ACETO CORPORATION
One Hollow Lane
Lake Success, New York 11042-1215
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
December 7, 2000
The Annual Meeting of Stockholders of Aceto Corporation, a New York
corporation, ("the Company"), will be held at the Inn at Great Neck, 30 Cutter
Mill Road, Great Neck, New York 11021, at 10:00 A.M. New York City time, on
Thursday, December 7, 2000 for the following purposes:
1. To elect seven directors to hold office until the next
Annual Meeting of Stockholders or until their successors are
elected and qualified;
2. 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, 2000 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 20, 2000
ACETO CORPORATION
One Hollow Lane
Lake Success, New York 11042-1215
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
December 7, 2000
Approximate Mailing Date of Proxy Statement and Form of Proxy: October 20,
2000
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 7, 2000
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) 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, 2000 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 class of stock was outstanding and
entitled to notice and vote:
Shares Votes per
Class Outstanding Share Votes
Common stock 6,034,717 1.0000 6,034,717
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth as of September 11, 2000 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 stock:
NAME and ADDRESS COMMON STOCK
Amount & Nature
of Beneficial % of
Ownership Class
Private Capital
Management 824,175(1) 13.7
3003 Tamiami Trail
North Naples, FL 34103
T. Rowe Price
Associates, Inc. 638,000(2) 10.6%
100 East Pratt Street
Baltimore, MD 21202
Mark E. Brady 483,779(3) 8.0%
Robert J. Suttman
Ronald Eubel
Bernie Holtgrieve
William Hazel
Eubel Brady & Suttman
Asset Management, Inc.
7777 Washington
Village Drive
Dayton, Ohio 45459
Dimensional Fund
Advisors Inc. 437,008(4) 7.2%
1299 Ocean Avenue
11{th} Floor
Santa Monica, CA 90401
Delphi Management, Inc. 308,000(5) 5.1%
50 Rowes Wharf
Suite 540
Boston, MA 02110
(1) As of October 6, 2000.
(2) The securities are owned by various individual and institutional
investors [including T. Rowe Price Small Cap Value Fund, Inc. (which
owns 575,000 shares, representing 9.5% 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.
(3) Eubel Brady & Suttman Asset Management, Inc. (EBS) is an investment
advisor registered under Section 203 of the Investment Advisors Act of
1940. Mark E. Brady, Robert J. Suttman and Ronald L. Eubel, all
affiliates of EBS, each beneficially own 407,691 shares (6.8%), with
shared voting and dispositive power. Bernie Holtgrieve and William
Hazel, who are also affiliated with EBS, and EBS, each beneficially
own 391,838 shares (6.5%) with shared voting and dispositive power.
(4) Dimensional Fund Advisors, Inc. (Dimensional), an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940,
furnishes investment advice to four investment companies registered
under the Investment Company Act of 1940, and serves as investment
manager to certain other investment vehicles, including commingled
group trusts. (These investment companies and investment vehicles are
the "Portfolios"). In its role as investment advisor and investment
manager, Dimensional possesses both voting and investment power over
437,008 shares of Aceto Corporation as of June 30, 2000. The
Portfolios own all securities reported in this statement, and
Dimensional disclaims beneficial ownership of such securities.
(5) Per 13-F filing of June 30, 2000.
PROPOSAL 1: ELECTION OF DIRECTORS
At the meeting seven 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 54, 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
Committee and the incumbent Chairman of the Audit Committee. He has been a
director of the Company since 1991.
SAMUEL I. HENDLER, Age 78, 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 and Audit Committees. He has been a director
since 1990.
ROBERT A. WIESEN, Age 49, 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.
RICHARD AMITRANO, Age 52, SENIOR VICE PRESIDENT of the Company.
Mr. Amitrano joined the Company in 1972 and is in charge of its organic
intermediates and colorants department. He has been a director since 1997.
STANLEY H. FISCHER, Age 57, ATTORNEY, President of Fischer and Burstein P.C., a
law firm. Mr. Fischer received a J.D. degree from New York University School
of Law. He has been a practicing attorney for more than thirty years and has
advised and represented corporate entities in matters relative to internal
matters, mergers, acquisitions, real estate and litigation. He is a member of
the American Bar Association, the New York Bar Association, the Association of
the Bar of the City of New York, Association of Trial Lawyers of America, New
York State Trial Lawyers and Nassau County Bar. He is a member of various
professional committees including the International Law Section of the New York
State Bar. Mr. Fischer became a director in March 2000 and is a member of the
Executive Committeee.
ALBERT L. EILENDER, Age 57, is the sole owner of Waterways Advisory Services, a
firm specializing in advising companies on developing and evaluating options
relative to mergers, acquisitions and strategic partnerships in the Chemical
Industry. He has more than 30 years of diverse Senior Level experience in the
Specialty Chemicals and Pharmaceutical industry and has had direct P&L
responsibility for running businesses up to $300 million, with significant
experience in mergers, acquisitions and joint ventures, both domestically and
internationally. He has also served on the boards of numerous industry trade
associations during his career.
JOHN H. SCHLESINGER, Age 52, is Managing Director of Young and Partners, LLC,
an investment bank specializing in mergers and acquisitions in the chemical and
pharmaceutical industries. He is a corporate finance executive with more than
15 years of experience specializing in chemical mergers & acquisitions. He
holds an MBA in Finance from the Wharton School. He was with Salomon Brothers
for 14 years ending up as the Managing Director and worldwide head of Chemical
Industry Mergers & Acquisitions and has extensive international experience in
South America and Asia.
Stock Ownership of Executive Officers, Directors and Nominees for
Director as of September 11, 2000
Common Stock Currently Total
Beneficially Exercisable Beneficial Percent
Name Owned Stock Options Ownership Ownership
Leonard S. Schwartz 32,288 127,500 159,788 2.6
Donald Horowitz 4,424 27,500 31,924 0.5
Samuel I. Hendler 5,622 1,000 6,622 0.1
Richard Amitrano 2,314 27,500 29,814 0.5
Robert A. Wiesen 301 1,000 1,301 -
Stanley H. Fischer - - - -
Albert L. Eilender - - - -
John H. Schlesinger - - - -
All directors, officers 44,949 184,500 229,449 3.7%
and nominees as a group
-eight persons
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 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), Stanley H. Fischer, Samuel I. Hendler and Robert A.
Wiesen, functions as the Executive Compensation Committee.
During the fiscal year ended June 30, 2000 there were 5 meetings of the Board
of Directors. All then incumbent 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 SEVEN NOMINEES FOR DIRECTOR.
AUDIT COMMITTEE
The incumbent members of the Audit Committee (the "Committee") are Messrs.
Schwartz, Hendler and Wiesen. The Company anticipates that the composition of
the Committee will be changed following the Annual Meeting to Messrs. Eilender,
Schlesinger and Wiesen, who are non-employee, independent directors.
The Committee held two meetings during the fiscal year. The Committee serves:
as an independent and objective party to monitor the Company's financial
reporting process and internal accounting system; annually recommends to the
Board of Directors the firm to be engaged as independent accountants for the
Company and the compensation to be paid to the independent accountants; reviews
the scope of, and the reports and findings of, the audit activities of the
independent accountants and of the Company's internal accounting department;
provides an open avenue of communication among the independent accountants,
financial and senior management, and the internal accounting department to
ascertain if any restrictions have been placed on the scope of their activities
or if there has been any lack of adequate response to their recommendations;
reviews the Company's corporate compliance program; and makes periodic reports
and recommendations to the Board of Directors.
The Company's Board of Directors has adopted a written charter for the Audit
Committee, a copy of which is included as an appendix hereto.
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
NAME AND YEAR SALARY BONUS OTHER RESTRICTED OPTIONS/ LTIP ALL
PRINCIPAL ANNUAL STOCK SARS PAYOUTS OTHER
POSITION COMPEN- AWARDS COMPEN-
SATION SATION(2)
Leonard S.
Schwartz 2000 $339,715 $519,246 $1,051 $ 65,754 - - $63,515
President, 1999 314,711 432,000 1,264 108,000 - - 58,223
Chairman 1998 298,558 500,000 4,053 100,000 60,000(1) - 60,415
& CEO
Donald
Horowitz 2000 226,477 137,750 1,877 6,250 - - 35,804
Secretary/ 1999 209,808 116,312 1,897 8,688 15,000 - 32,228
Treasurer 1998 199,731 115,000 2,334 - - - 31,348
& CFO
Richard
Amitrano 2000 213,325 149,160 1,950 - - - 35,529
Sr. Vice 1999 198,624 111,822 1,633 1,566 15,000 - 31,001
President 1998 189,579 93,210 1,273 28,000 - - 31,890
Anthony
Baldi 2000 207,692 200,000 3,161 - 2,000 - 35,811
President, 1999 200,000 185,500 2,349 4,500 2,000 - 34,988
Aceto 1998 200,330 144,000 2,634 36,000 - - 34,504
Agricul-
tural
Chemicals
Thomas
Brunner 2000 207,692 50,000 2,760 - 2,000 - 22,621
Sr. Vice 1999 200,000 50,000 2,718 - 2,000 - 24,675
President 1998 200,083 147,894 2,702 36,974 - - 34,735
(1) Adjusted for the 3 for 2 stock split paid in April 1998.
(2) Represents contributions to the Company's qualified and non-qualified
retirement plans.
Option Grants In Last Fiscal Year
The following table contains information regarding the grant of stock options
in the fiscal year ended June 30, 2000 to the named executives. All grants
were made in the form of non-qualified stock options.
Options Granted in Last Fiscal Year
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
for Option Term
Individual Grants
Number of
Securities % of Total Exercise
Underlying Options Granted or Base Expir-
Options To Employees Price ation
Name Granted in Fiscal Year ($/Sh) Date 5%(1) 10%(1)
Richard
Amitrano None
Anthony
Baldi 2,000 10% $11.75 12/2/09 $14,779 $34,682
Thomas
Brunner 2,000 10% $11.75 12/2/09 $14,779 $34,682
Donald
Horowitz None
Leonard
Schwartz None
(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 2000 and Value at June 30, 2000
The following table summarizes information with respect to options exercised
during fiscal year ended June 30, 2000 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 2000.
Value of
No. of Unexercised
Unexercised In-the-money
Options at Options at
Shares June 30, 2000 June 30, 2000(1)
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
Richard Amitrano - $ - 27,500/ $ 83,700/
10,000 -0-
Anthony Baldi 6,000 18,750 8,000/ 22,320/
2,000 -0-
Thomas Brunner 6,534 46,775 -0-/ -0- /
-0- -0-
Donald Horowitz - - 27,500/ 83,700/
10,000 -0-
Leonard S. Schwartz 6,534 39,832 127,500/ 364,500/
172,500 431,250
(a) Value of unexercised in-the-money options is based on the common
stock closing price on June 30, 2000 of $11.50.
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.
A committee consisting of Samuel I. Hendler (Chairman), Stanley H. Fischer 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.
The Company's 1998 Omnibus Equity Award Plan is administered by the Executive
Committee of the Company's Board of Directors.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Executive Committee of the Board of Directors, whose members are Leonard S.
Schwartz (Chairman), Stanley H. Fischer, Samuel I. Hendler and Robert A.
Wiesen, functions as the Executive Compensation Committee, and makes
recommendations to the Board with respect to the remuneration of the Company's
executive officers.
The Company's compensation policy has been designed to enable the Company to
attract, retain and motivate executives whose enthusiasm and abilities will
contribute to the growth of its business and result in maximum profitability to
the Company and its stockholders, by providing salaries and benefits
competitive with those offered by other companies in the chemical industry.
The executive compensation program includes base salary, annual incentive
compensation (cash bonuses), and long term incentive compensation (awards under
the Company's Omnibus Equity Award Plan).
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).
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 on the basis of the same factors utilized
to compensate other executives, taking into account total compensation
comparisons of top executives of corporations considered to be in the Company's
peer group.
The Executive Compensation Committee
Leonard S. Schwartz, Chairman
Stanley H. Fischer
Samuel I. Hendler
Robert A. Wiesen
DIRECTOR COMPENSATION
Each non-employee director currently receives $12,500 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.
Each of the then non-employee directors, Messrs. Hendler, Wiesen and Goldstein,
received stock options on December 2, 1999 under the 1998 Aceto Corporation
Omnibus Equity Award Plan. Each stock option was for 1,000 shares at a strike
price of $11.75 and expires ten years from the date of grant. At June 30,
2000, the closing price of Aceto Corporation common stock was $11.50. The
options were not in-the-money.
EMPLOYMENT AGREEMENTS
There are no employment contracts with any director, nominee for election as
director, or officer; however, Messrs. Amitrano 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, 1995 and ending June 30,
2000.
Comparison of Five Year Cumulative Return* Among Aceto Corporation, The S & P
500 Index and the Dow Jones Chemicals Index.
* $100 invested on 06/30/95 in stock or index including reinvestment of
dividends. Fiscal year ending June 30.
Cumulative Total Return
6/95 6/96 6/97 6/98 6/99 6/00
Aceto Corp. 100 120 115 194 140 138
S & P 500 100 126 169 221 271 291
DJ Chemicals 100 114 147 162 167 124
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 to the Company. Stanley H. Fischer, a director of the Company, is
President of Fischer and Burstein, P. C., a law firm which serves as counsel to
the Company on various corporate matters.
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 LLP as independent auditors for
the fiscal year ending June 30, 2001. A representative of KPMG 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 2001 Annual Meeting
of Stockholders must be duly received by the Company on or before June 2, 2001.
OTHER MATTERS
The Company's Annual Report to Stockholders for the year ended June 30, 2000 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, 2000 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, 2000 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 20, 2000
Addendum 1
STATEMENT PURSUANT TO SECTION 726 (d) OF
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: St. Paul Insurance Co.
Date of Contract: September 1, 1999
Expiration Date: July 1, 2001
Cost of Insurance: $60,238 ($32,857 per annum)
Corporate Positions Insured: Directors and Officers
Appendix 1
ACETO CORPORATION
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS CHARTER
I. FUNCTION, PURPOSE, RESPONSIBILITIES AND DUTIES
The primary function of the Audit Committee (the "Committee") is to assist the
Board of Directors (the "Board") in fulfilling its oversight responsibilities
by reviewing: the financial reports and other financial information provided by
Aceto Corporation (the "Corporation") to any governmental body or the public;
the Corporation's systems of internal controls regarding finance, accounting,
legal compliance and ethics that management and the Board have established; and
the Corporation's auditing, accounting and financial reporting processes
generally. Consistent with this function, the Committee should encourage
continuous improvement of, and should foster adherence to, the Corporation's
policies, procedures and practices at all levels. The Committee's primary
duties and responsibilities are to:
Serve as an independent and objective party to monitor the Corporation's
financial reporting process and internal accounting system.
Review and appraise the audit efforts of the Corporation's independent
accountants and internal accounting department.
Provide an open avenue of communication among the independent
accountants, financial and senior management, the internal accounting
department, and the Board.
TO FULFILL ITS RESPONSIBILITIES AND DUTIES THE AUDIT COMMITTEE SHALL:
DOCUMENTS/REPORTS REVIEW
1. Review and update this Charter periodically, at least annually, as
conditions dictate.
1. Review the Corporation's annual financial statements and any reports or
other financial information submitted to any governmental body, or the
public, including any certification, report, opinion, or review rendered by
the independent accountants.
2. Review the regular internal reports to management prepared by the internal
accounting department and management's response.
3. Review with financial management and the independent accountants the
Corporation's Quarterly Report on Form 10-Q prior to its filing or prior to
the release of earnings. The Chair of the Committee may represent the
entire Committee for purposes of this review.
INDEPENDENT ACCOUNTANTS
4. Recommend to the Board the selection of the independent accountants,
considering independence and effectiveness and approve the fees and other
compensation to be paid to the independent accountants. On an annual
basis, the Committee should review and discuss with the accountants all
significant relationships the accountants have with the Corporation to
determine the accountants' independence.
5. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances
warrant.
6. Periodically consult with the independent accountants out of the presence
of management about internal controls and the fullness and accuracy of the
Corporation's financial statements.
FINANCIAL REPORTING PROCESSES
7. In consultation with the independent accountants and the Corporation's
internal accounting personnel, review the integrity of the Corporation's
financial reporting processes, both internal and external.
8. Consider the independent accountants' judgments about the quality and
appropriateness of the Corporation's accounting principles as applied in
its financial reporting.
9. Consider and approve, if appropriate, major changes to the Corporation's
auditing and accounting principles and practices as suggested by the
independent accountants, management, or the internal accounting department.
PROCESS IMPROVEMENT
10. Establish regular and separate systems of reporting to the Audit Committee
by each of management, the independent accountants and the internal
accounting department regarding any significant judgments made in
management's preparation of the financial statements and the view of each
as to appropriateness of such judgments.
11. Following completion of the annual audit, review separately with each of
management, the independent accountants and the internal accounting
department any significant difficulties encountered during the course of
the audit, including any restrictions on the scope of work or access to
required information.
12. Review any significant disagreement among management and the independent
accountants or the internal accounting department in connection with the
preparation of the financial statements.
13. Review with the independent accountants, the internal accounting department
and management the extent to which changes or improvements in financial or
accounting practices, as approved by the Audit Committee, have been
implemented. (This review should be conducted at an appropriate time
subsequent to implementation of changes or improvements, as decided by the
Committee.)
ETHICAL AND LEGAL COMPLIANCE
14. Establish, review and update periodically a Code of Ethical Conduct and
ensure that management has established a system to enforce this Code.
15. Review management's monitoring of the Corporation's compliance with the
Ethical Code, and ensure that management has the proper review system in
place to ensure that Corporation's financial statements, reports and other
financial information disseminated to governmental organizations, and the
public satisfy legal requirements.
16. Review activities, organizational structure, and qualifications of the
internal accounting department.
17. Review, with the Corporation's counsel, legal compliance matters including
corporate securities trading policies.
18. Review, with the Corporation's counsel, any legal matter that could have a
significant impact on the Corporation's financial statements.
19. Perform any other activities consistent with this Charter, the
Corporation's By-laws and governing law, as the Committee or the Board
deems necessary or appropriate.
II. COMPOSITION
The Committee shall be comprised of three or more directors as determined by
the Board, at least three of such directors shall be independent directors, and
free from any relationship that, in the opinion of the Board, would interfere
with the exercise of such director's independent judgment as a member of the
Committee. "Independent director" means a person other than an officer or
employee of the Corporation or its subsidiaries or any other individual having
a relationship which, in the opinion of the Board, would interfere with the
exercise of independent judgment in carrying out the responsibilities of a
director. The following persons shall not be considered independent: (a) a
director who is employed by the Corporation or any of its affiliates for the
current year or any of the past three years; (b) a director who accepts any
compensation from the Corporation or any of its affiliates in excess of
$60,000.00 during the previous fiscal year, other than compensation for Board
service; (c) a director who is a member of the immediate family of an
individual who is, or has been in any of the past three years, employed by the
Corporation or any of its affiliates as an executive officer. Immediate family
includes a person's spouse, parents, children, siblings, mother-in-law, father-
in-law, brother-in-law, sister-in-law, and anyone who resides in such person's
home; (d) a director who is a partner in, or a controlling shareholder or an
executive officer of, any for-profit business organization to which the
Corporation made, or from which the Corporation received, payments (other than
those arising solely from investments in the Corporation's securities) that
exceed 5% of the business organization's consolidated gross revenues for that
year, or $200,000, whichever is more, in any of the past three years; or (e) a
director who is employed as an executive of another entity where any of the
Corporation's executives serve on that entity's compensation committee.]
Notwithstanding the foregoing, one director who is not independent as defined
herein, and is not a current employee or an immediate family member of such
employee, may be appointed to the Committee, if the Board has determined in its
business judgment that membership on the Committee is required by the best
interests of the Corporation and its shareholders.
All members of the Committee shall be able to read and understand fundamental
financial statements, including a company's balance sheet, income statement,
and cash flow statement or will become able to do so within a reasonable period
of time after appointment to the Committee. Additionally, at least one member
of the Committee, shall have past employment experience in finance or
accounting, requisite professional certification in accounting, or any other
comparable experience or background which results in the member's financial
sophistication, including being or having been a chief executive officer, chief
financial officer or other senior officer with financial oversight
responsibilities. Committee members may enhance their familiarity with finance
and accounting by participating in educational programs conducted by the
Corporation or an outside consultant.
The members of the Committee shall be elected by the Board and shall serve
until their successors shall be duly elected and qualified. Unless a Chair is
elected by the full Board, the members of the Committee may designate a Chair
by majority vote of the full Committee membership.
III. MEETINGS
The committee shall meet at least four times annually, or more frequently as
circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management, the person in charge
of internal accounting and the independent accountants in separate executive
sessions to discuss any matters that the Committee or each of these groups
believe should be discussed privately. In addition, the Committee or at least
its Chair should meet with the independent accountants and management quarterly
to review the Corporation's financials consistent Section I. 4 above.
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 7, 2000 at
The Inn at Great Neck, 30 Cutter Mill Road, Great Neck, 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:
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.
Either of the proxies or their substitutes who are present at the meeting may
exercise all powers conferred thereby.
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.
ACETO CORPORATION
P.O. Box 11199
New York, NY 10203-0199
(1) Election of Directors
FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] EXCEPTIONS [ ]
listed below for all nominees listed below
Nominees: Richard Amitrano, Albert L. Eilender, Stanley H. Fischer, Samuel I.
Hendler, John H. Schlesinger, Leonard S. Schwartz and Robert A. Wiesen
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided
below.)
*Exceptions__________________________________________________________
(2) In their discretion with respect to such other business as may properly
come before the meeting or any adjournment thereof.
NOTE: Please sign exactly as your name appears on this proxy. If shares are
held jointly, each joint owner should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
Proxies executed by a corporation should be signed with the full corporate name
by a duly authorized officer.
Dated: __________________________, 2000
__________________________
(Signature of Stockholder)
