================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (date of earliest event reported): April 26, 2007
ACME UNITED CORPORATION
(Exact name of registrant as specified in its charter)
------------------
Connecticut 001-07698 06-0236700
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) file number) Identification No.)
60 Round Hill Road, Fairfield, Connecticut 06824
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 254-6060
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
At the Annual Meeting of Shareholders (the "Annual Meeting") of Acme United
Corporation (the "Company") held on April 23, 2007, the Company's shareholders
approved an amendment to the Company's 2005 Non-Salaried Director Stock Option
Plan (the "Director Plan") that increased the number of the Company's shares
available for awards under the Director Plan from 50,000 shares to 90,000
shares, representing an increase of 40,000 shares. A copy of the Director Plan,
as amended, is set forth as Exhibit 99.1 to this Current Report on Form 8-K and
incorporated by reference herein.
At the Annual Meeting, the Company's shareholders also approved an amendment to
the Company's Employee Stock Option Plan, as more fully described below in Item
5.02.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Principal Officers; Compensatory Arrangements of Certain
Officers.
(e) At the Annual Meeting, the Company's shareholders approved an amendment to
the Company's Employee Stock Option Plan (the "Employee Plan") that increased
the number of the Company's shares authorized to be issued under the Employee
Plan from 300,000 shares to 460,000 shares, representing an increase of 160,000
shares. A copy of the Employee Plan, as amended, is set forth as Exhibit 99.2 to
this Current Report on Form 8-K and incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Number Title
- ------ -----
99.1 Acme United Corporation 2005 Non-Salaried Director Stock Option
Plan, as amended.
99.2 Acme United Corporation Employee Stock Option Plan, as amended.
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.
ACME UNITED CORPORATION
By /s/ WALTER C. JOHNSEN
------------------------------
Walter C. Johnsen
President and
Chief Executive Officer
Dated: April 26, 2007
By /s/ PAUL G. DRISCOLL
------------------------------
Paul G. Driscoll
Vice President and
Chief Financial Officer
Dated: April 26, 2007
Exhibit 99.1
ACME UNITED CORPORATION NON-SALARIED DIRECTOR STOCK OPTION PLAN
April 25, 2005
I. GENERAL
1.1 Purpose of the Plan
The purpose of the Acme United Corporation Non-Salaried Director Stock
Option Plan (the "Plan") is to enable Acme United Corporation (the "Company") to
attract and retain persons of exceptional ability to serve as directors of the
Company and to align the interests of directors and shareholders in enhancing
the value of the Company's common stock (the "Common Stock").
This Plan replaces the Non-Salaried Director Stock Option Plan of April 22,
1996 once all unused options under that plan have been granted.
1.2 Administration of the Plan
The Plan shall be administered by the Compensation Committee or its
successors (the "Committee") of the Company's Board of Directors (the "Board")
which shall have full and final authority in its discretion to interpret,
administer and amend the provisions of the Plan; to adopt rules and regulations
for carrying out the Plan; to decide all questions of fact arising in the
application of the Plan; and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee shall consist of at
least two persons and shall meet once each fiscal year, and at such additional
times as it may determine or as is requested by the chief executive officer of
the Company.
1.3 Eligible Participants
Commencing April 25, 2005 each member of the Board who is not a salaried
employee of the Company or any of its subsidiaries shall be a participant (a
"Participant") in the Plan.
1.4 Grants Under the Plan
Grants under the Plan shall be in the form of stock options as described in
Section I1 (an "Option" or "Options").
(1)
1.5 Shares
The aggregate number of shares of Common Stock, including shares reserved
for issuance pursuant to the exercise of Options, which may be issued under the
terms of the Plan, may not exceed 90,000 shares and hereby are reserved for such
purpose. Whenever any outstanding grant or portion thereof expires, is canceled
or forfeited or is otherwise terminated for any reason without having been
exercised, the Common Stock allocable to the expired, forfeited, canceled or
otherwise terminated portion of the grant may again be the subject of further
grants hereunder.
Notwithstanding the foregoing, the number of shares of Common Stock
available for grants at any time under the Plan shall be reduced to such lesser
amount as may be required pursuant to the methods of calculation necessary so
that the exemptions provided pursuant to Rule 16b-3 under the Securities
Exchange Act of 1934 as amended (the "Exchange Act") will continue to be
available for transactions involving all current and future grants. In addition,
during the period that any grants remain outstanding under the Plan, the
Committee may make good faith adjustments with respect to the number of shares
of Common Stock attributable to such grants for purposes of calculating the
maximum number of shares of Common Stock available for the granting of future
grants under the Plan, provided that following such adjustments the exemptions
provided pursuant to Rule 16b-3 under the Exchange Act will continue to be
available for transactions involving all current and future grants.
1.6 Definitions
The following definitions shall apply to the Plan:
(a) "Disability" shall have the meaning provided in the Company's
applicable disability plan or, in the absence of such a definition, when a
Participant becomes totally disabled (as determined by a physician mutually
acceptable to the participant and the Company) before termination of his or her
service on the Board if such total disability continues for more than three (3)
months.
(b) "Fair Market Value" means the average of the high and low sales prices
of the shares of Common Stock on such date on the principal national securities
exchange or automated quotation system of a registered securities association on
which such shares of Common Stock are listed or admitted to trading. If the
shares of Common Stock on such date are not listed or admitted to trading, the
Fair Market Value shall be the value established by the Board in good faith.
II. OPTIONS
2.1 Terms and Conditions of Options
Each Participant who is elected a director on April 25, 2005 and at
subsequent Annual Meetings and who has not received any prior grant under this
or previous plans shall receive an initial grant of an Option to purchase 5,000
shares of Common Stock (the "Initial Option") on his/her date of election as a
director. The Initial Options will vest over three years as described in Section
2.4.
(2)
Each Participant who is elected a director at an annual meeting and is not
receiving an Initial Option grant will receive a 2,500 share option (the "Annual
Option") grant. Under the Plan, the Board of Directors has the authority to
increase or decrease the number of shares of Common Stock which are the subject
of such Annual or Initial Option grants.
2.2 Nonqualified Stock Options
The terms of the Options shall, at the time of grant, provide that the
Options will not be treated as incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
2.3 Option Price
The option price per share shall be the Fair Market Value of the Common
Stock on the date the Option is granted.
2.4 Term and Exercise of Options
(a) The term of an Option shall not exceed ten (10) years from the date of
grant. Except as provided in this Section 2.4, after a Participant ceases to
serve as a Director of the Company, including, without limitation, any voluntary
or involuntary termination of a Participant's service as a director (a
"Termination"), the unexercisable portion of an Option shall immediately
terminate and be null and void, and the unexercised portion of any outstanding
Options held by such Participant shall terminate and be null and void for all
purposes, after thirty (30) days (or, for any option granted prior to April 28,
1997 three (3) months) have elapsed from the date of the Termination unless
extended by the Committee, in its sole discretion, within thirty (30) days from
the date of the Termination. Upon a Termination as a result of death or
disability, any outstanding Options may be exercised by the Participant or the
Participant's legal representative within twelve (12) months after such death or
disability. Retirees from the board have the same rights except that for those
who have served at least five years on the board. The exercise rights for
Options they hold are automatically extended to the expiration of the option
term. However, in no event shall the period extend beyond the expiration of the
option term. "Retirement" is defined for the purposes of this Section as the
termination of a Participant's service as a director (i) at the end of his/her
term of office where he/she is not re-elected or (ii) during his/her term of
office, for a reason other than death or disability; provided, in either case,
that the Board of Directors, in its sole discretion, determines that the
Participant is entitled to the benefit of Retirement under this subsection.
(b) Initial Options granted April 25, 2006, and later shall have a (10) ten
year term and become exercisable as follows:
(3)
25% - date of grant
25% - one year after date of grant
25% - two years after date of grant
25% - three years after date of grant
(c) Annual Options shall become exercisable one day after the date of grant
for Annual Options granted on April 25, 2005 or later. In no event, however,
shall an Option be exercised after the expiration of 10 years from the date of
grant.
(d) A Participant, by written notice to the Company, may designate one or
more persons (and from time to time change such designation) including his or
her legal representative, who, by reason of his or her death, shall acquire the
right to exercise all or a portion of the Option. If no designation is made
before the death of the Participant, the Participant's Option may be exercised
by the personal representative of the Participant's estate or by a person who
acquired the right to exercise such Option by will or the laws of descent and
distribution. If the person with exercise rights desires to exercise any portion
of the Option, such person must do so in accordance with the terms and
conditions of this Plan.
2.5 Notice of Exercise
When exercisable pursuant to the terms of the Plan and the governing stock
option agreement, an Option shall be exercised by the Participant as to all or
part of the shares subject to the Option by delivering written notice of
exercise to the Company at its principal business office or such other office as
the Company may from time to time direct, (a) specifying the number of shares to
be purchased, (b) accompanied by a check payable to the Company in an amount
equal to the full exercise price of the number of shares being exercised, and
(c) containing such further provisions consistent with the provisions of the
Plan as the Company may from time to time prescribe. No Option may be exercised
after the expiration of the term specified in Section 2.4 hereof.
2.6 Limitation of Exercise Periods
The Committee may limit the time periods within which an Option may be
exercised if a limitation on exercise is deemed necessary in order to effect
compliance with applicable law.
III. GENERAL PROVISIONS
3.1 General Restrictions
Each grant under the Plan shall be subject to the requirement that if the
Committee shall determine, at any time, that (a) the listing, registration or
qualification of the shares of Common Stock subject or related thereto upon any
securities exchange or under any state or federal law, or (b) the consent or
approval of any government regulatory body, or (c) an agreement by the
Participant with respect to the disposition of shares of Common Stock, is
necessary or desirable as a condition of, or in connection with, the granting or
the issuance or purchase of shares of Common Stock thereunder, such grant may
not be consummated in whole or in part unless such listing, registration,
qualification, consent, approval or agreement shall have been effected or
obtained free of any conditions not acceptable to the Committee.
(4)
3.2 Adjustments for Changes in Capitalization
In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, rights offer, liquidation, dissolution, merger,
consolidation, spin-off or sale of assets, or any other change in or affecting
the corporation structure or capitalization of the Company, the Board shall make
such adjustments as the Committee may recommend, and as the Board in its
discretion may deem appropriate, in the number and kind of shares authorized by
the Plan, in the number, Option price or kind of shares covered by the grants
and in any outstanding grants under the Plan in order to prevent substantial
dilution or enlargement thereof.
3.3 Amendments
Without further approval of the shareholders, the Board may discontinue the
Plan at any time and may amend it from time to time in such respect as the Board
may deem advisable including the initial and annual numbers of options granted,
unless shareholder or regulatory approval is required by law or regulation, and
subject to any conditions established by the terms of such amendment; provided,
however, that the Plan may not be amended more than once every six (6) months
other than to comport with changes in the Code, the Employee Retirement Income
Security Act or the rules thereunder.
3.4 Modification, Substitution or Cancellation of Grants
No rights or obligations under any outstanding Option may be altered or
impaired without the Participant's consent. The Company at its discretion and
with the agreement of the Participant may buy out the Participant's option
rights on Termination ((including but not limited to voluntary or involuntary
termination, death, disability and retirement) in return for cancellation of
exercisable grants. Unexercised grants returned to the Company can be regranted
to the Plan.
3.5 Shares Subject to the Plan
Shares distributed pursuant to the Plan shall be made available from
authorized but unissued shares or from shares purchased or otherwise acquired by
the Company for use in the Plan, as shall be determined from time to time by the
Committee.
3.6 Rights of a Shareholder
Participants under the Plan, unless otherwise provided by the Plan, shall
have no rights as shareholders by reason thereof unless and until certificates
for shares of Common Stock are issued to them.
(5)
3.7 Withholding
If a Participant is to experience a taxable event in connection with the
receipt of shares of Common Stock pursuant to an Option exercise, the
Participant shall pay the amount equal to the federal, state and local income
taxes and other amounts as may be required by law to be withheld by the Company
prior to the issuance of such shares of Common Stock. If a cash payment is made
in lieu of exercise, taxes will also be withheld as required by law.
3.8 Nonassignability
Except as expressly provided in the Plan, no grant shall be transferable
except by will, the laws of descent and distribution or a qualified domestic
relations order ("QDRO") as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder.
During the lifetime of the Participant, except as expressly provided in the
Plan, grants under the Plan shall be exercisable only by such Participant or by
the guardian or legal representative of such Participant or pursuant to a QDRO.
3.9 Nonuniform Determinations
Determinations by the Committee under the Plan (including, without
limitation, determinations of the persons to receive grants, the form, amount
and timing of such grants, and the terms and provisions of such grants and the
agreements evidencing the same) need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, awards under
the Plan, whether or not such persons are similarly situated.
3.10 Effective Date; Duration
The Plan, as amended, shall become effective as of the date the
shareholders approve the Plan. No grant may be given under the Plan after May
31, 2015, but grants theretofore granted may extend beyond such date.
The effective date of the Plan is April 25, 2005.
(As amended April 23, 2007).
3.11 Change in Control
Notwithstanding anything herein to the contrary, if a Change in Control of
the Company occurs, then all Options shall become fully exercisable as of the
date such Change in Control occurred. For the purposes of the Plan, a Change in
Control of the Company shall be deemed to have occurred upon the earliest of the
following events:
(6)
(a) when the Company acquires actual knowledge that any person (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the
beneficial owner (as defined in Rule 13d-3 of the Exchange Act) directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then-outstanding securities;
(b) upon the first purchase of Common Stock pursuant to a tender or
exchange offer (other than a tender or exchange offer made by the Company);
(c) upon the approval by the Company's shareholders of (1) a merger or
consolidation of the Company with or into another corporation (other than a
merger or consolidation in which the Company is the surviving corporation and
which does not result in any capital reorganization or reclassification or other
change in the Company's then outstanding shares of Common Stock), (ii) a sale or
disposition of all or substantially all of the Company's assets or (iii) a plan
of liquidation or dissolution of the Company; or
(d) if the Board of Directors or any designated committee determines in its
sole discretion that any person (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than a person who exercised a controlling
influence as of the effective date of the Plan, directly or indirectly exercises
a controlling influence over the management or policies of the Company.
3.12 Governing Law
The Plan and all actions taken thereunder shall be governed by and
construed in accordance with the laws of the State of Connecticut.
(7)
Exhibit 99.2
ACME UNITED CORPORATION
EMPLOYEE STOCK OPTION PLAN
1. PURPOSE
The purpose of this plan (the "Plan") is to promote the interests of Acme
United Corporation (the "Corporation") by enabling its key employees to
acquire an increased proprietary interest in the Corporation and thus to
share in the future success of the Corporation's business. Accordingly, the
Plan is intended as a means not only of attracting and retaining
outstanding management personnel but also of promoting a closer identity of
interests between employees and stockholders. Since the employees eligible
to receive Options under the Plan will be those who are in a position to
make important and direct contributions to the success of the Corporation,
the Directors believe that the grant of the Options under the Plan will be
in the best interests of the Corporation.
2. DEFINITIONS
Unless the context clearly indicates otherwise, the following terms when
used in the Plan, shall have the meanings set forth in this Section 2.
(a) "Beneficiary" means the person or persons who shall acquire the right
to exercise an option by bequest or inheritance.
(b) "Board of Directors" or "Board" means the Board of the Directors of
the Corporation.
(c) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(d) "Committee" means the Compensation Committee of the Board of
Directors, consisting of select Board members who are not employees of
the Corporation, but in no event fewer than two (2) such Board
members.
(e) "Common Stock" shall mean common stock, par value S2.50 per share, of
the Corporation.
(f) "Disability" means a disability as defined in the Corporation's
Long-Term Disability Plan, as amended from time to time.
(g) "Fair Market Value" shall mean the closing price for the Common Stock
on the date immediately preceding the date on which the option is
granted.
(h) "Incentive Stock Option" shall mean a stock option granted pursuant to
this Plan and intended to satisfy the requirements of Section 422 of
the Code.
(i) "Option" shall mean a stock option granted pursuant to the Plan.
(j) "Optionee" shall mean a person to whom an Option has been granted
under the Plan.
(k) "Option Agreement" shall mean the written agreement to be entered into
by the Corporation and the Optionee, as provided in Section 6 hereof.
(l) "Retirement" shall mean retirement pursuant to the Retirement Plan for
Employees of Acme United Corporation, as amended from time to time.
(m) "Share" shall mean the Common Stock of the Corporation, as adjusted in
accordance with Section 16 of the Plan.
(n) "Subsidiary" shall mean any subsidiary corporation of the Corporation
within the meaning of Section 424(f)of the Code (or a successor
provision of similar import).
Where used herein, unless the context indicates otherwise, words in the
masculine form shall be deemed to refer to females as well as to males.
(1)
3. SHARES SUBJECT TO THE PLAN
(a) The stock to be covered by the Options is the Common Stock of the
Corporation. The aggregate number of shares of Common Stock which may
be delivered on exercise of the Options is 460,000 shares, subject to
adjustment pursuant to Section 16.
(b) As determined by the Board from time to time, such shares may be
previously issued shares reacquired by the Corporation or authorized
but unissued shares. If any Option expires or terminates for any
reason without having been exercised in full, the Shares covered by
the unexercised portion of such Option shall again be available for
Options, within the limits specified above.
4. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Board of Directors of the
Corporation, which shall accept, amend, or reject recommendations made
by the Committee. In addition to its duties with respect to the Plan
stated elsewhere in the Plan, Board shall have full authority,
consistent with the Plan, to interpret the Plan, to promulgate such
rules and regulations with respect to the Plan as it deems desirable
and to make all other determinations necessary or desirable for the
administration of the Plan. All decisions, determinations, and
interpretations of the Board shall be binding upon all persons.
No member of the Board of Directors or the Committee and no employee
of the Corporation shall be liable for any act or action hereunder,
whether of omission or commission, by any other member or employee or
by any agent to whom duties in connection with the administration of
the plan have been delegated in accordance with the provisions of the
Plan or, except in circumstances involving his bad faith, for anything
done or omitted to be done by himself.
(b) Except as provided in Section 7, it is intended that the stock options
granted pursuant to the Plan constitute Incentive Stock Options within
the meaning of Section 422 of the Code. The Board shall administer the
Plan in such a manner as to establish and maintain such Options as
Incentive Stock Options.
(c) The Board may, with the consent of the Optionee, substitute Options
which are not intended to be Incentive Stock Options for outstanding
Incentive Stock Options. Any such substitution shall not constitute
the grant of a new Option for the purposes of this Plan, and shall not
require a revaluation of the Option exercised prior to the substituted
Option. Any such substitution shall be implemented by an amendment to
the applicable Option Agreement or in such other manner as the Board
in its discretion shall determine.
(d) The Committee, subject to the approval of the Board, shall make such
provision as it deems necessary or appropriate for the withholding of
any federal, state, local or other tax required to be withheld with
regard to the exercise of an Option under the Plan.
5. EMPLOYEES ELIGIBLE TO RECEIVE OPTIONS
(a) The Board, upon the recommendation of the Committee, shall from time
to time in its discretion select the employees to whom the options
shall be granted from among the key employees of the Corporation and
any Subsidiary.
(b) Members of the Board of Directors who are not regular salaried
employees of the Corporation or a Subsidiary shall not be eligible to
receive Options.
(c) An individual employee may receive more than one Option.
(2)
6. OPTION AGREEMENT
(a) No Option shall be exercised by an Optionee unless he or she shall
have executed and delivered an Option Agreement.
(b) Appropriate officers of the Corporation are hereby authorized to
execute and deliver Option Agreements in the name of the Corporation
as directed from time to time by the Board.
7. GRANTS OF OPTIONS
(a) The Board, acting upon the recommendation of the Committee, shall in
it discretion determine the time or times when Options shall be
granted and the number of shares of Common Stock to be subject to each
Option.
(b) The aggregate fair market value (determined as of the date the Option
is granted) of the stock with respect to which Incentive Stock Options
are exercisable for the first time by an individual during any
calendar year (under all stock option plans of the Corporation and its
Subsidiaries) shall not exceed $100,000.00.
(c) No Incentive Stock Option shall be granted to an employee who, at the
time the Option is granted, owns (within the meaning of Section
422(b)(6) of the code) stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Corporation
unless the following requirements are satisfied: (i) notwithstanding
the provisions of Section 8, the purchase price for each share of
common stock subject to an Option shall be at least 110 percent of the
fair market value of the Common Stock subject to the Option at the
time the Option is granted; and (ii) the Option is not exercisable
after the expiration of five (5) years from the date such Option is
granted.
(d) The Board may in its discretion grant Options that are not intended to
constitute Incentive Stock Options.
(e) Each Option shall be evidenced by an Option Agreement, in such form as
the Board shall from time to time approve, which shall state the terms
and conditions of the Option in accordance with the Plan, and also
shall contain such additional provisions as may be necessary or
appropriate under applicable laws, regulations, and rules.
8. OPTION PRICE
Subject to Section 7(c), the purchase price for each share of Common Stock
subject to an Option shall be one hundred percent (100%) of the Fair Market
Value of the Common Stock on the date the Option is granted provided,
however, that the purchase price shall not be less than the par value of
the Common Stock which is the subject of the Option.
9. OPTION PERIOD; EXERCISE RIGHTS
a) Each Option shall be for such term as the Board shall determine, but
not more than ten years from the date it is granted, and shall be
subject to earlier termination as provided in Section 1O.
b) Options shall be exercisable in accordance with the following
schedule: 25% one day after first year anniversary of date of grant;
25% one day after second year anniversary of date of grant; 25% one
day after third year anniversary of date of grant; 25% one day after
fourth year anniversary of date of grant.
c) Upon the purchase of shares of Common Stock under an Option, the Stock
certificate or certificates may, at the request of the purchaser, be
issued in his name and the name of another person as joint tenants
with the right of survivorship.
(3)
d) The exercise of each Option granted under the Plan shall be subject to
the condition that if at any time the Corporation shall determine in
its discretion that the listing, registration, or qualification of any
shares of Common Stock otherwise deliverable upon such exercise upon
any securities exchange or under any State or Federal law, or the
consent or approval of any regulatory body, is necessary or desirable
as a condition of, or in connection with, such exercise or the
delivery or purchase of shares thereunder, then in any such event such
exercise shall not be effective unless such listing, registration,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Corporation. Any
such postponement shall not extend the time within which the Option
may be exercised; and neither the Corporation nor its directors or
officers shall have any obligation or liability to the Optionee or to
a Beneficiary with respect to any shares of Common Stock as to which
the Option shall lapse because of such postponement.
10. EXERCISE RIGHTS UPON TERMINATION OF EMPLOYMENT
(a) Retirement
Except as provided in paragraph (e) of this section 10, if an Optionee
retires under a retirement or pension plan of the Corporation or of a
Subsidiary, the Optionee's Option shall terminate one year after the
date of such retirement but in no event later than the date on which
it would have expired if the Optionee had not retired, provided,
however, that if the Option is exercised later than three months from
the date of such retirement such Option shall not constitute an
Incentive Stock Option. During such period the Optionee may exercise
the Option in whole or in part notwithstanding the limitations of
Section 9(b) or any limitation that may have been set by the Board
pursuant thereto.
(b) Disability
Except as provided in paragraph (e) of this section 10, if an Optionee
becomes disabled, the Optionee may exercise the Option (i) within one
year after the date of Disability, but in no event later than the date
on which it would have expired if the Optionee had not become
disabled, or (ii) within such other period, not exceeding three years
after the date of Disability, as shall be prescribed in the Option
Agreement; provided, however, that if the Option is exercised later
than one year after the date of Disability, it shall not constitute an
Incentive Stock Option. During such period the Optionee may exercise
the Option in whole or in part notwithstanding the limitations of
Section 9(b) or any limitation that may have been set by the Board
pursuant thereto.
(c) Death
If an Optionee dies during a period in which he or she is entitled to
exercise an Option (including the period referred to in paragraphs
(a),(b),(d),and (e)of this Section 1O), the Option may be exercised at
any time within one year from the date of the Optionee's death, but in
no event later than the date on which it would have expired if the
Optionee had lived, by the Optionee's Beneficiary, in whole or in part
notwithstanding the limitations of Section 9(b) or any limitation that
may have been set by the Board pursuant thereto.
(d) Termination of Employment for Any Other Reason
Except as provided in paragraph (e) of this section 10, if an Optionee
ceases to be employed by the Corporation or a Subsidiary for any
reason other than retirement, disability, or death, the Optionee's
Option shall terminate 30 days after the date of such cessation of
employment, but in no event later than the date on which it would have
expired if such cessation of employment had not occurred. During such
period the option may be exercised only to the extent that the
Optionee was entitled to do so under Section 9(b) at the date of
cessation of employment unless the Board, in its sole and
nonreviewable discretion, permits exercise of the Option to a greater
extent. Except to the extent required by law, the employment of an
Optionee shall not be deemed to have ceased upon his or her absence
from the Corporation or a Subsidiary on a leave of absence granted in
accordance with the usual procedure of the Corporation or Subsidiary.
(4)
(e) Notwithstanding any language of the Plan to the contrary, if an
Optionee ceases to be employed by the Corporation or a Subsidiary and
becomes, or continues to be, a member of the Board of Directors prior
to the time the Optionee's Option(s) would have otherwise expired
pursuant to this Section 10, the Optionee's Option(s) shall continue
to vest in accordance with Section 8(b) hereof and shall continue to
be exercisable for the remainder of the term of the Option(s);
provided, that, if an Optionee described in this Section 10(e) ceases
to be a member of the Board of Directors for any reason, the
Optionee's Option(s) shall terminate in accordance with the provisions
of Section 2.4(a) of the Amended and Restated Acme United Corporation
Non-Salaried Director Stock Option Plan. Any Option which is not
exercised by the Optionee within the three-month period immediately
following the Optionee's termination of employment, or, in the case of
termination of employment on account of Disability, within one year
after the date of Disability, shall cease to be an Incentive Stock
Option.
11. METHOD OF EXERCISE
(a) Each exercise of an Option shall be by written notice to the Secretary
of the Corporation, stating the number of shares to be purchased. An
Option may be exercised with respect to all, or any part of, the
Shares of Common Stock as to which it is exercisable at the time.
(b) The purchase price of the shares being purchased shall be paid in full
at the time the Option is exercised. Such payment shall be made in
cash in United States currency.
12. NONTRANSFIERABILITY OF OPTIONS
Each Option shall be nonassignable and nontransferable by the Optionee
other than by will or by the laws of descent and distribution. Each Option
shall be exercisable during the Optionee's lifetime only by the Optionee.
13. SHAREHOLDER RIGHTS
No person shall have any rights of a shareholder by virtue of an Option
except with respect to shares actually issued to him and registered on the
transfer books of the Corporation, and the issuance of shares shall confer
no retroactive right to dividends.
14. USE OF PROCEEDS
The proceeds received by the Corporation from the sale by it of shares of
Common Stock to persons exercising an Option pursuant to the Plan will be
used for the general purposes of the Corporation or any Subsidiary.
15. GENERAL PROVISIONS
The grant of an Option in any year shall not give the Optionee any right to
similar grants in future years or any right to be retained in the employ of
the Corporation or any Subsidiary.
16. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
If there is a change in the number or kind of outstanding shares of the
Corporation's stock by reason of a stock dividend, stock split,
recapitalization, merger, consolidation, combination, or other similar
event, appropriate adjustments shall be made by the Board to the number and
kind of shares subject to the Plan, the number and kind of shares under
Options then outstanding, the maximum number of shares available for
Options or the Option Price and other relevant provisions.
17. EFFECT OF MERGER OR OTHER REORGANIZATION
If the Corporation shall be the surviving corporation in a merger or other
reorganization, an Option shall extend to stock and securities of the
Corporation to the same extent that a holder of that number of Shares
immediately before the merger or consolidation corresponding to the number
of Shares covered by the Option would be entitled to have or obtain stock
and securities of the Corporation under the terms of the merger or
consolidation. If the Corporation dissolves, sells substantially all of its
assets, is acquired in a stock for stock or securities exchange, or is a
party to a merger or other reorganization in which it is not the surviving
corporation, then each Option shall be exercisable within the period of
sixty (60) days commencing upon the date of the action of the shareholders
(or the Board if shareholders' action is not required) is taken to approve
the transaction and upon the expiration of that period all Options and all
rights thereto shall automatically terminate.
(5)
18. TERMINATION; AMMENDMENTS
(a) The Board may at any time terminate the Plan. Unless the Plan shall
previously have been terminated by the Board, it shall terminate on
February 26, 2012. No Option may be granted after such termination.
(b) The Board may at any time or times amend the Plan or amend any
outstanding Option for the purpose of satisfying the requirements of
any changes in applicable laws or regulations or for any other purpose
which at the time may be permitted by law.
(c) Except as provided in Section 16, no such amendment shall, without the
approval of the shareholders of the Corporation: (i) increase the
maximum number of shares of Common Stock for which the Options may be
granted under the Plan; (ii) reduce the Option price of outstanding
Options; (iii) extend the period during, which Options may be granted;
(iv) materially increase in any other way the benefits accruing to
Optionees; or (v) change the class of persons eligible to be
Optionees.
(d) No termination or amendment of the Plan shall without the consent of
an Optionee or Beneficiary, adversely affect the Optionee's or
Beneficiary's right under any Option previously granted, but it shall
be conclusively presumed that any adjustment for changes in
capitalization in accordance with Section 16 hereof does not adversely
affect any such right.
19. EFFECTIVE DATE
The effective date of the Plan is February 26, 2002.
(As amended April 25, 2005).
(As further amended June 12, 2006).
(As further amended April 23, 2007).
20. GOVERNING LAW
The Plan shall be construed and its provisions enforced and administered in
accordance with and under the laws of Connecticut except to the extent that
such laws may be superseded by any Federal law.
(6)