UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
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 o
Check the
appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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x
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Definitive
Proxy Statement
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o
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Definitive
Additional Materials
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o
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Soliciting
Material Pursuant to Rule 14a-11(c) or Rule
14a-12
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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
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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Aggregate
number of securities to which transaction applies:
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(3)
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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):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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Fee
paid previously with preliminary materials.
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o
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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.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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Date
Filed:
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ACETO
CORPORATION
One
Hollow Lane
Lake
Success, New York 11042-1215
Tel.
(516) 627-6000
October
16, 2008
Dear
Fellow Shareholder:
I take pleasure in inviting each of you
to attend Aceto Corporation’s annual meeting of shareholders to be held on
Thursday, December 4, 2008 at 10:00 a.m., Eastern Standard Time, at the NASDAQ
MarketSite, 4 Times Square (corner of 43rd Street and Broadway, entrance on
Broadway), New York, 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 and thank you for your continued support.
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Sincerely,
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Leonard
S. Schwartz
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Chairman
of the Board, President and
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Chief
Executive Officer
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ACETO
CORPORATION
One
Hollow Lane
Lake
Success, New York 11042-1215
Tel.
(516) 627-6000
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
To the
Shareholders of Aceto Corporation:
We hereby
notify you that the annual meeting of shareholders of Aceto Corporation, a New
York corporation (the “Company”), will be held on Thursday, December 4, 2008, at
10:00 a.m., Eastern Standard Time, at the NASDAQ MarketSite for the following
purposes:
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to
elect six directors to the board of directors to hold office for the
following year and until their successors are elected;
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to
ratify the appointment of BDO Seidman, LLP as the Company’s independent
registered public accounting firm for our fiscal year ending June 30,
2009; and
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to
transact any other business that may properly come before the meeting or
any adjournment thereof.
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The
matters listed in this notice of meeting are described in the accompanying proxy
statement. The Company’s board of directors has fixed the close of
business on October 10, 2008 as the record date for this year’s annual
meeting. You must be a shareholder of record at that time to be
entitled to notice of the annual meeting and to vote at the annual
meeting.
YOUR
VOTE IS IMPORTANT
Even if
you plan to attend the meeting, please promptly complete, sign, date and return
the enclosed proxy card in the envelope provided so that your vote will be
counted if you later decide not to attend the meeting. No postage is required if
the proxy card is mailed in the United States.
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By
order of the board of directors,
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Douglas
Roth
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Chief
Financial Officer and Corporate
Secretary
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Lake
Success, New York
October
16, 2008
ACETO
CORPORATION
ONE
HOLLOW LANE
LAKE
SUCCESS, NEW YORK 11042-1215
Tel.
(516) 627-6000
PROXY
STATEMENT
GENERAL
INFORMATION
Information
About Proxy Solicitation
This
proxy statement is being furnished to holders of shares as of the record date of
the common stock, $0.01 par value per share, of Aceto Corporation, a New York
corporation (the “Company”), in connection with the Company’s annual meeting to
be held on Thursday, December 4, 2008 at 10:00 a.m. Eastern Standard Time, at
the NASDAQ MarketSite. We sent you this proxy statement because our
board of directors is soliciting your proxy to vote your shares at the annual
meeting and at any adjournment. This proxy statement summarizes
information that we are required to provide to you under the rules of the United
States Securities and Exchange Commission and the Nasdaq Global Select Market,
which information is designed to assist you in voting your
shares. The purposes of the meeting and the matters to be acted on
are stated in the accompanying notice of annual meeting of shareholders. At
present, the board of directors knows of no other business that will come before
the meeting.
We will
begin mailing these proxy materials on or about October 24, 2008. 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, and
facsimile 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 those custodians,
nominees and fiduciaries for reasonable out-of-pocket expenses incurred by them
in doing so.
Information
About Voting
Q:
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Why am I receiving these
materials?
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A:
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The
board of directors is providing these proxy materials to you in connection
with the Company’s annual meeting of shareholders, which will take place
on December 4, 2008. As a shareholder, you are invited to attend the
annual meeting and to vote on the items of business described in this
proxy statement.
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Q:
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What
information is contained in these materials?
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A:
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The
information included in this proxy statement relates to the proposals to
be voted on at the annual meeting, the voting process, the compensation of
directors and the most highly paid executive officers, and certain other
required information. A copy of our annual report is also
enclosed.
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Q:
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What
items of business will be voted on at the annual
meeting?
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A:
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The
two items of business scheduled to be voted on at the annual meeting are
the election of directors and the ratification of the Company’s
independent registered public accounting firm. We will also
consider any other business that properly comes before the annual
meeting.
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Q:
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How
does the board of directors recommend that I vote?
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A:
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The
board of directors recommends that you vote your shares FOR each of the
nominees to the board and FOR the ratification of the Company’s
independent registered public accounting firm on the proxy card included
with this proxy statement.
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Q:
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What shares can I
vote?
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A:
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You
may vote all shares owned by you as of the close of business on October
10, 2008, the record date. These shares include: (1) shares held directly
in your name as a shareholder of record; and (2) shares held for you, as
the beneficial owner, through a broker or other nominee, such as a
bank.
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Q:
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What is the difference between
holding shares as a shareholder of record and as a beneficial
owner?
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A:
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Most
shareholders of the Company hold their shares through a broker or other
nominee rather than directly in their own name. As summarized below, there
are some distinctions between shares held of record and those owned
beneficially.
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If
your shares are registered directly in your name with the Company’s
transfer agent, BNY Mellon Shareowner Services, you are considered, with
respect to those shares, the shareholder of record and these proxy
materials are being sent directly to you by the Company. As the
shareholder of record, you have the right to grant your proxy directly to
the board of directors or to vote in person at the meeting. The board of
directors has enclosed or sent a proxy card for you to
use.
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If
your shares are held in a brokerage account or by another nominee, you are
considered the beneficial owner of shares held in “street name,” and these
proxy materials are being forwarded to you by your broker or nominee
together with a voting instruction card. As the beneficial owner, you have
the right to direct your broker or nominee how to vote and are also
invited to attend the annual meeting. However, since you are not the
shareholder of record, you may not vote these shares in person at the
meeting unless you obtain a “legal proxy” from the broker or nominee that
holds your shares, giving you the right to vote the shares. Your broker or
nominee has enclosed or provided voting instructions for you to use in
directing the broker or nominee how to vote your
shares.
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Q:
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How
can I attend the annual meeting?
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A:
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You
are entitled to attend the annual meeting only if you were a shareholder
of the Company or joint holder as of the close of business on October 10,
2008, or you hold a valid proxy for the annual meeting. You should be
prepared to present photo identification for admittance. If you are not a
record holder but hold shares through a broker or nominee (that is, in
“street name”), you should provide proof of beneficial ownership on the
record date, such as your most recent account statement prior to October
10, 2008, a copy of the voting instruction card provided by your broker or
nominee, or other similar evidence of ownership. If you do not provide
photo identification or comply with the other procedures outlined above
upon request, you will not be admitted to the annual meeting. The annual
meeting will begin promptly at 10:00 a.m. Eastern Standard Time. Check-in
will begin at 9:00 a.m., and you should allow ample time for the check-in
procedures.
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Q:
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How
can I vote my shares in person at the annual meeting?
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A:
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You
may vote in person at the annual meeting any shares that you hold as the
shareholder of record. You may only vote in person shares held in street
name if you obtain from the broker or nominee that holds your shares a
“legal proxy” giving you the right to vote the shares.
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Q:
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How
can I vote my shares without attending the annual
meeting?
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A:
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Whether
you hold shares directly as the shareholder of record or beneficially in
street name, you may without attending the meeting direct how your shares
are to be voted. If you are a shareholder of record, you may vote by
granting a proxy. If you hold shares in street name, you may vote by
submitting voting instructions to your broker or nominee. Each record
holder of Company common stock may submit a proxy by completing, signing,
and dating a proxy card and mailing it in the accompanying pre-addressed
envelope. Each shareholder who holds shares in street name may vote by
mail by completing, signing, and dating a voting instruction card provided
by the broker or nominee and mailing it in the accompanying pre-addressed
envelope.
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Q:
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Can
I change my vote?
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A:
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You
may change your vote at any time prior to the vote at the annual meeting.
For shares held directly in your name, you may accomplish this by granting
a new proxy bearing a later date (which automatically revokes the earlier
proxy) or by attending the annual meeting and voting in person. Attendance
at the meeting will not cause your previously granted proxy to be revoked
unless you specifically so request. For shares you hold beneficially, you
may change your vote by submitting new voting instructions to your broker
or nominee or, if you have obtained a “legal proxy” from your broker, or
nominee giving you the right to vote your shares, by attending the meeting
and voting in person. You may also change your vote by sending a written
notice of revocation to Mr. Douglas Roth, Chief Financial Officer and
Corporate Secretary, Aceto Corporation, One Hollow Lane, Lake Success, New
York 11042.
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Q:
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Who
can help answer my questions?
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A:
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If
you have any questions about the annual meeting or how to vote or revoke
your proxy, you should contact Mr. Terry Steinberg, Vice President,
Administration and Assistant Corporate Secretary, by mail to Aceto
Corporation, One Hollow Lane, Lake Success, New York 11042 or by phone at
516-627-6000. Also, if you need additional copies of this proxy
statement or voting materials, you should contact Mr.
Steinberg.
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Q:
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How
are votes counted?
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A:
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In
the election of directors, you may vote FOR all of the six nominees or you
may direct your vote to be WITHHELD with respect to one or more of the six
nominees. In the ratification of the Company’s independent
registered public accounting firm, you may vote FOR ratification, AGAINST
ratification or you may ABSTAIN from voting with respect to
ratification. If you provide specific instructions, your shares
will be voted as you instruct. If you sign your proxy card or voting
instruction card with no further instructions, your shares will be voted
in accordance with the recommendations of the board of directors FOR all
of the Company’s nominees, FOR ratification of the Company’s independent
registered public accounting firm and, in the discretion of the proxy
holders, on any other matters that properly come before the meeting. If
any other matters properly arise at the meeting, your proxy, together with
the other proxies received, will be voted at the discretion of the proxy
holders.
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Q:
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What
is a quorum and why is it necessary?
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A:
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Conducting
business at the meeting requires a quorum. The presence, either in person
or by proxy, of the holders of a majority of the Company’s shares of
common stock outstanding on October 10, 2008 is necessary to constitute a
quorum. Under the New York Business Corporation Law, and the Company’s
articles of incorporation and by-laws, abstentions are treated as present
for purposes of determining whether a quorum exists.
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Q:
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What
is the voting requirement to approve each of the
proposals?
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A:
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In
the election of directors, the six persons receiving the highest number of
FOR votes at the annual meeting will be elected. Accordingly, abstentions
and broker non-votes do not have the effect of a vote for or against the
election of any nominee. You do not have the right to cumulate your
votes. For ratification of the Company’s independent registered
public accounting firm for our fiscal year ending June 30, 2009 and any
other matters that might properly arise at the meeting require the
affirmative “FOR” vote of a majority of those shares present in person or
represented by proxy and entitled to vote on that proposal at the annual
meeting. Accordingly, abstentions on other proposals will have the same
effect as a vote against the proposal. In addition, where brokers are
prohibited from exercising discretionary authority for beneficial owners
who have not provided voting instructions (commonly referred to as “broker
non-votes”), those shares will not be included in the vote
totals. Broker non-votes will not have the effect of a vote for
or against other proposals. A list of shareholders entitled to
vote at the annual meeting will be available at the annual meeting for
examination by any shareholder.
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Q:
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What
should I do if I receive more than one set of voting
materials?
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A:
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You
may receive more than one set of voting materials, including multiple
copies of this proxy statement and multiple proxy cards or voting
instruction cards. For example, if you hold your shares in more than one
brokerage account, you will receive a separate voting instruction card for
each brokerage account in which you hold shares. If you are a shareholder
of record and your shares are registered in more than one name, you will
receive more than one proxy card. Please complete, sign, date, and return
each proxy card and voting instruction card that you
receive.
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Q:
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Where
can I find the voting results of the annual meeting?
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A:
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We
intend to announce preliminary voting results at the annual meeting and
publish final results in our Quarterly Report on Form 10-Q for our fiscal
quarter ending December 31, 2008.
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Q:
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What
happens if additional matters are presented at the annual
meeting?
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A:
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Other
than the two items of business described in this proxy statement, we are
not aware of any other business to be acted upon at the annual meeting.
However, if you grant a proxy, the persons named as proxy holders, Leonard
S. Schwartz, the Company’s Chairman, President and Chief Executive
Officer, and Douglas Roth, the Company’s Chief Financial Officer and
Secretary, will have the discretion to vote your shares on any additional
matters properly presented for a vote at the meeting. If for any
unforeseen reason any of our nominees is not available as a candidate for
director, the persons named as proxy holders will vote your proxy for any
one or more other candidates nominated by the board of
directors.
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Q:
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What
shares are entitled to be voted?
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A:
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Each
share of the Company’s common stock issued and outstanding as of the close
of business on October 10, 2008, the record date, is entitled to be voted
on all items being voted at the annual meeting, with each share being
entitled to one vote. On the record date, 24,529,541 shares of the
Company’s common stock were issued and outstanding.
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Q:
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Who
will count the votes?
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A:
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One
or more inspectors of election will tabulate the votes.
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Q:
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Is
my vote confidential?
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A:
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Proxy
instructions, ballots, and voting tabulations that identify individual
shareholders are handled in a manner that protects your voting privacy.
Your vote will not be disclosed, either within the Company or to anyone
else, except: (1) as necessary to meet applicable legal requirements; (2)
to allow for the tabulation of votes and certification of the vote; or (3)
to facilitate a successful proxy solicitation.
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Q:
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Who
will bear the cost of soliciting votes for the annual
meeting?
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A:
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The
board of directors is making this solicitation and will pay the entire
cost of preparing, assembling, printing, mailing and distributing these
proxy materials. Certain of our directors, officers and employees, without
any additional compensation, may also solicit your vote in person, by
telephone or by electronic communication. On request, we will also
reimburse brokerage houses and other custodians, nominees and fiduciaries
for their reasonable out-of-pocket expenses for forwarding proxy and
solicitation materials to shareholders.
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Q:
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May
I propose actions for consideration at next year’s annual meeting of
shareholders?
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A:
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You
may submit proposals for consideration at future shareholder meetings.
However, in order for a shareholder proposal to be considered for
inclusion in the Company’s proxy statement for the annual meeting next
year, the written proposal must be received by the corporate secretary of
the Company no later than June 27, 2009. Such proposals also
will need to comply with United States Securities and Exchange Commission
regulations under Proxy Rule 14a-8 regarding the inclusion of shareholder
proposals in company-sponsored proxy
materials.
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PROPOSAL
ONE
ELECTION
OF DIRECTORS
THE
NOMINEES
The
Company’s board of directors is proposing a slate of directors that consists of
six incumbent directors.
The
nominees are set forth in the table below.
NAME
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AGE
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POSITION
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DIRECTOR
SINCE
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Leonard
S. Schwartz
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62
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Chairman,
President and CEO
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1991
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Robert
A. Wiesen (1)
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57
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Director
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1994
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Stanley
H. Fischer
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65
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Director
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2000
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Albert
L. Eilender (2)(3)(4)
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65
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Director
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2000
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Hans
C. Noetzli (2)(4)
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67
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Director
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2002
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William
N. Britton (2)(4)
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63
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Director
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2006
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(1)
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This
director is the chairman of the compensation committee.
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(2)
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This
director is a member of the audit committee.
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(3)
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This
director is designated the lead independent director.
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(4)
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This
director is a member of the compensation
committee.
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It is the
intention of the persons named in the accompanying proxy card to vote all shares
of common stock for which they have been granted a proxy for the election of the
nominees, each to serve as a director until the next annual meeting of
shareholders and until his or her successor shall have been duly elected and
qualified. All the nominees have consented to being named in this
proxy statement and to serve as a director if elected.
At the
time of the annual meeting, if any of the nominees named above is not available
to serve as director (an event that the board of directors does not currently
have any reason to anticipate), all proxies will be voted for any one or more
other persons that the board of directors designates. The board of
directors believes that it is in the best interests of the Company to elect the
above-described slate of directors.
INFORMATION
ABOUT THE NOMINEES
No
director or executive officer of the Company is related to any other director or
executive officer. None of the Company’s officers or directors hold
any directorships in any other public company, except for Mr. Noetzli, who is a
member of the board of directors of Synthetech, Inc. A majority of
our board members are independent.
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.
Robert A.
Wiesen. Mr. Wiesen is a senior partner in the law firm of
Clifton Budd & DeMaria and has practiced employment law for over thirty
years. He is a member of the American Bar Association and has written
and lectured extensively on employment law issues over the years. Mr.
Wiesen received his legal and undergraduate degrees magna cum laude and cum
laude and has received many honors including Phi Beta Kappa membership and the
American Jurisprudence Award for 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 State Bar Association, the New York City Bar
Association, the American Association for Justice and the Nassau County Bar
Association. 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 financial responsibility for managing businesses up to $300 million in
revenues, 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.
Hans C.
Noetzli. Mr. Noetzli is the former 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 of experience in the fine
chemicals industry. Prior to his role as Chairman of Schweizerhall,
Inc., he served in many executive functions of the Alusuisse-Lonza Group, among
them as Chief Executive Officer of Lonza Inc. for 16 years and he was a member
of the executive committee of the worldwide Alusuisse-Lonza Group located in
Zurich, Switzerland. Mr. Noetzli 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 and he is a member of the board of directors
of Synthetech, Inc., a fine chemicals company specializing in organic synthesis,
biocatalysis and chiral technologies.
William N.
Britton. Mr. Britton is the sole owner of TD AIM, LLC through
which he is involved in a variety of activities surrounding financial consulting
and private equity investing. Mr. Britton is also a Vice Chairman of
P and E Capital, Inc., a management company involved in real
estate. Previously, Mr. Britton was a Senior Vice President with JP
Morgan Chase. He has over 30 years of commercial lending experience
ranging from large syndicated financings with Fortune 500 companies to privately
owned businesses, with significant experience in private equity related
transactions, asset based lending arrangements, leasing and many other forms of
secured lending. He is a former Vice President-Finance for the Boy
Scouts of America (Manhattan Council) and is on the board of the Rutgers
Business School.
INFORMATION
ABOUT THE COMPANY’S COMMITTEES
Audit
Committee
The audit
committee is comprised of Albert L. Eilender (Chairman), William N. Britton and
Hans C. Noetzli. The audit committee is responsible for
recommending the Company’s independent registered public accounting firm and
reviewing management actions in matters relating to audit
functions. The committee reviews with the Company’s independent
public accounting firm the scope and results of its audit engagement and the
Company’s system of internal controls and procedures. The committee
also reviews the effectiveness of procedures intended to prevent violations of
laws. The committee also reviews, prior to publication, our quarterly
earnings releases and reports to the SEC on Form 10-K and Form
10-Q. The report of the audit committee for fiscal year 2008 can be
found below.
The audit
committee, consistent with the Sarbanes-Oxley Act of 2002 and the rules adopted
thereunder, also 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.
Our board
has determined that all audit committee members are independent under applicable
SEC regulations, and as defined by Rule 4200 (a)(14) of the Nasdaq Marketplace
Rules. Our board of directors has determined that Mr. Britton qualifies as an
“audit committee financial expert” as that term is used in Section 407 of the
Sarbanes-Oxley Act of 2002. The audit committee operates under a
formal charter that governs its duties and conduct and is published on the
Company’s corporate website – www.aceto.com.
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.
Board
Nominations
The
Company’s board of directors does not have a nominating
committee. Instead, the Company’s independent directors make
recommendations to the full board, which nominates directors on an annual
basis. The board believes this process is preferable because it
wishes to involve all of its independent directors in the nomination process
rather than a select number of committee members.
The
independent directors perform the following functions with respect to nomination
decisions:
|
●
|
They
consider and recommend to the board of directors individuals for election
as directors.
|
|
|
|
|
●
|
They
make recommendations to the board of directors regarding any changes to
the size of the board of directors or any committee.
|
|
|
|
|
●
|
They
report to the board of directors on a regular basis, not less than once a
year.
|
The
Company’s independent directors and board of directors have determined that
candidates for director should have certain minimum qualifications, including
being able to understand basic financial statements, being over 21 years of age,
having relevant business experience, and having high moral character. The board
of directors retains the right to modify these minimum qualifications from time
to time.
In
evaluating an incumbent director whose term of office is set to expire, the
independent directors and the board of directors review that director’s overall
service to the Company during that director’s term, including the number of
meetings attended, level of participation, quality of performance, and any
transactions with the Company engaged in by that director during his or her
term.
When
selecting a new director nominee, the independent directors and the board of
directors first determine whether the nominee must be independent for Nasdaq
purposes and/or whether the candidate must qualify as an “Audit Committee
Financial Expert,” as that term is used in section 407 of the
Sarbanes-Oxley Act of 2002. The board then uses its network of contacts to
compile a list of potential candidates, but may also engage, if it deems
appropriate, a professional search firm. Each director then has an
opportunity to privately interview each nominee if he or she deems it necessary.
The board then meets to consider the candidates’ qualifications and chooses
candidates by a unanimous vote.
Shareholders
wishing to directly recommend candidates for election to the board of directors
at an annual meeting must do so by giving notice in writing to Leonard S.
Schwartz, Chairman, Aceto Corporation, One Hollow Lane, Lake Success, New York
11042. Any such notice must, for any given annual meeting, be delivered to the
Chairman not less than 120 days prior to the anniversary of the preceding year's
annual meeting. The notice must state (1) the name and address of the
shareholder making the recommendations, (2) the name, age, business
address, and residential address of each person recommended, (3) the
principal occupation or employment of each person recommended, (4) the
class and number of shares of Aceto shares that are beneficially owned by each
person recommended and by the recommending shareholder, (5) any other
information concerning the persons recommended that must be disclosed in nominee
and proxy solicitations in accordance with Regulation 14A of the Securities
Exchange Act of 1934, and (6) a signed consent of each person recommended
stating that he or she consents to serve as a director of the Company if
elected.
The board
of directors will consider and vote on any recommendations so submitted. In
considering any person recommended by a shareholder, the committee will look for
the same qualifications that it looks for in any other person that it is
considering for a position on the board of directors.
Any
shareholder nominee proposed by the board of directors for election at the next
annual meeting of shareholders will be included in the company's proxy statement
for that annual meeting.
The
compensation committee, comprised of four independent directors, conducts
reviews of the compensation of the Chief Executive Officer and other senior
executive officers of the Company including evaluating and approving those
officer’s benefits, bonus, incentive compensation, severance, equity-based
compensation, and other compensation arising from other programs of the
Corporation. Each member of the committee meets the independence requirements
specified by the Nasdaq Global Select Market, by Section 162(m) of the
Internal Revenue Code of 1986, as amended and for purposes of Rule 16b-3 under
the Securities Act of 1933, as amended. The committee meets as often
as the committee determines, but not less frequently than
annually.
The
compensation committee operates under a formal charter that governs its duties
and conduct. The charter is published on the Company’s corporate
website – www.aceto.com.
Board
and Committee Meetings
During
the Company’s fiscal year ended June 30, 2008, the board of directors held six
meetings and acted by unanimous written consent one time. Each
director attended a majority of the board meetings and a majority of the
meetings of the board committees on which he served.
At each
scheduled meeting of the board of directors, the independent members of the
board of directors meet separately in executive session without management being
present. A lead director elected by the independent directors is
responsible for chairing such executive sessions. Currently the lead
director is Albert L. Eilender.
During
the Company’s fiscal year ended June 30, 2008, both the audit committee and the
compensation committee met five times.
Director
Attendance at Annual Meetings
Our
directors are encouraged, but not required, to attend the annual meeting of
shareholders. All of our directors attended the 2007 annual meeting of
shareholders.
Communications
by our Shareholders to the Board of Directors
Our board
of directors recommends that shareholders direct to the Company’s corporate
secretary any communications intended for the board of directors. Shareholders
can send communications by e-mail to [email protected], by facsimile to (516)
627-6093, or by mail to Douglas Roth, Chief Financial Officer and Secretary,
Aceto Corporation, One Hollow Lane, Lake Success, New York 11042.
This
centralized process will assist the board in reviewing and responding to
shareholder communications in an appropriate manner. If a shareholder wishes to
direct any communication to a specific board member, the name of that board
member should be noted in the communication. The board of directors has
instructed the corporate secretary to forward shareholder correspondence only to
the intended recipients, but the board has also instructed the corporate
secretary to review all shareholder correspondence and, in his discretion, not
forward any items that he deems to be of a commercial or frivolous nature or
otherwise inappropriate for the board's consideration. Any such items may be
forwarded elsewhere in the Company for review and possible
response.
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 those 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 Global Select Market has recently made 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.
Code
of Ethics for Worldwide Financial Management
The
Company has adopted a Code of Ethics for Worldwide Financial Management that
sets forth standards of ethics for the Company’s principal executive officer and
senior financial officers, violations of which are reported to the audit
committee. This Code of Ethics is published on the Company’s
corporate website – www.aceto.com.
Code
of Business Conduct for all Aceto Employees
The
Company has adopted a Code of Business Conduct and Ethics for all Aceto
directors and employees 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. This Code of Business Conduct and
Ethics is in accordance with Nasdaq Qualitative Listing Requirement 4350(n) and
is published on the Company’s corporate website – www.aceto.com.
Disclosure
Committee
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 that governs its duties and conduct. The charter is published
on the Company’s corporate website – www.aceto.com.
Personal
Loans to Executive Officers and Directors
The
Company’s policy has always been to not extend personal loans or other terms of
personal credit to its directors and officers, and is in compliance with the
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, 2008 except that one Form 4 was filed 13 days late on behalf of Frank
DeBenedittis.
The
executive officers of Aceto, and their ages, as of October 10, 2008, are as
follows:
Name
|
|
Age
|
|
Position
|
Leonard
S. Schwartz
|
|
62
|
|
Chairman,
President and Chief Executive Officer
|
Douglas
Roth
|
|
51
|
|
Chief
Financial Officer
|
Vincent
Miata
|
|
55
|
|
Senior Vice
President
|
Frank
DeBenedittis
|
|
54
|
|
Senior Vice
President
|
Michael
Feinman
|
|
60
|
|
President,
Aceto Agricultural Chemicals Corp.
|
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.
Douglas Roth. Mr. Douglas Roth
has been Vice President and Chief Financial Officer since joining the Company in
May, 2001. Prior to joining the Company, Mr. Roth was the Vice President and
Chief Financial Officer of CitySprint 1-800 Deliver from September 1998 through
April 2001.
Vincent Miata. Mr. Miata has
served as Senior Vice President of the Company since 2001. Mr. Miata
joined the Company in 1979 as a sales/marketing representative and held various
positions within the Company including Product Manager, Group Vice President and
Vice President.
Frank
DeBenedittis. Mr. DeBenedittis has served as Senior Vice
President of the Company since 2001. Mr. DeBenedittis joined the
Company in 1979 as a marketing assistant and held various positions within the
Company including Assistant Product Manager, Product Manager, Assistant Vice
President, Group Vice President and Vice President.
Michael Feinman. Mr. Feinman
has served as President of Aceto Agricultural Chemicals Corp. since August 2000.
Mr. Feinman joined the Company in 1973 as a Sales Representative and held
various positions within the Company including Assistant Product Manager,
Product Manager, Assistant Vice President and Vice President.
COMPENSATION
DISCUSSION AND ANALYSIS
Our
Compensation Philosophy and Objectives
Our
executive compensation program is designed to attract, retain, and motivate
superior executive talent and to align their interests with those of our
shareholders and support our growth and profitability. Consistent with those
purposes, our compensation philosophy embodies the following
principles:
• the
compensation program should reward the achievement of our strategic initiatives
and short- and long-term operating and financial goals, and provide for
consequences for underperformance;
• compensation
should reflect differences in position and responsibility;
• compensation
should be comprised of a mix of cash and equity-based compensation that aligns
the short- and long-term interests of our executives with those of our
shareholders; and
• the
compensation program should be understandable and transparent.
In
structuring a compensation program that implements these principles, we have
developed, with the assistance of an executive compensation consulting firm, Hay
Group, Inc. (“Hay Group”), the following objectives for our executive
compensation program:
• overall
compensation levels should be competitive and should be set at levels necessary
to attract and retain talented leaders and motivate them to achieve superior
results;
• a
portion of total compensation should be contingent on, and variable with,
achievement of objective corporate performance goals;
• total
compensation should be higher for individuals with greater responsibility and
greater ability to influence our achievement of operating and financial goals
and strategic initiatives;
• the
number of different elements in our compensation program should be limited, and
those elements should be understandable and effectively communicated to
executives and shareholders; and
• compensation
should be set at levels that promote a sense of equity among all employees and
appropriate stewardship of corporate resources, while giving due regard to our
industry and any premiums that may be necessary in order to attract top talent
at the executive level.
Our
Analysis
Our
compensation committee engaged Hay Group to conduct a review of its total
compensation program for our chief executive officer as well as for our named
executive officers. Hay Group provided consulting services to us both in 2008
and 2007.
In 2007,
our compensation committee compared the compensation we have paid in recent
years to our chief executive officer, chief financial officer and our three
other most highly compensated executive officers to two peer groups. One peer
group consisted of 22 similarly sized companies in the chemical industry and the
second peer group was Hay Group’s 2006 Chemical Industry Database, which
consists of 78 companies that are also in the chemical industry but are of
varying size. The peer group companies were recommended by Hay Group and
selected by the committee because the committee believed that these companies
best reflect the competitive market for executive talent in the chemical and
pharmaceutical industries. The peer group companies
included: American Vanguard Corporation, Axcan Pharma, Inc., Cambrex
Corporation, Quaker Chemical Corporation, Calgon Carbon Corporation, Macdermid,
Inc., Idexx Laboratories, Inc., Compass Minerals International, Inc., Lesco,
Inc., Celgene Corporation, Abraxis Bioscience, Inc., Par Pharmaceutical
Companies, Inc., KV Pharmaceutical Co., Cabot Microelectronics Corp., Penford
Corp., Sciele Pharma, Inc., Martek Biosciences Corp., Adams Respiratory
Therapeutics, Inc., Landec Corp., NL Industries, Inc., Albany Molecular
Research, Inc. and Hawkins, Inc.. The compensation committee’s benchmarking
criteria for these purposes included comparisons of executive base salary
compensation, total cash compensation (base salary plus bonus), and total direct
compensation (total cash compensation plus long-term incentive
awards).
Based
upon this review, our compensation committee recommended that we continue to
strive towards a compensation mix to include a greater proportion of long-term
incentive compensation, and that we gradually alter the nature of the long-term
incentive grants from exclusively stock option grants and restricted stock
awards to a portfolio that includes stock option grants, restricted stock awards
and grants of performance units or shares.
While Hay
Group provided data and advice regarding our compensation practices, our
compensation committee makes all the decisions regarding our compensation
practices. These decisions must then be ratified by our full board of
directors.
Elements
of Our Executive Compensation
Our
executive compensation program has historically been comprised of base salary,
performance-based annual cash and equity bonuses, long-term equity incentive
awards and perquisites. These elements of compensation have been supplemented by
the opportunity for all our eligible employees to participate in benefit plans
that include employer contributions, including our 401(k) plan and our
supplemental retirement plan, as well as life insurance premiums paid by the
Company for employee life insurance policies.
As a
result of the approval of the Aceto Corporation 2007 Long-Term
Performance Incentive Plan (the “Plan”), at the 2007 annual meeting of
shareholders, our long-term incentive compensation component was increased for
our executive officers, making a larger portion of their annual total direct
compensation dependent on long-term stock appreciation and long-term company
financial and operating performance. We have concluded that gradually shifting a
larger share of executive compensation to equity incentives and other long-term
incentive compensation will further align our executive officers’ goals with
those of our shareholders and encourage long-term retention and operational and
financial success.
Additionally,
in order to provide us with increased flexibility with respect to the long-term
incentive component of our executive compensation, we have included in the Plan
the opportunity to grant long-term incentive awards that our prior incentive
plans have generally not included, including stock appreciation rights, shares
of restricted stock, shares of performance stock, performance incentive units
and restricted stock units.
Base
Salary
We
provide our executive officers with base salary to provide them with a fixed
base amount of compensation for services rendered during a fiscal year. We
believe this is consistent with competitive practices and will help assure our
retention of qualified leadership in those positions. We intend to maintain base
salaries at competitive levels in the marketplace for comparable executive
ability and experience, taking into consideration changes from time to time in
the consumer price index and whether competitive adjustments are necessary to
promote retention. Consideration is also given in each case to the historical
results achieved by each executive and the Company during each executive’s
tenure, to whether each executive is enhancing the team oriented nature of the
executive group, the potential of each executive to achieve future success, and
the scope of responsibilities and experience of each executive. In addition,
evaluations are made regarding the competencies of each executive officer that
are considered essential to our success.
The
compensation committee evaluated the historical performance of our executive
officers and considered the compensation levels and programs at the peer group
companies included in the 2007 Hay Group report before it made its most recent
compensation recommendations to the full board. The committee continues to
desire that the compensation levels for each of our executive officers be in the
third quartile (50% to 75%) of the compensation levels for the executive
officers in the peer group companies. The committee therefore recommended, and
our board of directors approved, an increase in the base salaries of our named
executive officers effective October 1, 2008 of 4.0% except for a recommended
and approved increase in the base salary of our president of Aceto Agricultural
Chemicals Corp of approximately 7.5%.
Performance-Based Annual
Cash Bonuses
We pay
performance-based cash bonuses on an annual basis in an effort to encourage
achievement of goals established for our short- and long-term financial and
operating results, and to reward our executive officers for consistent
performance in assisting us in achieving those goals. Pre-determined
annual performance measures were utilized, in connection with our current fiscal
year ended June 30, 2008.
For our
fiscal year ended June 30, 2008, the performance-based objective bonus criteria
as established by our compensation committee, and approved by our board of
directors, was based upon results obtained with respect to the following three
financial factors: (1) company sales; (2) company net income; and (3) company
earnings per share, except that with respect to our three executives who oversee
our three business segments, the performance-based objective bonus criteria also
included results obtained with respect to sales and adjusted pre-tax income for
their respective business segments. In addition, the bonus criteria included
results obtained with respect to certain individual goals that were tailored for
each executive officer and approved by our board of directors. The individual
goals included identifying business opportunities for us and successfully
executing on those opportunities as well as development of personnel and
succession planning.
The
compensation committee recommended that we continue to utilize pre-determined
measurements in order to determine performance-based cash bonuses for the fiscal
year end June 30, 2009. The precise criteria that we will use to determine the
bonuses for our executive officers will vary depending on each officer’s
specific responsibilities. However, in order to provide an example of the
criteria and the relative weight that we plan to give them, the following is the
chart that we plan to use when determining our chief financial officer’s
performance-based cash bonus for our fiscal year ending June 30,
2009:
|
|
|
|
|
|
|
THRESHOLD
BONUS
|
BASE
BONUS
|
TARGET
BONUS
|
MAXIMUM
BONUS
|
RELATIVE
WEIGHT
|
|
|
|
|
|
|
|
($108,750;
representing
75% of
prior
fiscal-year
bonus)
|
($130,500;
representing
90% of
prior
fiscal-year
bonus)
|
($145,000;
representing
100%
of
prior fiscal-year
bonus)
|
($217,500;
representing
150%
of
prior fiscal-year
bonus)
|
|
|
|
|
|
|
|
Company
Sales
|
$269,693,250;
representing
75% of
prior
fiscal-year
|
$359,591,000;
representing
100% of
prior
fiscal-year
|
$395,550,100;
representing
110% of
prior
fiscal-year
|
$449,488,750;
representing
125% of
prior
fiscal-year
|
10%
|
|
|
|
|
|
|
Company
Net Income
|
$10,104,750;
representing
75% of
prior
fiscal-year
|
$13,473,000;
representing
100% of
prior
fiscal-year
|
$14,820,300;
representing
110% of
prior
fiscal-year
|
$16,841,250;
representing
125% of
prior
fiscal-year
|
25%
|
|
|
|
|
|
|
Company
EPS
|
$0.41;
representing
75%
of prior fiscal
year
|
$.54;
representing
100%
of prior fiscal-
year
|
$.59;
representing
110%
of prior fiscal-
year
|
$.68;
representing
125%
of prior fiscal-
year
|
15%
|
|
|
|
|
|
|
Individual
Goal 1
|
|
|
|
|
20%
|
|
|
|
|
|
|
Individual Goal
2
|
|
|
|
|
20%
|
|
|
|
|
|
|
Individual
Goal 3
|
|
|
|
|
10%
|
Additionally,
while we have historically paid our annual performance-based cash bonus in four
installments based on each executive officer’s prior year cash bonus, we intend
to pay the bonus at the end of each of our fiscal years after the bonus is
determined and approved by our board of directors. This transition from four
payments to one annual payment is phased in over a five year period for our five
most highly compensated officers and began with this fiscal year ended June 30,
2008.
Performance-Based Annual
Equity Bonuses
A portion
of our performance-based bonus may be paid in the form of restricted stock
awards for our five most highly compensated officers. If the
pre-determined annual performance measures result in an amount greater than the
prior year’s performance bonus, then the excess over 100% of the prior year
bonus is split between 50% cash payment and 50% grant of restricted stock, which
vests after one year. The compensation committee believes that the granting of
equity-based awards creates a clear and strong alignment between compensation
and shareholder return and enables the named executive officers to maintain
stock ownership in the Company. For the fiscal year ended June 30, 2008,
performance-based equity bonuses were recorded for certain of the named
executive officers, which are reflected in the Summary Compensation Table
contained in this proxy statement.
Long-Term Incentive
Compensation
We intend
to place increasing emphasis on compensation tied to the market price of our
common stock and to the Company’s long-term financial and operating performance.
We believe that these incentives further align management’s interest with the
interests of our shareholders. The approval of the Plan in December 2007 has
allowed the Company to make long-term incentive awards to our executive officers
and other employees. In connection with the approval of the Plan, stock options
were granted to the named executive officers. These options vest on the first
anniversary of the date of grant and expire ten years from the date of grant. In
addition, the Company granted shares of restricted common stock to the named
executive officers, which vest over three years.
The Plan
also allows for the grant of stock appreciation rights which give the
participant the right to appreciation in the value of our common stock between
the date of grant and the date of exercise and performance incentive units and
shares which represent the right to receive cash and shares of stock on
achievement of performance goals.
Our
compensation committee also has recommended to our board of directors that
grants should be made during our fiscal year ending on June 30, 2009 to certain
of our employees, including our executive officers, which consist of stock
options, awards of restricted stock and awards of restricted stock
units.
Other
Compensation
Our
executive officers may also participate in our 401(k) plan on the same terms as
the rest of our eligible employees. We currently make a non-elective
contribution on behalf of each of our participating employees equal to 3% of the
participant’s compensation, including base salary and bonus, up to a maximum of
$225,000 of compensation. We also have historically made discretionary
contributions for each of our participating employees on an annual basis up to
approximately 8% of the participant’s compensation. Our participating
employees are fully vested in both their salary deferrals and non-elective
contributions, but Company discretionary contributions vest at the rate of 20%
per year with 100% vesting after five years of participation.
We also
maintain a supplemental retirement plan, commonly called a “SERP”. This plan is
a non-qualified deferred compensation plan intended to provide management
employees whose eligible annual compensation is in excess of $100,000 with
supplemental benefits beyond the Company’s 401(k) plan. Annual contributions by
the Company to the SERP are fixed by our board of directors and vest at the rate
of 20% per year of service over five consecutive years. In addition to Company
contributions, participants can elect to defer some or all of their bonus
compensation into their SERP account for the following year.
Perquisites
We allow
certain of our executive officers to use a Company automobile as a perquisite to
enhance our compensation package and make it more attractive relative to our
competition. The financial value of the use of a Company automobile for each of
these executive officers for our fiscal year ended June 30, 2008 is set forth in
footnote six to the All Other Compensation column of the Summary Compensation Table
contained in this proxy statement.
No Post-Employment
Compensation
All of
our executive officers are employed on an “at will” basis, meaning we, or any
executive officer, may terminate employment at any time for any reason not
prohibited by law. None of our executive officers has an employment agreement
with us. Therefore there is no contractual notice period required prior to
termination of employment and there is no requirement to pay severance following
any termination.
Stock
Ownership Requirements
Our compensation committee established,
and our board of directors approved, stock ownership requirements for our chief
executive officer, our chief financial officer and our three other most highly
compensated executive officers. These stock ownership requirements provide that
our chief executive officer must own shares of our common stock valued at four
times his base salary and our chief financial officer and our three other most
highly compensated executive officers must own shares of our common stock valued
at two times their base salaries within five years commencing October 1, 2007.
The stock ownership program also includes as a guideline, but not a requirement,
that all our other officers and managers that earn at least $100,000 per year
own shares of our common stock valued at one time base salary within the
same five year period. Shares of our restricted stock that are granted but not
yet vested count toward these stock ownership guidelines.
Management’s
Role in Establishing Our Executive Compensation
Our chief
executive officer plays an important role in assisting our compensation
committee in establishing the compensation for our executive officers. Key
aspects of this role include:
• evaluating
employee performance;
• suggesting
to the compensation committee business performance targets and objectives;
and
• recommending
salary and bonus levels and long-term incentive compensation.
During
this process, the compensation committee may ask our chief executive officer and
other executive officers to provide guidance to the compensation committee
regarding background information for our strategic objectives, an evaluation of
the performance of our executive officers, and compensation recommendations as
to the executive officers. Members of the compensation committee met informally
with our chief executive officer throughout the year to discuss compensation
matters and compensation policies in order to obtain insight regarding the day
to day performance of each of our executive officers.
Tax
Implications of Executive Compensation
Section
162(m) of the Internal Revenue Code of 1986, as amended, provides that
compensation in excess of $1.0 million paid to named executive officers is not
deductible unless it is performance-based and satisfies the conditions of the
exemption. While our compensation committee and board of directors considers all
compensation paid to our named executive officers to be performance-based,
historically not all of the compensation paid to them meets the definition of
“performance-based” compensation in Section 162(m). Equity compensation awarded
to our named executive officers is designed to qualify as performance-based
compensation under Section 162(m), but the historical cash bonuses paid to them
may not qualify. With the exception of our chief executive officer in our past
five fiscal years, relevant annual executive compensation has not exceeded the
$1.0 million threshold for any of our named executive officers so the exemption
was unnecessary for us to fully deduct such compensation payments. Our
compensation committee believes that retaining discretion in determining some
bonus awards within the parameters of the performance goals that the committee
is now putting in place is essential to their overall responsibilities. While
the compensation committee will continue to consider the impact of Section
162(m) on our compensation program, it reserves the right to pay nondeductible
compensation in the future if it determines that it is appropriate to do so. It
is our policy to review all compensation plans and policies against tax,
accounting, and SEC regulations, including Internal Revenue Code Section 162(m),
Internal Revenue Code Section 409A, and FAS 123(R).
COMPENSATION
COMMITTEE REPORT
The
compensation committee has reviewed and discussed with management the
Compensation Discussion and Analysis included in this proxy statement. Based on
that review and discussion, the compensation committee recommended to the board
of directors that the Compensation Discussion and Analysis be included in this
proxy statement and incorporated by reference in the Company’s annual report on
Form 10-K for its last completed fiscal year.
|
Robert
A. Wiesen (Chairman)
|
|
Albert
L. Eilender
|
|
Hans
C. Noetzli
|
|
William
N. Britton
|
EXECUTIVE
COMPENSATION
SUMMARY
COMPENSATION TABLE
The
following table sets forth certain information regarding the compensation of our
Chief Executive Officer and Chief Financial Officer and our three next most
highly compensated executive officers for the fiscal years ended June 30, 2008
and June 30, 2007. Except as set forth below, no other compensation
was paid to these individuals during the year.
Name
and
Principal
Position
|
|
Year
|
|
Salary
|
|
|
Bonus(1)
|
|
|
Stock
Awards
(2)
|
|
|
Option
Awards(3)
|
|
|
Non-Equity
Incentive Plan Compensation(4)
|
|
|
All
Other
Compen-
sation
(6)
|
|
|
Total
|
|
Leonard
S. Schwartz
|
|
2008
|
|
$ |
425,122 |
|
|
$ |
- |
|
|
$ |
241,500 |
|
|
$ |
42,328 |
|
|
$ |
1,181,000 |
|
|
$ |
104,344 |
|
|
$ |
1,994,294 |
|
President,
Chairman
|
|
2007
|
|
|
410,226 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,020,000 |
|
|
|
95,013 |
|
|
|
1,525,239 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas
Roth
|
|
2008
|
|
|
263,267 |
|
|
|
- |
|
|
|
11,147 |
|
|
|
8,466 |
|
|
|
127,500 |
(5) |
|
|
50,947 |
|
|
|
461,327 |
|
Chief
Financial Officer
|
|
2007
|
|
|
242,461 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
110,000 |
(5) |
|
|
48,154 |
|
|
|
400,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vincent
Miata
|
|
2008
|
|
|
248,112 |
|
|
|
- |
|
|
|
37,719 |
|
|
|
8,466 |
|
|
|
298,000 |
|
|
|
54,378 |
|
|
|
646,675 |
|
Senior
Vice President
|
|
2007
|
|
|
239,420 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
270,000 |
|
|
|
52,007 |
|
|
|
561,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frank
DeBenedittis
|
|
2008
|
|
|
254,026 |
|
|
|
- |
|
|
|
21,637 |
|
|
|
8,466 |
|
|
|
269,000 |
|
|
|
51,982 |
|
|
|
605,111 |
|
Senior
Vice President
|
|
2007
|
|
|
245,126 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
228,000 |
|
|
|
46,339 |
|
|
|
519,465 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
Feinman,
President
|
|
2008
|
|
|
203,023 |
|
|
|
- |
|
|
|
28,175 |
|
|
|
8,466 |
|
|
|
127,000 |
|
|
|
40,303 |
|
|
|
406,967 |
|
Aceto
Agricultural
|
|
2007
|
|
|
195,909 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
135,000 |
|
|
|
39,429 |
|
|
|
370,338 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Bonuses paid
during 2008 and 2007 pursuant to the Company’s bonus plan are reflected under
the column entitled “Non-Equity Incentive Plan Compensation.” The Company
did not pay discretionary bonuses during 2008 and 2007; all bonuses were
performance-based.
(2) Reflects awards
of restricted stock granted in December, 2007. Under the terms of
these restricted stock awards, one third of the shares vest on each of the
first, second and third anniversaries of the date of grant. Holders
of restricted stock are entitled to dividends to the same extent as holders of
unrestricted stock. The above table also reflects additional
compensation expense recorded during the year ended June 30, 2008 related to
grants of restricted common stock that occurred in September 2008. In accordance
with SFAS No. 123(R), compensation expense related to these awards was recorded
in fiscal 2008, since the service inception date preceded the grant date. In
accordance with SFAS No. 123(R), compensation expense is recognized on a
straight-line basis over the employee's vesting period or to the employee's
retirement eligibility date, if earlier, for restricted stock
awards. No amounts were recognized for financial statement reporting
purposes for the fiscal year ended June 30, 2007, in accordance with FAS 123(R),
as no stock awards were granted to the executive officers in fiscal 2007 or
2006.
(3) The values
shown reflect the dollar amounts relating to option awards recognized for
financial statement reporting purposes for the fiscal year ended June 30, 2008,
in accordance with FAS 123(R). These option awards vest on the first anniversary
of the date of grant. No amounts were recognized for financial statement
reporting purposes for the fiscal year ended June 30, 2007, in accordance with
FAS 123(R), as no options were granted to the executive officers in fiscal 2007
or 2006. The financial value of each option was estimated using the
Black-Scholes option-pricing model and the assumptions used in the calculation
of these amounts for fiscal year ended June 30, 2008 are included in Note 10 to
the Company’s audited financial statements for the fiscal year ended June 30,
2008, included in the Company’s Annual Report on Form 10-K filed with the SEC on
September 5, 2008.
(4) Reflects cash
bonuses paid under the Company’s bonus plan. Bonuses listed for a
particular year represent bonuses earned and paid with respect to such year even
though all or part of such bonuses may have been paid during the first quarter
of the subsequent year.
(5) The
bonus amount for Mr. Roth includes $25,500 and $22,000 of restricted stock,
which was received by Mr. Roth in lieu of a portion of his bonus for fiscal
years 2008 and 2007, respectively.
(6) All
Other Compensation consists of the use of a Company owned automobile,
contributions to retirement plans and compensation recognized from the issuance
of premium shares on restricted stock as follows:
Name
|
Year
|
|
|
Company
Automobile
($)
|
|
|
|
Company
Contributions to Retirement Plans ($)
|
|
|
|
Issuance
of premium
shares
of restricted
stock
($)
(7)
|
|
|
|
Total
Other Compensation ($)
|
|
L.
Schwartz
|
2008
|
|
|
3,904
|
|
|
|
100,440
|
|
|
|
-
|
|
|
|
104,344
|
|
|
2007
|
|
|
3,904
|
|
|
|
91,109
|
|
|
|
-
|
|
|
|
95,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D.
Roth
|
2008
|
|
|
7,700
|
|
|
|
39,848
|
|
|
|
3,399
|
|
|
|
50,947
|
|
|
2007
|
|
|
7,563
|
|
|
|
37,221
|
|
|
|
3,370
|
|
|
|
48,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
V.
Miata
|
2008
|
|
|
6,938
|
|
|
|
47,440
|
|
|
|
-
|
|
|
|
54,378
|
|
|
2007
|
|
|
6,938
|
|
|
|
45,069
|
|
|
|
-
|
|
|
|
52,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F.
DeBenedittis
|
2008
|
|
|
5,696
|
|
|
|
46,286
|
|
|
|
-
|
|
|
|
51,982
|
|
|
2007
|
|
|
3,085
|
|
|
|
43,254
|
|
|
|
-
|
|
|
|
46,339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
M.
Feinman
|
2008
|
|
|
3,543
|
|
|
|
36,760
|
|
|
|
-
|
|
|
|
40,303
|
|
|
2007
|
|
|
3,286
|
|
|
|
36,143
|
|
|
|
-
|
|
|
|
39,429
|
|
(7)
Eligible employees have the right to purchase restricted stock with a portion of
their annual bonus (up to 20%). Each restricted stock grant is entitled to a
premium equal to 25% of the number of shares of the purchase, paid on the third
anniversary of the purchase, only if the employee is still employed with the
Company.
2008
GRANTS OF PLAN-BASED AWARDS
|
|
|
Estimated
Future Payouts Under
Non-Equity
Incentive Plan Awards
(1)
|
|
|
Estimated
Future Payouts Under Equity Incentive Plan Awards (2)
|
|
|
All
Other
Stock Awards: Number
of
Shares
of
Stock
or
Units (#)
|
|
|
All
Other Option Awards: Number of Securities Underlying Options
(#)
|
|
|
Exercise
or
Base Price of Option Awards ($/Sh)
|
|
|
Grant
Date
Fair
Value
of
Stock
and
Option Awards ($)(3)
|
|
Name
|
Grant
Date
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leonard
Schwartz
|
12/06/07
|
|
|
765,000 |
|
|
|
1,020,000 |
|
|
|
1,530,000 |
|
|
0
|
|
|
0
|
|
|
|
29,965 |
|
|
|
10,000 |
|
|
|
25,000 |
|
|
|
8.05 |
|
|
|
316,750 |
|
Douglas
Roth
|
12/06/07
|
|
|
82,500 |
|
|
|
110,000 |
|
|
|
165,000 |
|
|
0
|
|
|
0
|
|
|
|
3,231 |
|
|
|
3,500 |
|
|
|
5,000 |
|
|
|
8.05 |
|
|
|
60,725 |
|
Vincent
Miata
|
12/06/07
|
|
|
202,500 |
|
|
|
270,000 |
|
|
|
405,000 |
|
|
0
|
|
|
0
|
|
|
|
7,932 |
|
|
|
3,500 |
|
|
|
5,000 |
|
|
|
8.05 |
|
|
|
71,225 |
|
Frank
DeBenedittis
|
12/06/07
|
|
|
171,000 |
|
|
|
228,000 |
|
|
|
342,000 |
|
|
0
|
|
|
0
|
|
|
|
6,698 |
|
|
|
3,500 |
|
|
|
5,000 |
|
|
|
8.05 |
|
|
|
84,225 |
|
Michael
Feinman
|
12/06/07
|
|
|
101,250 |
|
|
|
135,000 |
|
|
|
202,500 |
|
|
0
|
|
|
0
|
|
|
|
3,966 |
|
|
|
3,500 |
|
|
|
5,000 |
|
|
|
8.05 |
|
|
|
43,225 |
|
(1) Actual
awards paid for 2008 performance are included in the Summary Compensation Table
under the column Non-Equity Incentive Plan Compensation, while opportunities for
2008 at threshold, target and maximum are included in the above 2008 Grants of Plan-Based
Awards.
(2) Opportunities
to earn additional restricted stock awards were not established at the threshold
or target scenarios. Actual awards granted for 2008 performance are
included in the Summary
Compensation Table under the column Stock Awards, while opportunities
under this plan for 2008 at the maximum level are included in the above 2008 Grants of Plan-Based
Awards.
(3) These
amounts are valued based on the aggregate grant date fair value of the award
determined in accordance with FAS 123(R). The method and assumptions used to
determine the compensation cost are discussed in Note 10 to our consolidated
financial statements in our annual report on Form 10-K filed on September 5,
2008. The amounts reflect the total accounting expense for these awards and do
not correspond to actual value that may be recognized by such persons with
respect to these awards.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
The
following table discloses information regarding outstanding equity awards
granted or accrued as of June 30, 2008 for each of our named executive
officers.
|
Option
Awards
|
Stock
Awards
|
|
Name
|
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
|
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number
of
Shares
of
Stock
That
Have
Not
Vested
(#)
|
|
|
Market
Value
of
Shares
of
Stock
That
Have
Not
Vested
($) (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leonard
Schwartz
|
|
|
101,250 |
|
|
|
|
|
|
2.66 |
|
12/31/2012
|
|
|
28,919 |
|
|
|
220,941 |
|
|
|
|
101,250 |
|
|
|
|
|
|
2.66 |
|
12/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
101,250 |
|
|
|
|
|
|
2.66 |
|
12/31/2014
|
|
|
|
|
|
|
|
|
|
|
|
101,250 |
|
|
|
|
|
|
2.66 |
|
12/31/2015
|
|
|
|
|
|
|
|
|
|
|
|
33,750 |
|
|
|
|
|
|
2.91 |
|
12/06/2011
|
|
|
|
|
|
|
|
|
|
|
|
121,500 |
|
|
|
|
|
|
4.28 |
|
12/05/2012
|
|
|
|
|
|
|
|
|
|
|
|
27,000 |
|
|
|
|
|
|
8.22 |
|
08/05/2013
|
|
|
|
|
|
|
|
|
|
|
|
300,000 |
|
|
|
|
|
|
10.94 |
|
09/09/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000 |
|
|
|
8.05 |
|
12/06/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas
Roth
|
|
|
19,650 |
|
|
|
|
|
|
|
4.28 |
|
12/05/2012
|
|
|
5,556 |
|
|
|
42,448 |
|
|
|
|
9,000 |
|
|
|
|
|
|
|
8.22 |
|
08/05/2013
|
|
|
|
|
|
|
|
|
|
|
|
30,000 |
|
|
|
|
|
|
|
10.94 |
|
09/09/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000 |
|
|
|
8.05 |
|
12/06/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vincent
Miata
|
|
|
8,438 |
|
|
|
|
|
|
|
2.88 |
|
10/25/2010
|
|
|
6,790 |
|
|
|
51,876 |
|
|
|
|
13,500 |
|
|
|
|
|
|
|
2.91 |
|
12/06/2011
|
|
|
|
|
|
|
|
|
|
|
|
40,500 |
|
|
|
|
|
|
|
4.28 |
|
12/05/2012
|
|
|
|
|
|
|
|
|
|
|
|
9,000 |
|
|
|
|
|
|
|
8.22 |
|
08/05/2013
|
|
|
|
|
|
|
|
|
|
|
|
30,000 |
|
|
|
|
|
|
|
10.94 |
|
09/09/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000 |
|
|
|
8.05 |
|
12/06/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frank
DeBenedittis
|
|
|
40,500 |
|
|
|
|
|
|
|
4.28 |
|
12/05/2012
|
|
|
8,318 |
|
|
|
63,550 |
|
|
|
|
9,000 |
|
|
|
|
|
|
|
8.22 |
|
08/05/2013
|
|
|
|
|
|
|
|
|
|
|
|
30,000 |
|
|
|
|
|
|
|
10.94 |
|
09/09/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000 |
|
|
|
8.05 |
|
12/06/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
Feinman
|
|
|
40,500 |
|
|
|
|
|
|
|
4.28 |
|
12/05/2012
|
|
|
3,500 |
|
|
|
26,740 |
|
|
|
|
9,000 |
|
|
|
|
|
|
|
8.22 |
|
08/05/2013
|
|
|
|
|
|
|
|
|
|
|
|
30,000 |
|
|
|
|
|
|
|
10.94 |
|
09/09/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000 |
|
|
|
8.05 |
|
12/06/2017
|
|
|
|
|
|
|
|
|
|
(1)
|
Reflects
amounts based on the closing market price of the Company’s common stock of
$7.64 per share on June 30, 2008.
|
OPTIONS
EXERCISES AND STOCK VESTED DURING 2008
There
were no exercises of stock options or vesting of stock awards by the named
executive officers during the year ended June 30, 2008.
Equity
Compensation Plan Information
The
following table states certain information with respect to our equity
compensation plans at June 30, 2008:
Plan
category
|
|
Number
of securities
to
be issued upon exercise of outstanding options
|
|
|
Weighted-average
exercise price of outstanding options
|
|
|
Number
of securities remaining available for future issuance under equity
compensation plans
|
|
Equity
compensation plans approved by security holders
|
|
|
2,879,000 |
|
|
$ |
7.59 |
|
|
|
524,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans not approved by security holders
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total
|
|
|
2,879,000 |
|
|
$ |
7.59 |
|
|
|
524,000 |
|
NON-QUALIFIED
DEFERRED COMPENSATION
The
following table shows the Non-Qualified Deferred Compensation amounts earned by
the named executive officers during fiscal 2008:
Name
|
|
Executive
Contributions
In Last FY ($)
|
|
|
Registrant
Contributions
in Last FY ($)(1)
|
|
|
Aggregate
Earnings
in
Last FY ($)
|
|
|
Aggregate
Withdrawals/
Distributions ($)
|
|
|
Aggregate
Balance
at
Last
FY($)(2)
|
|
Leonard
S. Schwartz
|
|
$ |
50,000 |
|
|
$ |
75,119 |
|
|
|
92,424 |
|
|
$ |
- |
|
|
$ |
2,614,827 |
|
Douglas
Roth
|
|
|
13,000 |
|
|
|
14,526 |
|
|
|
(3,713 |
) |
|
|
- |
|
|
|
103,847 |
|
Vincent
Miata
|
|
|
- |
|
|
|
22,118 |
|
|
|
8,437 |
|
|
|
- |
|
|
|
244,489 |
|
Frank
DeBenedittis
|
|
|
10,000 |
|
|
|
20,964 |
|
|
|
13,156 |
|
|
|
- |
|
|
|
367,063 |
|
Michael
Feinman
|
|
|
7,500 |
|
|
|
11,439 |
|
|
|
4,535 |
|
|
|
- |
|
|
|
136,893 |
|
(1) These
amounts are reported in the Summary Compensation
Table.
(2) Of
the totals in this column, the following amounts have previously been reported
in the Summary Compensation
Table, as follows:
Name
|
|
Fiscal 2007
|
|
|
Fiscal 2006
|
|
|
Fiscal 2005
|
|
Leonard
S. Schwartz
|
|
$ |
66,324 |
|
|
$ |
60,741 |
|
|
$ |
234,233 |
|
Douglas
Roth
|
|
|
12,436 |
|
|
|
11,255 |
|
|
|
7,417 |
|
Vincent
Miata
|
|
|
20,284 |
|
|
|
18,194 |
|
|
|
17,939 |
|
Frank
DeBenedittis
|
|
|
18,469 |
|
|
|
18,121 |
|
|
|
17,667 |
|
Michael
Feinman
|
|
|
11,358 |
|
|
|
10,680 |
|
|
|
11,328 |
|
Deferred
Compensation Plan
On March
14, 2005, the Company’s Board of Directors adopted the Aceto Corporation
Supplemental Executive Deferred Compensation Plan (the “Deferred Compensation
Plan”). The Deferred Compensation Plan is a non-qualified deferred
compensation plan intended to provide certain qualified executives with
supplemental benefits beyond the Company’s 401(k) plan, as well as to permit
additional deferrals of a portion of their compensation. The Deferred
Compensation Plan is intended to comply with the provisions of section 409A of
the Internal Revenue Code of 1986, as amended. Substantially all compensation
deferred under the Deferred Compensation Plan, as well as Company contributions,
is held by the Company in a grantor trust, which is considered an asset of the
Company. The assets held by the grantor trust are in life insurance
policies.
COMPENSATION
OF DIRECTORS
The
following table documents the compensation of our directors for the fiscal year
ended June 30, 2008.
Name
|
|
Fees
Earned
or
Paid
in
Cash
(1)
|
|
|
Option
Awards
(2)
|
|
|
Stock
Awards
(3)
|
|
|
Total
|
|
Robert
A. Wiesen
|
|
$ |
56,000 |
|
|
$ |
26,041 |
|
|
$ |
3,517 |
|
|
$ |
85,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stanley
H. Fischer
|
|
|
52,000 |
|
|
|
26,041 |
|
|
|
3,517 |
|
|
|
81,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Albert
L. Eilender
|
|
|
77,000 |
|
|
|
26,041 |
|
|
|
3,517 |
|
|
|
106,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hans
Noetzli
|
|
|
64,500 |
|
|
|
26,041 |
|
|
|
3,517 |
|
|
|
94,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William
N. Britton
|
|
|
58,000 |
|
|
|
26,041 |
|
|
|
3,517 |
|
|
|
87,558 |
|
Directors
also receive reimbursement for expenses incurred in connection with meeting
attendance.
(1) Includes
payments made in fiscal 2008 for attendance at certain meetings held at the end
of fiscal 2007 and does not include payments for attendance at certain meetings
held at the end of fiscal 2008 for which payments were made in fiscal
2009.
(2) Reflects a
grant of 6,199 stock options to each director on December 6, 2007 and 9,281
stock options to each director on December 7, 2006, which grants vest over a
one-year service period. In accordance with SEC rules and FAS 123(R), the
amounts shown reflect the value of the award amortized over the portion of the
service period which lapsed during the year. The financial value of
each option was estimated using the Black-Scholes option-pricing model and the
assumptions disclosed in Note 10 in the Notes to the Consolidated Financial
Statements included in the Company’s Annual Report on Form 10-K filed with the
Securities and Exchange Commission on September 5, 2008.
(3) Reflects an
award of 2,317 shares of restricted stock granted to each director on December
6, 2007. Under the terms of these restricted stock awards, one third
of the shares vest on each of the first, second and third anniversaries of the
date of grant. In accordance with SFAS No. 123(R), compensation expense is
recognized on a straight-line basis over the vesting period.
The
following is a list of the outstanding options and restricted stock awards held
by each director as of June 30, 2008:
|
Option
Awards
|
Stock
Awards
|
Robert
A. Wiesen
|
52,105
|
2,317
|
Stanley
H. Fischer
|
56,855
|
2,317
|
Albert
L. Eilender
|
68,980
|
2,317
|
Hans
Noetzli
|
58,855
|
2,317
|
William
N. Britton
|
28,480
|
2,317
|
All
directors have been granted stock options for their board
service. All such options were granted at the fair market value
determined on the date of grant.
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 United States Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.
Executive
Compensation Committee Interlocks and Insider Participation
None of
the independent directors (who are responsible for compensation matters) have
ever 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 committee of any other entity
whose officers served either on our board of directors or executive compensation
committee.
REPORT
OF THE AUDIT COMMITTEE
The audit
committee acts under a written charter adopted by the audit committee and
approved by the board of directors. The audit committee charter is
available on the Company’s corporate website.
The audit
committee is currently comprised of Albert L. Eilender (Chairman), William N.
Britton and Hans C. Noetzli. Each of these directors meets the
independence and expertise requirements of the SEC and the Nasdaq Global Select
Market. The audit committee recommends the Company’s
independent registered public accounting firm, approves the scope of the audit
plan, and reviews and approves the fees of the independent
accountants. The audit committee met regularly with the Company’s
independent accountants during the past fiscal year, both with and without
management present, to review the scope and results of the audit engagement, the
Company’s system of internal controls and procedures, the effectiveness of
procedures intended to prevent violations of laws and regulations, and the
implementation of internal financial controls required by the Sarbanes-Oxley Act
of 2002. In compliance with the SEC rules regarding auditor
independence, and in accordance with the Company’s Audit Committee Charter, the
audit committee reviewed all services performed by BDO Seidman, LLP for the
Company within and outside the scope of the quarterly review and annual auditing
functions.
The audit
committee also:
|
●
|
Met
to discuss the quarterly unaudited and the annual audited financial
statements with management and BDO Seidman, LLP prior to the statements
being filed with the SEC;
|
|
|
|
|
●
|
Reviewed
the Company’s disclosures in the Management’s Discussion and Analysis
sections of such filings;
|
|
|
|
|
●
|
Reviewed
management’s program, schedule, progress and accomplishments for
maintaining financial controls and procedures to assure compliance with
Section 404 of the Sarbanes-Oxley Act of 2002;
|
|
|
|
|
●
|
Reviewed
quarterly earnings releases prior to their publication;
|
|
|
|
|
●
|
Reviewed
and approved in advance in accordance with the Company’s Audit Committee
Pre-Approval Policy all proposals and fees for any work to be performed by
BDO Seidman, LLP;
|
|
|
|
|
●
|
Reviewed
and revised the committee’s charter as necessary in order to comply with
newly enacted rules and regulations;
|
|
|
|
|
●
|
Monitored
the Company’s “whistleblower” program under which any complaints are
forwarded directly to the Committee, to be reviewed in accordance with an
established procedure for all such matters;
|
|
|
|
|
●
|
Reviewed
the audit, tax and audit-related services the Company had received from
BDO Seidman, LLP and determined that the providing of such services by BDO
Seidman, LLP was compatible with the preservation of their independent
status as our independent registered public accounting
firm.
|
The audit
committee also reviewed and discussed the audited financial statements for the
fiscal year ended June 30, 2008 with management and discussed with BDO Seidman,
LLP the matters required to be discussed by Statement on Auditing Standards No.
61, as amended by Statement on Auditing Standards No. 90 and Public Company
Accounting Oversight Board Auditing Standard No. 5. The audit
committee also received during the past fiscal year the written disclosures and
the letter from BDO Seidman, LLP required by Independence Standards Board
Standard No. 1 and have discussed with BDO Seidman, LLP their
independence. Based on the discussions referred to above, the audit
committee recommended that the audited financial statements be included in the
Company’s Annual Report on Form 10-K for filing with the SEC.
Respectfully
submitted by the members of the audit committee.
Albert L.
Eilender (Chairman)
William
N. Britton
Hans C.
Noetzli
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth, as of October 10, 2008, the number and percentage of
shares of the Company’s outstanding common stock owned by each named executive
officer, each 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 executive officers and directors as a
group. Unless indicated otherwise the business address of each person
is c/o Aceto Corporation, One Hollow Lane, Lake Success, New York
11042.
Name
and Address of Beneficial Owner
|
|
Number
of Shares
Beneficially
Owned
(excluding
stock
options) (1)
|
|
|
Exercisable
Stock
Options(2)
|
|
|
Total
Beneficial Ownership
|
|
|
Percent(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leonard
S. Schwartz
|
|
|
212,078 |
|
|
|
912,250 |
|
|
|
1,124,328 |
|
|
|
4.4 |
% |
Douglas
Roth
|
|
|
23,176 |
|
|
|
63,650 |
|
|
|
86,826 |
|
|
|
* |
|
Vincent
Miata
|
|
|
37,602 |
|
|
|
106,438 |
|
|
|
144,040 |
|
|
|
* |
|
Frank
DeBenedittis
|
|
|
41,047 |
|
|
|
84,500 |
|
|
|
125,547 |
|
|
|
* |
|
Michael
Feinman
|
|
|
23,699 |
|
|
|
84,500 |
|
|
|
108,199 |
|
|
|
* |
|
Robert
A. Wiesen
|
|
|
6,864 |
|
|
|
52,105 |
|
|
|
58,969 |
|
|
|
* |
|
Stanley
H. Fischer
|
|
|
7,692 |
|
|
|
56,855 |
|
|
|
64,547 |
|
|
|
* |
|
Albert
L. Eilender
|
|
|
17,317 |
|
|
|
68,980 |
|
|
|
86,297 |
|
|
|
* |
|
Hans
Noetzli
|
|
|
8,317 |
|
|
|
58,855 |
|
|
|
67,172 |
|
|
|
* |
|
William
N. Britton
|
|
|
7,267 |
|
|
|
28,480 |
|
|
|
35,747 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dimensional
Fund Advisors, Inc.
1299
Ocean Avenue
Santa
Monica, CA 90401
|
|
|
2,088,169 |
|
|
|
- |
|
|
|
2,088,169 |
|
|
|
8.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAK
Capital One L.L.C
590
Madison Avenue
New
York, NY 10022
|
|
|
1,860,221 |
|
|
|
- |
|
|
|
1,860,221 |
|
|
|
7.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Royce
& Associates, LLC
1414
Avenue of the Americas
New
York, NY 10019
|
|
|
1,641,956 |
|
|
|
- |
|
|
|
1,641,956 |
|
|
|
6.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T.
Rowe Price Associates, Inc. (4)
100
East Pratt Street
Baltimore,
MD 21202
|
|
|
1,453,600 |
|
|
|
- |
|
|
|
1,453,600 |
|
|
|
5.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cardinal
Capital Management LLC
1
Greenwich Office Park
Greenwich,
CT 06831-5150
|
|
|
1,391,264 |
|
|
|
- |
|
|
|
1,391,264 |
|
|
|
5.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
named executive officers and directors as a group (10
persons)
|
|
|
385,059 |
|
|
|
1,516,613 |
|
|
|
1,901,672 |
|
|
|
7.3 |
% |
* Less
than 1%.
|
(1)
|
Unless
otherwise indicated, each person has, or shares with his spouse, sole
voting and dispositive power over the shares shown as owned by
him.
|
|
|
|
|
(2)
|
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 those 60 days is deemed to be outstanding for the
purpose of computing the percentage ownership of such person, but is not
deemed to be outstanding for the purpose of computing the percentage
ownership of any other person.
|
|
(3)
|
Based
on 24,529,541 shares issued and outstanding as of the record
date.
|
|
|
|
|
(4)
|
Based
on information provided by T. Rowe Price Associates, Inc., these shares
are held by T. Rowe Price Small-Cap Value Fund, Inc, which T. Rowe Price
Associates, Inc. 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, T.
Rowe Price Associates, Inc. is deemed to be the beneficial owner of such
securities; however, T. Rowe Price Associates, Inc. disclaims beneficial
ownership of these shares in accordance with Rule 13d-4 of the Exchange
Act of 1934, as amended.
|
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 2008, the Company paid $319,000 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 2008, the Company paid $23,000 to Clifton,
Budd & DeMaria for legal services rendered to the Company.
THE
BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THE SIX NOMINEES FOR
DIRECTOR.
PROPOSAL
TWO
RATIFICATION
OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Based on
the recommendation of the Audit Committee, the Board of Directors has appointed
BDO Seidman, LLP, an independent registered public accounting firm, to examine
the financial statements of the Company for the year ending June 30, 2009.
BDO Seidman, LLP has been employed as the independent registered public
accounting firm of the Company since 2005.
The
Company anticipates that representatives of BDO Seidman, LLP will attend the
annual meeting for the purpose of responding to appropriate
questions. At the annual meeting, the representatives of BDO Seidman,
LLP will be afforded an opportunity to make a statement if they so
desire.
The
aggregate fees for professional services rendered by BDO Seidman, LLP for the
years ended June 30, 2008 and 2007 were:
|
|
Fiscal
2008
|
|
|
Fiscal
2007
|
|
|
|
|
|
|
|
|
Audit
fees
|
|
$ |
982,000 |
|
|
$ |
912,000 |
|
Audit
related fees
|
|
|
2,000 |
|
|
|
4,000 |
|
Tax
fees
|
|
|
60,000 |
|
|
|
19,000 |
|
|
|
|
|
|
|
|
|
|
Total
fees
|
|
$ |
1,044,000 |
|
|
$ |
935,000 |
|
Audit
fees are fees for the audit of the Company’s annual financial statements
included on Form 10-K, including the audits of internal control over financial
reporting, reviews of the quarterly financial statements and statutory
audits.
Audit
related fees consisted of fees for accounting consultations.
Tax fees
are fees for tax services, including tax compliance, tax advice and
planning.
THE
BOARD RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE SELECTION OF BDO SEIDMAN,
LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE
COMPANY’S FISCAL YEAR ENDING JUNE 30, 2009.
SHAREHOLDER
PROPOSALS
All
shareholder proposals which are intended to be presented at the 2009 Annual
Meeting of Shareholders of the Company must be received by the Company no later
than June 27, 2009, for inclusion in the board of directors' proxy statement and
form of proxy relating to the meeting.
OUR
ANNUAL REPORT ON FORM 10-K AND CORPORATE GOVERNANCE COMPLIANCE
DOCUMENTS
If you
own our common stock, you can obtain copies of our annual report on Form 10-K
for the fiscal year ended June 30, 2008 as filed with the SEC, including the
financial statements, our committee charters, and our codes of conduct, all
without charge, by writing to Mr. Douglas Roth, Chief Financial Officer and
Corporate Secretary, Aceto Corporation, One Hollow Lane, Lake Success, New York
11042. You can also access our 2008 Form 10-K on our website at www.aceto.com by
clicking on “Corporate Governance” and then on “SEC Filings”. You can
also access our committee charters at our website by clicking on “Corporate
Governance”.
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.
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BY
ORDER OF THE BOARD OF DIRECTORS
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Douglas
Roth
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Chief
Financial Officer and
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Corporate
Secretary
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Dated:
October 16, 2008
[This
page left blank intentionally]
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 Aceto Corporation’s
Common Stock which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Shareholders to be held on December 4, 2008 at
the NASDAQ MarketSite, 4 Times Square (corner of 43rd Street and Broadway,
entrance on Broadway), New York, New York, 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 SHARES ARE 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” IN ITEM 1 AND A VOTE “FOR” IN ITEM 2.
BNY
MELLON SHAREOWNER SERVICES
P.O. BOX
3550
SOUTH
HACKENSACK, NJ 07606-9250
Item
1: Election of Directors
Nominees: Leonard
S. Schwartz, Robert A. Wiesen, Stanley H. Fischer, Albert L. Eilender, Hans C.
Noetzli and William N. Britton.
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FOR
ALL: ____
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WITHOLD
FOR ALL: ____
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*EXCEPTIONS: ____
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(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
Item
2: Ratify the appointment of BDO Seidman, LLP as the Company’s
independent registered public accounting firm for the current fiscal
year.
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FOR: ____
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AGAINST:
____
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ABSTAIN: ____
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Item
3: 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 must be signed with the full
corporate name by a duly authorized officer.
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Date
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Share
Owner sign here
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Co-Owner
sign here (if applicable)
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