UFP TECHNOLOGIES INCUFPT
UFP TECHNOLOGIES INC Stock Compensation Disclosure
Share-Based Compensation
The Company issues share-based awards through several plans that are described in detail below.
Incentive Plan
In June 2003, the Company formally adopted the 2003 Incentive Plan (the “Plan”). As amended and restated to date, the Plan is intended to benefit the Company by offering equity-based and other incentives to certain of the Company’s executives and employees who are in a position to contribute to the long-term success and growth of the Company, thereby encouraging the continuance of their involvement with the Company and/or its subsidiaries.
Two types of equity awards may be granted to participants under the Plan: restricted shares and other stock awards. Restricted shares are shares of common stock awarded subject to restrictions and to possible forfeiture upon the occurrence of specified events. Other stock awards are awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of common stock. Such awards may include Restricted Stock Unit Awards (“RSUs”), incentive and non-qualified stock options, performance shares, or stock appreciation rights. The Company determines the form, terms, and conditions, if any, of any awards made under the Plan.
Through December 31, 2025, 1,408,674 shares of common stock were issued under the Plan, none of which have been restricted. These shares of common stock include the vesting of RSUs, stock options exercised, and shares of common stock granted under the Plan. For year the year ended December 31, 2025, 856 shares of common stock were granted under the Plan. For year the year ended December 31, 2025, 49,305 RSUs were granted under the Plan. At December 31, 2025, 75,851 RSUs are outstanding under the Plan. For year the year ended December 31, 2025, no stock options were granted under the Plan. At December 31, 2025, 7,935 stock options are outstanding under the Plan. At December 31, 2025, 671,821 shares, RSUs, or stock options are available for future issuance under the Plan.
Director Plan
Effective July 15, 1998, the Company adopted the 1998 Director Plan, which was amended and renamed on June 3, 2009 as the 2009 Non-Employee Director Stock Incentive Plan (the “Director Plan”). The Director Plan was amended on March 7, 2013, to (i) prohibit the repricing of stock options or other equity awards without the consent of the Company’s shareholders, and (ii) prohibit the Company from buying out underwater stock options. The Director Plan was amended on June 8, 2022, to increase the maximum number of shares issuable under the Director Plan from 975,000 to 1,075,000. The Director Plan, as amended, provides for the issuance of stock options, RSUs, and other equity-based securities to non-employee members of the Company’s board of directors.
For the year ended December 31, 2025, 3,750 RSUs were granted under the Director Plan. At December 31, 2025, 3,750 RSUs are outstanding under the Director Plan. For the year ended December 31, 2025, no stock options were granted under the Director Plan. At December 31, 2025, 54,034 stock options are outstanding under the Director Plan. At December 31, 2025, 115,937 shares, RSUs, or stock options are available for future issuance under the Plan.
Share-based compensation
Share-based compensation is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). Share-based compensation is included in selling, general & administrative expenses as follows (in thousands):
| Years Ended December 31, | |||||||||||||||||
| Share-based compensation related to: | 2025 | 2024 | 2023 | ||||||||||||||
| Common stock grants | $ | 400 | $ | 400 | $ | 400 | |||||||||||
| Stock option grants | 173 | 485 | 432 | ||||||||||||||
| RSUs | 8,281 | 5,957 | 3,809 | ||||||||||||||
| Total share-based compensation | $ | 8,854 | $ | 6,842 | $ | 4,641 | |||||||||||
The total income tax benefit recognized in the consolidated statements of comprehensive income for share-based compensation arrangements was approximately $4.8 million, $2.4 million, and $2.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Common stock grants
The compensation expense for common stock granted during the years ended December 31, 2025, 2024, and 2023, was determined based on the market price of the shares on the date of grant.
Stock option grants
No stock options were granted during the year ended December 31, 2025. The compensation expense for stock options granted during the years ended December 31, 2024 and 2023, was determined as the fair value of the options using the Black Scholes valuation model. The range of assumptions are noted as follows:
| Years Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Expected volatility | 39.7% | 36.6% - 40.6% | ||||||||||||
| Expected dividends | None | None | ||||||||||||
| Risk-free interest rate | 4.3% | 3.6% - 3.9% | ||||||||||||
| Exercise price | $260.92 | $111.54 - $167.98 | ||||||||||||
| Expected term (years) | 6.3 | 6.2 - 6.8 | ||||||||||||
| Weighted-average grant date fair value | $121.61 | $37.81 - $71.17 | ||||||||||||
The stock volatility for each grant is determined based on a review of the experience of the weighted average of historical daily price changes of the Company’s common stock over the expected option term, and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected term of the option. The expected term is estimated based on historical option exercise activity.
The following is a summary of stock option activity for the year ended December 31, 2025:
| Shares Under Options | Weighted Average Exercise Price (per share) | Weighted Average Remaining Contractual Life (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
| Outstanding December 31, 2024 | 73,232 | $ | 67.15 | ||||||||||||||||||||
| Exercised | (11,263) | 36.02 | |||||||||||||||||||||
| Outstanding December 31, 2025 | 61,969 | $ | 72.80 | 4.10 | $ | 9,362 | |||||||||||||||||
| Exercisable at December 31, 2025 | 61,969 | $ | 72.80 | 4.10 | $ | 9,362 | |||||||||||||||||
| Vested and expected to vest at December 31, 2025 | 61,969 | $ | 72.80 | 4.10 | $ | 9,362 | |||||||||||||||||
During the years ended December 31, 2025, 2024, and 2023, the total intrinsic value of all options exercised (i.e., the difference between the market price and the price paid by the employees to exercise the options) was approximately $2.1 million, $1.5 million, and $3.0 million, respectively, and the amount of consideration received from the exercise of these options was approximately $0.2 million, $0.2 million, and $0.7 million, respectively. At its discretion, the Company allows option holders to surrender previously owned common stock in lieu of paying the exercise price and withholding taxes. During the years ended December 31, 2025, 2024 and 2023, 748 shares, 653 shares and 861 shares were redeemed for this purpose at an average market price of $282.42, $162.93 and $127.05, respectively.
RSUs
The Company grants RSUs to its directors, executive officers and employees. The stock unit awards are subject to various time-based vesting requirements, and certain portions of these awards are subject to performance criteria of the Company. Compensation expense on these awards is recorded based on the fair value of the award at the date of grant, which is equal to the Company’s closing stock price, and is charged, to expense ratably over the requisite service period for time-based awards, and to expense utilizing the accelerated attribution method for performance-based awards. No compensation expense is taken on awards that do not become vested, and the amount of compensation expense recorded is adjusted based on management’s determination of the probability that these awards will become vested.
The following table summarizes information about stock unit award activity during the year ended December 31, 2025:
| Restricted Stock Units | Weighted Average Award Date Fair Value | ||||||||||
| Outstanding at December 31, 2024 | 80,827 | $ | 98.79 | ||||||||
| Awarded | 53,055 | 259.69 | |||||||||
| Shares vested | (43,296) | 119.05 | |||||||||
| Forfeitures | (10,985) | 243.39 | |||||||||
| Outstanding at December 31, 2025 | 79,601 | $ | 175.06 | ||||||||
At the Company’s discretion, RSU holders are given the option to net-share settle to cover the required minimum withholding tax, and the remaining amount is converted into the equivalent number of common shares. During the years ended December 31, 2025, 2024 and 2023, 18,152 shares, 21,914 shares and 20,457 shares were redeemed for this purpose at an average market price of $215.60, $216.80 and $117.95, respectively.
The following summarizes the future share-based compensation expense the Company will record as the equity securities granted through December 31, 2025, vest (in thousands):
| Restricted Stock Units | Total | ||||||||||
| 2026 | $ | 5,186 | $ | 5,186 | |||||||
| 2027 | 2,746 | 2,746 | |||||||||
| 2028 | 292 | 292 | |||||||||
| Total | $ | 8,224 | $ | 8,224 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 14, 2022 | |
| 2020 | Mar 12, 2021 | |
| 2019 | Mar 13, 2020 | |
| 2018 | Mar 15, 2019 | |
| 2017 | Mar 16, 2018 | |
| 2016 | Mar 10, 2017 | |
| 2015 | Mar 11, 2016 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.