-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LKa5KrjSenm6GPA49J6l5h8wTbWJ7ZLs+1QEqwSpxSiKxROkpK62Jb8jgZuvI8Xx /XvyLvdDguIoM8cQ6q392Q== 0001047469-98-030321.txt : 19980812 0001047469-98-030321.hdr.sgml : 19980812 ACCESSION NUMBER: 0001047469-98-030321 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980811 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UFP TECHNOLOGIES INC CENTRAL INDEX KEY: 0000914156 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS FOAM PRODUCTS [3086] IRS NUMBER: 042314970 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12648 FILM NUMBER: 98681973 BUSINESS ADDRESS: STREET 1: 172 EAST MAIN ST CITY: GEORGETOWN STATE: MA ZIP: 01833 BUSINESS PHONE: 5083522200 MAIL ADDRESS: STREET 1: 172 EAST MAIN ST CITY: GEORGETOWN STATE: MA ZIP: 02135 10-Q 1 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 (Mark one) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30,1998 or: [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to -------- -------- Commission File Number: 0-20967 UFP TECHNOLOGIES, INC. ---------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 04-2314970 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 172 East Main Street, Georgetown, Massachusetts 01833 ----------------------------------------------------- (Address of principal executive offices) (Zip Code) (978) 352-2200 -------------- (Registrant's telephone number, including area code) ----------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filings requirements for the past 90 days. Yes X No ----- ----- As of July 23, 1998, 4,677,354 shares of registrant's Common Stock, $.01 par value, were outstanding. UFP TECHNOLOGIES, INC. INDEX
Page PART I - FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets June 30, 1998 and December 31, 1997............................... 1 Consolidated Statements of Operations Three Months and Six Months Ended June 30, 1998 and 1997............................................ 2 Consolidated Statements of Cash Flows Six Months Ended June 30, 1998 and 1997........................... 3 Notes to Consolidated Financial Statements........................ 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...................................... 5 PART II - OTHER INFORMATION............................................................ 8 SIGNATURES............................................................................. 9
PART I: FINANCIAL INFORMATION Item 1. Financial Statements UFP TECHNOLOGIES, INC. Condensed Consolidated Balance Sheets
30-Jun-98 31-Dec-97 ---------------- ---------------- ASSETS (Unaudited) Current assets Cash and cash equivalents $ 880,316 $ 233,452 Receivables, net 6,406,889 6,413,251 Inventories 3,372,395 3,053,299 Prepaid expenses and other current assets 82,298 146,800 ---------------- ---------------- Total current assets 10,741,898 9,846,802 ---------------- ---------------- Property, plant and equipment 20,764,294 20,110,727 Less accumulated depreciation and amortization (9,743,911) (8,920,621) ---------------- ---------------- Net property, plant and equipment 11,020,383 11,190,106 ---------------- ---------------- Goodwill, net 2,455,366 2,539,367 Other assets 1,576,574 1,618,492 ---------------- ---------------- Total assets $ 25,794,221 $ 25,194,767 ----------------- ----------------- ----------------- ----------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable $ 2,500,000 $ 2,500,000 Current installments of long-term debt 53,721 111,888 Current installments of capital lease obligations 943,692 913,170 Accounts payable 1,806,786 1,540,377 Accrued expenses and payroll withholdings 2,268,534 2,202,817 ---------------- ---------------- Total current liabilities 7,572,733 7,268,252 Long-term debt, excluding current installments 600,038 624,641 Capital lease obligations, excluding current installments 2,144,992 2,608,768 Retirement liability 689,896 559,896 ---------------- ---------------- ---------------- ---------------- Total liabilities 11,007,659 11,061,557 ---------------- ---------------- Stockholders equity Preferred stock 0 0 Common stock 57,664 46,664 Additional paid-in capital 9,532,019 9,499,019 Retained earnings 5,196,879 4,587,527 ---------------- ---------------- Total stockholders equity 14,786,562 14,133,210 ---------------- ---------------- Total liabilities and stockholders' equity $ 25,794,221 $ 25,194,767 ----------------- ----------------- ----------------- -----------------
The accompanying notes are an integral part of these condensed consolidated financial statements. 1 UFP TECHNOLOGIES, INC. Consolidated Statements of Operations (Unaudited)
Three Months Ended Six Months Ended 30-Jun-98 30-Jun-97 30-Jun-98 30-Jun-97 ------------ ----------- ----------- ----------- Net sales $ 11,318,065 11,208,766 22,068,025 22,160,315 Cost of sales 8,169,212 8,170,061 16,074,464 16,395,827 ------------ ----------- ----------- ----------- Gross profit 3,148,853 3,038,705 5,993,561 5,764,488 Selling, general and administrative expenses 2,392,644 2,350,229 4,711,240 4,620,036 ------------ ----------- ----------- ----------- Operating income 756,209 688,476 1,282,321 1,144,452 Interest expense 134,839 174,154 278,884 310,688 Other (income) (2,494) 0 (35,914) 0 ------------ ----------- ----------- ----------- Income before income taxes 623,864 514,322 1,039,351 833,764 Income taxes 256,000 216,000 430,000 350,000 ------------ ----------- ----------- ----------- Net income $ 367,864 298,322 609,351 483,764 ------------ ----------- ----------- ----------- ------------ ----------- ----------- ----------- Basic net income per share $ 0.08 0.06 0.13 0.10 Diluted net income per share $ 0.08 0.06 0.13 0.10 Weighted average number of shares used in computation of per share data: Basic 4,677,354 4,653,024 4,671,854 4,641,359 Diluted 4,888,265 4,844,715 4,857,922 4,882,947
The accompanying notes are an integral part of these consolidated financial statements 2 UFP TECHNOLOGIES, INC. Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended 30-Jun-98 30-Jun-97 ----------- ----------- Cash flows from operating activities: Net income $ 609,351 $ 483,764 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 907,292 839,455 Equity in net income (loss) of unconsolidated affiliate and partnership (17,984) 8,590 Deferred income taxes 523 0 Stock issued in lieu of compensation 44,000 33,750 Changes in operating assets and liabilities: Receivables, net 6,362 (70,960) Inventories (319,096) (596,582) Prepaid expenses and other current assets 64,502 130,216 Accounts payable 266,409 (134,496) Accrued expenses and payroll withholdings 65,717 52,082 Retirement liability 130,000 30,000 ----------- ----------- Net cash provided by operating activities 1,757,076 775,819 Cash flows from investing activities: Additions to property, plant and equipment (653,567) (541,550) Acquisition of Foam Cutting Engineers, net of cash acquired 0 (1,512,879) Change in other assets 59,379 3,161 ----------- ----------- Net cash used in investing activities (594,188) (2,051,268) Cash flows from financing activities: Net borrowings under notes payable 0 2,000,000 Principal repayments of long-term debt (82,770) (91,046) Principal repayments of capital lease obligations (433,254) (355,018) Net proceeds from sale of common stock 0 39,412 ----------- ----------- Net cash provided by financing activities (516,024) 1,593,348 ----------- ----------- Net change in cash and cash equivalents 646,864 317,899 Cash and cash equivalents, at beginning of period 233,452 143,531 ----------- ----------- Cash and cash equivalents, at end of period 880,316 461,430 ----------- ----------- ----------- -----------
The accompanying notes are an integral part of these consolidated financial statements. 3 UFP TECHNOLOGIES, INC. NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (1) Basis of Presentation The interim consolidated financial statements of UFP Technologies, Inc. (the Company) presented herein, without audit, have been prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include all the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 1997, included in the Company's 1997 Annual Report on Form 10-K as provided to the Securities and Exchange Commission. The condensed consolidated balance sheet as of June 30, 1998, the consolidated statements of operations for the three and six months ended June 30, 1998 and 1997, and the consolidated statements of cash flows for the six months ended June 30, 1998 and 1997, are unaudited but, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments) necessary for fair presentation of results for these interim periods. The results of operations for the six months ended June 30, 1998, are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 1998. (2) Inventory Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following:
30-Jun-98 31-Dec-97 ----------- ----------- Raw materials $ 2,137,666 $ 1,933,740 Work-in-process 448,460 395,592 Finished goods 786,269 723,967 ----------- ----------- Total Inventory 3,372,395 3,053,299 ----------- ----------- ----------- -----------
Work-in-process and finished goods inventories consist of materials, labor and manufacturing overhead. (3) Common Stock At December 31, 1997, 697,500 options were outstanding under the Company's 1993 Employee Stock Option Plan ("1993 Plan"). The purpose of these options is to provide long-term rewards and incentives to the Company's key employees, officers, employees, directors, consultants and advisors. There were 95,000 options issued and zero options exercised in the first six months of 1998 under the 1993 Plan, and zero options expired. At June 30, 1998, 792,500 options were outstanding under the plan. 4 At December 31, 1997, 40,000 options were outstanding under the Company's 1993 Non-Employee Director Plan ("1993 Director's Plan"). There were 2,500 options issued and no options were exercised or expired in the first six months of 1998. At June 30, 1998, 42,500 options were outstanding under the 1993 Director's Plan. (4) Earnings per share The Company has adopted the provisions of the Statement of Financial Accounting Standards (SFAS) No. 128 "Earnings Per Share." SFAS No. 128 replaced the calculation of primary and fully diluted earnings per share with a calculation of basic and diluted earnings per share. Basic earnings per share is computed based on the weighted average number of shares of common stock outstanding. Diluted earnings per share is based upon the weighted average of common shares and dilutive common stock equivalent shares outstanding during each period. All earnings per share amounts for all periods have been restated to conform to SFAS No. 128 requirements. The weighted average number of shares used to compute diluted income per share consisted of the following:
Three Months Ended Six Months Ended 30-Jun-98 30-Jun-97 30-Jun-98 30-Jun-97 --------- --------- --------- --------- Weighted average common shares outstanding 4,677,354 4,653,024 4,671,854 4,641,359 Weighted average common equivalent shares due to stock options 210,911 191,691 186,068 241,588 --------- --------- --------- --------- 4,888,265 4,844,715 4,857,922 4,882,947 --------- --------- --------- --------- --------- --------- --------- ---------
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Sales Net sales for the three month period ended June 30, 1998 were $11.3 million or 1% above sales of $11.2 million in the same period last year. Sales for the six month period ended June 30, 1998 decreased slightly from $22.2 million a year ago to $22.1 million. Both sales patterns primarily reflect general volume increases offset by volume slowdowns at two large electronics customers affected by the Asian crisis. Gross Profit Gross Profit as a percentage of sales improved in both the three and six month periods ended June 30, 1998 from 27.1% and 26.0% to 27.8% and 27.2%, respectively. The improvements are primarily 5 attributable to continued business mix improvements and favorable overhead absorption in certain plants. Selling General and Administrative Expenses Selling, General and Administrative expenses ("SG&A") for the three month period ended June 30, 1998 were $2,393,000 or 1.8% higher than SG&A of $2,350,000 in the same period a year ago. SG&A for the six month period was $4,711,000 or 2.0% higher than SG&A of $4,620,000 last year. Both increases are primarily attributable to additions to the management team as well as to the implementation of new information software systems. Other Interest expense for the three month periods ended June 30, 1998 and 1997 were $135,000 and $174,000, respectively. Interest for the six month periods ended June 30, 1998 and 1997 were $279,000 and $311,000, respectively. The decline in both periods is primarily attributable to lower average borrowings. The Company's effective tax rate for the three and six month periods ended June 30, 1998 was 41% and 41.4% respectively, compared to 42% in both periods a year ago. Liquidity and Capital Resources The Company funds its operating expenses, capital requirements and growth plan through internally generated cash, bank credit facilities and long-term capital leases. At June 30, 1998 and December 31, 1997 the Company's working capital was approximately $3,402,000 and $2,579,000, respectively. The increase in working capital was primarily attributable to an increase in cash and inventory of approximately $647,000 and $319,000, respectively. During the six month periods ended June 30, 1998 and 1997, operating activities of the Company provided approximately $1,757,000 and $776,000 in cash, respectively. The increase was primarily attributable to improved profits of $126,000, a smaller increase in inventory of approximately $277,000 and a change in accounts payable deviation of approximately $401,000. Net cash used in investing activities during the six month periods ending June 30, 1998 and 1997, was approximately $594,000 and $2,051,000, respectively. The primary use of funds for investing activities in the current six month period was to purchase fixed assets. The decline in usage of cash for investing activities from 1997 to 1998 primarily reflects the impact in 1997 of the acquisition of Foam Cutting Engineers, Inc. Net cash used in financing activities for the six month period ended June 30, 1998 was approximately $516,000 compared to cash provided by financing activities of approximately $1,593,000 in 1997. The change reflects differences in net borrowing activity between the two periods primarily as a result of the prior year acquisition of Foam Cutting Engineers, Inc. While the Company does not have any significant capital commitments, it intends to continue to invest in capital equipment to support its operations. The Company is also engaged in discussions with certain parties regarding potential strategic acquisitions, but presently does not have any 6 agreements to enter into any such acquisitions. The Company intends to fund any such acquisitions with working capital and bank financing. There can be no assurances that such financing would be available on favorable terms, if at all. The Company has a $7,500,000 revolving bank loan facility, of which $2,500,000 was outstanding at June 30, 1998. This facility expires on June 30, 1999. Borrowings through this credit facility are unsecured, and bear interest at LIBOR plus 1.75% or prime. In addition, at June 30, 1998, the Company had capitalized equipment lease debt and other notes payable of approximately $3,089,000 and $654,000, respectively. At June 30, 1998 the current portion of all debt obligations was $3,264,000. The Company believes that its existing resources, including its revolving loan facility, together with cash generated from operations and funds expected to be available to it through any necessary equipment financing and additional bank borrowings, will be sufficient to fund its cash flow requirements through at least the end of 1998. However, there can be no assurances that such financing will be available at favorable terms, if at all. Year 2000 Data Conversion The Company is in the process of implementing comprehensive computer systems which are prepared for the year 2000. The implementation schedule anticipates a complete conversion prior to January 1, 2000. The Company presently believes that, with the conversion to new software, the year 2000 problem will not pose a significant operational problem to the Company. However, there can be no assurance that the systems of other parties upon which the Company's businesses also rely, including but not limited to the Company's customers and suppliers, will be converted on a timely basis. The Company's business, financial condition, or results of operations could be materially adversely affected by the failure of its systems or those of other parties to operate or properly manage dates beyond 1999. * * * * * 7 PART II - OTHER INFORMATION UFP TECHNOLOGIES, INC. Item 1 Legal Proceedings: No material litigation. Item 2 Changes in Securities: None Item 3 Defaults Upon Senior Securities: None Item 4 Submission of Matters to a Vote of Security Holders. The Company held its Annual Meeting of Stockholders on June 3, 1998. There were two proposals before the stockholders at the Annual Meeting. First, the stockholders elected the members of the Board of Directors of the Company. The votes for such matter were as follows:
Nominee For Withheld ------- --- -------- William H. Shaw 3,739,855 3,500 Richard L. Bailly 3,739,855 3,500 R. Jeffrey Bailly 3,739,810 3,545 William C. Curry 3,739,855 3,500 T. Gordon Roddick 3,739,855 3,500 Kenneth L. Gestal 3,739,855 3,500 Peter R. Worrell 3,739,855 3,500
There were no abstentions nor broker nonvotes in connection with the election of Directors. Second, the stockholders approved the adoption of the Company's 1998 Employee Stock Purchase Plan by a vote of 3,718,368 for and 16,545 against. There were 8,442 abstentions and no broker nonvotes for the proposal. Item 5 Other Information: None Item 6 Exhibits and Reports on Form 8-K. (a) Exhibits furnished: (4.5) 1998 Director Stock Option Incentive Plan (incorporated herein by reference to the Company's Registration Statement of Form S-8 Registration No. 333-56741) (10.19) 1993 Combined Stock Option Plan, as amended. (27) Financial Data Schedule (b) Reports on Form 8-K: The Company did not file a report on Form 8-K for the reporting period. 8 UFP TECHNOLOGIES, INC. AND SUBSIDIARY SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. UFP TECHNOLOGIES, INC. (Registrant) August 10, 1998 /s/ R. Jeffrey Bailly - --------------- ------------------------------------------------ Date R. Jeffrey Bailly President, Chief Executive Officer and Director August 10, 1998 /s/ Ronald J Lataille - --------------- ------------------------------------------------ Date Ronald J. Lataille Vice President, Chief Financial Officer 9 EX-10.19 2 EX. 10.19 UFP TECHNOLOGIES, INC. (a Delaware Corporation) 1993 STOCK OPTION PLAN (As Amended on April 16, 1998) 1. Statement of Purpose. The purpose of this Stock Option Plan (the "Plan") is to benefit UFP TECHNOLOGIES, INC., a Delaware corporation (the "Company"), through the maintenance and development of its businesses by offering certain present and future key individuals a favorable opportunity to become holders of stock in the Company over a period of years, thereby giving them a permanent stake in the growth and prosperity of the Company and encouraging the continuance of their involvement with the Company and/or its subsidiaries. 2. Administration. The Plan shall be administered by the Stock Option Committee (the "Committee") of the Board of Directors or any other committee of the Board of Directors selected by the Board of Directors. If no Committee shall be appointed, this Plan shall be administered by the full Board of Directors, which Board shall be deemed the Committee for purposes of this Plan. The Committee shall have full and plenary authority to interpret the terms and provisions of the Plan. 3. Eligibility. Options shall be granted only to key employees of the Company and its subsidiaries (including officers, and including directors of the Company and its subsidiaries who are also employees), and consultants and advisors of the Company and its subsidiaries (where bona fide services were rendered and such services were not in connection with the offer and sale of securities in a capital raising transaction), but excluding the Directors of the Company who are not employees of the Company, selected initially and from time to time thereafter by the Committee on the basis of their importance to the business of the Company or its subsidiaries. 4. Granting of Options. The Committee may grant options under which a total of not in excess of 1,050,000 Shares of the $.01 par value Common Stock of the Company ("Common Stock") may be purchased from the Company, subject to adjustment as provided in Section 12 hereof. The Committee may, in its discretion grant under the Plan either non-qualified stock options or incentive stock options as defined in Section 422 of the Internal Revenue Code of 1986 (the "Code"), provided, however, that incentive stock options may only be granted to employees of the Company or its subsidiaries. A maximum of 525,000 shares (subject to adjustment as provided in Section 12 hereof) may be subject to options granted to Directors of the Company and/or its subsidiaries who also serve as employees. The grant of a non-qualified stock option shall be evidenced by a written Non-Qualified Stock Option Agreement, executed by the Company and the holder of a non-qualified stock option, stating the number of shares of Common Stock subject to such non-qualified stock option evidenced thereby and in such form as the Committee may from time to time determine. The grant of an incentive stock option shall be evidenced by a written Incentive Stock Option Agreement, executed by the Company and the holder of the incentive stock option, stating the number of shares of Common Stock subject to such incentive stock option evidenced thereby and in such form as the Committee may from time to time determine. In the event that an option expires or is terminated or cancelled unexercised as to any shares, such released shares may again be optioned (including a grant in substitution for a cancelled option). Shares subject to options may be made available from unissued or reacquired shares of Common Stock. Nothing contained in the Plan or in any option granted pursuant thereto shall confer upon any optionee any right to be continued in the employment of the Company or any subsidiary of the Company, or interfere in any way with the right of the Company or its subsidiaries to terminate an employee's employment at any time, or interfere in any way with the right of the Company or its subsidiaries to terminate any consulting or other compensation arrangement between the Company or any subsidiary of the Company, and any consultant or advisor of the Company or such subsidiary. 5. Exercise Price. The exercise price shall be determined by the Committee in its discretion, and may be greater than, or less than the fair market value, at the time the option is granted, of the shares of Common Stock subject to the option, provided, however, that the exercise price of an incentive stock option shall be not less than the fair market value, at the time the option is granted, of the shares of Common Stock subject to the option. If one or more incentive stock options are granted to an employee who, at the time of grant, owns more than ten percent (10%) of the total voting power of all classes of stock of the Company (a "10% Owner"), the exercise price under such incentive stock option shall be not less than 110% of said fair market value. Such fair market value shall be deemed to be the last trading price of the Common Stock on the trading day next preceding the date of the grant of the option except that if the Common Stock is then listed on any national exchange, fair market value shall be the mean between the high and low sales price on the trading day next preceding the date of grant of the option. If shares of the Common Stock shall not have been traded on any national exchange or interdealer quotation system for more than 10 days immediately preceding the date of grant of such option or if deemed appropriate by the Committee for any other reason, the fair market value of shares of Common Stock shall be determined by the Committee in such other manner as it may deem appropriate. In no event shall the exercise price of any share of Common Stock be less than its par value. - 2 - 6. Duration of Options, Increments, and Extensions. Subject to the provisions of Section 8 hereof, each option shall be for a term of not more than ten years, provided, however, that incentive stock options granted to employees who, at the time of the grant, are 10% Owners shall be for a term of not more than five years. Each option shall become exercisable with respect to 25% of the total number of shares subject to the option twelve months after the date of its grant and, with respect to each additional 25%, at the end of each twelve-month period thereafter during the succeeding three years. Notwithstanding the foregoing, the Committee may, in its discretion (i) specifically provide at the date of grant of another time or times of exercise; (ii) accelerate the exercisability of such option subject to such terms as the Committee deems necessary and appropriate to effectuate the purpose of the Plan, including, without limitation, a requirement that the optionee grant to the Company an option to repurchase all or a portion of the number of shares acquired upon exercise of the accelerated option for their fair market value on the date of grant; or (iii) at any time prior to the expiration or termination of any non-qualified stock option previously granted, extend the term of any such option (including such non-qualified stock options held by officers or directors) for such period as the Committee in its discretion shall determine. In no event, however, shall the aggregate option period with respect to any option, including the original term of the option and any extensions thereof, exceed ten years. Subject to the foregoing, all or any part of the shares to which the right to purchase has accrued may be purchased at the time of such accrual or at any time or times thereafter during the option period. 7. Exercise of Option. Each stock option agreement shall set forth the procedure governing the exercise of the stock option granted thereunder, and shall provide that, upon such exercise in respect of any shares of common Stock subject thereto, the optionee shall pay the Company, in full, the option price for such shares with cash or its equivalent or with previously owned Common Stock, or by a combination of these methods of payment. In the discretion of the Committee, payment may also be made by delivery (including delivery by facsimile transmission) to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions to a broker-dealer to sell a sufficient portion of the shares and deliver the sale proceeds directly to the Company to pay for the exercise price, or by any other means which the Committee determines to be consistent with the Plan's purpose and applicable law. Alternatively the option may provide that the optionee may elect to direct the Company to withhold such number of shares issuable upon exercise of the option as is necessary to fund the exercise price. For the purpose of this paragraph, the per share value of the Common Stock of the Company shall be the fair market value on the date of exercise. Any optionee holding two or more options that are partially or wholly exercisable at the same time may exercise said options (to the extent they are then - 3 - exercisable) in any order the optionee chooses, regardless of the order in which said options were granted. At the time of exercise of any option, the Company may, if it shall determine it necessary or desirable for any reason, require the optionee (or his heirs, legatees, or legal representative, as the case may be) as a condition upon the exercise thereof to deliver to the Company a written representation of present intention to purchase the shares for investment and not for distribution. In the event such representation is required to be delivered, an appropriate legend may be placed upon each certificate delivered to the optionee upon his exercise of part or all of the option and a stop transfer order may be placed with the transfer agent. Each option shall also be subject to the requirement that, if at any time the Company determines, in its discretion, that the listing, registration or qualification of the shares subject to the option upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of or in connection with, the issue or purchase of shares thereunder, the option may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company. 8. Termination of Relationship - Exercise Thereafter. In the event the relationship between the Company and a director, officer, other employee, consultant or advisor who is an optionee is terminated for any reason other than death, permanent disability or retirement, such optionee's option may be exercised (to the extent exercisable by the optionee on the date of such termination) by the optionee, or if he or she is not living, by his or her heirs, legatees or legal representatives, as the case may be, during its specified term but not later than three (3) months after the date of such termination, and in any event not later than ten (10) years after the date the option was granted. Temporary absences because of illness, vacation, approved leaves of absence, and transfers among the Company and its subsidiaries, shall not be considered to terminate the employment or consulting relationship with the optionee or to interrupt continuous employment. In the event of termination of said relationship because of death, permanent disability (as that term is defined in Section 22(e)(3) of the Code, as now in effect or as subsequently amended), or retirement (at age 65 or earlier as may be permitted by the Company), the option may be exercised in full, without regard to any installments established under Section 6 hereof, by the optionee or, if he is not living, by his heirs, legatees, or legal representative, as the case may be, during its specified term, but not later than one (1) year after the date of death, permanent disability, or retirement, and in any event not later than ten (10) years after the date the option was granted. - 4 - 9. Withholding Taxes. Whenever the Company is required to issue or transfer shares of Common Stock under the Plan, the Company shall have the right to require the grantee to remit to the Company an amount sufficient to satisfy any federal, state and/or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares. In the discretion of the Committee, payment of such withholding taxes may be made by delivery (including delivery by facsimile transmission) to the Company or its designated agent of irrevocable instructions to a broker-dealer to sell a sufficient portion of the shares and deliver the sale proceeds directly to the Company to pay for the withholding taxes. Alternatively, the Company may, in its discretion, issue or transfer such shares of Common Stock net of the number of shares sufficient to satisfy the withholding tax requirements. For withholding tax purposes, the shares of Common Stock shall be valued on the date the withholding obligation is incurred. 10. Non-Transferability of Options. No option shall be transferable by the optionee otherwise than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by Code, Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder, and each option shall be exercisable during an optionee's lifetime only by the optionee. 11. Limitation on Amounts of Incentive Stock Options Granted. The aggregate fair market value (determined as of the date of grant) of stock for which incentive stock options granted to an optionee under this Plan become first exercisable shall not exceed One Hundred Thousand Dollars ($100,000) during any calendar year. 12. Adjustment. The number of shares subject to the Plan and to options granted under the Plan shall be adjusted as follows: (a) in the event that the outstanding shares of Common Stock of the Company is changed by any stock dividend, stock split or combination of shares, the number of shares subject to the Plan and to options granted thereunder shall be proportionately adjusted; (b) in the event of any merger, consolidation or reorganization of the Company with any other corporation or corporations, there shall be substituted, on an equitable basis as determined by the Committee, for each share of Common Stock then subject to the Plan, whether or not at the time subject to outstanding options, the number and kind of shares of Stock or other securities to which the holders of shares of Common Stock of the Company will be entitled pursuant to the transaction; and (c) in the event of any other relevant change in the capitalization of the Company, the Committee shall provide for an equitable adjustment in the number of shares of Common Stock then subject to the Plan, whether or not then subject to outstanding options. In the event of any such adjustment, the purchase price per share shall be proportionately adjusted. - 5 - 13. Termination and Amendment of Plan. This Plan shall terminate ten years from the effective date of this Plan, and an option shall not be granted under the Plan after that date. The Plan may at any time or from time to time be terminated, modified, or amended by the affirmative vote of a majority in interest of the voting stock of the Company. The Board of Directors may at any time and from time to time modify or amend the Plan in respects as it shall deem advisable to conform to any change in the law, or in any other respect, provided that any amendment by the Board of Directors which would (a) materially increase the benefits accruing to participants under the Plan, (b) increase the number of securities which may be issued under the plan (other than an increase pursuant to Section 12 hereof), or (c) materially modify the requirements as to eligibility for participation in the plan must be approved by a majority vote of the stockholders within twelve months before or after the effective date of such increase or change. In no event shall any amendment of the Plan (i) change or impair any options previously granted without the consent of the optionee, or (ii) extend the term of the plan. 14. Effective Date. This Plan as originally adopted, became effective on October 15, 1993. The Plan was amended on April 4, 1995 and on April 16, 1998. - 6 - EX-27 3 EX-27
5 0000914156 UFP TECHNOLOGIES INC. 1,000 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 880 0 6,626 219 3,372 10,742 20,764 9,744 25,794 2,573 0 0 0 58 14,729 25,794 22,068 22,068 16,074 20,785 (36) 28 279 1,039 430 609 0 0 0 609 0.13 0.13
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