Compensation Committee felt options directly incentivized our executives to increase shareholder value over the long-term.
In determining the total number of options to be granted to participants in the program in a given year, the Board of Directors, 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 Companys various stock option plans; (iii) the need to have an appropriate
balance between currently paid and longer-term compensation, and between cash and equity compensation, and (iv) the performance of the Company.
The Company
presently maintains its 2022 Employee Stock Option Plan (the 2022 Employee Plan), which provides for the issuance of incentive and nonqualified stock options having an exercise price equal to the fair market value of the Common Stock on
the date the option is granted. Options granted under the 2022 Employee Plan vest 25% one day after the first anniversary of the grant date and 25% one day after each of the next three anniversaries. Under the terms of the 2022 Employee Plan, no
option may be granted after the tenth anniversary of the effective date of the plan, i.e., after February 22, 2032. As of December 31, 2022, the number of shares available for grant under the 2022 Employee Plan was 166,750.
Options granted by the Company to employees historically have had a term of ten years. Commencing in July 2006, the Company has granted only non-qualified stock options to its employees. The Board presently anticipates that the remaining options which it may grant under the 2022 Employee Plan will be non-qualified
stock options.
An optionee may exercise an option by delivering to the Company payment of the exercise price in cash, or, subject to the approval of the Company, by
delivering of shares of the Companys common stock, which would otherwise have been issuable to the optionee. The 2022 Employee Plan also provides for the cash settlement of option exercises, subject to the approval of the Company. Options
granted under the 2022 Employee Plan are not transferable by the optionee other than by the will or by laws of descent and distribution. Each option is exercisable, during the lifetime of the optionee, only by the optionee. The 2022 Employee Plan is
administered by our Board of Directors.
Employee Benefits
We generally
do not provide perquisites or personal benefits to our executive officers. The Company provides standard core employee benefits, including medical and dental coverage, disability insurance and life insurance. The benefits available are the same for
all executive officers, except as indicated below under Summary Compensation Table.
None of our executive officers participate in or have account
balances in qualified or non-qualified defined benefit plans sponsored by us.
401(k) Plan
The Acme United Corporation 401(k) Profit Sharing Plan, is the primary retirement benefit offered to all United States employees of the Company and our executive
officers are eligible to participate in the 401(k) plan on the same basis as our other employees. Participants may generally contribute to the Plan annually up to the maximum amount permitted under the Internal Revenue Code$20,500 in 2022
($27,000 for persons aged 50 and over). The Company provides to participants a matching contribution equal to fifty percent of the first six percent (6%) of the participants eligible compensation not to exceed the limit on eligible
compensation imposed by the Internal Revenue Code $305,000 in 2022. Participant and employer contributions are held and invested, pursuant to the participants instructions, by the plans trustee.
In summary, our Board of Directors determined the compensation of our executive officers for the year ended December 31, 2022, by applying our policies and
practices regarding executive compensation, as described above, and after considering the recommendations of the Compensation Committee of the Board.
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