation, (i) short sales and (ii) buying or selling puts or calls (excluding options granted by the Company)we have granted); and (b) holding Companyour securities in a margin account or pledging Companyour securities as collateral for a loan.

 

Deferred Compensation Plan—in 2006, the Companywe implemented the UFP Technologies Executive Nonqualified Excess Plan (the “Deferred Compensation Plan”). Under the Deferred Compensation Plan, named executive officers and other key employees are eligible to defer up to 90% of base salary and 100% of bonus and/or commissions into the plan. Investments of the deferrals are directed by the participants and returns on the deferrals are determined accordingly. Employer contributions into the Deferred Compensation Plan are discretionary and determined by the Compensation Committee. No employer contributions were made in 2019.2022.

 

Supplemental Disability Insurance—named executive officers receive long-termlong‑term disability insurance coverage to supplement the Company’sour group long-termlong‑term disability plan. The objective is to provide named executive officers with sufficient coverage to replace a significant portion of their wages in the event of disability. TheWe pay the premiums, are paid for by the Company andwhich amounted to approximately $24,607$42,460 in the aggregate for all named executive officers in 2019.2022.

 

Profit Sharing/401(k) Plan—all employees of UFP Technologies, Inc., including named executive officers, who meet certain criteria are eligible to participate in the UFP Technologies, Inc. 401(k) Plan (the “401(k) Plan”). Participants inFor 2022, the 401(k) Plan can defer up to 20% of their gross compensation, subject to IRS limitations, on a pre-tax basis. The Company matchesmatched employee deferrals at a discretionary rate, which was 50% of employee deferrals up to a maximum of 2% of an employee’s grosseligible wages in 2019. In addition, the Company may make an additional discretionary profit-sharing contribution which was approximately 1.2% of gross qualifying wages in 2019. No employee deferrals are required to receive an allocated portion of the profit-sharing contribution.2022.

 

Perquisites—the Company provideswe provide welfare benefits to itsour named executive officers with officer contributions consistent with contributions to other UFP employees. The Chief Executive Officer is also eligible for additional perquisites including club and marina fees, life insurance and Company paidcompany-paid tax preparation fees. These Chief Executive Officer perquisites are offered principally to facilitate the Chief Executive Officer’s role as a Companyour representative within the community, and to entertain customers.

 

Policy on Equity-BasedEquity‑Based Award Timing and Pricing

 

The Company’sOur Board of Directors adopted a policy whereby equity-basedequity‑based awards are only to be granted by majority vote of members of the Compensation Committee at a committee meeting. The Company’sOur 2003 Incentive Plan establishes fair market value as the closing price on the date of grant of any equity security, including stock options, granted pursuant to such plan.

 

Stockholder Advisory Vote on Executive Compensation

 

In reviewing our 20192022 compensation decisions and policies, we considered the results of our stockholders’ advisory vote to approve executive compensation, which was conducted at our 20192022 annual meeting of stockholders last June.stockholders. In the proxy statement provided to stockholders in connection with our 20192022 annual meeting, the Company’sour Board of Directors recommended that stockholders vote in favor of this proposal. The affirmative vote of a majority of the votes cast by the stockholders entitled to vote on this proposal at the 20192022 annual meeting was required for advisory approval of this proposal. Over 82%91% of such shares were voted to approve, on an advisory basis, our executive compensation. We considered this vote as supportive of our compensation decisions and policies.

 

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25

 

Compensation Committee Interlocks and Insider Participation

From January 1, 2022 through June 7, 2022, the Compensation Committee was comprised of Lucia Luce Quinn, Marc Kozin and Daniel C. Croteau. From June 8, 2022 through December 31, 2022, the Compensation Committee was comprised of Marc Kozin, Daniel C. Croteau and Joseph John Hassett. None of the members of the Compensation Committee were an employee or a current or former officer of the Company during such period. None of the Compensation Committee members had a relationship with the Company requiring disclosure during their service on the Compensation Committee.

Report of the Compensation Committee

The Compensation Committee of the Board of Directors of the Company has reviewed and discussed the foregoing Compensation Discussion and Analysis with management of the Company and, based on such review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

By the Compensation Committee of the Board of Directors:

Marc Kozin, Chair

Daniel C. Croteau

Joseph John Hassett


EXECUTIVE COMPENSATION

 

The following tables present information regarding compensation of each of the named executive officers for services rendered in fiscals 2019, 2018fiscal years 2022, 2021 and 2017.2020. A description of our compensation policies and practices as well as a description of the components of compensation payable to our named executive officers is included above.

 

SUMMARY COMPENSATION TABLE—2019, 2018, 2017TABLE

 

Name and Principal Position
Name and Principal PositionYear Salary($)(1)  

Discretionary

Bonus(2)

  Stock
Awards($)(3)		  Non Equity
Incentive Plan
Compensation
($)(4)		  All Other
Compensation
($)(5)		  Total 

R. Jeffrey Bailly

2022

 $650,000  $600,000  $1,980,200  $944,800  $125,557  $4,300,557 

President, Chief Executive Officer

2021

 $615,000   —  $1,145,947  $733,200  $125,354  $2,619,501 
 

2020

 $600,000   —  $633,370  $299,500  $132,510  $1,665,380 
                          

Ronald J. Lataille

2022

 $420,000   —  $470,300  $381,542  $26,474  $1,298,316 

Senior Vice President, Treasurer,

2021

 $370,000   —  $308,531  $180,000  $20,111  $878,642 

and Chief Financial Officer

2020

 $360,000   —  $137,500  $85,500  $26,578  $609,578 
                          

Mitchell C. Rock

2022

 $420,000   —  $470,300  $384,042  $25,921  $1,300,263 

President, MedTech

2021

 $355,000   —  $308,531  $171,000  $19,556  $854,087 
 

2020

 $345,000   —  $137,500  $81,300  $26,023  $589,823 
                          

Christopher P. Litterio

2022

 $338,000   —  $220,000  $247,321  $21,915  $827,236 

General Counsel, Secretary, and

2021

 $293,000   —  $151,892  $128,000  $15,551  $588,443 
Senior Vice President of Human Resources

2020

 $285,000   —  $75,000  $66,500  $22,018  $448,518 
                          

Steven G. Cardin

2022

 $310,000   —  $214,564  $108,500  $19,633  $652,697 

Vice President, Chief Operating Officer,

2021

 $295,000   —  $113,920  $110,000  $8,630  $527,550 

MedTech

2020

 $285,000   —  $30,000  $75,000  $8,401  $398,401 

(1)         On February 14, 2023, based upon the market competitive assessment performed by Aon in 2022, the Compensation Committee approved increases in the base salaries of Messrs. Bailly, Lataille, Rock, Litterio and Cardin to $680,000, $440,000, $440,000, $355,000 and $325,000, respectively, effective January 1, 2023.

Year

Salary($)(1)

Stock
Awards($)(2)

Non-Equity
Incentive Plan
Compensation
($)(3)

All Other
Compensation
($)(4)

Total

R. Jeffrey Bailly

President, Chief Executive Officer

2019

2018

2017

$580,000

$500,000

$485,000

$963,350

$692,800

$645,250

$699,782

$659,400

$450,950

$82,850

$89,878

$88,699

$2,325,982

$1,942,078

$1,669,899

Ronald J. Lataille

Senior Vice President,

Treasurer, Secretary and

Chief Financial Officer

2019

2018

2017

$345,000

$290,000

$280,000

$238,500

$122,000

$102,188

$165,000

$147,000

$116,000

$23,422

$23,504

$22,976

$771,922

$582,504

$521,164

Mitchell C. Rock

Senior Vice President of Sales and Marketing

2019

2018

2017

$330,000

$265,000

$255,000

$238,500

$122,000

$102,188

$159,000

$135,000

$103,000

$22,952

$23,050

$22,536

$750,452

$545,050

$482,724

William David Smith

Senior Vice President of

Operations

2019

2018

2017

$305,000

$265,000

$255,000

$143,140

$122,000

$102,188

$136,000

$125,000

$98,000

$26,537

$26,393

$25,442

$610,677

$538,393

$480,630

Christopher P. Litterio

Senior Vice President of Human Resources and General Counsel

2019

2018

2017

$275,000

$265,000

$34,325

$133,600

$102,188

$83,820

$123,000

$120,000

$0

$18,853

$17,298

$21,619

$550,453

$504,486

$139,764

(1)On February 24, 2020, the Compensation Committee approved increases in the base salaries of Messrs. Bailly, Lataille, Rock, Smith and Litterio to $600,000, $360,000, $345,000, $310,000 and $285,000, respectively, effective January 1, 2020.

(2)The amounts included in the “Stock Awards” column represent the grant date fair value of stock unit awards granted to the named executive officers. Amounts shown do not reflect compensation actually received by the named executive officer nor does it necessarily reflect the actual value that will be recognized by the named executive officer. Instead, the amount shown is the grant date fair value of restricted stock granted to the named executive officer computed in accordance with FASB ASC, Topic 718, Compensation—Stock Compensation. The assumptions used to calculate the value of restricted stock awards are set forth under Note 1(l)—Share-Based Compensation, to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. The grant date fair value is based upon the probable outcome of the performance conditions applicable to each award. Assuming the maximum share payout, which is earned when performance is at or above 115% of targeted Adjusted Operating Income, the grant date fair value of all stock awards granted in 2019 to each named executive officer would be as follows: for Mr. Bailly, $600,000; for Mr. Lataille, $250,000; for Mr. Rock, $250,000; for Mr. Smith $150,000 and for Mr. Litterio $140,000. In the case of Mr. Litterio, the amount also includes 15,000 stock options granted to him on December 13, 2017, with a strike price of $28.70, the closing price of the stock on that date. The $83,820 figure disclosed above was determined using the Black-Scholes model in accordance with FASB ASC, Topic 718, Compensation—Stock Compensation, using a per share stock price of $5.588. In the case of Mr. Bailly, the amount also includes a grant of 8,532 shares of Common Stock issued on December 18, 2019 at the closing price of $46.88 on that date with a grant date fair value of $400,000.

(3)Represents performance-based incentive bonuses earned in 2019, 2018 and 2017 that were paid in March 2020, 2019 and 2018, respectively.

(4)Represents Company payments for (i) club and marina fees and tax preparation services for Mr. Bailly in 2019, 2018 and 2017 and (ii) car allowances, supplemental disability premiums and 401(k) contributions for each of the named executive officers in 2019, 2018 and 2017 and life insurance premiums paid by the Company for Mr. Bailly in the amount of $44,500, $54,000 and $54,000 in each of 2019, 2018 and 2017, respectively.

 

(2)         Represents a discretionary bonus of $300,000 earned in 2022 that was paid in March 2023, as well as stock options with a value of $300,000. With respect to the stock options, on February 14, 2023, the Compensation Committee granted stock options to Mr. Bailly to purchase up to an aggregate of 7,935 shares of the Company’s common stock, consisting of 1,792 incentive stock options and 6,143 non-qualified stock options (each, a “2023 Bailly Option” and, collectively, the “2023 Bailly Options”). The exercise price of each Option is $111.54 per share and each 2023 Bailly Option has a term of five years. The 2023 Bailly Options are exercisable as follows: (i) 50% of the shares subject to each 2023 Bailly Option are exercisable on March 1, 2024 and (ii) the remaining 50% of the shares subject to each 2023 Bailly Option are exercisable on March 1, 2025.

20

 

27

(3)         The amounts included in the “Stock Awards” column represent the grant date fair value of stock unit awards granted to the named executive officers. Amounts shown do not reflect compensation actually received by the named executive officer nor does it necessarily reflect the actual value that will be recognized by the named executive officer. Instead, the amount shown is the grant date fair value of restricted stock granted to the named executive officer computed in accordance with FASB ASC, Topic 718, Compensation—Stock Compensation. The assumptions used to calculate the value of restricted stock awards are set forth under Note 1(l)—Share‑Based Compensation, to our consolidated financial statements included in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2022. The grant date fair value is based upon the probable outcome of the performance conditions applicable to each award. Because the maximum share payout was earned as actual Adjusted Operating Income exceeded 115% of targeted Adjusted Operating Income, the grant date fair value of all stock awards granted in 2022 to each named executive officer was as follows: for Mr. Bailly, $1,580,200; for Mr. Lataille, $470,300; for Mr. Rock, $470,300; for Mr. Litterio $220,000 and for Mr. Cardin, $150,000. In the case of Mr. Bailly, the amount also includes a grant of 3,494 shares of Common Stock issued on December 15, 2022 at the closing price of $114.47 on that date with a grant date fair value of $400,000. In the case of Mr. Cardin, the amount also includes a grant of 579 shares of Common Stock issued on February 14, 2023 at the closing price of $111.54 on that date with a grant date fair value of $64,566, for a portion of his performance-based incentive bonus that he chose to have paid in Company stock.

(4)         Represents performance‑based incentive bonuses earned in 2022, 2021 and 2020 that were paid in March 2023, 2022 and 2021, respectively.

(5)         Represents our payments for (i) 2022, 2021 and 2020, respectively, of tax preparation fees and club and marina fees for Mr. Bailly (club and marina fees in the amount of $27,515 in 2021); (ii) company-paid life insurance premiums for Mr. Bailly in the amount of $77,160 in each of 2022, 2021 and 2020 and (iii) car allowances, supplemental disability premiums, excess personal liability insurance premiums and 401(k) contributions for each of the named executive officers in 2022, 2021 and 2020.

28

Employment Contract

 

On October 8, 2007, the Companywe entered into an employment agreement with Mr. Bailly, the Company’sour President and Chief Executive Officer and the Chairman of the Company’sour Board of Directors. The employment agreement is terminable by either party at any time, as provided below. On March 2, 2011, the Company and Mr. Bailly executed an amendment to the employment agreement.was amended. Pursuant to the terms of the amendment, effective January 1, 2012, Mr. Bailly’s annual salary increased from not less than $300,000 to not less than $350,000, and the Annual Stock Grant Award (as defined below) changed from 25,000 shares of the Company’sour Common Stock to $300,000 worth of shares of the Company’sour Common Stock. On February 18, 2013 the Company and Mr. Bailly executed another amendmentemployment agreement was again amended to the employment agreement. Pursuant to the terms of the amendment,provide that effective January 1, 2013, Mr. Bailly’s annual salary increased from not less than $350,000 to not less than $450,000, and the Annual Stock Grant Award changed from $300,000 worth of shares of the Company’sour Common Stock to $400,000 worth of shares of the Company’sour Common Stock. The amendment also eliminated the income tax gross-upgross‑up on the Annual Stock Grant Award contemplated by the original employment agreement.

 

As amended, the employment agreement provides that Mr. Bailly will receive a minimum annual salary of $450,000 and consideration for discretionary bonuses. Pursuant to the agreement, Mr. Bailly will receive an annual stock grant award (the “Annual Stock Grant Award”) each year entitling him to receive on or before December 31 (the “Issue Date”) of each year an aggregate of $400,000 worth of shares of the Company’sour Common Stock, provided that Mr. Bailly remains employed with the Companyus through the Issue Date of each such year. Annual Stock Grant Awards are to be made under the Company’sour 2003 Incentive Plan.

 

Mr. Bailly’s employment agreement prohibits him from competing with the Companyus for a period of eighteen months following the termination of his employment for any reason. The employment agreement provides Mr. Bailly with certain other benefits, including the opportunity to participate in the Company’sour stock plans, fringe benefit plans and other employment benefits as may be generally available to our senior executives, of the Company, as well as for the direct payment or reimbursement of tax preparation fees, a car allowance, certain dues and fees relating to club memberships and other fringe benefits.

 

Under the terms of his employment agreement, if (i) if we terminate Mr. Bailly’s employment with the Company is terminated by the Company without Cause (as defined in the agreement), (ii) Mr. Bailly terminates his employment with the Company for Good Reason (as defined in the agreement), or (iii) Mr. Bailly voluntarily terminates his employment within six months of aour Change in Control (as defined in the agreement) of the Company,, then the Company iswe are required to pay Mr. Bailly a lump sum amount equal to three times his average annual compensation for the two years preceding such termination. The employment agreement defines “average annual compensation” as including aggregate base salary, the Annual Stock Grant Award, and bonus compensation earned in such years. However, any termination payment to Mr. Bailly shall be limited to an amount that would not result in the imposition of an excise tax or denial of a tax deduction for the Companyus under the tax code’s golden parachute rules. The agreement also provides that in the event of (i) aour Change in Control of the Company or (ii) our termination of Mr. Bailly’s employment by the Company without Cause, or by Mr. Bailly for Good Reason, then (x) any shares in the Annual Stock Grant Award not issued to Mr. Bailly to which he would otherwise be entitled as of the next Issue Date following such Change in Control or such termination will be immediately issued to him and (y) any of Mr. Bailly’s other earned but unvested Stock Rights (as defined in the employment agreement) will immediately vest in full. If Mr. Bailly’s employment with the Company is terminated by the Companyus without Cause, or if Mr. Bailly terminates his employment with the Companyus for Good Reason, the Companywe will continue to pay Mr. Bailly’s health insurance for up to thirty-sixthirty‑six months.

 

29

Grants of Plan-Based Awards—2022

   

Estimated Possible
Payouts Under
Equity Incentive Plan Awards

                 

Name

Grant Date

 

Threshold
(#)

  

Target
(#)

  

Maximum
(#)

  

All Other
Stock Awards:
Number of
Shares of
Stock or
Units (#)

  

All Other
Option Awards:
Number of
Securities
Underlying
Options (#)

  

Exercise or Base
Price of

Option Awards
($/Sh)

  

Grant Date
Fair Value Of
Stock and

Option
Awards
($)(1)

 

R. Jeffrey Bailly(2)(3)

2/15/2022

  7,075   14,150   21,225   —   —   —  $1,580,200 

R. Jeffrey Bailly(4)

12/15/2022

  —   —   —   3,494   —   —  $400,000 

Ronald J. Lataille(2)(3)

2/15/2022

  3,158   4,737   6.316   —   —   —  $470,300 

Mitchell C. Rock(2)(3)

2/15/2022

  3,158   4,737   6.316   —   —   —  $470,300 

Christopher P. Litterio(2)(3)

2/15/2022

  1,478   2,217   2,956   —   —   —  $220,000 

Steven G. Cardin(2)(3)

2/15/2022

  1,007   1,511   2,015   —   —   —  $150,000 

(1)         Amount shown does not reflect compensation actually received by the named executive officer nor does it necessarily reflect the actual value that will be recognized by the named executive officer. Instead, the amount shown is the grant date fair value of restricted stock and stock options granted to the named executive officer computed in accordance with FASB ASC, Topic 718, Compensation—Stock Compensation. The assumptions used to calculate the value of restricted stock awards and stock options are set forth under Note 1(l)—Share‑Based Compensation, to our consolidated financial statements included in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2022.

(2)         Reflects grants of stock unit awards to the named executive officers pursuant to our 2003 Incentive Plan. These stock unit awards are subject to a (i) time‑based vesting requirement and (ii) our financial performance objectives, which are discussed in footnote 3 below and above under “Compensation Discussion and Analysis.” One‑third of these awards vested on March 1, 2023, one‑third of these awards vest on March 1, 2024 and one‑third of these awards vest on March 1, 2025, provided that the recipient remains continuously employed by us through each such vesting date and, for the amounts disclosed under the target and maximum columns, the corresponding financial performance requirement is met. Recipients of the stock unit awards will have no rights as stockholders, including, without limitation, the right to vote or to receive dividends, until and to the extent such stock unit awards have vested and the issuance of the shares of Common Stock in respect of the stock unit awards has been appropriately evidenced. Except in the case of Mr. Bailly, any unvested stock unit awards shall terminate upon the cessation of a recipient’s employment with us. With respect to Mr. Bailly, in the event of a cessation of employment by us without Cause or by Mr. Bailly for Good Reason (as such terms are defined in his stock unit award agreement), all earned but unvested stock unit awards shall become immediately exercisable, regardless of such cessation of employment. In the event of our Change in Control (as defined in the stock unit award agreement evidencing the award) on or after January 1, 2023, all earned but unvested stock unit awards held by each of the named executive officers shall become fully vested immediately prior to the effective date of such change in control.

30

(3)         The Threshold stock unit awards are subject to time vesting only. The Target and Maximum stock unit awards are also subject to financial performance objectives, established by the Compensation Committee as the achievement of 100% and 115%, respectively, of our targeted Adjusted Operating Income for fiscal 2022 of $32,821,000. The amounts in Threshold, Target and Maximum columns are cumulative; the “Target” award amount includes the full amount of the “Threshold” award amount, and the “Exceptional” award amount includes the full amount of both the “Threshold” and “Target” Amounts. Based upon our achievement of $45,863,786 in actual Adjusted Operating Income for our 2022 fiscal year, the Compensation Committee determined that both the Target goal and the Maximum goal had been fully achieved. Accordingly, each named executive officer earned the number of stock unit awards set forth next to his name in the Maximum columns above.

(4)         In accordance with the terms of Mr. Bailly’s employment agreement, these shares were approved for Mr. Bailly by the Compensation Committee on February 15, 2022 and granted and issued on December 15, 2022, valued at $114.47 per share, the closing price of the Common Stock on the date of issuance. The grant was for a fixed dollar amount of $400,000, with the number of shares to be determined on the date of issuance based upon the closing price on that date.

Outstanding Equity Awards at Fiscal 2019 Year-End2022 Year‑End

 

  Option Awards Stock Awards
Name Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable		 Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable		 Option
Exercise
Price
($)(1)		 Option
Expiration
Date		 Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)		 Market Value
of Shares or
Units of
Stock That
Have Not
Vested
($)(3)
R. Jeffrey Bailly — — — — 36,024(4) $1,787,151
Ronald J. Lataille — — — — 15,125(5) $750,351
Mitchell C. Rock — — — — 15,125(5) $750,351
William David Smith — — — — 12,231(6) $606,780
Christopher P. Litterio 6,250(7) 3,750(7) $28.70 12/13/2022 8,219(8) $404,745

(1)Exercise prices for all options granted to the named executive officers represent the closing price of the Common Stock on the date of grant.
  

Option Awards

  

Stock Awards

 

Name

 

Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable

  

Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable

  

Option
Exercise
Price
($)(1)

  

Option
Expiration
Date

  

Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)

  

Market Value
of Shares or
Units of
Stock That
Have Not
Vested
($)(3)

 

R. Jeffrey Bailly

  —   —   —   —   40,168(4) $4,735,406 

Ronald J. Lataille

  —   —   —   —   14,755(5) $1,739,467 

Mitchell C. Rock

  —   —   —   —   14,755(5) $1,739,467 

Christopher P. Litterio

  —   —   —   —   7,371(6) $868,967 

Steven G. Cardin

  —   —   —   —   3,648(7) $430,063 

(1)         Exercise prices for all options granted to the named executive officers represent the closing price of the Common Stock on the date of grant.

 

(2)Represents unvested stock unit awards granted pursuant to the Company’s 2003 Incentive Plan.

(2)         Represents unvested stock unit awards granted pursuant to our 2003 Incentive Plan.

 

(3)The market value of the stock unit awards that have not vested is calculated using the closing price of the Common Stock at the end of the Company’s last completed fiscal year. Accordingly, this value was determined based on the closing price of the Common Stock as of December 31, 2019, which was $49.61.

(3)         The market value of the stock unit awards that have not vested is calculated using the closing price of the Common Stock at the end of our last completed fiscal year. Accordingly, this value was determined based on the closing price of the Common Stock as of December 30, 2022, which was $117.89.

 

(4)Includes (i) 8,952 stock unit awards that vested on March 1, 2020, (ii) 12,341 stock unit awards that vest on March 1, 2021, (iii) 9,032 stock unit awards that vest on March 1, 2022 and (iv) 5,699 stock awards that vest on March 1, 2023.
31

 

(5)Includes (i) 3,731 stock unit awards that vested on March 1, 2020, (ii) 5,182 stock unit awards that vest on March 1, 2021, (iii) 3,799 stock unit awards that vest on March 1, 2022 and (iv) 2,413 stock awards that vest on March 1, 2023.

(4)         Includes (i) 19,395 stock unit awards that vested on March 1, 2023, (ii) 13,696 stock unit awards that vest on March 1, 2024 and (iii) 7,077 stock unit awards that vest on March 1, 2025.

 

(6)Includes (i) 3,731 stock unit awards that vested on March 1, 2020, (ii) 4,217 stock unit awards that vest on March 1, 2021, (iii) 2,835 stock unit awards that vest on March 1, 2022 and (iv) 1,448 stock awards that vest on March 1, 2023.

(5)         Includes (i) 7,530 stock unit awards that vested on March 1, 2023, (ii) 5,119 stock unit awards that vest on March 1, 2024 and (iii) 2,106 stock unit awards that vest on March 1, 2025.

 

(7)Represents the amount of shares of common stock underlying unexercised stock options granted to him on December 13, 2017 that were exercisable and unexercisable, respectively, as of December 31, 2019.

(6)         Includes (i) 3,868 stock unit awards that vested on March 1, 2023, (ii) 2,517 stock unit awards that vest on March 1, 2024 and (iii) 986 stock unit awards that vest on March 1, 2025.

 

(8)Includes (i) 1,389 stock unit awards that vested on March 1, 2020, (ii) 2,741 stock unit awards that vest on March 1, 2021, (iii) 2,738 stock unit awards that vest on March 1, 2022 and (iv) 1,351 stock awards that vest on March 1, 2023.

(7)         Includes (i) 1,589 stock unit awards that vested on March 1, 2023, (ii) 1,388 stock unit awards that vest on March 1, 2024 and (iii) 671 stock unit awards that vest on March 1, 2025.

Option Exercises and Stock Vested—2022

  

Option Awards

  

Stock Awards

 

Name

 

Number of
Shares Acquired
on Exercise
(#)

  

Value Realized
on Exercise
($)

  

Number of
Shares Acquired
on Vesting(1)
(#)

  

Value Realized
on Vesting(2)
($)

 

R. Jeffrey Bailly

  —   —   15,654  $1,048,818 

Ronald J. Lataille

  —   —   6,812  $456,404 

Mitchell C. Rock

  —   —   6,812  $456,404 

Christopher P. Litterio

  —   —   4,270  $286,090 

Steven G. Cardin.

  —   —   1,047  $71,669 

(1)         On March 1, 2022, previously issued stock unit awards covering 15,654, 6,812, 6,812, 4,270, and 917 shares of our Common Stock vested in full for each of Messrs. Bailly, Lataille, Rock, Litterio and Cardin, respectively. The value realized upon the vesting of the stock unit awards is based upon the closing price of $67.00 on March 1, 2022. On June 3, 2022, previously issued stock unit awards covering 130 shares of our Common Stock vested in full for Mr. Cardin. The Value realized upon the vesting of the stock unit awards is based upon the closing price of $78.69 on June 3, 2022.

(2)         Value realized is calculated based on the number of shares vested multiplied by the closing price of our Common Stock on the date of vesting. This calculation does not account for shares withheld for tax purposes, but rather, represents the gross value realized.

32

Nonqualified Deferred Compensation—2022

Name

 

Executive
Contributions
in Last FY
($)(1)

  

Company
Contributions
in Last FY
($)

  

Aggregate
Earnings
in Last FY
($)(2)

  

Aggregate
Withdrawals/
Distributions
($)

  

Aggregate
Balance at
12/31/2022
($)(3)

 

R. Jeffrey Bailly

 $50,000   —  $(161,922)  —  $521,412 

Ronald J. Lataille

  —   —   —   —   — 

Mitchell C. Rock

  —   —  $(67,619)  —  $910,485 

Christopher P. Litterio

  —   —   —   —   — 

Steven G. Cardin

 $126,295   —  $(58,240)  —  $279,285 

(1)         Represents amounts contributed into the Deferred Compensation Plan by each named executive officer. Such amounts are included in the Summary Compensation Table in the “Salary” column for 2022.

(2)         These amounts are not included in the Summary Compensation table because plan earnings were not preferential or above market.

(3)         The following amounts are included in the fiscal year-end balance and previously were reported as compensation to the following officers in the Summary Compensation Table: Mr. Bailly, $391,868; Mr. Rock, $340,341; and Mr. Cardin, $281,609.

 

Potential Payments upon Termination or Change of Control and Severance Plans

 

Mr. Bailly may be entitled to payment upon his termination or upon aour change of control of the Company, as described above under “Employment Contract.”control. Under the terms of his employment agreement, if (i) we terminate Mr. Bailly’s employment with the Company is terminated by the Company without Cause (as defined in the agreement), (ii) Mr. Bailly terminates his employment with the Companyus for Good Reason (as defined in the agreement), or (iii) Mr. Bailly voluntarily terminates his employment within six months of a Change in Control (as defined in the agreement) of the Company,, then the Company iswe are required to pay Mr. Bailly a lump sum amount equal to three times his average annual compensation for the two years preceding such termination. The employment agreement defines “average annual compensation” as including aggregate base salary, the Annual Stock Grant Award, and bonus compensation earned in such years. However, any termination payment to Mr. Bailly shall be limited to an amount that would not result in the imposition of an excise tax or denial of a tax deduction for the Companyus under the tax code’s golden parachute rules. Accordingly, assuming the triggering event occurred on December 31, 2019,2022, Mr. Bailly would have been entitled to receive a lump sum payment of $4,344,881.$6,064,500. Additionally, if we terminate Mr. Bailly is terminated by the Company without Cause or if he terminates his employment for Good Reason, he is also entitled to extended health insurance benefits for a period of up to thirty-sixthirty‑six months. Assuming a December 31, 20192022 triggering date, Mr. Bailly would have been entitled to receive health insurance benefits valued at $33,850.$28,683. The agreement also provides that in the event of (i) aour Change in Control of the Company or (ii) our termination of Mr. Bailly’s employment by the Company without Cause, or by Mr. Bailly for Good Reason, then (x) any shares in the Annual Stock Grant Award not issued to Mr. Bailly to which he would otherwise be entitled as of the next Issue Date following such Change in Control or such termination will be immediately issued to him and (y) any of Mr. Bailly’s other earned but unvested Stock Rights (as defined in the employment agreement) will immediately vest in full. Assuming a December 31, 20192022 triggering date, Mr. Bailly would have been entitled to receive vested equity valued at $1,787,101$3,067,262 calculated based on the closing price of the Common Stock as of December 31, 2019,30, 2022, which was $49.61.$117.89.

33

Each of the outstanding stock unit awards between the Company and Messrs. Lataille, Rock, Litterio and Cardin become vested upon a change of control, as defined in our 2003 Incentive Plan, provided that such officer was employed as of the date immediately prior to the effective date of such change in control. Subject to attainment of the performance objectives contained in each award, the stock unit awards will vest at the applicable threshold, target and maximum amounts. Assuming a December 31, 2022 triggering date, Messrs. Lataille, Rock, Litterio and Cardin would have been entitled to receive vested equity valued at $1,367,170, $1,367,170, $694,726 and $311,230 respectively, calculated based on the closing price of the Common Stock as of December 30, 2022, which was $117.89.

 

In September 1993, the Companywe adopted a policy that all executive officers of the Company not otherwise a party to an employment agreement with the Companyus will receive a severance benefit should we terminate the employee’s employment with the Company be terminated by the Company other than for cause in connection with aour 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 Companyus up to a maximum of 18 months. Accordingly, assuming termination on December 31, 2019,2022, such named executive officers would have been entitled to the following payments:

 

Name

 

Severance
Payment ($)

 

Ronald J. Lataille

 $630,000 

Mitchell C. Rock

 $630,000 

Christopher P. Litterio

 $253,500 

Steven G. Cardin

 $180,833 

Equity Compensation Plan Information

The following table discloses the securities authorized for issuance under our stock incentive plans as of December 31, 2022.

Plan Category

 

Number of
Securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights
(a)

  

Weighted‑average
exercise price of
outstanding options,
warrants and rights
(b)

  

Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a))
(c)

 

Equity compensation plans approved by security holders(1)

  190,523  $39.98   870,615 

Equity compensation plans not approved by security holders

  —   —   — 

Total

  190,523  $39.98   870,615 

Name Severance
Payment ($)
Ronald J. Lataille

(1)

$517,500
Mitchell C. Rock$495,000
William David Smith$254,167
Christopher P. Litterio$137,500

Includes our 2003 Incentive Plan and 2009 Non‑Employee Director Stock Incentive Plan.

 

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22

Director Compensation—2019CEO Pay Ratio

 

Beginning in June 2019,In accordance with rules adopted pursuant to the Dodd-Frank Act of 2010, we are required to calculate and disclose the total compensation paid to our median employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to Mr. Bailly, our President and CEO. We identified the median employee based on the year-to-date gross pay of our full-time, part-time, seasonal and temporary employees as of October 7, 2022. The only assumptions, adjustments, or estimates that we made to year-to-date gross pay was annualizing the gross pay for any full-time and part-time employees who were not employed for the fiscal year ended December 31, 2019, non-employeeentire year. We believe that this is a consistently applied compensation measure to identify the median employee. The adjusted gross pay for all employees, other than Mr. Bailly, were ranked highest to lowest in order to determine the median employee. For purposes of reporting annual total compensation and the ratio of annual total compensation of the CEO to the median employee, both the CEO and median employee’s annual total compensation were calculated consistent with the disclosure requirements of executive compensation under Item 402(c)(2)(x) of Regulation S-K. The annual total compensation for the median employee selected in this analysis was $5,782. The annual total compensation for 2022 for Mr. Bailly was $4,300,557 as reported under the heading “Summary Compensation Table.” For 2022, the ratio of the median employee’s annual total compensation to Mr. Bailly’s annual total compensation was 744:1. In accordance with the SEC rules, the CEO pay ratio calculation included 1,435 employees from Costa Rica and the Dominican Republic, where such wages, on average, are lower than that of our US employees. If our Costa Rica and Dominican Republic based employees were excluded from such calculation, the CEO pay ratio would have been 108:1.

Pay Versus Performance

The following table illustrates certain information about executive compensation for the Company’s Principal Executive Officer (“PEO”) and other named executive officers (NEOs) as well as certain performance measures against which compensation information can be compared. This disclosure has been prepared in accordance with Item 402(v) of Regulation S-K of the Exchange Act and does not necessarily reflect value actually realized by our NEOs or how our Compensation Committee evaluates compensation decisions in light of Company or individual performance. Please refer to the “Compensation Discussion and Analysis” for a discussion of our executive compensation program, its objectives, and the ways in which we align executive compensation with Company performance.

 

 

 

  

 

  

 

  

 

  

Value of initial fixed $100 investment based on:

  

 

  

 

 
Year  Summary
compensation
table total for PEO 		    Compensation
actually paid
to PEO		    Average
summary
compensation
table total for
non-PEO named
executive
officers		    Average
compensation
actually paid
to non-PEO named
executive
officers		  

Total
shareholder
return

  

Peer group
total
shareholder return

    Net income    Adjusted Operating Income (1) 

2022

 $4,300,557  $7,537,092  $1,019,628  $1,818,787  $237.60  $92.94  $41,789,243  $45,862,786 

2021

 $2,619,501  $4,461,268  $712,181  $1,183,984  $141.62  $106.69  $15,885,720  $21,364,112 

2020

 $1,665,380  $2,056,464  $460,442  $557,268  $93.93  $99.30  $13,368,880  $16,731,467 

(1)         Adjusted Operating Income is operating income as adjusted to disregard (i) non‑recurring restructuring charges related to plant closings and consolidations and (ii) the impact of acquired or disposed of operations.

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DIRECTOR COMPENSATION

From July 1, 2021 through June 30, 2022, our non‑employee directors annually received: (i) an annuala retainer of $115,000, with a $45,000 cash component and a $70,000 equity component, payable 50% in the form of restricted stock unit awards (“RSU’s”) that vest on May 31 of the following year and 50% in the form of stock options that become exercisable on May 31 of the following year, (ii) an annual audit committee retainer of $9,000 in cash, with an additional $11,000 for the non-employeenon‑employee director serving as audit committee chair, (iii) an annuala compensation committee retainer of $6,000 in cash, with an additional $9,000 for the non-employee director serving as compensation committee chair, (iv) reimbursement of expenses for each meeting physically attended, and (v) an annuala lead independent director retainer of $15,000 for the individual serving in that position. Mr. Kozin currently serves

Effective July 1, 2022, our non‑employee directors annually receive: (i) a retainer of $155,000, with a $55,000 cash component and a $100,000 equity component, payable 50% in the form of restricted stock unit awards (“RSU’s”) that vest on May 31 of the following year and 50% in the form of stock options that become exercisable on May 31 of the following year, (ii) an audit committee retainer of $9,000 in cash, with an additional $11,000 for the non‑employee director serving as audit committee chair, (iii) a compensation committee retainer of $6,000 in cash, with an additional $9,000 for the Lead Independent Director,non-employee director serving as compensation committee chair, (iv) reimbursement of expenses for each meeting physically attended, and (v) a position he has held since January 2015. lead independent director retainer of $25,000 for the individual serving in that position.

There was no additional compensation paid for services to the nominating committee.committee in fiscal year 2022.

 

Under our stock ownership guidelines, the Board has established a goal that, within five years after joining the Board, each non-employeenon‑employee Board member beneficially own Companyshares of our stock valued at three times his or her annual base cash retainer fee.

 

Name Fees Earned or
Paid in Cash
($)		 Stock
Awards
($)(1)		 Option
Awards
($)(2)(3)		 Total
($)
Marc Kozin 51,750 35,000 35,000 121,750
Thomas Oberdorf 42,000 35,000 35,000 112,000
Robert W. Pierce, Jr. 42,000 35,000 35,000 112,000
Lucia Luce Quinn 46,250 35,000 35,000 116,250
Daniel C. Croteau 40,500 35,000 35,000 110,500
Cynthia L. Feldmann 48,750 35,000 35,000 118,750
(1)On June 5, 2019 the Company granted to each continuing non-employee director who resided on the Board at that date, free of any restrictions, 907 RSU’s with a value equal to approximately $35,000, calculated using the $38.61 closing price of the Common Stock on the date of grant. Amounts reflected in the table represent the grant date fair value of the stock computed in accordance with FASB ASC, Topic 718, Compensation—Stock Compensation.

The table below summarizes the compensation paid to each of our non-employee directors. For a summary of the compensation earned by Mr. Bailly, our President, Chief Executive Officer and Chairman of the Board of Directors, see the “Executive Compensation” section above.

 

(2)On June 5, 2019 the Company granted to each continuing non-employee director who resided on the Board at that date, 2,756 non-qualified stock options to acquire Common Stock. Each option is exercisable in its entirety on May 31, 2020 and has a ten-year life with an exercise price of $38.61, the closing price of the Company’s Common Stock on the date of grant. Amounts reflected in the table represent the grant date fair value of the stock options computed in accordance with FASB ASC, Topic 718, Compensation—Stock Compensation.

Name

 

Fees Earned or
Paid in Cash
($)

  

Stock
Awards
($)(1)

  

Option
Awards
($)(2)(3)

  

Total
($)

 

Marc Kozin

 $60,500  $50,000  $50,000  $160,500 

Thomas Oberdorf

 $59,000  $50,000  $50,000  $159,000 

Robert W. Pierce, Jr. (4)

 $27,000   —   —  $27,000 

Lucia Luce Quinn (4)

 $30,000   —   —  $30,000 

Daniel C. Croteau

 $76,000  $50,000  $50,000  $176,000 

Cynthia L. Feldmann

 $70,000  $50,000  $50,000  $170,000 

Joseph John Hassett

 $30,500  $50,000  $50,000  $130,500 

Symeria Hudson

 $32,000  $50,000  $50,000  $132,000 

(1)         On June 8, 2022 we granted to each continuing non‑employee director who served on the Board at that date, free of any restrictions, 647 RSU’s with a value equal to approximately $50,000, calculated using the $77.28 closing price of the Common Stock on the date of grant. Amounts reflected in the table represent the grant date fair value of the stock computed in accordance with FASB ASC, Topic 718, Compensation—Stock Compensation.

 

(3)Messrs. Kozin, Oberdorf, Pierce and Croteau and Ms. Quinn and Ms. Feldmann had outstanding Option Awards at December 31, 2019 of 18,989, 25,396, 18,989, 10,718, 14,986 and 6,536, respectively.
36

 

(2)         On June 8, 2022 we granted to each continuing non‑employee director who served on the Board at that date, 1,646 non‑qualified stock options to acquire Common Stock. Each option is exercisable in its entirety on May 31, 2023 and has a ten‑year life with an exercise price of $77.28, the closing price of our Common Stock on the date of grant. Amounts reflected in the table represent the grant date fair value of the stock options computed in accordance with FASB ASC, Topic 718, Compensation—Stock Compensation.

(3)         Messrs. Kozin, Oberdorf, Pierce, Croteau and Hassett and Mses. Quinn, Feldmann and Hudson had outstanding Option Awards at December 31, 2022 of 8,670, 21,550, 18,677, 16,632, 1,646, 10,804, 12,450 and 1,646, respectively.

(4)          Mr. Pierce and Ms. Quinn did not stand for re-election at the 2022 Annual Meeting of Stockholders and, as a result, their compensation for 2022 shown above represents compensation for a partial year of service.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

Policy for Review and Approval of Related Party Transactions

The Company’s Audit Committee reviews and approves all related-party transactions involving executive officers and directors. The Company has a written policy governing the review of related party transactions, which are defined as those transactions or series of similar transactions where (i) the aggregate amount involved exceeds $120,000 in any calendar year, (ii) the Company is a participant, and (iii) any related party has or will have a direct or indirect material interest in the transaction (other than solely as a result of being a director or a less than ten percent beneficial owner of another entity). Any transactions directly or indirectly involving any related party is subject to the review and approval process described in the policy.

Related Party Transactions

R. Jeffrey Bailly. In fiscal 2019,2022, we paid Mr. Bailly’s brother compensation in the aggregate amount of approximately $157,666,$188,630, which primarily consisted of salary and of benefits available to all employees, for services rendered to the Companyus in his capacity as Director, Corporate Estimating.

 

EQUITY COMPENSATION PLAN INFORMATION


 

The following table discloses the securities authorized for issuance under the Company’s stock incentive plans as of December 31, 2019.


Plan Category Number of
Securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights
(a)		 Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)		 Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a))
(c)
Equity compensation plans approved by security holders(1) 214,038 $25.34 882,892
Equity compensation plans not approved by security holders — — —
Total 214,038 $25.34 882,892
(1)Includes the Company’s 2003 Incentive Plan and 2009 Non-Employee Director Stock Incentive Plan.

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PROPOSAL NO. 32

ADVISORY VOTE ON EXECUTIVE COMPENSATION

 

This advisory vote on executive compensation is provided as required pursuant to Section 14A of the Securities Exchange Act of 1934, as amended. The Company isWe are seeking the approval by itsour stockholders of a non-bindingnon‑binding advisory resolution to approve the compensation of our named executive officers, as disclosed in this proxy statement under the section titled “Executive Officer and Director Compensation” and “Executive Compensation.” While this stockholders’ vote on executive compensation is only an advisory vote that is not binding on the Companyus or theour Board of Directors, the Company valueswe value the opinions of itsour stockholders and will consider the outcome of the vote when making future compensation decisions.

 

As described more fully above under “Executive Officer and Director Compensation,” the primary objective of our executive compensation program is to attract, retain and reward executive officers who contribute to our long-termlong‑term success. We believe this requires a competitive compensation structure as compared to companies of a similar size in the same or similar industries. Additionally, we seek to align a significant portion of executive officer compensation to the achievement of our specified Company performance goals. Incentive cash bonuses are included to drive executive performance by having pay at risk so that a significant portion of potential annual cash compensation is tied to profitability targets. We also include performance-basedperformance‑based restricted stock awards with a time-basedtime‑based vesting component as a significant element of prospective executive compensation so that the value of a portion of an executive’s compensation is dependent upon both company-widecompany‑wide performance measures and continued employment.

 

We urge stockholders to read the Executive Officer and Director Compensation, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and the related compensation tables and narrative above which provide detailed information on the compensation of our named executive officers.

 

In light of the above, the Compensation Committee and the Board of Directors believe that the policies and procedures articulated in the Executive Officer and Director Compensation are effective in achieving our goals and that the compensation of our named executive officers reported in this proxy statement has supported and contributed to the Company’sour success. To that end, we will ask our stockholders to vote “FOR” the following resolution at the Meeting:

 

RESOLVED, that the compensation paid to the named executive officers, as disclosed in this Proxy Statement pursuant to the SEC’sSEC’s executive compensation disclosure rules (which disclosure includes the Executive Officer and Director Compensation section, the compensation tables, and the narrative disclosures that accompany the compensation tables), is hereby APPROVED.

 

Principal Effects of Approval or Non-ApprovalNon‑Approval of the Proposal

 

The approval of the compensation of the named executive officers, commonly known as a “say-on-pay”“say‑on‑pay” resolution, is non-bindingnon‑binding on the Board of Directors. As stated above, although the vote is non-binding,non‑binding, the Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program.

 

It is the Company’sour current intention to provide stockholders with an opportunity to approve, on a non-bindingnon‑binding advisory basis, the compensation of the named executive officers each year at the annual meeting of stockholders. It is expected that the next such vote will occur at the 20212024 annual meeting of stockholders.

 

38

 

Vote Required

 

The non-bindingnon‑binding approval of the compensation of the named executive officers by the stockholders requires the approval of a majority of the votes cast by the stockholders entitled to vote on this proposal at the Meeting. Abstentions and broker non-votesnon‑votes will not be treated as votes cast for this purpose and will not affect the outcome of the vote.

 

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THIS RESOLUTION.

 

 

 

25

 


PROPOSAL NO. 3

AMENDED AND RESTATED CHARTER

We are asking our stockholders to consider and vote upon a proposal to amend and restate the Company’s Restated Certificate of Incorporation (the “Certificate of Incorporation”) by adopting the Amended and Restated Certificate of Incorporation in the form attached hereto as Annex A (the “Amended and Restated Charter”) to (i) add a provision exculpating certain of the Company’s officers from liability in specific circumstances, as permitted by Delaware law, (ii) remove all references to Series A Junior Participating Preferred Stock and (iii) to make clarifying technical amendments to certain definitions.

Officer Exculpation

The State of Delaware, which is the Company’s state of incorporation, recently enacted legislation that enables Delaware companies to limit the liability of certain of their officers in limited circumstances. In light of this update, we are proposing to amend and restate the Certificate of Incorporation to, among other things, add a provision exculpating certain of the Company’s officers from liability in specific circumstances, as permitted by Delaware law. The new Delaware legislation only permits, and the proposed Amended and Restated Charter  would only permit, exculpation for direct claims (as opposed to derivative claims made by stockholders on behalf of the Company) and would not apply to breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. The rationale for so limiting the scope of liability is to strike a balance between stockholders’ interest in accountability and their interest in the Company being able to attract and retain quality officers to work on its behalf.

The Board of Directors believes that there is a need for officers to remain free of the risk of financial ruin as a result of an unintentional misstep. Further, the Board of Directors noted that the amendments to the Certificate of Incorporation would not negatively impact stockholder rights. Therefore, taking into account the narrow class and type of claims for which officers’ liability would be exculpated, and the benefits the Board of Directors believes would accrue to the Company and its stockholders in the form of an enhanced ability to attract and retain talented officers, the Board of Directors recommended to amend and restate the Certificate of Incorporation to provide such exculpation to the extent permitted by Delaware law.

Removal of Series A Junior Participating Preferred Stock

On March 20, 2009, the Company amended its then current Certificate of Incorporation by filing an Amended and Restated Certificate of Designation of Series A Junior Participating Preferred Stock which, among other things, created a class of 20,000 shares of Series A Junior Participating Preferred Stock, par value $0.01 per share, of the Company (the “Series A Junior Participating Preferred Stock”). The shares of Series A Junior Participating Preferred Stock were designated and issuable in connection with the Company’s former stockholder rights plan. The Company’s stockholder rights plan expired on March 19, 2019 and no rights issued under that plan were exercised. As a result, the Board concluded it is no longer necessary to have any shares of Series A Junior Participating Preferred Stock designated under the Certificate of Incorporation. The Board of Directors’ powers to issue and designate future series or classes of preferred stock remain unchanged in the Amended and Restated Charter.

Other Technical Amendments

Finally, the Amended and Restated Charter changed the definition of the Merger Date to insert November 15, 1993 rather than a formulaic date, making it easier to determine at a glance the meaning of Merger Date. This simplified Merger Date definition also enabled some clarifying changes to the term Related Person in the Amended and Restated Charter.

In light of the foregoing, the Board of Directors determined that it is advisable and in the best interests of the Company and our stockholders to amend and restate the Certificate of Incorporation as described herein.

The general description of the proposed Amended and Restated Charteris qualified in its entirety by reference to the Amended and Restated Charter, which is attached hereto as Annex A.

Accordingly, we ask our stockholders to vote on the following resolution:

“RESOLVED, that the Amended and Restated Charter in the form attached hereto as Annex A is hereby approved.”

If the proposed is approved by our stockholders, it would become effective immediately upon the filing of the Amended and Restated Charter with the Secretary of State of the State of Delaware, which we would expect to file promptly after the Annual Meeting.

If the proposed Amended and Restated Charter is not approved by our stockholders, our Certificate of Incorporation would remain unchanged.

The text of the Amended and Restated Charter is subject to modification to include such changes as may be required by the Delaware Secretary of State to effectuate the amendments described above. In accordance with the Delaware General Corporation Law, the Board of Directors may elect to abandon the proposed Amended and Restated Charter without further action by our stockholders at any time prior to the effectiveness of the filing of the Amended and Restated Charter with the Secretary of State of the State of Delaware, notwithstanding stockholder approval of the proposed Amended and Restated Charter at the Annual Meeting.

40

Vote Required

The approval of the Amended and Restated Charter by the stockholders requires the affirmative vote of a majority of the voting power of the outstanding stock entitled to vote on this proposal. Abstentions and broker non-votes are treated as votes against this proposal. THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THIS RESOLUTION.


PROPOSAL NO. 4

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Audit Committee has selected Grant Thornton LLP (“Grant Thornton”) as the Company’sour independent registered public accounting firm for the year ending December 31, 2020,2023, and the Board of Directors is asking stockholders to ratify that selection. Although current law, rules, and regulations, as well as the Audit Committee Charter, require the Audit Committee to engage, retain, and supervise the Company’sour independent registered public accounting firm, the Board considers the selection of the independent registered public accounting firm to be an important matter of stockholder concern and is submitting the selection of Grant Thornton for ratification by stockholders as a matter of good corporate practice. If the stockholders do not ratify the selection of Grant Thornton, the Audit Committee will review the Company’sour relationship with Grant Thornton and take such action as it deems appropriate, which may include continuing to retain Grant Thornton as the Company’sour independent registered public accounting firm.

42

 

Vote Required

 

The affirmative vote of a majority of the votes cast by the stockholders entitled to vote on this proposal at the Meeting is required to ratify the appointment of Grant Thornton. Abstentions will not be treated as votes cast for this purpose and will not affect the outcome of the vote. Please see Voting Procedure section below, with respect to broker non-votesnon‑votes on this proposal.

 

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON.

 

Independent Registered Public Accounting Firm

 

The Audit Committee has appointed Grant Thornton LLP to be the Company’sour independent registered public accounting firm and to audit theour consolidated financial statements of the Company for the year ending December 31, 2020. The Company is2023. We are advised that no member of Grant Thornton has any direct financial interest or material indirect financial interest in the Companyus or has had any connection with the Companyus in the capacity of promoter, underwriter, voting trustee, director, officer or employee since such date. Grant Thornton also served as our independent registered public accounting firm during 20192022 and 2018.2021.

 

A representative of Grant Thornton 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.

 

Audit Fees. The Company We incurred an aggregate of approximately $495,596$1,218,000 in fees for audit services from Grant Thornton in the fiscal year ended December 31, 20192022 and an aggregate of approximately $463,594$567,225 in fees for audit services from Grant Thornton in the fiscal year ended December 31, 2018.2021. Audit fees include fees and expenses for professional services rendered in connection with the audit of the Company’sour annual financial statements, the audit of the Company’sour internal control over financial reporting, reviews of the financial statements included in each of the Company’sour Quarterly Reports on Form 10-Q10‑Q during those years and fees for services related to the Company’sour registration statements, consents and assistance with and review of documents filed with the SEC.

 

Audit-RelatedAudit‑Related Fees. The Company We incurred no audit-relatedaudit‑related fees in the fiscal years ended December 31, 20192022 and 20182021 from Grant Thornton.

 

Tax Fees. The Company We incurred noan aggregate of approximately $182,470 in tax fees from Grant Thornton for tax planning and compliance in the fiscal year ended December 31, 2022 and $106,000 in tax fees from Grant Thornton for the fiscal yearsyear ended December 31, 2019 and 2018, respectively, from Grant Thornton.2021.

 

All Other Fees. The Company We incurred an aggregate of $87,310 in other fees from Grant Thornton in the fiscal year ended December 31, 2022 and no other fees forin the fiscal yearsyear ended December 31, 2019 and 2018, respectively,221 from Grant Thornton.

 

The Audit Committee has considered whether the provision of non-auditnon‑audit services by Grant Thornton is compatible with maintaining Grant Thornton’s independence, and believes that the provision of such services is compatible.

 

Audit Committee Policy on Pre-ApprovalPre‑Approval of Services of Independent Registered Public Accounting Firm

 

The Audit Committee’s policy is to pre-approvepre‑approve all audit and permissible non-auditnon‑audit services provided by Grant Thornton. These services may include audit services, audit-relatedaudit‑related services, tax services and other services. All of the services described under Audit Fees and Tax Fees in the immediately preceding section were approved by the Audit Committee.

 

26

43

 

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.we appoint. An automated system tabulates the votes. The vote on each matter submitted to stockholders is tabulated separately.

 

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 proposals at the Meeting. However, if a quorum is not present, a vote of a majority of the votes properly cast will adjourn the Meeting, whether or not a quorum is present. Votes withheld, abstentions and broker “non-votes” are included in the number of shares present or represented for purposes of quorum, but are disregarded for purposes of determining whether any of the proposals other than the amendment and restatement of the Company’s Certificate of Incorporation (Proposal No. 3) have been approved.

 

Banks, brokers, or other holders of record may vote shares held for a customer in street name on matters that are considered to be “routine” even if they have not received instructions from their customer. A broker “non-vote” occurs when a bank, broker, or other holder of record has not received voting instructions from a customer and cannot vote the customer’s shares because the matter is not considered routine.

 

One of the proposals before the Meeting is deemed a “routine” matter, namely the ratification of the appointment of Grant Thornton as our independent registered public accounting firm for fiscal 20202023 (Proposal No. 4), which means that, if your shares are held in street name, your bank, broker, or other nominee can vote your shares on that proposal if you do not provide timely instructions for voting your shares. The election of directors (Proposal No. 1), the vote to amend the Company’s certificate of incorporation to provide for the annual election of directors (Proposal No. 2) and the non-binding advisory vote to approve executive compensation (Proposal No. 2) and the proposed amendment and restatement of the Company’s Certificate of Incorporation  (Proposal No. 3) are not considered “routine” matters. As a result, if you do not instruct your bank, broker or nominee how to vote with respect to those matters, your bank, broker or nominee may not vote on those proposals and a broker “non-vote” will occur.Therefore, we urge you to give voting instructions to your bank, broker or nominee on all FOUR voting items.

44

 

The persons named as the proxies, R. Jeffrey Bailly, Christopher P. Litterio and Ronald J. Lataille, were selected by the Board of Directors. We do not know of any other matters to be presented at the Annual Meeting. If any other matters are properly presented at the Annual Meeting, your proxy authorizes us to vote, or otherwise act in accordance with the best judgment and discretion of the persons named as proxies below.proxies.

 

Other Proposed Action

 

The Board of Directors knows of no matters that may come before the Meeting other than those discussed above. 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 and applicable laws and regulations.

 

Stockholder Communications

 

Stockholders may contact theour Board of Directors of the Company by writing to them c/o Investor Relations, UFP Technologies, Inc., 100 Hale Street, Newburyport, Massachusetts 01950-3504.01950‑3504. In general, any stockholder communication directed to the Board or a committee thereof will be delivered to the Board or the appropriate committee. However, the Company reserveswe reserve the right not to forward to the Board any abusive, threatening or otherwise inappropriate materials.

 

Stockholder Proposals and Nominations for Director

 

StockholderWe must receive stockholder proposals for inclusion in the Company’sour proxy materials for the 20212024 Annual Meeting of Stockholders pursuant to Rule 14a-814a‑8 of the Securities Exchange Act of 1934 must be received by the Company no later than December 29, 2020.January 2, 2024. These proposals must also meet the other requirements of the rules of the SecuritiesSEC and Exchange Commission and the Company’sour Bylaws.

 

27

The Company’sOur Bylaws establish an advance notice procedure with regard to proposals that stockholders otherwise desire to introduce at the Company’s 2020our 2024 Annual Meeting of Stockholders without inclusion in the Company’sour proxy statement for that meeting. Written notice of such stockholder proposals and director nominations for the Company’sour 2024 Annual Meeting of Stockholders in 2021 must be received by the Company’sour Board of Directors, c/o Secretary, UFP Technologies, Inc., 100 Hale Street, Newburyport, Massachusetts 01950-3504,01950‑3504, not later than March 12, 20218, 2024 and must not have been received earlier than February 10, 20217, 2024 in order to be considered timely, and must contain specified information concerning the matters proposed to be brought before such meeting and concerning the stockholder proposing such matters. The matters proposed to be brought before the meeting also must be proper matters for stockholder action. If a stockholder who wishes to present suchnominate a director or make a proposal fails to notify the Companyus within this time frame, the proposal will not be addressed at our 2024 Annual Meeting of Stockholders. If a stockholder makes a timely notification, the proxies that management solicits for the meeting will have discretionary authority to vote on the stockholder’s proposal if it is properly brought before the meeting. If a stockholder makes a timely notification, the proxies may still exercise discretionary voting authority under circumstances consistent with the proxy rules of the Securities andSEC. In addition to satisfying the advance notice procedure in our Bylaws with respect to director nominations, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees for the 2024 Annual Meeting of Stockholders must provide notice that sets forth the information set forth in Rule 14a-19 under the Exchange Commission.Act of 1934, either postmarked or transmitted electronically to the Company no later than April 8, 2024.

45

 

Pursuant to the Company’sour Bylaws, the notice must set forth: (a) for each nominee (i) information as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission,SEC, and (ii) written consent to be named in theany proxy statement and any associated proxy card and serve as director if so elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of any proposed business including (i) the text of such proposal and any accompanying resolutions, (ii) the reasons for conducting such business at the meeting, and (iii) any material interest held by the proposing stockholder or any beneficial owner on whose behalf the proposal is made; and (c) proposing stockholder and/or beneficial owner information including, (i) name and address, (ii) the class and number of shares of capital stock held, (iii) a description of any agreement, arrangement or understanding with respect to the nomination or proposal with any of their affiliates or associates, and any others acting in concert with the foregoing, (iv) a description of any agreement, arrangement or understanding with respect to shares of the Company’sour stock entered into by the date of such notice for the purposes of loss mitigation, risk management or derivation of benefit from share price changes and/or redistribution of voting power, (v) a representation that such stockholder is the holder of record, is entitled to vote, and intends to appear in person or by proxy and propose such business or nomination, (vi) a representation of intention to either deliver proxy statements to holders of the necessary percentage of shares or to solicit proxies in support of the proposal, and (vii) any other information relating to such stockholder and/or beneficial owner required to be disclosed in filings made in connection with solicitation of proxies pursuant to the Securities Exchange Act of 1934. The stockholder can alternatively satisfy the notice requirement by submitting proposals in compliance with Securities and Exchange CommissionSEC requirements and inclusion of such proposal within a proxy statement prepared by the Company.we prepare. Compliance with the Company’sour Bylaws shall be the exclusive means for a stockholder to make nominations or submit other business to the annual meeting (other than matters properly brought in compliance with the rules of the Securities Exchange Act of 1934).

 

“Householding” of Proxy Materials

The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single proxy statement and annual report addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for shareholders and cost savings for companies.

Once you have received notice from your broker or us that each of us will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement and annual report, or if you are receiving multiple copies of the proxy statement and annual report and wish to receive only one, please notify your broker if your shares are held in a brokerage account or the Company if you hold registered shares. You can notify us by sending a written request to UFP Technologies, Inc., Attention: Investor Relation, 100 Hale Street, Newburyport, Massachusetts 01950 3504, or call us at (978) 352-2200.

Incorporation By Reference

 

To the extent that this Proxy Statement has been or will be specifically incorporated by reference into any filing by the Companyof our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the section of the Proxy Statement entitled “Report of the Audit Committee” shall not be deemed to be so incorporated, unless specifically otherwise provided in any such filing.

 

46

Annual Report on Form 10-K10‑K

 

Copies of the Company’sour Annual Report on Form 10-K10‑K for the fiscal year ended December31, 20192022 as filed with the Securities and Exchange Commission, this Proxy Statement and the Proxy Card are available to stockholders without charge at the Company’sour website,www.ufpt.com/investors/filings.html, and upon written request addressed to Investor Relations, UFP Technologies,Inc. at 100Hale Street, Newburyport, Massachusetts 01950-3504.01950‑3504.

 

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.

 

 

 

 

28

Appendix A

 

 

CERTIFICATE OF AMENDMENT OF


ANNEX A

FORM

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

UFP TECHNOLOGIES, INC.

 

(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)

UFP Technologies, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify that:

FIRST:       The name of the Corporation is UFP Technologies, Inc.

SECOND:       The date on which the original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware is October 15, 1993.

THIRD:       The Board of Directors of the Corporation, acting in accordance with provisions of Section 141 and 242 of the General Corporation Law of the State of Delaware (the “DGCLGeneral Corporation Law”),

DOES HEREBY CERTIFY:

1.    That the name of this corporation is UFP Technologies, Inc. and that this corporation was originally incorporated pursuant to the General Corporation Law on October 15, 1993; and

2.    That the Board of Directors duly adopted resolutions providing that it wasproposing to amend and restate the Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and authorizing the Corporationappropriate officers of this corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows:

RESOLVED, that the Certificate of Incorporation as amended,of this corporation be amended by striking out Article EIGHTH, Section (c)and restated in its entirety to read as follows:

FIRST:           The name of the corporation (hereinafter called the “Corporation”) is UFP Technologies, Inc.

SECOND:      The address, including street, number, city, and county, of the registered office of the Corporation in the State of Delaware is 251 Little Falls Drive, Wilmington, County of Newcastle, Delaware 19808; and the name of the registered agent of the Corporation in the State of Delaware at such address is Corporation Service Company.

THIRD:          The nature of the business and the purposes to be conducted and promoted by substitutingthe Corporation, shall be (a) to engage in lieu thereof the following new Article EIGHTH, Section (c)manufacture, sale, research and development of packaging and specialty products and (b) any lawful business, to promote any lawful purpose, and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

FOURTH:

 

“(c)(a)          The directorstotal number of shares of all classes of stock which the Corporation shall have authority to issue is (i) 20,000,000 shares of Common Stock, $.01 par value per share (“Common Stock”), and (ii) 1,000,000 shares of Preferred Stock, $.01 par value per share (the “Preferred Stock”).

A-1

(b)          The Preferred Stock may be classified,issued and designated by the Board of Directors, in one or more classes or series and with such rights, powers, preferences and terms and at such times and for such consideration as the Board of Directors shall determine, without further stockholder action. With respect to each class or series of Preferred Stock, prior to issuance, the Board of Directors by resolution shall designate that class or series to distinguish it from other classes and series of stock of the Corporation, shall specify the number of shares to be included in the class or series, and shall fix the rights, powers, preferences and terms of the shares of the class or series, including, but without limitation: (i) the dividend rate, which may be fixed or variable, its preference as to any other class or series of capital stock, and whether dividends will be cumulative or noncumulative; (ii) whether the shares are to be redeemable and, if so, at what times and prices (which price or prices may, but need not, vary according to the time or circumstances of such redemption) and on what other terms and conditions; (iii) the terms and amount of any sinking fund provided for the purchase or redemption of the shares; (iv) whether the shares shall be convertible or exchangeable and, if so, the times, prices, rates, adjustments and other terms of such conversion or exchange; (v) the voting rights, if any, applicable to the shares in addition to those prescribed by law; (vi) the restrictions and conditions, if any, on the issue or reissue of any additional shares of such class or series or of any other class or series of Preferred Stock ranking on a parity with or prior to the shares of such class or series; (vii) whether, and the extent to which, they shall hold their respective offices, by dividing them into three (3) classes, toany of the rights, powers, preferences and terms of any such class or series may be known as “Class I,” “Class II” and “Class III,” with each class to be apportioned as nearly equal in number as possible in accordance with amade dependent upon facts ascertainable outside of the Certificate of Incorporation or outside the resolution or resolutions providing for the issuance of such class or series by the Board of Directors, provided that the manner in which such facts shall operate is clearly set forth in the resolution or resolutions providing for the issuance of such class or series adopted by the Board of Directors. The term for each Class I, Class IIDirectors; and Class III directorship as(viii) the rights of the dateholders of such shares upon voluntary or involuntary liquidation, dissolution or winding up of the Corporation.

FIFTH:           [Intentionally omitted]

SIXTH:          The Corporation shall have perpetual existence.

SEVENTH:    Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this CertificateCorporation or of Amendmentany creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agrees to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, continueif sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.

EIGHTH:       For the management of the business and for the remaining termconduct of such directorship for suchthe affairs of the Corporation, and in further definition, limitation and regulation of the powers of the Corporation and of its directors and of its stockholders or any class and thereafter such directorship shall no longerthere‐of, as the case may be, classified andit is further provided that:

A-2

(a)          The business of the term for such directorshipCorporation shall be conducted by the officers of the Corporation under the supervision of the Board of Directors.

(b)          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. No election of Directors need be by written ballot.

(c)          The Directors shall be elected for an annual term until the next succeeding annual meeting of stockholders and until such successors are duly elected and qualified.”

 

FOURTH:       Thereafter,(d)          In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized to adopt, amend or repeal the By-laws of the Corporation.

(e)          Notwithstanding any other provision of law, all action required to be taken by the stockholders of the Corporation shall be taken at a meeting duly called and held in accordance with law and with the Certificate of Incorporation and the By-laws, and not by written consent

NINTH:

(a)          The Corporation may, to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which a person indemnified may be entitled under any By-Law, agreement, vote of stockholders or disinterested Directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a Director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

(b)          No director shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. Notwithstanding the foregoing sentence, a director shall be liable to the extent provided by applicable law (i) for breach of the Director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the General Corporation Law of the State of Delaware or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this paragraph (b) of this Article Ninth shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such Director occurring prior to such amendment.

(c)          No officer shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such officer as an officer. Notwithstanding the foregoing sentence, an officer shall be liable to the extent provided by applicable law (i) for breach of the officer’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a resolutionknowing violation of law, (iii) for any transaction from which the officer derived an improper personal benefit, (iv) in any action by or in the right of the Corporation. No amendment to or repeal of this paragraph (c) of this Article Ninth shall apply to or have any effect on the liability or alleged liability of any officer of the Corporation for or with respect to any acts or omissions of such officer occurring prior to such amendment.

A-3

TENTH: From time to time, subject to the provisions of this Certificate of Incorporation (including without limitation the provisions of paragraph (d) of Article Eleventh and of Article Twelfth), any of the provisions of this Certificate of Incorporation may be amended, altered or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this Certificate of Incorporation are granted subject to the provisions of this Article Tenth.

ELEVENTH:

(a)          Any direct or indirect purchase or other acquisition in one or more transactions by the Corporation or any Subsidiary of any of the outstanding Voting Stock of any class from any one or more individuals or entities known by the Corporation to be a Related Person, who has beneficially owned such security or right for less than two years prior to the date of such purchase, at a price in excess of the Fair Market Value shall, except as hereinafter provided, require the affirmative vote of the holders of at least two-thirds of the shares of Voting Stock, voting as a single class, excluding any votes cast with respect to shares of Voting Stock beneficially owned by such Related Person. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified by law or any agreement with any national securities exchange, or otherwise, but no such affirmative vote shall be required with respect to any purchase or other acquisition of securities made as part of (i) a tender or exchange offer by the Corporation to purchase securities of the same class made on the same terms to all holders of such securities and complying with the applicable requirements of the Exchange Act and the rules and regulations thereunder, or any successor rule or regulation or (ii) pursuant to an open-market purchase program conducted in accordance with the requirements of Rule 10b-18 promulgated by the Securities and Exchange Commission pursuant to the Exchange Act or any successor rule or regulation.

(b)          A majority of the Continuing Directors shall have the power and duty to determine, on the basis of information known to them after reasonable inquiry, all facts necessary to determine compliance with this Article Eleventh including, without limitation, (i) whether a person is a Related Person, (ii) the number of shares of Voting Stock beneficially owned by any person and (iii) whether a price is in excess of Fair Market Value.

(c)          Nothing contained in this Article Eleventh shall be construed to relieve any Related Person from any fiduciary obligation imposed by law.

(d)          Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least two-thirds of the outstanding shares of Voting Stock, voting together as a single class, shall be required to alter, change, amend, repeal or adopt any provision inconsistent with this Article Eleventh.

TWELFTH: Except as otherwise provided in this Certificate of Incorporation, the By-laws, any designation of terms pursuant to Section 151 of the General Corporation Law of the State of Delaware, any vote required by stockholders pursuant to said General Corporation Law, other than the election of directors (which shall not be affected by this provision), shall be effective if recommended by a majority of the Continuing Directors and the vote of a majority of each class of stock outstanding and entitled to vote thereon; and if not recommended by a majority of the Continuing Directors, then by the vote of 80% of each class of stock outstanding and entitled to vote thereon.

A-4

THIRTEENTH:

Definitions

The following definitions shall apply for the purpose of Articles Eleventh and Twelfth only:

(a) “Affiliate” shall have the meaning given such term in Rule 12b-2 under the Exchange Act.

(b) “Associate” shall have the meaning given such term in Rule 12b-2 under the Exchange Act.

(c) “Continuing Director” shall mean any member of the Board of Directors this Certificatewho is not an Affiliate of Amendmentany Related Person and who was submitteda member of the Board of Directors prior to the stockholderstime that any such Related Person became a Related Person, and any successor of a Continuing Director who is unaffiliated with any Related Person and is recommended to succeed a Continuing Director by a majority of the Continuing Directors then on the Board of Directors. Notwithstanding the above, a majority of the then existing Continuing Directors can deem a new director to be a Continuing Director, even though such person is Affiliated with a Related Person.

(d) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, from time to time.

(e) “Fair Market Value” shall mean: (i) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the principal United States securities exchange registered under the Exchange Act on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use or, if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by the Board of Directors in good faith; and (ii) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined by the Board of Directors in good faith.

(g) “Merger Date” shall mean November 15, 1993.

(h) “Person” shall mean any individual, firm, corporation or other entity.

(i) “Related Person” shall mean any Person (other than the Corporation, any Subsidiary or any individual who was a stockholder of the Corporation foron the Merger Date) which, together with its approval,Affiliates and Associates and with any other Person (other than the Corporation, any Subsidiary or any individual who was a stockholder of the Corporation on the Merger Date) with which it or they have entered into, after the Merger Date, any agreement, arrangement or understanding with respect to acquiring, holding or disposing of Voting Stock, acquires beneficial ownership (as defined in Rule 13d-3 of the Exchange Act, except that such term shall include any Voting Stock which such person has the right to acquire, whether or not such right may be exercised within 60 days), directly or indirectly of more than 5% of the voting power of the outstanding Voting Stock after the Merger Date.

A-5

(j) “Subsidiary” shall mean any corporation in which a majority of the capital stock entitled to vote generally in the election of directors is owned, directly or indirectly, by the Corporation.

(k) “Voting Stock” shall mean all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors.

3.    That the foregoing amendment and restatement was approved by the holders of the requisite number of shares of this corporation in accordance with Section 228 of the General Corporation Law.

4.    That this Amended and Restated Certificate of Incorporation, which restates and integrates and further amends the provisions of this corporation’s Certificate of Incorporation, has been duly adopted in accordance with the provisions of SectionSections 242 and 245 of the DGCL.General Corporation Law.

 

In Witness Whereof, UFP Technologies, Inc. has caused IN WITNESS WHEREOF, this Amended and Restated Certificate of Amendment to be signedIncorporation has been executed by its President and Chief Executive Officera duly authorized officer of this ____corporation on this ___th day of ______________, 2020.June, 2023.

 

UFP TECHNOLOGIES, INC.

By:________________________

Name:

Title:

29

Appendix B

AMENDED AND RESTATED BY-LAWS

of

UFP TECHNOLOGIES, INC.

A Delaware Corporation

By ___________________________________

R. Jeffrey Bailly, Chairman and

Chief Executive Officer

 

 

 

 

 

 

 

 

A-6

 

As amended and restated,

effective as of [June 10], 2020

/s/ Christopher P. Litterio

Christopher P. Litterio, Secretary

30

proxy_1.jpg

 

AMENDED AND RESTATED BY-LAWS

TABLE OF CONTENTS

ARTICLE I. Stockholders1
Section 1.1 Annual Meeting1
Section 1.2 Special Meetings1
Section 1.3 Notice of Meeting1
Section 1.4 Notice of Stockholder Business and Nominations2
Section 1.5 Quorum5
Section 1.6 Voting and Proxies5
Section 1.7 Action at Meeting6
Section 1.8 Action Without Meeting6
Section 1.9 Voting of Shares of Certain Holders6
Section 1.10 Stockholder Lists7
ARTICLE II. Board of Directors7
Section 2.1 Powers7
Section 2.2 Number of Directors; Qualifications7
Section 2.3 Election of Directors7
Section 2.4 Vacancies7
Section 2.5 Change in Size of the Board8
Section 2.6 Tenure and Resignation8
Section 2.7 Removal8
Section 2.8 Meetings8
Section 2.9 Notice of Meeting8
Section 2.10 Agenda9
Section 2.11 Quorum9
Section 2.12 Action at Meeting9
Section 2.13 Action Without Meeting9
Section 2.14 Committees9
ARTICLE III. Officers10
Section 3.1 Enumeration10
Section 3.2 Election10
Section 3.3 Qualification10
Section 3.4 Tenure10
Section 3.5 Removal10
Section 3.6 Resignation10
Section 3.7 Vacancies10
Section 3.8 Chairman of the Board10
Section 3.9 Chief Executive Officer10
Section 3.10 President11
Section 3.11 Vice-President(s)11
Section 3.12 Treasurer and Assistant Treasurers11
Section 3.13 Secretary and Assistant Secretaries11
Section 3.14 Other Powers and Duties11
ARTICLE IV. Capital Stock12
Section 4.1 Stock Certificates12
Section 4.2 Transfer of Shares12
Section 4.3 Record Holders12
Section 4.4 Record Date12
Section 4.5 Transfer Agent and Registrar for Shares of Corporation13
Section 4.6 Loss of Certificates14
Section 4.7 Restrictions on Transfer14

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i

Section 4.8 Multiple Classes of Stock14
ARTICLE V. Dividends14
Section 5.1 Declaration of Dividends14
Section 5.2 Reserves14
ARTICLE VI. Powers of Officers to Contract with the Corporation14
ARTICLE VII. Indemnification15
Section 7.1 Definitions15
Section 7.2 Right to Indemnification in General16
Section 7.3 Proceedings Other Than Proceedings by or in the Right of the Corporation17
Section 7.4 Proceedings by or in the right of the Corporation17
Section 7.5 Indemnification for a Party Who is Wholly or Partly Successful17
Section 7.6 Indemnification for Expenses of a Witness18
Section 7.7 Advancement of Expenses18
Section 7.8 Notification and Defense of Claim18
Section 7.9 Procedures19
Section 7.10 Action by the Corporation20
Section 7.11 Non-Exclusivity20
Section 7.12 Insurance20
Section 7.13 No Duplicative Payment21
Section 7.14 Expenses of Adjudication21
Section 7.15 Severability21
ARTICLE VIII. Miscellaneous Provisions21
Section 8.1 Certificate of Incorporation21
Section 8.2 Fiscal Year21
Section 8.3 Corporate Seal21
Section 8.4 Execution of Instruments21
Section 8.5 Voting of Securities22
Section 8.6 Evidence of Authority22
Section 8.7 Corporate Records22
Section 8.8 Charitable Contributions22
Section 8.9 Communications of Notices22
Section 8.10 Electronic Transmissions22
ARTICLE IX. Amendments22
Section 9.1 Amendment by Stockholders22
Section 9.2 Amendment by Board of Directors23

ii

AMENDED AND RESTATED BY-LAWS

OF

UFP TECHNOLOGIES, INC.

(A Delaware Corporation)

ARTICLE I.

Stockholders

Section 1.1 Annual Meeting. The annual meeting of the stockholders of the corporation shall be held on such date as shall be fixed by the board of directors, at such time and place within or without the State of Delaware as may be designated in the notice of meeting. The board of directors may, in its sole discretion, determine that the annual meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by the General Corporation Law of the State of Delaware (the “DGCL”). If the day fixed for the annual meeting shall fall on a legal holiday, the meeting shall be held on the next succeeding day not a legal holiday.

Section 1.2 Special Meetings. Special meetings of the stockholders may be called at any time only by the president, the chief executive officer or the board of directors. Special meetings of the stockholders shall be held at such time, date and place within or outside of the State of Delaware as may be designated in the notice of such meeting. The board of directors may, in its sole discretion, determine that a special meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by the DGCL. Business transacted at any special meeting of the stockholders shall be limited to the purpose or purposes stated in the notice of such meeting.

Section 1.3 Notice of Meeting. A written notice stating the place, if any, date, and hour of each meeting of the stockholders, the means of remote communication, if any, by which stockholders and proxy holders may be deemed present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote at such meeting, and to each stockholder who, under the Certificate of Incorporation or these by-laws, is entitled to such notice, by delivering such notice to such person or leaving it at his, her or its residence or usual place of business, or by mailing it, postage prepaid, and addressed to such stockholder at his address as it appears upon the books of the corporation or by giving notice by electronic transmission as permitted by Section 8.10 of these by-laws, at least ten (10) days and not more than sixty (60) before the meeting. Such notice shall be given by the secretary, an assistant secretary, or any other officer or person designated either by the secretary or by the person or persons calling the meeting.

The requirement of notice to any stockholder may be waived (i) by a written waiver of notice, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether executed or transmitted before or after the meeting by the stockholder or his attorney thereunto duly authorized, and filed with the records of the meeting, (ii) if communication with such stockholder is unlawful, (iii) by attendance at the meeting without protesting prior thereto or at its commencement the lack of notice, or (iv) as otherwise excepted by law. A waiver of notice or electronic transmission of any regular or special meeting of the stockholders need not specify the business to be transacted or the purposes of the meeting unless so required by the Certificate of Incorporation or these bylaws.

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If a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken, except that if the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting.

Section 1.4 Notice of Stockholder Business and Nominations.

(A)            Annual Meetings of Stockholders.

(1)            Nominations of persons for election to the board of directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders only (a) pursuant to the corporation's notice of meeting (or any supplement thereto), (b) by or at the direction of the nominating and corporate governance committee of the board of directors or the board of directors or (c) by any stockholder of the corporation who was a stockholder of record of the corporation at the time the notice provided for in this Section 1.4 is delivered to the secretary of the corporation, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 1.4.

(2)            For nominations or other business to be properly brought before an annual meeting of stockholders by a stockholder pursuant to clause (c) of paragraph (A)(1) of this Section 1.4, the stockholder must have given timely notice thereof in writing to the secretary of the corporation and any such proposed business other than the nominations of persons for election to the board of directors must constitute a proper matter for stockholder action. To be timely, a stockholder's notice shall be delivered to the secretary at the principal executive offices of the corporation not later than the close of business on the ninetieth day nor earlier than the close of business on the one hundred twentieth day prior to the first anniversary of the preceding year's annual meeting (provided, however, that in the event that the date of the annual meeting is more than thirty days before or more than seventy days after such anniversary date, notice by the stockholder must be so delivered not earlier than the close of business on the one hundred twentieth day prior to such annual meeting and not later than the close of business on the later of the ninetieth day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made by the corporation). In no event shall the public announcement of an adjournment or postponement of an annual meeting of stockholders commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth: (a) as to each person whom the stockholder proposes to nominate for election as a director (i) all information relating to such person that is required to

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be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in accordance with Section 14(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules and regulations promulgated thereunder, and (ii) such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the by-laws of the corporation, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the corporation's books, and of such beneficial owner, (ii) the class or series and number of shares of capital stock of the corporation which are owned beneficially and of record by such stockholder and such beneficial owner, (iii) a description of any agreement, arrangement or understanding with respect to the nomination or proposal between or among such stockholder and/or such beneficial owner, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing, (iv) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the stockholder’s notice by, or on behalf of such stockholder and such beneficial owners, whether or not such instrument or right shall be subject to settlement in underlying shares of capital stock of the corporation, the effect or intent of which is to mitigate loss to manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner, with respect to the shares of stock of the corporation, (v) a representation that the stockholder is a holder of record of stock of the corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination, (vi) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation's outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (b) otherwise to solicit proxies from stockholders in support of such proposal or nomination, and (vii) any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder. The foregoing notice requirements of this Section 1.4 shall be deemed satisfied by a stockholder with respect to business other than a nomination if the stockholder has notified the corporation of his, her or its intention to present a proposal at an annual meeting in compliance with applicable rules and regulations promulgated under the Exchange Act and such stockholder's proposal has been included in a proxy statement that has been prepared by the corporation to solicit proxies for such annual meeting. The corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the corporation.

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(3)            Notwithstanding anything in the second sentence of paragraph (A)(2) of this Section 1.4 to the contrary, in the event that the number of directors to be elected to the board of directors of the corporation is increased effective at the annual meeting and there is no public announcement by the corporation naming the nominees for the additional directorships at least one hundred days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 1.4 shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the secretary at the principal executive offices of the corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the corporation.

(B)            Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the corporation's notice of meeting. Nominations of persons for election to the board of directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the corporation's notice of meeting (1) by or at the direction of the board of directors or (2) provided that the board of directors has determined that directors shall be elected at such meeting, by any stockholder of the corporation who is a stockholder of record at the time the notice provided for in this Section 1.4 is delivered to the secretary of the corporation, who is entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section 1.4. In the event the corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the board of directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the corporation's notice of meeting, if the stockholder's notice required by paragraph (A)(2) of this Section 1.4 shall be delivered to the secretary at the principal executive offices of the corporation not earlier than the close of business on the one hundred twentieth day prior to such special meeting and not later than the close of business on the later of the ninetieth day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the board of directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above.

(C)            General.

(1)            Only such persons who are nominated in accordance with the procedures set forth in this Section 1.4 shall be eligible to be elected at an annual or special meeting of stockholders of the corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 1.4. Except as otherwise provided by law, the chairman of the meeting shall have the power and duty (a) to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 1.4 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder's nominee or proposal in compliance with such stockholder's representation as required by clause (A)(2)(c)(vi) of this Section 1.4) and

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(b) if any proposed nomination or business was not made or proposed in compliance with this Section 1.4, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted. Notwithstanding the foregoing provisions of this Section 1.4, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the corporation. For purposes of this Section 1.4, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

(2)            For purposes of this Section 1.4, “public announcement” shall include disclosure in a press release reported by a national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.

(3)            Notwithstanding the foregoing provisions of this Section 1.4, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section 1.4; provided however, that any references in these by-laws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 1.4 (including paragraphs A(1)(c) and B hereof), and compliance with paragraphs A(1)(c) and B of this Section 1.4 shall be the exclusive means for a stockholder to make nominations or submit other business (other than, as provided in the penultimate sentence of A(2), matters brought properly under and in compliance with Rule 14a-8 of the Exchange Act, as may be amended from time to time). Nothing in this Section 1.4 shall be deemed to affect any rights (a) of stockholders to request inclusion of proposals or nominations in the corporation's proxy statement pursuant to applicable rules and regulations promulgated under the Exchange Act or (b) of the holders of any series of Preferred Stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.

Section 1.5 Quorum. The holders of a majority in voting power of all stock issued, outstanding and entitled to vote at a meeting shall constitute a quorum. Any meeting may be adjourned from time to time by a majority of the votes properly cast upon the question, whether or not a quorum is present.

Section 1.6 Voting and Proxies. Stockholders shall have one vote for each share of stock entitled to vote owned by them of record according to the books of the corporation, unless otherwise provided by law or by the Certificate of Incorporation. Stockholders may vote either in person or by proxy. Any such proxy may be in writing, or by means of electronic transmission (including telephone, electronic mail, the Internet or such other electronic means as the board of directors may determine from time to time) that sets forth or is submitted with information from which it can be determined that such transmission was authorized by the stockholder, or by such other means permitted under applicable law. No proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. Proxies shall be filed with the secretary of the meeting, or of any adjournment thereof. Except as otherwise limited therein, proxies shall entitle the persons authorized thereby to vote at any adjournment of such meeting. A proxy purporting to be executed by or on behalf of a stockholder shall be deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity shall rest on the challenger. A proxy with respect to stock held in the name of two or more persons shall be valid if executed by one of them unless at or prior to exercise of the proxy the corporation receives a specific written notice to the contrary from any one of them.

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Section 1.7 Action at Meeting. When a quorum is present at any meeting of stockholders, a plurality of the votes properly cast for election to any office shall elect to such office, and a majority of the votes properly cast upon any question other than election to an office shall decide such question, except where a larger vote is required by law, the Certificate of Incorporation or these by-laws. No ballot shall be required for any election unless requested by a stockholder present or represented at the meeting and entitled to vote in the election.

Section 1.8 Action Without Meeting. All action required or permitted to be taken by the stockholders must be taken at a meeting of the stockholders duly called and held in accordance with law and in accordance with the Certificate of Incorporation and these bylaws. The stockholders cannot act by written consent.

Section 1.9 Voting of Shares of Certain Holders.Shares of stock of the corporation standing in the name of another corporation, domestic or foreign, may be voted by such officer, agent, or proxy as the by-laws of such corporation may prescribe, or, in the absence of such provision, as the board of directors of such corporation may determine.

Shares of stock of the corporation standing in the name of a deceased person, a minor ward or an incompetent person, may be voted by his administrator, executor, court-appointed guardian or conservator without a transfer of such shares into the name of such administrator, executor, court appointed guardian or conservator. Shares of capital stock of the corporation standing in the name of a trustee or fiduciary may be voted by such trustee or fiduciary.

Shares of stock of the corporation standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority so to do be contained in an appropriate order of the court by which such receiver was appointed.

A stockholder whose shares are pledged shall be entitled to vote such shares unless in the transfer by the pledgor on the books of the corporation he expressly empowered the pledgee to vote thereon, in which case only the pledgee or its proxy shall be entitled to vote the shares so transferred.

Shares of its own stock belonging to this corporation shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares at any given time, but shares of its own stock held by the corporation in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares.

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Section 1.10 Stockholder Lists. The secretary (or the corporation’s transfer agent or other person authorized by these by-laws or by law) shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The corporation shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least ten days prior to the meeting, (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting or (ii) during ordinary business hours, at the corporation’s principal executive office. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible network, and the information required to access such list shall be provided with the notice of the meeting.

ARTICLE II.

Board of Directors

Section 2.1 Powers. Except as reserved to the stockholders by law or by the Certificate of Incorporation, the business of the corporation shall be managed under the direction of the board of directors, who shall have and may exercise all of the powers of the corporation. In particular, and without limiting the foregoing, the board of directors shall have the power to issue or reserve for issuance from time to time the whole or any part of the capital stock of the corporation which may be authorized from time to time to such person, for such consideration and upon such terms and conditions as they shall determine, including the granting of options, warrants or conversion or other rights to stock.

Section 2.2 Number of Directors; Qualifications. Subject to Section 2.5, the board of directors shall consist of such number of directors (which shall not be less than three) as shall be fixed initially by the incorporator(s) and thereafter, from time to time, by resolution of the board of directors. No director need be a stockholder.

Section 2.3 Election of Directors. The initial board of directors shall be designated in the Certificate of Incorporation, or if not so designated, elected by the incorporator(s) at the first meeting thereof. Thereafter, directors shall be elected by the stockholders at their annual meeting or at any special meeting the notice of which specifies the election of directors as an item of business for such meeting, in accordance with the provisions of the Certificate of Incorporation.

Section 2.4 Vacancies. In the case of any vacancy in the board of directors from death, resignation, disqualification or other cause, including a vacancy resulting from enlargement of the board, the appointment or election of a director to fill such vacancy shall be only by vote of a majority of the directors then in office, whether or not constituting a quorum. The director thus appointed or elected shall hold office until his successor is duly elected and qualified or his earlier resignation or removal.

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Section 2.5 Change in Size of the Board. The number of members of the board of directors may be changed by vote of a majority of the directors then in office or by the stockholders by vote of eighty percent (80%) of the shares of voting stock outstanding.

Section 2.6 Tenure and Resignation. Except as otherwise provided by law, by the Certificate of Incorporation or by these by-laws, directors shall hold office until the next annual meeting of stockholders and thereafter until their successors are duly elected and qualified. Any director may resign by delivering or mailing postage prepaid a written resignation, or by giving notice by electronic transmission as permitted by Section 8.10 of these by-laws, to the corporation at its principal office or to the chairman of the board, if any, or to the president, secretary or assistant secretary, if any. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.

Section 2.7 Removal. A director may be removed from office only for cause, by vote of the holders ofeighty percent (80%) a majority of theshares then entitled to vote at an election of directorsvoting stock then outstanding, after reasonable notice and opportunity to be heard before the body proposing to remove him.

Section 2.8 Meetings. Regular meetings of the board of directors may be held without call or notice at such times and such places within or without the State of Delaware as the board of directors may, from time to time, determine, provided that notice of the first regular meeting following any such determination shall be given to directors absent from such determination. A regular meeting of the board of directors shall be held without notice immediately after, and at the same place as, the annual meeting of the stockholders or the special meeting of the stockholders held in place of such annual meeting, unless a quorum of the directors is not then present. Special meetings of the board of directors may be held at any time and at any place designated in the call of the meeting when called by the chairman of the board, the chief executive officer, the president (if a director) or a majority of the directors. Members of the board of directors or any committee elected thereby may participate in a meeting of such board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time, and participation by such means shall constitute presence in person at the meeting.

Section 2.9 Notice of Meeting. It shall be sufficient notice to a director to send or give notice (i) by mail at least seventy-two (72) hours before the meeting addressed to such person at his usual or last known business or residence address or (ii) in person, by telephone, facsimile or electronic transmission to the extent provided in Section 8.10 of these by-laws, at least twenty-four (24) hours before the meeting. Notice shall be given by the secretary, or in his absence or unavailability, may be given by any of an assistant secretary, if any, or by the officer or directors calling the meeting. The requirement of notice to any director may be waived by a written waiver of notice signed by the person entitled to notice or a waiver by electronic transmission by the person entitled to notice, executed or transmitted by such person before or after the meeting or meetings, and filed with the records of the meeting, or by attendance at the meeting without protesting prior thereto or at its commencement the lack of notice. A notice or waiver of notice of a meeting of the board of directors or any committee thereof need not specify the purposes of the meeting.

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Section 2.10 Agenda. Any lawful business may be transacted at a meeting of the board of directors, notwithstanding the fact that the nature of the business may not have been specified in the notice or waiver of notice of the meeting.

Section 2.11 Quorum. At any meeting of the board of directors, a majority of the directors then in office shall constitute a quorum for the transaction of business. Any meeting may be adjourned by a majority of the votes cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned without further notice.

Section 2.12 Action at Meeting. Any motion adopted by vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, except where a different vote is required by law, by the Certificate of Incorporation or by these by-laws.

Section 2.13 Action Without Meeting. Any action required or permitted to be taken at any meeting of the board of directors, or any committee thereof, may be taken without a meeting if all of the members of the board of directors or committee, as the case may be, consent to the action in writing or by electronic transmission and the writing(s) or electronic transmission(s) are filed with the minutes of proceedings of the board of directors or committee. Such filing shall be in paper form if the minutes are in paper form and shall be in electronic form if the minutes are maintained in electronic form. Such consent shall be treated for all purposes as a vote of the board of directors or committee, as the case may be, at a meeting.

Section 2.14 Committees. The board of directors may, by the affirmative vote of a majority of the directors then in office, appoint an executive committee or other committees consisting of one or more directors and may by vote delegate to any such committee some or all of their powers except those which by law, the Certificate of Incorporation or these bylaws they may not delegate. In addition to other committees that the board of directors may designate from time to time, the board of directors shall designate a compensation committee and an audit committee. In the absence or disqualification of a member of a committee, the members of the committee present and not disqualified, whether or not they constitute a quorum, may by unanimous vote appoint another member of the board of directors to act at the meeting in place of the absent or disqualified member. A committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to such subcommittee any or all of the powers of the committee. Unless the board of directors shall otherwise provide, any such committee may make rules for the conduct of its business, but unless otherwise provided by the board of directors or such rules, its meetings shall be called, notice given or waived, its business conducted or its action taken as nearly as may be in the same manner as is provided in these by-laws with respect to meetings or for the conduct of business or the taking of actions by the board of directors. The board of directors shall have power at any time to fill vacancies in, change the membership of, or discharge any such committee at any time. The board of directors shall have power to rescind any action of any committee, but no such rescission shall have retroactive effect.

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ARTICLE III.
Officers

Section 3.1 Enumeration. The officers shall consist of a president, a treasurer, a secretary and such other officers and agents (including a chairman of the board, a chief executive officer, one or more vice-presidents, assistant treasurers and assistant secretaries), as the board of directors may, in its discretion, determine.

Section 3.2 Election. The president, treasurer and secretary shall be elected annually by the directors at their first meeting following the annual meeting of the stockholders or any special meeting held in lieu of the annual meeting. Other officers may be chosen by the directors at such meeting or at any other meeting.

Section 3.3 Qualification. An officer may, but need not, be a director or stockholder. Any two or more offices may be held by the same person. Any officer may be required by the directors to give bond for the faithful performance of his duties to the corporation in such amount and with such sureties as the directors may determine. The premiums for such bonds may be paid by the corporation.

Section 3.4 Tenure. Except as otherwise provided by the Certificate of Incorporation or these by-laws, the term of office of each officer shall be for one year or until his successor is elected and qualified or until his earlier resignation or removal.

Section 3.5 Removal. Any officer may be removed from office, with or without cause, by the affirmative vote of a majority of the directors then in office; provided, however, that an officer may be removed for cause only after reasonable notice and opportunity to be heard by the board of directors prior to action thereon.

Section 3.6 Resignation. Any officer may resign by delivering or mailing postage prepaid a written resignation, or by giving notice by electronic transmission as permitted by Section 8.10 of these by-laws, to the corporation at its principal office or to the president, secretary, or assistant secretary, if any, and such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some event.

Section 3.7 Vacancies. A vacancy in any office arising from any cause may be filled for the unexpired portion of the term by the board of directors.

Section 3.8 Chairman of the Board. The board of directors may appoint a chairman of the board and may designate the chairman of the board as chief executive officer. If the board of directors appoints a chairman of the board, he shall preside at all meetings of the stockholders and of the board of directors at which present and shall perform such other duties and possess such other powers as are assigned to him by the board of directors.

Section 3.9 Chief Executive Officer. The board of directors may appoint a chief executive officer, who may be a person other than the chairman of the board or the president. Unless a chairman of the board is so designated or except as otherwise voted by the board of directors, the chief executive officer shall preside at all meetings of the stockholders and of the board of directors at which present. The chief executive officer shall have such duties and powers as are commonly incident to the office and such duties and powers as the board of directors shall from time to time designate.

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Section 3.10 President. The president shall be the chief executive officer of the corporation, unless another person is so designated. The president shall have such duties and powers as are commonly incident to the office and such duties and powers as the board of directors shall from time to time designate.

Section 3.11 Vice-President(s). The vice-president(s), if any, shall have such powers and perform such duties as the board of directors may from time to time determine.

Section 3.12 Treasurer and Assistant Treasurers. The treasurer, subject to the direction and under the supervision and control of the board of directors, shall have general charge of the financial affairs of the corporation. The treasurer shall have custody of all funds, securities and valuable papers of the corporation, except as the board of directors may otherwise provide. The treasurer shall keep or cause to be kept full and accurate records of account which shall be the property of the corporation, and which shall be always open to the inspection of each elected officer and director of the corporation. The treasurer shall deposit or cause to be deposited all funds of the corporation in such depository or depositories as may be authorized by the board of directors. The treasurer shall have the power to endorse for deposit or collection all notes, checks, drafts, and other negotiable instruments payable to the corporation. The treasurer shall perform such other duties as are incidental to the office, and such other duties as may be assigned by the board of directors.

Assistant treasurers, if any, shall have such powers and perform such duties as the board of directors may from time to time determine.

Section 3.13 Secretary and Assistant Secretaries. The secretary shall record, or cause to be recorded, all proceedings of the meetings of the stockholders and directors (including committees thereof) in the book of records of this corporation. The record books shall be open at reasonable times to the inspection of any stockholder, director, or officer. The secretary shall notify the stockholders and directors, when required by law or by these by-laws, of their respective meetings, and shall perform such other duties as the directors and stockholders may from time to time prescribe. The secretary shall have the custody and charge of the corporate seal, and shall affix the seal of the corporation to all instruments requiring such seal, and shall certify under the corporate seal the proceedings of the directors and of the stockholders, when required. In the absence of the secretary at any such meeting, a temporary secretary shall be chosen who shall record the proceedings of the meeting in the aforesaid books.

Assistant secretaries, if any, shall have such powers and perform such duties as the board of directors may from time to time designate.

Section 3.14 Other Powers and Duties. Subject to these by-laws and to such limitations as the board of directors may from time to time prescribe, the officers of the corporation shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the board of directors.

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ARTICLE IV.

Capital Stock

Section 4.1 Stock Certificates. The shares of capital stock of the corporation shall be represented by certificates in such form as shall, in conformity to law, be prescribed from time to time by the board of directors, provided that the board of directors may provide by resolution or resolutions that some or all of any or all classes or series of stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Each certificate shall be signed by the president or vice-president and treasurer or assistant treasurer or such other officers designated by the board of directors from time to time as permitted by law, shall bear the seal of the corporation, and shall express on its face its number, date of issue, class, the number of shares for which, and the name of the person to whom, it is issued. The corporate seal and any or all of the signatures of corporation officers may be facsimile.

If an officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed on, a certificate shall have ceased to be such before the certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the time of its issue.

Section 4.2 Transfer of Shares. Transfers of stock shall be made only on the books of the corporation, and in the case of certificated shares of stock, title to a certificate of stock and to the shares represented thereby shall be transferred by delivery to the corporation or its transfer agent of the certificate properly endorsed, or by delivery of the certificate accompanied by a written assignment of the same, or a properly executed written power of attorney to sell, assign or transfer the same or the shares represented thereby. Upon surrender of a certificate for the shares being transferred, a new certificate or certificates shall be issued according to the interests of the parties. In the case of uncertificated shares of stock, title to the uncertificated shares shall be transferred upon receipt by the corporation or its transfer agent of proper transfer instructions from the registered holder of the shares or by transfer instructions accompanied by a written assignment of the same, or a properly executed written power of attorney to sell, assign or transfer the uncertificated shares.

Section 4.3 Record Holders. Except as otherwise may be required by law, by the Certificate of Incorporation or by these by-laws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect thereto, regardless of any transfer, pledge or other disposition of such stock, until the shares have been transferred on the books of the corporation in accordance with the requirements of these by-laws.

It shall be the duty of each stockholder to notify the corporation of his post office address.

Section 4.4 Record Date.

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(a)  In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournments thereof, the board of directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted by the board of directors and which record date shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed, the record date for determining stockholders entitled to receive notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board may fix a new record date for the adjourned meeting.

(b)  In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted by the board of directors, and which record date shall be not be more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.

Section 4.5 Transfer Agent and Registrar for Shares of Corporation. The board of directors may appoint a transfer agent and a registrar of the certificates of stock of the corporation. Any transfer agent so appointed shall maintain, among other records, a stockholders’ ledger, setting forth the names and addresses of the holders of all issued shares of stock of the corporation, the number of shares held by each, the certificate numbers representing such shares, and the date of issue of the certificates representing such shares. Any registrar so appointed shall maintain, among other records, a share register, setting forth the total number of shares of each class of shares which the corporation is authorized to issue and the total number of shares actually issued. The stockholders’ ledger and the share register are hereby identified as the stock transfer books of the corporation; but as between the stockholders’ ledger and the share register, the names and addresses of stockholders, as they appear on the stockholders’ ledger maintained by the transfer agent shall be the official list of stockholders of record of the corporation. The name and address of each stockholder of record, as they appear upon the stockholders’ ledger, shall be conclusive evidence of who are the stockholders entitled to receive notice of the meetings of stockholders, to vote at such meetings, to examine a complete list of the stockholders entitled to vote at meetings, and to own, enjoy and exercise any other property or rights deriving from such shares against the corporation. Stockholders, but not the corporation, its directors, officers, agents or attorneys, shall be responsible for notifying the transfer agent, in writing, of any changes in their names or addresses from time to time, and failure to do so will relieve the corporation, its other stockholders, directors, officers, agents and attorneys, and its transfer agent and registrar, of liability for failure to direct notices or other documents, or pay over or transfer dividends or other property or rights, to a name or address other than the name and address appearing in the stockholders’ ledger maintained by the transfer agent.

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Section 4.6 Loss of Certificates. In case of the loss, destruction or mutilation of a certificate of stock, a replacement certificate may be issued in place thereof upon such terms as the board of directors may prescribe, including, in the discretion of the board of directors, a requirement of bond and indemnity to the corporation.

Section 4.7 Restrictions on Transfer. Every certificate for shares of stock which are subject to any restriction on transfer, whether pursuant to the Certificate of Incorporation, the by-laws or any agreement to which the corporation is a party, shall have the fact of the restriction noted conspicuously on the certificate and shall also set forth on the face or back either the full text of the restriction or a statement that the corporation will furnish a copy to the holder of such certificate upon written request and without charge.

Section 4.8 Multiple Classes of Stock. The amount and classes of the capital stock and the par value, if any, of the shares, shall be as fixed in the Certificate of Incorporation. At all times when there are two or more classes of stock, the several classes of stock shall conform to the description and the terms and have the respective preferences, voting powers, restrictions and qualifications set forth in the Certificate of Incorporation and these by-laws. Every certificate issued when the corporation is authorized to issue more than one class or series of stock shall set forth on its face or back either (i) the full text of the preferences, voting powers, qualifications and special and relative rights of the shares of each class and series authorized to be issued, or (ii) a statement of the existence of such preferences, powers, qualifications and rights, and a statement that the corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge.

ARTICLE V.

Dividends

Section 5.1 Declaration of Dividends. Except as otherwise required by law or by the Certificate of Incorporation, the board of directors may, in its discretion, declare what, if any, dividends shall be paid from the surplus or from the net profits of the corporation for the current or preceding fiscal year, or as otherwise permitted by law. Dividends may be paid in cash, in property, in shares of the corporation’s stock, or in any combination thereof. Dividends shall be payable upon such dates as the board of directors may designate.

Section 5.2 Reserves. Before the payment of any dividend and before making any distribution of profits, the board of directors, from time to time and in its absolute discretion, shall have power to set aside out of the surplus or net profits of the corporation such sum or sums as the board of directors deems proper and sufficient as a reserve fund to meet contingencies or for such other purpose as the board of directors shall deem to be in the best interests of the corporation, and the board of directors may modify or abolish any such reserve.

ARTICLE VI.

Powers of Officers to Contract
with the Corporation

Any and all of the directors and officers of the corporation, notwithstanding their official relations to it, may enter into and perform any contract or agreement of any nature

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between the corporation and themselves, or any and all of the individuals from time to time constituting the board of directors of the corporation, or any firm or corporation in which any such director may be interested, directly or indirectly, whether such individual, firm or corporation thus contracting with the corporation shall thereby derive personal or corporate profits or benefits or otherwise; provided, that (i) the material facts of such interest are disclosed or are known to the board of directors or committee thereof which authorizes such contract or agreement; (ii) if the material facts as to such person’s relationship or interest are disclosed or are known to the stockholders entitled to vote thereon, and the contract is specifically approved in good faith by a vote of the stockholders; or (iii) the contract or agreement is fair as to the corporation as of the time it is authorized, approved or ratified by the board of directors, a committee thereof, or the stockholders. Any director of the corporation who is interested in any transaction as aforesaid may nevertheless be counted in determining the existence of a quorum at any meeting of the board of directors which shall authorize or ratify any such transaction. This Article shall not be construed to invalidate any contract or other transaction which would otherwise be valid under the common or statutory law applicable thereto.

ARTICLE VII.

Indemnification

Section 7.1 Definitions. For purposes of this Article VII the following terms shall have the meanings indicated:

"Corporate Status" describes the status of a person who is or was a director, officer, employee, agent, trustee or fiduciary of the Corporation or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the express written request of the corporation.

"Court" means the Court of Chancery of the State of Delaware, the court in which the Proceeding in respect of which indemnification is sought by a Covered Person shall have been brought or is pending, or another court having subject matter jurisdiction and personal jurisdiction over the parties.

"Covered Person" means a person who is a present or former director or Officer of the corporation and shall include such person's legal representatives, heirs, executors and administrators.

"Disinterested" describes any individual, whether or not that individual is a director, Officer, employee or agent of the corporation, who is not and was not and is not threatened to be made a party to the Proceeding in respect of which indemnification, advancement of Expenses or other action is sought by a Covered Person.

"Expenses" shall include, without limitation, all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating or being or preparing to be a witness in a Proceeding.

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"Good Faith" shall mean a Covered Person having acted in good faith and in a manner such Covered Person reasonably believed to be in or not opposed to the best interests of the corporation or, in the case of an employee benefit plan, the best interests of the participants or beneficiaries of said plan, as the case may be, and, with respect to any Proceeding which is criminal in nature, having had no reasonable cause to believe such Covered Person's conduct was unlawful.

"Improper Personal Benefit" shall include, but not be limited to, the personal gain in fact by reason of a person's Corporate Status of a financial profit, monies or other advantage not also accruing to the benefit of the corporation or to the stockholders generally and which is unrelated to his usual compensation including, but not limited to, (i) in exchange for the exercise of influence over the corporation's affairs, (ii) as a result of the diversion of corporate opportunity, or (iii) pursuant to the use or communication of confidential or inside information for the purpose of generating a profit from trading in the corporation's securities. Notwithstanding the foregoing, "Improper Personal Benefit" shall not include any benefit, directly or indirectly, related to actions taken in order to evaluate, discourage, resist, prevent or negotiate any transaction with or proposal from any person or entity seeking control of, or a controlling interest in, the corporation.

"Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and may include law firms or members thereof that are regularly retained by the corporation but not by any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the standards of professional conduct then prevailing and applicable to such counsel, would have a conflict of interest in representing either the corporation or Covered Person in an action to determine the Covered Person's rights under this Article.

"Officer" means the chairman of the board, the president, vice presidents, treasurer, assistant treasurer(s), secretary, assistant secretary and such other executive officers as are appointed by the board of directors of the corporation and explicitly entitled to indemnification hereunder.

"Proceeding" includes any actual, threatened or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation (including any internal corporate investigation), administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative, other than one initiated by the Covered Person, but including one initiated by a Covered Person for the purpose of enforcing such Covered Person's rights under this Article to the extent provided in Section 7.14 of this Article. "Proceeding" shall not include any counterclaim brought by any Covered Person other than one arising out of the same transaction or occurrence that is the subject matter of the underlying claim.

Section 7.2 Right to Indemnification in General.

(a)  Covered Persons. The corporation may indemnify, and may advance Expenses, to each Covered Person who is, was or is threatened to be made a party or otherwise involved in any Proceeding, as provided in this Article and to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may hereafter from time to time permit.

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The indemnification provisions in this Article shall be deemed to be a contract between the corporation and each Covered Person who serves in any Corporate Status at any time while these provisions as well as the relevant provisions of the Delaware General Corporation Law are in effect, and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any Proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such a contract right may not be modified retroactively without the consent of such Covered Person.

(b)  Employees and Agents. The corporation may, to the extent authorized from time to time by the board of directors, grant indemnification and the advancement of Expenses to any employee or agent of the corporation to the fullest extent of the provisions of this Article with respect to the indemnification and advancement of Expenses of Covered Persons.

Section 7.3 Proceedings Other Than Proceedings by or in the Right of the Corporation. Each Covered Person may be entitled to the rights of indemnification provided in this Section 7.3 if, by reason of such Covered Person's Corporate Status, such Covered Person is, was or is threatened to be made, a party to or is otherwise involved in any Proceeding, other than a Proceeding by or in the right of the corporation. Each Covered Person may be indemnified against Expenses, judgments, penalties, fines and amounts paid in settlements, actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection with such Proceeding or any claim, issue or matter therein, if such Covered Person acted in Good Faith and such Covered Person has not been adjudged during the course of such proceeding to have derived an Improper Personal Benefit from the transaction or occurrence forming the basis of such Proceeding.

Section 7.4 Proceedings by or in the Right of the Corporation. Each Covered Person may be entitled to the rights of indemnification provided in this Section 7.4 if, by reason of such Covered Person's Corporate Status, such Covered Person is, or is threatened to be made, a party to or is otherwise involved in any Proceeding brought by or in the right of the corporation to procure a judgment in its favor. Such Covered Person may be indemnified against Expenses, judgments, penalties, and amounts paid in settlement, actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection with such Proceeding if such Covered Person acted in Good Faith and such Covered Person has not been adjudged during the course of such proceeding to have derived an Improper Personal Benefit from the transaction or occurrence forming the basis of such Proceeding. Notwithstanding the foregoing, no such indemnification shall be made in respect of any claim, issue or matter in such Proceeding as to which such Covered Person shall have been adjudged to be liable to the corporation if applicable law prohibits such indemnification; provided, however, that, if applicable law so permits, indemnification shall nevertheless be made by the corporation in such event if and only to the extent that the Court which is considering the matter shall so determine.

Section 7.5 Indemnification of a Party Who is Wholly or Partly Successful.Notwithstanding any provision of this Article to the contrary, to the extent that a Covered Person is, by reason of such Covered Person's Corporate Status, a party to or is otherwise involved in and is successful, on the merits or otherwise, in any Proceeding, such Covered Person shall be indemnified to the maximum extent permitted by law, against all Expenses, judgments, penalties, fines, and amounts paid in settlement, actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection therewith. If such Covered Person is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the corporation shall indemnify such Covered Person to the maximum extent permitted by law, against all Expenses, judgments, penalties, fines, and amounts paid in settlement, actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section 7.5 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

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Section 7.6 Indemnification for Expenses of a Witness. Notwithstanding any provision of this Article to the contrary, to the extent that a Covered Person is, by reason of such Covered Person's Corporate Status, a witness in any Proceeding, such Covered Person shall be indemnified against all Expenses actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection therewith.

Section 7.7 Advancement of Expenses. Notwithstanding any provision of this Article to the contrary, the corporation may advance all reasonable Expenses which, by reason of a Covered Person's Corporate Status, were incurred by or on behalf of such Covered Person in connection with any Proceeding, within thirty (30) days after the receipt by the corporation of a statement or statements from such Covered Person requesting such advance or advances, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by the Covered Person and shall include or be preceded or accompanied by an undertaking by or on behalf of the Covered Person to repay any Expenses if such Covered Person shall be adjudged to be not entitled to be indemnified against such Expenses. Any advance and undertaking to repay pursuant to this Section 7.7 may be unsecured interest free, as the corporation sees fit. Advancement of Expenses pursuant to this Section 7.7 shall not require approval of the board of directors or the stockholders of the corporation, or of any other person or body. The secretary of the corporation shall promptly advise the Board in writing of the request for advancement of Expenses, of the amount and other details of the request and of the undertaking to make repayment provided pursuant to this Section 7.7.

Section 7.8 Notification and Defense of Claim. Promptly after receipt by a Covered Person of notice of the commencement of any Proceeding, such Covered Person shall, if a claim is to be made against the corporation under this Article, notify the corporation of the commencement of the Proceeding. The failure to notify the corporation will not relieve the corporation from any liability which it may have to such Covered Person otherwise than under this Article. With respect to any such Proceedings to which such Covered Person notifies the corporation:

(a)     The corporation will be entitled to participate in the defense at its own expense.

(b)    Except as otherwise provided below in this subparagraph (b), the corporation

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(jointly with any other indemnifying party similarly notified) will be entitled to assume the defense with counsel reasonably satisfactory to the Covered Person. After notice from the corporation to the Covered Person of its election to assume the defense of a suit, the corporation will not be liable to the Covered Person under this Article for any legal or other expenses subsequently incurred by the Covered Person in connection with the defense of the Proceeding other than reasonable costs of investigation or as otherwise provided below in this subparagraph (b). The Covered Person shall have the right to employ his own counsel in such Proceeding but the fees and expenses of such counsel incurred after notice from the corporation of its assumption of the defense shall be at the expense of the Covered Person except as provided in this paragraph. The fees and expenses of counsel shall be at the expense of the corporation if (i) the employment of counsel by the Covered Person has been authorized by the corporation, (ii) the Covered Person shall have concluded reasonably that there may be a conflict of interest between the corporation and the Covered Person in the conduct of the defense of such action and such conclusion is confirmed in writing by the corporation's outside counsel regularly employed by it in connection with corporate matters, or (iii) the corporation shall not in fact have employed counsel to assume the defense of such Proceeding. The corporation shall be entitled to participate in, but shall not be entitled to assume the defense of any Proceeding brought by or in the right of the corporation or as to which the Covered Person shall have made the conclusion provided for in (ii) above and such conclusion shall have been so confirmed by the corporation's said outside counsel.

(c)     Notwithstanding any provision of this Article to the contrary, the corporation shall not be obligated to indemnify the Covered Person under this Article for any amounts paid in settlement of any Proceeding effected without its written consent. The corporation shall not settle any Proceeding or claim in any manner which would impose any penalty, limitation or disqualification of the Covered Person for any purpose without such Covered Person's written consent. Neither the corporation nor the Covered Person will unreasonably withhold their consent to any proposed settlement.

(d)     If it is determined that the Covered Person is entitled to indemnification other than as afforded under subparagraph (b) above, payment to the Covered Person of the additional amounts for which he is to be indemnified shall be made within ten (10) days after such determination.

Section 7.9 Procedures.

(a)     Method of Determination. A determination (as provided for by this Article or if required by applicable law in the specific case) with respect to a Covered Person's entitlement to indemnification shall be made either (i) by the board of directors by a majority vote of a quorum consisting of Disinterested directors, or (ii) in the event that a quorum of the board of directors consisting of Disinterested directors is not obtainable or, even if obtainable, such quorum of Disinterested directors so directs, by Independent Counsel in a written determination to the board of directors, a copy of which shall be delivered to the Covered Person seeking indemnification, (iii) by a special litigation committee of the board of directors appointed by the board, or (iv) by the vote of the holders of a majority of the corporation's capital stock outstanding at the time entitled to vote thereon.

(b)     Initiating Request. A Covered Person who seeks indemnification under this Article shall submit a Request for Indemnification, including such documentation and information as is reasonably available to such Covered Person and is reasonably necessary to determine whether and to what extent such Covered Person is entitled to indemnification.

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(c)     Presumptions. In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall not presume that the Covered Person is or is not entitled to indemnification under this Article.

(d)  Burden of Proof. Each Covered Person shall bear the burden of going forward and demonstrating sufficient facts to support his claim for entitlement to indemnification under this Article. That burden shall be deemed satisfied by the submission of an initial Request for Indemnification pursuant to Section 7.9(b) above.

(e)  Effect of Other Proceedings. The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of guilty or of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Article) of itself adversely affect the right of a Covered Person to indemnification or create a presumption that a Covered Person did not act in Good Faith.

(f)   Actions of Others. The knowledge, actions, or failure to act, of any director, officer, employee, agent, trustee or fiduciary of the enterprise whose daily activities the Covered Person was actually responsible may be imputed to a Covered Person for purposes of determining the right to indemnification under this Article.

Section 7.10 Action by the Corporation. Any action, payment, advance determination other than a determination made pursuant to Section 7.9(a) above, authorization, requirement, grant of indemnification or other action taken by the Corporation pursuant to this Article shall be effected exclusively through any Disinterested person so authorized by the board of directors of the corporation, including the president or any vice president of the corporation.

Section 7.11 Non-Exclusivity. The rights of indemnification and to receive advancement of Expenses as provided by this Article shall not be deemed exclusive of any other rights to which a Covered Person may at any time be entitled under applicable law, the Certificate of Incorporation, these By-Laws, any agreement, a vote of stockholders or a resolution of the board of directors, or otherwise. No amendment, alteration, rescission or replacement of this Article or any provision hereof shall be effective as to an Covered Person with respect to any action taken or omitted by such Covered Person in such Covered Person's Corporate Status or with respect to any state of facts then or previously existing or any Proceeding previously or thereafter brought or threatened based in whole or to the extent based in part upon any such state of facts existing prior to such amendment, alteration, rescission or replacement.

Section 7.12 Insurance. The corporation may maintain, at its expense, an insurance policy or policies to protect itself and any Covered Person, officer, employee or agent of the corporation or another enterprise against liability arising out of this Article or otherwise, whether or not the corporation would have the power to indemnify any such person against such liability under the Delaware General Corporation Law.

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Section 7.13 No Duplicative Payment. The corporation shall not be liable under this Article to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that a Covered Person has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 7.14 Expenses of Adjudication.In the event that any Covered Person seeks a judicial adjudication, or an award in arbitration, to enforce such Covered Person's rights under, or to recover damages for breach of, this Article, the Covered Person shall be entitled to recover from the corporation, and shall be indemnified by the corporation against, any and all expenses (of the types described in the definition of Expenses in Section 7.1 of this Article) actually and reasonably incurred by such Covered Person in seeking such adjudication or arbitration, but only if such Covered Person prevails therein. If it shall be determined in such adjudication or arbitration that the Covered Person is entitled to receive part but not all of the indemnification of expenses sought, the expenses incurred by such Covered Person in connection with such adjudication or arbitration shall be appropriately prorated.

Section 7.15 Severability. If any provision or provisions of this Article shall be held to be invalid, illegal or unenforceable for any reason whatsoever:

(a)   the validity, legality and enforceability of the remaining provisions of this Article (including without limitation, each portion of any Section of this Article containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and

(b)  to the fullest extent possible, the provisions of this Article (including, without limitation, each portion of any Section of this Article containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

ARTICLE VIII.
Miscellaneous Provisions

Section 8.1 Certificate of Incorporation. All references in these by-laws to the Certificate of Incorporation shall be deemed to refer to the Certificate of Incorporation of the corporation, as amended and in effect from time to time.

Section 8.2 Fiscal Year. Except as from time to time otherwise provided by the board of directors, the fiscal year of the corporation shall end on December 31st of each year.

Section 8.3 Corporate Seal. The board of directors shall have the power to adopt and alter the seal of the corporation.

Section 8.4 Execution of Instruments. All deeds, leases, transfers, contracts, bonds, notes, and other obligations authorized to be executed by an officer of the corporation on its behalf shall be signed by the president or the treasurer except as the board of directors may generally or in particular cases otherwise determine.

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Section 8.5 Voting of Securities. Unless the board of directors otherwise provides, the president or the treasurer may waive notice of and act on behalf of this corporation, or appoint another person or persons to act as proxy or attorney in fact for this corporation with or without discretionary power and/or power of substitution, at any meeting of stockholders or shareholders of any other corporation or organization, any of whose securities are held by this corporation.

Section 8.6 Evidence of Authority. A certificate by the secretary or any assistant secretary as to any action taken by the stockholders, directors or any officer or representative of the corporation shall, as to all persons who rely thereon in good faith, be conclusive evidence of such action. The exercise of any power which by law, by the Certificate of Incorporation, or by these by-laws, or under any vote of the stockholders or the board of directors, may be exercised by an officer of the corporation only in the event of absence of another officer or any other contingency shall bind the corporation in favor of anyone relying thereon in good faith, whether or not such absence or contingency existed.

Section 8.7 Corporate Records. Any books or records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method;provided, however, that the books and records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any books or records so kept upon the request of any person entitled to inspect such records pursuant to the Certificate of Incorporation, these by-laws, or the provisions of the DGCL.

Section 8.8 Charitable Contributions. The board of directors from time to time may authorize contributions to be made by the corporation in such amounts as it may determine to be reasonable to corporations, trusts, funds or foundations organized and operated exclusively for charitable, scientific or educational purposes, no part of the net earning of which inures to the private benefit of any stockholder or individual.

Section 8.9 Communications of Notices. Any notice required to be given under these by-laws may be given by (i) delivery in person, (ii) mailing it, postage prepaid, first class, (iii) mailing it by nationally or internationally recognized second day or faster courier service, or (iv) electronic transmission, in each case, to the addressee; provided however that facsimile transmission or electronic transmission may only be used if the addressee has consented to such means.

Section 8.10 Electronic Transmissions. Notwithstanding any reference in these bylaws to written instruments, all notices, meetings, consents and other communications contemplated by these by-laws may be conducted by means of an electronic transmission, to the extent permitted by law, if specifically authorized by the board of directors of the corporation.

ARTICLE IX.

Amendments

Section 9.1 Amendment by Stockholders. Prior to the issuance of stock, these by-laws may be amended, altered or repealed by the incorporator(s) by majority vote. After stock has been issued, these by-laws may be amended altered or repealed by the stockholders at any annual or special meeting by vote of a majority of all shares outstanding and entitled to vote, except that where the effect of the amendment would be to reduce any voting requirement otherwise required by law, the Certificate of Incorporation or another provision of these by-laws, such amendment shall require the vote that would have been required by law, the Certificate of Incorporation or these by-laws or such other provision of these by-laws. Notice and a copy of any proposal to amend these by-laws must be included in the notice of meeting of stockholders at which action is taken upon such amendment.

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Section 9.2 Amendment by Board of Directors. These by-laws may be amended or altered by the board of directors at a meeting duly called for the purpose by majority vote of the directors then in office, except that directors shall not amend the by-laws in a manner which:

(a)             changes the stockholder voting requirements for any action;

(b)             alters or abolishes any preferential right or right of redemption applicable to a class or series of stock with shares already outstanding;

(c)             alters the provisions of Article IX hereof; or

(d)             permits the board of directors to take any action which under law, the Certificate of Incorporation, or these by-laws is required to be taken by the stockholders.

Any amendment of these by-laws by the board of directors may be altered or repealed by the stockholders at any annual or special meeting of stockholders.

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KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. Signature (Joint Owners) Signature [PLEASE SIGN WITHIN BOX] Date Date To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below . 0 0 0 0 0000461438_1 R1.0.1.18 For Withhold For All All All Except The Board of Directors recommends you vote FOR the following: 1. ELECTION OF DIRECTORS Nominees 01) Robert W. Pierce, Jr. 02) Daniel C. Croteau 03) Cynthia L. Feldmann For Against Abstain 0 0 0 0 0 0 0 0 0 UFP TECHNOLOGIES, INC. 100 HALE STREET NEWBURYPORT, MA 01950 - 3504 USA VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on 06/09/2020. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/UFPT2020 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage - paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 . The Board of Directors recommends you vote FOR proposals 2, 3 and 4. 2. To amend the Company's Certificate of Incorporation to eliminate the classified structure of the Board of Directors and provide for the annual election of directors. 3. A non - binding advisory resolution to approve our executive compensation. 4. To ratify the appointment of Grant Thornton LLP as the Company's independent registered public accounting firm for the year ending December 31, 2020. NOTE: Such other business as may properly come before the annual meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Yes No 0 0 For address change/comments, mark here. (see reverse for instructions) Please indicate if you plan to attend this meeting Yes No 0 0 Please indicate if you wish to view meeting materials electronically via the Internet rather than receiving a hard copy. Please note that you will continue to receive a proxy card for voting purposes only.

0000461438_2 R1.0.1.18 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement and Annual Report are available at www.proxyvote.com UFP TECHNOLOGIES, INC. Annual Meeting of Stockholders June 10, 2020, 10:00 AM EDT The undersigned hereby appoints R . Jeffrey Bailly, Ronald J . Lataille, and Christopher P . Litterio, and each of them, acting singly, with full power of substitution, attorneys and proxies to represent the undersigned at the 2020 Annual Meeting of Stockholders of UFP Technologies, Inc . to be held virtually via live audio webcast at www . virtualshareholdermeeting . com/UFPT 2020 , on Wednesday, June 10 , 2020 at 10 : 00 a . m . EDT, and at any adjournment or adjournments thereof, with all power that the undersigned would possess if personally present, and to vote all shares of stock that the undersigned may be entitled to vote at said meeting upon the matters set forth in the Notice of and Proxy Statement for the Annual Meeting in accordance with the instructions and with discretionary authority upon such other matters as may come before the Annual Meeting . All previous proxies are hereby revoked . This Proxy is solicited on behalf of the Board of Directors as listed herein . It will be voted as directed by the undersigned and if no direction is indicated, it will be voted "FOR" all director nominees, "FOR" proposals 2 , 3 and 4 , and in the discretion of the proxy holders as to any other matter that may properly come before the Annual Meeting . Address change/comments: (If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.) Continued and to be signed on reverse side