SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
|_| Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
ACETO CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies: Common
Stock, par value $.01 per share
(2) Aggregate number of securities to which transaction applies:
(3) 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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
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. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
ACETO CORPORATION
ONE HOLLOW LANE
LAKE SUCCESS, NEW YORK 11042-1215
(516) 627-6000
October 24, 2003
Dear Fellow Shareholders:
I take pleasure in inviting each of you to attend Aceto Corporation's
Annual Meeting of Shareholders on Thursday, December 4, 2003 at 10:00 a.m. at
the Company's offices, One Hollow Lane, Lake Success, New York. I am pleased to
provide you with your Company's Annual Report and the Proxy Statement attached
to this letter.
Please use this opportunity to take part in our affairs by voting on the
business to come before this meeting. You may vote your shares at the Annual
Meeting by marking your votes on the enclosed proxy card, signing and dating it,
and mailing it in the enclosed envelope.
I look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ Leonard S. Schwartz
-----------------------
Leonard S. Schwartz
Chairman of the Board and
Chief Executive Officer
ACETO CORPORATION
ONE HOLLOW LANE
LAKE SUCCESS, NEW YORK 11042-1215
(516) 627-6000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To our Shareholders:
The Annual Meeting of Shareholders of Aceto Corporation will be held on
Thursday, December 4, 2003, at 10:00 a.m. at the Company's offices indicated
above, for the following purposes:
1. To elect a Board of Directors to serve for the ensuing year;
2. To amend the Company's Certificate of Incorporation to increase the
number of authorized shares of common stock from 20,000,000 to
40,000,000;
3. To ratify the appointment of KMPG LLP as the Company's independent
auditors for the current fiscal year; and
4. To transact any other business that may properly come before the
meeting.
Shareholders of record at the close of business on October 6, 2003 are
entitled to receive notice of and to vote at the Annual Meeting and at any
continuation or adjournment thereof.
By Order of the Board of Directors
/s/ Douglas Roth
----------------
Douglas Roth
Chief Financial Officer and Secretary
Lake Success, New York
October 24, 2003
ACETO CORPORATION
ONE HOLLOW LANE
LAKE SUCCESS, NEW YORK 11042-1215
(516) 627-6000
---------
PROXY STATEMENT
---------
GENERAL INFORMATION
INFORMATION ABOUT PROXY SOLICITATION
This Proxy Statement is furnished to the holders of the common stock, $0.01
par value per share (the "Common Stock"), of Aceto Corporation, a New York
corporation (the "Company") in connection with the solicitation of proxies on
behalf of the Board of Directors of the Company for use at the Annual Meeting of
Shareholders to be held on Thursday, December 4, 2003 at 10:00 a.m. (Eastern
Standard Time), at the Company's offices, One Hollow Lane, Suite 201, Lake
Success, New York 11042, and at any adjournment thereof. The purposes of the
meeting and the matters to be acted upon are set forth in the accompanying
Notice of Annual Meeting of Shareholders. At present, the Board of Directors
knows of no other business which will come before the meeting.
The Notice of Annual Meeting, Proxy Statement, and form of proxy will be
mailed to Shareholders on or about October 24, 2003. The Company will bear the
cost of its solicitation of proxies. The original solicitation of proxies by
mail may be supplemented by personal interview, telephone, telegram, and telefax
by the directors, officers and employees of the Company. Arrangements will also
be made with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of solicitation material to the beneficial owners of stock held
by such persons, and the Company may reimburse such custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred by them in connection
therewith.
REVOCABILITY AND VOTING OF PROXY
A form of proxy for use at the meeting and a return envelope for the proxy
are enclosed. Shareholders may revoke their proxies at any time before being
voted. Shares of Common Stock represented by executed and unrevoked proxies will
be voted in accordance with the instructions specified thereon. If no
instructions are given, the proxies will be voted FOR the election as directors
of management's seven nominees, FOR the proposal to amend the Company's
Certificate of Incorporation, and FOR ratification of the appointment of KPMG
LLP as the Company's independent auditors for the fiscal year ending June 30,
2004.
RECORD DATE AND VOTING RIGHTS
Only stockholders of record at the close of business on October 6, 2003 are
entitled to notice of and to vote at the meeting or any adjournment thereof. On
October 6, 2003, the Company had outstanding 10,344,568 shares of Common Stock,
each of which is entitled to one vote upon matters presented at the meeting.
Votes cast at the meeting will be tabulated by persons appointed as
inspectors of election of the meeting. The inspectors of election will treat
shares of Common Stock represented by a properly signed and returned proxy as
"present" at the meeting for purposes of determining a quorum, without regard to
whether the proxy is marked as casting a vote or abstaining. Likewise, the
inspectors of election will treat shares of Common Stock represented by "broker
non-votes" as present for purposes of determining a quorum.
Under New York law, (i) a plurality of the votes cast at the Annual Meeting
is necessary to elect directors, (ii) the affirmative vote of a majority of all
outstanding shares of the Company's Common Stock is required to amend the
Company's Certificate of Incorporation, and (iii) the affirmative vote of a
majority of the votes cast at the Annual Meeting is required to ratify the
appointment of KPMG LLP as the Company's independent auditors for the current
fiscal year.
Shares represented by proxies designated as broker non-votes will be
counted for purposes of determining a quorum. Broker non-votes occur when a
broker nominee (which has voted on one or more matters at a meeting) does not
vote on one or more other matters at a meeting because it has not received
instructions to so vote from the beneficial owner and does not have
discretionary authority to so vote. Shares represented by proxies designated as
broker non-votes will not be treated as being cast for purposes of determining
the outcome of a vote on any matter, except that broker non-votes will have the
effect of a vote against the proposal to amend the Company's Certificate of
Incorporation because this proposal requires the affirmation vote of a majority
of all the Company's outstanding shares in order to be passed.
A list of shareholders entitled to vote at the Annual Meeting will be
available at the Company's office, One Hollow Lane, Lake Success, New York
11042, during business hours, for a period of 10 days prior to the Annual
Meeting for examination by any shareholder. Such list will also be available at
the Annual Meeting.
QUORUM
The presence, either in person or by proxy, of the holders of a majority of
the shares of common stock outstanding on October 6, 2003 is necessary to
constitute a quorum at the Annual Meeting.
ACTIONS TO BE TAKEN AT THE ANNUAL MEETING
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
The Company's Board of Directors consists of seven Directors, each one of
which serves for a one year term and until their successors are duly elected and
qualified. The Board of Directors is proposing a slate of directors that
consists of seven incumbent directors. Our policy is for Board members to
propose nominees consistent with the interests of the Company's stakeholders.
The Board then evaluates each nominee to ensure that he or she was qualified and
met the highest standards of ethical behavior. Each director then has an
opportunity to interview each nominee if he or she deemed it necessary. The
Board then formally nominates those individuals that it unanimously agrees is in
the best interests of the Company and all its stakeholders.
Proxies not marked to the contrary will be voted "FOR" the election of the
following seven persons:
DIRECTOR
NAME AGE POSITION SINCE
-------------- ------ --------------------------------- -------------------
Leonard S. Schwartz (1) 57 Chairman, President and CEO 1991
Samuel I. Hendler (1) 81 Director 1990
Robert A. Wiesen (1) 52 Director 1994
Stanley H. Fischer (1) 60 Director 2000
Albert L. Eilender (1)(2) 60 Director 2000
Ira S. Kallem (2) 55 Director 2002
Hans C. Noetzli (2) 62 Director 2002
--------------------------------------------------------------------------------
(1) Member of the Executive Committee
(2) Member of the Audit Committee
BIOGRAPHICAL INFORMATION ABOUT NOMINEES
Set forth below is the principal occupation of the nominees, the business
experience of each for at least the past five years and certain other
information relating to the nominees.
LEONARD S. SCHWARTZ. Mr. Schwartz has served as Chairman and Chief
Executive Officer of the Company since July 1, 1997 and President since July 1,
1996. After joining the Company in 1969, Mr. Schwartz, a chemist by training,
developed the Company's industrial chemicals business and had a key role in the
management of the Company's subsidiaries.
SAMUEL I. HENDLER. Mr. Hendler has been engaged in the private practice of
law in New York since 1949 and has been retained as counsel to the Company for
more than 50 years. Mr. Hendler is a director of Pneumercator Company, Inc., a
privately held company based in Farmingdale, New York. Mr. Hendler is a member
of the Corporation Law Committee and the Securities and Banking Law Committee of
the Nassau County Bar Association.
ROBERT A. WIESEN. Mr. Wiesen is an attorney and partner in the law firm of
Clifton Budd & DeMaria. He joined this law firm in 1979 subsequent to his
employment with the National Labor Relations Board. He has handled matters for
the Company relating to labor and employment law for over ten years and he has
written and lectured on labor law.
STANLEY H. FISCHER. Mr. Fischer is President of Fischer and Burstein P.C.,
a law firm. Mr. Fischer received a J.D. degree from New York University School
of Law. He has been a practicing attorney for more than 30 years and has advised
and represented corporate entities in matters relative to internal matters,
mergers, acquisitions, real estate and litigation. He is a member of the
American Bar Association, the New York Bar Association, the Association of the
Bar of the City of New York, the Association of Trial Lawyers of America, New
York State Trial Lawyers and the Nassau County Bar. He is a member of various
professional committees including the International Law Section of the New York
State Bar.
ALBERT L. EILENDER. Mr. Eilender is the sole owner of Waterways Advisory
Services, a firm specializing in advising companies on developing and evaluating
options relative to mergers, acquisitions and strategic partnerships in the
Chemical Industry. He has more than 30 years of diverse Senior Level experience
in the Specialty Chemicals and Pharmaceutical industry and has had direct P&L
responsibility for managing businesses up to $300 million, with significant
experience in mergers, acquisitions and joint ventures, both domestically and
internationally. He has also served on the boards of numerous industry trade
associations during his career.
IRA S. KALLEM. Mr. Kallem has been a managing accountant, part-time, at
Wiener, Frushtick & Straub, Certified Public Accountants, since September 2000.
In June 1994, Mr. Kallem co-founded Mateo Express, Inc., an international money
transfer company and served as Chief Financial Officer and Director until May
2000. Previously, he was a Senior Partner at Shine & Company, Certified Public
Accountants.
HANS C. NOETZLI. Mr. Noetzli is the Chairman of Schweizerhall, Inc., a
wholly owned subsidiary of Schweizerhall Holding AG, Basel, Switzerland. Mr.
Noetzli holds a degree in Business Administration. He has more than 30 years
experience in the Fine Chemicals Industry. Prior to assuming his present
position, he served in many executive functions of the Alusuisse-Lonza Group,
among them as CEO of Lonza Inc. for 16 years and was a member of the Executive
Committee of the worldwide Alusuisse-Lonza Group located in Zurich, Switzerland.
He also served on the Board of Directors of the Chemical Manufacturing
Association, the Swiss-American Chamber of Commerce, New York, as well as other
industry associations. Currently, he is a member of the Board of Directors of
IRIX Pharmaceuticals, Inc., a privately owned developer and manufacturer of
active pharmaceutical ingredients.
INFORMATION ABOUT THE BOARD OF DIRECTORS, COMMITTEES OF THE BOARD AND SENIOR
EXECUTIVES.
During the Company's fiscal year ended June 30, 2003, the Board of
Directors held four meetings. Each incumbent Director attended all Board
meetings and meetings of the Board committees on which he served. The Company
does not have a standing nominating committee, the functions of which are
performed by the entire Board.
During the Company's fiscal year ended June 30, 2003, the Executive
Compensation Committee of the Board met four times. The Executive Compensation
Committee has the power to establish base salaries and annual incentives, and to
recommend grants of stock options and other long-term incentives.
During the Company's fiscal year ended June 30, 2003, the Audit Committee
of the Board met eight times. The Audit Committee has the responsibility of
recommending the engagement of independent auditors and reviewing and
considering actions of management in matters relating to audit functions. The
Committee reviews, with the independent auditors, the scope and results of its
audit engagement, the system of internal controls and procedures and reviews the
effectiveness of procedures intended to prevent violations of laws. The Audit
Committee has recommended the selection of KPMG LLP as independent auditors for
the fiscal year ended June 30, 2004.
No director or senior executive of the Company is related to any other
director or senior executive of the Company. None of the Company's officers or
nominees for director hold any directorships in any other public company.
CORPORATE GOVERNANCE
The Company operates within a comprehensive plan of corporate governance for the
purpose of defining responsibilities, setting high standards of professional and
personal conduct and assuring compliance with such responsibilities and
standards. In July 2002, Congress passed the Sarbanes-Oxley Act of 2002 which,
among other things, establishes, or provides the basis for, a number of new
corporate governance standards and disclosure requirements. In addition, the
Nasdaq Stock Market, Inc. has recently made changes or proposed changes to its
corporate governance and listing requirements. The Board of Directors has
initiated numerous actions consistent with these new rules and will continue to
regularly monitor developments in the area of corporate governance.
INDEPENDENT DIRECTORS
o A majority of the members of the Company's Board of Directors are
independent.
AUDIT COMMITTEE
o All Audit Committee members are independent as defined by Rule 4200 (a)(14)
of the NASDAQ Market Place Rules. Our Board of Directors has determined that Mr.
Kallem qualifies as an "audit committee financial expert" as that term is used
in Section 407 of the Sarbanes-Oxley Act of 2002.
o The Audit Committee operates under a formal charter that governs its duties
and conduct. The charter is attached hereto as Appendix A.
o KPMG LLP, the Company's independent auditors, reports directly to the Audit
Committee.
o The Audit Committee, consistent with the Sarbanes-Oxley Act of 2002 and the
rules adopted thereunder, meets with management and the auditors prior to the
filing of officers' certifications with the SEC to request information
concerning, among other things, significant deficiencies in the design or
operation of internal controls, if any.
o The Audit Committee has adopted a Non-Retaliation Policy and a Complaint
Monitoring Procedure to enable confidential and anonymous reporting regarding
financial irregularities, if any.
EXECUTIVE COMPENSATION COMMITTEE
o The Executive Committee of the Board of Directors functions as the
Executive Compensation Committee, and makes recommendations to the Board with
respect to the remuneration of the Company's executive officers.
CODE OF BUSINESS CONDUCT
o The Company has adopted a Code of Business Conduct that includes provisions
ranging from restrictions on gifts to conflicts of interest. All employees are
required to affirm in writing their acceptance of the code. The code is attached
hereto as Appendix B.
CODE OF ETHICS
o The Company has adopted a Code of Ethics for its principal executive
officer and its senior financial officers, violations of which may be reported
to the Audit Committee. The code is attached hereto as Appendix C.
DISCLOSURE COMMITTEE
o The Company has formed a Disclosure Committee, comprised of senior
management, including senior financial personnel, to formalize processes to
ensure accurate and timely disclosure in Aceto's periodic reports filed with the
United States Securities and Exchange Commission and to implement certain
disclosure controls and procedures. The Disclosure Committee operates under a
formal charter, which is attached hereto as Appendix D.
PERSONAL LOANS TO EXECUTIVE OFFICERS AND DIRECTORS
o The Company's policy has always been to not extend personal loans or other
terms of personal credit to its directors and officers, and it will comply with
the recently enacted legislation prohibiting such personal loans and other forms
of personal credit.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16 of the Exchange Act, the Company's Directors and executive officers and beneficial owners of more than
10% of the Company's Common Stock are required to file certain reports, within specified time periods, indicating their holdings of
and transactions in the Common Stock and derivative securities. Based solely on a review of such reports provided to the Company and
written representations from such persons regarding the necessity to file such reports, the Company is not aware of any failures to
file reports or report transactions in a timely manner during the Company's fiscal year ended June 30, 2003.
EXECUTIVE COMPENSATION
The following table shows, for the last three fiscal years, compensation information for Leonard S. Schwartz, the Company's
Chief Executive Officer, and the next four most highly compensated executives. Other tables that follow provide more detail about
the specific type of compensation.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM
COMPENSATION
NAME AND YEAR SALARY BONUS RESTRICTED OPTIONS/(1 ALL OTHER
PRINCIPAL POSITION STOCK SARS COMPENSATION (2)
AWARDS
Leonard S. Schwartz 2003 $368,505 $703,135 $12,765 54,000 $ 321,155
President, Chairman 2002 354,332 584,527 26,073 15,000 90,267
And Chief Executive 2001 340,704 495,000 90,000 - 82,727
Officer
Frank DeBenedittis 2003 $213,844 $256,500 $13,500 18,000 $ 49,128
Senior Vice President 2002 203,625 196,622 8,378 6,000 42,459
2001 186,520 160,613 9,387 3,750 38,548
Vincent Miata 2003 $215,070 $200,000 - 18,000 $ 39,128
Senior Vice President 2002 202,129 160,000 - 6,000 35,502
2001 172,908 170,000 - 3,750 35,725
Axel Mueller (3) 2003 $254,212 $160,000 $40,000 18,000 $ 33,535
Vice President, 2002 202,003 120,000 30,000 4,500 27,030
International 2001 50,001 30,000 7,500 3,750 3,047
Michael Feinman 2003 $171,429 $96,625 $13,375 18,000 $ 32,299
President, Aceto 2002 164,836 78,006 16,994 6,000 27,367
Agricultural Chemicals 2001 157,207 95,862 4,138 3,750 27,488
Corp.
(1) All figures have been adjusted to reflect the 3-for-2 stock dividend on our common stock paid on January 2, 2003.
(2) Represents contributions to retirement plans and compensation recognized from the issuance of premium shares on restricted
stock.
(3) Axel Mueller's employment with the Company commenced March 26, 2001.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information regarding the grant of stock options in the fiscal year ended June 30, 2003 to the
named executives. All figures have been adjusted to reflect the 3-for-2 stock dividend on our common stock paid on January 2, 2003.
POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE OR TERM (1)
OPTIONS GRANTED EMPLOYEES BASE PRICE -------------------------------
NAME (# OF SHARES) IN FISCAL YEAR ($/SH) EXPIRATION DATE 5% 10%
----------- ----------------- -------------- --------------- --------------- ------ -------
Leonard S. Schwartz 54,000 (2) 11% $9.63 12/05/12 $326,925 $828,491
Frank DeBenedittis 18,000 (2) 4% 9.63 12/05/12 108,975 276,164
Vincent Miata 18,000 (2) 4% 9.63 12/05/12 108,975 276,164
Axel Mueller 18,000 (2) 4% 9.63 12/05/12 108,975 276,164
Michael Feinman 18,000 (2) 4% 9.63 12/05/12 108,975 276,164
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(1) The dollar amounts illustrate value that might be realized upon exercise of the options immediately prior to the
expiration of their term, covering the specific compounded rates of appreciation set by the Securities and Exchange
Commission (5% and 10%) and are not, therefore, intended to be forecasts by Aceto of possible future appreciation of the
stock price of Aceto.
(2) On December 5, 2002, the Company granted incentive stock options to Messrs. Schwartz, DeBenedittis, Miata, Mueller and
Feinman to purchase common stock of the Company under the Company's 2002 Stock Option Plan. All of these options vest at
the rate of 20% per year beginning one year from date of grant, subject to acceleration if the stock price exceeds
pre-determined levels for a period of time.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table contains information regarding the exercise of stock options by the named executives in the fiscal year
ended June 30, 2003 and the value of unexercised options held by such persons on June 30, 2003.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT OPTIONS AT
FY-END (1) FY-END (2)
SHARES --------------------------------- -----------------------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (1) REALIZED UNEXERCISABLE UNEXERCISABLE
------------------- ------------ --------------- --------------------------------- -----------------------------------
Leonard S. Schwartz 101,250 $1,282,913 206,250 189,000 $2,600,663 $2,195,010
Frank DeBenedittis 31,500 324,945 9,750 18,000 118,103 162,420
Vincent Miata 22,500 237,720 18,750 18,000 210,953 162,420
Michael Feinman 23,875 289,649 8,000 18,000 82,525 162,420
Axel Mueller 8,250 110,618 - 18,000 - 162,420
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(1) All share amounts have been adjusted to reflect the 3-for-2 stock dividend paid on January 2, 2003, as appropriate.
(2) The dollar value of each exercisable and unexercisable option was calculated by multiplying the number of shares of common
stock underlying the option by the difference between the exercise price of the option and the closing price of the Company's
common stock on June 30, 2003 ($18.65).
COMPENSATION OF DIRECTORS
Directors of the Company who are not also employees receive $20,000 per year for serving on the Board of Directors plus fees
ranging from $500 to $2,000 for each committee meeting attended. Directors of the Company who are also employees are not compensated
for their services as Directors.
On December 5, 2002, the Company granted each of Messrs. Eilender, Hendler, Wiesen, Fischer, Noetzli and Kallem 4,500
non-qualified stock options, adjusted to reflect the effect of the 3-for-2 stock dividend paid January 2, 2003, pursuant to the 2002
Stock Option Plan. Each option vests one year from the date of grant, is exercisable at $9.63 (adjusted) and expires 10 years from
the date of grant.
EMPLOYMENT AGREEMENTS
On March 26, 2001, in conjunction with Aceto's acquisition of Schweizerhall Pharma, a subsidiary of the Company entered into an
employment contract with Dr. Axel Mueller. The contract has a term of three years, with an initial salary of $200,000 plus annual
increases at a rate equal to that which other senior Aceto executives receive and a minimum annual bonus of $125,000 (including
restricted stock awards). In addition, Dr. Mueller received an option for 3,750 shares (adjusted) of Aceto's common stock at 100% of
the Fair Market value at that date. Dr. Mueller is also to be provided with an automobile for his use.
The Company has no other employment agreements with its senior executives.
LIMITS ON LIABILITY AND INDEMNIFICATION
The Company's Articles of Incorporation eliminate the personal liability of
its directors to the Company and its shareholders for monetary damages for
breach of the directors' fiduciary duties in certain circumstances. The Articles
of Incorporation further provide that the Company will indemnify its officers
and directors to the fullest extent permitted by law. The Company believes that
such indemnification covers at least negligence and gross negligence on the part
of the indemnified parties. Insofar as indemnification for liabilities under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Company pursuant to the foregoing provisions or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
Members of the Executive Compensation Committee, with the exception of
Leonard S. Schwartz, have never served as officers or employees of the Company
or any of our subsidiaries. During the last fiscal year, none of our senior
executives served on the Board of Directors or Compensation Committee of any
other entity whose officers served either on our Board of Directors or
Compensation Committee.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Executive Committee of the Board of Directors, whose members are
Leonard S. Schwartz (Chairman), Stanley H. Fischer, Samuel I. Hendler, Albert L.
Eilender and Robert A. Wiesen, functions as the Executive Compensation
Committee, and makes recommendations to the Board with respect to the
remuneration of the Company's executive officers.
The Company's compensation policy has been designed to enable the Company
to attract, retain and motivate executives whose enthusiasm and abilities will
contribute to the growth of its business and result in maximum profitability to
the Company and its stockholders, by providing salaries and benefits competitive
with those offered by other companies in the chemical industry. The executive
compensation program includes base salary, annual incentive compensation (cash
bonuses), and long term incentive compensation (awards under the Company's Stock
Option Plans).
Base salaries are set at levels competitive with the chemical industry.
Because of the way the Company operates its business, the contributions of its
executives significantly affect corporate profitability. Bonuses (which can
exceed base salary) are paid to reflect the extent of such contributions. The
Chief Executive Officer (CEO) also is the Chairman of the Board, President and
Chief Operating Officer of the Company. The bonuses paid to the CEO and to the
Secretary/Treasurer, who is the Chief Financial Officer (CFO), are intended to
reflect the Company's overall performance (excluding extraordinary events).
The four highest paid executives, other than the CEO, are each responsible
for the performance of one of the Company's principal profit centers. Internally
generated performance records are kept on a monthly and yearly basis for these
profit centers, and each center's profitability is compared in the current year
to the previous year.
Other factors considered in determining the bonuses of individual executives are
the individual's own performance and the overall performance of the Company. The
Executive Compensation Committee determines each bonus primarily based on this
data, also taking into account the long term contributions of each individual.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
The CEO's compensation was determined on the basis of the same factors utilized
to compensate other executives, taking into consideration total compensation
comparisons of top executives of corporations in the chemical industry.
Submitted October 7, 2003 by members of the Executive Compensation Committee
Leonard S. Schwartz, Chairman
Albert L. Eilender
Stanley H. Fischer
Samuel I. Hendler
Robert A. Wiesen
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee is comprised of three independent directors (each of whom
meets the independence and expertise requirements of the National Association of
Securities Dealers, Inc.) and operates under a written charter, a copy of which
is attached hereto as Appendix A. The Audit Committee recommends the engagement
of the Company's independent auditor and reviews and considers actions of
management in matters relating to audit functions. The Audit Committee also
reviews with the independent auditor the scope and results of its audit
engagement, the Company's system of internal controls and procedures, and
reviews the effectiveness of procedures intended to prevent violations of laws.
In fulfilling its responsibilities, the Audit Committee has reviewed and
discussed the audited consolidated financial statements for the Company for the
fiscal year ended June 30, 2003 with the Company's management and KPMG LLP
("KPMG"), the Company's independent auditors.
Pursuant to the Sarbanes-Oxley Act of 2002, in September 2003 the Audit
Committee established the Aceto Corporation Audit Committee Pre-Approval Policy
whereby the Committee is required to pre-approve the audit fees, and the
provision of certain tax and other non-audit related services by KPMG after KPMG
provides a detailed description of the services to be performed and specific fee
estimates for each such service. The Audit Committee limits the engagement by
the Company of KPMG for non-audit services and tax services to those
circumstances where the services are considered integral to the audit services
that it provides, or in which there is another compelling rationale for using
its services. The Audit Committee considered the provision by KPMG of the below
mentioned tax services and other non-audit services and concluded that the
provision of these services was compatible with maintaining the independence of
KPMG.
The Audit Committee has discussed with KPMG the matters required to be discussed
by Statement on Auditing Standards No. 61, "Communication with Audit
Committees." In addition, the Audit Committee has received the
written disclosures and the letter from KPMG required by Independence Standards
Board Standard No. 1, "Independence Discussions with Audit Committees" and has
discussed with KPMG its independence from the Company and its management.
Finally, in reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited consolidated
financial statements for the Company for the fiscal year ended June 30, 2003 be
included in our Annual Report on Form 10-K for the year ended June 30, 2003
which has been filed with the United States Securities and Exchange Commission.
AUDIT FEES AND ALL OTHER FEES
AUDIT FEES
Fees for audit services totaled approximately $317,000 in fiscal year 2003 and
approximately $267,000 in fiscal year 2002, including fees associated with the
annual audit and the reviews of the Company's quarterly reports on Form 10-Q.
AUDIT RELATED FEES
There were no fees for audit related services. Such services may include due
diligence services and the audit of financial statements of certain employee
benefit plans.
TAX FEES
Fees for tax services, including tax compliance, tax advice and tax planning,
totaled approximately $183,000 in fiscal year 2003 and $343,000 in fiscal year
2002.
ALL OTHER FEES
There were no other fees paid during either fiscal year 2003 or fiscal year
2002.
Respectfully submitted October 7, 2003 by the members of the Audit Committee.
Albert L. Eilender (Chairman)
Ira S. Kallem
Hans C. Noetzli
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 6, 2003, the number and percentage of shares of outstanding Common
Stock owned by each named senior executive, and director and each person that to the best of the Company's knowledge
owns more than 5% of the Company's issued and outstanding Common Stock, and all named officers and directors as a
group:
NUMBER OF
SHARES
BENEFICIALLY
OWNED
NAME AND ADDRESS OF (EXCLUDING STOCK EXERCISABLE STOCK TOTAL BENEFICIAL PERCENT (4)
BENEFICIAL OWNER (1) OPTIONS) (2) OPTIONS (3) OWNERSHIP
--------------------------- ------------------- ----------------------- -------------------- ----------------
Leonard S. Schwartz 69,181 209,850 279,031 2.6%
Frank DeBenedittis 12,811 10,950 23,761 *
Vincent Miata 13,694 19,950 33,644 *
Michael Feinman 7,971 9,200 17,171 *
Axel Mueller 8,074 1,200 9,274 *
Samuel I. Hendler 8,433 13,500 21,933 *
Robert A. Wiesen 451 13,500 13,951 *
Stanley H. Fischer -- 10,500 10,500 *
Albert L. Eilender 5,500 9,000 14,500 *
Hans Noetzli 900,000 (5) 4,500 904,500 8.7%
Ira S. Kallem -- 4,500 4,500 *
T. Rowe Price Associates, Inc. 673,500 (6) 673,500 6.5%
100 East Pratt Street
Baltimore, MD 21202
Schweizerhall, Inc. 900,000 (7) 900,000 8.7%
c/o Nicholas L. Truglio, CPA
Rosenberg, Rich, Baker,
Berman & Co.
380 Foothill Road
Bridgewater, NJ 08807
All named officers and 1,026,115 306,650 1,332,765 12.5%
directors as a group (11 persons)
------------------------------------
* Less than 1%.
(1) Unless otherwise indicated, the business address of each person is in care of the Company, One Hollow Lane, Lake
Success, New York 11042.
(2) Unless otherwise indicated, each person has or shares with his spouse, sole voting and dispositive power, or
shares with his over the shares shown as owned by him.
(3) For purposes of the table, a person is deemed to have "beneficial ownership" of any shares which such person has
the right to acquire within 60 days after the record date. Any share which such person has the right to acquire
within 60 days after such date is deemed to be outstanding for the purpose of computing the percentage ownership
of such person, but it is not deemed to be outstanding for the purpose of computing the percentage ownership of
any other person.
(4) Based on 10,344,568 shares issued and outstanding as of the record date.
(5) These shares are registered in the name of Schweizerhall, Inc., of which Mr. Noetzli is Chairman. These are the
same shares listed as owned by Schweizerhall Inc. in the table above. See footnote 7. Mr. Noetzli disclaims
beneficial ownership of these shares in accordance with Rule 13d-4 of the Exchange Act Rules promulgated pursuant
to the Securities Exchange Act of 1934, as amended.
(6) Based on information provided by T. Rowe Price Associates, Inc., a registered investment adviser which furnishes
investment advice to investment companies and individual and institutional clients. T. Rowe Price Associates has
the dispositive and voting power for the entire holding of 673,500 shares. The total shares held of 673,500 shares
are owned by various individual and institutional investors, including the T. Rowe Price Small-Cap Value Fund,
Inc. (which owns 525,000 shares representing 5.1% of the Company's outstanding shares), which T. Rowe Price
Associates (Price Associates) serves as investment advisor with power to direct investments and/or power to vote
the securities. For purposes of the reporting requirements of the Securities Exchange Act of 1934, Price
Associates is deemed to be a beneficial owner of such securities; however Price Associates disclaims beneficial
ownership of these shares in accordance with Rule 13d-4 of the exchange Act of 1934, as amended.
(7) Represents shares (adjusted) issued in connection with the Company's March 26, 2001 acquisition of the
Schweizerhall Pharma distribution division of Schweizerhall Holding AG, and certain assets relating to the
pharmaceutical ingredients business of Schweizerhall, Inc., a wholly owned subsidiary of Schweizerhall Holding AG.
PERFORMANCE GRAPH
The following graph compares on a cumulative basis the yearly percentage
change, assuming dividend reinvestment, over the last five fiscal years in (a)
the total shareholder return on our common stock with (b) the total return on
the Standard & Poors 500 Index and (c) the total return on a published
line-of-business index - the Dow Jones U.S. Chemicals Index (the "Peer Group").
The following graph assumes that $100 had been invested in each of the
Company, the Standard & Poors 500 Index and the Peer Group on June 30, 1998.
5-YEAR CUMULATIVE TOTAL RETURN COMPARISION
AMONG ACETO CORPORATION,
THE S&P 500 INDEX AND THE DOW JONES U.S. CHEMICALS INDEX
ACETO DOW JONES U.S.
----- --------------
CORPORATION S&P INDEX CHEMICALS
----------- --------- ---------
June 30, 1998 100 100 100
June 30, 1999 72 123 103
June 30, 2000 71 132 77
June 30, 2001 67 112 87
June 30, 2002 74 92 93
June 30, 2003 195 92 85
ASSUMES $100 INVESTED ON JUNE 30, 1998
ASSUMES DIVIDEND REINVESTMENT
FISCAL YEAR ENDING JUNE 30, 2003
The preceding sections entitled "Executive Compensation" and "Performance
Graph" do not constitute soliciting material for purposes of SEC Rule 14a-9,
will not be deemed to have been filed with the SEC for purposes of Section 18 of
the Securities Exchange Act of 1934, and are not to be incorporated by reference
into any other filing that we make with the SEC.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Stanley H. Fischer, a director of the Company, is President of Fischer and
Burstein, P.C., a law firm which serves as counsel to the Company on various
corporate matters. During fiscal 2003, the Company paid $173,710 to Fischer and
Burstein, P.C. for legal services rendered to the Company.
Robert A. Wiesen, a director of the Company, is a partner in Clifton, Budd
& DeMaria, a law firm which serves as labor and employment counsel to the
Company. During fiscal 2003, the Company paid $107,553 to Clifton, Budd &
DeMaria for legal services rendered to the Company.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THE SEVEN
DIRECTORS.
PROPOSAL TWO
AMENDMENT OF THE COMPANY'S
CERTIFICATE OF INCORPORATION
We propose to amend the Company's Certificate of Incorporation to increase
the number of authorized shares of the Company's Common Stock from 20,000,000 to
40,000,000.
The Certificate of Incorporation of the Company currently authorizes
20,000,000 shares of Common Stock. As of October 6, 2003, the Company had issued
12,292,684 shares of common stock, with 10,344,568 shares outstanding, and
1,948,116 shares held as treasury stock. In addition, as of that date, the
Corporation has reserved up to 1,947,041 shares of its Common Stock for issuance
upon the exercise of options and premium shares on restricted stock. After
giving effect to both the common shares issued and the common shares reserved
for issuance, there were 5,760,275 authorized but unissued shares available to
the Company as of October 6, 2003.
On October 1, 2003, the Board of Directors approved and adopted resolutions
to amend the Company's Certificate of Incorporation to increase the number of
authorized shares of Common Stock to 40,000,000. The additional shares, if
issued, would have the same rights as the shares of Common Stock now
outstanding.
The Board of Directors believes that the proposed increase is in the best
interests of the Company and its shareholders. The Board believes that the
additional shares will be necessary for the Company's legitimate corporate
purposes, including equity financings, the acquisition of other companies, the
establishment of strategic relationships with corporate partners, the
declaration of stock dividends, stock splits or other distributions, and other
general corporate purposes.
You should be aware, however, that if the Company's shareholders approve
the proposed amendment to the Certificate of Incorporation, the Board of
Directors may authorize the issuance of additional shares of Common Stock
without further approval of the Company's shareholders, except as may be
required in certain cases by the Company's charter documents or applicable law
or regulations. Under the Company's Certificate of Incorporation, the Company's
shareholders do not have preemptive rights to subscribe to additional securities
which may be issued by the Company, which means that current shareholders do not
have a prior right to purchase any new issue of capital stock of the Company in
order to maintain their proportionate ownership of the Common Stock.
Furthermore, if the Board elects to issue additional shares of Common Stock or
securities convertible into or exercisable for shares of Common Stock, such
issuance could have a dilutive effect on the voting power and earnings per share
of existing shareholders.
In addition, the increase in the number of authorized shares of Common
Stock could have an anti-takeover effect. For example, if the Board issues
additional shares in the future, such issuance could dilute the voting power of
a person seeking control of the Company, thereby rendering more difficult a
merger, tender offer, proxy contest or an extraordinary transaction opposed by
the Board of Directors. As of the date of this proxy statement, the Board is not
aware of any attempt or plan to obtain control of the Company.
If approved, the amendment to the Company's Certificate of Incorporation
would provide substantially as is set forth in Appendix E hereto.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO INCREASE THE COMPANY'S AUTHORIZED SHARES OF
COMMON STOCK.
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Company has engaged KPMG LLP as its principal independent public
accountants to perform the audit of the Company's financial statements for the
fiscal year ending June 30, 2004. KPMG LLP has audited the Company's financial
statements since 1971. The Audit Committee recommends that KPMG LLP be ratified
as the principal accounting firm to be utilized by the Company throughout the
year ending June 30, 2004.
The Company anticipates that representatives of KPMG LLP will attend the
Annual Meeting for the purpose of responding to appropriate questions. At the
Annual Meeting, the representatives of KPMG LLP will be afforded an opportunity
to make a statement if they so desire.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE SELECTION OF KPMG
LLP AS THE COMPANY'S AUDITORS FOR THE 2004 FISCAL YEAR.
SHAREHOLDER PROPOSALS
All shareholder proposals which are intended to be presented at the 2004
Annual Meeting of Shareholders of the Company must be received by the Company no
later than June 18, 2004, for inclusion in the Board of Directors' proxy
statement and form of proxy relating to the meeting.
OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at the
meeting. However, if any other business properly comes before the meeting, it is
the intention of the persons named in the enclosed proxy to vote on such matters
in accordance with their best judgment.
The prompt return of the proxy will be appreciated and helpful in obtaining
the necessary vote. Therefore, whether or not you expect to attend the meeting,
please sign the proxy and return it in the enclosed envelope.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Douglas Roth
----------------
Douglas Roth
Chief Financial Officer and Secretary
Dated: October 24, 2003
APPENDIX A
ACETO CORPORATION
AUDIT COMMITTEE CHARTER
PURPOSE OF THE COMMITTEE
The primary purpose of the Audit Committee (the "Committee") is to assist
the Board of Directors of Aceto Corporation (the "Company") in fulfilling its
oversight responsibilities by reviewing the financial information which will be
provided to the Company's shareholders and others, the quality of the Company's
accounting policies and reporting practices, the systems of internal disclosure
controls which management and the Board of Directors have established,
compliance with the Company's Code of Ethics, and the internal and external
audit processes. The Committee is to assist the Board in maintaining compliance
by the Company with legal and regulatory requirements.
In fulfilling its purpose, it is the responsibility of the Committee to
provide an open avenue of communication between the Board of Directors,
management and the independent auditors. The Committee is to be the Board's
principal agent in ensuring the independence and objectivity of the independent
auditors, the integrity of management, and the adequacy of disclosure to
shareholders. The independent auditors are ultimately accountable to the Board
of Directors and the Committee, as representative of the Company's shareholders;
however, the Committee has the sole authority to select, evaluate, and, where
appropriate, replace the independent auditors.
The Committee members are not acting as professional accountants or
auditors, and their functions are not intended to duplicate or substitute for
the activities of management and the independent auditors. The Committee serves
a Board-level oversight role in which it provides advice, counsel and direction
to management and the independent auditors on the basis of information it
receives, discussion with the accountants and the experience of the Committee's
members in business, financial and accounting matters.
AUTHORITY OF THE COMMITTEE
The Committee has the authority to investigate any activity of the Company
within its scope of responsibilities, and shall have unrestricted access to
members of management and all information relevant to its responsibilities. All
employees are directed to cooperate as requested by members of the Committee.
The Committee is empowered to retain persons having special competence as
necessary to assist the Committee in fulfilling its responsibility.
COMPOSITION OF THE COMMITTEE
The Committee shall be comprised of at least three members, all of whom
shall meet the independence requirements and experience qualifications of the
United States Securities and Exchange Commission (the "SEC") and The Nasdaq
Stock Market, Inc ("Nasdaq"). At
least one member of the Audit Committee shall be an "audit committee financial
expert" as defined by the SEC. The Audit Committee members shall be appointed by
the Company's Board of Directors. Audit Committee members may be replaced by the
Board.
MEETINGS OF THE COMMITTEE
The Audit Committee shall meet, either in person or telephonically, at
least quarterly. Prior to each meeting, the Chairman of the Committee may
communicate with the independent auditors to review the agenda and solicit input
on any additional topics that should be covered. The Audit Committee shall also
meet periodically, in the discretion of the Chairman of the Committee, with
Company's management, and the independent auditor in separate executive
sessions.
ATTENDANCE AT MEETINGS OF THE COMMITTEE
Members of the Committee are expected to use all reasonable efforts to
attend each meeting. The Chairman may also request that members of management,
the Company's outside counsel or the independent auditor attend a meeting of the
Committee or meet with any members of, or consultants to, the Committee.
MINUTES OF MEETINGS OF THE COMMITTEE
Minutes of each meeting shall be prepared under the direction of the
Chairman of the Committee and circulated to Committee members for review and
approval. Copies are then to be made available to the Company directors who are
not members of the Committee, the independent auditors and the Company's Chief
Financial Officer.
SPECIFIC RESPONSIBILITIES OF THE COMMITTEE
General Matters
The Committee shall:
1. Oversee the work and compensation of the independent auditor in
connection with the preparation by the independent auditor of its
audit report.
2. Review the scope of the independent auditor's audit examination,
including their engagement letter, prior to the annual audit. Review
and approve the audit fees agreed upon by management. Approve any
permitted non-audit services to be provided by the independent
auditors. The Chairman has the authority to approve any additional
audit or permitted non-audit services provided to the Company,
provided that the approval of such services is ratified by the entire
Committee as soon as reasonably practicable by either an electronic
communication with all the committee members, a telephonic meeting
with all the committee members, or another prompt method, but in all
instances, such ratification shall be considered and passed upon by
the Committee at its next regularly scheduled meeting.
3. Have the authority to recommend to the Board the retention or
replacement of the independent auditors, and provide a written summary
of the basis for any recommended change (subject, if applicable, to
shareholder ratification). The independent auditor shall report
directly to the Audit Committee.
4. Have the authority, to the extent it deems necessary or appropriate,
to retain independent legal, accounting or other advisors. The Company
shall provide for appropriate funding, as determined by the Audit
Committee, for payment of compensation to the independent auditor for
the purpose of rendering or issuing an audit report and to any
advisors employed by the Audit Committee.
Financial Statement and Disclosure Matters
The Committee shall:
1. Review and discuss with management and the independent auditor the
annual audited financial statements, including disclosures made in
management's discussion and analysis, and recommend to the Board
whether the audited financial statements should be included in the
Company's Form 10-K.
2. Review and discuss with management and the independent auditor the
Company's quarterly financial statements prior to the filing of its
Form 10-Q, including the results of the independent auditor's review
of the quarterly financial statements.
3. Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit, including any difficulties encountered in the
course of the audit work, any restrictions on the scope of activities
or access to requested information, and any significant disagreements
with management.
4. Discuss with management and the independent auditor significant
financial reporting issues and judgments made in connection with the
preparation of the Company's financial statements, including any
significant changes in the Company's selection or application of
accounting principles, any major issues as to the adequacy of the
Company's internal controls and any special steps adopted in light of
material control deficiencies, if any.
5. Review and discuss quarterly reports from the independent auditors on:
(a) all critical accounting policies and practices to be used; (b) all
alternative treatments of financial information within generally
accepted accounting principles that have been discussed with
management, ramifications of the use of such alternative disclosures
and treatments, and the treatment preferred by the independent
auditor; and (c) other material written communications between the
independent auditor and management, such as any management letter or
schedule of unadjusted differences.
6. Discuss with management the Company's earnings press releases,
including the use of "pro forma" or adjusted" non-GAAP information, as
well as financial information and earnings guidance provided to
analysts and rating agencies.
7. Discuss with management and the independent auditor the effect of
regulatory and accounting initiatives as well as off-balance sheet
structures on the Company's financial statements, if any.
8. Discuss with management the Company's major risk exposures and the
steps management has taken to monitor and control such exposures,
including the Company's risk assessment and risk management policies.
9. Review disclosures made to the Audit Committee by the Company's CEO
and CFO during their certification process for the Form 10-K and Form
10-Q about any significant deficiencies in the design or operation of
internal controls or material weaknesses therein and any fraud
involving management or other employees who have a significant role in
the Company's internal controls.
Oversight of the Company's Relationship with the Independent Auditor
The Committee shall:
1. Review and evaluate the lead partner of the independent auditor team.
2. Obtain and review a report from the independent auditor at least
annually regarding (a) the independent auditor's internal
quality-control procedures, (b) any material issues raised by the most
recent internal quality-control review, or peer review, of the firm,
or by any inquiry or investigation by governmental or professional
authorities within the preceding five years respecting one or more
independent audits carried out by the firm, (c) any steps taken to
deal with any such issues, and (d) all relationships between the
independent auditor and the Company. Evaluate the qualifications,
performance and independence of the independent auditor, including
considering whether the auditor's quality controls are adequate and
the provisions of the permitted non-audit services is compatible with
maintaining the auditor's independence, taking into account the
opinions of management and internal auditors. The Audit Committee
shall present its conclusions with respect to the independent auditor
to the Board.
3. Oversee the rotation of the audit partners as required by law.
4. Meet with the independent auditor to discuss the planning and staffing
of the audit.
Compliance Oversight Responsibilities
The Committee shall:
1. Obtain from the independent auditor assurance that to its knowledge
Section 10A(b) of the Exchange Act has not been implicated.
2. Review management's monitoring of the Company's compliance with its
Code of Ethics. Review reports and disclosures of insider and
affiliate party transactions.
3. Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters, and the confidential,
anonymous submission by the employees of concerns regarding the
questionable accounting or auditing matters.
4. Discuss with management and the independent auditor any correspondence
with regulators or governmental agencies and any published reports
which raise material issues regarding the Company's financial
statements or accounting policies.
5. Discuss with the Company's outside counsel legal matters that may have
a material impact on the financial statements or the Company's
compliance policies.
Limitation of Audit Committee's Role
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements and disclosures
are complete and accurate and are in accordance with the generally accepted
accounting principles and applicable rules and regulations. These are either the
responsibilities of management or the independent auditor, as applicable.
APPENDIX B
CODE OF BUSINESS CONDUCT
Aceto expects all representatives of the company and its subsidiaries to
act in accordance with the highest standards of personal and professional
integrity in all aspects of their activities and to comply with all applicable
laws, regulations and company policies. We must never compromise that integrity,
either for personal benefit or for Aceto's purported benefit. In accepting a
position, or continuing in a position, with Aceto or any of its subsidiaries,
each of us becomes accountable for compliance with the law and with this Code of
Business Conduct.
This Code of Business Conduct applies to all representatives of Aceto and
its subsidiaries, including directors, employees, temporary workers and other
independent contractors and consultants. It is your responsibility to become
familiar with the policies set forth herein.
If you have any questions about these policies, you should discuss them
with Aceto's Corporate Secretary or Human Resources Manager. As a general
matter, when there is a conflict between internal policies that apply to you or
between jurisdictions in which you conduct business, the more restrictive policy
will prevail. Waivers of this Code of Business Conduct, if any, may only be
granted by Aceto's Board of Directors and must be publicly disclosed promptly.
Aceto expects you to act in full compliance with the policies set forth in
this Code of Business Conduct and in a manner consistent with the highest
ethical standards. Failure to observe these policies may result in disciplinary
action, up to and including termination of employment. Furthermore, violations
of this Code of Business Conduct may also be violations of the law and may
result in civil or criminal penalties for you and/or Aceto.
This Code of Business Conduct sets forth guidelines only and does not
constitute or imply an employment contract, nor is it intended to make a
commitment to any employee concerning how individual employment action can,
should, or will be handled.
Responsibilities to Aceto
RAISING ETHICAL ISSUES
Maintaining ethical standards, including appropriate disclosure and
internal accounting controls, is the responsibility of every member of the Aceto
family. Early identification and resolution of the ethical issues that may arise
are critical to maintaining our commitment to world-class business practices.
Aceto personnel are expected to treat compliance with ethical standards as
a critical element of their responsibilities. Although this Code of Business
Conduct addresses a wide
range of business practices and procedures, it cannot anticipate every issue
that may arise. If you are unsure of what to do in any situation, you should
seek additional guidance and information before you act. You should use your
judgment and common sense; if something seems unethical or improper it probably
is. If you have any questions regarding the best course of action in a
particular situation, or if you suspect a possible violation of a law,
regulation or Aceto ethical standard, you should promptly contact any of the
following:
Your supervisor
Your Human Resources representative
Aceto's Compliance Officer and independent board member Robert A. Wiesen, Esq.
at (212) 687-7410, or at [email protected]
You should feel free to contact either someone in your business unit or
someone at the corporate level, whichever you believe is more appropriate.
Alternatively, you may choose to remain anonymous by sending an anonymous e-mail
to the secure location on Aceto's corporate web site. If you raise an ethical
issue and you believe the issue has not been properly addressed, you should
raise it with another of the contacts listed above.
In addition, you are required to report suspected insider trading, fraud or
attempted fraud, and any mysterious disappearance of funds immediately. You may
do so by contacting any of the persons listed above or sending an anonymous
e-mail to the secure location on Aceto's corporate web site.
Aceto strongly encourages personnel to raise possible ethical issues. Aceto
has adopted a Non-Retaliation Policy which specifically prohibits any
retaliatory action against any individual for raising legitimate concerns or
questions regarding ethics matters or for reporting suspected violations.
PROTECTING ACETO'S CORPORATE ASSETS
You are responsible for safeguarding the tangible and intangible assets of
Aceto and its customers, suppliers and distributors that are under your control.
Aceto assets must not be used for personal benefit except where permitted by
Aceto in line with local practices and laws. Assets include cash, business
plans, customer information, supplier information, distributor information,
intellectual property (computer programs, models and other items), physical
property and services.
Misappropriation of corporate assets is a breach of your duty to Aceto and
may constitute an act of fraud against Aceto. Similarly, carelessness or waste
in regard to corporate assets is also a breach of your duty to Aceto.
Aceto has strict policies regarding the use of its telephone, e-mail and
voice-mail systems. Each is a business communication tool and users are
obligated to use these tools in a responsible, effective and lawful manner.
Violations of Aceto's policies regarding these tools can result in corrective
action up to and including discharge.
ACCURACY OF ACETO'S RECORDS AND REPORTING
The records, data and information owned, used and managed by Aceto must be
accurate and complete. You are personally responsible for the integrity of the
information, reports and records under your control. Records must be maintained
in sufficient detail as to reflect accurately the company's transactions.
Financial statements must always be prepared in accordance with generally
accepted accounting principles and fairly present, in all material respects, the
financial condition and results of the company.
You must use common sense and observe standards of good taste regarding
content and language when creating business records and other documents (such as
e-mail) that may be retained by Aceto or a third party. You should keep in mind
that at a future date, Aceto or a third party may be in a position to rely on or
interpret the document with the benefit of hindsight and/or the disadvantage of
imperfect recollections.
You are required to cooperate fully with appropriately authorized internal
and external investigations. Making false statements to or otherwise misleading
internal or external auditors, Aceto counsel, Aceto representatives or
regulators can be a criminal act that can result in severe penalties. You must
never withhold or fail to communicate information that raises ethical questions
and thus should be brought to the attention of higher levels of management.
You are prohibited from destroying any records that are potentially
relevant to a violation of law or any litigation or any pending, threatened or
foreseeable government investigation or proceeding.
Aceto is also committed to accuracy in tax-related records, and to tax
reporting in compliance with the overall intent and letter of applicable laws.
Tax returns must be filed on a timely basis and taxes due paid on time.
Representing Aceto to Customers and Others
FAIR TREATMENT
Aceto is committed to dealing fairly with its customers, suppliers,
competitors and employees. No person may take unfair advantage of any such
persons through manipulation, concealment, abuse of confidential information,
misrepresentation of material facts or other unfair dealing practice.
MEDIA, PUBLISHING AND PUBLIC APPEARANCES
Aceto employees may be approached for interviews or comments by the news
media from time to time and in such instances should immediately contact Aceto's
Chief Executive Officer. Only contact people designated by the Chief Executive
Officer may comment to news reporters on Aceto policy or events relevant to
Aceto.
All inquiries from the media relating to Aceto should be referred to
Aceto's Chief Executive Officer. Only officially designated spokespersons may
provide comments for the media.
Gifts and Entertainment
ACCEPTING GIFTS AND ENTERTAINMENT
In general, you should not accept gifts or the conveyance of anything of
value (including entertainment) from current or prospective Aceto customers or
suppliers. Moreover, you should never accept a gift in circumstances in which it
could even appear to others that your business judgment has been compromised.
Gifts may only be accepted from current or prospective Aceto customers or
suppliers when permitted under applicable law if they are: (1) noncash gifts of
nominal value; or (2) customary and reasonable meals and entertainment at which
the giver is present, such as the occasional business meal or sporting event.
Any gift which appears to be of more than a nominal value must be reported to
the Human Resources Manager of Aceto, and may be returned to the source.
GIVING GIFTS AND PROVIDING ENTERTAINMENT
If a gift could be seen by others as a consideration for an official or
business favor, you must not give the gift. Appropriate entertainment may be
offered to customers by persons authorized to do so, subject to the applicable
business expense reimbursement requirements.
The United States and other countries, states and many local jurisdictions
have laws restricting gifts (e.g., meals, entertainment, transportation, lodging
or other things of value) that may be provided to government officials. In
addition, the U.S. Foreign Corrupt Practices Act of 1977 ("FCPA") outlines very
serious provisions against bribery, including the payment, or promise of
payment, of anything of value to foreign officials (including any person
employed by or representing a foreign government, officials of a foreign
political party, officials of public international organizations and candidates
for foreign office). Payment made indirectly through a consultant, contractor or
other intermediary is also prohibited.
POLITICAL ACTIVITIES AND CONTRIBUTIONS
You have the right voluntarily to participate in the political process. No
one at Aceto may require you to contribute to, support or oppose any political
group or candidate. If you choose to participate in the political process, you
must do so as an individual, not as a representative of Aceto. You may not work
on a political fundraiser or other campaign activity while at work or use
company property for these activities. Any overt, visible and partisan political
activity that could cause someone to believe that your actions reflect the views
or position of Aceto requires the prior approval of Aceto's Chief Executive
Officer.
LOBBYING
Aceto encourages every employee to take an active interest in government
processes. Any participation in a political process, however, is to be
undertaken as an individual - not as a representative of Aceto. You must not
engage in lobbying activities on behalf of Aceto.
Investments and Activities Outside of Aceto
INSIDER TRADING
Aceto has adopted a Corporate Trading Policy. This policy and the laws of
the United States and many other countries prohibit trading in the securities
(including equity securities, convertible securities, options, bonds and any
stock index containing the security) of any company while in possession of
material, nonpublic information (also know as "inside information") regarding
the company. This prohibition applies to transactions for your personal account.
A personal account is any account in which you have a financial or beneficial
interest, or the power to affect or the ability to influence trading or
investment decisions, either directly or indirectly. Personal accounts typically
include accounts of spouses, domestic partners, children and other members of
your household, and accounts over which you have investment discretion.
If you believe you have come into possession of inside information, you may
not execute any trade in the securities of the subject company without first
consulting with Aceto's Corporate Secretary, who will then determine whether
such trade would violate Aceto's Corporate Trading Policy or applicable laws.
The definition of "material, nonpublic information" is broad. Information is
"material" (and hence, potentially subject to the prohibition on insider
trading) if there is a substantial likelihood that a reasonable investor would
consider the information important in determining whether to trade in a
security, or if the information, if made public, likely would affect the market
price of a company's securities. Information may be material even if it relates
to future, speculative or contingent events, and even if it is significant only
when considered in combination with publicly available information. Information
is considered to be "nonpublic" unless it has been publicly disclosed, and
adequate time has passed for the securities markets to digest the information.
Examples of adequate disclosure include public filings with securities
regulatory authorities and the issuance of press releases.
It is also illegal in the United States and many other countries to "tip"
or pass on inside information to any other person if you know or reasonably
suspect that the person receiving such information from you will misuse
information by trading in securities or passing such information on further,
even if you do not receive any monetary benefit from the tippee.
PERSONAL INVESTMENTS IN ACETO SECURITIES
Aceto supports employee stock ownership. Investments in Aceto securities
for personal accounts should be made with a long-term orientation and as part of
a broader
investment strategy. In order to comply with applicable law and avoid the
appearance of impropriety, certain general restrictions apply to all
transactions in Aceto securities.
You are prohibited from trading in Aceto securities for your personal
accounts if you possess material nonpublic information about Aceto.
Additionally, directors and officers are subject to reporting and other
legal restrictions regarding their personal trading of Aceto securities. You are
responsible for knowing and abiding by any Aceto policies regarding Aceto
securities that may be applicable to you.
CONFLICTS OF INTEREST
You must be sensitive to any activities, interests or relationships that
might interfere with, or even appear to interfere with, your ability to act in
the best interests of Aceto and its customers. The following are only some of
the areas in which real or perceived conflicts of interest may arise. Because it
is impossible to describe every potential conflict, Aceto necessarily relies on
your commitment to exercise sound judgment, to seek advice when appropriate and
to adhere to the highest and ethical standards in the conduct of your
professional and personal affairs.
INVESTMENTS
You must not make any personal investment in an enterprise if your position
at Aceto creates a conflict of interest or the appearance of such a conflict.
Investments subject to this provision include investments in a public or private
company that is a vendor to or competitor of Aceto, or otherwise does business
with or is doing a transaction with Aceto. This provision will not apply to
personal investments in enterprises having a business relationship with Aceto
that is solely that of a customer of Aceto products available to similarly
situated customers on substantially the same basis, or to investments of under
1% of the outstanding equity securities of a public company.
OUTSIDE BUSINESS ACTIVITIES
Because of potential conflicts with Aceto or even the potential
perception of a conflict of interest, Aceto requires that employees obtain
approval before they accept a position as a director of an unaffiliated
for-profit company or organization. Any employee accepting an appointment as
director of an unaffiliated for-profit company or organization must ensure the
proper treatment of confidential information received from such entity in
connection with being a director. Before accepting such an appointment,
employees are required to obtain the written approval of Aceto's Corporate
Secretary. In addition, employees should not accept or hold a position as a
director, officer, employee or agent of, or consultant or advisor to, any
competitor of, or vendor to, Aceto or any of its affiliates unless they obtain
the written approval of the Corporate Secretary.
USE OF ACETO NAME, FACILITIES OR RELATIONSHIPS
You should not use Aceto's name, facilities, or relationships for personal
benefit or for outside work. Use of Aceto's name, facilities or relationships
for charitable or pro bono purposes can be made only with prior approval from
the Corporate Secretary.
CORPORATE OPPORTUNITIES
You owe a duty to Aceto to advance its legitimate interests when the
opportunity to do so arises. You may not take for yourself a corporate
opportunity that is discovered in the course of your employment or through the
use of corporate property, information or your position, nor may you compete
against the company.
RELATED PARTY BUSINESS DEALINGS
You must notify your supervisor of any business relationship or proposed
business relationship or proposed business transaction Aceto may have with any
company in which you or a related party has a direct or indirect interest or
from which you or a related party may derive a benefit, or where a related party
member is employed, if such a relationship or transaction might give rise to the
appearance of a conflict of interest (for example, if you or a family member own
or control property of significant value that Aceto is either purchasing or
leasing).
This requirement generally excludes any interest that exists solely as a
result of your ownership of less than 1% of the outstanding publicly traded
equity securities of such company.
COMMITMENT TO THE ENVIRONMENT
Aceto is committed to conducting business in an environmentally responsible
manner that protects human health, natural resources and the global environment.
The U.S. and many other countries have laws and regulations relating to
environmental protections. Environmental risks or opportunities that may arise
out of our operations should be identified and managed in accordance with these
laws and regulations. Questions regarding environmental concerns should be
directed to Aceto's environmental affairs department or to the Corporate
Secretary.
Conclusion
We at Aceto aspire to the highest standards of moral and ethical conduct -
- working to earn the trust of our customers, day in and day out. In the
thousands of decisions we make and actions we take every day, we affirm our
commitment to this Code of Business Conduct and to deliver value to our
customers, our people, our shareholders and our communities.
APPENDIX C
CODE OF ETHICS FOR ACETO CORPORATION'S
WORLDWIDE FINANCIAL MANAGEMENT
Aceto Corporation's mission includes the promotion of professional conduct
in the practice of its financial management worldwide. Those persons responsible
for financial management worldwide at Aceto Corporation hold an important and
elevated role in corporate governance in that they are uniquely capable and
empowered to ensure that the interests of all those involved with Aceto
Corporation - including shareholders, employees, customers, and the public - are
appropriately balanced, protected and preserved.
This Code of Ethics provides principles for those persons responsible for
Aceto Corporation's financial management worldwide. These persons are expected
to adhere to these principles and advocate them. These principles embody rules
regarding individual and peer responsibilities, as well as responsibilities to
other employees, the public and shareholders. Any violations of this Code of
Ethics may result in disciplinary action.
All those persons responsible for financial management worldwide at Aceto
Corporation will:
o Act with honesty and integrity, avoiding actual or apparent
conflicts of interest in personal and professional relationships.
o Provide public disclosure of information that is accurate,
complete, objective, relevant, timely and understandable.
o Comply with rules and regulations of federal, state and local
governments, and other appropriate private and public regulatory
agencies.
o Act in good faith, responsibly, with due care, competence and
diligence, without misrepresenting material facts or allowing
one's independent judgment to be subordinated.
o Respect the confidentiality of information acquired in the course
of one's work except when authorized or otherwise legally
obligated to disclose.
o Confidential information acquired in the course of one's work
will not be used for personal advantage.
o Share knowledge and maintain skills important and relevant to
Aceto Corporation.
o Proactively promote and be an example of ethical behavior as a
responsible partner among peers, in the work environment and the
community.
o Achieve responsible use of and control over all assets and
resources employed or entrusted.
APPENDIX D
DISCLOSURE COMMITTEE CHARTER
This disclosure committee (the "Committee") charter (the "Charter") has
been established by Aceto Corporation (the "Company") and ratified by the
Company's board of directors to assist the Company's chief executive officer and
chief financial officer (the "Certifying Officers").
I. OBJECTIVE
The Committee has been formed to help ensure that disclosures made by the
Company in its United States Securities and Exchange Commission (the "SEC")
filings and to the investment community comply with applicable laws and stock
exchange rules.
The Committee shall have full access to the Company's books, records and
facilities, and the Company's officers and employees, regarding any matter
within the scope of the Committee's responsibilities. The Committee shall confer
with the Company's independent auditors and outside legal counsel in order to
verify the accuracy and completeness of the Company's disclosures.
The Committee will, under the supervision and oversight of the Certifying
Officers, facilitate these objectives by:
A. Creating a process (this process shall be referred to as the Company's
"Disclosure Controls and Procedures") designed to ensure that
information required by the Company to be disclosed in filings with
the SEC and other information that the Company discloses to the
investment community is recorded, processed, summarized and reported
accurately and timely.
B. Supervising the preparation of the Company's: (i) annual report on
Form 10-K and each quarterly report on Form 10-Q (collectively, the
"periodic reports"), and current reports, proxy statements,
information statements, registration statements and other filings with
the SEC; (ii) press releases containing financial and other
information material to the marketplace for the Company's securities;
(iii) presentations to shareholders, analysts and the investment
community; and (iv) presentations to rating agencies and lenders
(collectively, the "Disclosure Statements"); and (v) the Company's web
site.
C. Evaluating the integrity and effectiveness of the Company's Disclosure
Controls and Procedures within 90 days before the Company files its
periodic reports with the SEC and any amendments to those reports.
D. Reviewing with the Certifying Officers, outside counsel and the public
auditors all relevant information with respect to the Committee's
proceedings, the preparation of the Disclosure Statements and the
D. Committee's evaluation of the effectiveness of the Company's
Disclosure Controls and Procedures.
E. Certifying to the Certifying Officers before filing each periodic
report as to: (i) the Committee's compliance with this charter and the
Disclosure Controls and Procedures; and (ii) the Committee's
conclusions resulting from its evaluation of the effectiveness of the
Disclosure Controls and Procedures.
II. MEMBERSHIP, PROCESS
A. Committee members shall include the Company's chief financial officer,
controller, vice president of administration, vice president of
international, and other appropriate Aceto employees as determined by
the Certifying Officers.
B. The Certifying Officers (acting with such members of the Committee as
they shall determine) may, at any time, assume any or all of the
duties of the Committee identified in this Charter, including, for
example, approving the Disclosure Statements when time or other
factors do not permit the full Committee to review the Disclosure
Statement.
C. The chief financial officer shall serve as the Committee Chair. The
Committee Chair shall schedule and preside over meetings and prepare
agendas. Any interpretation of the Charter or the Committee's
procedures shall be made by the Committee Chair.
D. As soon as practicable, the Committee shall prepare and submit for the
approval of the Certifying Officers and the Company's Board of
Directors, a set of Disclosure Controls and Procedures, including
policies and procedures of the Committee and policies and procedures
to test the effectiveness of the Disclosure Controls and Procedures.
E. The Committee shall meet as necessary to: (i) ensure the accuracy and
completeness of the Disclosure Statements; and (ii) evaluate the
Disclosure Controls and Procedures.
III. PERIODIC EVALUATION
The Committee shall review and reassess this Charter and the performance of
the Committee annually and recommend any proposed changes to the Certifying
Officers and the Board of Directors for approval.
IV. OTHER RESPONSIBILITIES, DELEGATION
The Certifying Officers may assign other responsibilities, consistent with
this Charter, to the Committee, and may delegate as they consider appropriate.
APPENDIX E
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF ACETO CORPORATION
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
-------------------------------------------------
The undersigned, being the president and the secretary of ACETO Corporation, do
hereby certify and set forth:
1. The name of the corporation is ACETO CORPORATION. The corporation was
formed under the name ACETO CHEMICAL CO. INC.
2. The Certificate of Incorporation was filed by the Department of State
on June 13, 1947.
3. The Amendment to the Certificate of Incorporation effected by this
Certificate of Amendment is to increase the number of authorized common shares,
$.01 par value, from 20,000,000 to 40,000,000.
4. To accomplish the foregoing, paragraph THIRD(A) of the Certificate of
Incorporation, which refers to shares, is hereby amended as follows:
"THIRD(A) The aggregate number of shares which the Corporation shall
have authority to issue is 42,000,000 shares, of which 40,000,000
shares shall be Common Stock, par value $.01 per share, and 2,000,000
shares shall be Preferred Stock, par value $2.50 per share, issuable
in series."
5. Amendment to the Certificate of Incorporation was authorized by vote
of the Board of Directors followed by vote of the holders of a majority of all
outstanding shares entitled to vote thereon at a meeting of the shareholders.
IN WITNESS WHEREOF, this Certificate has been subscribed this ___ day of
December 2003, by the undersigned who affirm the statements made herein are true
under the penalties of perjury.
------------------
Leonard S. Schwartz
President and CEO
------------------
Douglas Roth
Secretary
ACETO CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned, revoking all previous proxies, hereby constitutes and appoints
Leonard S. Schwartz and Douglas Roth, and each of them, proxies with full power
of substitution to vote for the undersigned all shares of Common Stock of Aceto
Corporation which the undersigned would be entitled to vote if personally
present at the Annual Meeting of the Shareholders to be held on December 4, 2003
at the Company's offices, One Hollow Lane, Suite 201,Lake Success, New York
11042, at 10:00 a.m., Eastern Standard Time, and at any adjournment thereof,
upon the matters described in the accompanying Proxy Statement and upon any
other business that may properly come before the meeting or any adjournment
thereof. Said proxies are directed to vote or refrain from voting as checked on
the reverse side upon the matters listed on the reverse side, and otherwise in
their discretion.
PLEASE INDICATE HOW YOUR STOCK IS TO BE VOTED.IF NO SPECIFIC VOTING INSTRUCTIONS
ARE GIVEN,THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS RECOMMENDED BY
THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL
NOMINEES "IN ITEM 1 AND "FOR " ITEMS 2 AND 3.
ACETO CORPORATION
P.O. BOX 11199
NEW YORK, N.Y. 10203-0199
(1) Election of Directors
FOR all nominees listed below *EXCEPTIONS WITHHOLD AUTHORITY to vote
Nominees: Leonard S. Schwartz , Samuel I. Hendler, Robert A. Wiesen, Stanley H.
Fischer, Albert L. Eilender, Ira S. Kallem and Hans C. Noetzli.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX ABOVE AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED
BELOW.)
*Exceptions
________________________________________________________________________________
(2) Amend the Company's Certificate of Incorporation to increase the Company's
authorized shares of common stock from 20,000,000 to 40,000,000.
FOR AGAINST ABSTAIN
(3) Ratify the appointment of KPMG LLP as the Company's independent auditors for
the current fiscal year.
FOR AGAINST ABSTAIN
(4) In their discretion with respect to such other business as may properly come
before the meeting or any adjournment thereof.
Change of Address Mark Here
(PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED POSTAGE PREPAID
ENVELOPE.)
NOTE: Please sign exactly as your name appears on this proxy. If shares are held
jointly, each joint owner should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. Proxies
executed by a corporation should be signed with the full corporate name by a
duly authorized officer.
Dated:_____________________________, 2003
___________________________________
(Signature of Stockholder)