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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001026608-10-000028.txt : 20100323
<SEC-HEADER>0001026608-10-000028.hdr.sgml : 20100323
<ACCEPTANCE-DATETIME>20100323162923
ACCESSION NUMBER:		0001026608-10-000028
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20100419
FILED AS OF DATE:		20100323
DATE AS OF CHANGE:		20100323
EFFECTIVENESS DATE:		20100323

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ACME UNITED CORP
		CENTRAL INDEX KEY:			0000002098
		STANDARD INDUSTRIAL CLASSIFICATION:	CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420]
		IRS NUMBER:				060236700
		STATE OF INCORPORATION:			CT
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-07698
		FILM NUMBER:		10699568

	BUSINESS ADDRESS:	
		STREET 1:		60 ROUND HILL ROAD
		CITY:			FAIRFIELD
		STATE:			CT
		ZIP:			06824
		BUSINESS PHONE:		203-254-6060

	MAIL ADDRESS:	
		STREET 1:		60 ROUND HILL ROAD
		CITY:			FAIRFIELD
		STATE:			CT
		ZIP:			06824

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ACME SHEAR CO
		DATE OF NAME CHANGE:	19710713
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>acme_def14a2010.htm
<DESCRIPTION>DEF 14A
<TEXT>
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    <title>acme_def14a2010.htm</title>
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<body bgcolor="#ffffff" style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">UNITED
STATES</font></div>
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AND EXCHANGE COMMISSION</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Washington,
D.C. 20549</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">SCHEDULE
14A</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt">Filed by the Registrant&#160;&#160; <font style="FONT-FAMILY: courier new; FONT-SIZE: 10pt">[&#160;<font style="DISPLAY: inline; FONT-FAMILY: courier new; FONT-SIZE: 10pt; FONT-WEIGHT: bold">X</font>&#160;]</font></font></font></font></font></font></font></div>
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a Party other than the Registrant&#160;&#160; <font style="FONT-FAMILY: courier new; FONT-SIZE: 10pt">[&#160;&#160;&#160;]</font></font><br></font></font></font></font></font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Check the
appropriate box:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-FAMILY: courier new; FONT-SIZE: 10pt">[&#160;&#160;&#160;]&#160;
</font>Preliminary Proxy
Statement</font></font></font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-FAMILY: courier new; FONT-SIZE: 10pt">[&#160;&#160;&#160;]&#160;
</font>Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))</font></font></font></font></font></font></div>
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</font>Definitive Proxy
Statement</font></font></font></font></font></font></div>
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</font>Definitive Addition
Materials</font></font></font></font></font></font></div>
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</font>Soliciting Material Pursuant to
&#167;240.14a-12</font></font></font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
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<tr bgcolor="white">
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            <td width="70%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center"><font style="FONT-SIZE: 10pt; FONT-WEIGHT: bold">Acme United
      Corporation</font></td>
            <td width="15%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
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            <td width="70%" style="TEXT-ALIGN: center"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(Name
      of Registrant as specified in Its Charter)</font></font></td>
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          </tr><tr bgcolor="white">
            <td width="15%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="70%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="15%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
          </tr><tr bgcolor="white">
            <td width="15%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="70%" style="BORDER-BOTTOM: black 2px solid"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="15%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
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            <td width="15%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="70%" style="TEXT-ALIGN: center"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(Name
      of Person(s) Filing Proxy Statement if other than the
      Registrant)</font></font></td>
            <td width="15%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
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            <td width="15%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="70%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="15%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
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of Filing Fee (Check the appropriate box):</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-FAMILY: courier new; FONT-SIZE: 10pt">[&#160;<font style="DISPLAY: inline; FONT-FAMILY: courier new; FONT-SIZE: 10pt; FONT-WEIGHT: bold">X</font>&#160;]&#160;
</font>No fee required.</font></font></font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-FAMILY: courier new; FONT-SIZE: 10pt">[&#160;&#160;&#160;]&#160;
</font>Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.</font></font></font></font></font></font></div>
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      <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="white">
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            <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt">&#160;<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1)</font></font></font></font></font></font></font></td>
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      of each class of securities to which transaction
  applies:</font></font></td>
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            <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="84%" style="BORDER-BOTTOM: black 2px solid"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
          </tr><tr bgcolor="white">
            <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;2)</font></td>
            <td width="84%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Aggregate number of
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            <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="84%" style="BORDER-BOTTOM: black 2px solid"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
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            <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt">&#160;<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3)</font></font></font></font></font></font></font></td>
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              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Per
      unit price or other underlying value of transaction computed pursuant to
      Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
      calculated and state how it was determined):</font></div>
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            <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="84%" style="BORDER-BOTTOM: black 2px solid"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
          </tr><tr bgcolor="white">
            <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;4)&#160;</font></td>
            <td width="84%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Proposed maximum
      aggregate value of transaction:</font></td>
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            <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="84%" style="BORDER-BOTTOM: black 2px solid"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
          </tr><tr bgcolor="white">
            <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;5)</font></td>
            <td width="84%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total fee
      paid:</font></td>
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            <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            <td width="84%" style="BORDER-BOTTOM: black 2px solid"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
          </tr></table>
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    <div align="left">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-FAMILY: courier new; FONT-SIZE: 10pt">[&#160;&#160;&#160;]&#160;
</font>Fee paid previously with preliminary
materials.</font></font></font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-FAMILY: courier new; FONT-SIZE: 10pt">[&#160;&#160;&#160;]&#160;
</font>Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously.&#160;&#160;Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its
filing.</font></font></font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">
      <div align="left">
        <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="white">
              <td width="8%">
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              <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt">&#160;<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1)</font></font></font></font></font></font></font></td>
              <td width="84%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Amount
      Previously Paid:</font></font></td>
            </tr><tr bgcolor="white">
              <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td width="84%" style="BORDER-BOTTOM: black 2px solid"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            </tr><tr bgcolor="white">
              <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;2)</font></td>
              <td width="84%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Form, Schedule or
      Registration Statement No.:</font></td>
            </tr><tr bgcolor="white">
              <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td width="84%" style="BORDER-BOTTOM: black 2px solid"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
            </tr><tr bgcolor="white">
              <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt">&#160;<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3)</font></font></font></font></font></font></font></td>
              <td width="84%">
                <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Filing
      party:</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td width="8%" style="PADDING-BOTTOM: 2px"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td width="84%" style="BORDER-BOTTOM: black 2px solid"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
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              <td width="8%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
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  Filed:</font></td>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">March 23,
2010</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Dear
Fellow Shareholder:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">On behalf
of your Board of Directors and Management, I cordially invite you to attend the
Annual Meeting of Shareholders of Acme United Corporation scheduled to be held
on Monday, April 19, 2010 at 11:00 A.M., local time, at the Cornell Club, 6 East
44th Street, New York, New York.&#160;&#160;I look forward to greeting
personally those shareholders able to attend.</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">At the
Meeting, shareholders will be asked to elect six directors to serve for a
one-year term, to approve an amendment to the Company&#8217;s Employee Stock Option
Plan to increase the number of shares authorized to be issued under the plan,
and to ratify the appointment of our independent registered public accounting
firm for the fiscal year ending December 31, 2010.&#160;&#160;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.</font></div>
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important that your shares be represented and voted at the
Meeting.&#160;&#160;Whether or not you plan to attend, please take a moment to
sign, date and promptly mail your proxy card in the enclosed prepaid
envelope.&#160;&#160;This will not limit your right to vote in person should you
attend the Meeting.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">On behalf
of your Board of Directors, thank you for your continued support and interest in
Acme United Corporation.</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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Johnsen</font></div>
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and Chief Executive Officer</font></div>
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      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Acme
United Corporation</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">60
Round Hill Road</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Fairfield,
Connecticut 06824</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">TO
BE HELD ON MONDAY, APRIL 19, 2010</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">To our
Shareholders: The Annual Meeting of Shareholders (the &#8220;Meeting&#8221;) of Acme United
Corporation, a Connecticut Corporation, (the &#8220;Company&#8221;) will be held on Monday,
April 19, 2010, at 11:00 A.M., local time, at the Cornell Club, 6 East 44th
Street, New York, New York, for the following purposes:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div>
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<tr valign="top">
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              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">1.</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">To
      elect six (6) Directors of the
Company;</font></div>
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<tr valign="top">
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            </td>
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              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">To
      consider and vote upon&#160;an amendment to the Company&#8217;s Employee Stock
      Option Plan to increase the number of shares authorized to be issued
      thereunder from 610,000 to 760,000, an increase of 150,000
      shares;</font></div>
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    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
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<tr valign="top">
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              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">3.</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">To
      consider and vote upon the ratification of the appointment of our
      independent registered public accounting firm for the fiscal year ending
      December 31, 2010; and</font></div>
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    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
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<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
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              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">4.</font></div>
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            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">To
      transact such other business as may properly come before the
      Meeting.</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Shareholders
of record at the close of business on March 3, 2010 are entitled to receive
notice of and to vote at the Meeting and at any adjournment
thereof.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Please
carefully read the attached Proxy Statement for information regarding the
matters to be considered and acted upon at the Meeting.&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Your Board of
Directors recommends that you vote in favor of Proposals 1, 2, and 3
above.</font> You are cordially invited to attend the Meeting and we hope that
you will do so.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">WHETHER
OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING IN PERSON, YOU ARE URGED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED RETURN
POSTAGE-PAID ENVELOPE.&#160;&#160;No additional postage need be affixed to the
return envelope if mailed in the United States.&#160;&#160;If you attend the
Meeting, you may withdraw your proxy and vote in person by ballot.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>&#160;</div>
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<tr>
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            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">By
      Order of the Board of Directors,</font></font></td>
          </tr><tr>
            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;</font></td>
            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;</font></td>
          </tr><tr>
            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;</font></td>
            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;</font></td>
          </tr><tr>
            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;</font></td>
            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Paul G.
      Driscoll</font></td>
          </tr><tr>
            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;</font></td>
            <td width="50%" style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
              <div><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Vice
      President and Chief Financial Officer, </font></font></div>
              <div><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Secretary
      and Treasurer</font></font></div>
            </td>
          </tr></table>
    </div>
    <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">March 23,
2010</font></div>
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Connecticut</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div><br>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%">
        </div>
      </div>
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        <div style="TEXT-ALIGN: center; WIDTH: 100%">
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      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
</font></div>
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    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Acme
United Corporation</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">60
Round Hill Road</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Fairfield,
Connecticut 06824</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">ANNUAL
MEETING OF SHAREHOLDERS TO BE HELD ON</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">April
19, 2010</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">PROXY
STATEMENT</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">This
Proxy Statement and the accompanying Notice of Annual Meeting of Shareholders
and Proxy Card are being furnished in connection with the solicitation of
proxies by the Board of Directors of Acme United Corporation, a Connecticut
Corporation (the &#8220;Company&#8221;), to be used at the Annual Meeting of Shareholders of
the Company, to be held April 19, 2010, at 11:00 A.M., local time, at the
Cornell Club, 6 East 44th Street, New York, New York or at any adjournment or
postponement thereof (the &#8220;Meeting&#8221;). This Proxy Statement and the enclosed
Proxy Card are being furnished on or about March 24, 2010 to all holders of
record of the Company&#8217;s Common Stock, par value $2.50 per share (the &#8220;Common
Stock&#8221;), as of the close of business on March 3, 2010.&#160;&#160;A copy of the
Company&#8217;s 2009 Annual Report to Shareholders, including consolidated financial
statements for the fiscal year ended December 31, 2009, accompanies this Proxy
Statement.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">At the
Meeting, shareholders will:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
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<tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: symbol, serif; FONT-SIZE: 11pt">&#183;&#160;
      &#160;&#160;</font></div>
            </td>
            <td>
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">elect
      six (6) Directors to serve until the next annual meeting ( Proposal
      1);</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: symbol, serif; FONT-SIZE: 11pt">&#183;&#160;
      &#160;&#160;</font></div>
            </td>
            <td>
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">consider
      and vote upon a proposal to amend the Company&#8217;s Employee Stock Option Plan
      to increase the number of shares authorized to be issued under the plan
      from 610,000 to 760,000, an increase of 150,000 shares (Proposal 2);
      and</font></div>
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<tr valign="top">
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      &#160;&#160;</font></div>
            </td>
            <td>
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">consider
      and vote upon a proposal to ratify the appointment of the Company&#8217;s
      independent registered public accounting firm for the fiscal year ending
      December 31, 2010 (Proposal 3).</font></div>
            </td>
          </tr></table>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING
TO BE HELD ON APRIL 19, 2010.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
Notice of Annual Meeting of Shareholders, this Proxy Statement, Proxy card, and
the 2009 Annual Report to Shareholders are available at the following website
address: www.proxy. acmeunited.com.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Voting
Securities, Record Date and Quorum</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-SIZE: 11pt">Record Date.</font>
The Board of Directors has fixed the close of business on March 3, 2010 as the
record date (the &#8220;Record Date&#8221;) for determination of shareholders entitled to
receive notice of and to vote at the Meeting.&#160;&#160;As of the Record Date,
there were 3,174,109&#160;shares of Common Stock issued and outstanding and
there were no other voting securities of the Company
outstanding.</font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-SIZE: 11pt">Quorum.</font> The
presence at the Meeting, in person or by proxy, of a majority of the outstanding
shares of Common Stock entitled to vote shall constitute a quorum for the
Meeting.&#160;&#160;Each outstanding share of Common Stock entitles the record
holder thereof to one vote.&#160;&#160;Abstentions and broker non-votes are not
counted as votes cast on any matter to which they relate, but are counted in
determining the presence of a quorum.</font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-SIZE: 11pt">Election of
Directors.</font>&#160;&#160;Assuming the presence of a quorum, a plurality of
the votes cast in person or by proxy at the Meeting is required to elect each of
the nominees for Director.&#160;&#160;Abstentions and broker non-votes will not
be taken into account in determining the outcome of the election of
directors.</font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">On July
1, 2009, the SEC approved the New York Stock Exchange&#8217;s (&#8220;NYSE&#8221;) proposed rule
change that eliminates broker discretionary voting in uncontested director
elections.&#160;&#160;If you hold your shares through a broker, your broker is
permitted to vote your shares on &#8220;routine&#8221; matters, even if the broker does not
receive instructions from you.&#160;&#160;However, the NYSE no longer considers
the election of directors to be routine, so your broker may not vote your shares
on those proposals without receiving instructions from you.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-SIZE: 11pt">Amendment of the
Employee Stock Option Plan</font>.&#160;&#160;To be approved, the proposal to
increase the number of shares which are authorized for issuance upon exercise of
options granted under the Employee Stock Option Plan must receive the
affirmative vote of a majority of the shares of Common Stock cast in person or
by proxy at the meeting.&#160;&#160;Uninstructed shares are not entitled to vote
on this proposal; accordingly, broker non-votes will not affect the outcome of
the vote on the proposal.&#160;&#160;Abstentions also will not affect the
outcome of the vote on the proposal.</font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-SIZE: 11pt">Ratification of the
Appointment of Our Independent Registered Accounting Firm</font>.&#160;&#160;To
be approved, the proposal to ratify the appointment of our independent
registered accounting firm for the fiscal year ending December 31, 2010 must
receive the affirmative vote of a majority of the shares of Common Stock cast in
person or by proxy at the meeting.&#160;&#160;Abstentions and broker non-votes
will not be taken into account in determining the outcome of the vote on this
proposal.</font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Voting
Rights and Solicitation of Proxies</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt">Eligible shareholders of record may vote at the Meeting
in person or by means of the enclosed Proxy Card.&#160;&#160;You may specify
your voting choices by marking the appropriate boxes on the Proxy
Card.&#160;&#160;The proxy solicited hereby, if properly signed and returned to
the Company and not revoked prior to or at the Meeting, will be voted in
accordance with the instructions specified thereon.&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-WEIGHT: bold">If you properly sign
and return your Proxy Card, but do not specify your choices, your shares will be
voted by the proxy holders as recommended by the Board of
Directors.</font></font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Board
of Directors encourages you to complete and return the Proxy Card even if you
expect to attend the Meeting.&#160;&#160;You may 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) submission of a proxy bearing a later date or
(iii) by attending the Meeting in person and casting a ballot.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">2</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt">The proxy holders, Walter C. Johnsen and Susan H.
Murphy, will vote all shares of Common Stock represented by Proxy Cards that are
properly signed and returned by shareholders.&#160;&#160;The Proxy Card also
authorizes the proxy holders to vote the shares represented in their sole
discretion with respect to any matters not included in this Proxy Statement that
may properly be presented for consideration at the Meeting.&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-WEIGHT: bold">You must return a
signed Proxy Card if you want the proxy holders to vote your shares of Common
Stock.</font></font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The cost
of soliciting proxies will be borne by the Company.&#160;&#160;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.&#160;&#160;Such persons will not receive any fees or
other compensation for such solicitation.&#160;&#160;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 Mackenzie Partners, Inc. to assist in the solicitation of
votes and the distribution of proxy materials for a fee of $5,000, plus
out-of-pocket expenses.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Governance
of the Company</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Board
of Directors</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
By-laws of the Company provide that the Company shall have a Board of Directors
of not fewer than five or more than nine directors, as fixed by the Board from
time to time.&#160;&#160;The number of directors is presently fixed at
six.&#160;&#160;Directors serve until the next annual meeting of shareholders
and until their respective successors have been elected and
qualified.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
Company has determined to combine the positions of its Chief Executive Officer
and Chairman of the Board.&#160;&#160;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&#8217;s operations, the efficiencies obtained by
combining the positions and the fact that the combination of the positions
facilitates the alignment of the Board&#8217;s agenda with its oversight
responsibilities relating to the business and operations of the
Company.&#160;&#160;The Company does not have a lead independent
Director.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Board
of Director Meetings and Committees</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Board
of Directors held seven meetings in 2009. All Directors attended at least 75% of
the aggregate of the total number of the Board meetings and meetings of
committees of the Board of which they were a member.&#160;&#160;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.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Independence
Determinations</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Board
of Directors annually determines the independence of directors.&#160;&#160;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.&#160;&#160;Material relationships
can include commercial, banking, consulting, legal, accounting, charitable, and
familial relationships, among others.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">3</font></div>
      </div>
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        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">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 Amex (formerly, the American Stock Exchange) rules, the following
persons are not considered independent:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(a)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">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;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(b)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">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
      $120,000 during any period of twelve consecutive months within the three
      years preceding the determination of independence (other than certain
      specified types of compensation, including, e.g., compensation for Board
      or Committee service, benefits under a tax-qualified retirement plan, or
      non-discretionary compensation);</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(c)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">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;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(d)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">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&#8217;s
      securities) that exceed 5% of the organization&#8217;s consolidated gross
      revenues for that year, or $200,000, whichever is more, in any of the past
      three years;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(e)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">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&#8217;s executive officers serve on that other
      entity&#8217;s compensation committee;
and</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(f)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">a
      director who is, or has an immediate family member who is, a current
      partner of the Company&#8217;s outside auditor, or was a partner or employee of
      the Company&#8217;s outside auditor who worked on the Company&#8217;s audit at any
      time during any of the past three fiscal
years.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Immediate
family includes a person&#8217;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&#8217;s home.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">4</font></div>
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        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Mr.
Johnsen, Chairman of the Board, serves as Chief Executive Officer of the
Company, and Mr. Olschan, a member of the Board, serves as President and Chief
Operating Officer of the Company. The Board has determined that all of the other
current directors are &#8220;independent&#8221; within the meaning of the applicable listing
standards of the NYSE Amex.&#160;&#160;These independent directors
are:&#160;&#160;Mr. Davidson, Mr. Holden, Ms. Murphy, and Mr. Ward, each of whom
is standing for re-election.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Nominations
for Directors</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
functions of a Nominating Committee have been historically performed by the
whole Board.&#160;&#160;A majority of the Board&#8217;s independent directors (as such
term is defined in Section 803A of the NYSE Amex&#8217;s listing standards) would
recommend nominees for consideration by the full Board, including the nominees
standing for election at the Meeting.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">In
February 2009, the Board of Directors organized a Nominating Committee,
described below under &#8220;Committees of the Board.&#8221;&#160;&#160;The Board continues
to be responsible for nominating 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 Nominating Committee reviews all potential director
candidates, and recommends potential director candidates to the full
Board.&#160;&#160;The Nominating Committee will also consider nominations by
shareholders, as described below.&#160;&#160;The full Board reviews and has
final approval authority on all potential director candidates being recommended
to the shareholders for election.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">In
considering candidates for new membership or incumbents for continued membership
on the Board of Directors of the Company, the Nominating Committee will consider
the factors set forth below, together with any other factors the Committee deems
appropriate from time to time.&#160;&#160;The 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 together, represent a diversity of skills,
background and experience. Each potential nominee:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(a)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">should
      be accomplished and have recognized achievements in his or her respective
      and professional field;</font></div>
            </td>
          </tr></table>
    </div>
    <div>&#160;</div>
    <div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td style="WIDTH: 36pt">
                <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></div>
              </td>
              <td style="WIDTH: 36pt">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(b)&#160;</font></div>
              </td>
              <td>
                <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">should
      have relevant expertise and experience, and be able to offer advice and
      guidance to senior management based on that expertise and
      experience;</font></div>
              </td>
            </tr></table>
      </div>
      <div>&#160;</div>
      <div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td style="WIDTH: 36pt">
                  <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></div>
                </td>
                <td style="WIDTH: 36pt">
                  <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(c)</font></div>
                </td>
                <td>
                  <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">must
      possess high personal and professional ethics, integrity and
      values;</font></div>
                </td>
              </tr></table>
        </div>
        <div>&#160;</div>
        <div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                  <td style="WIDTH: 36pt">
                    <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></div>
                  </td>
                  <td style="WIDTH: 36pt">
                    <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(d)</font></div>
                  </td>
                  <td>
                    <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">must
      be inquisitive and objective, have the ability to exercise practical and
      sound business judgment, and have an independent
  mind;</font></div>
                  </td>
                </tr></table>
          </div>
          <div>&#160;</div>
          <div>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                    <td style="WIDTH: 36pt">
                      <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></div>
                    </td>
                    <td style="WIDTH: 36pt">
                      <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(e)</font></div>
                    </td>
                    <td>
                      <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">must
      be able and willing to devote sufficient time and effort to carrying out
      his or her duties and responsibilities as a director
      effectively;</font></div>
                    </td>
                  </tr></table>
            </div>
            <div>&#160;</div>
            <div>
              <div>
                <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                      <td style="WIDTH: 36pt">
                        <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></div>
                      </td>
                      <td style="WIDTH: 36pt">
                        <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(f)</font></div>
                      </td>
                      <td>
                        <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">should
      be &#8220;independent&#8221; under the rules established by the NYSE Amex;
      and</font></div>
                      </td>
                    </tr></table>
              </div>
              <div>&#160;</div>
              <div>
                <div>
                  <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                        <td style="WIDTH: 36pt">
                          <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></div>
                        </td>
                        <td style="WIDTH: 36pt">
                          <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(g)</font></div>
                        </td>
                        <td>
                          <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">should
      have the ability to work effectively with
  others.</font></div>
                        </td>
                      </tr></table>
                </div>
                <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;&#160;&#160;</font></div>
                <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                  <div id="FTR">
                    <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">5</font></div>
                  </div>
                  <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
                    <div style="TEXT-ALIGN: center; WIDTH: 100%">
                      <hr style="COLOR: black" noshade size="1">
                    </div>
                  </div>
                  <div id="HDR">
                    <div id="GLHDR" style="WIDTH: 100%" align="right">
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
Nominating Committee will commence 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.&#160;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 in enough time for Nominating
Committee consideration. In addition, it has historically been customary for
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 it deems appropriate.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
Nominating Committee considers diversity in identifying nominees for
Director.&#160;&#160;The Nominating Committee seeks qualified individuals, who,
taken together, represent a diversity of skills, background and
experience.&#160;&#160;In considering a potential nominee&#8217;s background and
experience, the Nominating Committee will consider the individual&#8217;s race and
gender.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Any
shareholder entitled to vote for election of directors at a meeting may nominate
persons for election as directors if, as more fully provided in Section 11 of
the By-laws, the shareholder provides written notice of such shareholder&#8217;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
shareholders 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.&#160;&#160;The
nomination must be sent in care of the Secretary of the Company at 60 Round Hill
Road, Fairfield, CT 06824, and must include, among other information, the name,
address, telephone number and resum&#233; of the nominee&#8217;s business and educational
background, along with a written statement by the shareholder as to why such
person should be considered for election to the Board of Directors.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Board
will consider nominees for directors properly recommended by shareholders, as
described above.&#160;&#160;The Board follows the same evaluation procedures
whether a candidate is recommended by directors or shareholders.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Committees
of the Board</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Executive
Committee</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
Executive Committee of the Board of Directors is composed of Mr. Holden, who
serves as Chairman, and Mr. Ward.&#160;&#160;The function of the Executive
Committee is to act for the Board of Directors during the intervals between
meetings of the Board.&#160;&#160;The Executive Committee held one meeting in
2009.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">6</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Audit
Committee</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">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.&#160;&#160;The Board of Directors
has determined that all members of the Audit Committee are &#8220;independent&#8221; and
&#8220;financially literate&#8221; within the meaning of the applicable listing standards of
the NYSE Amex.&#160;&#160;In addition, the Board has determined that Mr. Ward
qualifies as an &#8220;audit committee financial expert&#8221; within the meaning of
regulations adopted by the Securities and Exchange Commission and has the
financial sophistication required under the listing standards of the NYSE
Amex.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
Committee consists of Mr. Ward, Chairman, and Messrs. Holden and
Davidson.&#160;&#160;The Audit Committee meets at least quarterly, and more
often as needed.&#160;&#160;The Committee met seven times in
2009.&#160;&#160;The Board of Directors has adopted a written charter for the
Audit Committee, which is reviewed annually by the Audit Committee.&#160;&#160;A
copy of the Audit Committee charter is available on the Company&#8217;s website at
<font style="DISPLAY: inline; FONT-SIZE: 11pt; TEXT-DECORATION: underline">www.acmeunited.com</font>
in the Investor Relations/Corporate Governance section.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Compensation
Committee</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">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.&#160;&#160;The duties of the Committee include evaluating
and making recommendations to the Board regarding the compensation and equity
incentives and awards for our executive officers and the administration of the
Company&#8217;s Non-Salaried Director Stock Option Plan.&#160;&#160;The Compensation
Committee does not have a charter.&#160;&#160;The Board of Directors has
determined that all members of the Compensation Committee are &#8220;independent&#8221;
within the meaning of the applicable listing standards of the NYSE
Amex.&#160;&#160;The Committee consists of Mr. Holden, Chairman, Mr. Davidson
and Ms. Murphy.&#160;&#160;The Committee held two meetings during
2009.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Nominating
Committee</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
Nominating Committee assists the Board in identifying individuals qualified to
become Board members and recommends director nominees 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.&#160;&#160;The Nominating Committee was organized in February
2009 and consists of Mr. Holden, Chairman, Mr. Davidson and Mr.
Ward.&#160;&#160;The Board of Directors has determined that all members of the
Nominating Committee are &#8220;independent&#8221; within the meaning of the applicable
listing standards of the NYSE Amex.&#160;&#160;The Nominating Committee will
meet at least once a year and more often as needed.&#160;&#160;The Committee
held four meetings during 2009.The Board of Directors has adopted a written
charter for the Nominating Committee which will be reviewed annually by the
Nominating Committee; a copy of the charter is available on the Company&#8217;s
website at <font style="DISPLAY: inline; FONT-SIZE: 11pt; TEXT-DECORATION: underline">www.acmeunited.com</font>
in the Investor Relations/Corporate Governance section.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">7</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Board&#8217;s
Role in Oversight of Risk Management.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
Company&#8217;s Board of Directors as a whole exercises risk oversight in connection
with risk in its various forms, including credit risk, liquidity risk, and
operational risk.&#160;&#160;The Board discusses with management the steps
management will take to monitor and control the Company&#8217;s exposure to such
risks.&#160;&#160;The Board administers these functions, in part, with the
assistance of the Audit Committee of the Board, particularly with regard to
financial risk exposures.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">A key
element of the Board&#8217;s risk oversight process is the Company&#8217;s annual Strategic
Planning meeting, a two day meeting held early in the third quarter of each
year.&#160;&#160;At this meeting, the Board meets with senior management of the
Company to identify both risks and opportunities facing the
Company.&#160;&#160;The senior management includes the Company&#8217;s Chief Executive
Officer, President, Chief Financial Officer and the heads of product
development, technology, production, sourcing, marketing and supply
chain.&#160;&#160;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.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Board
believes that the foregoing procedures enable it to properly perform its risk
oversight, particularly since the Company is not highly leveraged and does not
utilize complex financial derivative instruments.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Attendance
at Annual Meetings</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">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.&#160;&#160;In 2009, all six then incumbent members of the
Board attended the 2009 Annual Meeting of Shareholders.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Shareholder
Communications with Directors</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
Company has established a process for shareholders to send communications to the
Board of Directors.&#160;&#160;Shareholders may send communications to the Board
of Directors to the attention of the Secretary, Acme United Corporation, 60
Round Hill Road, Fairfield, Connecticut 06824, who will forward them to all
Board members within a reasonable time after receipt. If the shareholder wishes
the communication to be sent to one or more specific Board members only, the
addressee should be the specific Board member(s), &#8220;c/o Secretary,&#8221; who will then
forward the communication to such Board member(s).&#160;&#160;If one or more
specific Board members are not designated for such other communication, the
communication will be forwarded to the entire Board.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">8</font></font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
</font></div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">PROPOSAL
1:</font></div>
    <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">ELECTION
OF DIRECTORS</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Six
directors are to be elected at the Meeting to serve for one-year terms until the
2011 Annual Meeting of Shareholders and until their respective successors are
elected and qualified. A plurality of the votes cast at the Meeting is required
to elect each of the nominees for Director.&#160;&#160;The Board has determined
to nominate six individuals for election to the Board of Directors, each of whom
is presently an incumbent director.&#160;&#160;The Board of Directors knows of
no reason why any nominee would be unable to serve as director.&#160;&#160;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.&#160;&#160;If any
nominee should for any reason become unable to serve, then all valid proxies
will be voted for the election of a substitute nominee designated by the
Board.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
following information about the nominees for election as our directors is based,
in part, upon information furnished by the nominees.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
      <div>
        <div align="left">
          <table cellpadding="5" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
                <td valign="top" width="23%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left; BORDER-LEFT: #000000 0.85pt solid; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; BORDER-TOP: #000000 0.85pt solid; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Nominees</font></div>
                </td>
                <td valign="top" width="40%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left; BORDER-LEFT: #000000 0.85pt solid; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; BORDER-TOP: #000000 0.85pt solid; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Principal
      Occupation</font></div>
                </td>
                <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: #000000 0.85pt solid; BORDER-RIGHT: black 0.85pt solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Director
      Since</font></div>
                </td>
              </tr><tr>
                <td valign="top" width="23%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left; BORDER-LEFT: #000000 0.85pt solid; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 446pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Walter
      C. Johnsen</font></div>
                  <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(age
      59)</font></div>
                </td>
                <td valign="top" width="40%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: justify; BORDER-LEFT: #000000 0.85pt solid; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Chairman
      of the Board and Chief Executive Officer of the Company since January 1,
      2007; President and Chief Executive Officer of the Company from November
      30, 1995 to December 31, 2006.&#160;&#160;He formerly served as Vice
      Chairman and a principal of Marshall Products, Inc., a medical supply
      distributor. Mr. Johnsen&#8217;s qualifications to serve on the Board include
      the in-depth knowledge of all facets of the Company&#8217;s business which he
      has gained during his more than fifteen years of service as the Company&#8217;s
      Chief Executive Officer.</font></div>
                </td>
                <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: black 0.85pt solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">1995</font></div>
                </td>
              </tr></table>
        </div>
        <div>&#160;</div>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">9</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="1">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div>&#160;</div>
        <div align="left">
          <table cellpadding="5" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
                <td valign="top" width="23%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left; BORDER-LEFT: #000000 0.85pt solid; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; BORDER-TOP: black 2px solid; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Richmond
      Y. Holden, Jr.</font></div>
                  <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(age
      56)</font></div>
                </td>
                <td valign="top" width="40%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: justify; BORDER-LEFT: #000000 0.85pt solid; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; BORDER-TOP: black 2px solid; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Since
      May 2007, President of Educators Publishing Service, a supplementary
      publisher of education materials and a subsidiary of School Specialty
      Inc.&#160;&#160;He served as President and Chief Executive Officer of J.L.
      Hammett Co., a reseller of educational products from 1992 to 2006. The
      qualifications of Mr. Holden to serve on the Board include his senior
      management level experience of large complex companies in the educational
      markets.&#160;&#160;In particular, as a result of his experience with
      School Specialty Inc., a $1 billion reseller of educational products, Mr.
      Holden has broad knowledge of educational markets and operational matters
      relating to educational products, such as marketing, sourcing, pricing and
      distribution.</font></div>
                </td>
                <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: black 2px solid; BORDER-RIGHT: black 0.85pt solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">1998</font></div>
                </td>
              </tr><tr>
                <td valign="top" width="23%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left; BORDER-LEFT: #000000 0.85pt solid; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Brian
      S. Olschan</font></div>
                  <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(age
      53)</font></div>
                </td>
                <td valign="top" width="40%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: justify; BORDER-LEFT: #000000 0.85pt solid; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">President
      and Chief Operating Officer of the Company since January 1, 2007;
      Executive Vice President and Chief Operating Officer of the Company from
      January 1999 to December 31, 2006; Senior Vice President - Sales and
      Marketing of the Company from September 1996 to January 1999. He formerly
      served as Vice President and General Manager of the Cordset and Assembly
      Business of General Cable Corporation, an electrical wire and cable
      manufacturer.&#160;&#160;Mr. Olschan&#8217;s qualifications to serve on the
      Board include his detailed knowledge of the Company&#8217;s operations which he
      has gained in his capacity as a member of senior management for more than
      eleven years, including as Chief Operating Officer since January 1999 and
      President since January 2007.</font></div>
                </td>
                <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: black 0.85pt solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">2000</font></div>
                </td>
              </tr></table>
        </div>
        <div>&#160;</div>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">10</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="1">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div>&#160;</div>
        <div align="left">
          <table cellpadding="5" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
                <td valign="top" width="23%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 0.5pt solid; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; BORDER-TOP: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Stevenson
      E. Ward III</font></div>
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(age
      64)</font></div>
                </td>
                <td valign="top" width="40%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: justify; BORDER-LEFT: black 0.5pt solid; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; BORDER-TOP: black 2px solid">
                  <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Vice
      President and Chief Financial Officer of Triton Thalassic Technologies,
      Inc. since September 2000. Triton&#8217;s technology controls and inactivates
      pathogens in the healthcare and industrial industries. From 1999 through
      2000, Mr. Ward served as Senior Vice President-Administration of
      Sanofi-Synthelabo, Inc., a major pharmaceutical company.&#160;&#160;He
      also served as Executive Vice President (1996-1999) and Chief Financial
      Officer (1994-1995) of Sanofi, Inc., and Vice President-Finance,
      Pharmaceutical Group, Sterling Winthrop, Inc. (1992-1994). Prior to
      joining Sterling he was </font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">employed
      by General Electric Company with management positions in Purchasing,
      Corporate Audit and Finance.&#160;&#160;Mr. Ward&#8217;s qualifications for
      service on the Board include his extensive experience in senior executive
      level finance positions at Fortune 100 multinational
      corporations.</font></font></font></font></div>
                </td>
                <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center; BORDER-LEFT: black 0.5pt solid; BORDER-TOP: black 2px solid; BORDER-RIGHT: black 0.85pt solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">2001</font></div>
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                </td>
              </tr><tr>
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                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Susan
      H. Murphy</font></div>
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(age
      58)</font></div>
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                <td valign="top" width="40%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: justify; BORDER-LEFT: black 0.5pt solid; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
                  <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Vice
      President for Student and Academic Services, Cornell University, since
      1994; Dean of Admissions and Financial Aid from 1985 to 1994. Ms. Murphy
      has been employed at Cornell since 1978. Ms. Murphy received a Ph.D. from
      Cornell University. Ms. Murphy has broad senior management level
      experience in a large, complex organization<font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-WEIGHT: bold">.&#160;&#160;</font>In
      particular, her experience in employee compensation matters and the
      development and implementation of diversity policies is helpful to the
      Company.</font></div>
                </td>
                <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center; BORDER-LEFT: black 0.5pt solid; BORDER-RIGHT: black 0.85pt solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">2003</font></div>
                </td>
              </tr></table>
        </div>
        <div>&#160;</div>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">11</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="1">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div>&#160;</div>
        <div align="left">
          <table cellpadding="5" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
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                  <div style="MARGIN-LEFT: 9pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Rex
      L. Davidson</font> </font></font></font></font></div>
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                  <div style="TEXT-ALIGN: justify; MARGIN-LEFT: 9pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">President
      of Rex Davidson Associates, LLC, a management consulting service and
      Executive Director of Las Cumbres Community Services which provides
      developmental disability&#160;and mental health services to children,
      adults and families in Northern New Mexico.&#160; Past President and Chief
      Executive Officer of Goodwill Industries of Greater New York and Northern
      New Jersey, Inc., and Past President of Goodwill Industries Housing
      Corporation.&#160;&#160;Mr. Davidson&#8217;s qualifications to serve on the
      Board include significant management experience at the highest level,
      having been responsible for the management of an organization with over
      2,000 employees and revenues in excess of $100 million.&#160;&#160;Mr.
      Davidson&#8217;s experience in the areas of compensation of personnel at all
      levels, his experience relating to retail matters, such as retail trends
      and pricing, and diversity policies are of significant benefit to the
      company.</font></font></div>
                </td>
                <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center; BORDER-LEFT: black 0.5pt solid; BORDER-TOP: black 2px solid; BORDER-RIGHT: black 0.85pt solid"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">2006</font></font></td>
              </tr></table>
        </div>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">OWNERSHIP
OF ACME UNITED CORPORATION STOCK</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">PRINCIPAL
SHAREHOLDERS</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
following table sets forth certain information, as of March 1, 2010, with
respect to the beneficial ownership of shares of Common Stock by any person who,
to the knowledge of the Company, owned beneficially more than 5% of the
outstanding shares of Common Stock of the Company.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div>
      <div align="left">
        <table cellpadding="5" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="bottom" width="39%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; BORDER-TOP: #000000 0.85pt solid">
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              </td>
              <td valign="bottom" width="17%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: #000000 0.85pt solid">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Type
      of Ownership</font></div>
              </td>
              <td valign="bottom" width="16%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: #000000 0.85pt solid">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Number
      of Shares Beneficially Owned (1)</font></div>
              </td>
              <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Percent
      of Class</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="39%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Walter
      C. Johnsen</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">60
      Round Hill Road</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Fairfield,
      CT&#160;&#160;&#160;06824</font></div>
              </td>
              <td valign="top" width="17%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Direct</font></div>
              </td>
              <td valign="top" width="16%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">561,722
      (5)</font></div>
              </td>
              <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">17.4</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="39%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">First
      Wilshire Securities Management, Inc</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">1124
      E. Green St., Suite 200</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Pasadena,
      CA 91106</font></div>
              </td>
              <td valign="top" width="17%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Direct</font></div>
              </td>
              <td valign="top" width="16%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">245,802
      *</font></div>
              </td>
              <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">7.7</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="39%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">North
      Star Investment Management</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">20
      N. Wacker Dr., Suite 1416</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Chicago,
      Il 60606</font></div>
              </td>
              <td valign="top" width="17%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Direct</font></div>
              </td>
              <td valign="top" width="16%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">217,110**</font></div>
              </td>
              <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">6.8</font></div>
              </td>
            </tr></table>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">*Based on
the reporting person&#8217;s Schedule 13G dated February 17, 2010.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">**Based
on the reporting person&#8217;s Form 13F dated January 29, 2010.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">12</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">SECURITY
OWNERSHIP OF DIRECTORS AND OFFICERS</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
following table sets forth certain information, as of March 1, 2010, with
respect to the beneficial ownership of shares of Common Stock by (i) each
director and nominee for director of the Company; (ii) each executive officer
named in the Summary Compensation Table appearing below under &#8220;Executive
Compensation&#8221;; and (iii) all executive officers and directors as a
group.&#160;&#160;The persons shown have sole voting and investment power in
these shares except as indicated below in the notes to the table.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
address of each person appearing in the table is 60 Round Hill Road, Fairfield,
CT 06824.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <div align="left">
        <table cellpadding="5" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="39%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Name
      of Beneficial Owner</font></div>
              </td>
              <td valign="top" width="25%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Number
      of Shares Beneficially Owned (1)</font></div>
              </td>
              <td valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Percent</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="39%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Rex
      L. Davidson (2)</font></div>
              </td>
              <td valign="top" width="25%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">14,000</font></div>
              </td>
              <td valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">*</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="39%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Paul
      G. Driscoll (3)</font></div>
              </td>
              <td valign="top" width="25%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">58,395</font></div>
              </td>
              <td valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">1.8</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="39%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Richmond
      Y. Holden, Jr. (4)</font></div>
              </td>
              <td valign="top" width="25%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">32,000</font></div>
              </td>
              <td valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">1.0</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="39%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Walter
      C. Johnsen (5)</font></div>
              </td>
              <td valign="top" width="25%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">561,722</font></div>
              </td>
              <td valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">17.4</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="39%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Susan
      M. Murphy (6)</font></div>
              </td>
              <td valign="top" width="25%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">24,006</font></div>
              </td>
              <td valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">*</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="39%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Brian
      S. Olschan (7)</font></div>
              </td>
              <td valign="top" width="25%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">146,000</font></div>
              </td>
              <td valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">4.5</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="39%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Stevenson
      E. Ward III (8)</font></div>
              </td>
              <td valign="top" width="25%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">27,200</font></div>
              </td>
              <td valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">*</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="39%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Executive
      officers and directors</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">as
      a group (7 persons)</font></div>
              </td>
              <td valign="top" width="25%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">863,323</font></div>
              </td>
              <td valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">26.7</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              </td>
            </tr></table>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">*Less
than 1.0%</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(1)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Based
      on a total of 3,174,109 shares outstanding as of March 1,
      2010.&#160;&#160;Under applicable rules promulgated under the Securities
      Exchange Act of 1934, as amended (the &#8220;Exchange Act&#8221;), 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.&#160;&#160;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.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(2)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Includes
      14,000 shares issuable upon exercise of
options.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(3)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Includes
      54,250 shares issuable upon exercise of
options.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(4)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Includes
      26,500 shares issuable upon exercise of
options.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">13</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(5)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Includes
      53,750 shares issuable upon exercise of
options.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(6)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Includes
      20,500 shares issuable upon exercise of
options.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(7)</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Includes
      97,500 shares issuable upon exercise of
options.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(8)&#160;</font></div>
            </td>
            <td>
              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Includes
      14,000 shares issuable upon exercise of
options.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-SIZE: 11pt">&#160;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">EXECUTIVE
COMPENSATION</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Our
compensation policies and programs for our executive officers are designed to
support the overall objective of enhancing value for our
shareholders.&#160;&#160;To achieve this objective, it is critical that we be
able to attract, motivate, reward and retain highly qualified and productive
individuals.&#160;&#160;This is to be accomplished by:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt">
        <table border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td align="right" style="WIDTH: 27pt">
                <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: symbol, serif; FONT-SIZE: 11pt">&#183;</font></div>
              </td>
              <td align="left">
                <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black"></font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">directly
      relating compensation to both Company and individual
      performance;</font></div>
              </td>
            </tr></table>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt">
      <table border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td align="right" style="WIDTH: 27pt">
              <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: symbol, serif; FONT-SIZE: 11pt">&#183;</font></div>
            </td>
            <td align="left">
              <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black"></font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">structuring
      compensation levels to be externally competitive and
      internallyequitable;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt">
      <table border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td align="right" style="WIDTH: 27pt">
              <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: symbol, serif; FONT-SIZE: 11pt">&#183;</font></div>
            </td>
            <td align="left">
              <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black"></font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">enabling
      key employees to share in the future success of the Company
      by&#160;acquiring equity interests in the Company;
  and</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt">
      <table border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td align="right" style="WIDTH: 27pt">
              <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: symbol, serif; FONT-SIZE: 11pt">&#183;</font></div>
            </td>
            <td align="left">
              <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black"></font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">designing
      compensation programs to provide an optimal combination of costs to the
      Company and value to our employees.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">In 2009,
the compensation and benefits for our executive officers consisted of four
components:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt">
      <table border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td align="right" style="WIDTH: 27pt">
              <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: symbol, serif; FONT-SIZE: 11pt">&#183;</font></div>
            </td>
            <td align="left">
              <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black"></font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">base
      salary;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt">
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salaries for our officers are set annually and reflect skills and experience,
level and scope of responsibility and performance during the prior year and
historical, long-term performance.&#160;&#160;The Compensation Committee also
considers external factors, such as cost of living in the areas in which our
officers reside and current market conditions.&#160;&#160;During 2009, the Chief
Executive Officer participated in discussions with the Committee regarding the
base salary amounts of the executive officers.</font></div>
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    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
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Plan</font></font></div>
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Company grants cash incentive awards under our Cash Bonus Plan based upon the
achievement of both Company and individual performance objectives. The Company
generally makes cash awards under this Plan if the Company achieves the minimum
level of net income set for the applicable year.&#160;&#160;However, the Company
may make awards at its discretion if the minimum levels of net income are not
attained due to unusual circumstances, but where the performance of individual
executive officers merit such awards.</font></div>
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Company&#8217;s Deferred Compensation Plan for executives and key managers
participating in the Company&#8217;s Cash Bonus Plan, participants will be eligible to
make an irrevocable election on or before December 31st of each year as to the
percentage of his or her bonus to be awarded in the following
year.&#160;&#160;The deferral may be for all or a portion of the participant&#8217;s
payment under the Cash Bonus Plan.&#160;&#160;All deferred amounts are
non-forfeitable and earn the prime rate of interest plus 1% compounded quarterly
during the period of deferral.&#160;&#160;The Company adds 20% to the deferred
amount for each employee as a matching contribution up to a maximum of $10,000
annually.&#160;&#160;Amounts deferred are deferred until separation from service
with the Company.&#160;&#160;The plan is administered by the Deferred
Compensation Plan Committee, which consists of our Chief Executive Officer, the
Chief Operating Officer and the Chief Financial Officer.</font></div>
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Option Plan</font></font></div>
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Company's stock option program is administered by the Board of Directors, which
acts upon recommendations of the Compensation Committee. The purpose of the
Company's stock option program is to facilitate the acquisition of equity
interests in the Company by its officers and key employees and thus their
sharing in the future success of the Company's business. The Committee takes
into account factors such as: (i) the total number of shares of common stock
outstanding; (ii) the total number of shares of common stock which remain
available for grant under the Company's various stock option plans; and (iii)
the need to have an appropriate balance between currently paid and longer-term
compensation, and between cash and equity compensation.</font></div>
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Company provides core employee benefits, including medical and dental coverage,
disability insurance and life insurance.&#160;&#160;The benefits available are
the same for all executive officers.</font></div>
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Plan</font></font></div>
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United Corporation 401(k) Profit Sharing Plan, or 401(k) plan, is the primary
retirement benefit offered to all United States employees of the
Company.&#160;&#160;Participants may generally contribute to the Plan annually
up to the maximum amount permitted under the Internal Revenue Code - $16,500 in
2009 ($22,000 for persons over age 50).&#160;&#160;The Company provides to
participants a matching contribution equal to fifty percent of the first six
percent of the participant&#8217;s eligible compensation not to exceed the limit on
eligible compensation imposed by the Internal Revenue Code &#8211;&#160;&#160;$245,000
in 2009.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
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        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">15</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Summary
Compensation Table</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
following table sets forth information concerning the compensation of the
Company&#8217;s Principal Executive Officer and each of the two other most highly
compensated executive officers of the Company for the fiscal years ended
December 31, 2009 and 2008.&#160;&#160;These three officers are referred to as
named executive officers, or NEOs.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
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<tr>
            <td valign="bottom" width="19%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Name
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Year</font></div>
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Bonus</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">&#160;($)
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Option
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">($)
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Nonqualified
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            <td valign="bottom" width="14%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">All
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Compensation</font></div>
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            <td valign="bottom" width="11%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Total</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">($)</font></div>
            </td>
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            <td valign="top" width="19%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Walter
      C. Johnsen</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Chairman
      &amp; Chief</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Executive
      Officer</font></div>
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            <td valign="top" width="7%" style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">2009</font></div>
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">2008</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
            </td>
            <td valign="top" width="12%" style="TEXT-ALIGN: center">
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$490,000</font></div>
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$472,116</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
            </td>
            <td valign="top" width="11%" style="TEXT-ALIGN: center">
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$100,000</font></div>
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$72,400</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
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            <td valign="top" width="14%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$5,000</font></div>
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              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$17,463
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Brian
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Operating
      Officer</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td valign="top" width="7%" style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">2009</font></div>
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">2008</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
            </td>
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
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            <td valign="top" width="11%" style="TEXT-ALIGN: center">
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
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            <td valign="top" width="12%">
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
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            <td valign="top" width="14%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
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            <td valign="top" width="14%" style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td valign="top" width="11%">
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
            </td>
          </tr><tr>
            <td valign="top" width="19%">
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      G. Driscoll</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Vice
      President-Chief</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Financial
      Officer</font></div>
            </td>
            <td valign="top" width="7%" style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">2009</font></div>
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">2008</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
            </td>
            <td valign="top" width="12%" style="TEXT-ALIGN: center">
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$242,000</font></div>
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
            </td>
            <td valign="top" width="11%" style="TEXT-ALIGN: center">
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
              <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;57,500</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
            </td>
            <td valign="top" width="12%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$35,500</font></div>
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
            </td>
            <td valign="top" width="14%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
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            <td valign="top" width="14%">
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      8,427 (4)</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td valign="top" width="11%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$286,287</font></div>
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(1)&#160;&#160;</font></div>
            </td>
            <td>
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
      bonus reported includes bonuses for the fiscal year reported paid both
      during and after the end of the fiscal
year.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(2)&#160;&#160;</font></div>
            </td>
            <td>
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Represents
      the aggregate fair value of stock options on grant date rather than an
      amount paid to or realized by the named executive officer.&#160;&#160;For
      information on valuation assumptions, refer to the note on Stock Option
      Plans in the notes to the Company&#8217;s financial statements in its Annual
      Report on Form 10-K.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Each
option vests in four equal annual installments commencing on the first
anniversary of the grant date and thereafter on the annual anniversary of the
grant date.&#160;&#160;The exercise price of each option is equal to 100 percent
of fair market value on the grant date.&#160;&#160;The fair market value was
determined to be the closing price of the Common Stock on the trading day
immediately preceding the grant date.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">16</font></div>
      </div>
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        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
options granted to NEOs in 2009 and 2008 had exercise prices of $7.90 per share
and $13.19 per share, respectively.&#160;&#160;The number of shares underlying
options granted to the NEOs in 2009 and 2008 are as follows:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div align="center">
        <table cellpadding="0" cellspacing="0" width="80%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="bottom" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-SIZE: 11pt">Name</font></font></div>
              </td>
              <td colspan="2" valign="top" width="40%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Number
      of Shares</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-SIZE: 11pt">Underlying
      Options</font></font></div>
              </td>
            </tr><tr>
              <td valign="top" width="21%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></td>
              <td valign="top" width="19%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-SIZE: 11pt">2009</font></font></div>
              </td>
              <td valign="top" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-SIZE: 11pt">2008</font></font></div>
              </td>
            </tr><tr>
              <td align="left" valign="top" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Walter
      C. Johnsen</font></div>
              </td>
              <td valign="top" width="19%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">35,000</font></div>
              </td>
              <td valign="top" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">20,000</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="top" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Brian
      S. Olschan</font></div>
              </td>
              <td valign="top" width="19%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">25,000</font></div>
              </td>
              <td valign="top" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">15,000</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="top" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Paul
      G. Driscoll</font></div>
              </td>
              <td valign="top" width="19%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">15,000</font></div>
              </td>
              <td valign="top" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">10,000</font></div>
              </td>
            </tr></table>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(3)&#160;&#160;</font></div>
            </td>
            <td>
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Consists
      of reimbursement of out-of-pocket health care expenses, payment of life
      insurance premiums and Company matching contribution to the Company&#8217;s
      401(k) Profit Sharing Plan.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(4)&#160;&#160;</font></div>
            </td>
            <td>
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Consists
      of reimbursement of payments of life insurance premiums and Company
      matching contribution to the Company&#8217;s 401(k) Profit Sharing
      Plan.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div><br>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">17</font></font></font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
</font></div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-SIZE: 11pt">&#160;</font></div>
    <div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Outstanding
Equity Awards at Fiscal Year-End</font></div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
following table shows outstanding stock option awards classified as exercisable
and unexercisable as of December 31, 2009 for each of the NEOs.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td align="left" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: #000000 0.85pt solid">
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              </td>
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Number
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      (#)&#160;&#160;Exercisable</font></div>
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Number
      of Securities Underlying Unexercised Options
      (#)&#160;&#160;Unexercisable</font></div>
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              <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Option</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Exercise</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Price</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">($)</font></div>
              </td>
              <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Option</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Expiration</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Date
      (1)</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Walter
      C. Johnsen</font></div>
              </td>
              <td valign="top" width="23%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">10,000</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">20,000</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">11,250</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      7,500</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      5,000</font></div>
              </td>
              <td valign="top" width="25%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      3,750</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      7,500</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">15,000</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">35,000</font></div>
              </td>
              <td valign="top" width="9%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;&#160;&#160;&#160;4.00</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;&#160;15.65</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;&#160;15.15</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;&#160;14.93</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;&#160;13.19</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;&#160;&#160;&#160;7.90</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              </td>
              <td valign="top" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center; BORDER-LEFT: #000000 0.85pt solid; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      6/23/13</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      4/28/15</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      7/31/16</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      6/12/17</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      8/06/18</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      6/08/19</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Brian
      S. Olschan</font></div>
              </td>
              <td valign="top" width="23%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;&#160;7,500</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;&#160;5,000</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">20,000</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">20,000</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">15,000</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">15,000</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">11,250</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      7,500</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      3,750</font></div>
              </td>
              <td valign="top" width="25%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center; BORDER-LEFT: #000000 0.85pt solid; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      3,750</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      7,500</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">11,250</font></div>
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">25,000</font></div>
              </td>
              <td valign="top" width="9%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;&#160;&#160;1.63</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;&#160;&#160;3.56</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;&#160;&#160;2.75</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;&#160;&#160;3.05</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;&#160;&#160;4.00</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;15.65</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;15.15</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;14.93</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;13.19</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$&#160;&#160;&#160;&#160;7.90</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
              </td>
              <td valign="top" width="11%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;&#160;1/25/10</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">10/10/10</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      5/07/11</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">11/12/11</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      6/23/13</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      4/28/15</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      7/31/16</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      6/12/17</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      8/06/18</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      6/08/19</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Paul
      G. Driscoll</font></div>
              </td>
              <td valign="top" width="23%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">10,000</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;&#160;1,000</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">10,000</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;&#160;7,500</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;10,000</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;&#160;&#160;7,500</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;&#160;
      5,750</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;&#160;
      2,500</font></div>
              </td>
              <td valign="top" width="25%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
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<tr valign="top">
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      option with an expiration date in 2015 or earlier vests in four equal
      parts commencing on the day after the grant date and on each of the three
      anniversary dates of the grant date.&#160;&#160;Options with an expiration
      date after 2015 vest in four equal parts beginning on the first
      anniversary of grant date and thereafter on each of the three anniversary
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Benefits</font></div>
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December 1995, the Board of directors adopted a resolution to freeze the
Retirement Plan resulting in no further benefit accruals after February 1, 1996.
None of the NEOs is a participant in the Pension Plan.</font></div>
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Company has a Salary Continuation Plan that covers officers of the Company at
the level of Corporate Vice President or above, under the age of sixty-five
(65).&#160;&#160;The Plan is designed to retain key employees and provide for
continuity of management in the event of an actual or threatened change in
control of the Company.&#160;&#160;A covered officer would receive payment under
the Plan if there is a disposition of the Company and, within one year (or if
such employee is also a director, within two years) after such change in
control, one of the following triggering events occurs:</font></div>
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<tr valign="top">
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<tr valign="top">
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<tr valign="top">
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<tr valign="top">
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disposition of the Company shall include (i) a sale of substantially all the
assets of the Company or a successor, or of a Division with more than 50% of the
sales of the Company in the preceding full year of operations, such that
shareholder approval is required and (ii) the acquisition by any such person or
group of persons acting in concert, of legal or beneficial ownership of fifty
percent (50%) or more of the voting stock of the Company, or its
successor.</font></div>
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compensation provided to a covered officer upon disposition of the Company would
consist of the following:</font></div>
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<tr valign="top">
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<tr valign="top">
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and</font></div>
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<tr valign="top">
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of the first two items would be in a lump sum, payable no later than thirty (30)
days after the date on which the officer submits notice to the Board that the
officer wishes to exercise his or her rights under the Plan.</font></div>
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Director of the Company who is also an officer of the Company at the level of
Executive Vice President or above would be entitled to the value of thirty-six
(36) months&#8217; compensation and benefits for thirty-six (36)
months.&#160;&#160;Officers at the level of Senior Vice President and Vice
President would be entitled to the value of twenty-four (24) months&#8217;
compensation and benefits for twenty-four (24) months.</font></div>
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presently covers Walter C. Johnsen, Brian S. Olschan, Larry H. Buchtmann and
Paul G. Driscoll.&#160;&#160;Walter C. Johnsen and Brian S. Olschan would be
entitled to the value of thirty-six (36) months of compensation and
benefits.&#160;&#160;Larry H. Buchtmann and Paul G. Driscoll would be entitled
to the value of twenty-four (24) months of compensation and
benefits.</font></div>
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Pay Plan</font></div>
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Severance Pay Plan covers officers of the Company employed in the United States
at the level of Corporate Vice President or above, under the age of sixty-five
(65).&#160;&#160;&#160;The Plan is designed to enable the Company to attract and
retain key employees.&#160;&#160;A covered officer would receive payments under
the Plan if one of the following triggering events occurs:</font></div>
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termination for any reason other than gross misconduct;</font></div>
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of responsibility, status or compensation reduced; or</font></div>
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to a location unreasonably distant from his or her current
location.</font></div>
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would only apply if the Salary Continuation Plan would not
apply.&#160;&#160;Payment under this Plan, except in the event of termination by
death, would be equivalent to one month&#8217;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.&#160;&#160;The Plan sets out a minimum
and maximum number of months&#8217; compensation payable to each such employee upon
such severance.&#160;&#160;The Plan would also provide death benefits to covered
officers&#8217; beneficiaries.</font></div>
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Director of the Company who is also an Officer of the Company at the level of
Executive Vice President or above would be entitled to a minimum of nine (9)
months&#8217; compensation and a maximum of thirty (30) months&#8217;
compensation.&#160;&#160;In the event of such officer&#8217;s death, his or her
beneficiaries would be entitled to nine (9) months&#8217;
compensation.&#160;&#160;&#160;Officers at the level of Senior Vice President or
Vice President would be entitled to a minimum of six (6) months&#8217; compensation
and a maximum of eighteen (18) months&#8217; compensation.&#160;&#160;In the event of
such officer&#8217;s death, his or her beneficiaries would be entitled to six (6)
months&#8217; compensation.&#160;&#160;Payments would be made in a single lump
sum.</font></div>
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covers Walter C. Johnsen, Brian S. Olschan, Larry H. Buchtmann and Paul G.
Driscoll.&#160;&#160;Walter C. Johnsen and Brian S. Olschan would be entitled to
a minimum of nine (9) months&#8217; compensation and a maximum of thirty (30) months&#8217;
compensation.&#160;&#160;Larry H. Buchtmann and Paul G. Driscoll would be
entitled to a minimum of six (6) months&#8217; compensation and a maximum of eighteen
(18) months&#8217; compensation.&#160;&#160;In the event of termination by death,
beneficiaries of Walter C. Johnsen and Brian S. Olschan would be entitled to a
minimum of nine (9) months&#8217; compensation and beneficiaries of Larry H. Buchtmann
and Paul G. Driscoll would be entitled to a minimum of six (6) months&#8217;
compensation.</font></div>
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        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">20</font></div>
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        </div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Director
Compensation</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Cash
Compensation</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">As
described below, in 2009 the Company paid as compensation to non-employee
directors cash consisting of annual fees and fees for Board and committee
meetings attended.&#160;&#160;Each director who chaired a committee received
additional compensation to compensate for the additional responsibility and
effort associated with the director&#8217;s respective position.&#160;&#160;These fees
consisted of:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
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              <div><font style="DISPLAY: inline; FONT-FAMILY: symbol, serif; FONT-SIZE: 11pt">&#183;&#160;&#160;
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      annual fee of $16,000, payable
quarterly;</font></div>
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    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
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<tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: symbol, serif; FONT-SIZE: 11pt">&#183;&#160;
      &#160;&#160;</font></div>
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      for each Board meeting attended;</font></div>
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    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
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<tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: symbol, serif; FONT-SIZE: 11pt">&#183;&#160;
      &#160;&#160;</font></div>
            </td>
            <td>
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      for each committee meeting
attended;</font></div>
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    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: symbol, serif; FONT-SIZE: 11pt">&#183;&#160;
      &#160;&#160;</font></div>
            </td>
            <td>
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$700
      to committee chairpersons for each committee meeting conducted;
      and</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: symbol, serif; FONT-SIZE: 11pt">&#183;&#160;
      &#160;&#160;</font></div>
            </td>
            <td>
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">an
      annual fee of $3,500 to the Chairperson of the Audit
      Committee.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">In
addition, the Company provided reimbursement to each director for customary and
usual travel expenses incurred in connection with attendance at Board and
committee meetings.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Stock
Options</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">On April
20, 2009, the date of the Company&#8217;s 2009 annual meeting of shareholders, each
non-employee director re-elected to the Board of Directors received an annual
option grant, as provided under the 2005 Non-Salaried Director Stock Option
Plan, to purchase 4,000 shares of Common Stock.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Under the
Non-Salaried Director Stock Option Plan, each new director, upon becoming a
member of the Board of Directors, receives an option to purchase 5,000 shares of
Common Stock.&#160;&#160;These options vest as follows: 25% on the day after the
date of the grant; 25% one day after the first year anniversary of the date of
grant; 25% one day after the second year anniversary of the date of grant; and
25% one day after the third year anniversary of the date of grant.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">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&#8217;s non-employee
directors during the fiscal year ended December 31, 2009.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div><br>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
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      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
</font></div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div align="left">
        <table cellpadding="5" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Name</font></div>
              </td>
              <td valign="bottom" width="16%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Fees
      Earned or Paid in Cash ($)</font></div>
              </td>
              <td valign="bottom" width="16%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Option
      Awards</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">($)(1)</font></div>
              </td>
              <td valign="bottom" width="18%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-TOP: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Total</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="middle" width="24%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Rex
      L. Davidson</font></div>
              </td>
              <td valign="middle" width="16%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$33,600</font></div>
              </td>
              <td valign="middle" width="16%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$8,320</font></div>
              </td>
              <td valign="middle" width="18%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$41,920</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="middle" width="24%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Richmond
      Y. Holden, Jr.</font></div>
              </td>
              <td valign="middle" width="16%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$36,400</font></div>
              </td>
              <td valign="middle" width="16%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$8,320</font></div>
              </td>
              <td valign="middle" width="18%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$44,720</font></div>
              </td>
            </tr><tr>
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Susan
      M. Murphy</font></div>
              </td>
              <td valign="middle" width="16%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$28,000</font></div>
              </td>
              <td valign="middle" width="16%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$8,320</font></div>
              </td>
              <td valign="middle" width="18%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid; BORDER-RIGHT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$36,320</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="middle" width="24%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Stevenson
      E. Ward III</font></div>
              </td>
              <td valign="middle" width="16%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: #000000 0.85pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$39,900</font></div>
              </td>
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$8,320</font></div>
              </td>
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$48,220</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    </div>
    <div>
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<tr valign="top">
            <td align="right" style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">(1)&#160;&#160;</font></div>
            </td>
            <td>
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      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 on Stock Option Plans in the
      notes to the Company&#8217;s financial statements in its Annual Report on Form
      10-K.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">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 $7.30 per share, and was immediately exercisable in
full.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
following table shows the aggregate number of option awards outstanding for each
non-employee director as of December 31, 2009.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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<tr>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
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      <div id="FTR">
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        <div style="TEXT-ALIGN: center; WIDTH: 100%">
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        </div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Report
of the Audit Committee</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Audit
Committee oversees the Company&#8217;s financial reporting process on behalf of the
Board of Directors.&#160;&#160;The Audit Committee has reviewed and discussed
our audited consolidated financial statements for the fiscal year ended December
31, 2009, with management and with representatives of UHY LLP, our independent
auditors, including discussions of the applicability and quality of accounting
principles, the reasonableness of significant judgments and the clarity of
disclosures in the financial statements.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Management
has the primary responsibility for the financial statements and our accounting,
auditing and financial reporting processes.&#160;&#160;The Audit Committee does
not provide any expert or special assurance as to our financial
statements.&#160;&#160;UHY LLP is responsible for expressing an opinion on the
conformity of our financial statements with generally accepted accounting
principles in the United States.&#160;&#160;The Audit Committee does not provide
any professional certification as to UHY LLP&#8217;s work product.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Audit
Committee has discussed with representatives of UHY LLP the matters required to
be discussed by professional standards.&#160;&#160;The Audit Committee has
received and reviewed the written disclosures and letter from UHY LLP required
by applicable requirements of the Public Company Accounting Oversight Board
regarding the independent accountant&#8217;s communications with the Audit Committee
concerning independence, and has discussed the independence of UHY LLP with
representatives of the firm.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Audit
Committee discussed with the Company&#8217;s independent auditors the overall scope
and plan for their respective audits.&#160;&#160;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&#8217;s internal
controls, and the overall quality of the Company&#8217;s financial
reporting.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Based on
the reviews and discussion referred to above, the Audit Committee recommended to
the Board of Directors that our audited consolidated financial statements for
the year ended December 31, 2009 be included in our Annual Report on Form 10-K
for the year ended December 31, 2009 for filing with the Securities and Exchange
Commission.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div align="center">
      <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;</font></td>
            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;Stevenson E.
      Ward, III, Chair</font></td>
          </tr><tr>
            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;</font></td>
            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;Richmond Y.
      Holden, Jr., Member</font></td>
          </tr><tr>
            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;</font></td>
            <td width="50%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt">&#160;<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Rex
      L. Davidson,
Member</font></font></font></font></font></td>
          </tr></table>
    </div>
    <div>&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Transactions
with Related Persons</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">There
were no material transactions between the Company and any &#8220;related
person.&#8221;&#160;&#160;The term related person includes any executive officer of
the Company, any director or nominee for election as director, any security
holder holding more than 5% of the Common Stock of the Company or any immediate
family member of any of the foregoing persons.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold"><font style="DISPLAY: inline; FONT-SIZE: 11pt; TEXT-DECORATION: underline">Policy</font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Board
of Directors has determined that transactions involving the Company and related
persons shall be reviewed and approved by the Audit Committee.&#160;&#160;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.&#160;&#160;This requirement covers any such
transaction and is not limited to transactions which meet the minimum threshold
for disclosure in the proxy statement under the relevant rules under the
Exchange Act (generally, with respect to smaller reporting companies
transactions which involve an amount equal to the lesser of $120,000 or one
percent of the average of the company&#8217;s total assets at year-end for the last
two completed fiscal years, and in which a related person has a direct or
indirect material interest).</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">23</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold"><font style="DISPLAY: inline; FONT-SIZE: 11pt; TEXT-DECORATION: underline">Procedures</font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Management
or the affected director or executive officer will bring the transaction to the
attention of the Audit Committee.&#160;&#160;The transaction must be approved in
advance whenever practicable, and if not practicable, must be reviewed as
promptly as practicable.&#160;&#160;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.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">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.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Compliance
with Section 16(a) of the Securities Exchange Act of 1934</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Section
16(a) of the Exchange Act requires the Company&#8217;s directors and executive
officers, and persons who own more than 10% of the Common Stock (collectively
referred to herein as &#8220;Reporting Persons&#8221;), to file with the SEC and the NYSE
Amex initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of the Company. Reporting Persons are required
by the Exchange Act to furnish the Company with copies of all Section 16(a)
forms they file.&#160;&#160;Based solely on review of copies of such forms
received by the Company and written representations from Reporting Persons, the
Company believes that, during the 2009 fiscal year, all Reporting Persons
complied with all applicable filing requirements under Section
16(a).</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Equity
Compensation Plan Information</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
following table sets forth information regarding compensation payable under the
Company&#8217;s equity compensation plans (the Non-Salaried Director Stock Option Plan
and the Employee Stock Option Plan) in effect as of December 31,
2009.&#160;&#160;The Company&#8217;s shareholders have approved each equity
compensation plan.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">24</font></div>
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        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
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        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
      <div align="left">
        <table cellpadding="5" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="bottom" width="18%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 0.5pt solid; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; BORDER-TOP: black 0.5pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Plan
      Category</font></div>
              </td>
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Number
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">to
      be issued upon</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">exercise
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">outstanding
      options,</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">warrants
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">(a)</font></div>
              </td>
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Weighted-average</font></div>
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">outstanding
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Number
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">remaining
      available </font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">for
      future issuance </font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">under
      equity </font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">compensation
      plans, </font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">(excluding
      securities </font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">reflected
      in</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">column
      (a))</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">(c)</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="18%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left; BORDER-LEFT: black 0.5pt solid; PADDING-LEFT: 0pt; MARGIN-LEFT: 446pt">
                <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Equity
      compensation</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">plans
      approved by</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">security
      holders</font></div>
              </td>
              <td valign="middle" width="22%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 0.5pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">722,500</font></div>
              </td>
              <td valign="middle" width="20%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 0.5pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$9.96</font></div>
              </td>
              <td valign="middle" width="20%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 0.5pt solid; BORDER-RIGHT: black 0.5pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">98,938</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="18%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: left; BORDER-LEFT: black 0.5pt solid; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
                <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Equity
      compensation</font></div>
                <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">plans
      not approved by security holders</font></div>
              </td>
              <td valign="middle" width="22%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 0.5pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-0-</font></div>
              </td>
              <td valign="middle" width="20%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 0.5pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-0-</font></div>
              </td>
              <td valign="middle" width="20%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 0.5pt solid; BORDER-RIGHT: black 0.5pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-0-</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="18%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 0.5pt solid; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Total</font></div>
              </td>
              <td valign="middle" width="22%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 0.5pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">722,500</font></div>
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              <td valign="middle" width="20%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 0.5pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$9.96</font></div>
              </td>
              <td valign="middle" width="20%" style="BORDER-BOTTOM: black 2px solid; BORDER-LEFT: black 0.5pt solid; BORDER-RIGHT: black 0.5pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">98,938</font></div>
              </td>
            </tr></table>
      </div>
      <div>&#160;</div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">PROPOSAL
2:</font></div>
    <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">&#160;AMENDMENT
TO EMPLOYEES&#8217; STOCK OPTION PLAN</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">On
February 23, 2010, the Board of Directors, subject to approval of the
Shareholders, amended the Employee Stock Option Plan effective February 26, 2002
(the &#8220;Plan&#8221;) to increase the number of shares subject to options from 610,000 to
760,000.&#160;&#160;The Company proposes that the number of shares of Common
Stock reserved for issuance under the Plan be so increased in order to enable
the Company to continue to attract and retain highly qualified personnel. The
following description of the Plan as amended is qualified in its entirety by
reference to the text of the Plan and its prior amendments, copies of which have
been filed with the SEC.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Purpose</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
purpose of the Plan is to advance the interests of the Company and its
shareholders by strengthening the ability of the Company to attract, retain and
reward highly qualified key employees, to motivate key employees to achieve
business objectives established to promote the long-term growth, profitability
and success of the Company, and to encourage ownership of the Common Stock of
the Company by participating key employees.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Administration
of the Plan</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Plan
is administered by the Board of Directors of the Company.&#160;&#160;In
administering the Plan, the Board acts upon recommendations of the Compensation
Committee, which consists of members of the Board who are not employees of the
Company.&#160;&#160;Subject to the provisions of the Plan, the Board determines
the employees who will receive options under the Plan, the number of shares
subject to each option and the terms of those options, and interprets the Plan
and makes such rules of procedure as the Board may deem proper.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">25</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Shares
of Stock Subject to the Plan</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Plan
presently permits the granting of 610,000 shares of Common Stock (760,000 shares
after approval of amendment).</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Eligibility</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Based on
current staffing, under the Plan, approximately 25 to 30 key employees of the
Company (including directors and officers who are employees) may be granted
options to purchase shares of Common Stock.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Options</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-ALIGN: justify; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Options
granted under the Plan may be either incentive stock options within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended, or
non-qualified stock options. The exercise price with respect to an option
awarded under the plan will be one hundred percent (100%) of the fair market
value of the Common Stock on the date that the option is granted provided,
however, that the price shall not be less than the par value of the Common Stock
which is subject to the option.&#160;&#160;If incentive stock options are
granted to an employee owning Common Stock having more than ten (10%) of the
voting power of the Company, the exercise price must be at least one hundred ten
percent (110%) instead of one hundred percent (100%) of the fair market value of
the Common Stock on the date that the option is granted, and the option by its
terms may not be exercisable after the expiration of five (5) years from the
date of grant.&#160;&#160;No option may be granted under the Plan after the
tenth anniversary of the adoption of the Plan.&#160;&#160;The options granted by
the Company to employees historically have had a term of ten years and vest over
a period presently set at four years.&#160;&#160;The Company may grant both
incentive stock options (ISOs) and non-qualified stock
options.&#160;&#160;However, commencing in July 2006, the Company has granted
only non-qualified stock options to its employees.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Terms
of Exercise of Options</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Upon the
granting of any option, the optionee must enter into a written agreement with
the Company setting forth the terms upon which the option may be
exercised.&#160;&#160;Such an agreement sets forth the length of the term of the
option and the timing of its vesting and may provide arrangements for income and
employment tax withholding. Under terms of the Plan, options are exercisable in
accordance with the following schedule: twenty-five percent (25%) one day after
first year anniversary of the date of grant; twenty-five percent (25%) one day
after second year anniversary of date of grant; twenty-five percent (25%) one
day after third year anniversary of date of grant; twenty-five percent (25%) one
day after fourth year anniversary of date of grant. In no event shall the length
of an option extend beyond ten years from the date of its grant.&#160;&#160;An
optionee may exercise an option by delivering payment to the Company in
cash.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">26</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Under the
Plan, if the employment of any person to whom an option has been granted is
terminated for any reason other than the death, disability or retirement of the
optionee, the optionee may exercise within thirty (30) days of such termination
such options as the optionee could have exercised if his or her employment had
continued for such 30-day period, subject to the ten (10) year
limitation.&#160;&#160;If the termination is by reason of retirement, the
optionee may exercise the option, in whole or in part, at any time within one
(1) year following such termination of employment, subject to the ten (10) year
limitation, but if the option is exercised later than three (3) months from the
date of retirement the option shall not constitute an ISO.&#160;&#160;If the
optionee dies while employed by the Company or its subsidiaries, or during a
period after termination of employment in which the optionee could exercise an
option, the optionee&#8217;s beneficiary may exercise the option within one (1) year
of the date of the optionee&#8217;s death but in no event may the option be exercised
later than the date on which the option would have expired if the optionee had
lived.&#160;&#160;If the termination is by reason of disability, the optionee
may exercise the option, in whole or in part, at any time within one (1) year
following such termination of employment or within such other period, not
exceeding three (3) years after the date of disability, as is set forth in the
option agreement with respect to such options, provided, however, that if the
option is exercised later than one (1) year after the date of disability, it
shall not constitute an ISO, and in no event may the option be exercised after
ten (10) years from grant.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">In
addition, if an optionee ceases to be employed by the Company and becomes, or
continues to be, a member of the Board of Directors prior to the time the
optionee&#8217;s option(s) would have otherwise expired, the optionee&#8217;s option(s)
shall continue to vest in accordance with the terms of the Plan and shall
continue to be exercisable for the remainder of the term of the option(s). Any
option which is not exercised by the optionee within the three-month period
immediately following the optionee&#8217;s termination of employment, or, in the case
of termination of employment on account of disability, within one (1) year after
the date of disability, shall cease to be an Incentive Stock Option. If an
optionee described in the preceding two sentences ceases to be a member of the
Board of Directors for any reason, the optionee&#8217;s option(s) shall terminate in
accordance with the provisions of Section 2.4(a) of the Acme United Corporation
Non-Salaried Director Stock Option Plan, which section (i) cancels any unvested
options at that time; (ii) permits a twelve-month period for exercise of vested
options in the event of termination due to death or disability; and (iii)
permits a thirty-day period for exercise of vested options in the event of
termination due to any other reason, except that the Board may in its discretion
extend the period of exercise.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Notwithstanding
the above, no option may be exercised after the expiration date specified in the
option agreement.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Amendment
to the Plan</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Plan
may be terminated, suspended, or modified at any time by the Board of Directors,
but no amendment increasing the maximum number of shares for which options may
be granted (except to reflect a stock split, stock dividend or other
distribution), reducing the option price of outstanding options, extending the
period during which options may be granted, otherwise materially increasing the
benefits accruing to optionees or changing the class of persons eligible to be
optionees shall be made without first obtaining approval of the shareholders of
the Company.&#160;&#160;No termination, suspension or modification of the Plan
shall adversely affect any right previously acquired by the optionee or other
beneficiary under the Plan.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">27</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Options
granted under the Plan may not be transferred other than by will or by the laws
of descent and distribution and, during the optionee&#8217;s lifetime may be exercised
only by the optionee.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">All of
the Options previously issued under the prior plan remain unchanged and
outstanding.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Federal
Income Tax Consequences</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Granting
of Non-Qualified Stock Options</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">With
respect to the tax effects of non-qualified stock options, since the options
granted under the Plan do not have a &#8220;readily ascertainable fair market value&#8221;
within the meaning of the Federal income tax laws, an optionee of an option will
realize no taxable income at the time the option is granted.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Exercise
of Non-Qualified Stock Options</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">When a
non-qualified stock option is exercised, the optionee will generally be deemed
to have received compensation, taxable at ordinary income tax rates, in an
amount equal to the excess of the fair market value of the shares of Common
Stock of the Company on the date of exercise of the option over the exercise
price. The Company will withhold income and employment taxes in connection with
the optionee&#8217;s recognition of ordinary income as a result of the exercise by an
employee/optionee of a non-qualified stock option, and arrangements must be made
with the Company for the source of such withholding.&#160;&#160;The Company
generally can claim a deduction in the fiscal year of the Company which includes
the last day of the taxable year of the optionee which includes the exercise
date or the date on which the optionee recognizes income.&#160;&#160;The amount
of such deduction will be equal to the ordinary income recognized by the
optionee.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Granting
of Incentive Stock Options and Exercise of Incentive Stock Options</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">With
respect to the tax effects of Incentive Stock Options, the optionee does not
recognize any regular taxable income when the option is granted or exercised;
however, the excess of the fair market value of the stock on the date of
exercise over the exercise price must be included in the optionee&#8217;s alternative
minimum taxable income.&#160;&#160;Depending on the optionee&#8217;s other income and
deductions, all or a portion or this excess could be subject to alternative
minimum tax of as much as twenty-eight percent (28%).</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Sale
of the Stock</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">When
stock acquired through the exercise of a non-qualified stock option is sold, the
difference between the optionee&#8217;s basis in the shares and the sale price will be
taxable to the optionee as a capital gain (or loss).</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">If no
disposition of shares issued to an optionee pursuant to the exercise of an ISO
is made by the optionee within two (2) years after the date the option was
granted or within one (1) year after the shares were transferred to the
optionee, then (a) upon sale of such shares, any amount realized in excess of
the exercise price (the amount paid for the shares) will be taxed to the
optionee as long-term capital gain and any loss sustained will be a long-term
capital loss and (b) no deduction will be allowed to the Company for federal
income tax purposes.&#160;&#160;The tax basis of the stock for alternative
minimum tax purposes shall be the fair market value of the stock on the date of
exercise of the option, and the optionee may be entitled to a credit if its
alternative minimum tax is less than its regular tax in the year of
sale.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">28</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">If shares
of Common Stock acquired upon the exercise of an ISO are disposed of prior to
the expiration of the two-year and one-year holding periods described above (a
&#8220;Disqualifying Disposition&#8221;) generally (a) the optionee will realize ordinary
income in the year of disposition in an amount equal to the excess (if any) of
the fair market value of the shares at exercise (or, if less, the amount
realized upon the sale of such shares) over the option price thereof, and (b)
the Company will be entitled to deduct such amount.&#160;&#160;Any further gain
realized will be taxed as short-term or long-term capital gain and will not
result in any deduction by the Company.&#160;&#160;A Disqualifying Disposition
in the same year as exercise will eliminate the alternative minimum tax
adjustment associated with the exercise of the Incentive Stock
Option.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Plan
Benefits</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Awards
under the Plan are granted at the discretion of the Board of Directors, which
acts upon recommendations of the Compensation Committee.&#160;&#160;The Board
determines the key employees who will receive options under the Plan and the
terms of those options.&#160;&#160;Accordingly, the nature and amounts of any
future awards to be made to participants in the Plan are not presently
determinable.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Vote
Required</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
approval of the amendment to the Employee Stock Option Plan requires the
affirmative vote of a majority of the shares of Common Stock of the Company
voting in person or by proxy on the amendment.&#160;&#160;If the amendment is
not approved by shareholders, it will not become effective.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">The
Board of Directors recommends a vote FOR approval of the amendment to the
Employee Stock Option Plan.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">PROPOSAL
3:</font></div>
    <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">RATIFICATION
OF THE APPOINTMENT OF UHY LLP AS OUR</font></div>
    <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM</font></div>
    <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">FOR
THE FISCAL YEAR ENDING DECEMBER 31, 2010</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Audit
Committee of the Board of Directors has appointed UHY LLP as our independent
registered public accounting firm for the fiscal year ending December 31,
2010.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Representatives
of UHY LLP will be present at the Annual Meeting and will have the opportunity
to make a statement if they desire to do so. They will also be available to
respond to appropriate questions.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Audit
Committee is not aware of any disagreements between management and our current
auditors, UHY LLP, regarding accounting principles and their application or
otherwise.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">29</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Change
in Auditors</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">On
September 15, 2008, the Company, based on its Audit Committee&#8217;s recommendation
and approval, dismissed Ernst&#160;&amp; Young LLP (&#8220;E&amp;Y&#8221;) as the Company&#8217;s
independent registered public accountants. The Audit Committee took this action
after consultation with management to enable the Company to obtain audit and
related services at a lower annual cost. &#160;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">E&amp;Y&#8217;s
reports on the Company&#8217;s financial statements for the years ended
December&#160;31, 2007 and 2006 did not contain an adverse opinion or disclaimer
of opinion, nor were they qualified or modified as to uncertainty, audit scope
or accounting principles.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">During
the years ended December&#160;31, 2007 and 2006 and through the date of
dismissal of E&amp;Y, there were no disagreements with E&amp;Y on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure which, if not resolved to E&amp;Y&#8217;s satisfaction, would have
caused them to make reference to the subject matter in connection with their
report on the Company&#8217;s consolidated financial statements for such years; and
there were no reportable events, as listed in Item 304(a)(1)(v)&#160;of
Regulation S-K.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;&#160;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">On
September 18, 2008, the Audit Committee of the Company&#8217;s Board of Directors
approved the engagement of UHY LLP as its independent registered public
accounting firm to audit the Company&#8217;s financial statements for the fiscal year
ending December&#160;31, 2008.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">During
the years ended December&#160;31, 2007 and 2006 and through the date of the
Audit Committee&#8217;s decision, the Company did not consult UHY LLP with respect to
the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Company&#8217;s consolidated financial statements, or any other matter or
reportable events listed in Items 304(a)(2)(i)&#160;and (ii)&#160;of Regulation
S-K.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Audit
Committee Pre-Approval of Independent Auditor Services</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The Audit
Committee pre-approves all audit and permissible non-audit services provided by
the independent auditors.&#160;&#160;These services may include audit services,
audit-related services, tax services and other services.&#160;&#160;The Audit
Committee has adopted policies and procedures for the pre-approval of services
provided by the independent auditors.&#160;&#160;The policies and procedures
provide that management and the independent auditors jointly submit to the Audit
Committee a schedule of audit and non-audit services for approval as part of the
annual plan for each year.&#160;&#160;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.&#160;&#160;For each proposed service,
management and the auditors 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.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Fees
to Auditors</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Set forth
below is a description of the fees for professional audit services rendered by
UHY LLP and affiliates and Ernst &amp; Young LLP (E&amp;Y), the predecessor
audit firm, for the audit of our annual financial statements and review of our
interim financial statements, and fees for other services rendered by UHY LLP,
UHY Advisors, Inc. and E&amp;Y.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">30</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div><br>
      <div align="left">
        <table cellpadding="5" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="48%" style="PADDING-BOTTOM: 2px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; TEXT-DECORATION: underline"><font style="DISPLAY: inline; FONT-SIZE: 11pt">Fee
    Category</font></font></div>
              </td>
              <td align="right" valign="top" width="16%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Fiscal
      2009 Fees</font></div>
              </td>
              <td valign="top" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></td>
              <td align="right" valign="top" width="16%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Fiscal
      2008 Fees</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="48%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Audit
      Fees</font></div>
              </td>
              <td align="right" valign="top" width="16%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$192,000</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></td>
              <td align="right" valign="top" width="16%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">$193,000</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="48%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Audit
      Related Fees</font></div>
              </td>
              <td align="right" valign="top" width="16%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">11,000</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></td>
              <td align="right" valign="top" width="16%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">11,000</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="48%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Tax
      Fees</font></div>
              </td>
              <td align="right" valign="top" width="16%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">65,000</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
      </font></td>
              <td align="right" valign="top" width="16%">
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              <td valign="top" width="48%" style="LINE-HEIGHT: 1">
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      Fees</font></div>
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              <td align="right" valign="top" width="16%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">-</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">&#160;
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              <td align="right" valign="top" width="16%" style="BORDER-BOTTOM: black 2px solid">
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      Fees</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-SIZE: 11pt">Audit Fees.
</font>2008 audit fees include $43,000 paid to E&amp;Y for services provided
prior to the appointment of UHY LLP.</font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-SIZE: 11pt">Audit Related
Fees.</font> These fees were for audit of the Company&#8217;s post retirement defined
pension plan in 2009 and 2008, and for services rendered in connection with the
filing of a registration statement in 2009.</font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-SIZE: 11pt">Tax
Fees.</font><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-WEIGHT: bold">&#160;</font>Tax
services included tax compliance, tax advice, and tax planning provided by UHY
Advisors, Inc. in 2009 ($49,000) and 2008 ($59,000) and E&amp;Y in 2009
($16,000) and 2008 ($51,000).</font></font></font></font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-SIZE: 11pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-SIZE: 11pt">Other
Fees.</font><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-WEIGHT: bold">&#160;</font>General
business consulting provided by UHY Advisors, Inc. in
2008.</font></font></font></font></div>
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Committee has determined that the provision of non-audit services described
above is compatible with maintaining UHY LLP&#8217;s independence.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Through
and as of March 23, 2010, UHY LLP and UHY Advisors, Inc. (Advisors), as separate
legal entities, collectively provide attest, accounting, tax and business
consulting services through an alternative practice structure which is
necessitated by most State statues that prohibit corporate ownership of firms
that provide attest services. UHY LLP is a licensed CPA firm and provides attest
services only, whereas Advisors provides the other services.&#160;&#160;UHY LLP
leases auditing staff who are full-time, permanent employees of Advisors. UHY
LLP has only a few full-time employees; however, the Partners of UHY LLP are
also Managing Directors of Advisors. While few of the audit services performed
were provided by permanent, full-time employees of UHY LLP, for the most part,
the leased staff are CPA qualified and satisfy the continuing education and
other professional requirements. UHY LLP trains, manages and supervises the
audit services and audit staff, and is exclusively responsible for the opinion
rendered in connection with its examination. During 2009 and 2008, Advisors
provided certain permitted tax and business consulting services as described
above.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">Vote
Required</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">The
ratification of the appointment by our Audit Committee of UHY LLP as our
independent registered public accounting firm for the fiscal year ending
December 31, 2010 requires the affirmative vote of a majority of the shares of
Common Stock of the Company voting in person or by proxy on such
ratification.&#160;&#160;Although shareholder approval of the appointment is not
required by law and is not binding on the Audit Committee, the Committee will
take the appointment under advisement if such appointment is not approved by the
affirmative vote of a majority of the votes cast at the Meeting.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">31</font></div>
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          <hr style="COLOR: black" noshade size="1">
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        </div>
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    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">The
Board of Directors recommends a vote FOR the ratification of our independent
registered public accounting firm for the fiscal year ending December 31,
2010.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">SUBMISSION
OF SHAREHOLDER PROPOSALS FOR THE 2011 ANNUAL MEETING</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">If you
intend to present a proposal at our 2011 Annual Meeting, you must submit it to
us by no later than November 23, 2010, to receive consideration for inclusion in
our 2011 proxy materials. If you intend to present a proposal at our 2011 Annual
Meeting that is not to be included in our 2011 proxy materials, you should send
the proposal to us in writing by February 12, 2011.&#160;&#160;Any such proposal
should be sent to the Secretary of the Company at 60 Round Hill Road, Fairfield,
Connecticut, 06824.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt; FONT-WEIGHT: bold">OTHER
BUSINESS</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Management
does not know of any matters to be presented, other than those described herein,
at the Annual Meeting.&#160;&#160;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.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">By Order
of the Board of Directors,</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Paul G.
Driscoll, Vice President and</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Chief
Financial Officer, Secretary</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">and
Treasurer</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Acme
United Corporation</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">60 Round
Hill Road</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">Fairfield,
Connecticut 06824</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 11pt">March 23,
2010</font></div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">32&#160;
</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
        <div style="TEXT-ALIGN: center; WIDTH: 100%">
          <hr style="COLOR: black" noshade size="1">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
      </div>
    </div><br>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">PROXY</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">ACME
UNITED CORPORATION</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ACME UNITED
CORPORATION FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 19,
2010</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The undersigned hereby appoints Walter
C. Johnsen and Susan H. Murphy, and each of them, with full powers of
substitution, to act as attorneys and proxies of the undersigned, to vote all
shares of the Common Stock of ACME UNITED CORPORATION, held of record by the
undersigned on March 3, 2010&#160;&#160;at the Annual Meeting of Shareholders,
to be held at the Cornell Club, 6 East 44<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font>
Street, New York, New York on Monday, April 19, 2010, at 11:00 a.m. and at any
adjournment(s) or postponement(s) thereof, with all the powers the undersigned
would have if personally present.&#160;&#160;Without limiting the general
authorization hereby given, said proxies are, and each of them hereby is,
instructed to vote or act as follows on the reverse side hereof on the Proposals
1, 2 and 3. In their discretion, the proxies are authorized to vote upon such
other matters, if any, as may properly come before the Annual
Meeting.</font></div>
    <div style="LINE-HEIGHT: 1; TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
undersigned acknowledges receipt of the Company&#8217;s Notice of Annual Meeting of
Shareholders, a Proxy Statement dated March 23, 2010 and the 2009 Annual Report
to Stockholders.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block">
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        <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
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              <td width="60%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
                <div><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;CONTINUED AND
      TO BE COMPLETED, SIGNED AND </font></div>
                <div><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">DATED ON
      REVERSE SIDE</font></div>
              </td>
              <td width="20%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center; BORDER-LEFT: black 1px solid; BORDER-TOP: black 1px solid; BORDER-RIGHT: black 1px solid"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;SEE REVERSE
      SIDE</font></td>
            </tr></table>
      </div>
      <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">NOTICE OF
INTERNET AVAILABILITY OF PROXY MATERIAL:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company&#8217;s Notice of Annual Meeting, Proxy Statement and Proxy card are available
at </font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">proxy.acmeunited.com</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
      <div align="center">
        <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="10%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;<font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">[X]&#160;</font></font></td>
              <td width="14%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">PLEASE MARK VOTES AS IN THIS EXAMPLE</font></td>
              <td width="76%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">&#160;</font></td>
            </tr></table>
      </div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">THIS PROXY WHEN EXECUTED WILL BE VOTED AS DIRECTED
HEREIN.&#160;&#160;IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt; TEXT-DECORATION: underline">FOR</font>
THE ELECTION OF ALL SIX NOMINEES LISTED IN PROPOSAL 1 BELOW AND FOR PROPOSALS 2
AND 3.</font></div>
    <div style="LINE-HEIGHT: 1; TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
    <div align="center">
      <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
            <td width="5%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">1.</font></td>
            <td width="30%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">Election of Directors</font></font></td>
            <td width="30%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">&#160;</font></td>
            <td width="35%">
            </td>
          </tr><tr>
            <td width="5%" style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font id="TAB2" style="FONT-FAMILY: Times New Roman; LETTER-SPACING: 9pt; FONT-SIZE: 9pt">&#160;</font></td>
            <td width="30%" style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
      Nominees:</font></td>
            <td width="30%">
            </td>
            <td width="35%">
            </td>
          </tr><tr>
            <td width="5%" style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">&#160;</font></td>
            <td width="30%" style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt">
            </td>
            <td width="30%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">Walter C. Johnsen</font></td>
            <td width="35%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">Susan H. Murphy</font></td>
          </tr><tr>
            <td width="5%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">&#160;</font></td>
            <td width="30%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">&#160;</font></td>
            <td width="30%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">Richmond Y. Holden, Jr.</font></td>
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    <div>&#160;</div>
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<tr>
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            <td width="20%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">&#160;</font></td>
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            <td width="20%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">&#160;</font></td>
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            <td width="20%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">&#160;</font></td>
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            <td width="20%"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">&#160;</font></td>
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individual nominee(s), mark &#8220;FOR ALL EXCEPT&#8221; and fill in the circle next to each
nominee you wish to withhold, as shown here:</font></div>
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<tr>
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              <div><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 9pt">[&#160;&#160;]</font></font></div>
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<tr>
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Proxy.&#160;&#160;When shares are held jointly, each holder should
sign.&#160;&#160;When signing as executor, administrator, attorney, trustee or
guardian, please give full title.&#160;&#160;If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full title as
such.&#160;&#160;If signer is a partnership, please sign in partnership name by
authorized person.</font></div>
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<tr>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
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PROMPTLY IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block"><br><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">2
</font>
      <div>
        <hr style="COLOR: black" align="left" noshade size="1" width="100%">
      </div>
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