SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
ACETO CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock, par value $.01 per share
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
ACETO CORPORATION
ONE HOLLOW LANE
LAKE SUCCESS, NEW YORK 11042-1215
TEL. (516) 627-6000
October 22, 2004
Dear Fellow Shareholder:
I take pleasure in inviting each of you to attend Aceto Corporation's
annual meeting of shareholders to be held on Thursday, December 2, 2004 at 10:00
a.m., Eastern Standard Time, at the Company's offices, One Hollow Lane, Lake
Success, New York. I am pleased to provide you with your Company's annual report
and the proxy statement attached to this letter.
Please use this opportunity to take part in our affairs by voting on the
business to come before this meeting. You may vote your shares at the annual
meeting by marking your votes on the enclosed proxy card, signing and dating it,
and mailing it in the enclosed envelope.
I look forward to seeing you at the annual meeting and thank you for
your continued support.
Sincerely,
Leonard S. Schwartz
Chairman of the Board, President and
Chief Executive Officer
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ACETO CORPORATION
ONE HOLLOW LANE
LAKE SUCCESS, NEW YORK 11042-1215
TEL. (516) 627-6000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of Aceto Corporation:
We hereby notify you that the annual meeting of shareholders of Aceto
Corporation, a New York corporation (the "Company"), will be held on Thursday,
December 2, 2004, at 10:00 a.m., Eastern Standard Time, at the Company's offices
indicated above for the following purposes:
o to elect seven directors to the board of directors to hold
office for the following year and until their successors are
elected;
o to ratify the appointment of KPMG LLP as the Company's
independent auditors; and
o to transact any other business that may properly come before the
meeting or any adjournment thereof.
The matters listed in this notice of meeting are described in the accompanying
proxy statement. The Company's board of directors has fixed the close of
business on October 7, 2004 as the record date for this year's annual meeting
You must be a shareholder of record at that time to be entitled to notice of the
annual meeting and to vote at the annual meeting.
YOUR VOTE IS IMPORTANT
Even if you plan to attend the meeting, please promptly complete, sign, date and
return the enclosed proxy card in the envelope provided so that your vote will
be counted if you later decide not to attend the meeting. No postage is required
if the proxy card is mailed in the United States.
By order of the board of directors,
Douglas Roth
Chief Financial Officer and
Corporate Secretary
Lake Success, New York
October 22, 2004
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ACETO CORPORATION
ONE HOLLOW LANE
LAKE SUCCESS, NEW YORK 11042-1215
TEL. (516) 627-6000
-------------------
PROXY STATEMENT
-------------------
GENERAL INFORMATION
INFORMATION ABOUT PROXY SOLICITATION
This proxy statement is being furnished to holders of shares as of the record
date of the common stock, $0.01 par value per share, of Aceto Corporation (the
"Company"), a New York corporation, in connection with the Company's annual
meeting to be held on Thursday, December 2, 2004 at 10:00 a.m. Eastern Standard
Time, at the Company's offices. We sent you this proxy statement because our
board of directors is soliciting your proxy to vote your shares at the annual
meeting and at any adjournment. This proxy statement summarizes information that
we are required to provide to you under the rules of the United States
Securities and Exchange Commission and the Nasdaq Stock Market, Inc., which
information is designed to assist you in voting your shares. The purposes of the
meeting and the matters to be acted on are stated in the accompanying notice of
annual meeting of shareholders. At present, the board of directors knows of no
other business that will come before the meeting.
We will begin mailing these proxy materials on or about October 22, 2004. The
Company will bear the cost of its solicitation of proxies. The original
solicitation of proxies by mail may be supplemented by personal interview,
telephone, and facsimile by the directors, officers and employees of the
Company. Arrangements will also be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of solicitation material
to the beneficial owners of stock held by such persons, and the Company may
reimburse those custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses incurred by them in doing so.
INFORMATION ABOUT VOTING
Q: WHY AM I RECEIVING THESE MATERIALS?
A: The board of directors is providing these proxy materials to you in
connection with the Company's annual meeting of shareholders, which will
take place on December 2, 2004. As a shareholder, you are invited to
attend the annual meeting and to vote on the items of business described
in this proxy statement.
Q: WHAT INFORMATION IS CONTAINED IN THESE MATERIALS?
A: The information included in this proxy statement relates to the
proposals to be voted on at the annual meeting, the voting process, the
compensation of directors and the most highly paid executive officers,
and certain other required information. A copy of our annual report is
also enclosed.
Q: WHAT ITEMS OF BUSINESS WILL BE VOTED ON AT THE ANNUAL MEETING?
A: The two items of business scheduled to be voted on at the annual meeting
are: (1) election of directors; and (2) ratification of the independent
auditors. We will also consider any other business that properly comes
before the annual meeting.
Q: HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE?
A: The board of directors recommends that you vote your shares FOR each of
the nominees to the board on the proxy card included with this proxy
statement and FOR ratification of the independent auditors.
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Q: WHAT SHARES CAN I VOTE?
A: You may vote all shares owned by you as of the close of business on
October 7, 2004, the record date. These shares include: (1) shares held
directly in your name as a shareholder of record; and (2) shares held
for you, as the beneficial owner, through a broker or other nominee,
such as a bank.
Q: WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF RECORD
AND AS A BENEFICIAL OWNER?
A: Most shareholders of the Company hold their shares through a broker or
other nominee rather than directly in their own name. As summarized
below, there are some distinctions between shares held of record and
those owned beneficially.
If your shares are registered directly in your name with the Company's
transfer agent, The Bank of New York, you are considered, with respect
to those shares, the shareholder of record and these proxy materials are
being sent directly to you by the Company. As the shareholder of record,
you have the right to grant your proxy directly to the board of
directors or to vote in person at the meeting. The board of directors
has enclosed or sent a proxy card for you to use.
If your shares are held in a brokerage account or by another nominee,
you are considered the beneficial owner of shares held in "street name,"
and these proxy materials are being forwarded to you by your broker or
nominee together with a voting instruction card. As the beneficial
owner, you have the right to direct your broker or nominee how to vote
and are also invited to attend the annual meeting. However, since you
are not the shareholder of record, you may not vote these shares in
person at the meeting unless you obtain a "legal proxy" from the broker
or nominee that holds your shares, giving you the right to vote the
shares. Your broker or nominee has enclosed or provided voting
instructions for you to use in directing the broker or nominee how to
vote your shares.
Q: HOW CAN I ATTEND THE ANNUAL MEETING?
A: You are entitled to attend the annual meeting only if you were a
shareholder of the Company or joint holder as of the close of business
on October 7, 2004, or you hold a valid proxy for the annual meeting.
You should be prepared to present photo identification for admittance.
If you are not a record holder but hold shares through a broker or
nominee (that is, in "street name"), you should provide proof of
beneficial ownership on the record date, such as your most recent
account statement prior to October 7, 2004, a copy of the voting
instruction card provided by your broker or nominee, or other similar
evidence of ownership. If you do not provide photo identification or
comply with the other procedures outlined above upon request, you will
not be admitted to the annual meeting. The annual meeting will begin
promptly at 10:00 a.m. Eastern Standard Time. Check-in will begin at
9:00 a.m., and you should allow ample time for the check-in procedures.
Q: HOW CAN I VOTE MY SHARES IN PERSON AT THE ANNUAL MEETING?
A: You may vote in person at the annual meeting any shares that you hold as
the shareholder of record. You may only vote in person shares held in
street name if you obtain from the broker or nominee that holds your
shares a "legal proxy" giving you the right to vote the shares.
Q: HOW CAN I VOTE MY SHARES WITHOUT ATTENDING THE ANNUAL MEETING?
A: Whether you hold shares directly as the shareholder of record or
beneficially in street name, you may without attending the meeting
direct how your shares are to be voted. If you are a shareholder of
record, you may vote by granting a proxy. If you hold shares in street
name, you may vote by submitting voting instructions to your broker or
nominee. Each record holder of Company common stock may submit a proxy
by completing, signing, and dating a proxy card and mailing it in the
accompanying pre-addressed envelope. Each shareholder who holds shares
in street name may vote by mail by completing, signing, and dating a
voting instruction card provided by the broker or nominee and mailing it
in the accompanying pre-addressed envelope.
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Q: CAN I CHANGE MY VOTE?
A: You may change your vote at any time prior to the vote at the annual
meeting. For shares held directly in your name, you may accomplish this
by granting a new proxy bearing a later date (which automatically
revokes the earlier proxy) or by attending the annual meeting and voting
in person. Attendance at the meeting will not cause your previously
granted proxy to be revoked unless you specifically so request. For
shares you hold beneficially, you may change your vote by submitting new
voting instructions to your broker or nominee or, if you have obtained a
"legal proxy" from your broker, or nominee giving you the right to vote
your shares, by attending the meeting and voting in person. You may also
change your vote by sending a written notice of revocation to Mr.
Douglas Roth, Chief Financial Officer and Corporate Secretary, Aceto
Corporation, One Hollow Lane, Lake Success, New York 11042.
Q: WHO CAN HELP ANSWER MY QUESTIONS?
A: If you have any questions about the annual meeting or how to vote or
revoke your proxy, you should contact Mr. Terry Steinberg, Vice
President, Administration and Assistant Corporate Secretary, by mail to
Aceto Corporation, One Hollow Lane, Lake Success, New York 11042 or by
phone at 516-627-6000. Also, if you need additional copies of this proxy
statement or voting materials, you should contact Mr. Steinberg.
Q: HOW ARE VOTES COUNTED?
A: In the election of directors, you may vote FOR all of the seven nominees
or you may direct your vote to be WITHHELD with respect to one or more
of the seven nominees. With respect to ratification of the independent
auditors, you may vote FOR, AGAINST or ABSTAIN. If you ABSTAIN, it has
the same effect as a vote AGAINST. If you provide specific instructions,
your shares will be voted as you instruct. If you sign your proxy card
or voting instruction card with no further instructions, your shares
will be voted in accordance with the recommendations of the board of
directors (FOR all of the Company's nominees and FOR ratification of the
independent auditors and, in the discretion of the proxy holders, on any
other matters that properly come before the meeting). If any other
matters properly arise at the meeting, your proxy, together with the
other proxies received, will be voted at the discretion of the proxy
holders.
Q: WHAT IS A QUORUM AND WHY IS IT NECESSARY?
A: Conducting business at the meeting requires a quorum. The presence,
either in person or by proxy, of the holders of a majority of the
Company's shares of common stock outstanding on October 7, 2004 is
necessary to constitute a quorum. Under the New York Business
Corporation Law, and the Company's articles of incorporation and
by-laws, abstentions are treated as present for purposes of determining
whether a quorum exists.
Q: WHAT IS THE VOTING REQUIREMENT TO APPROVE EACH OF THE PROPOSALS?
A: In the election of directors, the seven persons receiving the highest
number of FOR votes at the annual meeting will be elected. Accordingly,
abstentions and broker non-votes do not have the effect of a vote for or
against the election of any nominee. You do not have the right to
cumulate your votes. All other proposals require the affirmative "FOR"
vote of a majority of those shares present in person or represented by
proxy and entitled to vote on that proposal at the annual meeting.
Accordingly, abstentions on other proposals will have the same effect as
a vote against the proposal. In addition, where brokers are prohibited
from exercising discretionary authority for beneficial owners who have
not provided voting instructions (commonly referred to as "broker
non-votes"), those shares will not be included in the vote totals.
Broker non-votes will not have the effect of a vote for or against other
proposals. A list of shareholders entitled to vote at the annual meeting
will be available at the annual meeting for examination by any
shareholder.
Q: WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS?
A: You may receive more than one set of voting materials, including
multiple copies of this proxy statement and multiple proxy cards or
voting instruction cards. For example, if you hold your shares in more
than one
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brokerage account, you will receive a separate voting instruction card
for each brokerage account in which you hold shares. If you are a
shareholder of record and your shares are registered in more than one
name, you will receive more than one proxy card. Please complete, sign,
date, and return each proxy card and voting instruction card that you
receive.
Q: WHERE CAN I FIND THE VOTING RESULTS OF THE ANNUAL MEETING?
A: We intend to announce preliminary voting results at the annual meeting
and publish final results in our Quarterly Report on Form 10-Q for the
fiscal quarter ending December 31, 2004.
Q: WHAT HAPPENS IF ADDITIONAL MATTERS ARE PRESENTED AT THE ANNUAL MEETING?
A: Other than the two items of business described in this proxy statement,
we are not aware of any other business to be acted upon at the annual
meeting. However, if you grant a proxy, the persons named as proxy
holders, Leonard S. Schwartz, the Company's Chairman, President and
Chief Executive Officer, and Douglas Roth, the Company's Chief Financial
Officer and Secretary, will have the discretion to vote your shares on
any additional matters properly presented for a vote at the meeting. If
for any unforeseen reason any of our nominees is not available as a
candidate for director, the persons named as proxy holders will vote
your proxy for any one or more other candidates nominated by the board
of directors.
Q: WHAT SHARES ARE ENTITLED TO BE VOTED?
A: Each share of the Company's common stock issued and outstanding as of
the close of business on October 7, 2004, the record date, is entitled
to be voted on all items being voted at the annual meeting, with each
share being entitled to one vote. On the record date, 16,065,480 shares
of the Company's common stock were issued and outstanding.
Q: WHO WILL COUNT THE VOTES?
A: One or more inspectors of election will tabulate the votes.
Q: IS MY VOTE CONFIDENTIAL?
A: Proxy instructions, ballots, and voting tabulations that identify
individual shareholders are handled in a manner that protects your
voting privacy. Your vote will not be disclosed, either within the
Company or to anyone else, except: (1) as necessary to meet applicable
legal requirements; (2) to allow for the tabulation of votes and
certification of the vote; or (3) to facilitate a successful proxy
solicitation.
Q: WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE ANNUAL MEETING?
A: The board of directors is making this solicitation and will pay the
entire cost of preparing, assembling, printing, mailing and distributing
these proxy materials. Certain of our directors, officers and employees,
without any additional compensation, may also solicit your vote in
person, by telephone or by electronic communication. On request, we will
also reimburse brokerage houses and other custodians, nominees and
fiduciaries for their reasonable out-of-pocket expenses for forwarding
proxy and solicitation materials to shareholders.
Q: MAY I PROPOSE ACTIONS FOR CONSIDERATION AT NEXT YEAR'S ANNUAL MEETING OF
SHAREHOLDERS?
A: You may submit proposals for consideration at future shareholder
meetings. However, in order for a shareholder proposal to be considered
for inclusion in the Company's proxy statement for the annual meeting
next year, the written proposal must be received by the corporate
secretary of the Company no later than June 18, 2005. Such proposals
also will need to comply with United States Securities and Exchange
Commission regulations under Proxy Rule 14a-8 regarding the inclusion of
shareholder proposals in company-sponsored proxy materials.
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ACTIONS TO BE TAKEN AT THE ANNUAL MEETING
PROPOSAL ONE
ELECTION OF DIRECTORS
THE NOMINEES
The Company's board of directors is proposing a slate of directors that consists
of seven incumbent directors. The nominees are set forth in the table below.
NAME AGE POSITION DIRECTOR SINCE
---------- ------ -------------------------- --------------
Leonard S. Schwartz (1) 58 Chairman, President and CEO 1991
Samuel I. Hendler (1) 82 Director 1990
Robert A. Wiesen (1) 53 Director 1994
Stanley H. Fischer (1) 61 Director 2000
Albert L. Eilender (1)(2)(3) 61 Director 2000
Ira S. Kallem (2) 56 Director 2002
Hans C. Noetzli (2) 63 Director 2002
--------------------------------------------------------------------------------
(1) This director is a member of the executive compensation committee.
(2) This director is a member of the audit committee.
(3) This director is designated the lead independent director.
It is the intention of the persons named in the accompanying proxy card to vote
all shares of common stock for which they have been granted a proxy for the
election of the nominees, each to serve as a director until the next annual
meeting of shareholders and until his or her successor shall have been duly
elected and qualified. All the nominees have consented to being named in this
proxy statement and to serve as a director if elected.
At the time of the annual meeting, if any of the nominees named above is not
available to serve as director (an event that the board of directors does not
currently have any reason to anticipate), all proxies will be voted for any one
or more other persons that the board of directors designates. The board of
directors believes that it is in the best interests of the Company to elect the
above-described slate of directors.
INFORMATION ABOUT THE NOMINEES
No director or executive officer of the Company is related to any other director
or executive officer. None of the Company's officers or directors hold any
directorships in any other public company. A majority of our board members are
independent.
Set forth below is the principal occupation of the nominees, the business
experience of each for at least the past five years and certain other
information relating to the nominees.
LEONARD S. SCHWARTZ. Mr. Schwartz has served as Chairman and Chief Executive
Officer of the Company since July 1, 1997 and President since July 1, 1996.
After joining the Company in 1969, Mr. Schwartz, a chemist by training,
developed the Company's industrial chemicals business and had a key role in the
management of the Company's subsidiaries.
SAMUEL I. HENDLER. Mr. Hendler has been engaged in the private practice of law
in New York since 1949 and has been retained as counsel to the Company for more
than 50 years. Mr. Hendler is a director of Pneumercator Company, Inc., a
privately held company based in Farmingdale, New York. Mr. Hendler is a member
of the Corporation Law Committee and the Securities and Banking Law Committee of
the Nassau County Bar Association.
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ROBERT A. WIESEN. Mr. Wiesen is an attorney and partner in the law firm of
Clifton Budd & DeMaria. He joined this law firm in 1979 subsequent to his
employment with the National Labor Relations Board. He has handled matters for
the Company relating to labor and employment law for over ten years and he has
written and lectured on labor law.
STANLEY H. FISCHER. Mr. Fischer is President of Fischer and Burstein P.C., a law
firm. Mr. Fischer received a J.D. degree from New York University School of Law.
He has been a practicing attorney for more than 30 years and has advised and
represented corporate entities in matters relative to internal matters, mergers,
acquisitions, real estate and litigation. He is a member of the American Bar
Association, the New York Bar Association, the Association of the Bar of the
City of New York, the Association of Trial Lawyers of America, New York State
Trial Lawyers and the Nassau County Bar Association. He is a member of various
professional committees including the International Law Section of the New York
State Bar.
ALBERT L. EILENDER. Mr. Eilender is the sole owner of Waterways Advisory
Services, a firm specializing in advising companies on developing and evaluating
options relative to mergers, acquisitions and strategic partnerships in the
chemical industry. He has more than 30 years of diverse senior level experience
in the specialty chemicals and pharmaceutical industry and has had direct
financial responsibility for managing businesses up to $300 million in revenues,
with significant experience in mergers, acquisitions and joint ventures, both
domestically and internationally. He has also served on the boards of numerous
industry trade associations during his career.
IRA S. KALLEM. Mr. Kallem has been a practicing accountant, part-time, at
Wiener, Frushtick & Straub, Certified Public Accountants, since September 2000.
In June 1994, Mr. Kallem co-founded Mateo Express, Inc., an international money
transfer company and served as Chief Financial Officer and Director until May
2000. Previously, he was a Senior Partner at Shine & Company, Certified Public
Accountants.
HANS C. NOETZLI. Mr. Noetzli is the Chairman of Schweizerhall, Inc., a wholly
owned subsidiary of Schweizerhall Holding AG, Basel, Switzerland. Mr. Noetzli
holds a degree in Business Administration. He has more than 30 years experience
in the fine chemicals industry. Prior to assuming his present position, he
served in many executive functions of the Alusuisse-Lonza Group, among them as
Chief Executive Officer of Lonza Inc. for 16 years and he was a member of the
executive committee of the worldwide Alusuisse-Lonza Group located in Zurich,
Switzerland. Mr. Noetzli also served on the board of directors of the Chemical
Manufacturing Association, the Swiss-American Chamber of Commerce, New York, as
well as other industry associations. Currently, he is a member of the board of
directors of IRIX Pharmaceuticals, Inc., a privately owned developer and
manufacturer of active pharmaceutical ingredients.
INFORMATION ABOUT THE COMPANY'S COMMITTEES
AUDIT COMMITTEE
The audit committee is comprised of Ira S. Kallem (Chairman), Albert L. Eilender
and Hans C. Noetzli. The audit committee is responsible for recommending the
Company's independent auditor and reviewing management actions in matters
relating to audit functions. The committee reviews with the Company's
independent auditors the scope and results of its audit engagement and the
Company's system of internal controls and procedures. The committee also reviews
the effectiveness of procedures intended to prevent violations of laws. The
Committee also reviews, prior to publication, our quarterly earnings releases
and reports to the SEC on Form 10-K and Form 10-Q. The report of the audit
committee for fiscal year 2004 can be found below under the heading "Proposal
Two: Ratification of Appointment of Independent Auditors."
The audit committee, consistent with the Sarbanes-Oxley Act of 2002 and the
rules adopted thereunder, also meets with management and the auditors prior to
the filing of officers' certifications with the SEC to request information
concerning, among other things, significant deficiencies in the design or
operation of internal controls, if any.
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Our board has determined that all audit committee members are independent under
applicable SEC regulations, and as defined by Rule 4200 (a)(14) of the Nasdaq
Marketplace Rules. Our board of directors has determined that Mr. Kallem
qualifies as an "audit committee financial expert" as that term is used in
Section 407 of the Sarbanes-Oxley Act of 2002. The audit committee operates
under a formal charter that governs its duties and conduct. The charter was
attached as an appendix to the Company's 2003 proxy statement, and is published
on the Company's corporate website - WWW.ACETO.COM.
The audit committee has adopted a Non-Retaliation Policy and a Complaint
Monitoring Procedure to enable confidential and anonymous reporting regarding
financial irregularities, if any.
COMPENSATION COMMITTEE
The executive compensation committee is comprised of Leonard S. Schwartz
(Chairman), Samuel I. Hendler, Robert A. Wiesen, Stanley H. Fischer and Albert
L. Eilender. The executive compensation committee is responsible for
recommending the remuneration of the Company's executive officers, including
recommendations with respect to the Company's stock option plans. The executive
compensation committee operates under formal charter that governs its duties and
conduct. The charter is published on the Company's corporate website.
BOARD NOMINATIONS
The Company's board of directors does not have a nominating committee. Instead,
nominations for director are made by the full board of directors. The board
believes this process is preferable because it wishes to involve all of its
directors in the nomination process.
The Company's board has determined that candidates for director should have
certain minimum qualifications, including being able to understand basic
financial statements, being over 21 years of age, having relevant business
experience, and having high moral character. The board of directors retains the
right to modify these minimum qualifications from time to time.
In evaluating an incumbent director whose term of office is set to expire, the
board of directors reviews that director's overall service to the Company during
that director's term, including the number of meetings attended, level of
participation, quality of performance, and any transactions with the Company
engaged in by that director during his or her term.
When selecting a new director nominee, the committee first determines whether
the nominee must be independent for Nasdaq purposes or whether the candidate
must qualify as an "Audit Committee Financial Expert," as that term is used in
section 407 of the Sarbanes-Oxley Act of 2002. The board then uses its network
of contacts to compile a list of potential candidates, but may also engage, if
it deems appropriate, a professional search firm. Each director then has an
opportunity to privately interview each nominee if he or she deems it necessary.
The board then meets to consider the candidates' qualifications and chooses
candidates by a unanimous vote.
Shareholders wishing to directly recommend candidates for election to the board
of directors at an annual meeting must do so by giving notice in writing to
Leonard S. Schwartz, Chairman, Aceto Corporation, One Hollow Lane, Lake Success,
New York 11042. Any such notice must, for any given annual meeting, be delivered
to the Chairman not less than 120 days prior to the anniversary of the preceding
year's annual meeting. The notice must state (1) the name and address of the
shareholder making the recommendations, (2) the name, age, business address, and
residential address of each person recommended, (3) the principal occupation or
employment of each person recommended, (4) the class and number of shares of
Aceto shares that are beneficially owned by each person recommended and by the
recommending shareholder, (5) any other information concerning the persons
recommended that must be disclosed in nominee and proxy solicitations in
accordance with Regulation 14A of the Securities Exchange Act of 1934, and (6) a
signed consent of each person recommended stating that he or she consents to
serve as a director of the Company if elected.
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The board of directors will consider and vote on any recommendations so
submitted. In considering any person recommended by a shareholder, the committee
will look for the same qualifications that it looks for in any other person that
it is considering for a position on the board of directors.
Any shareholder nominee proposed by the board of directors for election at the
next annual meeting of shareholders will be included in the company's proxy
statement for that annual meeting.
BOARD AND COMMITTEE MEETINGS
During the Company's fiscal year ended June 30, 2004, the board of directors
held five meetings and acted by unanimous written consent three times. Each
director attended more than 75% of the board meetings and meetings of the board
committees on which he served.
During the Company's fiscal year ended June 30, 2004, the executive compensation
committee met four times, and the audit committee met nine times.
At each scheduled meeting of the board of diectors, the independent members of
the board of directors meet separately in executive session without management
being present. A lead director elected by the independent directors is
responsible for chairing such executive sessions. Currently the lead director is
Albert L. Eilender.
DIRECTOR ATTENDANCE AT ANNUAL MEETINGS
Our directors are encouraged, but not required, to attend the annual meeting of
shareholders. All of our directors attended the 2003 annual meeting of
shareholders.
COMMUNICATIONS BY OUR SHAREHOLDERS TO THE BOARD OF DIRECTORS
Our board of directors recommends that shareholders direct to the Company's
corporate secretary any communications intended for the board of directors.
Shareholders can send communications by e-mail to droth@aceto.com, by facsimile
to (516) 627-6093, or by mail to Douglas Roth, Chief Financial Officer and
Secretary, Aceto Corporation, One Hollow Lane, Lake Success, New York 11042.
This centralized process will assist the board in reviewing and responding to
shareholder communications in an appropriate manner. If a shareholder wishes to
direct any communication to a specific board member, the name of that board
member should be noted in the communication. The board of directors has
instructed the corporate secretary to forward shareholder correspondence only to
the intended recipients, but the board has also instructed the corporate
secretary to review all shareholder correspondence and, in his discretion, not
forward any items that he deems to be of a commercial or frivolous nature or
otherwise inappropriate for the board's consideration. Any such items may be
forwarded elsewhere in the Company for review and possible response.
CORPORATE GOVERNANCE
The Company operates within a comprehensive plan of corporate governance for the
purpose of defining responsibilities, setting high standards of professional and
personal conduct and assuring compliance with those responsibilities and
standards. In July 2002, Congress passed the Sarbanes-Oxley Act of 2002 which,
among other things, establishes, or provides the basis for, a number of new
corporate governance standards and disclosure requirements. In addition, the
Nasdaq Stock Market, Inc. has recently made changes to its corporate governance
and listing requirements. The board of directors has initiated numerous actions
consistent with these new rules and will continue to regularly monitor
developments in the area of corporate governance.
CODE OF ETHICS FOR WORLDWIDE FINANCIAL MANAGEMENT
The Company has adopted a Code of Ethics for Worldwide Financial Management that
sets forth standards of ethics for the Company's principal executive officer and
senior financial officers, violations of which are reported to the audit
committee. This Code of Ethics was attached as an appendix to the Company's 2003
proxy statement, and is published on the Company's corporate website.
11
CODE OF BUSINESS CONDUCT FOR ALL ACETO EMPLOYEES
The Company has adopted a Code of Business Conduct for all Aceto Employees that
includes provisions ranging from restrictions on gifts to conflicts of interest.
All employees are required to affirm in writing their acceptance of the code.
The Code of Business Conduct was attached as an appendix to the Company's 2003
proxy statement, and is published on the Company's corporate website.
NASDAQ CODE OF BUSINESS CONDUCT AND ETHICS
The Company also adopted a Code of Business Conduct and Ethics for all Aceto
directors and employees in accordance with Nasdaq Qualitative Listing
Requirement 4350(n). This Code of Conduct is published on the Company's
corporate website.
DISCLOSURE COMMITTEE
The Company has formed a disclosure committee, comprised of senior management,
including senior financial personnel, to formalize processes to ensure accurate
and timely disclosure in Aceto's periodic reports filed with the United States
Securities and Exchange Commission and to implement certain disclosure controls
and procedures. The disclosure committee operates under a formal charter that
governs its duties and conduct. The charter was attached as an appendix to the
Company's 2003 proxy statement, and is published on the Company's corporate
website.
PERSONAL LOANS TO EXECUTIVE OFFICERS AND DIRECTORS
The Company's policy has always been to not extend personal loans or other terms
of personal credit to its directors and officers, and it will comply with the
recently enacted legislation prohibiting such personal loans and other forms of
personal credit.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16 of the Exchange Act, the Company's directors and
executive officers and beneficial owners of more than 10% of the Company's
Common Stock are required to file certain reports, within specified time
periods, indicating their holdings of and transactions in the Common Stock and
derivative securities. Based solely on a review of such reports provided to the
Company and written representations from such persons regarding the necessity to
file such reports, the Company is not aware of any failures to file reports or
report transactions in a timely manner during the Company's fiscal year ended
June 30, 2004.
12
EXECUTIVE COMPENSATION
The following table shows, for the last three fiscal years, compensation
information for Leonard S. Schwartz, the Company's Chief Executive Officer, and
the next four most highly compensated executives, as well as an additional
executive who is no longer employed by the Company. Other tables that follow
provide more detail about the specific type of compensation.
SUMMARY COMPENSATION TABLE
--------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
---------------------------------- -------------------------------------------------------
RESTRICTED
NAME AND STOCK OPTIONS/(1) ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS SARS COMPENSATION (2)
------------------------- ------ -------- --------- ------------- ------------- -----------------------
Leonard S. Schwartz 2004 $383,245 $715,900 - 18,000 $571,034
President, Chairman 2003 368,505 703,135 $12,765 81,000 321,155
and Chief Executive Officer 2002 354,332 584,527 26,073 22,500 90,267
Frank DeBenedittis 2004 $222,263 $240,000 - 6,000 $50,395
Senior Vice President 2003 213,844 256,500 $13,500 27,000 49,128
2002 203,625 196,622 8,378 9,000 42,459
Vincent Miata 2004 $223,673 $220,000 - 6,000 $40,473
Senior Vice President 2003 215,070 200,000 - 27,000 39,128
2002 202,129 160,000 - 9,000 35,502
Axel Mueller (3) 2004 $213,577 $100,000 - 6,000 $26,974
Vice President, 2003 254,212 160,000 $40,000 27,000 33,535
International 2002 202,003 120,000 30,000 6,750 27,030
Michael Feinman 2004 $177,758 $132,000 - 6,000 $37,243
President, Aceto 2003 171,429 96,625 $13,375 27,000 32,299
Agricultural Chemicals Corp. 2002 164,836 78,006 16,994 9,000 27,367
Douglas Roth 2004 $195,766 $67,200 $16,800 6,000 $31,393
Chief Financial Officer 2003 188,352 56,000 14,000 27,000 28,397
2002 181,108 32,000 8,000 6,750 23.694
(1) All figures have been adjusted to reflect the 3-for-2 stock dividends
paid in January 2004 and 2003, as appropriate.
(2) Represents contributions to retirement plans and compensation recognized
from the issuance of premium shares on restricted stock.
(3) Dr. Mueller resigned from the Company effective March 31, 2004.
13
STOCK OPTION GRANTS IN LAST FISCAL YEAR
---------------------------------------
The following table contains information regarding the grant of stock options in
the fiscal year ended June 30, 2004 to the named executives.
% OF TOTAL POTENTIAL REALIZABLE VALUE AT
NUMBER OF OPTIONS ASSUMED ANNUAL RATES OF
SECURITIES GRANTED TO STOCK PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OR OPTION TERM (1)
OPTIONS GRANTED IN FISCAL BASE PRICE EXPIRATION ----------------------------
NAME (# OF SHARES) YEAR ($/SH) DATE 5% 10%
-------------- --------------- ----------- ---------- ---------- ------ ------
Leonard S. Schwartz 18,000 (2) 7% $12.33 8/5/2013 $139,615 $353,811
Frank DeBenedittis 6,000 (2) 2% 12.33 8/5/2013 46,538 117,937
Vincent Miata 6,000 (2) 2% 12.33 8/5/2013 46,538 117,937
Axel Mueller 6,000 (2) 2% 12.33 8/5/2013 46,538 117,937
Michael Feinman 6,000 (2) 2% 12.33 8/5/2013 46,538 117,937
Douglas Roth 6,000 (2) 2% 12.33 8/5/2013 46,538 117,937
--------------------------------------------------------------------------------
(1) The dollar amounts illustrate value that might be realized upon exercise
of the options immediately prior to the expiration of their term, at 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 the Company of possible future appreciation of the stock
price of the Company.
(2) On August 5, 2003, the Company granted incentive stock options to
Messrs. Schwartz, DeBenedittis, Miata, Mueller, Feinman and Roth to
purchase common stock of the Company under the Company's 2002 Stock
Option Plan. All of these options vest at the rate of 20% per year
beginning December 15, 2004, subject to acceleration if the stock price
exceeds pre-determined levels for a period of time. All share amounts
have been adjusted to reflect the 3-for-2 stock dividend paid in January
2004.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
---------------------------------
The following table contains information regarding the exercise of stock options
by the named executives in the fiscal year ended June 30, 2004 and the value of
unexercised options held by such persons on June 30, 2004.
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS AT
SHARES OPTIONS AT FY-END (1) FY-END (1)
ACQUIRED ON --------------------------- ---------------------------
NAME EXERCISE (1) VALUE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------- -------------- -------------- --------------------------- ---------------------------
Leonard S. Schwartz 219,375 $1,904,625 373,500 18,000 $4,875,255 $94,860
Frank DeBenedittis 14,625 129,656 27,000 6,000 301,860 31,620
Vincent Miata 13,500 117,918 41,625 6,000 495,574 31,620
Michael Feinman 12,000 92,008 27,000 6,000 301,860 31,620
Axel Mueller 27,000 216,594 - - - -
Douglas Roth 13,900 121,958 13,100 6,000 146,458 31,620
--------------------------------------------------------------------------------
(1) The dollar value of each exercisable and unexercisable option was
calculated by multiplying the number of shares of common stock
underlying the option by the difference between the exercise price of
the option and the closing price of the Company's common stock on June
30, 2004 ($17.60). All share amounts have been adjusted to reflect the
3-for-2 stock dividend, as appropriate.
14
COMPENSATION OF DIRECTORS
Directors of the Company who are not also employees currently receive $30,000
per year for serving on the board of directors plus fees ranging from $1,000 to
$2,500 for each committee or special board meeting attended. In addition, the
lead independent director receives $5,000 per year for serving in such capacity.
Directors of the Company who are also employees are not compensated for their
services as Directors.
On August 5, 2003, the Company granted each of Messrs. Eilender, Hendler,
Wiesen, Fischer, Noetzli and Kallem 6,750 non-qualified stock options, adjusted
to reflect the effect of the 3-for-2 stock dividend paid January 2, 2004,
pursuant to the 2002 Stock Option Plan. Each option vests on December 15, 2004,
is exercisable at $12.33 (adjusted) and expires 10 years from the date of grant.
EMPLOYMENT AGREEMENTS
The Company has no employment agreements with its senior executives.
LIMITS ON LIABILITY AND INDEMNIFICATION
The Company's Articles of Incorporation eliminate the personal liability of its
directors to the Company and its shareholders for monetary damages for breach of
the directors' fiduciary duties in certain circumstances. The articles of
incorporation further provide that the Company will indemnify its officers and
directors to the fullest extent permitted by law. The Company believes that such
indemnification covers at least negligence and gross negligence on the part of
the indemnified parties. Insofar as indemnification for liabilities under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Company pursuant to the foregoing provisions or otherwise, the Company
has been advised that in the opinion of the United States Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Members of the executive compensation committee, with the exception of Leonard
S. Schwartz, have never served as officers or employees of the Company or any of
our subsidiaries. During the last fiscal year, none of our senior executives
served on the board of directors or committee of any other entity whose officers
served either on our board of directors or executive compensation committee.
15
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The executive compensation committee of the board of directors, is comprised of
Leonard S. Schwartz (Chairman), Stanley H. Fischer, Samuel I. Hendler, Albert L.
Eilender and Robert A. Wiesen, 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 shareholders, by providing salaries and benefits competitive
with those offered by other companies in the chemical industry. The executive
compensation program includes base salary, annual incentive compensation (cash
bonuses), and long term incentive compensation (awards under the Company's stock
option plans).
Base salaries are set at levels competitive within the chemical industry.
Because of the way the Company operates its business, the contributions of its
executives significantly affect corporate profitability. Bonuses (which can
exceed base salary) are paid to reflect the extent of such contributions. The
Company's Chief Executive Officer also is the Chairman of the Board, and
President of the Company. The bonuses paid to the Chief Executive Officer and to
the Secretary/Treasurer, who is the Chief Financial Officer, are intended to
reflect the Company's overall performance.
The three highest paid executives, other than the Chief Executive Officer, 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
compensation committee determines each bonus primarily based on this data, also
taking into account the long term contributions of each individual.
The Chief Executive Officer's compensation was determined on the basis of the
same factors utilized to compensate other executives, taking into consideration
total compensation comparisons of top executives of corporations in the chemical
industry. The Chief Executive Officer is not present at the time that his
compensation is evaluated and determined.
The executive compensation committee operates under a formal charter that
governs its duties and conduct. The charter is published on the Company's
website.
Submitted October 7, 2004 by members of the executive compensation committee
Leonard S. Schwartz (Chairman)
Albert L. Eilender
Stanley H. Fischer
Samuel I. Hendler
Robert A. Wiesen
REPORT OF THE AUDIT COMMITTEE
The audit committee is comprised of Ira S. Kallem (Chairman), Albert L. Eilender
and Hans C. Noetzli. Each of these directors meets the independence and
expertise requirements of the SEC and the Nasdaq Stock Market, Inc. The audit
committee recommends the engagement of the Company's independent auditor and
reviews and considers actions of management in matters relating to audit
functions. The audit committee also reviews with the independent auditor the
scope and results of its audit engagement, the Company's system of internal
controls and procedures, and reviews the effectiveness of procedures intended to
prevent violations of laws. In fulfilling its responsibilities, the audit
committee has reviewed and discussed the audited consolidated financial
statements for the Company for the fiscal year ended June 30, 2004 with the
Company's management and KPMG LLP, the Company's independent auditors.
16
Pursuant to the Sarbanes-Oxley Act of 2002, in September 2003 the audit
committee established the Aceto Corporation Audit Committee Pre-Approval Policy
whereby the Committee is required to pre-approve the audit fees, and the
provision of certain tax and other non-audit related services by KPMG LLP after
KPMG LLP provides a detailed description of the services to be performed and
specific fee estimates for each such service. The audit committee limits the
engagement by the Company of KPMG LLP for non-audit services and tax services to
those circumstances where the services are considered integral to the audit
services that it provides, or in which there is another compelling rationale for
using its services. The audit committee considered the provision by KPMG LLP of
the below mentioned tax services and other non-audit services and concluded that
the provision of these services was compatible with maintaining the independence
of KPMG LLP.
The audit committee has discussed with KPMG LLP the matters required to be
discussed by Statement on Auditing Standards No. 61, "Communication with audit
committees." In addition, the audit committee has received the written
disclosures and the letter from KPMG LLP required by Independence Standards
Board Standard No. 1, "Independence Discussions with audit committees" and has
discussed with KPMG LLP its independence from the Company and its management.
Finally, in reliance on the reviews and discussions referred to above, the audit
committee recommended to the board of directors that the audited consolidated
financial statements for the Company for the fiscal year ended June 30, 2004 be
included in our Annual Report on Form 10-K for the year ended June 30, 2004
which has been filed with the United States Securities and Exchange Commission.
Respectfully submitted October 7, 2004 by the members of the audit committee.
Ira S. Kallem (Chairman)
Albert L. Eilender
Hans C. Noetzli
17
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
The following table sets forth, as of October 7, 2004, the number and percentage
of shares of the Company's outstanding common stock owned by each named
executive officer, each director and each person that, to the best of the
Company's knowledge, owns more than 5% of the Company's issued and outstanding
common stock, and all named executive officers and directors as a group. Unless
indicated otherwise the business address of each person is c/o Aceto
Corporation, One Hollow Lane, Lake Success, New York 11042.
NUMBER OF SHARES
BENEFICIALLY
NAME AND ADDRESS OF OWNED (EXCLUDING EXERCISABLE STOCK TOTAL BENEFICIAL
BENEFICIAL OWNER STOCK OPTIONS) (1) OPTIONS (2) OWNERSHIP PERCENT (3)
-------------------- ------------------ ------------------- ------------------ -----------------
Leonard S. Schwartz 109,403 573,500 682,903 4.1%
Frank DeBenedittis 19,780 47,000 66,780 *
Vincent Miata 20,541 61,625 82,166 *
Michael Feinman 12,205 47,000 59,205 *
Axel Mueller (4) 8,805 - 8,805 *
Douglas Roth 4,375 33,100 37,475 *
Samuel I. Hendler 12,649 27,000 39,649 *
Robert A. Wiesen 781 27,000 27,781 *
Stanley H. Fischer -- 15,750 15,750 *
Albert L. Eilender 10,000 20,250 30,250 *
Hans Noetzli 1,319,096 (5) 13,500 1,332,596 8.3%
Ira S. Kallem -- 13,500 13,500 *
T. Rowe Price Associates, Inc. 1,147,750 (6) 1,147,750 7.1%
100 East Pratt Street
Baltimore, MD 21202
Schweizerhall, Inc. 1,319,096 (7) 1,319,096 8.2%
c/o Leonard M. Friedman, CPA
380 Foothill Road
Bridgewater, NJ 08807
All named executive officers and 1,517,635 879,225 2,396,860 14.1%
directors as a group (11 persons)
--------------------------------------------------------------------------------
* Less than 1%.
(1) Unless otherwise indicated, each person has, or shares with his spouse,
sole voting and dispositive power over the shares shown as owned by him.
18
(2) For purposes of the table, a person is deemed to have "beneficial
ownership" of any shares which such person has the right to acquire
within 60 days after the record date. Any share which such person has
the right to acquire within those 60 days is deemed to be outstanding
for the purpose of computing the percentage ownership of such person,
but is not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person.
(3) Based on 16,065,480 shares issued and outstanding as of the record date.
(4) Axel Mueller resigned from the Company effective March 31, 2004.
(5) These shares are registered in the name of Schweizerhall, Inc., of which
Mr. Noetzli is Chairman. These are the same shares listed as owned by
Schweizerhall Inc. in the table above. Mr. Noetzli disclaims beneficial
ownership of these shares in accordance with Rule 13d-4 of the Exchange
Act Rules promulgated pursuant to the Securities Exchange Act of 1934,
as amended.
(6) Based on information provided by T. Rowe Price Associates, Inc. T. Rowe
Price Associates, Inc. has sole dispositive and voting power with
respect to these shares. These shares are held of record by various
individual and institutional investors, including the T. Rowe Price
Small-Cap Value Fund, Inc. (which owns 925,000 shares representing 5.8%
of the Company's outstanding shares), which T. Rowe Price Associates,
Inc. serves as investment advisor with power to direct investments
and/or power to vote the securities. For purposes of the reporting
requirements of the Securities Exchange Act of 1934. T. Rowe Price
Associates, Inc. is deemed to be the beneficial owner of such
securities. T. Rowe Price Associates, Inc., however, disclaims
beneficial ownership of these shares in accordance with Rule 13d-4 of
the Exchange Act of 1934, as amended.
(7) Represents shares issued in connection with the Company's fiscal 2001
acquisition of the Schweizerhall Pharma distribution division of
Schweizerhall Holding AG, and certain assets relating to the
pharmaceutical ingredients business of Schweizerhall, Inc., a wholly
owned subsidiary of Schweizerhall Holding AG.
19
PERFORMANCE GRAPH
-----------------
The following graph compares on a cumulative basis the yearly percentage change,
assuming dividend reinvestment, over the last five fiscal years in (a) the total
shareholder return on our common stock with (b) the total return on the Standard
& Poors 500 Index and (c) the total return on a published line-of-business index
- the Dow Jones U.S. Chemicals Index (the "Peer Group").
The following graph assumes that $100 had been invested in each of the Company,
the Standard & Poors 500 Index and the Peer Group on June 30, 1999.
5-YEAR CUMULATIVE TOTAL RETURN COMPARISON
AMONG ACETO CORPORATION,
THE S&P 500 INDEX AND THE DOW JONES U.S. CHEMICALS INDEX
DOW JONES
---------
ACETO CORPORATION S&P INDEX U.S. CHEMICALS
----------------- --------- --------------
June 30, 1999 100 100 100
June 30, 2000 98 107 75
June 30, 2001 92 91 85
June 30, 2002 101 75 90
June 30, 2003 270 75 83
June 30, 2004 388 89 104
ASSUMES $100 INVESTED ON JUNE 30, 1999
ASSUMES DIVIDEND REINVESTMENT
FISCAL YEAR ENDING JUNE 30, 2004
The preceding sections entitled "Executive Compensation" and "Performance Graph"
do not constitute soliciting material for purposes of SEC Rule 14a-9, will not
be deemed to have been filed with the SEC for purposes of Section 18 of the
Securities Exchange Act of 1934, and are not to be incorporated by reference
into any other filing that we make with the SEC.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Stanley H. Fischer, a director of the Company, is President of Fischer and
Burstein, P.C., a law firm which serves as counsel to the Company on various
corporate matters. During fiscal 2004, the Company paid $238,606 to Fischer and
Burstein, P.C. for legal services rendered to the Company.
Robert A. Wiesen, a director of the Company, is a partner in Clifton, Budd &
DeMaria, a law firm which serves as labor and employment counsel to the Company.
During fiscal 2004, the Company paid $67,627 to Clifton, Budd & DeMaria for
legal services rendered to the Company.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THE SEVEN
NOMINEES FOR DIRECTOR.
20
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Company has engaged KPMG LLP as its principal independent public accountants
to perform the audit of the Company's financial statements for the fiscal year
ending June 30, 2005. KPMG LLP has audited the Company's financial statements
since 1971. The Board of Directors, in accordance with the recommendation of the
Audit Committee, recommends that KPMG LLP be ratified as the principal
accounting firm to be utilized by the Company throughout the year ending June
30, 2005.
The Company anticipates that representatives of KPMG LLP will attend the annual
meeting for the purpose of responding to appropriate questions. At the annual
meeting, the representatives of KPMG LLP will be afforded an opportunity to make
a statement if they so desire.
Fees paid to the auditors:
2004 2003
Audit Fees $521,000 $317,000
Audit Related Fees $ - $ -
Tax Fees $203,000 $183,000
All Other Fees $ - $ -
Audit fees are fees associated with the annual audit and the reviews of the
Company's quarterly reports on Form 10-Q; SEC related matters and acquisition
audits. Tax Fees are fees associated with tax services, including tax
compliance, tax advice and tax planning.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE SELECTION OF KPMG
LLP AS THE COMPANY'S AUDITORS FOR THE 2005 FISCAL YEAR.
SHAREHOLDER PROPOSALS
All shareholder proposals which are intended to be presented at the 2005 Annual
Meeting of Shareholders of the Company must be received by the Company no later
than June 18, 2005, for inclusion in the board of directors' proxy statement and
form of proxy relating to the meeting.
OUR ANNUAL REPORT ON FORM 10-K AND CORPORATE GOVERNANCE COMPLIANCE DOCUMENTS
If you own our common stock, you can obtain copies of our annual report on Form
10-K for the fiscal year ended June 30, 2004 as filed with the SEC, including
the financial statements, our committee charters, and our codes of conduct, all
without charge, by writing to Mr. Douglas Roth, Chief Financial Officer and
Corporate Secretary, Aceto Corporation, One Hollow Lane, Lake Success, New York
11042. You can also access our 2004 Form 10-K on our website at WWW.ACETO.COM by
clicking on "Corporate Governance" and then on "SEC Filings". You can also
access our committee charters at our website by clicking on "Corporate
Governance".
21
OTHER BUSINESS
The board of directors knows of no other business to be acted upon at the
meeting. However, if any other business properly comes before the meeting, it is
the intention of the persons named in the enclosed proxy to vote on such matters
in accordance with their best judgment.
The prompt return of the proxy will be appreciated and helpful in obtaining the
necessary vote. Therefore, whether or not you expect to attend the meeting,
please sign the proxy and return it in the enclosed envelope.
BY ORDER OF THE BOARD OF DIRECTORS
Douglas Roth
Chief Financial Officer and
Corporate Secretary
Dated: October 22, 2004
22
ACETO CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned, revoking all previous proxies, hereby constitutes and appoints
Leonard S. Schwartz and Douglas Roth, and each of them, proxies with full power
of substitution to vote for the undersigned all shares of Common Stock of Aceto
Corporation which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Shareholders to be held on December 2, 2004 at
the Company's offices, One Hollow Lane, Suite 201, Lake Success, New York 11042,
at 10:00 a.m., Eastern Standard Time, and at any adjournment thereof, upon the
matters described in the accompanying Proxy Statement and upon any other
business that may properly come before the meeting or any adjournment thereof.
Said proxies are directed to vote or refrain from voting as checked on the
reverse side upon the matters listed on the reverse side, and otherwise in their
discretion.
PLEASE INDICATE HOW YOUR SHARES ARE TO BE VOTED. IF NO SPECIFIC VOTING
INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS
RECOMMENDED BY THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR ALL NOMINEES "IN ITEM 1 AND "FOR " ITEM 2.
ACETO CORPORATION
P.O. BOX 11199
NEW YORK, N.Y. 10203-0199
(1) Election of Directors
FOR all nominees listed below
*EXCEPTIONS:
WITHHOLD AUTHORITY to vote for Nominees: Leonard S. Schwartz, Samuel I. Hendler,
Robert A. Wiesen, Stanley H. Fischer, Albert L. Eilender, Ira S. Kallem and Hans
C. Noetzli.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX ABOVE AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED
BELOW.)
*Exceptions ____________________________________________________________________
(2) Ratify the appointment of KPMG LLP as the Company's independent auditors for
the current fiscal year.
FOR AGAINST ABSTAIN
(3) In their discretion with respect to such other business as may properly come
before the meeting or any adjournment thereof.
Change of Address Mark Here
(PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED POSTAGE PREPAID
ENVELOPE.)
NOTE: Please sign exactly as your name appears on this proxy. If shares are held
jointly, each joint owner should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. Proxies
executed by a corporation should be signed with the full corporate name by a
duly authorized officer.
Dated:_____________________________, 2004
___________________________________
(Signature of Shareholder)
23