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8-K/A
ACETO CORP filed this Form 8-K/A on 10/17/2017
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EXPLANATORY NOTE

 

This Amendment No. 1 amends the Current Report on Form 8-K filed by Aceto Corporation (the “Company”) on September 27, 2017 (the “Original Report”). The Original Report disclosed that on September 27, 2017, the Company’s board of directors (the “Board”) appointed William C. Kennally, III, President and Chief Executive Officer of the Company, effective October 2, 2017. At the time the Original Report was filed, the Company had not entered into any formal arrangements with Mr. Kennally in connection with his appointment as the Company’s President and Chief Executive Officer. This Amendment No. 1 is being filed to provide additional information under Item 5.02 regarding the material terms of Mr. Kennally’s appointment. 

 

Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

On September 27, 2017, the Board appointed William C. Kennally, III, age 61, President and Chief Executive Officer of the Company effective as of October 2, 2017. In connection with Mr. Kennally’s appointment, the Company has entered into a letter agreement (the “Agreement”) with Mr. Kennally. Material terms of the Agreement are as set forth below:

 

·Mr. Kennally’s initial base salary will be $650,000 per annum.

 

·During his employment, Mr. Kennally will be eligible to participate in the Company’s annual performance award program as in effect from time to time. Mr. Kennally’s target performance award will be 100% of base salary, pro-rated for the remainder of the fiscal year ending June 30, 2018. The achievement of the performance award for each fiscal year, if any, will be based on Company performance and Mr. Kennally’s performance for the relevant year.

 

·In accordance with the terms of the Company’s 2015 Equity Participation Plan, for the fiscal year ending June 30, 2018, Mr. Kennally was awarded, on October 2, 2017, (i) 60,000 shares of restricted stock, vesting in three equal installments on each of September 1, 2018, September 1, 2019, and September 1, 2020, and (ii) 35,000 restricted stock units subject to vesting if certain performance metrics are met during a performance period that ends on June 30, 2020.

 

·During his employment, upon satisfying certain applicable eligibility conditions, Mr. Kennally will be entitled to participate in a benefit package generally available to the Company’s executives, consisting of health insurance, life insurance, participation in a 401(k) plan, a Supplemental Executive Retirement Plan and a Flex Spending Plan, and the use of a Company automobile in accordance with the Company’s automobile policy.

 

·The Agreement provides for “at-will” employment subject to termination by either party pursuant to the terms of the Agreement. In the event of Mr. Kennally’s voluntary resignation, Mr. Kennally is required to deliver at least thirty (30) days’ prior written notice to the Company.

 

·If the Company terminates Mr. Kennally’s employment other than for cause pursuant to the Agreement, the Company will be required to continue to pay Mr. Kennally’s base salary, at the rate then in effect, for the fifteen month period following the date of termination, subject to offset by any amounts earned by Mr. Kennally through other employment or consultancy during the fifteen (15) month period.

 

In connection with Mr. Kennally’s appointment, the Company entered into a change in control agreement with Mr. Kennally (the “Change in Control Agreement”) on October 11, 2017. The Change in Control Agreement provides for “double trigger” change in control severance protections, as summarized below, which means no amount will become payable under the Change in Control Agreement unless a “change in control” of the Company occurs and Mr. Kennally’s employment is terminated by the Company other than for “cause” or by Mr. Kennally for “good reason” within a specified period following the change in control. Material terms of the Change in Control Agreement are set forth below:

 

   
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