p12-1733sc13d.htm

0000902664-12-001324.txt : 20121026 0000902664-12-001324.hdr.sgml : 20121026 20121026172941 ACCESSION NUMBER: 0000902664-12-001324 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20121026 DATE AS OF CHANGE: 20121026 GROUP MEMBERS: KEVIN T. KEANE FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KEANE DANIEL G CENTRAL INDEX KEY: 0001182855 FILING VALUES: FORM TYPE: SC 13D MAIL ADDRESS: STREET 1: 1801 ELMWOOD AVE CITY: BUFFALO STATE: NY ZIP: 14207 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MOD PAC CORP CENTRAL INDEX KEY: 0001191857 STANDARD INDUSTRIAL CLASSIFICATION: PAPERBOARD CONTAINERS & BOXES [2650] IRS NUMBER: 160957153 STATE OF INCORPORATION: NY FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-78992 FILM NUMBER: 121165240 BUSINESS ADDRESS: STREET 1: 1801 ELMWOOD AVE. CITY: BUFFALO STATE: NY ZIP: 14207-2496 BUSINESS PHONE: 716-873-0640 MAIL ADDRESS: STREET 1: 1801 ELMWOOD AVENUE CITY: BUFFALO STATE: NY ZIP: 14207 SC 13D 1 p12-1733sc13d.htm MOD-PAC CORP. p12-1733sc13d.htm

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No.[__])*

Mod-Pac Corp.
(Name of Issuer)

Common Stock, $0.01 par value Class B Common Stock, $0.01 par value
(Title of Class of Securities)

607495108 607495207
(CUSIP Number)


Daniel G. Keane 1801 Elmwood Avenue Buffalo, New York 14207 (716) 873-0640
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

March 14, 2003
(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. [ ]

(Page 1 of 9 Pages)

______________________________

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 607495108

607495207

SCHEDULE 13D

Page 2 of 9 Pages

1	NAME OF REPORTING PERSON Daniel G. Keane
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) ý
3	SEC USE ONLY
4	SOURCE OF FUNDS PF/OO (See Item 3)
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 704,223 shares of Common Stock1 216,232 shares of Class B Common Stock2
	8	SHARED VOTING POWER 0
	9	SOLE DISPOSITIVE POWER 704,223 shares of Common Stock1 216,232 shares of Class B Common Stock2
	10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 704,223 shares of Common Stock1 216,232 shares of Class B Common Stock2
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 24.3% of the outstanding shares of Common Stock 37.9% of the outstanding shares of Class B Common Stock 33.3% of the aggregate voting power of the outstanding shares of Common Stock and Class B Common Stock 26.6% of the economic interest of the outstanding shares of Common Stock and Class B Common Stock
14	TYPE OF REPORTING PERSON IN

1 Includes 255,321 shares of Common Stock issuable upon exercise of options, 16,997 shares of Common Stock owned by the Reporting Person’s wife and 25,000 shares of Common Stock owned by the Reporting Person’s children.

2 Includes 14,995 shares of Class B Common Stock owned by the Reporting Person’s wife.

CUSIP No. 607495108

607495207

SCHEDULE 13D

Page 3 of 9 Pages

1	NAME OF REPORTING PERSON Kevin T. Keane
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) ý
3	SEC USE ONLY
4	SOURCE OF FUNDS PF/OO (See Item 3)
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 99,189 shares of Common Stock3 75,650 shares of Class B Common Stock4
	8	SHARED VOTING POWER 0
	9	SOLE DISPOSITIVE POWER 99,189 shares of Common Stock3 75,650 shares of Class B Common Stock4
	10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 99,189 shares of Common Stock3 75,650 shares of Class B Common Stock4
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.7% of the outstanding shares of Common Stock 13.2% of the outstanding shares of Class B Common Stock 10.2% of the aggregate voting power of the outstanding shares of Common Stock and Class B Common Stock 5.3% of the economic interest of the outstanding shares of Common Stock and Class B Common Stock
14	TYPE OF REPORTING PERSON IN

3 Includes 64,750 shares of Common Stock issuable upon exercise of options and 29,439 shares of Common Stock owned by, or held in trust for the benefit of, the Reporting Person’s wife.

4 Includes 12,414 shares of Class B Common Stock owned by, or held in trust for the benefit of, the Reporting Person’s wife.

CUSIP No. 607495108

607495207

SCHEDULE 13D

Page 4 of 9 Pages

Item 1.	SECURITY AND ISSUER

	This statement on Schedule 13D (the “Schedule 13D”) relates to the (i) shares of common stock, par value $0.01 per share (the "Common Stock"), of Mod-Pac Corp., a New York corporation (the "Issuer") and (ii) shares of class B common stock, par value $0.01 per share (the "Class B Common Stock"), of the Issuer. The Issuer's principal executive offices are located at 1801 Elmwood Avenue, Buffalo, New York 14207.

Item 2.	IDENTITY AND BACKGROUND

(a)	This Schedule 13D is filed by:

	(i) Daniel G. Keane (“Mr. D. Keane”), with respect to the shares of Common Stock and Class B Common Stock directly held by him, as well as the Common Stock owned by his wife and children and the Class B Common Stock owned by his wife; and

	(ii) Kevin T. Keane (“Mr. K. Keane”), with respect to the shares of Common Stock and Class B Common Stock directly held by him, as well as the Common Stock and Class B Common Stock owned by, or held in trust for the benefit of, his wife.

	The foregoing persons are hereinafter sometimes collectively referred to as the "Reporting Persons."

	The foregoing should not be construed in and of itself as an admission by any Reporting Person, as to beneficial ownership of shares of Common Stock held by the other Reporting Person. In addition, Mr. D. Keane disclaims any beneficial ownership of shares owned by his wife and children and Mr. K. Keane disclaims any beneficial ownership of shares owned by, or held in trust for the benefit of, his wife.

(b)	The business address of the Reporting Person is 1801 Elmwood Avenue, Buffalo, New York 14207.

(c)	The principal occupation of (i) Mr. D. Keane is to serve as a director, the President and the Chief Executive Officer of the Issuer and (ii) Mr. K. Keane is to serve as the Chairman of the Board of Directors of the Issuer (the “Board”) and of Astronics Corporation, a New York publicly traded corporation. Mr. D. Keane is the son of Mr. K. Keane.

(d) & (e)	During the last five years, none of the Reporting Persons has been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining further violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

CUSIP No. 607495108

607495207

SCHEDULE 13D

Page 5 of 9 Pages

Item 3.	SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

	1,334 shares of Common Stock and 14,857 shares of Class B Common Stock were distributed to Mr. D. Keane in the Spin-Off (as defined in Item 4). 3,335 shares of Common Stock and 14,995 shares of Class B Common Stock were distributed to Mr. D. Keane's wife in the Spin-Off. 371,656 shares of Common Stock and 180,000 shares of Class B Common Stock reported by Mr. D. Keane were received as a gift from Mr. K. Keane. 16,900 shares of Common Stock were acquired by Mr. D. Keane in the open market with personal funds in the aggregate amount of approximately $161,000. 13,662 shares of Common Stock were acquired by Mr. D. Keane’s wife in the open market with personal funds in the aggregate amount of approximately $62,000. Mr. D. Keane acquired for his children’s benefit 25,000 shares of Common Stock in the open market with his personal funds in the aggregate amount of $280,000 17,015 shares of Common Stock and 6,380 shares of Class B Common Stock reported by Mr. D. Keane were acquired through the exercise of options received pursuant to the Stock Option Plan (as defined in Item 6) with personal funds in the aggregate amount of approximately $30,500 and $12,000, respectively. 255,321 shares of Common Stock reported herein as beneficially owned by Mr. D. Keane are underlying certain options not yet exercised by Mr. D. Keane. 5,000 shares of Common Stock and 63,236 shares of Class B Common Stock were distributed to Mr. K. Keane in the Spin-Off. 29,439 shares of Common Stock and 12,414 shares of Class B Common Stock were distributed to, or distributed to a trust for the benefit of, Mr. K. Keane's wife. 64,750 shares of Common Stock reported herein as beneficially owned by Mr. K. Keane are underlying certain options not yet exercised by Mr. K. Keane.

Item 4.	PURPOSE OF TRANSACTION

	The Reporting Persons acquired their respective initial positions in the Common Stock and Class B Common Stock on March 14, 2003 in the spin-off of the Issuer from Astronics Corporation described in the Separation and Distribution Agreement included as Exhibit 2.1 to the Registration Statement of Securities Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934 on Form 10/A filed with the Securities and Exchange Commission (the “SEC”) on January 28, 2003 (the “Spin-Off”).

	Since the Date of Event Which Requires Filing of this Statement, the Reporting Persons have engaged in transactions in the Issuer's securities as disclosed in the Forms 4 filed by the Reporting Persons with SEC.

	On October 26, 2012, the Reporting Persons sent the Board a letter (the “Letter”) submitting a non-binding proposal to acquire all outstanding shares of Common Stock and Class B Common Stock not beneficially owned by the Reporting Persons and their respective affiliates at a price of $7.20 in cash per share. This price represents a premium of approximately 31.0% to the Company’s closing price on October 26, 2012 and a premium of approximately 57.0% to the volume-weighted average price during the last 30 trading days and a premium of 53% to the volume-weighted average price during the last 90 trading days. The proposal also provides the shareholders with liquidity in a common stock that trades on average less than 5,000 shares per day, and certain value in cash during a highly volatile period in the equity markets. The Reporting Persons anticipate continuing to run the Issuer’s business in accordance with current practice and retaining the Issuer’s senior management team and employee base. This summary of the Letter is qualified in its entirety by reference to the text of the Letter, which is attached hereto as Exhibit 1.

	Except as set forth herein, the Reporting Persons have no present plan or proposal that would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D. In connection with the preliminary non-binding proposal set forth in the Letter, the Reporting Persons may in the future take certain actions, including, without limitation, pursuing discussions with the other members of management and the Board, other shareholders of the Issuer and third parties, including its advisors, with regard to their investment in the Issuer and all matters referred to in Item 4 of the Schedule 13D.

CUSIP No. 607495108

607495207

SCHEDULE 13D

Page 6 of 9 Pages

Item 5.	INTEREST IN SECURITIES OF THE ISSUER

(a)	See rows (11) and (13) of the cover pages to this Schedule 13D for the aggregate number of shares of Common Stock and Class B Common Stock and percentages of the Common Stock and Class B Common Stock beneficially owned by each of the Reporting Persons. The percentages reported in this Schedule 13D are calculated based upon the 2,637,734 shares of Common Stock and the 571,095 shares of Class B Common Stock outstanding as of June 30, 2012, as reported in the Issuer’s Quarterly Report on Form 10-Q for the fiscal period ended June 30, 2012 filed with the SEC on August 1, 2012.

(b)	See rows (7) and (10) of the cover pages to this Schedule 13D for the number of shares of Common Stock and Class B Common Stock as to which each Reporting Person has the sole or shared power to vote or direct the vote and sole or shared power to dispose or to direct the disposition.

(c)	None of the Reporting Persons have effected any transaction in the Issuer’s stock during the past 60 days.

(d)	No person is known by the Reporting Persons to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any shares of Common Stock or Class B Common Stock beneficially owned by the Reporting Persons.

Item 6.	CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER

	The Issuer has granted options to purchase shares of Common Stock to Mr. D. Keane under (i) the Issuer’s 2001 Stock Option Plan (the “2001 Stock Option Plan”) pursuant to a stock option agreement dated January 24, 2003 (the “2003 Mr. D. Keane Option Agreement”), (ii) the Issuer’s 2002 Stock Option Plan (the “Stock Option Plan”) pursuant to stock option agreements dated February 20, 2004 (the “2004 Mr. D. Keane Stock Option Agreement”), January 6, 2005, December 21, 2005, December 13, 2006, December 20, 2007, December 15, 2008, December 16, 2009, December 21, 2010 and December 2, 2011 (these agreements are referred to collectively as the “Mr. D. Keane Stock Option Agreements” and together with the 2003 Mr. D. Keane Option Agreement and the 2004 Mr. D. Keane Option Agreement, the “Mr. D. Keane Option Agreements”). All the options covered by the Mr. D. Keane Option Agreements have vested to date. Following is a summary of the terms of grants of stock options to Mr. D. Keane pursuant to the Mr. D. Keane Option Agreements:


Date of Grant	Number of Shares	Purchase Price Per Share	Expiration Date
01/24/2003	31,921	$5.392	01/24/2013
02/20/2004	28,000	$8.44	02/20/2014
01/06/2005	22,300	$12.80	01/06/2015
12/21/2005	22,300	$11.68	12/21/2015
12/13/2006	22,300	$10.00	12/13/2016
12/20/2007	26,000	$7.36	12/20/2017
12/15/2008	40,000	$1.85	12/15/2018
12/16/2009	25,000	$4.37	12/16/2019
12/21/2010	25,000	$4.65	12/21/2020
12/02/2011	12,500	$5.90	12/02/2021

CUSIP No. 607495108

607495207

SCHEDULE 13D

Page 7 of 9 Pages

The Issuer has granted options to purchase shares of Common Stock to Mr. K. Keane under (i) the Stock Option Plan pursuant to stock option agreements dated February 20, 2004 (the “2004 Mr. K. Keane Option Agreement”) and January 6, 2005 (the “2005 Mr. K. Keane Option Agreement”) and (ii) the Issuer’s 2002 Director Stock Option Plan (the “Director Stock Option Plan”) pursuant to stock option agreements dated December 21, 2005, December 13, 2006, February 27, 2008, February 25, 2009, February 22, 2010, March 9, 2011 and December 2, 2011 (these agreements are referred to collectively as the “Mr. K. Keane Director Option Agreements” and together with the 2004 Mr. K. Keane Option Agreement and the 2005 Mr. K. Keane Option Agreement, the “Mr. K. Keane Option Agreements”). All the options covered by the Mr. K. Keane Option Agreement have vested to date. Following is a summary of the terms of grants of stock options to Mr. K. Keane pursuant to the Mr. K. Keane Option Agreements:


Date of Grant	Plan	Number of Shares4	Purchase Price Per Share	Expiration Date
02/20/2004	Stock Option Plan	18,750	$8.44	02/20/2014
01/06/2005	Stock Option Plan	14,000	$12.80	01/06/2015
12/21/2005	Director Stock Option Plan	4,000	$11.68	12/21/2015
12/13/2006	Director Stock Option Plan	4,000	$10.00	12/13/2016
02/27/2008	Director Stock Option Plan	4,000	$5.62	02/27/2018
02/25/2009	Director Stock Option Plan	7,500	$1.68	02/25/2019
02/22/2010	Director Stock Option Plan	5,000	$6.03	02/22/2020
03/09/2011	Director Stock Option Plan	5,000	$4.86	03/09/2021
12/02/2011	Director Stock Option Plan	2,500	$5.90	12/21/2021

A form of the Mr. D. Keane Option Agreements is attached hereto as Exhibit 2. The 2003 Mr. D. Keane Option Agreement is attached as Exhibit 3. The 2004 Mr. D. Keane Option Agreement is attached as Exhibit 4. The 2004 Mr. K. Keane Option Agreement is attached hereto as Exhibit 5. The 2005 Mr. K. Keane Option Agreement is attached hereto as Exhibit 6. A form of the Mr. K. Keane Director Option Agreements is attached hereto as Exhibit 7. Copies of the Stock Option Plan and the Director Stock Option Plan are attached hereto as Exhibits 8 and 9, respectively, and are incorporated herein by reference to Exhibits 10.6 and 10.8 of the Issuer’s Form 10/A Registration Statement, dated January 28, 2003 filed with the SEC on December 26, 2002. Any description set forth in this statement on Schedule 13D of the terms and conditions of the Mr. D. Keane Option Agreements and the Mr. K. Keane Option Agreements are qualified in their entirety by reference to the Mr. D. Keane Option Agreements and the Mr. K. Keane Option Agreements.

Other than as described in this Item 6 and the Joint Filing Agreement attached as Exhibit 10 hereto, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 hereof and between such persons and any person with respect to any securities of the Issuer, including but not limited to transfer or voting of any other securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, divisions of profits or loss, or the giving or withholding of proxies.

CUSIP No. 607495108

607495207

SCHEDULE 13D

Page 8 of 9 Pages

Item 7.	MATERIAL TO BE FILED AS EXHIBITS

	Exhibit 1: Letter

	Exhibit 2: Form of Mr. D. Keane Option Agreements

	Exhibit 3: 2003 Mr. D. Keane Option Agreement

	Exhibit 4: 2004 Mr. D. Keane Option Agreement

	Exhibit 5: 2004 Mr. K. Keane Option Agreement

	Exhibit 6: 2005 Mr. K. Keane Option Agreement

	Exhibit 7: Form of Mr. K. Keane Director Option Agreements

	Exhibit 8: Stock Option Plan (incorporated by reference to Exhibit 10.6 to the Issuer’s Form 10/A Registration Statement, dated January 28, 2003 filed with the SEC on December 26, 2002)

	Exhibit 9: Director Stock Option Plan (incorporated by reference to Exhibit 10.8 to the Issuer’s Form 10/A Registration Statement, dated January 28, 2003 filed with the SEC on December 26, 2002)

	Exhibit 10: Joint Filing Agreement as required by Rule 13d-1(k)(1) under the Act.

CUSIP No. 607495108

607495207

SCHEDULE 13D

Page 9 of 9 Pages

SIGNATURES

After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Date: October 26, 2012




/s/ Daniel G. Keane
DANIEL G. KEANE




/s/ Kevin T. Keane
KEVIN T. KEANE

EX-99 3 p12-1733exhibit2.htm EXHIBIT 2_STOCK OPTION AGREEMENT p12-1733exhibit2.htm

MOD-PAC CORP.

STOCK OPTION AGREEMENT

(2002 STOCK OPTION PLAN)

OPTION NO.

DEFINED TERMS

As used in this Agreement, the following terms shall have the meaning indicated:

Optionor or Company:
Optionee:
Shares Optioned:
Number of Shares Optioned:
Date of Grant:
Agreement Date:
Expiration Date:
Option Price Per Share:
Option Vesting Schedule -

AGREEMENT, made and entered into as of the Agreement Date by and between Optionor and Optionee;

RECITALS

A. On December 6, 2002, the Optionor adopted the 2002 Stock Option Plan (“Plan”) and authorized a Stock Option Committee of the Board of Directors (“Committee”) to grant to certain employees of Optionor options to purchase shares of the $.01 par value Common Stock of the Optionor (“Shares”), in such amounts, at such prices, exercisable at such times and under such form of agreement as the Committee shall determine; and

B. The Committee, acting pursuant to the authority given to it, has approved this form of Stock Option Agreement (“Agreement”) and has determined that an option to purchase certain Shares shall be granted to Optionee.

NOW, THEREFORE, in consideration of $1.00 and other valuable consideration paid by Optionee to Optionor, and of the mutual promises and representations herein contained, it is agreed by and between the parties hereto as follows:

Section 1. Grant and Option Price. Optionor hereby grants to Optionee an option (“Option”) to purchase the Shares optioned at the Option Price shown on the cover page of this Agreement. The Option Price for each class of shares is the greater of the minimum price required by the Plan or the fair market value of the Shares on the Date of Grant.

Section 2. Payment of Option Price. The Option Price shall be paid in full by Optionee (or by any other person entitled, pursuant to the terms hereof, to exercise the Option) to Optionor at the time of and to the extent of the exercise of this Option and before delivery of the Shares purchased. The Option Price is payable in cash or cash equivalents or by surrendering to the Optionor Shares that are already owned by the Optionee.

DGK and DBL

- 2 -

Section 3. Investment Intent. Absent advice from legal counsel to the Optionor that the Shares are the subject of an effective registration statement filed with the Securities and Exchange Commission, Optionee shall exercise this Option and acquire the Shares for his own account for investment and not with a view of the resale or distribution thereof, and shall make such representations and undertakings to that effect as counsel for Optionor may then advise as necessary or desirable. The certification for the Shares issued pursuant to an exercise of this Option, if required by legal counsel to the Optionor, shall bear an appropriate legend regarding this intent.

Section 4. Exercise. Subject to the other provisions of this Agreement and the Plan, the Option may be exercised only in full Share lots of the Shares Optioned, in accordance with the following provisions:

(a) Installments. No Option shall be exercisable (i) before six (6) months after the Date of Grant, or (ii) after the Expiration Date (“Exercise Period”); provided, however, that in no event shall the Option be exercisable after the expiration of ten (10) years from the Date of Grant. The Option, once accrued, shall be exercisable in whole at any time, or in part from time to time (in blocks of 25 shares or any multiple thereof) during the Exercise Period.

(b) Method of Exercise. This Option shall be exercised only upon receipt by the Chief Financial Officer or Secretary of Optionor of written notification from Optionee of his exercise of the same.

(c) Nontransferable. No Option is transferable by Optionee, other than by will or the laws of descent and distribution, and the Option shall be exercisable, during Optionee’s lifetime and within the Exercise Period, only by him.

(d) Death of Optionee. If Optionee dies while employed by the Company or one of its subsidiaries and during the term of this Option, this Option may be exercised by any person who obtains the rights of Optionee by will or by operation of the laws of descent and distribution of the domicile of Optionee at the date of his death, but only to the extent of exercise installments which had accrued as of the date of death, and only within a period of one (1) year after the date of such death or until the Expiration Date, whichever occurs first.

DGK and DBL

- 3 -

(e) Termination of Employment.

(1) In the event of the termination of employment of the Optionee for any reason other than death, disability or for cause, the Option may be exercised by Optionee, but only to the extent accrued as of the date of termination, and only within a period of ninety (90) days from the date of the termination of employment or until the Expiration Date, whichever occurs first. In the event of the termination of employment of Optionee for cause, the Option, including any which have accrued, shall expire immediately. Cause means (i) the unauthorized used or disclosure of the confidential information or trade secrets of the Company, (ii) conviction of, or a plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state, (iii) negligence or misconduct in the performance of Optionee’s duties or (iv) material breach of Optionee’s obligations under any agreement or arrangement with the Company, a Subsidiary or any affiliate thereof (including under the terms of any loan made to the Optionee).

(2) If Optionee dies within three (3) months after termination of employment other than for cause, the Option may be exercised by the personal representative of Optionee, but only to the extent accrued as of the date of termination, and only within a period of one (1) year from the date Optionee was terminated by Optionor or until the Expiration Date, whichever occurs first.

(f) Disability of Optionee. In the event Optionee becomes disabled within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, the Option may be exercised by Optionee, but only to the extent accrued as of the date of such disability, and only within a period of one (1) year from the date Optionee was disabled or until the Expiration Date, whichever occurs first.

Section 5. Regulatory Requirements. As a condition precedent to the exercise of this Option, either in whole or in part, Optionee shall comply with all regulations and requirements of any regulatory authority having control or supervision of the issuance of the common stock of Optionor and, in connection therewith, shall execute any documents Optionor, in its sole discretion, shall deem necessary or advisable.

DGK and DBL

- 4 -

Section 6. Adjustments for Changes.

(a) Shares Optioned and Option Price. Subject to any required action by shareholders of Optionor, in the event of any change in the Shares or in any shares of the outstanding common stock of Optionor by reason of a reorganization, re-capitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, the aggregate number and class of shares as to which the Plan relates, the Shares Optioned and the Option Price shall be appropriately adjusted by the Committee. The Committee’s determination in this respect shall be final, binding and conclusive, provided that, to the extent incentive stock options are granted hereunder pursuant to the Plan, the incentive stock options shall not be adjusted in a manner that causes this Option to fail to continue to qualify as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

(b) Rights of Optionor. The grant of an option pursuant to the Plan shall not affect in any way the right or power of Optionor to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to merge or to consolidate, or to dissolve, liquidate or sell, or transfer all or any part of its business or assets. The Board of Directors may make such adjustments, not only with regard to the Shares Optioned, but also with regard to the Option Price, and any such change, when so made by the Board of Directors, shall be automatically deemed incorporated in the provisions of this Agreement.

Section 7. Not Employment Agreement. The granting to Optionee of this Option to purchase Shares shall not constitute or be evidence of any agreement or understanding, express or implied, on the part of Optionor to employ Optionee for any specified period.

Section 8. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective heirs, legal representatives, successors and assigns of the parties hereto.

DGK and DBL

- 5 -

Section 9. Nature of Stock Option. It is intended that this Option shall be treated as a non-qualified stock option.

Section 10. Holding Periods. Without giving prior written notice to Optionor, addressed to the Chief Financial Officer or Secretary of Optionor, of his intent to dispose of such Shares within such periods, Optionee will not dispose of any Shares acquired pursuant to an exercise of this Option until a date which is at least two (2) years from the date of Grant and at least one (1) year after the Date of exercise.

Section 11. Plan Controlling. This Agreement is entered into and delivered pursuant to the terms of the Plan, and shall be in all respects interpreted in accordance therewith. A copy of the Plan has been furnished Optionee, receipt of which is acknowledged by the signing of this Agreement. The Plan is, by reference, incorporated in and made a part hereof, and if any inconsistency between this Agreement and the Plan exists, the Plan shall govern and control.

Section 12. Pronouns. All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the person or persons may require.

- 6 -

DGK and DBL

IN WITNESS WHEREOF, Optionor has caused this Agreement to be executed by its officers thereunto duly authorized, and its corporate seal to be hereunto affixed, and the Optionee has hereunto set his hand and seal as of the Agreement Date.

	MOD-PAC CORP.


	By	/s/ Mod-Pac Corp.
		Optionor



	By	/s/ K. Keane
		Optionee

DGK and DBL - 7 -

EX-99 4 p12-1733exhibit3.htm EXHBIT 3_2001 STOCK OPTION PLAN p12-1733exhibit3.htm

MOD-PAC CORP

INCENTIVE STOCK OPTION AGREEMENT

(2001 STOCK OPTION PLAN)

Option No. 217

DEFINED TERMS

As used in this Agreement, the following terms shall have the meaning indicated:

Optionor or Company:		MOD-PAC CORP
Optionee:		Daniel G. Keane
Shares Optioned:		Common Stock
Number of Shares Optioned:		31,921
Date of Grant:		January 24, 2003
Agreement Date:		January 24, 2003
Expiration Date:		January 24, 2013
Option Price Per Share:		$5.392

Option Vesting Schedule - Options covered by this Agreement vest and become exercisable over five (5) years, as follows:

	Date First Exercisable	Number of Shares
January 24, 2004		6,384
January 24, 2005		6,384
January 24, 2006		6,384
January 24, 2007		6,384
January 24, 2008		6,385

AGREEMENT, made and entered into as of the Agreement Date by and between Optionor and Optionee;

RECITALS

A. On April 26, 2001, at the annual meeting of shareholders of Optionor, the shareholders approved the Stock Option Plan (“Plan”) and subsequently amended on December 6, 2002 authorized a Stock Option Committee of the Board of Directors (“Committee”) to grant to certain employees of Optionor options to purchase shares of the $.01 par value Common Stock of the Optionor (“Shares”), in such amounts, at such prices, exercisable at such times and under such form of agreement as the Committee shall determine; and

(a) Annual Installments. No Option shall be exercisable (i) before one (1) year after the Date of Grant, or (ii) after the Expiration Date (“Exercise Period”); provided, however, that in no event shall the Option be exercisable after the expiration of ten (10) years from the Date of Grant. Within the Exercise Period, unless the Committee establishes otherwise and except as provided in subsections (d), (e) and (f) of this Section 4, the Option will become exercisable by Optionee in equal annual installments on the first five (5) anniversaries of the Date of Grant as shown on the cover page of this Agreement. Any Option installment which first becomes exercisable on the fifth anniversary of the Date of Grant shall be exercisable on that Date. Each installment, once accrued, shall be exercisable in whole at any time, or in part from time to time (in blocks of 25 shares or any multiple thereof) during the Exercise Period.

(b) Method of Exercise. This Option shall be exercised only upon receipt by the Chief Financial Officer or Secretary of Optionor of written notification from Optionee of his exercise of the same.

-2-

(e) Termination of Employment.

(1) In the event of the termination of employment of the Optionee for any reason other than death, disability or for cause, the Option may be exercised by Optionee, but only to the extent of the exercise of installments which had accrued as of the date of termination, and only within a period of ninety (90) days from the date of the termination of employment or until the Expiration Date, whichever occurs first. In the event of the termination of employment of Optionee for cause, the Option, including any exercise installments which have accrued, shall expire immediately. Cause means (i) the unauthorized used or disclosure of the confidential information or trade secrets of the Company, (ii) conviction of, or a plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state, (iii) negligence or misconduct in the performance of Optionee’s duties or (iv) material breach of Optionee’s obligations under any agreement or arrangement with the Company, a Subsidiary or any affiliate thereof (including under the terms of any loan made to the Optionee).

(2) If Optionee dies within three (3) months after termination of employment other than for cause, the Option may be exercised by the personal representative of Optionee, but only to the extent of the exercise of installments which had accrued as of the date of termination, and only within a period of one (1) year from the date Optionee was terminated by Optionor or until the Expiration Date, whichever occurs first.

(f) Disability of Optionee. In the event Optionee becomes disabled within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, the Option may be exercised by Optionee, but only to the extent of the exercise of installments which had accrued as of the date of such disability, and only within a period of one (1) year from the date Optionee was disabled or until the Expiration Date, whichever occurs first.

Section 6. Adjustments for Changes.

(a) Shares Optioned and Option Price. Subject to any required action by shareholders of Optionor, in the event of any change in the Shares or in any shares of the outstanding common stock of Optionor by reason of a reorganization, re-capitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, the aggregate number and class of shares as to which the Plan relates, the Shares Optioned and the Option Price shall be appropriately adjusted by the Committee. The Committee’s determination in this respect shall be final, binding and conclusive, provided that this Option and any other options granted pursuant to the Plan shall not be adjusted in a manner that causes this Option to fail to continue to qualify as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

Section 8. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective heirs, legal representatives, successors and assigns of the parties hereto.

Section 9. Incentive Stock Option. It is intended that this Agreement meet the applicable requirements of and qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended, and this Agreement shall in all respects be so interpreted and construed as to be consistent with such intention.

-3-

MOD-PAC CORP

By /s/ Mod-Pac Corp.

Optionor

By /s/ D. Keane

Optionee

Officers and Key Employees

-4-

EX-99 5 p12-1733exhibit4.htm EXHBIT 4_2002 STOCK OPTION PLAN p12-1733exhibit4.htm

MOD-PAC CORP

NON-QUALIFIED STOCK OPTION AGREEMENT

(2002 STOCK OPTION PLAN)

Option No. 003

DEFINED TERMS

As used in this Agreement, the following terms shall have the meaning indicated:

Optionor or Company:		MOD-PAC CORP
Optionee:		Daniel G. Keane
Shares Optioned:		Common Stock
Number of Shares Optioned:		28,000
Date of Grant:		February 20, 2004
Agreement Date:		February 20, 2004
Expiration Date:		February 20, 2014
Option Price Per Share:		$8.44

Option Vesting Schedule - Options covered by this Agreement vest and become exercisable over five (5) years, as follows:

	Date First Exercisable	Number of Shares
August 20, 2004		28,000

AGREEMENT, made and entered into as of the Agreement Date by and between Optionor and Optionee;

RECITALS

A. On December 6, 2002, at a meeting of the shareholder of Optionor, the shareholder approved the Stock Option Plan (“Plan”) and authorized a Stock Option Committee of the Board of Directors (“Committee”) to grant to certain employees of Optionor options to purchase shares of the $.01 par value Common Stock of the Optionor (“Shares”), in such amounts, at such prices, exercisable at such times and under such form of agreement as the Committee shall determine; and

(a) Exercise Period. No Option shall be exercisable (i) before six (6) months after the Date of Grant, or (ii) after the Expiration Date (“Exercise Period”); provided, however, that in no event shall the Option be exercisable after the expiration of ten (10) years from the Date of Grant

(b) Method of Exercise. This Option shall be exercised only upon receipt by the Chief Financial Officer or Secretary of Optionor of written notification from Optionee of his exercise of the same.

(c) Nontransferable. Except as allowed by the Committee. No Option is transferable by Optionee, other than by will or the laws of descent and distribution, and the Option shall be exercisable, during Optionee’s lifetime and within the Exercise Period, only by him.

(d) Death of Optionee. If Optionee dies while employed by the Company or one of its subsidiaries and during the term of this Option, this Option may be exercised by any person who obtains the rights of Optionee by will or by operation of the laws of descent and distribution of the domicile of Optionee at the date of his death only within a period of one (1) year after the date of such death or until the Expiration Date, whichever occurs first.

-2-

(e) Termination of Employment.

(1) In the event of the termination of employment of the Optionee for any reason other than death, disability or for cause, the Option may be exercised by Optionee and only within a period of ninety (90) days from the date of the termination of employment or until the Expiration Date, whichever occurs first. In the event of the termination of employment of Optionee for cause, the Option, shall expire immediately. Cause means (i) the unauthorized used or disclosure of the confidential information or trade secrets of the Company, (ii) conviction of, or a plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state, (iii) negligence or misconduct in the performance of Optionee’s duties or (iv) material breach of Optionee’s obligations under any agreement or arrangement with the Company, a Subsidiary or any affiliate thereof (including under the terms of any loan made to the Optionee).

(2) If Optionee dies within three (3) months after termination of employment other than for cause, the Option may be exercised by the personal representative of Optionee and only within a period of one (1) year from the date Optionee was terminated by Optionor or until the Expiration Date, whichever occurs first.

(f) Disability of Optionee. In the event Optionee becomes disabled within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, the Option may be exercised by Optionee and only within a period of one (1) year from the date Optionee was disabled or until the Expiration Date, whichever occurs first.

Section 6. Adjustments for Changes.

Section 8. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective heirs, legal representatives, successors and assigns of the parties hereto.

-3-

Section 9. Plan Controlling. This Agreement is entered into and delivered pursuant to the terms of the Plan, and shall be in all respects interpreted in accordance therewith. A copy of the Plan has been furnished Optionee, receipt of which is acknowledged by the signing of this Agreement. The Plan is, by reference, incorporated in and made a part hereof, and if any inconsistency between this Agreement and the Plan exists, the Plan shall govern and control.

Section 10. Pronouns. All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the person or persons may require.

MOD-PAC CORP

By /s/ Mod-Pac Corp.

Optionor

By /s/ D. Keane

Optionee

Officers and Key Employees

-4-

EX-99 6 p12-1733exhibit5.htm EXHIBIT 5_NON-QUALIFIED STOCK OPTION AGREEMENT p12-1733exhibit5.htm

MOD-PAC CORP

NON-QUALIFIED STOCK OPTION AGREEMENT

(2002 STOCK OPTION PLAN)

Option No. 002

DEFINED TERMS

As used in this Agreement, the following terms shall have the meaning indicated:

Optionor or Company:	MOD-PAC CORP
Optionee:	Kevin Keane
Shares Optioned:	Common Stock
Number of Shares Optioned:	18,750
Date of Grant:	February 20, 2004
Agreement Date:	February 20, 2004
Expiration Date:	February 20, 2014
Option Price Per Share:	$8.44

Option Vesting Schedule - Options covered by this Agreement vest and become exercisable as follows:

Date First Exercisable	Number of Shares
August 20, 2004	18,750

AGREEMENT, made and entered into as of the Agreement Date by and between Optionor and Optionee;

RECITALS

A. On November 6, 2002, at a meeting of the shareholder of Optionor, the shareholder approved the Stock Option Plan (“Plan”) and authorized a Stock Option Committee of the Board of Directors (“Committee”) to grant to certain employees of Optionor options to purchase shares of the $.01 par value Common Stock of the Optionor (“Shares”), in such amounts, at such prices, exercisable at such times and under such form of agreement as the Committee shall determine; and

(a) Exercise Period. No Option shall be exercisable (i) before one six (6) months after the Date of Grant, or (ii) after the Expiration Date (“Exercise Period”); provided, however, that in no event shall the Option be exercisable after the expiration of ten (10) years from the Date of Grant.

(b) Method of Exercise. This Option shall be exercised only upon receipt by the Chief Financial Officer or Secretary of Optionor of written notification from Optionee of his exercise of the same.

(d) Death of Optionee. If Optionee dies while employed by the Company or one of its subsidiaries and during the term of this Option, this Option may be exercised by any person who obtains the rights of Optionee by will or by operation of the laws of descent and distribution of the domicile of Optionee at the date of his death and only within a period of one (1) year after the date of such death or until the Expiration Date, whichever occurs first.

-2-

(e) Termination of Employment.

(f) Disability of Optionee. In the event Optionee becomes disabled within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, the Option may be exercised by Optionee and only within a period of one (1) year from the date Optionee was disabled or until the Expiration Date, whichever occurs first.

Section 6. Adjustments for Changes.

Section 8. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective heirs, legal representatives, successors and assigns of the parties hereto.

-3-

	MOD-PAC CORP.


	By	/s/ Mod-Pac Corp.
		Optionor



	By	/s/ K. Keane
		Optionee

Officers and Key Employees

-4-

EX-99 7 p12-1733exhibit6.htm EXHIBIT 6_STOCK OPTION AGREEMENT (OPTION NO. 23) p12-1733exhibit6.htm

MOD-PAC CORP.

STOCK OPTION AGREEMENT

(2002 STOCK OPTION PLAN)

OPTION NO. 23

DEFINED TERMS

As used in this Agreement, the following terms shall have the meaning indicated:

Optionor or Company:	MOD-PAC CORP.
Optionee:	Kevin T. Keane
Shares Optioned:	Common Stock
Number of Shares Optioned:	14,000 Non-Qualified Stock Options
Date of Grant:	January 6, 2005
Agreement Date:	January 6, 2005
Expiration Date:	January 6, 2015
Option Price Per Share:	$12.80

Option Vesting Schedule - Options covered by this Agreement vest and become exercisable in full six (6) months from the Date of Grant shown above.

AGREEMENT, made and entered into as of the Agreement Date by and between Optionor and Optionee;

RECITALS

A. On December 6, 2002, the Optionor adopted the 2002 Stock Option Plan (“Plan") and authorized a Stock Option Committee of the Board of Directors (“Committee”) to grant to certain employees of Optionor options to purchase shares of the $.01 par value Common Stock of the Optionor (“Shares”), in such amounts, at such prices, exercisable at such times and under such form of agreement as the Committee shall determine; and

(b) Method of Exercise. This Option shall be exercised only upon receipt by the Chief Financial Officer or Secretary of Optionor of written notification from Optionee of his exercise of the same.

-2-

(e) Termination of Employment.

(3) Disability of Optionee. In the event Optionee becomes disabled within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, the Option may be exercised by Optionee, but only to the extent accrued as of the date of such disability, and only within a period of one (1) year from the date Optionee was disabled or until the Expiration Date, whichever occurs first.

-3-

Section 6. Adjustments for Changes.

	MOD-PAC CORP.


	By:	/s/ Mod-Pac Corp.
		Optionor


	By:	/s/ K. Keane
		Optionee

-4-

EX-99 8 p12-1733exhibit7.htm EXHIBIT 7_2002 DIRECTOR STOCK OPTION AGREEMENT p12-1733exhibit7.htm

MOD-PAC CORP.

2002 DIRECTOR STOCK OPTION AGREEMENT

Option No.
Optionee:
Number of Shares Optioned:
Date of Grant:
Option Price Per Share:
Agreement Date:
Expiration Date:

AGREEMENT, made and entered into as of the Agreement Date stated above, by and between MOD-PAC CORP., a New York corporation (“Optionor”), and the Optionee named above, a director of the Optionor;

WITNESSETH THAT WHEREAS:

A. It is in the interest of Optionor, its shareholders and its subsidiaries to encourage and enable outside directors whose judgment, initiative and effort may be expected to directly and significantly influence the growth and profitability of Optionor, to acquire and retain a proprietary interest in Optionor by ownership of its stock; and

B. Optionee is a director of Optionor, but not an officer or employee of Optionor or any of its subsidiary corporations; and

C. On December 6, 2002, the Optionor adopted the 2002 Director Stock Option Plan (“Plan”), pursuant to which certain directors could be granted options to purchase authorized and unissued shares of Common Stock of the Optionor (or treasury shares at the Optionor’s discretion), such option to be granted to Optionee in such amounts as the committee appointed by the Board of Directors to administer the Plan (“Committee”) shall determine;

D. The Committee has approved this form of stock option agreement.

NOW, THEREFORE, in consideration of the payment of $1.00 and other valuable considerations by the Optionee to the Optionor, and of the mutual promises and representations herein contained, it is agreed by and between the parties hereto as follows:

Section 1. Grant of Option. Subject to the terms and conditions of the plan, Optionor hereby gives and grants to Optionee, an option to purchase the number of shares of the $.01 par value Common Stock of the Optionor stated above at the option price stated above for each share, which price is not less than 100% of the fair market value of Optionor’s Common Stock on the Date of Grant stated above. The price of the shares shall be paid in full by Optionee (or by any other person entitled, pursuant to the terms hereof, to exercise the same) to Optionor at the time of and to the extent of the exercise of this option and before delivery of the stock purchased. Payment shall be made in cash or by certified check, or with the approval of the Committee, shares of Common Stock, or both, such that the aggregate fair market value of the shares (as determined by the Committee) plus cash equals the total exercise price. Optionee agrees that any exercise shall only be by an instrument in writing.

Section 2. Restricted Stock. Absent advice from legal counsel to the Optionor that the Common Stock is the subject of an effective registration statement filed with the Securities and Exchange Commission, Optionee, exercising an option, shall acquire Common Stock of the Optionor for his own account or investment and not with a view to the resale or distribution thereof and shall make such representations and undertakings in connection therewith as counsel for Optionor may advise as necessary or desirable in connection therewith. The Common Stock issued pursuant to the exercise of an option, if required by legal counsel to the Optionor, shall bear an appropriate legend conforming to this Section.

- 2 -

Section 3. Exercise of Options. Subject to the other provisions of this Agreement and the Plan, the option granted herein may be exercised in one or more full share lots as follows:

(a) By Optionee during the period that he continues as a director of Optionor, but in no event after ten (10) years from the Date of Grant or the Expiration Date stated above, if sooner. This option shall be deemed exercised, from time to time, upon receipt by Optionor of written notification from Optionee of his exercise of the same.

(b) This option shall be exercisable only during the thirty (30) day period commencing one week after a press release announcing quarterly or annual results of operations of the Optionor; but in no event shall it be exercised within the six (6) month period immediately following the Date of Grant.

(c) No option shall be transferable by Optionee, other than by will or the laws of descent and distribution and each option shall be exercisable, during Optionee’s lifetime, only by Optionee. No option shall be pledged or hypothecated in any way and no option shall be subject to execution, attachment, or similar process except with the express consent of the Committee.

(d) If Optionee dies or is disabled while serving as a director of Optionor (within the meaning of Section 105(d)(4) of the Internal Revenue Code), this option may be exercised by any person who obtains the rights of Optionee by testamentary transfer or by operation of the laws of descent and distribution of the domicile of Optionee at the date of his death, or the Optionee if disabled, but may be so exercised only to the extent that Optionee himself, on the date of his death, could have exercised the same, and only within a period of twelve (12) months after the date of such death or determination of disability, or the Expiration Date, whichever occurs first.

(e) If the Optionee ceases to be a director of Optionor for any reason other than death or disability, Optionee shall be entitled to exercise this option, at any time during a period of thirty (30) days from the date Optionee ceases to be a director or the Expiration Date, whichever occurs first.

(f) Neither Optionee nor his successor shall have any of the rights of a shareholder of Optionor until the certificates evidencing the shares purchased are properly delivered to such Optionee or his successor.

- 3 -

(g) If the Optionee is determined by the Committee to have committed an act of embezzlement, fraud, dishonesty, deliberate or repeated disregard of the rules of the Optionor, unauthorized disclosure of any of the trade secrets or confidential information of the Optionor, unfair competition with the Optionor, inducement of any customer of the Optionor to breach a contract with the Optionor, inducement of any principal for whom the Optionor acts as agent to terminate such agency relationship or any culpable degree of negligence, then neither the Optionee nor the Optionee’s estate shall be entitled to exercise any Option after termination of the Optionee’s directorship, whether or not, after termination of such directorship, such Optionee may receive payment from the Optionor for services rendered prior to termination, services for the day on which termination occurs, or other benefits.

Section 4. Compliance with Law. As a condition precedent to the exercise of this option, either in whole or in part, Optionee shall comply with all regulations and requirements of any regulatory authority having control or supervision of the issuance of the Common Stock of Optionor and, in connection therewith, execute any documents Optionor, in its sole discretion, shall deem necessary or advisable.

Section 5. Merger or Consolidation. Subject to any required action by the shareholders, if the Optionor shall be the surviving corporation in any merger or consolidation, any unexercised part of this option shall pertain to and apply to the securities to which a holder of the number of shares of Common Stock subject to this option would have been entitled. A dissolution or liquidation of Optionor or a merger or consolidation in which Optionor is not the surviving corporation shall cause any unexercised part of this option to terminate, provided that Optionee shall, in such event, have the right immediately prior to such dissolution or liquidation, or merger or consolidation in which Optionor is not the surviving corporation, to exercise this option in whole or in part without regard to any other provisions of the Agreement.

Section 6. Changes in Stock; Stock Dividends. If the Common Stock as presently constituted is changed into or exchanged for a different number or kind of shares of stock or other securities of the Optionor or of another corporation (whether by reason of merger, consolidation, recapitalization, reclassification, split-up, combination of shares, or otherwise), or if the number of shares of Common Stock shall be increased through the payment of a stock dividend or other distribution, then notwithstanding any other provision of this Plan, there shall be substituted for or added to each share subject to this Plan the number and kind of shares of stock or other securities into which each outstanding share shall be

- 4 -

exchanged, or to which each such share shall be entitled, as the case may be. Outstanding options shall also be amended as to price and other terms if necessary to reflect the foregoing events. If there shall be any other change in the number or kind of the outstanding shares, or of any stock or other securities into which it shall have been exchanged, then if the Committee shall, in its sole discretion, determine that such change equitably requires an adjustment in any option theretofore granted or that may be granted under this Agreement, such adjustment shall be made in accordance with such determination.

Section 7. Adjustments by Board of Directors. To the extent that the adjustments under Sections 5 or 6 relate to stock or securities of Optionor, such adjustments shall be made by the Board of Directors of Optionor whose determination in that respect shall be final, binding and conclusive.

Section 8. No Further Rights. Except as expressly provided in Sections 5 and 6, the Optionee shall have no right by reason of any subdivision or consolidation of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class or by reason of any dissolution, liquidation, merger or consolidation, or spin-off of assets or stock of another corporation, and any issue by Optionor of shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to this option.

Section 9. No Effect on Corporate Action. The grant of an option pursuant to the Agreement shall not affect in any way the right or power of Optionor to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to merge or to consolidate, or to dissolve, liquidate or sell, or transfer all or any part of its business or assets.

- 5 -

Section 10. Compliance with Committee Action. This option shall be subject to the requirement that if at any time the Committee shall determine, in its discretion, that the satisfaction of withholding tax or other withholding liabilities, or that the listing, registration or qualification of the shares covered hereby 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 granting of this option or the purchase of shares hereunder, this option may not be exercised in whole or in part unless and until such withholding, listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee.

Section 11. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective heirs, legal representatives, successors and assigns of the parties hereto.

Section 12. Tax Status. It is intended that the options granted under this Agreement are intended to be options which do not meet the requirements of Section 422A of the Internal Revenue Code, and this Agreement shall in all respects be so interpreted and construed as to be consistent with such intention.

Section 13. Interpretation; Plan Governs. Any dispute or disagreement which should arise under, or as a result of, or in any way relate to, the interpretation, construction or application of the Agreement will be resolved by the Board of Directors of Optionor. Any determination made hereunder shall be final, binding and conclusive for all purposes. If there is any discrepancy between this Agreement and the Plan, the Plan shall govern.

Section 14. No Employment Agreement. The granting of an option to Optionee does not alter in any way the shareholders’ or Board of Directors’ existing rights to remove Optionee as a director at any time for any reason, nor does it confer upon Optionee any rights or privileges except as specifically provided for in the Agreement.

- 6 -

	MOD-PAC CORP.


	By:
		Optionor


	By:
		Optionee

- 6 -

EX-99 9 p12-1733exhibit10.htm EXHIBIT 10_JOINT FILING p12-1733exhibit10.htm

EXHIBIT 10

JOINT FILING AGREEMENT

PURSUANT TO RULE 13d-1(k)

The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D shall be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows or has reason to believe that such information is inaccurate.

DATE: October 26, 2012




/s/ Daniel G. Keane
DANIEL G. KEANE




/s/ Kevin T. Keane
KEVIN T. KEANE