(10) Stock Based Compensation Plans

At the annual meeting of shareholders of the Company, held on December 2, 2010, the Company’s shareholders approved the Aceto Corporation 2010 Equity Participation Plan (“2010 Plan”). Under the 2010 Plan, grants of stock options, restricted stock, restricted stock units, stock appreciation rights, and stock bonuses (collectively, “Stock Awards”) may be made to employees, non-employee directors and consultants of the Company, including the chief executive officer, chief financial officer and other named executive officers. The maximum number of shares of common stock of the Company that may be issued pursuant to Stock Awards granted under the 2010 Plan will not exceed, in the aggregate, 2,000 shares.

At the annual meeting of shareholders of the Company held December 6, 2007, the shareholders approved the Aceto Corporation 2007 Long-Term Performance Incentive Plan (2007 Plan). The Company has reserved 700 shares of common stock for issuance under the 2007 Plan to the Company’s employees and non-employee directors. There are five types of awards that may be granted under the 2007 Plan-options to purchase common stock, stock appreciation rights, restricted stock, restricted stock units and performance incentive units.

In September 2002, the Company adopted the Aceto Corporation 2002 Stock Option Plan (2002 Plan), which was ratified by the Company’s shareholders in December 2002. Under the 2002 Plan, restricted stock or options to purchase up to 1,688 shares of the Company’s common stock may be granted by the Company to officers, directors, employees and agents of the Company. The exercise price per share shall not be less than the market value of Aceto common stock on the date of grant and each option may not become exercisable less than six months from the date it is granted. Restricted stock may be granted to an eligible participant in lieu of a portion of any annual cash bonus earned by such participant. Such award may include additional shares of restricted stock (premium shares) greater than the portion of bonus paid in restricted stock. The restricted stock award is vested at issuance and the restrictions lapse ratably over a period of years as determined by the Board of Directors, generally three years. The premium shares vest when all the restrictions lapse, provided that the participant remains employed by the Company at that time.

In fiscal years 2012 and 2011, the Company granted 217 and 240, stock options, respectively, to employees at an exercise price equal to the market value of the common stock on the date of grant, determined in accordance with the 2010 Plan. These options vest over three years and have a term of ten years from the date of grant.

As of June 30, 2012, there were 674, 39 and 28 shares of common stock available for grant under the 2010, 2007 and 2002 Plans, respectively.

In December 1998, the Company adopted the Aceto Corporation 1998 Omnibus Equity Award Plan (1998 Plan). The 1998 Plan expired in December 2008. Outstanding options survive the expiration of the 1998 Plan.

Under the terms of the Company’s 1980 Stock Option Plan, as amended (1980 Plan), options may be issued to officers and key employees. The exercise price per share can be greater or less than the market value of the stock on the date of grant. The 1980 Plan expired in September 2005. Outstanding options survive the expiration of the 1980 Plan.

The following summarizes the shares of common stock under options for all plans at June 30, 2012, 2011 and 2010, and the activity with respect to options for the respective years then ended:

	Shares subject to option			Weighted average exercise price per share		Aggregate Intrinsic Value
Balance at June 30, 2009		2,903		$	7.74
Granted		-			-
Exercised		(567	)		3.02
Forfeited (including cancelled options)		(423	)		10.59
Balance at June 30, 2010		1,913		$	8.51
Granted		240			7.76
Exercised		(98	)		6.28
Forfeited (including cancelled options)		(96	)		9.82
Balance at June 30, 2011		1,959		$	8.46
Granted		217			6.10
Exercised		(168	)		4.33
Forfeited (including cancelled options)		(193	)		9.68
Balance at June 30, 2012		1,815		$	8.47	$2,177
Options exercisable at June 30, 2012		1,472		$	8.87	$1,390

The total intrinsic value of stock options exercised during the years ended June 30, 2012, 2011 and 2010 was approximately

$690, $178 and $1,373, respectively. At June 30, 2012, outstanding options had expiration dates ranging from December 2012 to December 2021.

Under the 2002 Plan and the 1998 Plan, compensation expense is recorded for the market value of the restricted stock awards in the year the related bonus is earned and over the vesting period for the market value at the date of grant of the premium shares granted. In fiscal 2012, 2011 and 2010, restricted stock awarded and premium shares vested of 8, 11, and 10 common shares, respectively, were issued under employee incentive plans, which increased stockholders’ equity by $49, $66 and $69, respectively. The related non-cash compensation expense related to the vesting of premium shares during the year was $11, $33 and $54 in fiscal 2012, 2011 and 2010, respectively. Additionally, non-cash compensation expense of $333, $186 and $360 was recorded in fiscal 2012, 2011 and 2010, respectively, relating to stock option grants, which is included in selling, general and administrative expenses. Included in the years ended June 30, 2012 and June 30, 2011 stock-based compensation expense for stock options was approximately $11 and $54, respectively, related to the modification of certain stock options. As of June 30, 2012, the total unrecognized compensation cost related to option awards is $589.

The following summarizes the non-vested stock options at June 30, 2012 and the activity with respect to non-vested options for the year ended June 30, 2012:

	Shares subject to option			Weighted average grant date fair value
Non-vested at June 30, 2011		235		$	2.88
Granted		217			2.07
Vested		(79	)		2.88
Forfeited		(30	)		2.74
Non-vested at June 30, 2012		343		$	2.38

There were no stock options granted during fiscal 2010. The per-share weighted-average fair value of stock options granted during 2012 and 2011 was $2.07 and $2.88, respectively, on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2012			2011

Expected life	5.7 years			5.7 years
Expected volatility		48.1	%		48.8%
Risk-free interest rate		1.59	%		1.95%
Dividend yield		3.24	%		2.58%

During the year ended June 30, 2012, the Company granted 103 shares of restricted common stock to its employees that vest over three years and 38 shares of restricted common stock to its non-employee directors, which vest over one year. In addition, the Company also issued a target grant of 49 performance-vested restricted stock units, which grant could be as much as 73 if certain performance criteria and market conditions are met. Performance-vested restricted stock units will cliff vest 100% at the end of the third year following grant in accordance with the performance metrics set forth in the applicable employee performance-vested restricted stock unit grant.

In December 2010, the Company granted 62 shares of restricted common stock to its employees that vest over three years. In addition, the Company also issued a target grant of 62 performance-vested restricted stock units, which grant could be as much as 93 if certain performance criteria are met. Performance-vested restricted stock units will cliff vest 100% at the end of the third year following grant in accordance with the performance metrics set forth in the applicable employee performance-vested restricted stock unit grant.

For the years ended June 30, 2012, 2011 and 2010, the Company recorded non-cash stock-based compensation expense of approximately $824, $635, and $629, respectively, which is included in selling, general and administrative expenses, for shares of restricted common stock and restricted stock units.

The remaining stock-based compensation expense for restricted stock awards and units is approximately $1,163 at June 30, 2012 and the related weighted average period over which it is expected that such unrecognized compensation cost will be recognized is approximately 1.6 years.

A summary of restricted stock awards including restricted stock units as of June 30, 2012, is presented below:

	Shares			Weighted average grant date fair value
Non-vested at beginning of year		170		$	7.80
Granted		195			6.34
Vested		(69	)		7.98
Forfeited		(20	)		7.24
Non-vested at June 30, 2012		276		$	6.76