UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Base Salaries
At a meeting on February 14, 2023, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of UFP Technologies, Inc. (the “Company”) approved increases in the base salaries of the Company’s named executive officers, effective January 1, 2023. The following table sets forth the new base salary of each of the Company’s named executive officers whose base salary was adjusted by the Compensation Committee.
| Name and Title | 2023 Base Salary (effective January 1, 2023) |
| R. Jeffrey Bailly, President, Chief Executive Officer and Chairman |
$680,000 |
| Ronald J. Lataille, Senior Vice President, Treasurer and Chief Financial Officer |
$440,000 |
|
Christopher P. Litterio, Senior Vice President of Human Resources and Chief Counsel |
$355,000 |
| Mitchell C. Rock, Senior Vice President of Sales and Marketing |
$440,000 |
|
Steve Cardin Vice President, COO Medtech |
$325,000 |
Executive Officer 2022 Special Discretionary Bonus- Cash
Also at its February 14, 2023 meeting, in addition to Mr. Bailly’s individual performance bonus, the Compensation Committee approved the terms of a supplemental discretionary year-end cash bonus in the amount of $300,000 to Mr. Bailly for 2022 related to the Company’s exceptional financial performance.
Executive Officer 2022 Special Discretionary Bonus- Options
Also at its February 14, 2023 meeting, the Compensation Committee granted stock options to Mr. Bailly to purchase up to an aggregate of 7,766 shares of the Company’s common stock, consisting of 1,792 incentive stock options and 5,974 non-qualified stock options (each, an “Option” and, collectively, the “Options”). The purchase price of each Option is $111.54 per share and each Option has a term of five years. The Options are exercisable as follows: (i) 50% of the shares subject to each Option are exercisable on March 1, 2024 and (ii) the remaining 50% of the shares subject to each Option are exercisable on March 1, 2025.
The above description of the Options is qualified in its entirety by reference to the text of Incentive Stock Option Agreement and Non-Qualified Stock Option Agreement evidencing such Options, as applicable, copies of the forms of which are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein in their entirety by reference.
Stock Unit Awards
Also at its February 14, 2023 meeting, the Compensation Committee approved the grant of stock unit awards to the Company’s named executive officers, as indicated below. Subject to the terms of the Company’s 2003 Incentive Plan, as amended (the “2003 Incentive Plan”) and the stock unit award agreement evidencing each such award, with the Company’s Chief Executive Officer, R. Jeffrey Bailly, receiving a separate form of stock unit award agreement than the other executive officers, 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 | Column A Number of “Threshold” Stock Unit Awards (No Minimum Adjusted Operating Income Requirement) |
Column B Number of “Target” Stock Unit Awards (Upon Attainment of Target Adjusted Operating Income) |
Column C Number of “Exceptional” Stock Unit Awards (Upon Attainment of Exceptional Adjusted Operating Income) |
| R. Jeffrey Bailly Chairman, Chief Executive Officer and President |
7,056 | 7,056 | 7,056 |
| Ronald J. Lataille Senior Vice President, Treasurer and Chief Financial Officer |
2,761 | 1,381 | 1,380 |
| Mitchell Rock Senior Vice President, GM Medtech |
2,761 | 1,381 | 1,380 |
| Chris Litterio Senior Vice President of Human Resources and Chief Counsel |
1,224 | 612 | 612 |
| Steve Cardin Vice President, COO Medtech |
807 | 404 | 403 |
All stock unit awards listed in the table above are subject to time-based and continuous employment vesting requirements. The stock unit awards listed in Columns B and C are also subject to the Company meeting certain financial performance objectives (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 2024. Assuming achievement of the applicable Performance Objectives, one-third of the stock unit awards listed in Columns A, B, and C above shall vest on March 1, 2024, one-third shall vest on March 1, 2025 and one-third shall vest on March 1, 2026, provided that the recipient remains continuously employed by the Company through each such vesting date.
Any unvested stock unit awards shall terminate upon the cessation of a recipient’s employment with the Company. Notwithstanding the foregoing and only with respect to the award to Mr. Bailly, subject to the terms of Mr. Bailly’s employment agreement dated October 8, 2007, as amended (the “CEO Employment Agreement”), and the stock unit award agreement evidencing Mr. Bailly’s award, in the event that Mr. Bailly’s employment ceases without “cause” or for “good reason” (as such terms are defined in the CEO Employment Agreement), Mr. Bailly shall be entitled to receive shares that, but for such cessation of employment, would have otherwise been issued to Mr. Bailly pursuant to the terms of the stock unit awards listed in Columns A, B, and C above, notwithstanding such cessation of employment.
In the event of a change in control of the Company (as defined in the 2003 Incentive Plan), any unvested stock unit awards listed in each of Columns A, B, and C above shall become fully vested as of the effective date of such change in control, 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, and, with respect to the stock unit awards listed in Columns B and C above, subject to achievement of any applicable Performance Objectives 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 CEO stock unit award agreement or the stock unit award agreement evidencing such awards, as applicable, copies of the forms of which are attached hereto as Exhibit 10.3 and Exhibit 10.4, respectively, and are incorporated herein in their entirety by reference.
2023 Chief Executive Officer’s Performance Bonus Plan
Also at its February 14, 2023 meeting, the Compensation Committee approved a 2023 cash bonus plan for Mr. Bailly that included corporate financial performance targets and individual performance goals. The overall targeted bonus established under this plan was $680,000 (Mr. Bailly’s annual base salary), with a maximum amount of $1,360,000 (two times Mr. Bailly’s annual base salary). The actual bonus award, if any, will be determined based upon the level of achievement of the established performance targets and goals as determined by the Compensation Committee.
2023 Named Executive Officer Cash Bonus Plan
Also at its February 14, 2023 meeting, the Compensation Committee approved the corporate financial performance targets and individual performance goals for a 2023 cash bonus plan for Messrs. Lataille, Litterio, Rock, and Cardin. The target amounts of such cash bonuses range from 40% to 50% of base salary for each of the officers. The actual amount of each cash bonus, if any, will be subject to increase or decrease at the discretion of the Compensation Committee.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number | Description | |
| 10.1 | Form of 2023 CEO Incentive Stock Option Agreement | |
| 10.2 | Form of 2023 CEO Non-Qualified Stock Option Agreement | |
| 10.3 | Form of 2023 CEO Stock Unit Award Agreement. | |
| 10.4 | Form of 2023 Stock Unit Award Agreement. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: February 21, 2023 | UFP TECHNOLOGIES, INC. | ||
| By: | /s/ Ronald J. Lataille | ||
| Ronald J. Lataille, Chief Financial | |||
| Officer and Senior Vice President | |||