|ACETO CORP filed this Form DEF 14A on 10/20/2017|
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Mr. Kavuru was not a member of the Company’s Board at the time that the above-mentioned Product Purchase Agreement, transition services agreement, lease or Development Agreements were executed.
Pursuant to its charter, the Company’s Audit & Risk Committee shall review on an on-going basis for potential conflicts of interest, and approve if appropriate, all “Related Party Transactions” of the Company as required by the applicable NASDAQ listing rule. For purposes of the Audit & Risk Committee charter, “Related Party Transactions” shall mean those transactions required to be disclosed pursuant to SEC Regulation S-K, Item 404.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THE SEVEN NOMINEES FOR DIRECTOR (PROPOSAL ONE).
APPROVAL OF MATERIAL TERMS OF THE SECTION 162(m) PERFORMANCE GOALS FOR AWARDS UNDER THE ACETO EQUITY PERFORMANCE AWARD PLAN
Our board of directors recommends that shareholders approve the material terms of the performance goals that may be used under the Company’s Executive Performance Award Plan (the “Performance Award Plan”). Approval of the material terms of the performance goals is a condition for certain awards made under the Performance Award Plan to qualify as tax-deductible performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”).
Section 162(m) places a limit of $1 million on the amount the Company may deduct in any one year for compensation paid to a “covered employee,” which is defined by Section 162(m) to mean any person who as of the last day of the fiscal year is the chief executive officer or one of the Company’s three highest compensated executive officers other than the Company’s principal financial officer, as determined under SEC rules. There is, however, an exception to this limit on deductibility for compensation that satisfies certain conditions for “qualified performance-based compensation” set forth under Section 162(m). One of the conditions requires shareholder approval every five years of the material terms of the performance goals of the plan under which the compensation will be paid. The Company’s shareholders most recently approved the material terms of the performance goals of the Performance Award Plan when they approved the Performance Award Plan at the Company’s 2012 Annual Meeting of Shareholders. At the 2017 Annual Meeting, the board is asking shareholders to approve the material terms of the performance goals for use under the Performance Award Plan, as described herein.
For purposes of Section 162(m), the material terms of the performance goals include (i) the individuals eligible to receive compensation under the Performance Award Plan, (ii) a description of the business criteria on which performance goals may be based and (iii) the maximum amount payable to any covered employee under the Performance Award Plan in any year. Each of these aspects of the Performance Award Plan is discussed below.
Awards under the Performance Award Plan are made in the form of cash, provided that in lieu of cash, the compensation committee may settle all or a portion of an award payable to a participant with equity-based awards pursuant to the Company’s 2015 Equity Participation Plan which equity-based awards will be subject to such terms and conditions (including vesting requirements) as the compensation committee may determine. The Performance Award Plan is administered by the compensation committee of our board of directors, which is composed of “outside directors” as defined under Section 162(m).
Eligibility and Participation
Executive officers of the Company or any of its subsidiaries are eligible to participate in the Performance Award Plan. The compensation committee selects, from among those eligible, the persons who will from time to time participate in the Performance Award Plan. The approximate number of persons who currently are eligible to participate under the Performance Award Plan is 149 employees.
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