<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>2
<FILENAME>ex4-5.txt
<DESCRIPTION>EXHIBIT 4.5
<TEXT>
                                                                     Exhibit 4.5


                             ACME UNITED CORPORATION
                           EMPLOYEE STOCK OPTION PLAN



1.       PURPOSE

         The purpose of this plan (the "Plan") is to promote the interests of
         Acme United Corporation (the "Corporation") by enabling its key
         employees to acquire an increased proprietary interest in the
         Corporation and thus to share in the future success of the
         Corporation's business. Accordingly, the Plan is intended as a means
         not only of attracting and retaining outstanding management personnel
         but also of promoting a closer identity of interests between employees
         and stockholders. Since the employees eligible to receive Options under
         the Plan will be those who are in a position to make important and
         direct contributions to the success of the Corporation, the Directors
         believe that the grant of the Options under the Plan will be in the
         best interests of the Corporation.

2.       DEFINITIONS

         Unless the context clearly indicates otherwise, the following terms
         when used in the Plan, shall have the meanings set forth in this
         Section 2.

          (a)  "Beneficiary"  means the person or persons who shall  acquire the
               right to exercise an option by bequest or inheritance.

          (b)  "Board of  Directors" or "Board" means the Board of the Directors
               of the Corporation.

          (c)  "Code" means the Internal  Revenue Code of 1986,  as amended from
               time to time.

          (d)  "Committee"  means  the  Compensation  Committee  of the Board of
               Directors,  consisting  of  select  Board  members  who  are  not
               employees of the Corporation,  but in no event fewer than two (2)
               such Board members.

          (e)  "Common  Stock"  shall mean  common  stock,  par value  S2.50 per
               share, of the Corporation.

          (f)  "Disability"  means a disability as defined in the  Corporation's
               Long-Term Disability Plan, as amended from time to time.

          (g)  "Fair Market  Value" shall mean the closing  price for the Common
               Stock on the date  immediately  preceding  the date on which  the
               option is granted.

          (h)  "Incentive  Stock  Option"  shall  mean a  stock  option  granted
               pursuant to this Plan and intended to satisfy the requirements of
               Section 422 of the Code.

          (i)  "Option" shall mean a stock option granted pursuant to the Plan.

          (j)  "Optionee" shall mean a person to whom an Option has been granted
               under the Plan.

          (k)  "Option Agreement" shall mean the written agreement to be entered
               into by the Corporation and the Optionee,  as provided in Section
               6 hereof.

          (l)  "Retirement"  shall mean  retirement  pursuant to the  Retirement
               Plan for  Employees of Acme United  Corporation,  as amended from
               time to time.

          (m)  "Share"  shall  mean  the  Common  Stock of the  Corporation,  as
               adjusted in accordance with Section 16 of the Plan.

          (n)  "Subsidiary"  shall  mean  any  subsidiary   corporation  of  the
               Corporation within the meaning of Section 424(f)of the Code (or a
               successor provision of similar import).

              Where used herein, unless the context indicates otherwise, words
              in the masculine form shall be deemed to refer to females as well
              as to males.


<PAGE>





3. SHARES SUBJECT TO THE PLAN

     (a) The stock to be covered by the Options is the Common Stock of the
         Corporation. The aggregate number of shares of Common Stock which may
         be delivered on exercise of the Options is 300,000 shares, subject to
         adjustment pursuant to Section 16.

     (b) As determined by the Board from time to time, such shares may be
         previously issued shares reacquired by the Corporation or authorized
         but unissued shares. If any Option expires or terminates for any reason
         without having been exercised in full, the Shares covered by the
         unexercised portion of such Option shall again be available for
         Options, within the limits specified above.

4. ADMINISTRATION OF THE PLAN

     (a) The Plan shall be administered by the Board of Directors of the
         Corporation, which shall accept, amend, or reject recommendations made
         by the Committee. In addition to its duties with respect to the Plan
         stated elsewhere in the Plan, Board shall have full authority,
         consistent with the Plan, to interpret the Plan, to promulgate such
         rules and regulations with respect to the Plan as it deems desirable
         and to make all other determinations necessary or desirable for the
         administration of the Plan. All decisions, determinations, and
         interpretations of the Board shall be binding upon all persons.

         No member of the Board of Directors or the Committee and no employee of
         the Corporation shall be liable for any act or action hereunder,
         whether of omission or commission, by any other member or employee or
         by any agent to whom duties in connection with the administration of
         the plan have been delegated in accordance with the provisions of the
         Plan or, except in circumstances involving his bad faith, for anything
         done or omitted to be done by himself.

     (b) Except as provided in Section 7, it is intended that the stock options
         granted pursuant to the Plan constitute Incentive Stock Options within
         the meaning of Section 422 of the Code. The Board shall administer the
         Plan in such a manner as to establish and maintain such Options as
         Incentive Stock Options.

     (c) The Board may, with the consent of the Optionee, substitute Options
         which are not intended to be Incentive Stock Options for outstanding
         Incentive Stock Options. Any such substitution shall not constitute the
         grant of a new Option for the purposes of this Plan, and shall not
         require a revaluation of the Option exercised prior to the substituted
         Option. Any such substitution shall be implemented by an amendment to
         the applicable Option Agreement or in such other manner as the Board in
         its discretion shall determine.

     (d) The Committee, subject to the approval of the Board, shall make such
         provision as it deems necessary or appropriate for the withholding of
         any federal, state, local or other tax required to be withheld with
         regard to the exercise of an Option under the Plan.

5. EMPLOYEES ELIGIBLE TO RECEIVE OPTIONS

     (a) The Board, upon the recommendation of the Committee, shall from time to
         time in its discretion select the employees to whom the options shall
         be granted from among the key employees of the Corporation and any
         Subsidiary.

     (b) Members of the Board of Directors who are not regular salaried
         employees of the Corporation or a Subsidiary shall not be eligible to
         receive Options.

     (c) An individual employee may receive more than one Option.










<PAGE>


   6. OPTION AGREEMENT

          (a)  No Option  shall be  exercised  by an  Optionee  unless he or she
               shall have executed and delivered an Option Agreement.

          (b)  Appropriate  officers of the Corporation are hereby authorized to
               execute  and  deliver  Option  Agreements  in  the  name  of  the
               Corporation as directed from time to time by the Board.

   7. GRANTS OF OPTIONS

          (a)  The Board, acting upon the recommendation of the Committee, shall
               in it  discretion  determine the time or times when Options shall
               be granted and the number of shares of Common Stock to be subject
               to each Option.

          (b)  The aggregate  fair market value  (determined  as of the date the
               Option is granted) of the stock with  respect to which  Incentive
               Stock Options are exercisable for the first time by an individual
               during any  calendar  year (under all stock  option  plans of the
               Corporation and its Subsidiaries) shall not exceed $100,000.00.

          (c)  No Incentive Stock Option shall be granted to an employee who, at
               the time the  Option is  granted,  owns  (within  the  meaning of
               Section  422(b)(6)  of the code) stock  possessing  more than ten
               percent  of the total  combined  voting  power of all  classes of
               stock of the Corporation  unless the following  requirements  are
               satisfied:  (i)  notwithstanding the provisions of Section 8, the
               purchase  price for each  share of  common  stock  subject  to an
               Option  shall be at least 110 percent of the fair market value of
               the Common Stock  subject to the Option at the time the Option is
               granted;  and  (ii)  the  Option  is not  exercisable  after  the
               expiration  of five  (5)  years  from  the date  such  Option  is
               granted.

          (d)  The  Board  may in its  discretion  grant  Options  that  are not
               intended to constitute Incentive Stock Options.

          (e)  Each Option shall be evidenced  by an Option  Agreement,  in such
               form as the Board  shall from time to time  approve,  which shall
               state the terms and  conditions of the Option in accordance  with
               the Plan,  and also shall contain such  additional  provisions as
               may  be  necessary  or   appropriate   under   applicable   laws,
               regulations, and rules.

     8. OPTION PRICE

         Subject to Section 7(c), the purchase price for each share of Common
         Stock subject to an Option shall be one hundred percent (100%) of the
         Fair Market Value of the Common Stock on the date the Option is granted
         provided, however, that the purchase price shall not be less than the
         par value of the Common Stock which is the subject of the Option.

     9. OPTION PERIOD; EXERCISE RIGHTS

          a)   Each Option shall be for such term as the Board shall  determine,
               but not more  than ten  years  from the date it is  granted,  and
               shall be subject to earlier  termination  as  provided in Section
               1O.

          b)   Options shall be  exercisable  in  accordance  with the following
               schedule:  25% one day  after  date of  grant;  25% one day after
               first year anniversary of date of grant; 25% one day after second
               year  anniversary of date of grant;  25% one day after third year
               anniversary of date of grant.

          c)   Upon the purchase of shares of Common Stock under an Option,  the
               Stock  certificate  or  certificates  may,  at the request of the
               purchaser,  be issued in his name and the name of another  person
               as joint tenants with the right of survivorship.







<PAGE>



d)       The exercise of each Option  granted under the Plan shall be subject to
         the condition that if at any time the  Corporation  shall  determine in
         its discretion that the listing,  registration, or qualification of any
         shares of Common Stock  otherwise  deliverable  upon such exercise upon
         any  securities  exchange  or under any State or  Federal  law,  or the
         consent or approval of any  regulatory  body, is necessary or desirable
         as a condition of, or in connection with, such exercise or the delivery
         or purchase of shares thereunder,  then in any such event such exercise
         shall   not   be   effective   unless   such   listing,   registration,
         qualification, consent or approval shall have been effected or obtained
         free of any  conditions  not  acceptable to the  Corporation.  Any such
         postponement  shall not extend the time within  which the Option may be
         exercised;  and neither the  Corporation  nor its directors or officers
         shall  have  any  obligation  or  liability  to  the  Optionee  or to a
         Beneficiary  with respect to any shares of Common Stock as to which the
         Option shall lapse because of such postponement.

10.      EXERCISE RIGHTS UPON TERMINATION OF EMPLOYMENT

(a)      Retirement
         Except as provided in paragraph (e) of this section 10, if an Optionee
         retires under a retirement or pension plan of the Corporation or of a
         Subsidiary, the Optionee's Option shall terminate one year after the
         date of such retirement but in no event later than the date on which it
         would have expired if the Optionee had not retired, provided, however,
         that if the Option is exercised later than three months from the date
         of such retirement such Option shall not constitute an Incentive Stock
         Option. During such period the Optionee may exercise the Option in
         whole or in part notwithstanding the limitations of Section 9(b) or any
         limitation that may have been set by the Board pursuant thereto.

(b)      Disability
         Except as provided in paragraph (e) of this section 10, if an Optionee
         becomes disabled, the Optionee may exercise the Option (i) within one
         year after the date of Disability, but in no event later than the date
         on which it would have expired if the Optionee had not become disabled,
         or (ii) within such other period, not exceeding three years after the
         date of Disability, as shall be prescribed in the Option Agreement;
         provided, however, that if the Option is exercised later than one year
         after the date of Disability, it shall not constitute an Incentive
         Stock Option. During such period the Optionee may exercise the Option
         in whole or in part notwithstanding the limitations of Section 9(b) or
         any limitation that may have been set by the Board pursuant thereto.

(c)      Death
         If an Optionee dies during a period in which he or she is entitled to
         exercise an Option (including the period referred to in paragraphs
         (a),(b),(d),and (e)of this Section 1O), the Option may be exercised at
         any time within one year from the date of the Optionee's death, but in
         no event later than the date on which it would have expired if the
         Optionee had lived, by the Optionee's Beneficiary, in whole or in part
         notwithstanding the limitations of Section 9(b) or any limitation that
         may have been set by the Board pursuant thereto.

(d)      Termination of Employment for Any Other Reason
         Except as provided in paragraph (e) of this section 10, if an Optionee
         ceases to be employed by the Corporation or a Subsidiary for any reason
         other than retirement, disability, or death, the Optionee's Option
         shall terminate 30 days after the date of such cessation of employment,
         but in no event later than the date on which it would have expired if
         such cessation of employment had not occurred. During such period the
         option may be exercised only to the extent that the Optionee was
         entitled to do so under Section 9(b) at the date of cessation of
         employment unless the Board, in its sole and nonreviewable discretion,
         permits exercise of the Option to a greater extent. Except to the
         extent required by law, the employment of an Optionee shall not be
         deemed to have ceased upon his or her absence from the Corporation or a
         Subsidiary on a leave of absence granted in accordance with the usual
         procedure of the Corporation or Subsidiary.

(e)      Notwithstanding any language of the Plan to the contrary, if an
         Optionee ceases to be employed by the Corporation or a Subsidiary and
         becomes, or continues to be, a member of the Board of Directors prior
         to the time the Optionee's Option(s) would have otherwise expired
         pursuant to this Section 10, the Optionee's Option(s) shall continue to
         vest in accordance with Section 8(b) hereof and shall continue to be
         exercisable for the remainder of the term of the Option(s); provided,
         that, if an Optionee described in this Section 10(e) ceases to be a
         member of the Board of Directors for any reason, the Optionee's
         Option(s) shall terminate in accordance with the provisions of Section
         2.4(a) of the Amended and Restated Acme United Corporation Non-Salaried
         Director Stock Option Plan. Any Option which is not exercised by the
         Optionee within the three-month period immediately following the
         Optionee's termination of employment, or, in the case of termination of
         employment on account of Disability, within one year after the date of
         Disability, shall cease to be an Incentive Stock Option.



<PAGE>


11. METHOD OF EXERCISE

          (a)  Each  exercise  of an Option  shall be by  written  notice to the
               Secretary of the Corporation,  stating the number of shares to be
               purchased. An Option may be exercised with respect to all, or any
               part of, the Shares of Common Stock as to which it is exercisable
               at the time.

          (b)  The purchase price of the shares being purchased shall be paid in
               full at the time the Option is  exercised.  Such payment shall be
               made in cash in United States currency.

12. NONTRANSFIERABILITY OF OPTIONS

     Each Option shall be nonassignable and nontransferable by the Optionee
     other than by will or by the laws of descent and distribution. Each Option
     shall be exercisable during the Optionee's lifetime only by the Optionee.

13. SHAREHOLDER RIGHTS

     No person shall have any rights of a shareholder by virtue of an Option
     except with respect to shares actually issued to him and registered on the
     transfer books of the Corporation, and the issuance of shares shall confer
     no retroactive right to dividends.

14. USE OF PROCEEDS

     The proceeds received by the Corporation from the sale by it of shares of
     Common Stock to persons exercising an Option pursuant to the Plan will be
     used for the general purposes of the Corporation or any Subsidiary.

15. GENERAL PROVISIONS

     The grant of an Option in any year shall not give the Optionee any right to
     similar grants in future years or any right to be retained in the employ of
     the Corporation or any Subsidiary.

16. ADJUSTMENT UPON CHANGES IN CAPITALIZATION

     If there is a change in the number or kind of outstanding shares of the
     Corporation's stock by reason of a stock dividend, stock split,
     recapitalization, merger, consolidation, combination, or other similar
     event, appropriate adjustments shall be made by the Board to the number and
     kind of shares subject to the Plan, the number and kind of shares under
     Options then outstanding, the maximum number of shares available for
     Options or the Option Price and other relevant provisions.

17. EFFECT OF MERGER OR OTHER REORGANIZATION

     If the Corporation shall be the surviving corporation in a merger or other
     reorganization, an Option shall extend to stock and securities of the
     Corporation to the same extent that a holder of that number of Shares
     immediately before the merger or consolidation corresponding to the number
     of Shares covered by the Option would be entitled to have or obtain stock
     and securities of the Corporation under the terms of the merger or
     consolidation. If the Corporation dissolves, sells substantially all of its
     assets, is acquired in a stock for stock or securities exchange, or is a
     party to a merger or other reorganization in which it is not the surviving
     corporation, then each Option shall be exercisable within the period of
     sixty (60) days commencing upon the date of the action of the shareholders
     (or the Board if shareholders' action is not required) is taken to approve
     the transaction and upon the expiration of that period all Options and all
     rights thereto shall automatically terminate.



<PAGE>





18. TERMINATION; AMMENDMENTS

     (a)  The Board may at any time  terminate  the Plan.  Unless the Plan shall
          previously  have been  terminated by the Board,  it shall terminate on
          February 26, 2012. No Option may be granted after such termination.

     (b)  The  Board  may at any time or  times  amend  the  Plan or  amend  any
          outstanding  Option for the purpose of satisfying the  requirements of
          any changes in applicable laws or regulations or for any other purpose
          which at the time may be permitted by law.

     (c)  Except as provided in Section 16, no such amendment shall, without the
          approval of the  shareholders  of the  Corporation:  (i)  increase the
          maximum  number of shares of Common Stock for which the Options may be
          granted  under the Plan;  (ii) reduce the Option price of  outstanding
          Options; (iii) extend the period during, which Options may be granted;
          (iv)  materially  increase in any other way the  benefits  accruing to
          Optionees;  or  (v)  change  the  class  of  persons  eligible  to  be
          Optionees.

     (d)  No  termination  or amendment of the Plan shall without the consent of
          an  Optionee  or  Beneficiary,  adversely  affect  the  Optionee's  or
          Beneficiary's right under any Option previously granted,  but it shall
          be   conclusively   presumed  that  any   adjustment  for  changes  in
          capitalization in accordance with Section 16 hereof does not adversely
          affect any such right.


19. EFFECTIVE DATE

         The effective date of the Plan is February 26, 2002.
         (As amended April 25, 2005).

20. GOVERNING LAW

         The Plan shall be construed and its provisions enforced and
         administered in accordance with and under the laws of Connecticut
         except to the extent that such laws may be superseded by any Federal
         law.





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</DOCUMENT>
