PRELIMINARY COPY
FOR INFORMATION OF THE SECURITIES AND EXCHANGE COMMISSION ONLY
ACETO CORPORATION
One Hollow Lane
Lake Success, New York 11042-1215
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
December 10, 1998
The Annual Meeting of Stockholders of Aceto Corporation, a New York
corporation, ("the Company"), will be held at the Long Island Marriott, 101
James Doolittle Boulevard, Uniondale, New York 11553, at 10:00 A.M. New York
City time, on Thursday, December 10, 1998 for the following purposes:
1. To elect nine directors to hold office until the next Annual
Meeting of Stockholders or until their successors are
elected and qualified;
2. To amend the Company's Certificate of Incorporation to
increase the number of authorized shares of common stock
from 10 million to 20 million;
3. To approve the Aceto Corporation 1998 Omnibus Equity Award
Plan; and
4. 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 11, 1998 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 23, 1998
ACETO CORPORATION
One Hollow Lane
Lake Success, New York 11042-1215
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
December 10, 1998
Approximate Mailing Date of Proxy Statement and Form of Proxy: October 24,
1998
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 10, 1998
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 to amend the Company's Certificate of Incorporation; (3) FOR the
proposal to approve the Aceto Corporation 1998 Omnibus Equity Award Plan and
(4) 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 11, 1998 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 6,683,123 1.0000 6,683,123
Preferred stock
Third series 100,000 3.1000* 309,996
Fourth series 40,000 2.8662* 114,648
Fifth series 40,000 2.6500* 105,998
Sixth series 40,000 2.4500* 98,000
Seventh series 40,000 2.2651* 90,605
Eighth series 40,000 2.1780* 87,120
Total preferred
stock 300,000 806,367
Total all classes 6,983,123 7,489,490
*Adjusted for stock dividends and stock split.
All of the outstanding preferred stock is held by the Aceto Corporation Profit
Sharing Plan.
<PAGE>
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth as of September 11, 1998 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 344,477(1) 5.2%
One Hollow Lane
Lake Success, NY 11042
Leonard S. Schwartz 76,345(1)(2) 1.1% 300,000(4) 100%
One Hollow Lane
Lake Success, NY 11042
Donald Horowitz 20,878(1)(3) 0.3% 300,000(4) 100%
One Hollow Lane
Lake Success, NY 11042
Samuel I. Hendler 5,820(1) 0.1% 300,000(4) 100%
1983 Marcus Avenue
Lake Success, NY 11042
Aceto Corporation
Profit Sharing Plan 139,314(4) 2.0% 300,000(4) 100%
One Hollow Lane
Lake Success, NY 11042
T. Rowe Price
Associates, Inc. 671,250(5) 10.0%
100 East Pratt Street
Baltimore, MD 21202
Dimensional Fund
Advisors, Inc. 369,608(6) 5.5%
1299 Ocean Avenue
Santa Monica, CA 90401
(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 74,034 shares of currently exercisable stock options.
(3) Includes 17,856 shares of currently exercisable stock options.
(4) All the preferred stock is owned by the Company's Profit Sharing
Retirement Plan. The Trustees of the Plan are Leonard S. Schwartz, Donald
Horowitz and Samuel I. Hendler. The Trustees are considered by the SEC to be
beneficial owners of the preferred stock because they have investment and
voting power. The preferred stock is convertible into common shares at various
conversion rates decided by the Board when the shares were issued. As of
September 11, 1998, the 300,000 shares of preferred stock were convertible into
139,314 shares of common stock and, if converted, would comprise 2.0% of the
outstanding shares of common stock.
(5) The securities are owned by various individual and institutional investors
[including T. Rowe Price Small Cap Value Fund, Inc. (which owns 593,400 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 investments 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.
(6) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 369,608 shares as of June
30, 1998, all of which shares are held in portfolios of DFA Investment
Dimensions Group Inc., a registered open-end investment company, or in series
of The DFA Investment Trust Company, a Delaware business trust, or the DFA
Group Trust and the DFA Participating Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund Advisors Inc.
serves as investment manager. Dimensional disclaims beneficial ownership of
all such shares.
PROPOSAL 1: ELECTION OF DIRECTORS
At the meeting nine 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:
LEONARD S. SCHWARTZ, Age 52, PRESIDENT , CHAIRMAN OF THE BOARD and CHIEF
EXECUTIVE OFFICER. Mr. Schwartz 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. Schwartz is also Chairman of the Executive
and Audit Committees. He has been a Director of the Company since 1991.
ARNOLD J. FRANKEL, Age 76, CONSULTANT TO THE COMPANY. Mr. 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.
He has been a director since 1947.
DONALD HOROWITZ, Age 51, SECRETARY, TREASURER and CHIEF FINANCIAL OFFICER of
the Company. Mr. Horowitz has been employed by the Company since 1971 and was,
in January 1990, elected Secretary and Treasurer and Chief Financial Officer.
He has been a director since 1991.
SAMUEL I. HENDLER, Age 76, ATTORNEY. Mr. 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. Mr. Hendler
is a member of the Executive Committee. He has been a director since 1990.
ANTHONY BALDI, Age 59, PRESIDENT of Aceto Agricultural Chemicals Corp., a
wholly owned subsidiary of the Company. Mr. Baldi has been employed by the
Company since 1957. 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. He has been a
director since 1991.
THOMAS BRUNNER, Age 59, SENIOR VICE PRESIDENT of the Company. Mr. Brunner has
been employed by the Company since 1967. Mr. Brunner is Senior Vice President
in charge of the Company's international sales. He has been a director since
1991.
RICHARD AMITRANO, Age 50, SENIOR VICE PRESIDENT of the Company.
Mr. Richard Amitrano joined the Company in 1972 and is in charge of its organic
intermediates and colorants department. He has been a director since 1997.
STEPHEN M. GOLDSTEIN, Age 59, RETIRED, FORMER SENIOR VICE PRESIDENT, Chase
Manhattan Bank. Mr. Goldstein retired in 1997 from his position as a Senior
Vice President and Regional Manager in the Middle Market Division of Chase
Manhattan Bank. He was responsible for the bank's middle market business in
Queens, New York and had been employed by Chase Manhattan Bank since 1963. Mr.
Goldstein is a member of the Executive and Audit Committees. He has been a
director since 1993.
ROBERT A. WIESEN, Age 47, ATTORNEY, Partner in Clifton Budd & DeMaria. Mr.
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.
Mr. Wiesen is a member of the Executive and Audit Committees. He has been a
director since 1994.
Stock Ownership of Executive Officers and Directors
As of September 11, 1998
Common Stock Currently Total
Beneficially Exercisable Beneficial Percent
Name Owned Stock Options Ownership Ownership
Leonard S. Schwartz(1) 2,311 74,034 76,345 1.1
Arnold J. Frankel 344,477 344,477 5.2
Donald Horowitz(1) 3,022 17,856 20,878 0.3
Samuel I. Hendler(1) 5,820 5,820 0.1
Anthony Baldi 29,922 6,000 35,922 0.5
Thomas Brunner 3 31,068 31,071 0.5
Richard Amitrano - 13,500 13,500 0.2
Stephen M. Goldstein 165 - 165 -
Robert A. Wiesen 301 - 301 -
All directors, officers
and nominees as a group 386,021 142,458 528,479 7.9%
- -nine persons
(1) Messrs. Hendler, Horowitz and Schwartz also are Trustees of the Company's
Profit Sharing Retirement Plan. The Plan owns 300,000 shares of preferred
stock. Messrs. 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.
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, 1998 were Messrs. Leonard S.
Schwartz (Chairman), Stephen M. Goldstein, and Robert A. Wiesen. The Audit
Committee held one meeting during the past fiscal year at which a majority of
the members were present.
The Board of Directors does not have a nominating committee. The Executive
Committee of the Board of Directors, whose members are Messrs. Leonard S.
Schwartz (Chairman), Stephen M. Goldstein, Samuel I. Hendler, and Robert A.
Wiesen, functions as the Executive Compensation Committee.
During the fiscal year ended June 30, 1998 there were 4 meetings of the Board
of Directors. All directors attended at least 75% of the meetings.
A plurality of votes actually cast at the meeting is required to elect a
director.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" ALL NINE NOMINEES FOR DIRECTOR.
<PAGE>
PROPOSAL 2: APPROVE AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK TO 20 MILLION.
We propose to amend paragraph THIRD (a) of the Certificate of Incorporation to
increase the number of authorized shares of common stock from 10 million to 20
million.
- - Of the 10 million shares presently authorized for issuance under our
Certificate of Incorporation, there are only approximately 100,000 shares
unissued and unreserved. As of the record date, there were approximately 9
million shares issued and approximately 900,000 reserved for issuance.
- - Our proposed amendment increases the number of authorized shares of common
stock by 10 million. The additional shares, if issued, would have the same
rights as the shares of common stock now outstanding. The Board has no present
plans, agreements, commitments or understandings for the issuance or use of
these proposed additional shares.
- - We believe that the proposed increase is in the best interests of Aceto and
our stockholders. It is important for the Board to have the flexibility to act
promptly to meet future business needs as they arise. Sufficient shares should
be readily available to maintain our financing and capital raising flexibility,
for stock splits and stock dividends, acquisitions and mergers, employee
benefit plans and other proper business purposes.
- - By having additional shares readily available for issuance, the Board will be
able to act expeditiously without spending the time and incurring the expense
of soliciting proxies and holding special meetings of stockholders. For
example, today, if the Board determined that a stock split were advisable to
enhance your liquidity or to achieve a more attractive market price for a
broader spectrum of investors, the Board would not have sufficient authorized
shares available to effect a split.
The affirmative vote of a majority of the outstanding votes is required to
approve the amendment.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE AMENDMENT TO THE CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK TO 20
MILLION.
PROPOSAL 3: APPROVE THE ACETO CORPORATION 1998 OMNIBUS EQUITY AWARD PLAN
We are asking for your approval of the 1998 Omnibus Equity Award Plan ("The
Plan"). The Board adopted The Plan on September 8, 1998, subject to your
approval at the Annual Meeting.
We have summarized below certain key provisions of The Plan. Because it is a
summary, it may not contain all the information that is important to you.
Before you decide how to vote, you should review the full text of The Plan,
which we have included as Exhibit B.
DESCRIPTION OF OMNIBUS EQUITY AWARD PLAN
PURPOSES AND ELIGIBILITY
The purposes of the Omnibus Equity Award Plan are to attract, retain and
motivate eligible participants, to compensate them for their contributions to
our growth and profits and to encourage them to own Aceto common stock. The
Omnibus Equity Award Plan authorizes the issuance of certain awards to such
individuals. We estimate that as of September 11, 1998, approximately 80
individuals were eligible to participate in the Omnibus Equity Award Plan.
Eligible participants will be employees (including officers and directors of
the Company or its affiliates), non-employee directors, advisors, consultants
or independent contractors to the Company or its affiliates.
SHARES AVAILABLE, OVERALL LIMIT
A total of 500,000 shares of common stock will be authorized for issuance under
The Plan. We will adjust the number of shares available for issuance under The
Plan if there are changes in our capitalization, including (but not limited to)
stock dividends, stock splits, a merger, reorganization or similar
transactions. We may issue new shares or treasury shares or both. Treasury
shares are shares that we previously issued and subsequently repurchased and
are holding in our treasury.
ADMINISTRATION
The Plan will be administered by the Board. The Executive Committee of the
Board ("Committee") will make recommendations to the Board as to which
participants from among the eligible participants shall receive awards and
determine the form, terms and conditions of awards. The Board will make all
awards under The Plan, and shall have sole discretion with regard to any award.
AWARDS GENERALLY
The Plan authorizes the following awards based upon Aceto common stock: stock
options, restricted stock, or other stock-based awards the Committee determines
to be consistent with the purposes of The Plan and the interests of Aceto. The
Board will determine vesting, exercisability, payment and other restrictions
that apply to an award. Vesting means the individual has the right to the
award.
CHANGE IN CONTROL
A change in control of Aceto (generally a merger or consolidation into another
company or a "person" becoming beneficial owner of 20% or more of Aceto's
voting stock without concurrence of the Board) will cause all outstanding
awards to vest, become immediately exercisable, and have all restrictions
lifted. (The change in control provision could be viewed as having a possible
anti-takeover consequence, in that it could have a deterrent effect against a
hostile takeover).
STOCK OPTIONS
All stock options issued will be non-qualified. The exercise price per share
shall be not less than the fair market value of Aceto common stock on the date
of grant. The exercise price of a stock option may be paid in cash or
previously owned stock or both.
The Board, upon recommendation of the Committee, will fix the term of a stock
option upon grant. However, under The Plan, the term may not be longer than ten
years from the date of award.
RESTRICTED STOCK AWARDS
Restricted Stock awards may be awarded to an eligible participant in lieu of a
portion of cash bonus earned by the participant. These restricted shares will
vest over a period of years as determined by the Board at time of grant and
will not be transferable until vested. In addition, awards of Restricted Stock
may have a premium paid in additional shares when fully vested. There may be
other restrictions as the Board may determine.
OTHER OMNIBUS EQUITY AWARDS
The Board upon recommendation of the Committee has the authority to specify the
terms and provisions of other forms of equity-based awards or equity-related
awards not described above which the Committee determines to be consistent with
the purposes of the Omnibus Equity Award Plan and the interests of Aceto.
STOCK OWNERSHIP GUIDELINES
One of the objectives of The Plan is that certain designated employees be
stockholders. The Plan contains guidelines for stock ownership, to be attained
in five years, relative to the positions and base salaries of the employees
involved. Restricted Stock awards can be used to satisfy these requirements.
TERMINATION
No awards shall be made after ten years from the date of approval by the
stockholders.
AMENDMENT
We may amend or terminate the Plan at any time. However, we must obtain
stockholder approval to:
- increase the maximum number of shares issuable, or
- reduce the exercise price of a stock option.
Also, we may not amend or terminate The Plan without an employee's consent if
it would adversely affect an employee's rights to previously-granted awards.
STOCK PRICE
On September 4, 1998, the closing price of Aceto common stock on NASDAQ was
$13.13.
NEW PLAN BENEFITS
As of the date of this Proxy Statement, we have made awards under The Plan,
totaling 20,000 shares of Restricted Stock, subject to approval of The Plan at
this Annual Meeting. Since awards will be authorized by the Board in its sole
discretion, it is not possible to determine the benefits or amounts that will
be received by any particular employee or group of employees in the future.
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax consequences of issuing and exercising non-qualified
stock options under the Plan may be summarized as follows:
The grant of a non-qualified stock option has no immediate federal income tax
effect; the employee will not recognize taxable income and Aceto will not
receive a tax deduction.
When the employee exercises the option, the employee will recognize ordinary
income in an amount equal to the excess of the fair market value of the common
stock on the date of exercise over the exercise price. Aceto is required to
withhold tax on the amount of income recognized. Aceto will receive a tax
deduction equal to the amount of income recognized.
When the employee sells common stock obtained from exercising a non-qualified
stock option, any gain or loss will be taxed as a capital gain or loss (long-
term or short-term, depending on how long the shares have been held). Certain
additional rules apply if the exercise price for an option is paid in shares
previously owned by the employee.
The affirmative vote of a majority of the votes cast at the annual meeting is
required to approve The Plan.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE ACETO CORPORATION
1998 EQUITY AWARD PLAN.
<PAGE>
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.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NAME AND YEAR SALARY BONUS OTHER RESTRICTED OPTIONS(1)/ LTIP ALL OTHER
PRINCIPAL POSITION ANNUAL STOCK SARS PAYOUTS COMPENSATION(2)
COMPEN- AWARDS
SATION
Leonard S. Schwartz 1998 298,558 500,000 4,053 100,000 60,000 - 60,415
President, Chairman 1997 224,231 300,000 5,345 - 202,500 - 40,399
and Chief Executive 1996 179,547 250,000 6,954 - 37,500 - 35,665
Officer
Donald Horowitz 1998 199,731 115,000 2,334 - - - 31,148
Secretary/Treasurer 1997 185,807 120,000 2,147 - - - 28,955
and Chief Financial 1996 182,158 105,000 1,924 - 22,500 - 25,315
Officer
Richard Amitrano 1998 189,579 93,210 1,273 28,000 - - 31,890
Senior Vice President 1997 171,074 104,186 1,656 - - - 27,482
1996 153,742 101,630 1,944 - 22,500 26,036
Anthony Baldi 1998 200,330 144,000 2,634 36,000 - - 34,504
President, Aceto 1997 216,962 149,387 3,699 - - - 32,535
Agricultural Chemicals 1996 204,624 185,000 3,519 - 30,000 - 33,669
Thomas Brunner 1998 200,083 147,894 2,702 36,974 - - 34,735
Senior Vice President 1997 204,084 182,789 2,511 - - - 33,635
1996 192,532 186,848 2,280 - 30,000 - 33,157
</TABLE>
(1) Adjusted for the 3 for 2 stock split paid in April 1998.
(2) Represents contributions to the Company's qualified and non-qualified
retirement plans.
<PAGE>
Option Grants In Last Fiscal Year
The following table contains information regarding the grant of stock options
in the fiscal year ended June 30, 1998 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(1) in Fiscal Year ($/Sh) Date 5% (2) 10%(2)
Richard
Amitrano None
Anthony
Baldi None
Thomas
Brunner None
Donald
Horowitz None
Leonard S.
Schwartz 30,000 $9.00 12/31/14 $716,714 $2,009,566
30,000 74.5% 9.00 12/31/15 766,050 2,237,523
(1) Adjusted for the 3 for 2 stock split paid in April 1998.
(2) 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.
<PAGE>
Stock Option Exercises in Fiscal 1998 and Value at June 30, 1998
The following table summarizes information with respect to options exercised
during fiscal year ended June 30, 1998 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 1998.
Value of
No. of Unexercised
Unexercised In-the-money
Options at Options at
June 30, 1998 June 30, 1998(1)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
Richard Amitrano 7,260 $ 81,968 13,500/ $110,970/
9,000 73,980
Anthony Baldi 10,904 106,268 6,000/ 49,320/
12,000 98,640
Thomas Brunner - - 31,068/ 297,048/
12,000 98,640
Donald Horowitz 2,904 37,717 17,856/ 160,666/
9,000 73,980
Leonard S.
Schwartz - - 74,034/ 574,494/
232,500 1,645,800
(l) Value of unexercised in-the-money options is based on the common stock
closing bid price on June 30, 1998 of $16.00.
On June 9, 1992, the Company's Board of Directors adopted resolutions amending
the Company's 1980 Stock Option Plan ("the Option 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 Option 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 Option Plan was submitted for approval of the stockholders of the
Company disclosed that such director will not participate in the Option Plan.
On December 4, 1997, a committee consisting of Samuel I. Hendler (Chairman),
Stephen M. Goldstein and Robert A. Wiesen was appointed by the Board of
Directors to administer the Option Plan. All of said directors were
disinterested persons as defined by the Option Plan.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Executive Committee of the Board of Directors, whose members are Leonard S.
Schwartz (Chairman), Stephen M. Goldstein, Samuel I. Hendler and Robert A.
Wiesen, functions as the Executive Compensation Committee, and makes
recommendations to the Board with respect to the remuneration of the Company's
executive officers.
The Company's compensation policy has been designed to enable the Company to
attract, retain and motivate executives whose enthusiasm and abilities will
contribute to the growth of its business and result in maximum profitability to
the Company and its stockholders, by providing salaries and benefits
competitive with those offered by other companies in the chemical industry.
The executive compensation program includes base salary, annual incentive
compensation (cash bonuses), and long term incentive compensation (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.
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. Hendler, Goldstein and Wiesen
took into account total compensation comparisons of top executives of
corporations considered to be in the Company's peer group, as well as the
overall performance of the Company and the increase in corporate stature and
stockholder value since Mr. Schwartz assumed the positions of Chairman and CEO.
(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
Leonard S. Schwartz, Chairman
Stephen M. Goldstein
Samuel I. Hendler
Robert A. Wiesen
DIRECTOR COMPENSATION
Each non-employee director receives $10,000 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.
Non-employee directors currently are not eligible to receive stock options.
However, if the Aceto Corporation 1998 Omnibus Equity Award Plan is approved,
they will be eligible to receive stock options and other awards under the plan.
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 stockholder 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, 1993 and ending June 30,
1998.
Comparison of Five Year Cumulative Return* Among Aceto Corporation, The S & P
500 Index and the Dow Jones Chemicals Index.
* $100 invested on 06/30/93 in stock or index including reinvestment of
dividends. Fiscal year ending June 30.
Cumulative Total Return
6/93 6/94 6/95 6/96 6/97 6/98
Aceto Corp. 100 112 112 134 128 217
S & P 500 100 101 128 161 217 282
DJ Chemicals 100 118 145 174 233 266
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.
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, to December 31, 1998. He will be paid $64,200 for
consulting services during the current fiscal year.
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
The Board has again appointed the firm of KPMG Peat Marwick LLP as independent
auditors for the fiscal year ending June 30, 1999. A representative of KPMG
Peat Marwick LLP will be present at the Annual Meeting of Stockholders to
respond to appropriate questions from stockholders and will have the
opportunity to make a statement, if he so desires.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder intends to present at the 1999 Annual Meeting
of Stockholders must be duly received by the Company on or before June 11,
1999.
OTHER MATTERS
The Company's Annual Report to Stockholders for the year ended June 30, 1998 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, 1998 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 11, 1998 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 23, 1998
STATEMENT PURSUANT 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, 1998
Expiration Date: March 10, 2001
Cost of Insurance: $96,140 ($32,047 per annum)
Corporate Positions Insured: Directors and Officers
EXHIBIT A
TEXT OF AMENDMENT TO CERTIFICATE OF INCORPORATION
(3) The Certificate of Incorporation of ACETO CORPORATION, as amended, is
amended pursuant to Section 801 of the Business Corporation Law to increase the
aggregate number of shares of Common Stock, $.01 par value, per share, which
the Corporation shall have authority to issue, from 10,000,000 shares to
20,000,000 shares.
(4) Paragraph THIRD (A) of the Certificate of Incorporation of ACETO
CORPORATION as amended, which sets forth the aggregate number of shares which
the Corporation shall have authority to issue, is hereby amended to read as
follows:
"THIRD (A) The aggregate number of shares which the Corporation shall
have authority to issue is 22,000,000 shares of which 2,000,000 shares shall be
Preferred Stock, issuable in series, of the par value of $2.50 per share and
20,000,000 shares shall be Common Stock of the par value of $.01 per share."
EXHIBIT B
TEXT OF ACETO CORPORATION 1998 OMNIBUS EQUITY AWARD PLAN
SECTION 1.
Purpose.
The purposes of the ACETO CORPORATION 1998 Omnibus Equity Award Plan are to
attract, retain and motivate Eligible Participants, as defined below, to
compensate them for their contributions to the Company's growth and profit and
to encourage them to own the Company's Common stock, thereby promoting the
interests of the Company and its stockholders.
SECTION 2.
Definitions.
As used in the Plan, the following terms shall have the meanings set forth
below:
"AFFILIATE" shall mean (i) any entity that, directly or indirectly, is
controlled by the Company (ii) a subsidiary of the Company and (iii) any entity
in which the Company has a significant equity or business interest, in any case
as determined by the Board.
"AWARD" shall mean any Option, Restricted Stock Award, or other stock-based
Award.
"AWARD AGREEMENT" shall mean any written instrument or document evidencing any
Award, which may, but need not be, executed by an Eligible Participant.
"BOARD" shall mean the Board of Directors of the Company.
"CHANGE IN CONTROL" shall be deemed to have occurred if: (i) any "person" as
such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than
the Company, any trustee or other fiduciary holding securities under any
employee benefit plan of the Company,) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the voting power of the
Company's then outstanding securities; (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors, and any new director (other than a director designated
by a person who has entered into an agreement with the Company to effect a
transaction described in clause (i), (iii), or (iv) of this paragraph) whose
election by the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the beginning of the two year
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority of the Board of
Directors; (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation; provided, however, that a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person acquires more than 20% of the
combined voting power of the Company's then outstanding securities shall not
constitute a change in Control of the Company; or (iv) the stockholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets. If any of the events
enumerated in clauses (i) through (iv) occur the Board shall determine
the effective date of the Change in Control resulting therefrom, for
purposes of the Plan.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder.
"COMMITTEE" shall mean a committee of the Board designated by the Board to make
recommendations to the Board with regard to Awards. Until otherwise determined
by the Board, the Executive Committee of the Board (which serves as the
Executive Compensation Committee) shall be the Committee under the Plan.
"COMPANY" shall mean ACETO CORPORATION.
"ELIGIBLE PARTICIPANT" shall mean an employee (including an officer, Executive
Officer or director) of the Company or any Affiliate. Such term shall also
mean any non-employee director, adviser, consultant or independent contractor
to the Company or any Affiliate, and any reference to employment or termination
of employment under the Plan shall be deemed to apply to such director,
adviser, consultant or independent contractor, for the purpose of the Plan
only, as if the services of such person constitute employment services.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER" shall mean, at any time, an individual who is an executive
officer of the Company within the meaning of Exchange Act Rule 3b-7 promulgated
and interpreted by the SEC under the Exchange Act, or any successor rule or
regulation thereto as in effect from time to time, or who is an officer of the
Company within the meaning of Exchange Act Rule 16a-1(f) as promulgated and
interpreted by the SEC under the Exchange Act, or any successor rule or
regulation thereto as in effect from time to time.
"FAIR MARKET VALUE" Shall mean with respect to any given day, the average of
the mean between the highest and lowest reported sales prices on the principal
national stock exchange on which the Common Stock is traded, or if such
exchange was closed on such day or, if it was open but the Common Stock was not
traded on such day, then on the preceding day that the Common Stock was traded
on such exchange.
"NON-QUALIFIED STOCK OPTION" shall mean an Option which does not meet the
requirements of Section 422 of the Code.
"OPTION" shall mean a Non-Qualified Stock Option.
"PARTICIPANT" shall mean any Eligible Participant selected by the Board to
receive an Award under the Plan.
"PERSON" shall mean any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or
political subdivision thereof or other entity.
"PLAN" shall mean this ACETO CORPORATION 1998 OMNIBUS EQUITY AWARD PLAN.
"QDRO" shall mean a domestic relations order meeting such requirements as the
Committee shall determine, in its sole discretion.
"RESTRICTED STOCK" Shall mean any Share granted under Section 7 of the Plan.
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto and shall include the staff thereof.
"SHARES" shall mean shares of the common stock, $.01 par value, of the
Company.
SECTION 3.
Administration.
(a) AUTHORITY OF COMMITTEE. The Committee shall, subject to the terms of the
Plan and applicable law, make recommendations to the Board with regard to (i)
designation of Participants; (ii) the type or types of Awards to be granted to
an Eligible Participant; (iii) the number of Shares to be covered by Awards;
(iv) terms and conditions of Awards; and (v) unless otherwise expressly
provided in the Plan, designations, determination, interpretations, and
suggested decisions with respect to the Plan or any Award.
(b) AUTHORITY OF BOARD. All Awards under the Plan shall be made by the Board,
which shall have full authority to accept, reject or modify any
recommendations of the Committee. All designations, determinations,
interpretations, and other decisions under or with respect to the Plan or any
Award shall be within the sole discretion of the Board, may be made at any time
and shall be final, conclusive, and binding upon all Persons, including the
Company, any Affiliate, any Participant, any holder or beneficiary of any
Award, and any stockholder.
SECTION 4.
Shares Available for Awards.
(a) SHARES AVAILABLE. Subject to adjustment as provided in Section 4(b), the
number of Shares with respect to which Awards may be granted under the Plan
shall be five hundred thousand (500,000).
If, after the effective date of the Plan, any Shares covered by an Award
granted under the Plan are forfeited, or if such an Award terminates or is
canceled without the delivery of shares, then the Shares covered by such Award,
or the number of Shares otherwise counted against the aggregate number of
Shares with respect to which Awards may be granted, to the extent of any
such, forfeiture, termination or cancellation, shall again become Shares
with respect to which Awards may be granted. In the event that any
Option or other Award granted hereunder is exercised through the delivery of
Shares or in the event that withholding tax liabilities arising from such Award
are satisfied by the withholding of Shares by the Company, the number of Shares
available for Awards under the Plan shall be increased by the number of Shares
so surrendered or withheld.
(b) ADJUSTMENTS. In the event that any dividend (other than regular
dividends) or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares, or other similar corporate transaction or
event affects the Shares such that an adjustment is appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then adjustment shall be made, in such
manner as shall be equitable, of (i) the number of Shares with respect to which
Awards may be granted, (ii) the number of Shares subject to outstanding Awards,
and (iii) the grant or exercise price with respect to any Award, provided, that
with respect to any Award no such adjustment shall be made to the extent that
such adjustment would be inconsistent with the Plan's meeting the requirements
of Section 162(m) of the Code, as from time to time amended.
(c) SOURCES OF SHARES DELIVERABLE UNDER AWARDS. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.
SECTION 5.
Eligibility.
Any employee (including an officer, Executive Officer or director) of the
Company or any Affiliate, including any non-employee director, advisor,
consultant or independent contractor to the Company or any Affiliate, shall be
an Eligible Participant. To the extent the Board deems it necessary,
appropriate or desirable to comply with foreign law or practice and to further
the purpose of this Plan, the Board may, without amending this Plan, (i)
establish rules applicable to Awards granted to Participants who are foreign
nationals, are employed outside the United States, or both, including rules
that differ from those set forth in this Plan, and (ii) grant Awards to such
Participants in accordance with those rules.
SECTION 6.
Stock Options. - TERMS AND CONDITIONS.
All Options granted under the Plan shall be Non-qualified Stock Options and
shall be evidenced by Award Agreements which shall be subject to applicable
provisions of the Plan and such other provisions as they may contain including:
(a) PRICE. The exercise price per Share shall not be less than 100% of the
Fair Market Value of a Share on the date of Award.
(b) PERIOD. The Board, upon recommendation of the Committee may establish
the term of any Option award under the Plan, provided, however, that an Option
shall expire no later than 10 years from the date of Award.
(c) TIME OF EXERCISE. The Board, upon recommendation of the Committee, may
establish installment exercise terms in Awards to Participants based on the
Company's publicly traded Share price, and may establish installment exercise
terms based on the passage of time or otherwise, such that the Option
becomes fully exercisable in a series of cumulating portions, and may also
establish other conditions of exercise as it shall determine and may
accelerate the exercisability of any Option granted to a Participant
under the Plan.
(d) PAYMENT. No Shares shall be delivered pursuant to any exercise
of an Option until payment in full of the option price in cash, or its
equivalent, or by exchanging Shares owned by the optionee (which are not the
subject of any pledge or other security interest), or by a combination of
the foregoing, provided that the combined value of all cash and cash
equivalents and the Fair Market Value of any such Shares so tendered to the
Company as of the date of such tender is at least equal to such option price.
(e) EXERCISE. An Option, or portion thereof, shall be exercised by delivery
of a written notice of exercise to the Company, and payment of the full price
of the Shares being exercised. A Participant shall not have any of the rights
or privileges of the holder of Common Stock until such time as Shares of Common
Stock are issued or transferred to the Participant.
SECTION 7.
Restricted Stock
(a) GRANT. Subject to the provisions of the Plan, the Board, upon
recommendation of the Committee, shall have authority to determine the
Participants to whom Shares of Restricted Stock shall be granted, the number of
Shares of Restricted Stock to be granted to each Participant, and the other
terms and conditions of such Awards. Restricted Stock may be awarded to an
Eligible Participant in lieu of a portion, as determined by the Board, of any
annual cash bonus earned by such Participant, which will vest ratably over a
period of years determined by the Board on each anniversary of the date of
Award. Such Restricted Stock so awarded, as set forth in the Award Agreement
may have a premium in Shares greater than the portion of the bonus to be paid
in Restricted Shares, which Premium shares shall be delivered to the
Participant when the Award is fully vested, provided that the Participant is in
the employ of the Company when vesting occurs.
(b) TRANSFER RESTRICTIONS. Upon the lapse of the restrictions applicable to
Shares of Restricted Stock, the Company shall deliver certificates for same to
the Participant or the Participant's legal representative.
(c) PAYMENT. Each share of Restricted Stock shall be paid in Shares, upon
the lapse of the restrictions applicable thereto, or otherwise in accordance
with the applicable Award Agreement.
(d) DIVIDENDS AND DISTRIBUTIONS. Dividends and other distributions paid on
or in respect of any Shares of Restricted Stock shall be paid to the
Participant.
SECTION 8.
Termination of Employment.
The following provisions shall apply in the event of the Participant's
termination of employment unless otherwise provided in the Award Agreement:
(a) NON-QUALIFIED STOCK OPTIONS.
(i) Termination of Employment. If the Participant's employment with the
Company or its Affiliates is terminated for any reason other than death,
permanent and total disability, or retirement, the Participant's right to
exercise any Non-Qualified Stock Option shall terminate, and such Option shall
expire, on the earlier of (A) the first anniversary of such termination of
employment or (B) the date of such Option would have expired had it not been
for the termination of employment. The Participant shall have the right to
exercise such option prior to such expiration to the extent it was exercisable
at the date of such termination of employment and shall not have been
exercised.
(ii) Death, Disability or Retirement. If the Participant's
employment with the Company or its Affiliates is terminated by death,
permanent and total disability, or retirement, the Participant or his or her
estate representative (if employment is terminated by death) shall have the
right, within three (3) months from the date of determination of permanent
and total disability, retirement, or the appointment of an estate
representative, to exercise any Non-Qualified Stock Option to the
extent it was exercisable at the date of such termination of
employment and shall not have been exercised, but in no event shall
such option be exercisable later than the date the Option would have expired
had it not been for the termination of such employment.
(b) RESTRICTED STOCK. In the event of a Participant's retirement, permanent
and total disability, or death, or in cases of special circumstances, the Board
may, when it finds that a waiver would be in the best interest of the Company,
waive in whole or in part, any or all remaining restrictions with respect to
such Participant's entitlement to shares of Restricted Stock.
SECTION 9.
Change in Control.
Notwithstanding any other provision of the Plan to the contrary, upon a
Change in Control all outstanding Awards shall vest, become immediately
exercisable or payable and have all restrictions lifted as may apply to the
type of Award.
SECTION 10.
Amendment and Termination.
(a) AMENDMENTS TO THE PLAN. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided
that no such amendment, alteration, suspension discontinuation or termination
shall be made without stockholder approval to: increase the number of shares
issuable; reduce the exercise price of Options; or extend the termination
period of the Plan. The Board, however, may not amend or terminate the Plan
without a Participant's consent insofar as it would adversely affect a
Participant's rights to previously granted Awards.
(b) CANCELLATION. Any Award granted hereunder may be canceled with the
approval and agreement of the Participant in consideration of a cash payment or
alternative Award made to the holder of such canceled Award equal in value to
the Fair Market Value of such canceled Award.
SECTION 11.
General Provisions
(a) NONTRANSFERABILITY. No Award shall be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by a Participant, except
by will or the laws of descent and distribution or pursuant to a QDRO.
(b) NO RIGHTS TO AWARDS. No Participant or other Person shall have any claim
to be granted any Award, and there is no obligation for uniformity of treatment
of Participants, or holders or beneficiaries of Awards. The terms and
conditions of Awards need not be the same with respect to each recipient.
(c) SHARE CERTIFICATES. All certificates for Shares or other securities of
the Company delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other restrictions as
the Board may deem advisable under the Plan or the rules, regulations, and
other requirements of the Securities and Exchange Commission, any stock
exchange upon which such Shares or other securities are then listed, and any
applicable Federal or state laws, and a legend or legends may be put on any
such certificates to make appropriate reference to such restrictions.
(d) WITHHOLDING. A Participant may be required to pay to the Company and the
Company shall have the right and is hereby authorized to withhold from any
Award, from any payment due or transfer made under any Award or under the Plan
or from any compensation or other amount owing to a Participant the amount (in
cash, or Shares), of any applicable withholding taxes in respect of an Award,
its exercise, or any payment or transfer under an Award or under the Plan and
to take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such taxes.
(e) AWARD AGREEMENTS. Each Award hereunder shall be evidenced by an Award
Agreement that shall be delivered to the Participant and shall specify the
terms and conditions of the Award and any rules applicable thereto.
(f) NO RIGHT TO EMPLOYMENT. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate. Further, the Company or an Affiliate may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(g) RIGHTS AS STOCKHOLDER. No holder of an Award of stock options or
beneficiary of any such Award shall have any rights as a stockholder with
respect to such options until he or she has exercised such option and become
the holder of Shares. In connection with each grant of Restricted Stock
hereunder, the applicable Award shall be entitled to the rights of a
stockholder in respect of such Restricted Stock, except for such transfer
restrictions as may be applicable thereto.
(h) GOVERNING LAW. The validity, construction, and effect of the Plan and any
rules and regulations relating to the Plan and any Award Agreement shall be
determined in accordance with the laws of the State of New York.
(i) SEVERABILITY. If any provision of the Plan or any Award is or becomes or
is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to
any Person or Award, or would disqualify the Plan or any Award under any
applicable law, such provision shall be construed or deemed amended to conform
to the applicable laws, or if it cannot be construed or deemed amended without,
in the determination of the Board, materially altering the intent of the Plan
or the Award, such provision shall be stricken as to such jurisdiction, Person
or Award and the remainder of the Plan and any such Award shall remain in full
force and effect.
(j) OTHER LAWS. The Company may refuse to issue or transfer any Shares or
other consideration under an Award if, it determines that the issuance or
transfer of such shares might violate any applicable law or regulation or
entitle the Company to recover the same under Section 16(b) of the Exchange
Act, and any payment tendered to the Company by a Participant, other holder or
beneficiary in connection with the exercise of such Award shall be promptly
refunded to the relevant Participant, holder, or beneficiary. Without limiting
the generality of the foregoing, no Award granted hereunder shall be construed
as an offer to sell securities of the Company, and no such offer shall be
outstanding, unless the Board has determined that any such offer, if made,
would be in compliance with all applicable requirements of the U.S. federal
securities laws any other laws to which such offer, if made, would be subject.
(k) NO TRUST FUND CREATED. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company and a Participant or any other Person. To the
extent that any Person acquires rights pursuant to an Award, such rights shall
be no greater than the rights of any unsecured general creditor of the Company.
(l) NO OBLIGATION TO EXERCISE OPTIONS. The granting of an Option shall
impose no obligation upon the Participant to exercise such Option.
(m) PLAN EXPENSES. Any expenses of administering this Plan shall be borne by
the Company.
(n) NO WARRANTY OF TAX EFFECT. Except as may be contained in any Award
Agreement, no opinion shall be deemed to be expressed or warranties made as to
the effect of foreign, federal, state, or local tax on any Awards.
SECTION 12.
Share Ownership Guidelines.
It is an objective of this Plan that designated Eligible Participants be owners
of Shares.
(a) APPLICABILITY. Share ownership guidelines are applicable to the Chief
Executive Officer ("CEO") and to managerial Participants designated by the
Board ("Designated Participants").
(b) BASIS. Share ownership guidelines are in terms of Fair Market Value of
Shares to be owned relative to the positions held and base salaries of
Designated Participants. Ownership levels and guidelines will be reviewed (and
if advisable modified) by the Board (upon recommendation of the Committee)
periodically, based on internal reports and overall operations of the Company.
(c) TARGETED GUIDELINE LEVELS. Designated Participants will either from
inception of the Plan or commencement of employment have five (5) years to
reach the targeted guideline levels of Share ownership, which levels can be
changed, modified, or suspended due to individual or group circumstances.
Restricted Stock awarded to a Participant shall be included in calculating
Shares owned.
(d) GUIDELINES.
POSITION/BASE SALARY GUIDELINES, AS A MULTIPLE
("X") OF SALARY
CEO 2X
Base Salary of $100,000.00 or more 1X
Base Salary of under $100,000.00 1/2 X
SECTION 13.
Stockholder Approval and Effective Dates.
This Plan shall become operative and in effect on such date as it shall be
approved by the stockholders of the Company. No option or Award shall be
granted hereunder after the expiration of ten years after the date that it
shall have become operative and in effect.
<PAGE>
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 10, 1998 at
the Long Island Marriott, 101 James Doolittle Boulevard, Uniondale, 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, 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 amend the Company's Certificate of Incorporation
to increase the number of authorized shares of common stock.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
(3) Proposal to approve the Aceto Corporation 1998 Omnibus
Equity Award Plan.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
(4) 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.
<PAGE>
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, FOR the proposal to amend the
Company's Certificate of Incorporation and FOR the proposal to approve the
Aceto Corporation 1998 Omnibus Equity Award Plan.
Either of the proxies or their substitutes who are present at the meeting may
exercise all powers conferred thereby.
Dated: 1998
_________________________
(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.
