Acme United Corp

This management proposal seeks shareholder approval to increase the share reserve under the 2022 Employee Stock Option Plan from 500,000 to 700,000 to permit the Company to continue granting stock options as part of its compensation program. Management argues that equity incentives are necessary to attract, motivate, reward and retain key employees and that anticipated growth and acquisitions will increase participant counts; the Board considered current plan usage (only 9,375 shares available as of the record date) in setting the proposed increase. The amendment would authorize an additional 200,000 shares (which may be authorized but unissued or treasury shares) and would be subject to shareholder majority approval; non-employee directors are excluded from participation. From a governance perspective, the proposal expands potential dilution to existing shareholders and increases the pool of option awards that can be granted at the discretion of the Board and Compensation Committee; the plan includes standard vesting, exercise-price and post-termination provisions and contains shareholder-approval safeguards for material changes. The Board recommends the amendment, framing it as necessary for competitive recruiting and retention and to maintain alignment between employee incentives and shareholder value via options that vest over multi-year schedules. Investors should weigh the tradeoff between potential dilution and the retention/long-term performance benefits that option grants can provide, noting that the Company historically grants non-qualified options and ties option value to share price appreciation. The proposal also raises typical proxy-season considerations: the potential for large future grants, the discretion retained by the Board in allocating awards, and the absence of explicit caps on individual grants beyond plan terms. Given the modest size of the requested increase relative to the total outstanding shares (200,000 of ~3.8 million outstanding) and the Company’s stated reliance on options as a core long-term incentive, a vote FOR reflects support for management’s compensation strategy, while a vote AGAINST would reflect concerns about dilution and governance oversight of future grants. The approval threshold is a simple majority of votes cast; broker non-votes may not be voted on this proposal if shares are held in street name without instructions.

This advisory management proposal asks shareholders to approve, on a non-binding basis, the 2025 compensation disclosures for the named executive officers (NEOs), encompassing base salary, cash bonus, stock option awards, and related narrative. Management frames the program as pay-for-performance: bonuses are tied to budgeted net income with a sliding scale and options vest over multiple years to align long-term interests, and the Board and Compensation Committee retain discretion over awards and plan administration. The proposal is non-binding, so while the Board will consider the outcome, it is not compelled to change prior decisions; the Company intends to use the vote outcome in future compensation considerations. From a governance perspective, a FOR vote signals shareholder support for the mix of annual incentives and long-term equity, whereas a negative vote would signal dissatisfaction and could prompt the Board to engage with shareholders and potentially alter program design. The filing notes the program’s use of performance measures (budgeted net income) and significant option usage, which could raise questions for some investors about the transparency of performance targets, the magnitude of equity awards, and dilution. The Company emphasizes its pay philosophy and the lack of perquisites, and states it seeks to align executives’ interests with long-term shareholder value; the Board believes the 2025 compensation achieved those goals. Given the advisory nature, institutional shareholders typically weigh this vote alongside say-on-pay outcomes at peers, pay-for-performance alignment metrics, and any recent changes to compensation policies; the Board’s unanimous recommendation for FOR reflects confidence in existing structures. The approval requires a majority of votes cast; broker non-votes do not count as votes cast on this non-binding advisory item.