Proxy Statement (Form DEF 14A)
| ☐ | Preliminary Proxy Statement | |
| ☐ |
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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| ☒ | Definitive Proxy Statement | |
| ☐ | Definitive Additional Materials | |
| ☐ | Soliciting Material Pursuant to
§240.14a-12
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| ☒ | No fee required | |
| ☐ | Fee paid previously with preliminary materials | |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
and 0-11
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Dear Fellow Shareholder:
On behalf of your Board of Directors and Management, I cordially invite you to attend the 2025 Annual Meeting of Shareholders of
| • |
to elect seven (7) directors to serve for a one-year term, |
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to vote, on a non-binding advisory basis, on the compensation of our named executive officers, |
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to vote, on a non-binding advisory basis, on the frequency of executive compensation voting, and |
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to ratify the appointment of |
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.
We hope that you will attend our virtual Annual Meeting. Whether or not you plan to attend, it is important that your shares be represented and voted at the virtual Annual Meeting. Please take a moment to sign, date and promptly mail your proxy card in the enclosed prepaid envelope. Alternatively, you may vote online or by telephone as instructed in the proxy materials. This will not limit your right to vote via the Internet should you attend the Annual Meeting.
On behalf of your Board of Directors, thank you for your continued support and interest in
Sincerely,
Chairman and Chief Executive Officer
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
To our Shareholders:
The 2025 Annual Meeting of Shareholders (the "Annual Meeting") of
At the Annual Meeting, shareholders will consider and act upon the following proposals:
| 1. |
To elect seven (7) Directors of the Company; |
| 2. |
To vote, on a non-binding advisory basis, on the compensation of our named executive officers; |
| 3. |
To vote, on a non-binding advisory basis, on the frequency of executive compensation voting, |
| 4. |
To vote upon the ratification of the appointment of |
| 5. |
To transact such other business as may properly come before the Meeting. |
Shareholders of record at the close of business on
Please carefully read the attached Proxy Statement for information regarding the matters to be considered and acted upon at the Meeting. Your Board of Directors recommends that you vote in favor of Proposals 1, 2, 3 and 4 above. You are cordially invited to attend the virtual Annual Meeting online and we hope that you will do so.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, 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 retuenvelope if mailed in
By Order of the Board of Directors,
Vice President and Chief Financial Officer, Secretary and Treasurer
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
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
At the Annual Meeting, shareholders will:
| • |
Elect seven (7) Directors to serve until the next annual meeting (Proposal 1); |
| • |
Vote upon a proposal to approve, on a non-binding advisory basis, the compensation of the Company's named executive officers (Proposal 2); |
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Vote upon a proposal to approve, on a non-binding advisory basis, on the frequency of executive compensation voting (Proposal 3); and |
| • |
Vote upon a proposal to ratify the appointment of |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON
The Notice of Annual Meeting of Shareholders, this Proxy Statement, Proxy Card, and the 2024 Annual Report to Shareholders are available at the following website address: proxy.acmeunited.com.
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VOTING SECURITIES, RECORD DATE AND QUORUM
Virtual Meeting.
The Annual Meeting will be held on
If you have questions about how to attend and participate in the Annual Meeting, there will be Technical Support contact information on the shareholder login page to provide technical support on the day of the Annual Meeting. Personnel will be available 15 minutes prior to the start of the meeting to answer your technical questions.
Questions at the Annual Meeting. Shareholders will have an opportunity to submit written questions via the Internet at any time during the meeting by following the instructions that will be available on the meeting website.
Record Date.The Board of Directors has fixed the close of business on
Quorum.At the Annual Meeting, the virtual attendance of, together with our receipt of proxies from shareholders, representing a majority of, the total number of shares of outstanding Common Stock entitled to vote at the Annual Meeting, will constitute a quorum for the Annual Meeting. Broker non-votes and abstentions will have no effect on the outcome of any of the matters being voted on at the Annual Meeting, as they are not counted as votes cast; but are counted in determining the presence of a quorum.
Voting. Each outstanding share of Common Stock entitles the record holder of the share to one vote. If a shareholder holds shares in street name, and does not submit voting instructions to its broker, bank or other nominee, such broker, bank or other nominee will not be permitted to vote the shareholder's shares in their discretion on the election of directors, the advisory vote on executive compensation and the advisory vote on the frequency of executive compensation vote (Proposals 1, 2 and 3), but may still be permitted to vote the shareholder's shares in their discretion on the ratification of the independent registered public accounting firm (Proposal 4). As noted above, abstentions and broker non-votes are not counted as votes cast on any matter to which they relate; accordingly, broker non-votes and abstentions will not affect the outcome of the vote on any of the proposals.
Election of Directors.A plurality of the votes cast via the Internet or by proxy at the Annual Meeting is required to elect each of the nominees for Director.
Advisory Vote on Executive Compensation. To be approved, the non-binding advisory vote on executive compensation must receive a majority of the votes cast via the Internet or by proxy at the Annual Meeting.
Advisory Vote on the Frequency of an Advisory Vote on Executive Compensation. A plurality of the votes cast via the Internet or by proxy at the Annual Meeting is required to select the recommended frequency of future votes on executive compensation.
Ratification of the Appointment of Our Independent Registered Public Accounting Firm. To be approved, the proposal to ratify the appointment of our independent registered public accounting firm for the fiscal year ending
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VOTING RIGHTS AND SOLICITATION OF PROXIES
Voting by Proxy.
You may cast your vote by proxy prior to the Annual Meeting through the Internet by going to www.proxyvote.comand entering your control number. Shareholders of record that receive paper copies of the proxy materials may also cast their votes by proxy and submit their voting instructions by:
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signing, completing and returning the proxy card in the postage-paid envelope provided; or |
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using the telephone number listed on their proxy card. |
Votes and voting instructions provided through the Internet and by telephone are authenticated by use of your control number. This procedure allows shareholders to appoint a proxy, provide voting instructions, and to confirm that their actions have been properly recorded. If you vote through the Internet or by telephone, you do not need to retuyour proxy card.
The proxy solicited hereby, if properly executed 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 retuyour 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 retuthe Proxy Card or vote via Internet or telephone even if you expect to attend the Annual Meeting. You may subsequently revoke your proxy at any time before it is voted at the meeting by (i) giving written notice of revocation to the Secretary of the Company, (ii) submitting of a proxy bearing a later date, or (iii) attending the meeting virtually and voting at the meeting.
The proxy holders,
Voting at the Annual Meeting.
Shareholders may cast their votes electronically via the Internet at the Annual Meeting by following the instructions at www.virtualshareholdermeeting.com/ACU2025.
Solicitation of Proxies.
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. The Company has engaged
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GOVERNANCE OF THE COMPANY
Board of Directors
The By-laws of the Company provide that the Company shall have a Board of Directors of not fewer than five nor more than nine directors, as determined by the Board from time to time. The number of directors is presently fixed at eight. Directors serve until the next annual meeting of shareholders and until their respective successors have been elected and qualified.
The Board has determined that it is beneficial to combine the positions of its Chief Executive Officer and Chairman of the Board. In making this determination, the Board of Directors considered a number of factors, including the size of the Board in relation to the scope of the Company's operations, the efficiencies obtained by combining the positions and the fact that the combination of the positions facilitates the alignment of the Board's agenda with its oversight responsibilities relating to the business and operations of the Company. The Company does not have a lead independent Director.
Board of Director Meetings and Committees
The Board of Directors held seven meetings in 2024. In 2024, each Director attended at least 75% of the aggregate of the total number of Board meetings and meetings of committees of the Board of which they were a member. The Board of Directors has established standing Executive, Audit, Compensation and Nominating Committees, each of which is comprised solely of independent non-employee members of the Board of Directors.
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 NYSE American rules, the following persons are not 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 |
| (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 |
| (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 served on that other entity's compensation committee; and |
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| (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 fiscal 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.
Nominations for Directors
The Board of Directors is responsible for selecting director nominees to stand for election at each annual meeting of shareholders and for filling vacancies on the Board at any time during the year. The Board has established a Nominating Committee that reviews all potential director candidates and recommends candidates to the full Board. The Nominating Committee will also consider nominations by shareholders, as described below. The full Board reviews and has final approval authority over all director nominees to be recommended to the shareholders for election.
In considering candidates for new membership or incumbents for continued membership on the Board of Directors of the Company, the Nominating Committee considers the factors set forth below, together with any other factors the Committee deems appropriate from time to time. The Nominating Committee generally seeks (i) active or former senior level executives of public companies or other complex organizations who have experience at a strategy/policy setting level or with high level management experience; (ii) persons whose background and experience are in areas important to the operations or management of the Company; and (iii) qualified individuals who, taken as a group, represent a diversity of skills, background and experience. Each potential nominee:
| (a) |
should be accomplished and have recognized achievements in his or her respective and professional field; |
| (b) |
should have relevant expertise and experience, and be able to offer advice and guidance to senior management based on that expertise and experience; |
| (c) |
must possess high personal and professional ethics, integrity and values; |
| (d) |
must be inquisitive and objective, have the ability to exercise practical and sound business judgment, and have an independent mind; |
| (e) |
must be able and willing to devote sufficient time and effort to carrying out his or her duties and responsibilities as a director effectively; |
| (f) |
if the nominee is not an employee of the Company, the nominee should be "independent" under the rules established by the NYSE American; and |
| (g) |
should have the ability to work effectively with others. |
The Nominating Committee 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 Nominating Committee and management regarding the candidate. To the extent the Nominating Committee does not have enough information to evaluate a candidate, the Nominating Committee may send a questionnaire to the candidate for completion for Nominating Committee consideration. In addition, it has historically been customary for
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some members of the Board to meet with the candidate individually or in small groups, as appropriate. Members of the Nominating Committee will also interview candidates as the Nominating Committee deems appropriate.
The Nominating Committee considers diversity in identifying nominees for Director. As stated above, the Nominating Committee seeks qualified individuals, who, taken as a group, represent a diversity of skills, background and experience. In considering a potential nominee's background and experience, the Nominating Committee will consider the individual's race, gender, ethnicity, and related characteristics.
Any shareholder entitled to vote for the election of directors at a meeting may nominate persons for election as directors if, as more fully provided in Article 2, Section 11 of the By-laws, the shareholder provides written notice of such shareholder's intent to make such nomination at least sixty (60) days prior to the annual meeting at which the election of directors is to be held. If directors were to be elected at a special meeting of shareholders, the written notice of the shareholder's intent to make a nomination must be provided to the Company not later than the close of business of the seventh day following the date on which notice of the special meeting is first given to shareholders. The nomination must be sent in care of the Secretary of the Company at
The Board will consider nominees for directors properly recommended by shareholders, as described above. The Board follows the same evaluation procedures whether a candidate is recommended by the Nominating Committee or shareholders.
COMMITTEES OF THE BOARD
Executive Committee
The Executive Committee of the Board of Directors is comprised of
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 Committee consists of
The Audit Committee meets at least quarterly, and more often, as needed. The Committee met four times in 2024. The Board of Directors has adopted a written charter for the Audit Committee that conforms to applicable
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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 primary duties of the Committee are (i) evaluating and making recommendations to the Board regarding the compensation, equity incentives and awards and benefits for our executive officers; and (ii) the administration of the Company's Non-Salaried Director Stock Option Plans. 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 NYSE American. The Committee consists of
Nominating Committee
The Nominating Committee assists the Board in identifying individuals qualified to become Board members and recommends director candidates to be nominated by the Board to stand for election as directors at each annual meeting of shareholders of the Company and to fill vacancies on the Board and any newly created directorships. The Nominating Committee consists of
Board's Role in Oversight of Risk Management.
The Company's Board of Directors as a whole exercises risk oversight in connection with risk in its various forms, including credit risk, liquidity risk, inflationary risk and operational risks including cybersecurity risk, supply chain risk and labor supply risk. The Board discusses with management the steps that management will take to monitor and control the Company's exposure to such risks.
A key element of the Board's risk oversight process is the Company's annual Strategic Planning meeting, a two-day meeting held early in the third quarter of each year. At this meeting, the Board meets with senior management of the Company to identify both risks and opportunities facing the Company. The senior management includes the Company's Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Information Officer and the heads of product development, technology, production, sourcing, marketing and supply chain. The Board and members of senior management continue their discussions of various risk-related matters, as appropriate, throughout the year at the regularly scheduled meetings of the Board.
The Board believes that the foregoing procedures enable it to properly perform its risk oversight, particularly since the Company is not overly leveraged and does not utilize complex financial derivative instruments.
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. All members of the Board attended the virtual 2024 Annual Meeting of Shareholders.
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Code of Conduct
The Company has adopted a Code of Conduct that is applicable to its employees, including the Chief Executive Officer, Chief Financial Officer and Controller. The Code of Conduct is available in the investor relations section on the Company's website at www.acmeunited.com.
If the Company makes any substantive amendments to the Code of Conduct which apply to its Chief Executive Officer, Chief Financial Officer or Controller, or grants any waiver, including any implicit waiver, from a provision of the Code of Conduct to the Company's executive officers, the Company will disclose the nature of the amendment or waiver on its website.
The Company has not adopted any practices or procedures regarding the ability of its employees (including officers) or its directors to engage in transactions that hedge or offset any decrease in the market value of the Company's common stock or other equity securities.
Insider Trading Policy
The Company has a long-standing Insider Trading Policy which governs the purchase and sale or other disposition of the Company's securities by directors, officers, employees and the Company itself, which is reasonably designed to promote compliance with insider trading laws, rules and regulations, including those of the NYSE American. A copy of the Company's Insider Trading Policy appears as Exhibit 19 to the Company's Annual Report on Form 10-K for the year ended
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,
PROPOSAL 1: ELECTION OF DIRECTORS
Seven directors are to be elected at the Annual Meeting to serve for one-year terms until the 2025 Annual Meeting of Shareholders and until their respective successors are elected and qualified. A plurality of the votes cast at the Annual Meeting is required to elect each of the nominees for Director. The Board has nominated seven individuals for election to the Board of Directors, all of whom are presently incumbent directors. 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, if any, designated by the Board.
As stated above,
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The following information about the nominees for election as our directors is based, in part, upon information furnished by the nominees. Each nominee is an incumbent director.
| Nominees | Principal Occupation and Relevant Skills | Director Since | ||||
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(age 74) |
Chairman of the Board and Chief Executive Officer of the Company since |
1995 | ||||
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(age 71) |
1998 | |||||
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(age 68) |
President and Chief Operating Officer of the Company since |
2000 | ||||
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(age 73) |
Vice President Emerita, |
2003 | ||||
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(age 75) |
Since 2009, |
2006 | ||||
10
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(age 65) |
2019 | |||||
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(Age 65) |
2024 | |||||
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Vote Required
A plurality of the votes cast at the Annual Meeting via the Internet or by proxy is required to elect each of the nominees for Director.
The Board of Directors unanimously recommends a vote FOR each of the individuals nominated by the
OWNERSHIP OF ACME UNITED CORPORATION STOCK
Principal Shareholders
The following table sets forth certain information (unless otherwise indicated), as of
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Number of Shares Beneficially Owned (1) |
Percent of Class (2) | ||
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1Waterview Drive |
663,499 (3) | 16.2 | ||
|
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569,849 (4) | 15.2 | ||
|
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299,403 (5) | 8.0 | ||
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1Waterview Drive |
286,553 (6) | 7.2 | ||
|
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251,580 (7) | 6.7 | ||
| (1) |
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) |
Based on a total of 3,754,498 shares outstanding as of |
| (3) |
Includes 348,500 shares issuable upon exercise of options. |
| (4) |
As of |
| (5) |
As of |
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| (6) |
Includes 245,450 shares issuable upon exercise of options. |
| (7) |
As of |
Security Ownership of Directors and Officers
The following table sets forth certain information, as of
The address of each person appearing in the table is
| Number of Shares Beneficially Owned (1) |
Percent of Class (2) | |||||||||
|
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22,728 | (3) | 0 .6 | |||||||
|
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173,523 | (4) | 4.5 | |||||||
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34,250 | (5) | 0.9 | |||||||
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663,499 | (6) | 16.2 | |||||||
|
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28,787 | (7) | 0.8 | |||||||
|
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286,553 | (8) | 7.2 | |||||||
|
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17,800 | (9) | 0.5 | |||||||
|
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1,250 | (10) | - | |||||||
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Stevenson E. Ward III |
32,874 | 0.9 | ||||||||
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Executive officers and directors as a group (9 persons) |
1,261,264 | 31.4 | ||||||||
| (1) |
Under applicable rules promulgated under 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) |
Based on a total of 3,754,498 shares outstanding as of |
| (3) |
Includes 21,500 shares issuable upon exercise of options. |
| (4) |
Includes 123,125 shares issuable upon exercise of options. |
| (5) |
Includes 19,000 shares issuable upon exercise of options. |
| (6) |
Includes 348,500 shares issuable upon exercise of options. |
| (7) |
Includes 21,500 shares issuable upon exercise of options. |
| (8) |
Includes 245,450 shares issuable upon exercise of options. |
| (9) |
Includes 16,500 shares issuable upon exercise of options. |
| (10) |
Includes 1,250 shares issuable upon exercise of options. |
EXECUTIVE COMPENSATION
The following compensation disclosure is intended to comply with the requirements applicable to "smaller reporting" companies (as defined in Item 10 of Regulation S-K promulgated under the Securities and Exchange Act of 1934). This section also includes supplemental narrative that describes the 2024 executive compensation program for the Company's principal executive officer and each of the two most highly compensated executive officers of the Company, who constitute our Named Executive Officers ("NEOs").
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Oversight of Executive Compensation
The Compensation Committee is comprised of independent, non-employee members of the Board of Directors and is responsible for evaluating and making recommendations to the Board of Directors regarding the compensation to be paid to the NEOs. Our Board of Directors is responsible for making all NEO compensation decisions. Our compensation policies and programs for our executive officers are designed to support the overall objective of enhancing value for our shareholders. To achieve this objective, it is critical that we be able to attract, motivate, reward and retain highly qualified and productive individuals by providing competitive compensation packages. We design our executive compensation programs to:
| • |
attract, motivate and retain executives with the skills and expertise necessary to execute our business plans; |
| • |
directly relate compensation to both Company and individual performance; |
| • |
provide compensation packages that are externally competitive, reasonable and fair within the highly competitive market for talented individuals in our industry but are also internally equitable; |
| • |
reward executives fairly over time for actions consistent with creating long-term shareholder value and enable executives to share in the future success of the Company by acquiring equity interests in the Company; |
| • |
provide an optimal combination of costs to the Company and value to our employees; and |
| • |
align the interests of our executive officers with those of our shareholders. |
In 2024, the compensation and benefits program for our executive officers continued to consist of four components which we designed to reward and provide incentives for both short-term and long-term performance and to minimize excessive risk taking:
| • |
base salary; |
| • |
a performance based cash bonus award; |
| • |
performance based stock option awards; and |
| • |
a benefits package. |
The Compensation Committee establishes a total compensation program for each NEO that is a mix of current, short-term and long-term incentive compensation, and cash and non-cash compensation, that it believes appropriate to achieve the goals of our executive compensation program and our corporate objectives. In line with our pay for performance philosophy, we structured a significant portion of our NEOs' 2024 compensation to be variable, at risk and tied directly to our measurable performance in the form of performance-based bonuses and long-term stock options incentives.
Consistent with the Company's compensation philosophy, in determining the base salary of our NEOs for 2024, the Board has considered a number of factors, including:
Quantitative Factors
| • |
Sales Growth-Average annual growth rate over ten years of 7%. |
| • |
Strong Financial Position-In recent years the Company has significantly reduced bank debt to provide at |
| • |
Dividend Increase-Increase in the quarterly dividend from |
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Business and Operational Milestones and Achievements
| • |
Diversification of Product Lines-During the past eight years, sales of first aid and medical products have grown to approximately 61% of total sales. As a result, we have broadened our customer and revenue base. In addition, our sales of school, home, craft and office products increased 10% in 2024, partly due to the introduction of new products. |
| • |
First Aid Acquisition-On |
| • |
Markets/Products-In 2024, we: |
| • |
Introduced first aid SmartCabinet 2.0 with patented RFID technology that automates the requisition process and helps end users to maintain |
| • |
Expanded in the craft market by providing advanced cutting tools which are used for precise and unique designs. |
| • |
Expanded into the home and culinary markets with a wide variety of DMT sharpening tools, including versatile countertop pull-through sharpeners. |
| • |
Cost Reduction Initiatives-In 2024, the Company implemented a variety of productivity enhancements across our manufacturing and distribution facilities, along with a reduction in SG&A expenses and other costs, leading to approximately |
| • |
Capacity Expansion-In 2024, the Company installed a new storage racking system in our 340,000 square foot |
Base Salaries
Base salary provides financial stability and security to our NEOs through a fixed amount of cash for performing job responsibilities. 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, historical, long-term performance and our objective of achieving a base salary structure that is internally equitable. 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 2024, the Chief Executive Officer participated in discussions with the Compensation Committee regarding the base salary amounts of the executive officers.
Performance Based Cash Bonus Plan
The Company grants performance based "at risk" cash bonus 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 by the Compensation Committee for the applicable year.
Specifically, at the beginning of each fiscal year, the Company establishes a cash bonus pool equal to 15% of the Company's budgeted net income before taxes for that year. Payment of cash bonuses is contingent on achievement of the budgeted net income before taxes after the accrual for bonuses.
The bonus pool is adjusted for company performance. It increases to 16% for net income before taxes 110% over the budgeted amount and declines to 14% for net income before taxes within 90% of the budget. The Compensation Committee establishes a detailed sliding scale, subject to the approval of the Board of Directors.
The Company allocates an amount equal to 15% of base salary to key managers, including the NEOs. The Company then adjusts the individual allocations based on individual performance, with the historical range of payout being between 0% and 25% of base salary. The proposed bonuses are then totaled and compared to the cash bonus accrual for the fiscal year and adjusted so that the total does not exceed the accrual.
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If the operating budget is not achieved within the guidelines, no bonus is awarded. In fact, no bonuses were awarded in 2017, 2018 and 2022. In eight of the last sixteen years (i.e., 2009 - 2024), the NEOs received nocash bonuses.
In 2023 and 2024, the Company did not award cash bonuses under the plan to our NEOs. Transaction based cash bonuses were paid in 2023 and 2024 primarily related to the successful asset disposition of the
Deferred Compensation Plan
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
Stock Option Program For Employees
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, thereby enabling them to share in the future success of the Company's business.
The Compensation Committee historically has believed that stock options are the appropriate form of equity to grant to our NEOs, considering market practices and the Compensation Committee's goal of tying pay to performance. Stock options only provide value if the market price of our stock increases and therefore the Compensation Committee believed that 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 issuable upon exercise of outstanding options; (iii) the total number of options which remain available for grant under the Company's various stock option plans; (iv) the need to have an appropriate balance between currently paid and longer-term compensation, and between cash and equity compensation, and (v) the performance of the Company. Taking into account the factors described above, the Board determined not to grant options to the NEOs in 2024.
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
Options granted by the Company to employees historically have had a term of ten years. Commencing in
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 Company's common stock, which
16
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 participates in or has account balances in qualified or non-qualified defined benefit plans sponsored by the Company.
401(k) Plan
The
In summary, our Board of Directors determined the compensation of our executive officers for the year ended
Summary Compensation Table
The following table sets forth information concerning the compensation of our NEOs (i.e., the Company's Principal Executive Officer and each of the two other most highly compensated executive officers of the Company for the fiscal years ended
|
Position |
Year |
Salary ($) |
Bonus ($) (1) |
Option ($) (2) |
All Other Compensation ($) |
Total ($) |
||||||||||||||||||
|
|
2024 | $ | 1,024,684 | $ | 152,150 | - | $ | 54,787 | (3) | $ | 1,231,621 | |||||||||||||
|
Chairman & Chief Executive Officer |
2023 | $ | 966,681 | $ | 519,188 | $ | 316,250 | $ | 42,487 | (3) | $ | 1,844,535 | ||||||||||||
|
|
2024 | $ | 888,903 | $ | 130,670 | - | $ | 12,887 | (4) | $ | 1,032,460 | |||||||||||||
|
President & Chief Operating Officer |
2023 | $ | 838,597 | $ | 435,588 | $ | 253,000 | $ | 11,887 | (4) | $ | 1,539,061 | ||||||||||||
|
|
2024 | $ | 537,409 | $ | 80,550 | - | $ | 12,887 | (4) | $ | 630,846 | |||||||||||||
|
Vice President & Chief Financial Officer |
2023 | $ | 506,993 | $ | 260,294 | $ | 158,125 | $ | 11,887 | (4) | $ | 937,298 | ||||||||||||
| (1) |
Consisted primarily of cash bonuses relating to the successful asset disposition of the |
| (2) |
Represents the aggregate fair value of stock options on grant date rather than an amount paid to or realized by the NEO. For information on valuation assumptions, refer to Note 11, "Stock Option Plans", in the notes to the Company's financial statements in its Annual Report on Form 10-K for the year ended |
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Each option vests in four equal annual installments commencing one day after the first anniversary of the grant date and thereafter one day after each of the three succeeding annual anniversary dates of the grant date. The exercise price of each option is equal to 100 percent of the fair market value on the grant date. The fair market value was determined to be the closing price of the Common Stock on the day on which the option is granted.
The options granted to NEOs in 2023 had an exercise price of
| Number of Shares Underlying Options | ||
| 2023 | ||
|
|
25,000 | |
|
|
20,000 | |
|
|
12,500 | |
| (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. |
Outstanding Equity Awards at Fiscal Year-End
The following table shows outstanding stock option awards classified as exercisable and unexercisable as of
| Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date (1) |
|||||||||||||||||
|
|
45,000 | - | $ | 21.49 | ||||||||||||||||
| 60,000 | - | $ | 23.94 | |||||||||||||||||
| 45,000 | - | $ | 24.92 | |||||||||||||||||
| 13,500 | - | $ | 23.94 | |||||||||||||||||
| 45,000 | - | $ | 22.66 | |||||||||||||||||
| 25,000 | - | $ | 19.48 | |||||||||||||||||
| 10,000 | - | $ | 24.06 | |||||||||||||||||
| 45,000 | - | $ | 23.05 | |||||||||||||||||
| 15,000 | 5,000 | $ | 32.64 | |||||||||||||||||
| 33,750 | 11,250 | $ | 39.56 | |||||||||||||||||
| 15,000 | 15,000 | $ | 29.35 | |||||||||||||||||
| 6,250 | 18,750 | $ | 30.47 | |||||||||||||||||
|
|
45,000 | - | $ | 23.99 | ||||||||||||||||
| 35,000 | - | $ | 24.92 | |||||||||||||||||
| 9,200 | - | $ | 23.94 | |||||||||||||||||
| 35,000 | - | $ | 22.66 | |||||||||||||||||
| 20,000 | - | $ | 19.48 | |||||||||||||||||
| 7,500 | - | $ | 24.06 | |||||||||||||||||
| 35,000 | - | $ | 23.05 | |||||||||||||||||
| 11,250 | 3,750 | $ | 32.64 | |||||||||||||||||
| 26,250 | 8,750 | $ | 39.56 | |||||||||||||||||
| 12,500 | 12,500 | $ | 29.35 | |||||||||||||||||
| 5,000 | 15,000 | $ | 30.47 | |||||||||||||||||
|
|
15,000 | - | $ | 21.49 | ||||||||||||||||
| 15,000 | - | $ | 24.92 | |||||||||||||||||
| 20,000 | - | $ | 22.66 | |||||||||||||||||
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| Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date (1) |
|||||||||||||||||
| 15,000 | - | $ | 19.48 | |||||||||||||||||
| 2,500 | - | $ | 24.06 | |||||||||||||||||
| 20,000 | - | $ | 23.05 | |||||||||||||||||
| 7,500 | 2,500 | $ | 32.64 | |||||||||||||||||
| 15,000 | 5,000 | $ | 39.56 | |||||||||||||||||
| 7,500 | 7,500 | $ | 29.35 | |||||||||||||||||
| 3,125 | 9,375 | $ | 30.47 | |||||||||||||||||
| (1) |
Options vest in four equal parts beginning one day after the first anniversary of grant date and thereafter one day after each of the three succeeding annual anniversary dates of the grant date. Each option has a ten-year term. |
We provide the following discussion of the timing of option awards in relation to the disclosure of material nonpublic information, as required by Item 402(x) of Regulation S-K.
During fiscal 2024, none of the Company's Named Executive Officers was awarded options. The Company's present policy is that it will not grant option awards during the four business days prior to or one business day after the filing of our periodic reports or the filing or furnishing of a Current Report on Form 8-K that discloses material nonpublic information.
The Company does not take material nonpublic information into account when determining the timing and terms of option awards. Further, the Company has not timed the disclosure of material nonpublic information to affect the value of executive compensation. Any coordination between a grant and the release of information that could be expected to affect such grant's value is precluded by the predetermined schedule.
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|
Year
|
Summary
Compensation Table Total For PEO |
Compensation
Actually Paid to PEO |
Average
Summary Compensation Table Total for Non-PEO NEOs |
Average
Compensation Actually Paid to Non-PEO NEOs |
Value of
Initial Fixed Investment Based On Total Shareholder Return |
Net
Income ( |
||||||||||||||||||
|
2024
|
$ | 1,231,621 | $ | 1,065,571
(1)
|
$ | 831,653
(4)
|
$ | 723,375 | $ | 116 | $ | 10,022 | ||||||||||||
|
2023
|
$ | 1,844,535 | $ | 2,457,648
(2)
|
$ | 1,238,180
(5)
|
$ | 1,675,367 | $ | 131 | $ | 8,148 |
(7)
|
|||||||||||
|
2022
|
$ | 1,279,627 | $ | 996,952
(3)
|
$ | 862,962
(6)
|
$ | 682,743 | $ | 67 | $ | 3,037 | ||||||||||||
|
(1)
|
To calculate the compensation "actually paid" to PEO for 2024, the Option Awards value in the Summary Compensation Table (SCT) was deducted (
|
|
(2)
|
To calculate the compensation "actually paid" to PEO for 2023, the Option Awards value in the Summary Compensation Table (SCT) was deducted (
|
|
(3)
|
To calculate the compensation "actually paid" to PEO for 2022, the Option Awards value in the Summary Compensation Table (SCT) was deducted (
|
|
(4)
|
To calculate the compensation "actually paid" to other NEOs for 2023, the Option Awards value in the Summary Compensation Table (SCT) was deducted (
|
|
(5)
|
To calculate the compensation "actually paid" to other NEOs for 2023, the Option Awards value in the Summary Compensation Table (SCT) was deducted (
|
|
(6)
|
To calculate the compensation "actually paid" to other NEOs for 2022, the Option Awards value in the Summary Compensation Table (SCT) was deducted (
|
|
(7)
|
Excludes a net gain in the amount of
|
Change in Control Plan
The Company's Change in Control Plan (successor to the Salary Continuation Plan) covers officers of the Company at the level of Corporate Vice President or above, who are designated from time to time by the Board of Directors of the Company as a participant in the plan. The plan participants presently consist of three individuals:
A change in control of the Company is deemed to occur when any one person, or more than one person acting as a group, (i) acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50 percent (50%) of the total fair market value or total voting power of the stock of the Company; or (ii) acquires assets from the Company that have a total gross fair market value equal to or more than 50 percent (50%) of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions. For this purpose, the gross fair market value of assets excludes liabilities associated with such assets.
The compensation and benefits which would be provided to a participant in the plan consist of the following:
| • |
Monthly salary at the rate being paid on the date of the change in control multiplied by the number of months payable, as described below; |
| • |
Average monthly incentive bonus payments for the three taxable years immediately prior to the change in control multiplied by the number of months payable, as described below; and |
| • |
Medical, life and other insurance in effect on the date of disposition to continue into the future for the number of months that compensation is payable. |
In addition, the plan imposes a limit on the total amounts and benefits which may be paid to a participant in the plan. The plan provides that, if any amount or benefit to be paid or provided to a participant would be deemed an "excess parachute payment" (within the meaning of Section 280G of the Internal Revenue Code), then the payment to be paid or the benefits to be provided to the participant will be reduced to the minimum extent necessary so that all potential "parachute payments" to the participant will not exceed 2.99 times the participant's "base amount" (as also defined in Section 280G).
Payment of the first two items would be made in a lump sum, no later than thirty (30) days after the participant separates from service. However, payments to be made to a participant who is a key employee (as defined in the plan, based on certain levels of compensation or stock ownership in the Company), must be deferred for six months.
A director of the Company who is also an officer of the Company at the level of Executive Vice President or above (presently Messrs. Johnsen and Olschan) would be entitled to the value of thirty-six (36) months' compensation and benefits. Officers at the level of Senior Vice President and Vice President (presently,
Severance Pay Plan
The Severance Pay Plan covers officers of the Company employed in
| • |
involuntary termination for any reason other than gross misconduct; |
| • |
death; |
22
| • |
reduction of responsibility, status or compensation; or |
| • |
transfer to a location unreasonably distant from his or her current location. |
This plan would only apply if the Change in Control 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 (presently, Messrs. Johnsen and Olschan) 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 (presently,
Equity Compensation Plan Information
The following table sets forth information regarding compensation payable under the Company's equity compensation plans (the 2005 and 2017 Non-Salaried Director Stock Option Plans and the 2012 and 2022 Employee Plans) in effect as of
| Plan Category |
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) |
Weighted-average exercise price of outstanding options, warrants and rights (b) |
Number of securities remaining available for reflected in column (a)) (c) |
|||
|
Equity compensation plans approved by security holders |
1,403,090 | 223,875 | ||||
|
Equity compensation plans not approved by security holders |
-0- | -0- | -0- | |||
|
Total |
1,403,090 | 223,875 | ||||
DIRECTOR COMPENSATION
Cash Compensation
As described below, in 2024, the Company paid as compensation to non-employee directors cash consisting of annual fees and fees for Board and committee meetings attended. 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:
| • |
an annual fee of |
| • |
|
| • |
|
23
| • |
|
| • |
an annual fee of |
The Company also provided reimbursement to each director for customary and usual travel expenses incurred in connection with attendance at Board and committee meetings.
In addition, in 2023 and 2024, the Company paid cash to non-employee directors in lieu of granting stock options as disclosed in the table below under Stock Options and related footnote 1.
Stock Options
Under the 2017 Non-Salaried Director Stock Option Plan (the "2017 Director Plan"), each incumbent non-employee director re-elected to the Board of Directors receives an annual option grant to purchase up to 5,000 shares of Common Stock. The Board of Directors has the authority to increase or decrease the number of shares of Common Stock which are the subject of the annual or initial option grants to directors.
Under the 2017 Director Plan, each new director, upon becoming a member of the Board of Directors will receive an initial option to purchase 5,000 shares of Common Stock. These options would vest as follows: 25% on the day after the grant date; 25% one day after the first year anniversary of the grant date; 25% one day after the second year anniversary of the grant date; and 25% one day after the third year anniversary of the grant date.
In lieu of the customary annual grant of 5,000 options to the non-salaried directors in 2024, the Company, instead, granted an option to purchase 2,500 shares and paid a cash fee to each of the non-salaried directors in lieu of an annual option grant, as described below.
The 2017 Director Plan expires on
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 non-employee directors during the fiscal year ended
| Fees Earned or Paid in Cash |
Option Awards (1) |
Additional Cash Paid (2) |
Total | |||||||||||||
|
|
$ | 74,650 | $ | 42,900 | $ | 50,250 | $ | 167,800 | ||||||||
|
|
$ | 67,935 | $ | 85,800 | - | $ | 153,735 | |||||||||
|
|
$ | 79,360 | $ | 42,900 | $ | 50,250 | $ | 172,780 | ||||||||
|
|
$ | 84,130 | $ | 42,900 | $ | 50,250 | $ | 177,280 | ||||||||
|
|
$ | 73,405 | $ | 42,900 | $ | 50,250 | $ | 166,555 | ||||||||
|
Stevenson E. Ward III |
$ | 86,160 | $ | 42,900 | $ | 50,250 | $ | 179,310 | ||||||||
| (1) |
Represents the aggregate fair value of stock options on grant date rather than an amount paid to or realized by the director. For information on the valuation assumptions, refer to the Note 11, "Stock Option Plans", in the notes to the Company's financial statements in its Annual Report on Form 10-K for the year ended |
24
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 average price of the Common Stock on the trading day of the grant date. Each option had an exercise price of
| (2) |
The amount paid was equal to the aggregate fair value of options to purchase 2,500 shares of common stock on |
The following table shows the aggregate number of outstanding options held by each non-employee director as of
| Aggregate Options Outstanding as of |
|||||
|
|
16,500 | ||||
|
|
5,000 | ||||
|
|
31,500 | ||||
|
|
19,000 | ||||
|
|
31,500 | ||||
|
Stevenson E. Ward III |
- | ||||
25
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 the Company's audited consolidated financial statements for the fiscal year ended
Management has the primary responsibility for the financial statements of the Company and the Company's financial reporting process, including the system of internal controls. The Audit Committee does not provide any expert or special assurance as to the Company's financial statements.
As required by the standards of the
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 discussions referred to above, the Audit Committee recommended to the Board of Directors that the Company's audited consolidated financial statements for the year ended
26
Transactions with Related Persons
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 or any immediate family member of any of the foregoing persons.
Policy
As adopted by the Board of Directors, 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 applies to 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, in 2024, with respect to smaller reporting companies, transactions which involve an amount equal to the lesser of
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.
There were no related person transactions with the Company since
PROPOSAL 2
ADOPTION OF A NON-BINDING RESOLUTION TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") enacted in 2010 and pursuant to Section 14A of the Exchange Act, the Company is again providing shareholders with the opportunity to vote on a non-binding, advisory proposal, commonly known as a "say-on-pay" proposal, to approve the compensation of the Company's NEOs as disclosed above in this proxy statement under "Executive Compensation." The shareholders last voted on such a proposal at the Company's Annual Meeting of Shareholders in 2024. This proposal gives our shareholders an opportunity to express their views on the overall compensation of the Company's NEOs, but is not intended to address any specific item of compensation. In making a voting decision, shareholders are encouraged to review the discussion of the Company's compensation policies and decisions regarding its NEOs that appears earlier in this proxy statement under "Executive Compensation" including the compensation tables and related narrative disclosure.
The executive officers named in the summary compensation table and deemed to be "named executive officers" are
27
philosophy. It is straightforward, consisting principally of salary, which must be competitive to retain the skills and experience of excellent employees, annual bonus to reward strong performance, and equity compensation to encourage long-term commitment and team performance. Not all elements of our compensation package may be provided every year, depending on the performance of the Company and the executive, the Company' resources and other factors deemed relevant by the Board of Directors.
We believe that our executive compensation program, with our balance of base salary, performance-based bonuses and multi-year vesting equity awards, encourages and rewards sustained performance that is aligned with long-term shareholder interests.
The Board of Directors believes that the compensation given to our NEOs for 2024 helped to achieve the overall objective of enhancing value for our shareholders.
The vote solicited by this proposal is advisory and its outcome will not be binding on the Board of Directors nor require the Board of Directors to take any action. Moreover, the outcome of the vote will not be construed as overruling any decision of the Board of Directors, or creating or implying any additional fiduciary duty of the Board of Directors. However, the Board of Directors expects to take into account the outcome of this vote when considering future executive compensation arrangements recommended by the
The Board of Directors strongly supports our executive compensation programs and asks shareholders to vote on the following advisory resolution:
RESOLVED, that compensation paid to the Company's named executive officers for the year ended
Vote Required
The approval of Proposal 2 on an advisory basis requires the affirmative vote of a majority of the votes cast by the shareholders via the Internet or by proxy.
The Board of Directors unanimously recommends a vote FOR the approval of the compensation of our named executive officers, as disclosed in this Proxy Statement.
PROPOSAL 3
ADVISORY VOTE ON THE FREQUENCY OF THE NON-BINDING RESOLUTION TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
Under the Dodd-Frank Act the Company is required, not less frequently than once every six years, to provide a proxy statement for an annual meeting of shareholders for which the proxy solicitation rules of the
Accordingly, we are seeking an advisory shareholder vote regarding whether the non-binding resolution to approve the compensation of our NEOs should occur every one, two or three years.
In making a voting decision, shareholders are urged to review the Company's compensation policies and decisions regarding its named executive officers contained in the section entitled "Executive Compensation" that appears earlier in this Proxy Statement as well as the information provided under Proposal 2 above. Future votes, regardless of frequency, would be substantially similar in nature to the vote requested under Proposal 2 in this proxy statement.
The Board of Directors believes that an advisory shareholder vote to approve the compensation of our NEOs should occur annually. We believe that it is important to give our shareholders the opportunity to provide us
28
with their input on our philosophy, policies and practices regarding executive compensation as disclosed each year in the Company's annual proxy statement. The Board believes that annual votes by our shareholders will enhance our communication with and responsiveness to our shareholders. An annual vote would provide the additional benefits of tying the advisory vote on executive compensation to the current year's proxy statement compensation disclosure and avoiding the potential for confusion that exists with a biennial or triennial vote as to which year's compensation shareholders are being asked to evaluate and vote on.
Based on the foregoing considerations, the Board of Directors asks that you support a frequency of every yearfor future non-binding resolutions on compensation of our named executive officers.
The advisory vote on this proposal is not binding on the Company or the Board of Directors and cannot be construed as overruling any decision made by the Compensation Committee or Board of Directors. However, the Compensation Committee and the Board of Directors will review the results on the advisory vote and take them into consideration when making future decisions regarding the frequency of submitting to shareholders of the Company the non-binding resolution to approve the compensation of our named executive officers.
You have four choices as to how to vote on this proposal. You may indicate the voting frequency you recommend by choosing the option of one year, two years, or three years, or you may abstain from voting when you mark your proxy card in response to this proposal.
Vote Required
A plurality of the votes cast via the Internet or by proxy at the Annual Meeting is required to select the recommended frequency of future votes on executive compensation.
The Board of Directors recommends that you vote to hold the non-binding vote on executive compensation every year.
PROPOSAL 4
The Audit Committee of the Board of Directors has appointed
Representatives of
The Audit Committee is not aware of any disagreements between management and our current independent registered public accounting firm,
Audit Committee Pre-Approval of Independent Registered Public Accounting Firm Services
The Audit Committee pre-approves all audit and permissible non-audit services provided by the independent registered public accounting firm. 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 registered public accounting firm. The policies and procedures provide that management and the independent registered public accounting firm jointly submit
29
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 and the independent registered public accounting firm 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.
Fees Paid to Independent Registered Public Accounting Firm
Set forth below is a description of the fees for professional audit services rendered by
| Fee Category | 2024 | |
|
Audit Fees |
$ 753,800 | |
|
Audit Related Fees |
25,500 | |
|
Tax Fees |
44,100 | |
|
Total Fees |
$ 823,400 |
Audit Fees. Audit fees consist of fees for the annual audit of the Company's financial statements, including the audit of internal control over financial reporting, and the reviews of the interim financial statements included in our quarterly reports on Form 10-Q.
Audit Related Fees.These fees were for the audit of the
Tax Fees.Tax services included tax compliance, tax consulting, and tax planning.
The Audit Committee has determined that the provision of non-audit services described above was compatible with maintaining
Vote Required
The ratification of the appointment by our
The Board of Directors recommends a vote FOR the ratification of our independent registered public accounting firm for the fiscal year ending
SUBMISSION OF SHAREHOLDER PROPOSALS FOR THE 2026 ANNUAL MEETING
If you intend to present a proposal at our 2026 Annual Meeting, you must submit it to us no later than
30
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,
Chief Financial Officer, Secretary and Treasurer
31
|
1 WATERVIEW DR ATTN: |
VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Before The Meeting- Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until During The Meeting - Go to www.virtualshareholdermeeting.com/ACU2025 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until VOTE BY MAIL Mark, sign and date your proxy card and retuit in the postage-paid envelope we have provided or retuit to Vote Processing, c/o Broadridge, |
TO VOTE,
KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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For All |
Withhold All |
For All Except |
To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. |
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The Board of Directors recommends you vote FOR the following: |
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1. Election of Directors |
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Nominees |
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01) Walter C. Johnsen 02) Richmond |
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06) Brian K. Barker 07) Paul J. Conway |
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The Board of Directors recommends you vote FOR the following proposal: |
For | Against | Abstain | |||||||||||||||||||||||||
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2. Approval, by non-binding advisory vote, of the compensation of the named executive officers of the Company as described in the Proxy Statement. |
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The Board of Directors recommends you vote 1 YEAR on the following proposal: |
1 year | 2 years | 3 years | Abstain | ||||||||||||||||||||||||
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3. Approval, by non-binding advisory vote, on the Frequency of Executive Compensation voting. |
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The Board of Directors recommends you vote FOR the following proposal: |
For | Against | Abstain | |||||||||||||||||||||||||
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4. Ratification of the appointment of |
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NOTE: In their discretion, the proxies are authorized to vote on such other business as may properly come before the meeting or any adjournment thereof. |
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. |
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| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||||||||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com
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PROXY 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 The undersigned hereby appoints The undersigned acknowledges receipt of the Company's Notice of Annual Meeting of Shareholders, related Proxy Statement and 2024 Annual Report to Shareholders. |
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Continued and to be signed on reverse side |
Attachments
Disclaimer
Researchers’ Work from Sao Paulo School Economics Focuses on Structure Research (Is Bitcoin an Inflation Hedge?): Structure Research
Proxy Statement (Form DEF 14A)
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