8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

Current Report Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 18, 2011

UFP Technologies, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

001-12648	04-2314970
(Commission File Number)	(IRS Employer Identification No.)

172 East Main Street, Georgetown, MA	01833-2107
(Address of Principal Executive Offices)	(Zip Code)

(978) 352-2200

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On February 23, 2011, the Company issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2010.  A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.

Limitation on Incorporation by Reference.    The information furnished in this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Cautionary Note Regarding Forward-Looking Statements.     Except for historical information contained in the press release attached as an exhibit hereto, the press release contains forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements.  Please refer to the cautionary note in the press release regarding these forward-looking statements.

Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Stock Unit Awards

On February 18, 2011, the Compensation Committee approved, under and pursuant to the Company’s 2003 Incentive Plan, the grant of stock unit awards to certain of the Company’s named executive officers as indicated below.  Subject to the terms of the Company’s 2003 Incentive Plan and the stock unit award agreement evidencing each such award, each stock unit award provides the recipient with the right to receive one share of common stock of the Company.  Recipients of the stock unit awards will have no rights as stockholders of the Company in respect thereof, including, without limitation, the right to vote or to receive dividends, until and to the extent any applicable performance objectives have been satisfied, 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.

Name and Title of Recipient of Stock Unit Awards	Number of Stock Unit Awards Upon Attainment of “Threshold” Adjusted Operating Income“A”	Number of Stock Unit Awards Upon Attainment of “Target” Adjusted Operating Income“B”	Number of Stock Unit Awards Upon Attainment of “Exceptional” Adjusted Operating Income“C”
Ronald J. Lataille, Vice President, Treasurer and Chief Financial Officer	1,243	1,243	1,243
Richard LeSavoy, Vice President of Manufacturing	1,243	1,243	1,243
Mitchell Rock, Vice President of Sales and Marketing	1,243	1,243	1,243
Daniel J. Shaw, Jr., Vice President of Engineering	994	994	994

2

The stock unit awards listed in columns “A,” “B” and “C” above are subject to (i) time-based and continuous employment vesting requirements and (ii) the Company meeting certain financial performance objectives, described below (the “Performance Objectives”).  The Compensation Committee shall determine whether and to what extent any of the Performance Objectives have been achieved by the Company.  Such determination is currently expected to take place in February 2012.  Assuming achievement of any of the Performance Objectives, one-third of the applicable awards shall vest on March 1, 2013, one-third of the applicable awards shall vest on March 1, 2014 and one-third of the applicable awards shall vest on March 1, 2015, provided that the recipient remains continuously employed by the Company through each such vesting da te.

The Performance Objectives are based on the Company’s adjusted operating income for the Company’s fiscal year ended December 31, 2011, relative to specified adjusted operating income target amounts established by the Compensation Committee.  If the Company achieves the “threshold” adjusted operating income, then all of the stock unit awards listed in column “A” above will be eligible to become vested, subject to the time-based vesting and continuous employment requirements described above.  If the Company achieves the “target” adjusted operating income, then all of the stock unit awards listed in column “B” above (in addition to the stock unit awards listed in column “A” above) will be eligible to become vested, subject to the time-based vesting and continuous employment requirements described above.  To the extent the Company achie ves in excess of the “target” adjusted operating income, stock unit awards listed in column “C” above (in addition to the stock unit awards listed in columns “A” and “B” above) will be eligible to become vested, subject to the time-based vesting and continuous employment requirements described above, based on a straight-line interpolation of the “target” adjusted operating income established by the Compensation Committee in increments of 20% of such stock unit awards, up to the maximum amount listed in column “C” above, which represents “exceptional” adjusted operating income, as established by the Compensation Committee.  For purposes of determining whether or not any of the Performance Objectives are met, the Compensation Committee will measure 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 operati ons during the fiscal year ended December 31, 2011.

Any unvested stock unit awards shall terminate upon the cessation of a recipient’s employment with the Company.  In the event of a change in control of the Company (as defined in the stock unit award agreement evidencing the award) at any time following the completion of the Company’s 2011 fiscal year, provided that the recipient has been continuously employed by the Company through the date immediately prior to the effective date of such change in control, then subject to achievement of any of the Performance Objectives, the applicable stock unit awards listed in each of columns “A,” “B” and “C” above, to the extent not already vested, shall become fully vested immediately prior to the effective date of such change in control.

The above description of the stock unit awards is qualified in its entirety by reference to the text of the stock unit award agreement evidencing such awards, a copy of the form of which is attached as Exhibit 10.55 and is incorporated herein in its entirety by this reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
10.55	Form of 2011 Stock Unit Award Agreement.
99.1	Press release dated February 23, 2011 of UFP Technologies, Inc. announcing its financial results for the fourth quarter and year ended December 31, 2010.

3

SIGNATURE

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 hereunto duly authorized.

Dated: February 25, 2011	UFP TECHNOLOGIES, INC.
	By:	/s/ Ronald J. Lataille
		Ronald J. Lataille, Chief Financial Officer and Vice President

4

EXHIBIT INDEX

Exhibit Number	Description
10.55	Form of 2011 Stock Unit Award Agreement.
99.1	Press release dated February 23, 2011 of UFP Technologies, Inc. announcing its financial results for the fourth quarter and year ended December 31, 2010.

5

EX-10.55

Exhibit 10.55

STOCK UNIT AWARD AGREEMENT

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

This Stock Unit Award Agreement is entered into as of the 18th day of February, 2011 by and between UFP Technologies, Inc. (hereinafter the “Company”) and                            (the “Awardee”).  Capitalized terms used but not defined herein shall have the meanings assigned to them in the Company’s 2003 Incentive Plan (the “Plan”).  Stock Unit Awards (SUA’s represent the Company’s unfunded and unsecured promise to issue shares of Common Stock at a future date, subject to the terms of this Award Agreement, including, without limitation, the performance objectives set forth in Schedule A hereto, and the Plan.  Awardee has no rights under the SUAs other than the rights of a general unsecured creditor of the Company.

1.Grant of Stock Unit Awards; Performance Objectives; Vesting.

(a)The Company, in the exercise of its sole discretion pursuant to the Plan, does hereby award to the Awardee the number of SUAs set forth on Schedule A hereto upon the terms and subject to the conditions hereinafter contained.  The SUA’s shall consist of a Threshold Award, a Target Award and an Exceptional Award.  The Threshold Award, The Target Award and the Exceptional Award are each awarded subject to attainment during the Performance Cycle described on Schedule A of the Performance Objectives set forth on Schedule A.

(b)Subject to attainment of any applicable Performance Objectives, payment with respect to vested SUA’s shall be made entirely in the form of shares of Common Stock of the Company on each respective vesting date as set forth on Schedule A.

(c)As soon as possible after the end of the Performance Cycle, the Committee will certify in writing whether and to what extent the Performance Objectives have been met for the Performance Cycle.  The date of the Committee’s certification pursuant to this subsection (c) shall hereinafter be referred to as the “Certification Date”.  The Company will notify the Awardee of the Committee’s certification following the Certification Date (such notice, the “Determination Notice”).  The Determination Notice shall specify (i) the Performance Objective, as deri ved from the Company’s audited financial statements; and (ii) the extent, if any, to which the Performance Objectives were satisfied with respect to the Threshold Award, the Target Award and the Exceptional Award.

2.Change in Control.

(a)Notwithstanding the vesting schedule set forth in Schedule A: if there is a Change in Control of the Company (as defined below) following the end of the Performance Cycle, and the Awardee’s Continuous Status as an employee, as contemplated by Section 4 hereof, shall not have been terminated as of the date immediately prior to the effective date of such Change in Control, then subject to attainment during the Performance Cycle described on

Schedule A of the Performance Objectives set forth on Schedule A, and subject to the provisions of Section 21 of this Award Agreement, any SUA’s representing the Threshold, Target and the Exceptional Award, which are not already vested shall become vested in full as of the effective date of such Change in Control.

(b)For the purpose of this Agreement, a “Change in Control” shall mean  (i) the consummation of a reorganization, merger or consolidation or sale or disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, in each case following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of the Common Stock of the Company immediately before the consummation of such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outs tanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of the transaction owns the Company or all or substantially all of the assets of the Company either directly or indirectly through one or more subsidiaries); and (B) no person or group (as defined in Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934) of the Company or the corporation resulting from the Business Combination) beneficially owns, directly or indirectly, more than 50% of the then outstanding shares of the common stock of the corporation resulting from the Business Combination;  (ii) Individuals who, as of the date of this Agreement, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at lea st a majority of the Board of Directors of the Company, provided, however, that any individual’s becoming a director after the date of this Agreement whose election, or nomination for election by the stockholders of the Company, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though the individual were a member of the Incumbent Board, but excluding, for this purpose, any individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (iii) any person (as defined in Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934) shall become at any time or in any manner the beneficial owner of capital stock of the Company representing more than 50% of the voting power of the Company.

3.Termination.   Unless terminated earlier under Section 4, 5 or 6 below, an Awardee’s rights under this Award Agreement with respect to the SUAs issued under this Award Agreement shall terminate at the time such SUAs are converted into shares of Common Stock.

4.Termination of Awardee’s Continuous Status as an Employee.   Except as otherwise specified in Section 5 and 6 below, in the event of termination of Awardee’s Continuous Status as an employee of the Company, Awardee’s rights under this Award Agreement in any unvested SUAs shall terminate.  For purposes of this Award Agreement, an Awardee’s Continuous Status as an employee shall mean the absence of any interruption or termination of service as an employee.  Continuous Status as an employee shall not be considered interrupted in the case of sick leave or leave of absence for which Continuous Status is not considered interrupted as determined by the Company in its sole discretion.

5.Disability of Awardee.   Notwithstanding the provisions of Section 4 above, in the event of termination of Awardee’s Continuous Status as an employee as a result of disability (within the meaning of Section 409A of the Internal Revenue Code, and hereinafter referred to as “Disability”), the SUAs which would have vested during the twelve (12) months following the date of such termination, set out in Schedule A, shall become vested as of the date of such termination, subject, howev er, to the provisions of Section 21 of this Award Agreement.  If Awardee’s Disability originally required him or her to take a short-term disability leave which was later converted into long-term disability, then for the purposes of the preceding sentence the date on which Awardee ceased performing services shall be deemed to be the date of commencement of the short-term disability leave.  The Awardee’s rights in any unvested SUAs that remain unvested after the application of this Section 5 shall terminate at the time Awardee ceases to be in Continuous Status as an employee.

6.Death of Awardee.   Notwithstanding the provisions of Section 4 above, in the event of the death of Awardee:

(a)If the Awardee was, at the time of death, in Continuous Status as an employee, the SUAs which would have vested during the twelve (12) months following the date of death of Awardee, set out in Schedule A, shall become vested as of the date of death.

(b)The Awardee’s rights in any unvested SUAs that remain after the application of Section 6(a) shall terminate at the time of the Awardee’s death.

7.Value of Unvested SUAs.   In consideration of the award of these SUAs, Awardee agrees that upon and following termination of Awardee’s Continuous Status as an employee for any reason (whether or not in breach of applicable laws), and regardless of whether Awardee is terminated with or without cause, notice, or pre-termination procedure or whether Awardee asserts or prevails on a claim that Awardee’s employment was terminable only for cause or only with notice or pre-termination procedure, any unvested SUAs under this Award Agreement shall be deemed to have a value of zero dollars ($0.00).

8.Conversion of SUAs to shares of Common Stock; Responsibility for Taxes.

(a)Provided Awardee has satisfied the requirements of Section 8(b) below, and subject to the provisions of Section 21 below, on the vesting of any SUAs, such vested SUAs shall be converted into an equivalent number of shares of Common Stock that will be distributed to Awardee or, in the event of Awardee’s death, to Awardee’s legal representative, as soon as practicable.  The distribution to the Awardee, or in the case of the Awardee’s death, to the Awardee’s legal representative, of shares of Common Stock in respect of the vested SUAs shall be evidenced by a stock c ertificate, appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company, or other appropriate means as determined by the Company.

(b)Regardless of any action the Company takes with respect to any or all income tax (including federal, state and local taxes), social security, payroll tax or other tax-related withholding (“Tax Related Items”), Awardee acknowledges that the ultimate liability for all Tax Related Items legally due by Awardee is and remains Awardee’s responsibility and that the Company (i) makes no representations or undertakings regarding the treatment of any Tax Related Items in connection with any aspect of the SUAs, including the grant of the SUAs, the vesting of SUAs, the conversion of the SUAs into sha res of Common Stock, the subsequent sale of any shares of Common Stock acquired at vesting and the receipt of any dividends; and (ii) does not commit to structure the terms of the grant or any aspect of the SUAs to reduce or eliminate the Awardee’s liability for Tax Related Items.  Prior to the issuance of shares of Common Stock upon vesting of SUAs as provided in Section 8(a) above, Awardee shall pay, or make adequate arrangements satisfactory to the Company to satisfy all withholding obligations of the Company.  In this regard, Awardee authorizes the Company to withhold all applicable Tax Related Items legally payable by Awardee from Awardee’s wages or other cash compensation payable to Awardee by the Company.  Alternatively, the Awardee may elect to satisfy an applicable withholding requirement, in whole or in part, by having the Company withhold shares of Common Stock to satisfy such tax obligations.  The Awardee may only elect to have such shares withheld hav ing a Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction. All elections shall be irrevocable, made in writing and signed by the Awardee.  Awardee shall pay to the Company any amount of Tax Related Items that the Company may be required to withhold as a result of Awardee’s receipt of SUAs, the vesting of SUAs, or the conversion of vested SUAs to shares of Common Stock that cannot be satisfied by the means previously described.  The Company may refuse to deliver shares of Common Stock to Awardee if Awardee fails to comply with Awardee’s obligation in connection with the Tax Related Items as described herein.

(c)In lieu of issuing fractional shares of Common Stock, on the vesting of a fraction of a SUA, the Company shall round the shares to the nearest whole share and any such share which represents a fraction of a SUA will be included in a subsequent vest date.

(d)Until the distribution to Awardee of the shares of Common Stock in respect to the vested SUAs is evidenced by a stock certificate, appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company, or other appropriate means, Awardee shall have no right to vote or receive dividends or any other rights as a shareholder with respect to such shares of Common Stock, notwithstanding the vesting of SUAs.  Subject to the provisions of Section 21 below, the Company shall cause such distribution to Awardee to occur promptly upon the vesting of SUAs.  No adjustment will be made for a dividend or other right for which the record date is prior to the date Awardee is recorded as the owner of the shares of Common Stock, except as provided in Section 8 of the Plan.

(e)By accepting the Award of SUAs evidenced by this Award Agreement, Awardee agrees not to sell any of the shares of Common Stock received on account of vested SUAs at a time when applicable laws or Company policies prohibit a sale.  This restriction shall apply so long as Awardee is an Employee, Consultant or outside director of the Company or a Subsidiary of the Company.

9.Non-Transferability of SUAs.   Awardee’s right in the SUAs awarded under this Award Agreement and any interest therein may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner, other than by will or by the laws of descent or distribution, prior to the distribution of the shares of Common Stock in respect of such SUAs.  SUAs shall not be subject to execution, attachment or other process.

10.Acknowledgment of Nature of Plan and SUAs.   In accepting the Award, Awardee acknowledges that:

(a)the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan;

(b)the Award of SUAs is voluntary and occasional and does not create any contractual or other right to receive future awards of SUAs, or benefits in lieu of SUAs even if SUAs have been awarded repeatedly in the past;

(c)all decisions with respect to future awards, if any, will be at the sole discretion of the Company;

(d)Awardee’s participation in the Plan is voluntary;

(e)the future value of the underlying shares of Common Stock is unknown and cannot be predicted with certainty;

(f)if Awardee receives shares of Common Stock, the value of such shares of Common Stock acquired on vesting of SUAs may increase or decrease in value;

(g)notwithstanding any terms or conditions of the Plan to the contrary and consistent with Section 4 and Section 7 above, in the event of involuntary termination of Awardee’s employment (whether or not in breach of applicable laws), Awardee’s right to receive SUAs and vest under the Plan, if any, will terminate effective as of the date that Awardee is no longer actively employed and will not be extended by any notice period mandated under applicable law; furthermore, in the event of involuntary termination of employment (whether or not in breach of applicable laws), Awardee’s right to r eceive shares of Common Stock pursuant to the SUAs after termination of employment, if any, will be measured by the date of termination of Awardee’s active employment and will not be extended by any notice period mandated under applicable law.  The Committee shall have the exclusive discretion to determine when Awardee is no longer actively employed for purposes of the award of SUAs; and

(h)Awardee acknowledges and agrees that, regardless of whether Awardee is terminated with or without cause, notice or pre-termination procedure or whether Awardee asserts or prevails on a claim that Awardee’s employment was terminable only for cause or only with notice or pre-termination procedure, Awardee has no right to, and will not bring any legal claim or

action for, (a) any damages for any portion of the SUAs that have been vested and converted into Common Shares, or (b) termination of any unvested SUAs under this Award Agreement.

11.No Employment Right.   Awardee acknowledges that neither the fact of this Award of SUAs nor any provision of this Award Agreement or the Plan or the policies adopted pursuant to the Plan shall confer upon Awardee any right with respect to employment or continuation of current employment with the Company, or to employment that is not terminable at will.  Awardee further acknowledges and agrees that neither the Plan nor this Award of SUAs makes Awardee’s employment with the Company for any minimum or fixed period, and that such employmen t is subject to the mutual consent of Awardee and the Company, and subject to any written employment agreement that may be in effect from time to time between the Company and the Awardee, may be terminated by either Awardee or the Company at any time, for any reason or no reason, with or without cause or notice or any kind of pre- or post-termination warning, discipline or procedure.

12.Administration.   The authority to manage and control the operation and administration of this Award Agreement shall be vested in the Committee (as such term is defined in Section 2 of the Plan), and the Committee shall have all powers and discretion with respect to this Award Agreement as it has with respect to the Plan.  Any interpretation of the Award Agreement by the Committee and any decision made by the Committee with respect to the Award Agreement shall be final and binding on all parties.

13.Plan Governs.   Notwithstanding anything in this Award Agreement to the contrary, the terms of this Award Agreement shall be subject to the terms of the Plan, and this Award Agreement is subject to all interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan.

14.Notices.   Any written notices provided for in this Award Agreement which are sent by mail shall be deemed received three business days after mailing, but not later than the date of actual receipt.  Notices shall be directed, if to Awardee, at the Awardee’s address indicated by the Company’s records and, if to the Company, at the Company’s principal executive office.

15.Electronic Delivery.   The Company may, in its sole discretion, decide to deliver any documents related to SUAs awarded under the Plan or future SUAs that may be awarded under the Plan by electronic means or request Awardee’s consent to participate in the Plan by electronic means.  Awardee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

16.Acknowledgment.   By Awardee’s acceptance as evidenced below, Awardee acknowledges that Awardee has received and has read, understood and accepted all the terms, conditions and restrictions of this Award Agreement and the Plan.  Awardee understands and agrees that this Award Agreement is subject to all the terms, conditions, and restrictions stated in this Award Agreement and the Plan, as the latter may be amended from time to time in the Company’s sole discretion.

17.[Intentionally Omitted]

18.Governing Law.   This Award Agreement shall be governed by the laws of the State of Delaware, without regard to Delaware laws that might cause other law to govern under applicable principles of conflicts of law.

19.Severability.   If one or more of the provisions of this Award Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Award Agreement to be construed so as to foster the intent of this Award Agreement and the Plan.

20.Complete Award Agreement and Amendment.   This Award Agreement and the Plan constitute the entire agreement between Awardee and the Company regarding SUAs.  Any prior agreements, commitments or negotiations concerning these SUAs are superseded.  This Award Agreement may be amended only by written agreement of Awardee and the Company, without consent of any other person.  Awardee agrees not to rely on any oral information regarding this Award of SUAs or any written materials not identified in this Section 20.

21.Section 409A.  This Award Agreement is intended to be in compliance with the provisions of Section 409A of the Internal Revenue Code to the extent applicable, and the Regulations issued thereunder. Anything in this Agreement to the contrary notwithstanding, if at the time of the Awardee’s separation from service within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”), the Company determines that the Awardee is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Awardee becomes entitled to under this Agreement would be considered deferred compensation subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after the Awardee’s separation from service, or (B) the Awardee’s death.  The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h). To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Sect ion 409A of the Code.  The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party. Solely for the purposes of Section 409A of the Code, the share increments issuable on each vesting date on Schedule A shall be considered a separate payment.   The Company makes no representation or warranty and shall have no liability to the Awardee or any other person if any provisions of this Agreement are determined to

constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

EXECUTED the day and year first above written.

UFP TECHNOLOGIES, INC.
By:
	R. Jeffrey Bailly
	Chief Executive Officer

AWARDEE’S ACCEPTANCE:

I have read and fully understood this Award Agreement and, as referenced in Section 16 above, I accept and agree to be bound by all of the terms, conditions and restrictions contained in this Award Agreement and the other documents referenced in it.

[name of Awardee]

SCHEDULE A

The SUA’s issuable under this Agreement shall consist of a Threshold Performance Award, a Target Performance Award and an Exceptional Performance Award, each in the amounts set forth below, each such award issuable in one-third increments on the vesting dates set forth below, provided the respective performance objective is satisfied.

The Performance Objective established by the Committee with respect to the Threshold Performance Award, the Target Performance Award and Exceptional Performance Award is Adjusted Operating Income** for 2011

	Performance	Performance	Number of Shares of Common	Vesting
	Objective	Cycle	Stock	*/2013		*/2014		*/2015
a. Threshold Performance Award	of Adjusted Operating Income**	Calendar Year 2011		33.33	%	33.33	%	33.34	%
b. Target Performance Award	of Adjusted Operating Income**	Calendar Year 2011	(in addition to (a) above)	33.33	%	33.33	%	33.34	%
c. Exceptional Performance Award	of Adjusted Operating Income**	Calendar Year 2011	*** (in addition to (a) and (b) above)	33.33	%	33.33	%	33.34	%

* this date shall be the anniversary date of the date of determination by the Compensation Committee of satisfaction of the Performance Objectives.  Such determination date is expected to be in February 2012.

**Adjusted Operating Income is defined herein as Operating Income on the Company’s 10-K, excluding (i) non-recurring restructuring charges related to plant closings and consolidations; and (ii) the impact of acquired or disposed of operations during such year.

***Between Adjusted Operating Income of                        and                        , the number of shares of Common Stock to which the Awardee shall be entitled under the Exceptional Performance Award (in addition to the shares issuable upon attainment of the Threshold and Target Performance Award) shall range from 0 to the amount stated under the column entitled “Exceptional” based on straight line interpolation in increments of one fifth the total number of shares otherwise issuable for achievement of the Exceptional Award  for each full                   &nb sp;    of Adjusted Operating Income in excess of                        (not to exceed                        ).

EX-99.1

Exhibit 99.1

UFP TECHNOLOGIES, INC. 172 East Main Street Georgetown, MA 01833 — USA Tel. 978-352-2200 www.ufpt.com Contact: Ron Lataille

FOR IMMEDIATE RELEASE

UFP Technologies Announces Record 2010 Results

Georgetown, Mass., February 23, 2011.  UFP Technologies, Inc. (Nasdaq: UFPT), a manufacturer of packaging and component products, today reported net income of $9.2 million or $1.37 per diluted common share outstanding for its fiscal year ended December 31, 2010, 56% higher than net income of $5.9 million or $0.94 per diluted common share outstanding for its 2009 fiscal year.  Sales for 2010 were $120.8 million, 22% higher than 2009 sales of $99.2 million.

For its fourth quarter ended December 31, 2010, the Company reported net income of $3.1 million or $0.45 per diluted common share outstanding, 6% higher than net income of $2.9 million or $0.45 per diluted common share outstanding in the same period in 2009.  Sales for the fourth quarter of 2010 were $31.6 million, 9% higher than 2009 fourth quarter sales of $29.0 million.

“I am extremely pleased with our 2010 results,” said R. Jeffrey Bailly, Chairman & CEO.  “Our investments in strategic growth initiatives and successful 2009 acquisitions helped drive 22% top-line growth. This revenue growth and related economies of scale, combined with greater manufacturing efficiencies, yielded a 76% improvement in operating income.  Our 56% gain in net income is particularly noteworthy because 2009 results included $840,000 in one-time acquisition gains.”

“Each of our recent acquisitions has expanded our capabilities and strengthened our competitive platform,” Bailly continued. “Our strategy is to identify acquisition candidates that are an excellent cultural fit and enhance our ability to serve customers. This, along with our internal focus on the market opportunities where our engineered solutions add the most value, has enabled us to accelerate our sales and earnings growth. Looking ahead, we believe our growing pipeline of new business opportunities and strong balance sheet, which currently includes approximately $25 million in cash, position us well to continue executing our growth strategy.”

UFP Technologies is a leading designer and manufacturer of interior protective packaging and component product solutions using molded and fabricated foams, plastics, laminated composites, and natural fiber materials.  The Company primarily serves the medical, automotive, computers and electronics, aerospace and defense, consumer, and industrial markets.

This news release contains forward-looking information that involves risks and uncertainties, including statements about the Company’s prospects, anticipated advantages the Company expects to realize from its acquisition strategies, its participation and growth in multiple markets, its business opportunities, the Company’s growth potential and strategies for growth, and any indication that the Company may be able to sustain or increase its sales and earnings or sales and earnings growth rates.  Investors are cautioned that such forward-looking statements involve risks and uncertainties, including without limitation risks associated with the identification of suitable acquisition candidates and the successful, efficient execution of acquisition transactions and integration of any such acquisition candidates, as well as other risks and uncertainties that are detailed in the documents filed by the C ompany with the SEC.  Accordingly, actual results may differ materially.  Readers are referred to the documents filed by the Company with the SEC, specifically the last reports on Forms 10-K and 10-Q.  The forward-looking statements contained herein speak only of the Company’s expectations as of the date of this press release.  The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in the Company’s expectations or any change in events, conditions, or circumstances on which any such statement is based.

Consolidated Condensed Statements of Income

($ in thousands, except Per Share Data)

	Unaudited
	Three Months Ended						Twelve Months Ended
	31-Dec-10			31-Dec-09			31-Dec-10			31-Dec-09
Net sales	$	31,640		$	29,044		$	120,766		$	99,231
Cost of sales	22,434			20,093			86,150			72,512
Gross profit	9,206			8,951			34,616			26,719
SG&A	4,734			4,662			20,236			18,539
Operating income	4,472			4,289			14,380			8,180
Gain on acquisitions	—			—			—			840
Interest expense, other income & expenses	139			(46		)	46			(221		)
Income before income taxes	4,611			4,243			14,426			8,799
Income taxes	1,403			1,327			5,019			2,817
Net income from consolidated operations	$	3,208		$	2,916		$	9,407		$	5,982
Net income attributable to noncontrolling interests	$	(119	)	$	(10	)	$	(160	)	$	(53	)
Net income attributable to UFP Technologies, Inc.	$	3,089		$	2,906		$	9,247		$	5,929
Weighted average shares outstanding	6,276			5,920			6,157			5,830
Weighted average diluted shares outstanding	6,875			6,497			6,749			6,294
Per Share Data
Net income per share outstanding	$	0.49		$	0.49		$	1.50		$	1.02
Net income per diluted share outstanding	$	0.45		$	0.45		$	1.37		$	0.94

Consolidated Condensed Balance Sheets

($ in thousands)

	31-Dec-10		31-Dec-09
Assets:
Cash	$	24,434	$	14,999
Receivables	14,633		14,218
Inventories	8,044		7,647
Other current assets	3,658		1,887
Net property, plant, and equipment	12,575		12,218
Other assets	8,465		8,483
Total assets	$	71,809	$	59,452
Liabilities and equity:
Short-term debt	$	654	$	623
Accounts payable	5,169		4,274
Other current liabilities	6,679		6,153
Long-term debt	6,847		7,502
Other liabilities	2,234		1,895
Total liabilities	21,583		20,447
Total equity	50,226		39,005
Total liabilities and stockholders’ equity	$	71,809	$	59,452