UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
ACME UNITED CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if
other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11 (a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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March 25, 2008
Dear Fellow Shareholder:
On behalf of your Board of Directors and Management, I cordially invite you to
attend the Annual Meeting of Shareholders of Acme United Corporation scheduled
to be held on Monday, April 21, 2008 at 11:00 A.M., local time, at the American
Stock Exchange, 86 Trinity Place, New York, New York. I look forward to greeting
personally those shareholders able to attend.
At the Meeting, shareholders will be asked to elect seven directors to serve for
a one-year term. Information regarding these matters is set forth in the
accompanying Notice of Annual Meeting and Proxy Statement to which you are urged
to give your prompt attention.
It is important that your shares be represented and voted at the Meeting.
Whether or not you plan to attend, please take a moment to sign, date and
promptly mail your proxy card in the enclosed prepaid envelope. This will not
limit your right to vote in person should you attend the Meeting.
On behalf of your Board of Directors, thank you for your continued support and
interest in Acme United Corporation.
Sincerely,
Walter C. Johnsen
Chairman and Chief Executive Officer
Acme United Corporation
60 Round Hill Road
Fairfield, Connecticut 06824
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MONDAY, APRIL 21, 2008
To our Shareholders: The Annual Meeting of Shareholders (the "Meeting") of Acme
United Corporation, a Connecticut Corporation, (the "Company") will be held on
Monday, April 21, 2008, at 11:00 A.M., local time, at the American Stock
Exchange, 86 Trinity Place, New York, New York, for the following purposes:
1. To elect seven (7) Directors of the Company;
2. To transact such other business as may properly come before the
Meeting.
Shareholders of record at the close of business on March 4, 2008 are entitled to
receive notice of and to vote at the Meeting and at any adjournment thereof.
You are cordially invited to attend the Meeting. Please carefully read the
attached Proxy Statement for information regarding the matters to be considered
and acted upon at the Meeting. We hope that you will attend the Meeting.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING IN PERSON, YOU ARE URGED
TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED
RETURN POSTAGE-PAID ENVELOPE. No additional postage need be affixed to the
return envelope if mailed in the United States. If you attend the Meeting, you
may withdraw your proxy and vote in person by ballot.
By Order of the Board of Directors,
Paul G. Driscoll
Vice President and Chief Financial
Officer, Secretary and Treasurer
March 25, 2008
Fairfield, Connecticut
Acme United Corporation
60 Round Hill Road
Fairfield, Connecticut 06824
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
April 21, 2008
PROXY STATEMENT
This Proxy Statement and the accompanying Notice of Annual Meeting of
Shareholders and Proxy Card are being furnished in connection with the
solicitation of proxies by the Board of Directors of Acme United Corporation, a
Connecticut Corporation (the "Company"), to be used at the Annual Meeting of
Shareholders of the Company, to be held April 21, 2008, at 11:00 A.M., local
time, at the American Stock Exchange, 86 Trinity Place, New York, New York or at
any adjournment thereof (the "Meeting"). This Proxy Statement and the enclosed
Proxy Card are being furnished on or about March 26, 2008 to all holders of
record of the Company's Common Stock, par value $2.50 per share (the "Common
Stock"), as of the close of business on March 4, 2008. A copy of the Company's
2007 Annual Report to Shareholders, including consolidated financial statements
for the fiscal year ended December 31, 2007, accompanies this Proxy Statement.
At the Meeting, shareholders will elect seven (7) Directors to serve
until the next annual meeting.
VOTING SECURITIES, RECORD DATE AND QUORUM
Record Date. The Board of Directors has fixed the close of business on
March 4, 2008, as the record date (the "Record Date") for determination of
shareholders entitled to receive notice of and to vote at the Meeting. As of the
Record Date, there were 3,503,183 shares of Common Stock issued and outstanding
and there were no other voting securities of the Company outstanding.
Quorum. The presence at the Meeting, in person or by proxy, of a
majority of the outstanding shares of Common Stock entitled to vote shall
constitute a quorum for the Meeting. Each outstanding share of Common Stock
entitles the record holder thereof to one vote. Abstentions and broker non-votes
are not counted as votes cast on any matter to which they relate, but are
counted in determining the presence of a quorum.
Election of Directors. Assuming the presence of a quorum, a plurality
of the votes cast at the Meeting is required to elect each of the nominees for
Director. Abstentions and broker non-votes will not be taken into account in
determining the outcome of the election of directors.
(1)
VOTING RIGHTS AND SOLICITATION OF PROXIES
Eligible shareholders of record may vote at the Meeting in person or by
means of the enclosed Proxy Card. You may specify your voting choices by marking
the appropriate boxes on the Proxy Card. The proxy solicited hereby, if properly
signed and returned to the Company and not revoked prior to or at the Meeting,
will be voted in accordance with the instructions specified thereon. If you
properly sign and return your Proxy Card, but do not specify your choices, your
shares will be voted by the proxy holders as recommended by the Board of
Directors.
The Board of Directors encourages you to complete and return the Proxy
Card even if you expect to attend the Meeting. You may revoke your proxy at any
time before it is voted at the Meeting by giving written notice of revocation to
the Secretary of the Company, by submission of a proxy bearing a later date or
by attending the Meeting in person and casting a ballot.
The proxy holders, Walter C. Johnsen and Susan H. Murphy, will vote all
shares of Common Stock represented by Proxy Cards that are properly signed and
returned by shareholders. The Proxy Card also authorizes the proxy holders to
vote the shares represented in their sole discretion with respect to any matters
not included in this Proxy Statement that may properly be presented for
consideration at the Meeting. YOU MUST RETURN A SIGNED PROXY CARD IF YOU WANT
THE PROXY HOLDERS TO VOTE YOUR SHARES OF COMMON STOCK.
The cost of soliciting proxies will be borne by the Company. Following
the mailing of proxy solicitation materials, proxies may be solicited by
directors, officers and employees of the Company and its subsidiaries
personally, by telephone or otherwise. Such persons will not receive any fees or
other compensation for such solicitation. In addition, the Company will
reimburse brokers, custodians, nominees and other persons holding shares of
Common Stock for others for their reasonable expenses in sending proxy materials
to the beneficial owners of such shares and in obtaining their proxies.
(2)
PROPOSAL
ELECTION OF DIRECTORS
The By-laws of the Company provide that the Company have a Board of Directors of
not less than five or more than nine directors, with the number of directors to
be fixed by the Board from time to time. The number of directors is presently
fixed at eight. Directors serve until the next annual meeting and until their
respective successors have been elected and qualified.
The Board of Directors currently consists of eight directors. One incumbent
director, Gary D. Penisten, has decided to retire from the Board of Directors at
the conclusion of his present term as director, and accordingly, he will not
stand for reelection. His term as a director will expire at the Meeting; at that
time the number of directors will be fixed at seven.
Seven directors are to be elected at the Meeting to serve for one-year terms
until the 2009 Annual Meeting of Shareholders and until their respective
successors are elected and qualified. The Board has determined to nominate seven
individuals for election to the Board of Directors, each of whom is presently an
incumbent director. The Board of Directors knows of no reason why any nominee
would be unable to serve as director. Each nominee has consented to being named
as a nominee for director of the Company in this Proxy Statement and to serve as
a director if elected. If any nominee should for any reason become unable to
serve, then all valid proxies will be voted for the election of a substitute
nominee designated by the Board.
The following information about the nominees for election as our directors is
based, in part, upon information furnished by the nominees.
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Nominees Principal Occupation Director Since
------------------------- ------------------------------------ ---------------
Walter C. Johnsen Chairman of the Board and Chief 1995
(age 57) Executive Officer of the Company
since January 1, 2007; President
and Chief Executive Officer of the
Company from November 30, 1995 to
December 31, 2006. Formerly served
as Vice Chairman and a principal of
Marshall Products, Inc., a medical
supply distributor.
------------------------- ------------------------------------ ---------------
Richmond Y. Holden, Jr. Since 2007, President of Educators 1998
(age 54) Publishing Service, a supplementary
publisher of education materials
and a subsidiary of School
Specialty Inc. Previously,
President and Chief Executive
Officer of J.L. Hammett Co. from
1992 to 2006, a reseller of
educational products.
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(3)
------------------------- ------------------------------------ ---------------
Brian S. Olschan President and Chief Operating 2000
(age 51) Officer of the Company since
January 1, 2007; Executive Vice
President and Chief Operating
Officer of the Company from January
1999 to December 31, 2006; Senior
Vice President - Sales and
Marketing of the Company from
September 1996 to January 1999.
Formerly served as Vice President
and General Manager of the Cordset
and Assembly Business of General
Cable Corporation, an electrical
wire and cable manufacturer.
------------------------- ------------------------------------ ---------------
Stevenson E. Ward III Vice President and Chief Financial 2001
(age 62) Officer of Triton Thalassic
Technologies, Inc. since September
2000. From 1999 through 2000, Mr.
Ward served as Senior Vice
President-Administration of
Sanofi-Synthelabo, Inc., a major
pharmaceutical company. He also
served as Executive Vice President
(1996-1999) and Chief Financial
Officer (1994-1995) of Sanofi,
Inc., and Vice President,
Pharmaceutical Group, Sterling
Winthrop, Inc. (1992-1994). Prior
to joining Sterling he was employed
by General Electric Company.
------------------------- ------------------------------------ ---------------
Susan H. Murphy Vice President for Student and 2003
(age 56) Academic Services, Cornell
University since 1994; Dean of
Admissions and Financial Aid from
1985 to 1994. Employed at Cornell
since 1978. Ms. Murphy received a
Ph.D. from Cornell University.
------------------------- ------------------------------------ ---------------
Rex L. Davidson President and Chief Executive 2006
(age 58) Officer of Goodwill Industries of
Greater New York and Northern New
Jersey, Inc., and President of
Goodwill Industries Housing
Corporation since 1982. Appointed
by Mayor Bloomberg to the New York
City Workforce Investment Board in
2002. Serves on the Board of the
Better Business Bureau Education
and Research Foundation. He also
serves on the Stony Brook
University MBA Advisory Board.
------------------------- ------------------------------------ ---------------
(4)
------------------------- ------------------------------------ ---------------
Stephen Spinelli, Jr. President, Philadelphia University, 2006
(age 53) 2007-present. He served as Vice
Provost for Entrepreneurship and
Global Management for Babson
College from 2004 to 2007 and was a
member of the Babson faculty since
1993. Founder and former Chairman
of American Oil Change Corporation
(d.b.a. Jiffy Lube). He consults
with a wide array of businesses
globally. He received a Ph.D. in
Economics from Imperial College,
University of London (U.K.).
------------------------- ------------------------------------ ---------------
BOARD OF DIRECTOR MEETINGS AND COMMITTEES
The Board of Directors had seven meetings in 2007. All Directors attended at
least 75% of the aggregate of the total number of the Board meetings and
meetings of committees of the Board of which they were a member. The Board of
Directors has established standing Executive, Audit, and Compensation
Committees, each of which is comprised solely of independent non-employee
members of the Board of Directors. The Board of Directors does not have a
standing Nominating Committee.
INDEPENDENCE DETERMINATIONS
The Board of Directors annually determines the independence of directors. No
director is considered independent unless the Board has determined that he or
she has no material relationship with the Company, either directly or as a
partner, shareholder, or officer of an organization that has a material
relationship with the Company or otherwise. Material relationships can include
commercial, banking, consulting, legal, accounting, charitable, and familial
relationships, among others.
Independent directors are directors who, in the view of the Board of Directors,
are free of any relationship that would interfere with the exercise of
independent judgment. Under American Stock Exchange rules, the following persons
shall not be considered independent:
(a) a director who is or was employed by the Company or any of its
affiliates for the current year or any of the past three years;
(b) a director who accepted or who has an immediate family member who
accepted any compensation from the Company or any of its affiliates in
excess of $100,000 during any period of twelve consecutive months
within the three years preceding the determination of independence
(other than certain specified types of compensation, including, e.g.,
compensation for Board or Committee service, benefits under a
tax-qualified retirement plan, or non-discretionary compensation);
(5)
(c) a director who is a member of the immediate family of an individual
who is, or has been in any of the past three years, employed by the
Company as an executive officer;
(d) a director who is, or has an immediate family member who is, a partner
in, or a controlling shareholder or an executive officer of, any
organization to which the Company made, or from which the Company
received payments (other than those arising solely from investments in
the Company's securities) that exceed 5% of the organization's
consolidated gross revenues for that year, or $200,000, whichever is
more, in any of the past three years;
(e) a director who is, or has an immediate family member who is employed
as an executive of another entity where at any time during the most
recent three fiscal years, any of the Company's executive officers
serve on that other entity's compensation committee; and
(f) a director who is, or has an immediate family member who is, a current
partner of the Company's outside auditor, or was a partner or employee
of the Company's outside auditor who worked on the Company's audit at
any time during any of the past three years.
Immediate family includes a person's spouse, parents, children, sibling,
mother-in-law, father-in-law, brother-in-law, sister-in-law, son-in-law,
daughter-in-law, and anyone who resides in such person's home.
Mr. Johnsen, Chairman of the Board, serves as Chief Executive Officer of the
Company, and Mr. Olschan, a member of the Board, serves as President and Chief
Operating Officer of the Company. The Board has determined that all of the other
current directors are "independent" within the meaning of the applicable listing
standards of the American Stock Exchange. These independent directors are: Mr.
Davidson, Mr. Holden, Ms. Murphy, Mr. Spinelli and Mr. Ward, each of whom is
standing for reelection, and Mr. Penisten, who is not standing for reelection.
EXECUTIVE COMMITTEE
The Executive Committee of the Board of Directors is composed of Mr. Penisten,
who serves as Chairman, and Mr. Holden. The function of the Executive Committee
is to act for the Board of Directors during the intervals between meetings of
the Board. The Executive Committee held one meeting in 2007.
AUDIT COMMITTEE
The Audit Committee assists the Board of Directors in overseeing (1) the audit
and integrity of our financial statements, (2) the performance of our
independent auditors, (3) the adequacy and effectiveness of our accounting,
auditing and financial reporting processes, and (4) our compliance with legal
and regulatory requirements. The duties of the Audit Committee include the
selection and appointment of our independent auditors, including evaluation of
their qualifications, performance and independence. The Board of Directors has
determined that all members of the Audit Committee are "independent" and
"financially literate" within the meaning of the applicable listing standards of
the American Stock Exchange. In addition, the Board has determined that Mr. Ward
qualifies as an "audit committee financial expert" within the meaning of
regulations adopted by the Securities and Exchange Commission and has the
financial sophistication required under the listing standards of the American
Stock Exchange.
(6)
The Committee consists of Mr. Ward, Chairman, and Messrs. Holden and Spinelli.
The Audit Committee meets at least quarterly, and more often as needed. The
Committee met six times in 2007. The Board of Directors has adopted a written
charter for the Audit Committee, which is reviewed annually by the Audit
Committee. A copy of the Audit Committee charter is available on the company's
website at www.acmeunited.com in the Investor Relations/Corporate Governance
section.
NOMINATIONS FOR DIRECTORS
The functions of the Nominating Committee are performed by the whole Board.
Board of Director nominations are recommended for the entire Board's selection
by a majority of the Board's "independent directors," as such term is defined in
Section 121A of the American Stock Exchange's listing standards.
The Board will consider nominees for directors recommended in writing by
shareholders to the Board at least sixty (60) days prior to the annual meeting
at which the election of directors is to be held (subject to certain
requirements set forth in the By-laws). The nomination should be sent in care of
the Secretary of the Company at 60 Round Hill Road, Fairfield, CT 06824, and
should include the name, address, telephone number and resume of the nominee's
business and educational background, along with a written statement by the
shareholder as to why such person should be considered for election to the Board
of Directors.
The Board follows the same evaluation procedures whether a candidate is
recommended by directors or shareholders. In identifying and evaluating nominees
for director, the Board considers whether the candidate has the highest ethical
standards and integrity, and sufficient education, experience and skills
necessary to understand and wisely act upon the complex issues that arise in
managing a publicly held company. The Board commences its evaluation of
candidates on the basis of materials submitted by or on behalf of the candidate
and on the basis of the knowledge of members of the Board and management
regarding the candidate. To the extent the Board does not have enough
information to evaluate a candidate, the Board may send a questionnaire to the
candidate for completion in enough time for Board consideration. In addition, it
has historically been customary for some members of the Board to meet with the
candidate individually or in small groups.
COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors assists the Board in
establishing the compensation policies for cash and equity compensation of our
executive officers. The duties of the Committee include evaluating and making
recommendations to the Board regarding the compensation and equity incentives
and awards for our executive officers and the administration of the Company's
Non-Salaried Director Stock Option Plan. The Board of Directors has determined
that all members of the Compensation Committee are "independent" within the
meaning of the applicable listing standards of the American Stock Exchange. The
Committee consists of Mr. Holden, Chairman, Messrs. Davidson and Penisten, and
Ms. Murphy. The Committee held three meetings during 2007.
(7)
The Compensation Committee makes recommendations to the Board of Directors
regarding compensation of our executive officers. In 2007, the compensation and
benefits for our executive officers consisted of four components: (i) base
salary; (ii) a cash incentive bonus award; (iii) stock option awards; and (iv) a
benefits package.
The base salaries for our officers are set annually and reflect skills and
experience, level and scope of responsibility and performance during the prior
year and historical, long-term performance. The Compensation Committee also
considers external factors, such as cost of living in the areas in which our
officers reside and current market conditions. During 2007 the Chief Executive
Officer participated in discussions with the Committee regarding the base salary
amounts of the executive officers.
The Company grants cash incentive awards under our Cash Bonus Plan based upon
the achievement of both Company and individual performance objectives. The
Company generally makes cash awards under this Plan if the Company achieves the
minimum level of net income set for the applicable year. However, the Company
may make awards at its discretion if the minimum levels of net income are not
attained due to unusual circumstances, but where the performance of individual
executive officers merit such awards.
During 2007, the Chief Executive Officer proposed bonus awards and reviewed the
proposals, and the basis for the proposals, with the Compensation Committee. The
Committee subsequently proposed bonus awards to the independent directors of the
full Board for final review and approval.
The Company's stock option program is administered by the Board of Directors,
which acts upon recommendations of the Compensation Committee. The purpose of
the Company's stock option program is to facilitate the acquisition of equity
interests in the Company by its officers and key employees and thus their
sharing in the future success of the Company's business. The Committee takes
into account factors such as: (i) the total number of shares of common stock
outstanding; (ii) the total number of shares of common stock which remain
available for grant under the Company's various stock option plans; and (iii)
the need to have an appropriate balance between currently paid and longer-term
compensation, and between cash and equity compensation.
COMPENSATION OF DIRECTORS
DIRECTORS' CASH FEES
CASH COMPENSATION
As described below, in 2007 the Company paid as compensation to non-employee
directors cash consisting of annual fees and fees for Board and committee
meetings attended. The Chairman Emeritus of the Board and each director who
chaired a committee received additional compensation to compensate for the
additional responsibility and effort associated with the director's respective
position. These fees consisted of:
(8)
o an annual fee of $14,000, payable quarterly;
o $1,000 for each Board meeting attended;
o $2,000 paid to the Chairman Emeritus of the Board for each Board
meeting;
o $600 for each committee meeting attended;
o $600 to the committee chairpersons for each committee meeting
conducted; and
o an annual fee of $3,200 to the Chairperson of the Audit Committee.
In addition, the Company provided reimbursement to each director for customary
and usual travel expenses incurred in connection with attendance at Board and
committee meetings.
DIRECTORS' STOCK OPTIONS
On April 23, 2007, the date of the last annual meeting of shareholders, each
non-employee director re-elected to the Board of Directors received an annual
option grant, as provided under the 2005 Non-Salaried Director Stock Option
Plan, to purchase 2,500 shares of Common Stock. Each option had an exercise
price of $14.51 per share, and was immediately exercisable in full.
Under the Non-Salaried Director Stock Option Plan, each new director, upon
becoming a member of the Board of Directors, receives an option to purchase
5,000 shares of Common Stock. These options vest as follows: 25% on the day
after the date of the grant; 25% one day after the first year anniversary of the
date of grant; 25% one day after the second year anniversary of the date of
grant; and 25% one day after the third year anniversary of the date of grant.
ATTENDANCE AT ANNUAL MEETINGS
While the Company has no formal policy regarding the attendance of Board members
at annual meetings of shareholders, director attendance is deemed very important
and is strongly encouraged. In 2007, all eight then incumbent members of the
Board attended the 2007 Annual Meeting of Shareholders.
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
The Company has established a process for shareholders to send communications to
the Board of Directors. Shareholders may send communications to the Board of
Directors to the attention of the Secretary, Acme United Corporation, 60 Round
Hill Road, Fairfield, Connecticut 06824, who will forward them to all Board
members within a reasonable time after receipt. If the shareholder wishes the
communication to be sent to one or more specific Board members only, the
addressee should be the specific Board member(s), "c/o Secretary", who will then
forward the communication to such Board member(s). If one or more specific Board
members are not designated for such other communication, the communication will
be forwarded to the entire Board.
(9)
OWNERSHIP OF ACME UNITED CORPORATION STOCK
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information, as of March 1, 2008, with
respect to the beneficial ownership of shares of Common Stock by any person who,
to the knowledge of the Company, owns beneficially more than 5% of the
outstanding shares of Common Stock of the Company.
--------------------------- --------------------- --------------------- --------------
Number of
Beneficially Shares Percent of
Shareholder Type of Ownership Owned (1) Class
--------------------------- --------------------- --------------------- --------------
Walter C. Johnsen Direct 613,722 17.35
60 Round Hill Road
Fairfield, CT 06824
--------------------------- --------------------- --------------------- --------------
J. Carlo Cannell Direct 246,600* 7.04
240 E. Deloney Ave.
Jackson, WY 83001
--------------------------- --------------------- --------------------- --------------
*Based on the reporting person's Schedule G dated December 31, 2007.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth certain information, as of March 1, 2008, with
respect to the beneficial ownership of shares of Common Stock by (i) each
director and nominee for director of the Company; (ii) each executive officer
named in the Summary Compensation Table appearing below under "Executive
Compensation"; and (iii) all executive officers and directors as a group. The
persons shown have sole voting and investment power in these shares except as
indicated below in the notes to the table.
The address of each person appearing in the table who is an officer or director
of the Company is 60 Round Hill Road, Fairfield, CT 06824.
(10)
-------------------------------------- -------------------------- -----------
Name of Beneficial Owner Number of Shares Percent
Beneficially Owned (1)
-------------------------------------- -------------------------- -----------
Rex L. Davidson (2) 6,250 *
-------------------------------------- -------------------------- -----------
Paul G. Driscoll (3) 44,983 1.27
-------------------------------------- -------------------------- -----------
Richmond Y. Holden, Jr. (4) 41,272 1.17
-------------------------------------- -------------------------- -----------
Walter C. Johnsen (5) 613,722 17.35
-------------------------------------- -------------------------- -----------
Susan M. Murphy (6) 17,506 *
-------------------------------------- -------------------------- -----------
Brian S. Olschan (7) 127,250 3.55
-------------------------------------- -------------------------- -----------
Gary D. Penisten (8) 100,500 2.85
-------------------------------------- -------------------------- -----------
Stephen Spinelli, Jr. (2) 6,250 *
-------------------------------------- -------------------------- -----------
Stevenson E. Ward III (9) 20,700 *
-------------------------------------- -------------------------- -----------
Executive officers and directors 978,433 26.07
as a group (9 persons)
-------------------------------------- -------------------------- -----------
*Less than 1.0%
(1) Based on a total of 3,503,183 shares outstanding as of March 1, 2008. Under
applicable rules promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), a person is deemed to be the beneficial owner
of shares of Common Stock if, among other things, he or she directly or
indirectly has or shares voting power or investment power with respect to
such shares. A person is also considered to beneficially own shares of
Common Stock which he or she does not actually own but has the right to
acquire presently or within the next sixty (60) days, whether by exercise
of stock options or otherwise.
(2) Includes 6,250 shares issuable upon exercise of options.
(3) Includes 41,000 shares issuable upon exercise of options.
(4) Includes 32,500 shares issuable upon exercise of options.
(5) Includes 33,750 shares issuable upon exercise of options.
(6) Includes 14,000 shares issuable upon exercise of options.
(7) Includes 86,250 shares issuable upon exercise of options.
(8) Includes 22,500 shares issuable upon exercise of options.
(9) Includes 7,500 shares issuable upon exercise of options.
(11)
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation of the
Company's Principal Executive Officer and each of the two other most highly
compensated executive officers of the Company for the fiscal year ended December
31, 2007. These three officers are referred to as named executive officers, or
NEOs.
All Other
Bonus Option Awards Compensation Total
Name and Principal Position Year Salary ($) ($) (1) ($) (2) ($) ($)
Walter C. Johnsen 2007 $424,615 $150,000 $47,929 $25,202 (3) $647,746
Chairman & Chief 2006 $386,154 $100,000 $32,320 $19,619 $538,093
Executive Officer
Brian S. Olschan 2007 $375,962 $150,000 $42,099 $ 8,277 (4) $576,338
President & Chief 2006 $333,035 $ 75,000 $25,890 $ 8,127 $442,052
Operating Officer
Paul G. Driscoll 2007 $212,308 $110,000 $28,943 $ 7,192 (4) $358,442
Vice President-Chief 2006 $193,177 $ 40,000 $16,960 $ 4,427 $254,564
Financial Officer
(1) The bonus reported includes bonuses for the fiscal year reported paid
both during and after the end of the fiscal year.
(2) Represents the compensation costs of stock options for financial
reporting purposes for 2007 under FAS 123 (R), rather than an amount
paid to or realized by the named executive officer.
(3) Consists of reimbursement of out-of-pocket health care expenses,
payment of life insurance premiums and Company matching contribution
to the Company's 401(k) Profit Sharing Plan.
(4) Consists of reimbursement of payments of life insurance premiums and
Company matching contribution to the Company's 401(k) Profit Sharing
Plan.
(12)
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table shows outstanding stock option awards classified as
exercisable and unexercisable as of December 31, 2007 for each of the NEOs.
-------------------- ------------------------------- ---------------------------------- ------------- ---------------
Number of Securities Option
Underlying Unexercised Number of Securities Underlying Exercise Option
Options at Fiscal Year End Unexercised Options at Fiscal Price Expiration
Name (#) Exercisable Year End (#) Unexercisable ($) Date (1)
-------------------- ------------------------------- ---------------------------------- ------------- ---------------
Walter C. Johnsen 10,000 $ 4.00 6/23/13
15,000 5,000 $ 15.65 4/28/15
3,750 11,250 $ 15.15 7/31/16
15,000 $ 14.93 6/12/17
-------------------- ------------------------------- ---------------------------------- ------------- ---------------
Brian S. Olschan 7,500 $ 1.63 1/25/10
5,000 $ 3.56 10/10/10
20,000 $ 2.75 5/07/11
20,000 $ 3.05 11/12/11
15,000 $ 4.00 6/23/13
11,250 3,750 $ 15.65 4/28/15
3,750 11,250 $ 15.15 7/31/16
15,000 $ 14.93 6/12/17
-------------------- ------------------------------- ---------------------------------- ------------- ---------------
Paul G. Driscoll 10,000 $ 3.55 3/19/11
1,000 $ 3.05 11/12/11
10,000 $ 3.75 9/23/12
7,500 $ 4.00 6/23/13
7,500 2,500 $ 15.65 4/28/15
2,500 7,500 $ 15.15 7/31/16
11,500 $ 14.93 6/12/17
-------------------- ------------------------------- ---------------------------------- ------------- ---------------
(1) Each option with an expiration date of 2015 or earlier vests in four
equal parts commencing on the day after the date of grant and on each
of the three anniversary dates of the date of grant. Options with an
expiration date after 2015 vest as to one-fourth of the option grant
beginning on the first anniversary of grant date. Each option grant
has a ten-year term.
DEFERRED COMPENSATION BENEFIT
Under the Company's Deferred Compensation Plan for executives and key managers
participating in the Company's Cash Bonus Plan, participants will be eligible to
make an irrevocable election on or before December 31st of each year as to the
percentage of his or her bonus to be awarded in the following year. The deferral
may be for all or a portion of the participant's Cash Bonus Plan. All deferred
amounts will be non-forfeitable and will earn the prime rate of interest plus 1%
compounded quarterly during the period of deferral. The Company will add 20% to
the deferred amount for each employee as a matching contribution up to a maximum
of $10,000 annually. Amounts deferred will be deferred until separation from
service with the Company. The plan will be administered by the Deferred
Compensation Plan Committee, which consists of our Chief Executive Officer, the
Chief Operating Officer and the Chief Financial Officer.
(13)
PENSION BENEFITS
In December 1995, the Board of directors adopted a resolution to freeze the
Retirement Plan resulting in no further benefit accruals after February 1, 1996.
None of the NEOs is a participant of the Pension Plan.
CHANGE IN CONTROL ARRANGEMENTS--SALARY CONTINUATION PLAN
The Company has a Salary Continuation Plan that covers officers of the Company
at the level of Corporate Vice President or above, under the age of sixty-five
(65). The Plan is designed to retain key employees and provide for continuity of
management in the event of an actual or threatened change in control of the
Company. A covered officer would receive payment under the Plan if there is a
disposition of the Company and, within one year (or if such employee is also a
director, within two years) after such change in control, one of the following
triggering events occurs:
o involuntary termination;
o a reduction in responsibility, status or compensation;
o transfer to a location unreasonably distant from his or her current
location; or
o voluntary resignation.
A disposition of the Company shall include (i) a sale of substantially all the
assets of the Company or a successor, or of a Division with more than 50% of the
sales of the Company in the preceding full year of operations, such that
shareholder approval is required and (ii) the acquisition by any such person or
group of persons acting in concert, of legal or beneficial ownership of fifty
percent (50%) or more of the voting stock of the Company, or its successor.
The compensation provided to a covered officer upon disposition of the Company
would consist of the following:
o monthly salary rate being paid at the date of the change in control
multiplied by the number of months payable;
o average monthly incentive bonus payments for the prior three taxable
years multiplied by the number of months payable; and
o medical, life and other insurance in effect at the date of disposition
to continue into the future for the number of months compensation is
payable.
Payment of the first two items would be in a lump sum, payable no later than
thirty (30) days after the date on which the officer submits notice to the Board
that the officer wishes to exercise his or her rights under the Plan.
A Director of the Company who is also an officer of the Company at the level of
Executive Vice President or above would be entitled to the value of thirty-six
(36) months' compensation and benefits for thirty-six (36) months. Officers at
the level of Senior Vice President and Vice President would be entitled to the
value of twenty-four (24) months' compensation and benefits for twenty-four (24)
months.
The Plan presently covers Walter C. Johnsen, Brian S. Olschan, Larry H.
Buchtmann and Paul G. Driscoll. Walter C. Johnsen and Brian S. Olschan would be
entitled to the value of thirty-six (36) months of compensation and benefits.
Larry H. Buchtmann and Paul G. Driscoll would be entitled to the value of
twenty-four (24) months of compensation and benefits.
(14)
SEVERANCE PAY PLAN
The Severance Pay Plan covers officers of the Company employed in the
United States at the level of Corporate Vice President or above, under the age
of sixty-five (65). The Plan is designed to enable the Company to attract and
retain key employees. A covered officer would receive payments under the Plan if
one of the following triggering events occurs:
o involuntary termination for any reason other than gross
misconduct;
o death;
o reduction of responsibility, status or compensation reduced; or
o transfer to a location unreasonably distant from his or her
current location.
This Plan would only apply if the Salary Continuation Plan would not
apply. Payment under this Plan, except in the event of termination by death,
would be equivalent to one month's salary multiplied by each year of service to
the Company based upon the level of his or her compensation in effect
immediately preceding such termination. The Plan sets out a minimum and maximum
number of months' compensation payable to each such employee upon such
severance. The Plan would also provide death benefits to covered officers'
beneficiaries.
A Director of the Company who is also an Officer of the Company at the
level of Executive Vice President or above would be entitled to a minimum of
nine (9) months' compensation and a maximum of thirty (30) months' compensation.
In the event of such officer's death, his or her beneficiaries would be entitled
to nine (9) months' compensation. Officers at the level of Senior Vice President
or Vice President would be entitled to a minimum of six (6) months' compensation
and a maximum of eighteen (18) months' compensation. In the event of such
officer's death, his or her beneficiaries would be entitled to six (6) months'
compensation. Payments would be made in a single lump sum.
This Plan covers Walter C. Johnsen, Brian S. Olschan, Larry H.
Buchtmann and Paul G. Driscoll. Walter C. Johnsen and Brian S. Olschan would be
entitled to a minimum of nine (9) months' compensation and a maximum of thirty
(30) months' compensation. Larry H. Buchtmann and Paul G. Driscoll would be
entitled to a minimum of six (6) months' compensation and a maximum of eighteen
(18) months' compensation. In the event of termination by death, beneficiaries
of Walter C. Johnsen and Brian S. Olschan would be entitled to a minimum of nine
(9) months' compensation and beneficiaries of Larry H. Buchtmann and Paul G.
Driscoll would be entitled to a minimum of six (6) months' compensation.
(15)
DIRECTOR COMPENSATION
The following table discloses the cash, equity awards and other compensation
earned, paid or awarded, as the case may be, to each of the Company's directors
during the fiscal year ended December 31, 2007.
------------------------ ---------------------- ----------------- --------------
Fees Earned or Paid Option Awards
Name in Cash ($) ($)(1) Total
------------------------ ---------------------- ----------------- --------------
Rex L. Davidson $23,800 $11,800 $35,600
------------------------ ---------------------- ----------------- --------------
George R. Dunbar (2) $ 7,900 $ 0 $ 7,900
------------------------ ---------------------- ----------------- --------------
Richmond Y. Holden, Jr. $28,000 $11,800 $39,800
------------------------ ---------------------- ----------------- --------------
Susan M. Murphy $23,800 $11,800 $35,600
------------------------ ---------------------- ----------------- --------------
Gary D. Penisten $31,800 $11,800 $43,600
------------------------ ---------------------- ----------------- --------------
Stephen Spinelli, Jr. $24,400 $11,800 $36,200
------------------------ ---------------------- ----------------- --------------
Stevenson E. Ward III $30,000 $11,800 $41,800
------------------------ ---------------------- ----------------- --------------
(1) Represents the compensation costs of stock options for financial reporting
purposes for the year under FAS 123 (R), rather than an amount paid to or
realized by the named executive officer.
The exercise price of each option is equal to 100 percent of fair market
value on the date of grant. The fair market value was determined to be the
closing price of the Common Stock on the trading day immediately preceding
the grant date.
(2) Mr. Dunbar declined to stand for re-election to the Board in 2007.
Accordingly, his term as a director expired on April 23, 2007.
The following table shows the aggregate number of option awards outstanding for
each director as of December 31, 2007.
----------------------------------------- ----------------------------------
Aggregate Option Awards
Outstanding as of
Name December 31, 2007
----------------------------------------- ----------------------------------
Rex L. Davidson 7,500
----------------------------------------- ----------------------------------
Richmond Y. Holden, Jr. 32,500
----------------------------------------- ----------------------------------
Susan M. Murphy 14,000
----------------------------------------- ----------------------------------
Gary D. Penisten 22,500
----------------------------------------- ----------------------------------
Stephen Spinelli, Jr. 7,500
----------------------------------------- ----------------------------------
Stevenson E. Ward III 7,500
----------------------------------------- ----------------------------------
(16)
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Company's financial reporting process on behalf
of the Board of Directors. The Audit Committee has reviewed and discussed our
audited consolidated financial statements for the year ended December 31, 2007,
with management and with representatives of Ernst & Young LLP, our independent
auditors, including a discussion of the applicability and quality of accounting
principles, the reasonableness of significant judgments and the clarity of
disclosures in the financial statements.
Management has the primary responsibility for the financial statements and our
accounting, auditing and financial reporting processes. The Audit Committee is
not providing any expert or special assurance as to our financial statements.
Ernst & Young LLP is responsible for expressing an opinion on the conformity of
our financial statements with generally accepted accounting principles in the
United States. The Audit Committee is not providing any professional
certification as to Ernst & Young's work product.
The Audit Committee has discussed with representatives of Ernst & Young the
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees). The Audit Committee has received and
reviewed the written disclosures and letter from Ernst & Young required by
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), and has discussed the independence of Ernst & Young with
representatives of the firm.
The Audit Committee discussed with the Company's independent auditors the
overall scope and plan for their respective audits. The Audit Committee 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.
Based on the reviews and discussion referred to above, the Audit Committee
recommended to the Board of Directors that our audited consolidated financial
statement for the year ended December 31, 2007 be included in our Annual Report
on Form 10-K for the year ended December 31, 2007 for filing with the Securities
and Exchange Commission.
Stevenson E. Ward, III, Chair
Richmond Y. Holden, Jr., Member
Stephen Spinelli Jr., Member
TRANSACTIONS WITH RELATED PERSONS
There were no material transactions between the Company and any "related
person". The term related person includes any executive officer of the Company,
any director or nominee for election as director, any security holder holding
more than 5% of the Common Stock of the Company or any immediate family member
of any of the foregoing persons.
(17)
Policy
The Board of Directors has determined that transactions involving the
Company and related persons shall be reviewed and approved by the Audit
Committee. The Charter of the Audit Committee requires that related person
transactions must be reviewed and approved by the Audit Committee of the Board,
which consists solely of independent directors. This requirement covers any such
transaction and is not limited to transactions which meet the minimum threshold
for disclosure in the proxy statement under the relevant rules under the
Exchange Act (generally, transactions involving amounts exceeding $120,000 in
which a related person has a direct or indirect material interest).
Procedures
Management or the affected director or executive officer will bring the
transaction to the attention of the Audit Committee. The transaction must be
approved in advance whenever practicable, and if not practicable, must be
reviewed as promptly as practicable. Although the Audit Committee has not
adopted formal procedures for the review and approval of transactions with
related persons, the Audit Committee will approve the transaction only if it
determines that it is in the best interests of the Company.
If the Audit Committee were to approve a related party transaction, the
Audit Committee would periodically monitor the transaction to ensure that there
are no changed circumstances that would render it advisable for the Company to
amend or terminate the transaction.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 ("Exchange Act") requires
the Company's directors and executive officers, and persons who own more than
10% of a registered class of the Company Common Stock (collectively referred to
herein as "Reporting Persons"), to file with the SEC and the American Stock
Exchange initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Reporting Persons are
required by the Exchange Act to furnish the Company with copies of all Section
16(a) forms they file. Based solely on review of copies of such forms received
by the Company and written representations from Reporting Persons, the Company
believes that, during the 2007 fiscal year, all Reporting Persons complied with
all applicable filing requirements under Section 16(a).
(18)
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information regarding compensation payable under
the Company's equity compensation plans (the Non-Salaried Director Stock Option
Plan and the Employee Stock Option Plan) in effect as of December 31, 2007. The
Company's shareholders have approved each equity compensation plan.
------------------------ -------------------------- -------------------------- --------------------------
Number of Securities
Remaining Available for
Number of Securities Future Issuance Under
to be Issued Upon Weighted-average Equity Compensation Plans,
Exercise of Exercise Price of (Excluding Securities
Outstanding Options, Outstanding Options, Reflected in
Warrants and Rights Warrants and Rights Column (a))
Plan Category (a) (b) (c)
------------------------ -------------------------- -------------------------- --------------------------
Equity compensation 565,750 $9.82 151,438
plans approved by
security holders
------------------------ -------------------------- -------------------------- --------------------------
Equity compensation
plans not approved by -0- -0- -0-
security holders
------------------------ -------------------------- -------------------------- --------------------------
Total 565,750 $9.82 151,438
------------------------ -------------------------- -------------------------- --------------------------
SELECTION OF AUDITORS
AUDIT COMMITTEE PRE-APPROVAL OF INDEPENDENT AUDITOR SERVICES
The Audit Committee pre-approves all audit and permissible non-audit services
provided by the independent auditors. These services may include audit services,
audit-related services, tax services and other services. The Audit Committee has
adopted policies and procedures for the pre-approval of services provided by the
independent auditors. The policies and procedures provide that management and
the independent auditors jointly submit to the Audit Committee a schedule of
audit and non-audit services for approval as part of the annual plan for each
year. In addition, the policies and procedures provide that the Audit Committee
may also pre-approve particular services not in the annual plan on a
case-by-case basis. For each proposed service, management must provide a
detailed description of the service and the projected fees and costs (or a range
of such fees and costs) for the service.
(19)
FEES TO AUDITORS
Set forth below is a description of the fees for professional audit services
rendered by Ernst & Young LLP for the audit of our annual financial statements
and review of our interim financial statements for 2007 and 2006, and fees for
other services rendered by Ernst & Young LLP for 2007 and 2006.
Fee Category Fiscal 2007 Fees Fiscal 2006 Fees
------------ ---------------------- ----------------------
Audit Fees $231,000 $220,000
Audit Related Fees $ 17,000 $ 21,000
Tax Fees $ 29,000 $ 58,000
---------------------- ----------------------
Total Fees $277,000 $299,000
====================== ======================
Audit Related Fees. These fees were for assistance related to the Company's
filing of reports with the Securities and Exchange Commission (Form S-8),
adoption of new financial reporting pronouncements, and reporting on internal
control.
Tax Fees. Tax services included tax compliance, tax advice, and tax planning.
The Audit Committee has determined that the provision of non-audit services
described above is compatible with maintaining Ernst & Young's independence.
APPOINTMENT OF AUDITORS
The Company's Audit Committee has not yet appointed an independent auditor to
audit the financial statements of the Company for the fiscal year ending
December 31, 2008 because the Audit Committee is currently reviewing proposed
fees for audit and related work to be performed in respect of fiscal year 2008.
The Audit Committee is not aware of any disagreements between management and the
Company's current auditors regarding accounting principles and their application
or otherwise.
Representatives of Ernst & Young LLP are expected to be present at the 2008
Annual Meeting with the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions. The
Company knows of no direct or material indirect financial interest in the
Company or of any connection with the Company by this accounting firm except the
professional relationship between auditor and client.
(20)
SUBMISSION OF SHAREHOLDER PROPOSALS FOR THE 2009 ANNUAL MEETING
If you intend to present a proposal at our 2009 Annual Meeting, you must submit
it to us by no later than November 28, 2008, to receive consideration for
inclusion in our 2009 proxy materials. If you intend to present a proposal at
our 2009 Annual Meeting that is not to be included in our 2009 proxy materials,
you should send the proposal to us in writing by February 13, 2009. Any such
proposal should be sent to the Secretary of the Company at 60 Round Hill Road,
Fairfield, Connecticut, 06824.
OTHER BUSINESS
Management does not know of any matters to be presented, other than those
described herein, at the Annual Meeting. If any other business should come
before the meeting, the persons named in the enclosed proxy will have
discretionary authority to vote all proxies in accordance with their best
judgment.
By Order of the Board of Directors
Paul G. Driscoll, Vice President and
Chief Financial Officer, Secretary
and Treasurer
Acme United Corporation
60 Round Hill Road
Fairfield, Connecticut 06824
March 25, 2008
(21)
PROXY
ACME UNITED CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ACME
UNITED CORPORATION FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON APRIL 21, 2008
The undersigned hereby appoints Walter C. Johnsen and Susan H. Murphy,
and each of them, with full powers of substitution, to act as attorneys and
proxies of the undersigned, to vote all shares of the Common Stock of ACME
UNITED CORPORATION, held of record by the undersigned on March 4, 2008 at the
Annual Meeting of Shareholders, to be held at the American Stock Exchange at 86
Trinity Place, New York, New York on Monday, April 21, 2008, at 11:00 a.m. and
at any adjournment(s) or postponement(s) thereof, with all the powers the
undersigned would have if personally present. Without limiting the general
authorization hereby given, said proxies are, and each of them hereby is,
instructed to vote or act as follows on the reverse side hereof on the proposals
set forth in said Proxy Statement. In their discretion, the proxies are
authorized to vote upon such other matters, if any, as may properly come before
the Annual Meeting.
The undersigned acknowledges receipt of the Company's Notice of Annual Meeting
of Shareholders, a Proxy Statement dated March 25, 2008 and the 2007 Annual
Report to Stockholders.
SEE REVERSE CONTINUED AND TO BE COMPLETED, SIGNED AND SEE REVERSE
SIDE DATED ON REVERSE SIDE SIDE
--------------------------------------------------------------------------------
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE
THIS PROXY WHEN EXECUTED WILL BE VOTED AS DIRECTED HEREIN. IF NO DIRECTION IS
GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL SEVEN NOMINEES LISTED
BELOW.
1. Election of Directors
Nominees:
Walter C. Johnsen Susan H. Murphy
Richmond Y. Holden, Jr. Rex L. Davidson
Brian S. Olschan Stephen Spinelli, Jr.
Stevenson E. Ward III
[ ] FOR all nominees listed above (except as stricken out above).
(To withhold authority to vote for any specific nominee(s),
check the foregoing box and strike out or line through such
nominee's name on the list above.)
[ ] WITHHELD for all nominees listed above
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW [ ]
NEW ADDRESS:
Please sign exactly as your name appears above. Joint owners should both sign.
When signing as an attorney, executor, administrator, trustee or guardian,
please give full title.
Signature: Date:
-------------------------------------- --------------------------
Signature: Date:
-------------------------------------- --------------------------
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE