(10) Stock Based Compensation Plans

At the annual meeting of shareholders of the Company, held on December 6, 2012, the Company’s shareholders approved the amended and restated 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, 5,250 shares. In addition, 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.

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 fiscal year 2012, the Company granted 217 stock options 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. There were no stock options granted in fiscal year 2013 or 2014.

As of June 30, 2014, there were 2,398 and 14 shares of common stock available for grant under the 2010 and 2007 Plans, respectively.

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. The 2002 Plan expired in December 2012. Outstanding options survive the expiration of the 2012 Plan.

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, 2014, 2013 and 2012, 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, 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
Granted		-			-
Exercised		(740	)		8.43
Forfeited (including cancelled options)		(115	)		9.55
Balance at June 30, 2013		960		$	8.36
Granted		-			-
Exercised		(392	)		9.34
Forfeited (including cancelled options)		(17	)		6.58
Balance at June 30, 2014		551		$	7.72	$	5,741
Options exercisable at June 30, 2014		490		$	7.93	$	5,002

The total intrinsic value of stock options exercised during the years ended June 30, 2014, 2013 and 2012 was approximately $3,607, $2,047 and $690, respectively. At June 30, 2014, outstanding options had expiration dates ranging from September 2014 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 2014, 2013 and 2012, restricted stock awarded and premium shares vested of 7, 9 and 8 common shares, respectively, were issued under employee incentive plans, which increased stockholders’ equity by $93, $82 and $49, respectively. The related non-cash compensation expense related to the vesting of premium shares during the year was $20, $11 and $11 in fiscal 2014, 2013 and 2012, respectively. Additionally, non-cash compensation expense of $207, $324 and $333 was recorded in fiscal 2014, 2013 and 2012, respectively, relating to stock option grants, which is included in selling, general and administrative expenses. Included in the year ended June 30, 2012 stock-based compensation expense for stock options was approximately $11, related to the modification of certain stock options. As of June 30, 2014, the total unrecognized compensation cost related to option awards is $21.

The following summarizes the non-vested stock options at June 30, 2014 and the activity with respect to non-vested options for the year ended June 30, 2014:

	Shares subject to option			Weighted average grant date fair value
Non-vested at June 30, 2013		198		$	2.32
Granted		-			-
Vested		(130	)		2.45
Forfeited		(7	)		2.10
Non-vested at June 30, 2014		61		$	2.06

There were no stock options granted during fiscal 2014 or 2013. The per-share weighted-average fair value of stock options granted during 2012 was $2.07 on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2012

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

During the year ended June 30, 2014, the Company granted 214 shares of restricted common stock to its employees that vest over three years and 11 shares of restricted common stock to its non-employee directors, which vest over approximately one year as well as 32 restricted stock units that have varying vest dates from August 2014 through July 2015. In addition, the Company also issued a target grant of 131 performance-vested restricted stock units, which grant could be as much as 196 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.

During the year ended June 30, 2013, the Company granted 120 shares of restricted common stock to its employees that vest over three years and 25 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 84 performance-vested restricted stock units, which grant could be as much as 126 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.

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.

For the years ended June 30, 2014, 2013 and 2012, the Company recorded non-cash stock-based compensation expense of approximately $2,929, $1,453, and $824, 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 $4,409 at June 30, 2014 and the related weighted average period over which it is expected that such unrecognized compensation cost will be recognized is approximately 1.5 years.

A summary of restricted stock awards including restricted stock units as of June 30, 2014, is presented below:

	Shares			Weighted average grant date fair value
Non-vested at beginning of year		411		$	8.13
Granted		388			15.38
Vested		(191	)		8.34
Forfeited		(46	)		10.43
Non-vested at June 30, 2014		562		$	13.00