ACETO CORPORATION
One Hollow Lane
Lake Success, New York 11042-1215
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
December 4, 1997
The Annual Meeting of Stockholders of Aceto Corporation, a
New York corporation, ("the Company"), will be held at the
Crowne Plaza LaGuardia, 104-04 Ditmars Boulevard, E.
Elmhurst, New York, at 10:00 A.M. New York City time, on
Thursday, December 4, 1997 for the following purposes:
1. To elect ten directors to hold office until the
next Annual Meeting of Stockholders or until their
successors are elected and qualified.
2. To consider and vote upon a proposal to Ratify
Amendment of the Company's 1980 Stock Option Plan.
3. To transact such other business as may properly
come before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on
September 19, 1997 as the record date for the determination
of stockholders entitled to notice of and to vote at the
Annual Meeting.
If you do not expect to attend the meeting in person, please
fill in, sign, and return the enclosed form of proxy.
By order of the Board of Directors,
DONALD HOROWITZ
Secretary
Lake Success, New York
October 24, 1997
ACETO CORPORATION
One Hollow Lane
Lake Success, New York 11042-1215
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
December 4, 1997
Approximate Mailing Date of Proxy Statement and Form of
Proxy: October 24, 1997
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Aceto Corporation
("the Company") of proxies to be voted at the Annual Meeting
of Stockholders to be held on Thursday, December 4, 1997 and
at any adjournment thereof.
A stockholder who executes and mails a proxy in the enclosed
return envelope may revoke such proxy at any time prior to
its use by notice in writing to the Secretary of the Company
or by revocation in person at the Annual Meeting. Unless so
revoked, the shares represented by duly executed proxies
received by the Company prior to the Annual Meeting will be
voted for or against the proposals referred to therein and
presented at the Annual Meeting in accordance with the
stockholder's instructions marked thereon. If no
instructions are marked thereon, proxies will be voted (l)
FOR the election as directors of the nominees named below
under the caption "ELECTION OF DIRECTORS"; (2) for the
proposal listed in the accompanying Notice of Annual Meeting
of Stockholders and described in this Proxy Statement under
the caption "PROPOSAL TO RATIFY AMENDMENT OF STOCK OPTION
PLAN", and (3) in the discretion of the proxies named on the
proxy card with respect to such other business as may
properly come before the Annual Meeting or any adjournments
thereof.
The close of business on September 19, 1997 has been fixed
as the record date for the determination of stockholders
entitled to notice and to vote at the meeting. At that
record date, the following classes of stock were outstanding
and entitled to notice and vote:
Shares Votes per
Class Outstanding Share Votes
Common stock 4,484,351 1.0000* 4,484,351
Preferred stock
Third series 100,000 2.0666* 206,664
Fourth series 40,000 1.9108* 76,432
Fifth series 40,000 1.7666* 70,665
Sixth series 40,000 1.6333* 65,333
Seventh series 40,000 1.5101* 60,403
Eighth series 40,000 1.4520* 58,080
Total preferred stock 300,000 537,577
Total all classes 4,784,351 5,021,928
*Adjusted for all subsequent stock dividends.
All of the outstanding preferred stock is held by the Aceto
Corporation Profit Sharing Plan.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth as of September 19, 1997
certain information with respect to each person who to the
best of the knowledge of the Company beneficially owned more
than 5% of the outstanding shares of the Company's common or
preferred stock:
NAME and ADDRESS COMMON STOCK PREFERRED STOCK
Amount & Nature Amount & Nature
of Beneficial % of of Beneficial % of
Ownership Class Ownership Class
Arnold J. Frankel 265,571(1) 5.9% 300,000(4) 100%
One Hollow Lane
Lake Success, NY 11042
Leonard S. Schwartz 30,891(1)(2) 0.7% 300,000(4) 100%
One Hollow Lane
Lake Success, NY 11042
Donald Horowitz 13,823(1)(3) 0.3% 300,000(4) 100%
One Hollow Lane
Lake Success, NY 11042
Samuel I. Hendler 3,682(1) 0.1% 300,000(4) 100%
319 Willis Avenue
Mineola, NY 11501
Aceto Corporation
Profit Sharing Plan 92,875(4) 2.0% 300,000(4) 100%
One Hollow Lane
Lake Success, NY 11042
T. Rowe Price
Associates, Inc. 451,900(5) 10.1%
100 East Pratt Street
Baltimore, MD 21202
(l) Messrs. Frankel, Schwartz, Horowitz and Hendler have, or
share with their wives, voting power and investment power
with respect to the shares owned directly by each of them.
(2) Includes 29,356 shares of currently exercisable stock options.
(3) Includes 11,808 shares of currently exercisable stock options.
(4) These shares are owned by the Company's Profit Sharing
Retirement Plan (the "Plan"), vote as a class with common
stock, and are entitled to a total of 537,577 votes at this
Annual Meeting of Stockholders. The Trustees of the Plan are
Arnold J. Frankel, Leonard S. Schwartz, Donald Horowitz and
Samuel I. Hendler, who have voting and investment power with
regard to these shares, and who disclaim ownership thereof.
The preferred stock owned by the Plan is convertible into
common stock at various conversion rates set forth in the
Certificates of Amendment of the Certificate of
Incorporation of the Company fixing the number, designation,
relative rights, preferences and limitations of each series
of preferred stock. As of September 19, 1997, the 300,000
shares of preferred stock owned by the Plan were convertible
into 92,875 shares of common stock, and, if so converted on
that date, the said shares of common stock would comprise
2.0% of the class.
(5) The securities are owned by various individual and
institutional invetors [including T. Rowe Price Small Cap
Value Fund, Inc. (which owns 400,000 shares, representing
8.9% of the shares outstanding)], to which T. Rowe Price
Associates, Inc. ("Price Associates") serves as investment
advisor with power to direct invetments and/or sole power to
vote the securities. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, Price
Associates is deemed sole owner of such securities; however,
Price Associates expressly disclaims that it is, in fact,
the beneficial owner of such securities.
ELECTION OF DIRECTORS
At the meeting ten directors are to be elected, each to
serve until the next Annual Meeting of Stockholders or until
their successors are elected and qualified. If any nominee
should become unavailable for any reason, it is intended
that shares represented by proxies in the accompanying form
will be voted for a substitute nominee designated by the
management. The management has no reason to believe that any
of the nominees named will not be a candidate or will be
unable to serve if elected.
The names of the nominees for directors, together with
certain information regarding them, are as follows:
Common Stock
of the
Company
Beneficially
Owned as of
September 19,1997
Director
Present of the Amount & Nature
Principal Company of Beneficial % of
Name Occupation Age Since Ownership Class
Leonard S.
Schwartz President, 51 1991 30,891 (1)(5) 0.7%
and, since
July 1, 1997,
Chairman of the
Board and
Chief Executive
Officer, and
Member of the
Executive
Committee
which functions
as the Executive
Compensation
Committee
Arnold J.
Frankel Chairman 75 1947 265,571 (5) 5.9%
of the
Board,
and Chief
Executive
Officer
of the
Company
until June 30,
1997,
Consultant to
the Company,
Chairman of
the Executive
Committee
which
functions as
the Executive
Compensation
Committee, and
Chairman
of the Audit
Committee
Robert E.
Parsont Consultant to 61 1968 1,859
the Company,
and Member
of the
Executive
Committee
which functions
as the
Executive
Compensation
Committee
Donald
Horowitz Secretary, 50 1991 13,823 (2)(5) 0.3%
Treasurer,
and Chief
Financial
Officer
of the
Company
Samuel I. 75 1990 3,682 (5) 0.1%
Hendler Attorney and
Member of
the Executive
Committee
which functions
as the
Executive
Compensation
Committee
Anthony President of 58 1991 23,102 (3) 0.5%
Baldi Aceto Agricultural
Chemicals Corp., a
wholly owned
subsidiary of the
Company
Thomas Senior Vice 58 1991 16,714 (4) 0.4%
Brunner President
of the
Company
Richard Senior Vice 49 - 11,808 (2) 0.3%
Amitrano President
of the
Company
Stephen M. Senior 58 1993 110
Goldstein Vice President
Chase Manhattan
Bank, and Member
of the Audit
Committee
Robert A. Attorney, 46 1994
Wiesen Partner in
Clifton Budd &
DeMaria, and Member
of Audit Committee
All directors, officers
and nominees as a group - 367,560(1)(2) 8.1%
ten persons (3)(4)(5)
(1) Includes 29,356 shares of currently exercisable stock options.
(2) Includes 11,808 shares of currently exercisable stock options.
(3) Includes 10,904 shares of currently exercisable stock options.
(4) Includes 16,712 shares of currently exercisable stock options.
(5) Messrs. Frankel, Hendler, Horowitz and Schwartz also
are Trustees for the Company's Profit Sharing Retirement
Plan. The Plan owns 300,000 shares of preferred stock.
Messrs. Frankel, Hendler, Horowitz and Schwartz disclaim
ownership of such shares.
All the nominees for Director have, or share with their
respective spouses, voting power and investment power with
respect to the shares owned by each of them.
Mr. Leonard S. Schwartz, Chairman of the Board of Directors,
Chief Executive Officer and President of the Company, has
served as Chairman and Chief Executive Officer since July 1,
1997, and President since July 1, 1996. He joined the
Company in 1969, and became Senior Vice President in charge
of its industrial chemicals department in 1991. Mr. Arnold
J. Frankel is a founder of the Company and served as
Chairman of the Board and as Secretary and Treasurer since
the Company was incorporated in 1947 until 1990, at which
time he, in addition to retaining his position as Chairman
of the Board, became Chief Executive Officer, in which
capacities he served until he retired effective June 30,
1997, at which time he became a consultant to the Company.
Mr. Robert E. Parsont was employed by the Company since
1961. He was Executive Vice President of the Company until
January 1990, when he became President and Chief Operating
Officer, in which capacities he served until he retired
effective June 30, 1996, at which time he became a
consultant to the Company. Mr. Donald Horowitz has been
employed by the Company since 1971 and was, in January 1990,
elected Secretary and Treasurer and Chief Financial Officer.
Mr. Samuel I. Hendler, who has been engaged in the private
practice of law in New York since 1949, has acted as counsel
to the Company for more than 45 years and is Secretary, a
director and counsel to Pneumercator Company, Inc., a
Farmingdale, New York Corporation. Messrs. Anthony Baldi
and Thomas Brunner have been employed by the Company since
1957 and 1967, respectively, Mr. Baldi has been the
President, a director and Chief Operating Officer of Aceto
Agricultural Chemicals Corporation, a wholly-owned
subsidiary of the Company since 1976, when it was
incorporated, and prior thereto headed the Company's
agricultural chemicals department. Mr. Brunner is Senior
Vice President in charge of the Company's international
sales. Mr. Richard Amitrano who joined the Company in 1972,
has since July 1, 1997, been Senior Vice President in charge
of its organic intermediates and colorants department. He
holds BS and MS degrees in organic chemistry from Fordham
University and an MBA from St. John's University. Mr.
Stephen M. Goldstein is a Senior Vice President and Regional
Manager in the Middle Market Division of Chase Manhattan
Bank. He is responsible for the bank's middle market
business in Queens, New York and has been employed by Chase
Manhattan Bank since 1963. Mr. Robert A. Wiesen is an
attorney and partner in the law firm of Clifton Budd &
DeMaria. He joined the firm in 1979 subsequent to his
employment with the National Labor Relations Board. He has
handled matters for the Company relating to labor and
employment law for over ten years and he has written and
lectured on labor law.
The Audit Committee is charged with making recommendations
to the Board of Directors as to the selection of the
Company's independent auditors, maintaining communications
between the full Board and the independent auditors,
reviewing the annual audit submitted by the auditors and
determining the nature and extent of problems, if any,
presented by such audit warranting consideration by the full
Board. The Audit Committee is also utilized for a review of
potential conflict-of-interest situations in reviews
conducted by the Company of related party transactions, if
any. The members of the Audit Committee during the fiscal
year ended June 30, 1997 were Messrs. Arnold J. Frankel,
Stephen M. Goldstein and Robert A. Wiesen. The Audit
Committee held one meeting during the past fiscal year at
which Messrs. Goldstein and Wiesen were present.
The Board of Directors does not have a nominating committee.
The Executive Committee of the Board of Directors, whose
members are Messrs. Arnold J. Frankel, Samuel I. Hendler,
Robert E. Parsont and Leonard S. Schwartz, functions as the
Executive Compensation Committee.
During the fiscal year ended June 30, 1997 there were four
meetings of the Board of Directors. All directors attended
at least 75% of the meetings.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding compensation paid
or accrued during each of the Company's last three fiscal years to the Company's
Chief Executive Officer and each of the Company's four other most highly
compensated executive officers.
Annual Compensation Long Term Compensation
Other
Annual Restricted All Other
Name and Compen- Stock Options/ LTIP Compen-
Principal Year Salary Bonus sation Awards SARs Payouts sation(1)
Position
Anthony 1997 $216,962 $149,387 $3,699 - - - $32,535
Baldi 1996 204,624 185,000 3,519 - 20,000 - 33,669
President,1995 193,042 235,000 2,213 - - - 35,329
Aceto
Agricultural
Chemicals
Corp.
Thomas
Brunner 1997 204,084 182,789 2,511 - - - 33,635
Senior 1996 192,532 186,848 2,280 - 20,000 - 33,157
Vice 1995 181,634 218,740 2,512 - - - 34,206
President
Arnold J.
Frankel 1997 353,641 350,000 2,814 - - - 49,369
Chairman 1996 345,288 267,000 4,185 - - - 45,201
and Chief 1995 325,743 325,000 3,716 - - - 46,724
Executive
Officer
Donald
Horowitz 1997 185,807 120,000 2,147 - - - 28,995
Secretary 1996 173,885 105,000 1,924 - 15,000 - 25,315
Treasurer 1995 153,977 100,523 1,993 - - - 25,150
and
Chief
Financial
Officer
Leonard S.
Schwartz 1997 224,231 300,000 5,345 - 135,000 - 40,399
President 1996 179,547 250,000 6,954 - 25,000 - 35,665
and Chief 1995 169,384 203,670 6,915 - - - 33,157
Operating
Officer
(1) Represents contributions to the Company's qualified and non-qualified
retirement plans.
Option Grants In Last Fiscal Year
The following table contains information regarding the grant of stock options in
the fiscal year ended June 30, 1997 to the named executives. All grants were
made in the form of non-qualified stock options.
Options Granted in Last Fiscal Year
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation
Individual Grants for Option Term
Number of
Securities % of Total Exercise
Underlying Options Granted or Base
Options To Employees Price Expiration
Name Granted in Fiscal Year ($/Sh) Date 5% (1) 10%(1)
Anthony
Baldi None
Thomas
Brunner None
Arnold J.
Frankel None
Donald
Horowitz None
Leonard S.
Schwartz 15,000 $13.50 6/30/07 $127,351 $322,733
15,000 13.50 12/31/07 136,917 353,196
15,000 13.50 12/31/08 153,888 408,766
15,000 13.50 12/31/09 171,707 469,893
15,000 13.50 12/31/10 190,417 537,132
20,000 13.50 12/31/11 280,084 814,793
20,000 13.50 12/31/12 307,589 923,273
20,000 90.1% 13.50 12/31/13 336,468 1,042,600
(1) The dollar amounts illustrate value that might be realized upon exercise of
the options immediately prior to the expiration of their term, covering the
specific compounded rates of appreciation set by the Securities and Exchange
Commission (5% and 10%) and are not, therefore, intended to be forecasts by
Aceto of possible future appreciation of the stock price of Aceto.
Stock Option Exercises in Fiscal 1997 and Value at June 30, 1997
The following table summarizes information with respect to
options held by the Chief Executive Officer and the
executive officers named in the Summary Compensation Table,
and the value of the options held by such persons at the end
of fiscal year 1997. The Chief Executive Officer during
fiscal 1997, Arnold J. Frankel, does not participate in the
Company's stock option plan.
Value of
No. of Unexercised
Unexercised In-the-money
Options at Options at
June 30, 1997 June 30, 1997(1)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
Anthony Baldi 8,712 $ 54,708 10,904/ $ 44,748/
12,000 33,960
Thomas Brunner - - 16,712/ 88,964/
12,000 33,960
Arnold J. Frankel - - - -
Donald Horowitz - - 11,808/ 61,196/
9,000 25,470
Leonard S.
Schwartz - - 29,356/ 76,462/
135,000 162,450
(l) Value of unexercised in-the-money options is based on
the common stock closing bid price on June 30, 1997 of
$14.50.
On June 9, 1992, the Company's Board of Directors adopted
resolutions amending the Company's Stock Option Plan ("the
Plan"), in the following respects: the Plan is to be
administered by a committee consisting of not less than
three directors, all of whom shall be "disinterested
persons"; a committee member shall be a "disinterested
person" only if such person is not, at the time he exercises
discretion in administering the Plan, eligible, and has not
at any time within one year prior thereto been eligible, for
selection as a person as to whom options may be granted; and
no option may be granted to any director as to whom the
proxy statement for the meeting of stockholders at which the
plan was submitted for approval of the stockholders of the
Company disclosed that such director will not participate in
the Plan.
On December 5, 1996, a committee consisting of Arnold J.
Frankel, Stephen M. Goldstein and Samuel I. Hendler (Mr.
Arnold J. Frankel to be chairman of said committee) was
appointed by the Board of Directors to administer the Plan.
all of said directors were disinterested persons as defined
by the Plan.
On September 4, 1997, the Company's Board of Directors
adopted an amendment to the Plan; increasing by 250,000 the
number of shares of the Company's common stock with respect
to which stock options may be granted; extending the
termination date of the Plan to September 19, 2005; and
providing that transactions under the Plan be approved by
the Board of Directors or a committee of the Board of
Directors that is comprised solely of two or more non-
employee directors. The increase in the number of shares
with respect to which stock options may be granted and the
extension of the termination date is subject to ratification
by stockholders at this meeting. (See, PROPOSAL TO RATIFY
AMENDMENT OF STOCK OPTION PLAN).
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Executive Committee of the Board of Directors, whose
members are Leonard S. Schwartz, Arnold J. Frankel, Robert
E. Parsont, and Samuel I. Hendler, functions as the
Executive Compensation Committee, and makes recommendations
to the Board with respect to the remuneration of the
Company's executive officers.
The Company's compensation policy has been designed to
enable the Company to attract, retain and motivate
executives whose enthusiasm and abilities will contribute to
the growth of its business and result in maximum
profitability to the Company and its stockholders, by
providing salaries and benefits competitive with those
offered by other companies in the chemical industry. The
executive compensation program includes base salary, annual
incentive compensation (cash bonuses), and long term
incentive compensation (stock options).
Base salaries are set at levels competitive with the
chemical industry. Because of the way that the Company
operates its business, the contributions of its executives
significantly affect corporate profitability. Bonuses
(which can exceed base salary) are paid to reflect the
extent of such contributions. The Chief Executive Officer
(CEO) also is the President and Chief Operating Officer
(COO) of the Company. The bonuses paid to the CEO and to
the Secretary/Treasurer, who is the Chief Financial Officer
(CFO), reflect the Company's overall performance (excluding
extraordinary events such as a plant shut-down).
The three highest paid executives, other than the CEO and
CFO, are each responsible for the performance of one of the
Company's principal profit centers. Internally generated
performance records are kept on a monthly and yearly basis
for these profit centers, and each center's profitability is
compared in the current year to the previous year. Other
factors considered in determining the bonuses of individual
executives are the individual's own performance and the
overall performance of the Company. The Executive
Compensation Committee determines each bonus primarily based
on this data, also taking into account the long term
contributions of each individual.
The Company's Stock Option Plan is administered by the Board
or a committee comprised solely of two or more non-employee
directors. Grants of stock options, which vary according to
annual and longer term performance ratings, are made to
senior and middle management executives.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
The CEO's compensation was determined not only on the basis
of the same factors utilized to compensate other executives,
but also on the basis of the additional duties and
responsibilities assumed by him. Mr. Schwartz had been an
executive of the Company responsible for the performance of
one of its principal profit centers prior to his becoming
President and COO on July 1, 1996. In addition to serving
in such capacities, as of July 1, 1997, he was appointed
Chairman of the Board and CEO. Messrs. Frankel, Parsont and
Hendler took into account the compensation which in their
opinion the Company would have offered had it recruited
outside of the Company a person with his experience, skills
and talents to be Chairman, CEO and COO of the Company.
(Mr. Schwartz removed himself from participation in the
decision of the Executive Compensation Committee regarding
his compensation, although he did express to the Committee
his requests and views in the matter).
The Executive Compensation Committee
Arnold J. Frankel, Chairman
Samuel I. Hendler
Robert E. Parsont
Leonard S. Schwartz
Director Compensation
Each non-employee director receives $7,500 per year for
serving on the Board of Directors plus $500 for each
committee meeting attended. There is no additional
compensation for directors who are also employees.
Employment Agreements
There are no employment contracts with any director, nominee
for election as director, or officer; however, Messrs.
Amitrano, Baldi, Brunner and Schwartz have signed patent and
trade secret agreements.
STOCK PERFORMANCE GRAPH
Shown below is a line graph comparing the yearly percentage
change in the cumulative total shareholder return on the
Company's common stock against the cumulative total return
of the S & P 500 Index and the Dow Jones Chemicals Index for
the period of five years commencing July 1, 1992 and ending
June 30, 1997.
Comparison of Five Year Cumulative Return* Among Aceto
Corporation, The S & P 500 Index and the Dow Joines
Chemicals Index.
* $100 invested on 06/30/92 in stock or index including
reinvestment of dividends. Fiscal year ending June 30.
Cumulative Total Return
6/92 6/93 6/94 6/95 6/96 6/97
Aceto Corp. 100 104 117 116 140 133
S & P 500 100 114 115 145 183 247
DJ Chemicals 100 104 123 151 181 242
CERTAIN TRANSACTIONS
Samuel I. Hendler, a director of the Company, serves as
general counsel to the Company. Robert A. Wiesen, a director
of the Company, is a partner in the law firm of Clifton Budd
& DeMaria, which serves as labor and employment law counsel
of the Company.
Robert E. Parsont, a director of the Company, retired from
his position as President and Chief Operating Officer of the
Company effective June 30, 1996. The Board of Directors
authorized his being retained as a consultant for a period
of eighteen months, which was recently extended for another
twelve months, to December 31, 1998. He will be paid
$128,400 for consulting services during the current fiscal
year.
Arnold J. Frankel, a director of the Company, retired from
his position as Chairman of the Board and Chief Executive
Officer effective June 30, 1997. The Board of Directors
authorized his being retained as a consultant for a period
of eighteen months. He will be paid $128,400 for consulting
services during the current fiscal year.
PROPOSAL TO RATIFY AMENDMENT OF STOCK OPTION PLAN
Stockholders will be asked to consider and ratify an
amendment of the Aceto Corporation 1980 Stock Option Plan
("1980 Stock Option Plan"), which amendment was adopted by
the Company's Board of Directors on September 4, 1997,
subject to ratification by the stockholders at the Annual
Meeting (as amended the 1980 Stock Option Plan is referred
to herein as the "Amended Plan"). The Amended Plan
increases by 250,000 the number of shares of the Company's
common stock with respect to which stock options may be
granted; extends the termination date to September 19, 2005
and provides that transactions under the Plan be approved by
the Board of Directors or a committee of the Board of
Directors that is comprised solely of two or more non-
employee directors (the provision that transactions under
the plan be approved by the Board of Directors or Committee
of the Board of Directors that is comprised solely of two or
more non-employee directors does not require ratification by
stockholders). As of September 4, 1997 options to purchase
8,635 shares of common stock remained available for grant
pursuant to the terms of the 1980 Stock Option Plan. The
Board of Directors believes that the 1980 Stock Option Plan
has contributed significantly to the success of the Company
by enabling the Company to attract and retain upper
management personnel of outstanding ability and that the
amount of shares remaining for grant thereunder is
inadequate for future requirements.
If the stockholders do not ratify the increase in the number
of shares with respect to which options may be granted or
the extension of the termination date, such provisions shall
be without further force and effect, no options additional
to those authorized under the 1980 Stock Option Plan will be
granted, and the 1980 Stock Option Plan as amended and
restated in 1990 will remain in effect.
If the Amendment to the Plan is ratified by stockholders,
the voting power of the stockholders (as is the case with
any stock option plan) may be diluted in the event that
options granted under the Amended Plan are exercised.
Summary of amended Plan
The Amended Plan permits the issuance of options to purchase
an aggregate of up to 650,000 shares of common stock (an
increase of 250,000 over the 1980 Stock Option Plan, as
amended in 1990). If the Amendment is ratified, options to
purchase 258,635 shares of common stock would be available
for grant pursuant to the terms thereof. The options may be
issued on or prior to September 19, 2005 to officers and
other key employees. A director, as such, shall not be
considered an officer or employee for purposes of the
Amended Plan, but a person otherwise eligible to participate
in the plan is not disqualified because he is a director of
the Company. No option however may be granted to any person
who owns, at the time an option is granted to such person,
more than 10% of the then outstanding shares of the
Company's common stock.
Administration of the Amended Plan
The Company's Board of Directors (the "Board") is authorized
to administer the Amended Plan. Transactions under the
Amended Plan must be approved by the Board or a committee of
the Board comprised solely of two or more non-employee
directors, which transactions include the persons to whom
options are granted, the exercise price of options granted,
the period during which options will be exercisable, and the
number of shares subject to each option.
Securities Subject to Amended Plan
The Amended Plan covers a maximum of 650,000 authorized
shares of common stock, subject to adjustment in the event
of changes in the outstanding common stock by reason of
stock dividends, stock splits, stock distributions,
recapitalizations or the like. Upon the termination or
expiration of an unexercised option, in whole or in part,
the number of shares subject to the unexercised option will
become available again for allocation under the Amended
Plan.
The market value (bid price) of the Company's common stock
as of September 4, 1997 was $18.00 per share.
Description of Options
The per share exercise price of any option may be greater
than or less than the market value of the stock on the date
the option is granted.
Each option granted shall become exercisable at such time,
or in installments at such times, as may be provided
therein. To the extent that any installment of an option
has become exercisable it may be exercised thereafter, in
whole at any time or from time to time in part, until the
option or that installment terminates.
An option shall be exercisable by written notice of
exercise, in the form prescribed by the Board, delivered to
the Company, in such manner as the Board may designate. The
notice shall specify the number of shares for which the
option is being exercised (which number, if less than all of
the shares then subject to exercise, shall not be less than
such number as the Board may designate) and shall be
accompanied by payment in full of the purchase price of such
shares.
Upon any exercise of an option, the Company may, in the
discretion of the Board, offer to lend to the person
exercising the option all or any part of the purchase price
of the shares to be purchased upon exercise of the option,
the loan to be on such terms (including the rate of
interest, the repayment schedule and the security, if any)
as the Board may determine.
Upon any exercise of an option, the Company may, in the
discretion of the Board, permit the person exercising the
option to make all or any portion of such payment in kind by
the delivery of shares of the Company's common stock having
a fair market value, on the date of delivery, equal to the
portion of the option price so paid.
Each option, to the extent it has not theretofore been
exercised, shall terminate upon the termination of the
optionee's employment for any reason, except that if the
optionee's employment ceases by reason of his death, his
option may be exercised (by the person or persons to whom
his rights under the option pass by his will or by the laws
of descent and distribution) at any time within 90 days
after his death for the lesser of (i) that number of shares
which the optionee was entitled to purchase at the time of
his death or (ii) that number of shares for which the option
would have been exercisable on the date of exercise had the
optionee's employment not been terminated.
Options are not transferable except upon the death of the
optionee.
Duration and Modification of Amended Plan
The Amended Plan will terminate not later than September 19,
2005. The Board may at any time suspend or terminate the
Amended Plan and may amend it from time to time in such
respects as the Board may deem advisable in order to conform
to any change in the law, or in any other respect which the
Board may deem to be in the best interest of the Company;
provided,however, that without the approval of the
stockholders of the Company no such amendment shall (a)
except for adjustments upon changes in stock set forth in
the following paragraph, increase the maximum number of
shares for which options may be granted under the Amended
Plan, or (b) change the provisions thereof relating to
eligibility.
Adjustments Upon Changes in Stock
Each option shall contain such provisions as the Board may
determine to be appropriate for the adjustment of the kind
and number of shares subject to the option, or the option
price, or both, in the event of any changes in the
outstanding common stock of the Company by reason of stock
dividends, stock splits, stock distributions,
recapitalizations, reorganization, mergers, consolidations,
sales or exchanges of assets, combinations or exchange of
shares, or the like. In the event of any such change in the
outstanding common stock, the kind and aggregate number of
shares of stock subject to the Amended Plan shall be
adjusted if and to the extent determined appropriate by the
Board, whose determination shall be conclusive.
Federal Income Tax Consequences of Issuance and Exercise of
Options
The following discussion of the Federal income tax
consequences of granting and exercise of options under the
Amended Plan, and the sale of common stock acquired as a
result thereof, is based on an analysis of the Code, as
currently in effect, existing laws, judicial decisions and
administrative rulings and regulations, all of which are
subject to change. Each optionee must consult his or her
personal tax advisor to determine the taxes applicable to
the issuance, exercise and sale of options.
No income will be recognized by an optionee at the time a
stock option under the Amended Plan is granted. Ordinary
income will be recognized by an optionee at the time an
option is exercised, and the amount of such income will be
equal to the excess of the fair market value on the exercise
date of the shares issued to the optionee over the option
price. This ordinary income will also constitute wages
subject to the withholding of the income tax and the Company
will be required to be withheld is available for
withholding, in cash. An optionee's holding period with
respect to the shares acquired will begin on the date of the
exercise of the stock options.
The tax basis of the stock acquired upon the exercise of a
stock option will be equal to the sum of (a) the exercise
price of such stock option and (b) the amount included in
income of the exercise of such option. Gain or loss on a
subsequent sale or other disposition of the stock will be
measured by the difference between the amount realized on
the disposition and the tax basis of such shares.
If an optionee is permitted to, and does, make the required
payment of the option price by delivering shares of common
stock the optionee generally will not recognize any gain as
a result of such delivery, but the amount of gain, if any,
which is not so recognized will be excluded from his or her
basis in the new shares received. In such a case, an
optionee's holding period in the shares received will be
determined by reference to his or her holding period in the
shares of common stock exchanged.
The Company will be entitled to a deduction for Federal
income tax purposes in the same amount as the amount
included in income by the optionee with respect to his or
her stock option, subject to the usual rules as to
reasonableness of compensation and provided that suitable
arrangements are made to collect and pay over applicable
withholding tax from the optionee. The deduction will be
allowed for the taxable year of the Company in which the
exercise of the option occurs.
Recommendation and Vote Required
The Board of Directors believes that ratification of the
amendment of the 1980 Stock Option Plan is in the best
interests of the Company and all stockholders and recommends
a vote FOR the ratification of the amendment. Ratification
requires the affirmative vote of the holders of a majority
of the outstanding shares of the voting stock. Proxies
received in response to this solicitation will be voted FOR
the ratification of the amendment of the 1980 Stock Option
Plan unless otherwise specified in the proxy.
SECTION 16 COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors and executive officers, and
persons who own more than 10% of the registered class of the
Company's equity securities to file with the Securities and
Exchange Commission (the "SEC"), initial reports of
ownership and reports of changes in ownership of common
stock and other equity securities of the Company. Officers,
directors and greater than 10% stockholders are required by
SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file. To the Company's knowledge,
based solely on review of the copies of such reports
furnished to the Company and representations that no other
reports were required during the fiscal year, all Section
16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were
complied with.
RELATIONSHIP WITH THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS
KPMG Peat Marwick LLP was the Company's principal accountant
for the Company's most recent fiscal year ended June 30,
1997. Representatives of KPMG Peat Marwick LLP are expected
to be present at the Stockholders' Meeting with an
opportunity to make a statement, if they desire to do so.
Such representatives are also expected to be available to
respond to appropriate questions.
The Company has not as yet selected its principal accountant
for its current fiscal year since such selection is usually
made by the Company's Board of Directors late in the fiscal
year. At present, management has no reason to believe that
there will be any change in its principal accountant for the
current fiscal year.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder intends to present at the
1998 Annual Meeting of Stockholders must be duly received by
the Company on or before June 12, 1998.
OTHER MATTERS
The Company's Annual Report to Stockholders for the year
ended June 30, 1997 is being mailed to stockholders with
this Proxy Statement.
The cost of solicitation of proxies in the accompanying form
will be borne by the Company, including expenses in
connection with preparing and mailing this Proxy Statement.
In addition to the use of mails, proxies may be solicited by
personal interview, facsimile, telephone or telegram by
directors, officers and employees of the Company.
Arrangements may 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 of record by such persons, and the Company may
reimburse them for reasonable out-of-pocket expenses
incurred by them in connection therewith.
The management does not know of any matters to be presented
for consideration, other than the matters described in the
Notice of Annual Meeting, but if other matters are
presented, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance
with their judgment.
The Company will provide, without charge to each person
whose proxy is solicited, on the written request of any such
person, a copy of the Company's annual report on Form 10-K
for its fiscal year ended June 30, 1997 required to be filed
with the Securities and Exchange Commission, including the
financial statements and the schedules thereto. Such written
request should be directed to Mr. Donald Horowitz, Aceto
Corporation, One Hollow Lane, Lake Success, New York 11042-
1215. Each such request must set forth a good faith
representation that, as of September 19, 1997 the person
making the request was a beneficial owner of securities
entitled to vote at the annual meeting of stockholders.
By Order of the Board of Directors,
DONALD HOROWITZ
Secretary
October 24, 1997
STATEMENT PURSANT TO SECTION 726 (d) OF Addendum
THE NEW YORK BUSINESS CORPORATION LAW
RELATING TO DIRECTOR AND OFFICER INDEMNIFICATION
The following information pertains to directors and officers
liability indemnity insurance purchased by the Company:
Insurance Carrier: Great American Insurance Company
Date of Contract: March 10, 1997
Expiration Date: March 10, 1998
Cost of Insurance: $44,000
Corporate Positions Insured: Directors and Officers
EXHIBIT A
ACETO CORPORATION
STOCK OPTION PLAN
(as Amended and Restated effective as of September 4, 1997)
1. Purpose
The Aceto Corporation Stock Option Plan (the "Plan") is
intended to give to officers and other key employees of
Aceto Corporation (the "Company") an increased incentive
to promote the success of the Company by affording them
an opportunity to purchase stock in the Company pursuant
to stock options.
2. Number of Shares
Options may be granted by the Company from time to time
under the Plan to one or more persons falling within
the class of employees specified in Paragraph 4 hereof to
purchase an aggregate of 650,000 shares of the
Company's common stock, $.01 par value, subject to
adjustment as provided in paragraph 8. The shares
available for options to be granted under the Plan may
consist either in whole or in part of shares of the
Company's authorized but unissued common stock or shares
of the Company's authorized and issued common stock
reacquired by the Company and held in its treasury, as
may from time to time be determined by the Board of
Directors (the "Board"). If any option granted under the
plan expires or terminates for any reason, in whole or
in part, without having been exercised, the number of
shares subject to that option or part shall be
available for further options pursuant to the Plan.
3. Administration
The Plan shall be administered by the Board, or a
committee appointed by the Board that is comprised
solely of two or more non-employee directors, which shall
have full authority, subject to the provisions of the Plan,
(i) to determine, in its discretion, the individuals to
whom, and the times at which, options shall be granted,
the number of shares covered by each option, the option
price, and the other terms and provisions of the
respective option agreements (which need not be identical),
including provisions concerning the time or times when, and
the extent to which, the options may be exercised, (ii) to
adopt rules and regulations relating to the Plan, (iii)
to interpret the Plan and the option agreements, and (iv)
to make all other determinations and to take all other
action necessary or advisable for the administration of
the Plan. All such determination and actions shall be
final and conclusive for all purposes and upon all
persons.
4. Eligibility
Officers and other key employees of the Company or any
subsidiary of the Company shall be eligible to receive
an option or options hereunder. A director, as such,
shall not be considered an officer or employee for
purposes of the Plan, but a person otherwise eligible
to participate in the Plan shall not be disqualified
because he is a director of the Company or any
subsidiary. More than one option may be granted to any
eligible person. No option may be granted to any person
who owns, at the time an option is granted to him, more
than 10% of the then outstanding shares of the Company's
common stock. As used herein, the term "subsidiary"
means any corporation of which stock possessing 50% or
more of the total combined voting power of all classes of
stock is owned directly by the Company or by any one of
its subsidiaries (as defined in this sentence).
5. Option Price; Date of Option
(a) The option price shall be determined by the Board,
and may be greater than or less than the market
value of the stock on the date the option is
granted.
(b) The date of the granting of an option under the
Plan shall be the date on which such option
shall be duly executed by or on behalf of the
Company.
6. Exercise of Option
(a) Each option granted under the Plan shall become
exercisable at such time, or in installments at such
times, as may be provided therein. To the
extent that any installment of an option has become
exercisable it may be exercised thereafter, in whole
or at any time or from time to time in part, until
the option or that installment terminates. An option
may be exercised only during the continuance of the
optionee's employment, except as provided in paragraph 7
with respect to termination of optionee's employment on his
death. As used herein, the term "optionee's employment"
shall mean the employment of the optionee by the Company or
by a subsidiary.
(b) An option shall be exercised by written notice of
exercise in the form prescribed by the Board,
delivered to the Company, in such manner as the
Board may designate. The notice shall specify
the number of shares for which the option is
being exercised (which number, if less than all of
the shares then subject to exercise, shall not be less than
such number as the Board may designate) and shall
be accompanied by payment in full of the
purchase price of such shares.
(c) Upon any exercise of an option, the Company may,
in the discretion of the Board, offer to lend
to the person exercising the option all or
any part of the purchase price of the shares to be
purchased upon exercise of the option, the loan
to be on such terms (including the rate of
interest, the repayment schedule and the security, if any)
as the Board may determine.
(d) Upon any exercise of an option, the Company may,
in the discretion of the Board, permit the
person exercising the option to make all or any
portion of such payment in kind by the delivery of
shares of the Common Stock having a fair
market value, on the date of delivery, equal to the portion
of the price so paid.
(e) No shares shall be delivered upon exercise of any
option until all laws, rules and regulations
which the Board may deem applicable have been
complied with. If a registration statement under the
Securities Act of 1933 is not then in effect
with respect to the shares issuable upon such
exercise, the person exercising the option must give to the
Company a written representation and undertaking,
satisfactory in form and substance to the Board, that he is
acquiring the shares for his own account for investment and
not with a view to the distribution thereof; in such case
the certificates for the shares shall bear an appropriate
legend.
(f) The person exercising an option shall not be
considered a recordholder of the stock so
purchased for any purchase until the date on
which he is actually recorded as the holder of
such stock upon the stock records of the Company.
7. Termination of Option
Each option, to the extent is has not theretofore been
exercised, shall terminate upon the termination of the
optionee's employment for any reason, except that if the
optionee's employment ceases by reason of his death, his
option may be exercised (by the person or persons to whom
his rights under the option pass by his will or by the
laws of descent and distribution) at any time within 90 days
after his death, for the lesser of (i) that number of shares
which the optionee was entitled to purchase at the time
of his death or (ii) that number of shares for which the
option would have been exercisable on the date of exercise
had the optionee's employment not terminated. An
optionee's employment shall not be deemed to have
ceased by reason of the transfer of his employment, without
interruption of service, between or among the Company and
any subsidiary of the Company.
8. Adjustments Upon Changes in Stock
Each option agreement shall contain such provisions as
the Board may determine to be appropriate for the
adjustment of the kind and number of shares subject to
the option, or the option price or both, in the event
of any changes in the outstanding common stock of the
Company by reason of stock dividends, stock splits, stock
distributions, recapitilizations, reorganization, mergers,
consolidations, sales or exchanges of assets, combinations
or exchanges of shares, or the like. In the event of any
such change in the outstanding common stock, the kind and
aggregate number of shares of stock subject to the Plan
shall be adjusted if and to the extent determined
appropriate by the Board whose determination shall be
conclusive.
9. Non-Transferability of Options
Any option granted under the Plan may not be
transferred and, during the lifetime of the employee to
whom granted, may be exercised only by him.
10. No Right to Employment
Nothing in the Plan or in any option granted pursuant
to the Plan shall confer upon any officer or employee any
right to continue in the employ of the Company or of any
of its subsidiaries or shall interfere in any way with the
right of the Company or any such subsidiary to terminate
his employment with or without cause.
11. Amendment, Suspension, Expiration and Termination of Plan
The Board may at any time suspend or terminate the Plan
and may amend it from time to time in such respects as the
Board may deem advisable in order to conform to any
change in the law or in any other respect which the Board
may deem to be in the best interests of the Company;
provided, however, that without the approval of the
stockholders of the Company no such amendment shall (a)
except as specified in paragraph 8, increase the maximum
number of shares for which options may be granted under
the Plan, or (b) change the provisions of paragraph 4
relating to eligibility.
The Plan shall terminate on September 19, 2005 or at
any such earlier time as the Board may determine. Options
may be granted under the Plan at any time and from time
to time prior to its termination. Any option
outstanding under the Plan at the time of the termination
of the Plan shall remain in effect until such
option shall have been exercised or shall have expired in
accordance with its terms.
12. Stockholder Approval
The Plan as Amended and Restated shall become effective
upon its adoption by the Board but if the Amendment is not
ratified by the stockholders of the Company within
twelve months after its adoption by the Board the Plan and
any options granted thereunder subsequent to September
4, 1997 shall become void.
ACETO CORPORATION
One Hollow Lane
Lake Success, New York 11042-1215
ACETO CORPORATION Proxy Solicited on Behalf
of the Board of Directors
The undersigned hereby appoints Leonard S. Schwartz and
Donald Horowitz, with the full power of substitution,
proxies to vote at the annual meeting of stockholders of
Aceto Corporation to be held on Thursday, December 4, 1997
at the Crowne Plaza LaGuardia, 104-04 Ditmars Boulevard, E.
Elmhurst, New York, and at any adjournments of the meeting,
according to the number of votes the undersigned might cast
with all powers the undersigned would possess if personally
present, as follows:
(1) Election of Directors
[ ]FOR nominees listed below [ ]WITHHOLD authority
(except as marked to the to vote for ALL
contrary below) nominees listed below
Richard Amitrano, Anthony Baldi, Thomas Brunner,
Arnold J. Frankel, Stephen M. Goldstein, Samuel I. Hendler,
Donald Horowitz, Robert E. Parsont, Leonard S. Schwartz
and Robert A. Wiesen
To withhold authority to vote for any individual nominee(s),
write name or names here:
__________________________________________________________
(2) Proposal to ratify amendment of the Company's 1980
Stock Option Plan.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
(3) in their discretion with respect to such other
business as may properly come before the
meeting or any adjournment thereof.
PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND MAIL IT IN THE
ENCLOSED ENVELOPE. NO POSTAGE REQUIRED IF MAILED IN THE UNITED STATES.
The shares represented by this proxy will be voted in accordance with
the instructions given, but if no instructions are given, the shares
will be voted FOR the election of directors as a group, and FOR the
proposal to ratify amendment to the Company's 1980 Stock Option Plan.
Either of the proxies or their substitutes who are present
at the meeting may exercise all powers conferred thereby.
Dated: 1997
(Signature of Stockholder)
NOTE: Please sign exactly as your name appears on this
proxy. If shares are held jointly, each joint owner
should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title
as such. Proxies executed by a corporation should be signed
with the full corporate name by a duly authorized officer.
