MPAC Model Performance Acquisition Corporation

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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Exchange Act of 1934 (Amendment No. ___)

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MOD-PAC CORP.

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MOD-PAC CORP.
1801 ELMWOOD AVENUE, BUFFALO, NEW YORK 14207

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

DEAR SHAREHOLDERS:

The Annual Meeting of Shareholders of MOD-PAC CORP. will be held at MOD-PAC’s Corporate Headquarters, 1801 Elmwood Avenue, Buffalo, New York, on Wednesday, May 6, 2009 at 10:00 a.m., to consider and take action on the following:

	1.		To elect the Board of Directors;
	2.		To ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm for the Company for the current fiscal year;
	3.		To transact such other business as may properly come before the meeting or any adjournment thereof.

The Board of Directors has fixed the close of business on March 12, 2009 as the record date for the determination of shareholders entitled to notice of, and to vote at, the meeting.

It is important that your shares be represented at the Annual Meeting whether or not you plan to attend. Accordingly, we request that you vote at your earliest convenience. You may vote by mail or telephone. Further instructions are contained in the enclosed proxy card.

By Order of the Board of Directors

/s/ John B. Drenning, Secretary

Buffalo, New York
Dated: April 1, 2009

Important notice: the Company’s Proxy Statement and Annual Report to shareholders for the fiscal year ended December 31, 2008 are available at http://proxy.modpac.com.

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
MAY 6, 2009

This Proxy Statement and the enclosed form of proxy are furnished to the Shareholders of MOD-PAC CORP., a New York corporation (“MOD-PAC” or the “Company”), in connection with the solicitation of proxies by the Board of Directors of the Company for use at the Annual Meeting of Shareholders (the “Annual Meeting”) to be held Wednesday, May 6, 2009 at 10:00 a.m., and at any adjournment thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders. In addition to solicitation by mail, to the extent necessary to ensure sufficient representation at the Annual Meeting, solicitations may be made by personal interview, telecommunication by officers and other regular employees of the Company. The cost of this proxy solicitation will be borne by the Company. It is contemplated that this Proxy Statement and the related form of proxy will be first sent to shareholders April 1, 2009.

If the enclosed proxy is properly executed and returned, and the Shareholder specifies a choice on the proxy, the shares represented thereby will be voted (or withheld from voting) in accordance with the instructions contained therein. If the proxy is executed and returned but no specification is made, the proxy will be voted FOR the election of each of the nominees for director listed below and FOR the proposal to ratify the appointment of independent auditors. The Board of Directors of the Company knows of no business that will be presented for consideration at the Annual Meeting other than the matters described in this proxy statement. If any other matters are presented at the Annual Meeting, the proxy holders will vote the proxies in accordance with their judgment.

A shareholder may revoke any proxy given pursuant to this solicitation at any time prior to its use, by the Shareholder voting in person at the meeting, by submitting a proxy bearing a date subsequent to the date on the proxy to be revoked or by written notice to the Secretary of the Company. A notice of revocation need not be on any specific form.

RECORD DATE AND VOTING SECURITIES

The Board of Directors has fixed the close of business on March 12, 2009 as the record date for determining the holders of Common Stock and Class B Stock entitled to notice of and to vote at the meeting. On March 12, 2009, MOD-PAC had outstanding and entitled to vote at the meeting a total of 2,788,911 shares of Common Stock and 641,220 shares of Class B Stock. Each outstanding share of Common Stock is entitled to one vote and each outstanding share of Class B Stock is entitled to ten votes on all matters to be brought before the meeting.

The presence, in person or by proxy, of the holders of a majority of the outstanding shares of Common Stock and Class B Stock entitled to vote at the Annual Meeting will constitute a quorum. Each nominee for election as a director requires a plurality of the votes cast in order to be elected. A plurality means that the nominees with the largest number of votes are elected as directors up to the maximum number of directors to be elected at the Annual Meeting. A majority of the votes cast is required to approve the selection of the Company’s auditors. Under the law of the State of New York, the Company’s state of incorporation, only “votes cast” by the shareholders entitled to vote are determinative of the outcome of the matter subject to shareholder vote. Votes withheld, abstentions and broker non-votes will be counted in determining the existence of a quorum, but will not be counted towards such nominee’s or any other nominee’s achievement of plurality or in determining the votes cast on any other proposal.

PROPOSAL 1

ELECTION OF DIRECTORS

The Shareholders are being asked to elect five directors to the Company’s Board of Directors to hold office until the election and qualification of their successors at the next annual meeting. The five directors who are so elected will be all of the directors of the Company. Unless the proxy directs otherwise, the persons named in the enclosed form of proxy will vote for the election of the five nominees named below, each of whom other than Messrs. Daniel G. Keane and Kevin T. Keane is independent within the meaning of the NASDAQ Stock Market, Inc. director independence standards as currently in effect. If any of the nominees should be unable to serve as a director, or for good reason will not serve, the proxy will be voted in accordance with the best judgment of the person or persons acting under it. It is not anticipated that any of the nominees will be unable to serve.

The following information is provided concerning the nominees for director:

William G. Gisel, Jr. , age 56, has been a director since 2003. Since mid-2006, he has been the Chief Executive Officer of Rich Products Corporation, a privately held company that is a supplier and solutions provider to the food service and in-store bakery segments of the food industry. From 1999 to 2006, Mr. Gisel served as Chief Operating Officer of Rich Products Corporation. From 1996 to 1999, Mr. Gisel served as President of Rich Product’s Food Group. Prior to that, he has held positions with Rich Products of Executive Vice President, Vice-President International and General Counsel. Mr. Gisel holds a B.A. from Williams College, a J.D. from Emory University and an M.B.A. from the University of Rochester.

Kevin T. Keane , age 76, has served as the Chairman of the Board of the Company since 2002. From 1974 to the present, Mr. Keane has been Chairman of the Board of Astronics Corporation. Astronics Corporation is a publicly traded company that manufactures lighting, electronics, and power management equipment for the global aerospace industry and test equipment for the defense industry. Astronics was the parent of the Company until its spin-off in March 2003. Mr. Keane was also the President and Chief Executive Officer of Astronics from 1974 to 2002. Mr. Keane received an A.B. in economics and an M.B.A. from Harvard University. Mr. Keane is the father of Daniel G. Keane.

Daniel G. Keane , age 43, has served as a director since 2002 and has served as the Company’s President since 1997. Mr. Keane was appointed the Chief Executive Officer of the Company in 2002. Prior to becoming President, he was employed by the Company in various other management capacities. Mr. Keane received a B.A. in economics from Dartmouth College and received an M.B.A. from Duke University. Mr. Keane is the son of Kevin T. Keane.

Robert J. McKenna , age 60, has been a director since 2002. He was President and Chief Executive Officer of Wenger Corporation, a manufacturer of facility products for performing arts and education markets from October 2001 to December 2005 when he retired. From 1994 to October 2001, Mr. McKenna was Chairman of the Board, President and Chief Executive Officer of Acme Electric Corporation, a manufacturer of power conversion systems for electronic and electrical systems. Mr. McKenna also serves as a director of Astronics Corporation. Mr. McKenna received a B.S. in Business Management from Western Kentucky University.

Howard Zemsky , age 49, has been a director since 2003. He has been the Managing Partner of Taurus Capital Partners LLC, a privately held investment group since 2001. From 1999 until 2001, Mr. Zemsky was President of IBP Deli Group of Companies. For over twenty years, Mr. Zemsky was employed in various management capacities by Russer Foods, Inc., a subsidiary of Tyson Foods, Inc., and from 1989 until 1999, he served as its President. Mr. Zemsky is a graduate of Michigan State University and holds an M.B.A. from the University of Rochester.

Other Directorships

In addition to serving as a member of the MOD-PAC Board of Directors, Messrs. Robert J. McKenna and Kevin T. Keane are also members of the Board of Directors of Astronics Corporation. MOD-PAC is a former subsidiary of Astronics Corporation and was spun-off to the Astronics Corporation shareholders in March 2003.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES.

CORPORATE GOVERNANCE AND BOARD MATTERS

Board of Directors Independence

The Board of Directors has determined that each of its current directors, except for Messrs. Daniel G. Keane and Kevin T. Keane, is independent within the meaning of the NASDAQ Stock Market, LLC director independence standards as currently in effect.

Board of Directors Meetings and Standing Committees

The Board of Directors and its committees meet regularly throughout the year and also hold special meetings and act by written consent from time to time as appropriate. All Directors are expected to attend each meeting of the Board of Directors and the committees on which he serves, and are also invited, but not required , to attend the Annual Meeting. The Board of Directors has three standing committees: an Audit Committee, Compensation Committee, and Nominating/Governance Committee. During the year ended December 31, 2008, the Board of Directors held 4 meetings. Each director attended at least 75% of the meetings of the Board of Directors and of all committees on which he served.

The Audit Committee consists of Messrs. Gisel (Chair), McKenna and Zemsky, each of whom is independent within the meaning of the NASDAQ Stock Market, LLC director independence standards as currently in effect. The Board of Directors has determined that Messrs. Gisel, McKenna and Zemsky are each an “audit committee financial expert” as defined under federal securities laws. Information regarding the functions performed by the Committee, its membership, and the number of meetings held during the fiscal year is set forth in the “Report of the Audit Committee” included in this proxy statement. The Audit Committee held three meetings in 2008. The Audit Committee is governed by a written charter approved by the Board of Directors that is posted on the Investor Relations section of the Company’s website at www.modpac.com.

The Compensation Committee consists of Messrs. Zemsky (Chair), Gisel and McKenna, each of whom is independent within the meaning of the NASDAQ Stock Market, LLC director independence standards as currently in effect. The Compensation Committee is responsible for reviewing and approving compensation levels for the Company’s executive officers and reviewing and making recommendations to the Board of Directors with respect to other matters relating to the compensation practices of the Company. In appropriate circumstances, the Compensation Committee considers the recommendations of Daniel G. Keane, the Company’s Chief Executive Officer, with respect to reviewing and approving compensation levels for other executive officers. The Compensation Committee does not use outside compensation consultants on a regular basis. It does utilize market compensation data that is reflective of the markets in which the Company competes for employees. The Compensation Committee held one meeting in 2008. The Compensation Committee is not governed by a written charter.

The Nominating/Governance Committee consists of Messrs. McKenna (Chair), Gisel and Zemsky, each of whom is independent within the meaning of the NASDAQ Stock Market, LLC director independence standards as currently in effect. The Nominating/Governance Committee is responsible for evaluating and selecting candidates for the Board of Directors and addressing corporate governance matters on behalf of the Board of Directors. In performing its duties to recommend nominees for the Board of Directors, the Nominating/Governance Committee seeks director candidates with the following qualifications, at minimum: high character and integrity; substantial life or work experience that is of particular relevance to the Company; sufficient time available to devote to his or her duties; and ability and willingness to represent the interests of all shareholders rather than any special interest group. The Nominating/Governance Committee may use third-party search firms to identify Board of Director candidates. It also relies upon recommendations from a wide variety of its contacts, including current executive officers, directors, community leaders and shareholders, as a source for potential candidates. Shareholders wishing to submit or nominate candidates for election to the Board of Directors must supply information in writing regarding the candidate to the Nominating/Governance Committee at the Company’s executive offices in Buffalo, New York. This information should include the candidate’s name, biographical data and qualifications. Generally, the Nominating/Governance Committee will conduct a process of making a preliminary assessment of each proposed nominee based upon biographical data and qualifications. This information is evaluated against the criteria described above and the specific needs of the Company at the time. Additional information regarding proposed nominees may be requested. On the basis of the information gathered in this process, the Nominating/Governance Committee determines which nominee to recommend to the Board of Directors. The Nominating/Governance Committee uses the same process for evaluating all nominees, regardless of the source of the recommendation. The Nominating/Governance Committee held one meeting in 2008. The Nominating/Governance Committee is not governed by a written charter, but acts pursuant to a resolution adopted by the Board of Directors addressing the nomination process as required by federal securities laws and NASDAQ Stock Market, LLC regulations.

Executive Sessions of the Board

Non-management directors meet regularly in executive sessions. “Non-management” directors are all those directors who are not Company employees and includes directors, if any, who are not independent as determined by the Board of Directors. The Company’s non-management directors consist of all of its current directors, except Messrs. Daniel G. Keane and Kevin T. Keane. An executive session of the Company’s non-management directors is generally held in conjunction with each regularly scheduled Board of Directors meeting. Additional executive sessions may be called at the request of the Board of Directors or the non-management directors.

Code of Ethics

The Board of Directors has adopted a Code of Business Conduct and Ethics that is applicable to its Chief Executive Officer, Chief Financial Officer as well as all other directors, officers and employees of the Company. This Code of Business Conduct and Ethics is posted on the Investor Information section of the Company’s website at www.modpac.com. The Company will disclose any amendment to this Code of Business Conduct and Ethics or waiver of a provision of this Code of Business Conduct and Ethics, including the name of any person to whom the waiver was granted, on its website.

Compensation Committee Interlocks and Insider Participation

No interlocking relationship exists between any member of the Company’s Compensation Committee or any of its executive officers and any member of any other company’s board of directors or compensation committee (or equivalent), nor has any such relationship existed in the past. No member of the Compensation Committee was, during fiscal 2008 or prior thereto, an officer or employee of the Company or any of its subsidiaries.

Compensation of Directors

The following table sets forth the cash compensation as well as certain other compensation paid to the Company’s directors during the year ended December 31, 2008:

																		Change in Pension
																		Value and Non-
														Non-Equity				Qualified Deferred
		Fees Earned or				Stock				Option				Incentive Plan				Compensation				All Other
Name		Paid in Cash				Awards				Awards (4)				Compensation				Earnings				Compensation				Total
William G. Gisel, Jr. (1)		$	20,000				—			$	9,099	(5)			—				—				—			$	29,099
Daniel G. Keane (2)			—				—				—				—				—				—				—
Kevin T. Keane (3)		$	30,000				—			$	9,099	(5)			—				—				—			$	39,099
Robert J. McKenna (1)		$	20,000				—			$	9,099	(5)			—				—				—			$	29,099
Howard Zemsky (1)		$	20,000				—			$	9,099	(5)			—				—				—			$	29,099

Directors’ and Officers’ Indemnification Insurance

On March 1, 2009, the Company obtained a Directors’ and Officers’ Liability Insurance policy written by Federal Insurance Company. The annual premium is $82,000. The policy has limits of $10 million and provides indemnification benefits and the payment of expenses in actions instituted against any director or officer of the Company for claimed liability arising out of their conduct in such capacities. The Company has made no significant payments or claims of indemnification or expenses under any such insurance policies at any time.

The Company also has entered into indemnification agreements with its executive officers and directors. The indemnification agreements provide that the officer or director will be indemnified for expenses, investigative costs and judgments arising from certain threatened, pending or completed legal proceedings.

Contacting the Board of Directors

Although we do not have a formal policy regarding communications with the Board of Directors, shareholders may communicate with the Board of Directors by writing to: Board of Directors, MOD-PAC CORP., 1801 Elmwood Avenue, Buffalo, New York 14207. Shareholders who would like their submission directed to a particular director may so specify and the communication will be forwarded, as appropriate.

REPORT OF AUDIT COMMITTEE

The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the Committee reviewed the audited financial statements in the Annual Report with management and the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

The Audit Committee is comprised of the Directors named below, each of whom is independent as defined under Section 10A(m)(3) of the Exchange Act and under the NASDAQ Stock Market, LLC. listing standards currently in effect. In addition, pursuant to the requirements of Section 407 of the Sarbanes-Oxley Act of 2002, the Board of Directors has determined that each of Messrs. Gisel, McKenna and Zemsky qualifies as an “audit committee financial expert.”

The Audit Committee operates under a written charter which includes provisions requiring Audit Committee advance approval of all audit and non-audit services to be provided by independent public accountants.

The Audit Committee reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, their judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such other matters as are required to be discussed with the Committee under generally accepted auditing standards. In addition, the Committee has discussed with the independent auditors the auditors’ independence from management and the Company including the matters in the written disclosures required by the Independence Standards Board and considered the compatibility of non-audit services with the auditors’ independence.

The Audit Committee also discussed with the Company’s independent auditors the overall scope and plans for their audit, and met with the independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting.

The Audit Committee has reviewed and discussed the Company’s audited financial statements for the year ended December 31, 2008 with management. The Audit Committee has also discussed with Ernst & Young LLP, the Company’s independent auditors, the matters required to be discussed by Statement on Auditing Standards No. 61, “Communication with Audit Committees.”

The Audit Committee has also received and reviewed the written disclosures and the letter from Ernst & Young LLP required by Independence Standards Board Standard No. 1, “Independence Discussion with Audit Committees,” and has discussed the independence of Ernst & Young LLP with that firm.

Based on the review and the discussions noted above, the Audit Committee recommended to the Board of Directors that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the year ended December 31, 2008 for filing with the Securities and Exchange Commission.

March 5, 2009		William G. Gisel, Jr., Chairman Robert J McKenna Howard Zemsky

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The Company’s compensation philosophy and program objectives are directed by two primary guiding principles. First, the program is intended to provide levels of compensation sufficient to attract, motivate and retain talented executives. Second, the program is intended to create an alignment of interests between the Company’s executives and shareholders such that a portion of each executive’s compensation is directly linked to maximizing stockholder value.

The Company’s goals are to outperform its industry, in terms of growth, financial performance, and innovation. In support of these goals, the executive compensation program is designed to energize its executive officers to outperform its industry and to reward performance that is directly relevant to the Company’s short-term and long-term success. As such, the Company provides both short-term and long-term incentives. The Committee has structured the executive compensation program with three primary underlying components: base salary, annual incentives, and long-term incentives. The Company’s compensation philosophy is to (i) compensate its executive officers at a base level that is competitive with salaries near the average salaries paid by companies of similar size and nature; (ii) provide the opportunity for its executive officers to earn additional compensation in the form of annual bonuses if individual and business performance goals are met; and (iii) design long-term incentive plans to focus executive efforts on the long-term goals of the Company and to maximize total return to the Company’s shareholders, while taking into account the Company’s relative performance and strategic goals.

Base Salary

The Compensation Committee utilizes market compensation data that is reflective of the markets in which the Company competes for employees. The Compensation Committee generally approves the salaries paid to the Company’s executive officers and as part of its responsibilities, the Compensation Committee reviews these salaries annually. Individual salary changes are based on a combination of factors such as the performance of the executive, salary level relative to the competitive market, level of responsibility, growth of Company operations, experience of the executive and the recommendation of the Chief Executive Officer. In appropriate circumstances, the Compensation Committee considers the recommendations of Daniel G. Keane, the Company’s Chief Executive Officer. The Compensation Committee, consistent with the views of Daniel G. Keane, acknowledged the Company’s improved results in 2008. The Compensation Committee also recognized the additional responsibilities that Messrs. Lupp, Rechin, and Geary undertook in 2008. Salary adjustments were made in December 2008, effective January 12, 2009, for Messrs. Lupp, Rechin and Geary for a new annual rate of $250,000, $175,000 and $160,000, respectively. The Compensation Committee, with Daniel G. Keane’s active concurrence, determined to forego a base salary increase for 2009 for Daniel G. Keane.

Annual Bonus

The Compensation Committee has the authority to award discretionary annual bonuses to the Company’s executive officers. The annual incentive bonuses are intended to compensate officers for achieving both short-term and long-term financial and operational goals such as sales growth, earnings after tax, return on equity, investment in resources necessary to grow the business and expense management.

The discretionary annual bonus is paid in cash in an amount reviewed and approved by the Compensation Committee and ordinarily is paid in a single installment in the first quarter following the completion of a given fiscal year. The discretionary annual bonus is not benchmarked to a percentage of base salary, but is determined following a review of each executive’s individual performance and contribution to the Company’s tactical and strategic plans. In appropriate circumstances, the Compensation Committee considers the recommendations of Daniel G. Keane, the Company’s Chief Executive Officer. The Compensation Committee has not fixed a maximum payout for any officers’ annual discretionary bonus. For 2008, discretionary annual bonuses were awarded to Messrs. Lupp, Rechin and Geary in the amount of $70,000, $32,000 and $29,000, respectively. Daniel G. Keane did not receive a bonus for 2008.

Long-Term Incentives

The Company believes that long-term performance is achieved through an ownership culture that incentivizes its executive officers through the use of stock-based awards. The Company’s stock option plans have been established to provide certain of its employees, including its executive officers, with incentives to help align those employees’ interests with the interests of the Company’s shareholders. The Compensation Committee believes that the use of stock-based awards offers the best approach to achieving its compensation goals. The Company has not adopted stock ownership guidelines, and, other than the Company’s broad-based Employee Stock Purchase Plan, its stock option plans have provided the principal method for its executive officers to acquire equity or equity-linked interests in the Company.

Options

The Company’s 2002 Stock Option Plan authorizes it to grant options to purchase shares of common stock to its employees. The Compensation Committee is the administrator of the 2002 Stock Option Plan. Stock option grants generally are made annually or at the commencement of employment. The Compensation Committee reviews and approves stock option awards to executive officers based upon a review of competitive compensation data, its assessment of individual performance, a review of each executive’s existing long-term incentives and retention considerations. Periodic stock option grants are made at the discretion of the compensation committee to eligible employees and, in appropriate circumstances, the Compensation Committee considers the recommendations of Daniel G. Keane, the Company’s Chief Executive Officer. In 2008, certain named executive officers were awarded stock options in the amounts indicated in the section entitled “Grants of Plan Based Awards.” Stock options granted by the Company have an exercise price equal to the fair market value of the Common Stock on the day of grant, typically vest 20% per annum based upon continued employment over a 5-year period, and generally expire ten years after the date of grant. Incentive stock options also include certain other terms necessary to assure compliance with the Internal Revenue Code of 1986, as amended.

The Company’s 2002 Director Stock Option Plan authorizes it to grant options to purchase shares of common stock to its directors who are not executive officers or employees. Daniel G. Keane is the sole member of the Stock Option Committee that administers the 2002 Director Stock Option Plan. Stock option grants generally are made during the 30-day period commencing one week after the issuance of a press release announcing the Company’s quarterly or annual results of operations. The Stock Option Committee reviews and approves stock option awards to directors based upon a review of competitive compensation data, its assessment of individual performance and retention considerations.

Employment Agreements

The Company generally has not entered into employment agreements with its executive officers. In January 2006, the Company entered into an employment agreement with Mr. Lupp to serve as the Vice President — Finance and Chief Financial Officer of the Company. Pursuant to the terms of the employment agreement, Mr. Lupp’s employment is “at will” and continues until terminated by either party. The employment agreement provides for base compensation of $190,000 per year, subject to annual upward adjustment in the sole discretion of the Compensation Committee, annual performance bonus compensation and long term incentives in the sole discretion of the Compensation Committee and is entitled to participate in the Company’s standard benefit programs. If Mr. Lupp is terminated by the Company without “cause” or if he terminates his employment for “good reason,” the Company will be obligated to pay Mr. Lupp severance in the amount of his then base salary for a period of eight months from the date of termination plus an additional one month thereafter for every full year he has been employed by the Company through the date of termination. In no event shall such severance period exceed twelve months from the date of termination. If Mr. Lupp is terminated without “cause” within 18 months of a “change in control,” the Company will be obligated to pay Mr. Lupp as severance 140% of his then current base salary (grossed up for perquisites) for a period of one year from the date of termination.

Compensation Committee Report on Executive Compensation

The Compensation Committee of the Board of Directors (the “Committee”) determines the compensation of the Chief Executive Officer and other executive officers of the Company. The Committee is composed entirely of directors who are neither executive officers nor employees of the Company. In addition to determining the salary and bonus compensation for the Company’s executive officers, the Committee determines the grants under the Company’s Incentive Stock Option Plan and oversees the administration of other compensation plans and programs.

The Committee has reviewed the Compensation Discussion and Analysis contained elsewhere in this proxy statement and has discussed it with management. In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors (and the Board has approved) that the Compensation Discussion and Analysis be included in this proxy statement and in the Annual Report on Form 10-K for the year ended December 31, 2008 for filing with the Securities and Exchange Commission.

March 5, 2009		Howard Zemsky, Chairman William G. Gisel, Jr. Robert J. McKenna

Summary Compensation Table

The following table sets forth the cash compensation as well as certain other compensation paid during the years ended December 31, 2008, 2007 and 2006, for the Company’s Chief Executive Officer, Chief Financial Officer and each of its three other most highly compensated executive officers who received annual compensation in excess of $100,000:

																										Change in Pension
																										Value and Non-
																						Non-Equity				Qualified Deferred
Name and Principal														Stock				Option				Incentive Plan				Compensation				All Other
Position		Year				Salary				Bonus				Award				Awards				Compensation				Earnings				Compensation				Total
Daniel G. Keane,			2008			$	274,000				—				—			$	105,162				—				—			$	33,810	(1)		$	412,972
President and			2007			$	274,000				—				—			$	33,874				—				—			$	36,063			$	343,937
Chief Executive Officer			2006			$	274,000				—				—			$	126,029				—				—			$	38,380			$	438,409
David B. Lupp,			2008			$	203,923			$	70,000				—			$	49,244				—				—			$	32,551	(2)		$	355,718
Chief Operating Officer and			2007			$	200,000			$	40,000				—			$	31,513				—				—			$	34,866			$	306,379
Chief Financial Officer			2006			$	175,385			$	64,000				—			$	14,763				—				—			$	90,139			$	344,287
Philip C. Rechin,			2008			$	152,942			$	32,000				—			$	15,900				—				—			$	8,330	(3)		$	209,172
Vice President — Sales			2007			$	150,000			$	26,000				—			$	14,719				—				—			$	8,551			$	199,270
			2006			$	145,482			$	52,000				—			$	13,207				—				—			$	12,492			$	223,181
Daniel J. Geary,			2008			$	137,942			$	29,000				—			$	12,220				—				—			$	7,926	(4)		$	187,088
Vice President — Finance			2007			$	135,000			$	20,000				—			$	6,466				—				—			$	1,695			$	163,161
			2006			$	129,327			$	26,000				—			$	3,684				—				—			$	5,032			$	164,043

Grants of Plan-Based Awards

The following table sets forth information with respect to plan-based awards granted in 2008 to the executives named in the summary compensation table. All options were granted pursuant to the Company’s 2002 Stock Option Plan.

																														All Other				All Other
																														Stock				Option
																														Awards:				Awards:
																														Number of				Number of				Exercise or
						Estimated Future Payouts Under Non-												Estimated Future Payouts Under												Shares of				Securities				Base Price of
						Equity Incentive Plan Awards												Equity Incentive Plan Awards												Stock or				Underlying				Option Awards
Name		Grant Date				Threshold				Target				Maximum				Threshold				Target				Maximum				Units				Options				per share
Daniel G. Keane,		December 15, 2008					—				—				—				—				—				—				—				40,000	(1)		$	1.85
President and Chief Executive Officer
David B. Lupp,		December 15, 2008					—				—				—				—				—				—				—				40,000	(1)		$	1.85
Chief Operating Officer and Chief Financial Officer
Philip C. Rechin,		December 15, 2008					—				—				—				—				—				—				—				10,000	(2)		$	1.85
Vice President — Sales
Daniel J. Geary,		December 15, 2008					—				—				—				—				—				—				—				9,000	(2)		$	1.85
Vice President — Finance

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information with respect to the executives named in the summary compensation table relating to unexercised stock options, stock that has not vested, and equity incentive plan awards outstanding as of December 31, 2008:

		Option Awards																				Stock Awards
										Equity Incentive
										Plan Awards:																				Equity Incentive				Equity Incentive
		Number of				Number of				Number of																				Plan Awards:				Plan Awards:
		Securities				Securities				Securities												Number of				Market Value of				Number of				Market or Payout
		Underlying				Underlying				Underlying												Shares or Units				Shares or Units				Unearned Shares,				Value of Unearned
		Unexercised				Unexercised				Unexercised				Option				Option				of Stock That				of Stock That				Units or Other				Shares, Units or
		Options				Options				Unearned				Exercise				Expiration				Have Not				Have Not				Rights That Have				Other Rights That
Name		Exercisable				Unexercisable				Options				Price				Date				Vested				Vested				Not Vested				Have Not Vested
Daniel G. Keane,			14,180				—				—			$	5.221			January 18, 2009					—				—				—				—
President and			13,673				—								6.22			January 18, 2010
Chief Executive Officer			12,277				—								12.413			April 26, 2011
			11,172				—								10.344			January 25, 2012
			31,921				—								5.392			January 24, 2013
			28,000				—								8.44			February 20, 2014
			22,300				—								12.80			January 6, 2015
			22,300				—								11.68			December 21, 2015
			10,700				11,600								10.00			December 13, 2016
			26,000				—								7.36			December 20, 2017
			—				40,000								1.85			December 15, 2018
David B. Lupp,			6,000				9,000				—			$	11.73			March 8, 2016					—				—				—				—
Chief Operating Officer and			6,000				9,000								10.00			December 13, 2016
Chief Financial Officer			4,500				18,000								7.36			December 20, 2017
			—				40,000								1.85			December 15, 2018
Philip C. Rechin,			1,688				—				—			$	6.22			January 18, 2010					—				—				—				—
Vice President — Sales			1,535				—								7.738			January 19, 2011
			1,228				—								10.344			January 25, 2012
			4,297				—								5.392			January 24, 2013
			3,520				880								8.44			February 20, 2014
			1,320				880								12.80			January 6, 2015
			1,800				1,200								11.68			December 21, 2015
			1,200				1,800								10.00			December 13, 2016
			1,000				4,000								7.36			December 20, 2017
			—				10,000								1.85			December 15, 2018
Daniel J. Geary,			1,800				1,200				—			$	11.68			December 21, 2015					—				—				—				—
Vice President — Finance			1,200				1,800								10.00			December 13, 2016
			1,800				7,200								7.36			December 20, 2017
			—				9,000								1.85			December 15, 2018

Options Exercised and Stock Vested

The following table sets forth information with respect to the executives named in the summary compensation table relating to the exercise of stock options, stock appreciation rights and similar rights, and the vesting of stock in connection therewith, in 2008:

		Option Awards								Stock Awards
		Number of Shares Acquired				Value Realized on				Number of Shares Acquired				Value Realized on
Name		on Exercise				Exercise				on Vesting				Vesting
Daniel G. Keane,			(1	)			(1	)			—			$	0
President and Chief Executive Officer
David B. Lupp,			(1	)			(1	)			—			$	0
Vice President — Chief Operating Officer and Chief Financial Officer
Philip C. Rechin,			(1	)			(1	)			—			$	0
Vice President — Sales
Daniel J. Geary,			(1	)			(1	)			—			$	0
Vice President — Finance

Non-Qualified Deferred Compensation

The Company does not have any non-qualified defined contribution or other plan that provides for the deferral of compensation.

Other Potential Post-Employment Payments

Except with respect to Mr. Lupp, the Company does not have any contracts, agreements, plans or arrangements, whether unwritten or written, that provide for payments to the executives named in the summary compensation table at, following, or in connection with any termination, including, without limitation, payments resulting from resignation, severance, retirement, termination or change in control. As set forth in the executive compensation discussion and analysis, the Company has entered into an employment agreement with Mr. Lupp. Pursuant to his employment agreement, if Mr. Lupp is terminated by the Company without “cause” or if he terminates his employment for “good reason,” the Company will be obligated to pay him severance in the amount of his then base salary for a period of eight months from the date of termination plus an additional one month thereafter for every full year he has been employed by the Company through the date of termination. In no event shall such severance period exceed twelve months from the date of termination. If Mr. Lupp is terminated without “cause” within 18 months of a “change in control,” the Company will be obligated to pay Mr. Lupp as severance 140% of his then current base salary (grossed up for perquisites) for a period of one year from the date of termination.

In the past, the Company has also paid severance benefits to salaried employees upon termination of employment. The eligibility for such payments, and the amount thereof, has been determined by the Company on a case by case basis.

Equity Compensation Plan Information

The following table sets forth the aggregate information of the Company’s equity compensation plans in effect as of December 31, 2008.

Number of Securities

Remaining for Future

Number of Securities to be

Weighted Average

Issuance under Equity

Issued upon Exercise of

Exercise Price of

Compensation Plans

Outstanding Options,

Outstanding Options,

(excluding securities

Warrants and Rights

Warrants and Rights

reflected in column (a))

Plan Category

(a)

(b)

(c)

Equity compensation plans approved by security holders

537,009

$

7.33

554,758

Equity compensation plans not approved by security holders

—

—

—

Total

537,009

$

7.33

554,758

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information concerning persons known to the Company to own more than 5% of the outstanding shares of Common Stock or Class B Stock and the number of shares and percentage of each class beneficially owned by each director, each executive officer named in the summary compensation table and by all directors and executive officers as a group as of February 28, 2009 (an asterisk indicates less than 1% beneficial ownership of the class):

Name and Address		Shares of Common Stock								Shares of Class B Stock
of Owner (1)		Number				Percentage				Number				Percentage
William G. Gisel, Jr. (2)			20,110				*				—				—
Daniel J. Geary (3)			4,800				*				—				—
Daniel G. Keane (4)			259,718				8.7	%			226,283				34.7	%
Kevin T. Keane (5)			450,845				15.9	%			75,650				11.8	%
David B. Lupp (3)			16,500				*				—				—
Robert J. McKenna (2)			18,550				*				206				*
Philip C. Rechin (6)			19,471				*				767				*
Howard Zemsky (2)			62,880				2.2	%			—				—
Aegis Financial Corporation (7)			187,027				6.7	%			—				—
John H. Lewis (8)			157,962				5.7	%			—				—
Dimensional Fund Advisors LP (9)			155,619				5.6	%			—				—
Arbiter Partners, L.P. (10)			147,462				5.3	%			—				—
All directors and executive officers as a group (8) persons) (11)			852,874				27.4	%			302,906				46.4	%

PROPOSAL 2

APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee, with the approval of the Board of Directors, has selected Ernst & Young LLP as the independent registered public accounting firm, to act as auditors of MOD-PAC CORP. for 2009. All services provided on the Company’s behalf by Ernst & Young LLP during fiscal 2007 and 2008 were approved in advance by the Audit Committee. Representatives of Ernst & Young LLP are expected to attend the meeting and will have the opportunity to make a statement if they desire and will be available to respond to appropriate questions.

Auditor Fees . The following table sets forth the fees billed to the Company for the last fiscal year by the Company’s independent auditors, Ernst & Young LLP:

		2008				2007
Audit		$	191,201			$	187,200
Audit-related			—				—
Tax			16,485				42,200
All Other			—				26,400

The Audit Committee has adopted a policy that requires advance approval of all audit, audit-related, tax services, and other services performed by the independent auditor. The policy provides for pre-approval by the Audit Committee of specifically defined audit and non-audit services. Unless the specific service has been previously pre-approved with respect to that year, the Audit Committee must approve the permitted service before the independent auditor is engaged to perform it. The Audit Committee may delegate to an Audit Committee member the authority to approve permitted services provided that the delegated member reports any decisions to the committee at its next scheduled meeting.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT AUDITORS.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

During 2008, all executive officers and directors of the Company timely filed with the Securities Exchange Commission all required reports with respect to beneficial ownership of the Company’s securities.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The Company does not have written policies or procedures relating to the review, approval or ratification of related person transactions. Any such proposed transaction is submitted to the Board of Directors for approval. In 2008, the Company did not engage in any transaction with a related person in which the amount involved exceeded $120,000.

PROPOSALS OF SHAREHOLDERS FOR 2010 ANNUAL MEETING

To be considered for inclusion in the proxy materials for the 2010 Annual Meeting of Shareholders, shareholder proposals must be received by the Company no later than December 4, 2009.

If a shareholder wishes to present a proposal at the Company’s 2010 Annual Meeting of Shareholders or to nominate one or more directors, and the proposal is not intended to be included in the Company’s proxy materials relating to that meeting, such proposal or nomination(s) must comply with the applicable provisions of the Company’s by-laws and applicable law. In general, the Company’s by-laws provide that with respect to a shareholder nomination for director, written notice must be addressed to the Secretary and be received by the Company no less than 60 nor more than 90 days prior to the first anniversary of the preceding year’s annual meeting. For purposes of the Company’s 2010 Annual Meeting of Shareholders, such notice must be received not later than March 7, 2010 and not earlier than February 5, 2010. The Company’s by-laws set out specific requirements that such written notices must satisfy.

With respect to shareholder proposals (other than nominations for directors) that are not intended to be included in the Company’s proxy materials relating to the 2010 Annual Meeting of Shareholders, such proposals are subject to the rules adopted by the SEC relating to the exercise of discretionary voting authority unless notice of such a proposal is received by the Company no later than February 15, 2010.

OTHER BUSINESS

The Board of Directors knows of no other matters to be voted upon at the Annual Meeting. If any other matters properly come before the Annual Meeting, it is the intention of the persons named in the enclosed proxy to vote on such matters in accordance with their judgment.

Copies of the 2008 Annual Report to Shareholders of MOD-PAC have been mailed to shareholders. Additional copies of the Annual Report, as well as this Proxy Statement, Proxy Card(s), and Notice of Annual Meeting of Shareholders, may be obtained from MOD-PAC CORP., 1801 Elmwood Avenue, Buffalo, NY 14207, or at http://proxy.modpac.com.

A COPY OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO SHAREHOLDERS, BENEFICIALLY OR OF RECORD ON MARCH 12, 2009, ON REQUEST TO SHAREHOLDER RELATIONS, MOD-PAC CORP., 1801 ELMWOOD AVENUE, BUFFALO, NEW YORK 14207.

Buffalo, New York April 1, 2009		BY ORDER OF THE BOARD OF DIRECTORS /s/ John B. Drenning, Secretary

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