ACETO CORPORATION SUPPLEMENTAL EXECUTIVE DEFERRED COMPENSATION PLAN

Exhibit 10.22

ACETO CORPORATION

SUPPLEMENTAL EXECUTIVE DEFERRED COMPENSATION PLAN

AMENDED AND RESTATED

EFFECTIVE DECEMBER 8, 2008

ACETO CORPORATION

SUPPLEMENTAL EXECUTIVE DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS

ARTICLE 1	AMENDMENT AND RESTATEMENT; INTRODUCTION; PURPOSE	3
ARTICLE 2	DEFINITIONS	3
ARTICLE 3	PARTICIPATION	6
ARTICLE 4	DEFERRAL ELECTIONS/EMPLOYER CONTRIBUTIONS	7
ARTICLE 5	ACCOUNTS/VESTING/BENEFITS	10
ARTICLE 6	DISTRIBUTIONS	12
ARTICLE 7	PLAN ADMINISTRATION	16
ARTICLE 8	AMENDMENT AND TERMINATION	18
ARTICLE 9	MISCELLANEOUS	20

ARTICLE 1

AMENDMENT AND RESTATEMENT; INTRODUCTION; PURPOSE OF PLAN

1.01          Introduction; Purpose; Compliance With Code Section 409A .  Aceto Corporation (“Aceto” or the “Company”) hereby amends and restates the Aceto Corporation Supplemental Executive Deferred Compensation Plan (the “Plan”).  The primary purpose of the Plan is to provide a program of deferred compensation for a select group of management or highly compensated employees who meet the participation requirements set forth herein. As such, the Plan is intended to be a “top hat” plan, which is unfunded for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and to be exempt from any ERISA provision that is deemed inapplicable to an unfunded plan. This Plan is also intended to comply in form and operation with the requirements of Code section 409A and its corresponding regulations and shall be interpreted in a manner consistent with such Code section and regulations.  Any reference in the Plan to Treas. Reg. 1.409A shall be deemed to be a reference to the final regulations issued on April 17, 2007.

Except as specifically provided herein, the provisions of this Plan shall only apply to those individuals who are Eligible Employees of the Company on or after the Effective Date.  Except as specifically provided for herein, the rights and benefits, if any, of former Eligible Employees of the Company whose employment terminated prior to the Effective Date, shall be determined under the provisions of the Plan, as in effect from time to time prior to that date.

1.02          Transition Rules .  The transition relief provided in the Preamble to Treas. Reg. 1.409A Decision 9321 published April 17, 2007 shall apply to the extent applicable. The transition relief provided in Notice 2007-78 shall apply to the extent applicable.

ARTICLE 2

DEFINITIONS

 

"Account" means any of the book entry account(s) maintained with respect to each Participant pursuant to Article 5.  "Account" or "Accounts" shall include an Account established for Participant Contributions, Non-elective Contributions, and such other account(s) or subaccount(s) as the Plan Administrator, in its discretion, deems appropriate.

"Beneficiary" means the person or persons designated by the Participant to receive distributions from the Participant's Account after the Participant's death.  Upon enrollment, the Participant shall designate a Beneficiary to receive distributions from the Participant's Account in the event of the Participant's death.  A Participant may change his or her designated Beneficiary at any time.

"Code" means the Internal Revenue Code of 1986, as amended from time to time.

"Change in Control" means a change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the corporation. A Change in Control occurs on the date:

	(a)	any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the corporation possessing 30 percent or more of the total voting power of the stock of such corporation;
	(b)	a majority of members of the corporation's board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the corporation's board of directors before the date of the appointment or election; or
	(c)	that any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to 40 percent of the total gross fair market value of all of the assets of the corporation immediately before such acquisition or acquisitions.

See Treas. Reg. 1.409A-3(i)(5) for definitions of "person acting as a group", "corporation" and "gross fair market value".

To qualify as a Change in Control event, the occurrence of the event must be objectively determinable and any requirement that any other person or group, such as a Plan Administrator or compensation committee, certify the occurrence of a Change in Control must be strictly ministerial and not involve any discretionary authority. To the extent permitted by the Internal Revenue Service, a Change of Control may also occur in the event of changes in the ownership of a partnership and changes in the ownership of a substantial portion of the assets of a partnership.

“Committee” means the Plan Administration Committee, which shall be responsible for the administration of the Plan.

"Company" means Aceto Corporation. Company also means "service recipient" as used in Treas. Reg. section 1.409A-1(g).

“Deferral” means the portion of a Participant’s annual bonus that has been deferred in accordance with the Plan and the Participant’s most recent Participation Agreement and Deferral Election.  Such Deferral shall be held in the Deferred Compensation Account established and maintained for each Participant pursuant to Article III.

"Deferral Election" means an election as to the amount of deferred compensation with regard to Accounts established with respect to Participant Contributions and to the time and form of payment with respect to all Accounts.

"Disabled" or "Disability" shall mean the Participant is: (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant's employer. The determination of Disability shall be made by the Plan Administrator.

"Effective Date" shall mean December 8, 2008, which is the Effective Date of this amended and restated plan.

“Eligible Employee” shall mean any highly compensated or managerial employee on active status with the Company who is designated by the Board as eligible to participate in the Plan.

"Employee" means any individual who is employed by or providing services to the Employer. Employee means "service provider" as used in Treas. Reg. section 1.409A-1(f).

"Employer" means the Company or any other employer required to be aggregated with the Company under Code sections 414(b), (c), (m) or (o).

"ERISA" means the Employee Retirement Income Security Act of 1974, all amendments thereto and all federal regulations promulgated pursuant thereto.

"Non-elective Contribution" means the contributions described in Section 5.02(c).

"Participant" means an Eligible Employee who participates in the Plan in accordance with Articles 3 and 4.

"Participant Contribution" means the contributions described in Section 5.02(a).

"Plan Administrator" means the Committee.

"Plan Sponsor" means the Company.

"Plan Year" means the calendar year.

"Separation from Service" means any absence from service that ends the employment of an individual with the Employer shall be deemed to be a Separation from Service. However, the employment relationship is treated as continuing intact while the individual is on military leave, sick leave, or other bona fide leave of absence (such as temporary employment by the government), so long as the individual's right to reemployment with the Company is provided either by statute or by contract or as approved by the Company.

"Specified Employee" means a key employee (as defined in Code section 416(i) without regard to Code section 416(i)(5)) of the Company (within the meaning of Code section 409A(a)(2)(B)) any stock of which is publicly traded on an established securities market or otherwise. An employee is a key employee if the employee meets the requirements of Code section 416(i)(1)(A)(i), (ii) or (iii) (applied in accordance with the regulations thereunder and disregarding Code section 416(i)(5)) at any time during the 12-month period ending on December 31. The application of rules regarding a "Specified Employee" to spinoffs and mergers and nonresident alien employees shall be determined pursuant to applicable Internal Revenue Service guidance.

"Valuation Date" means the last day of the Plan Year or any other date selected by the Plan Administrator.

ARTICLE 3

PARTICIPATION

 

3.01          Participation . Each Eligible Employee as of the Effective Date who was eligible to participate in the Plan immediately prior to the Effective Date shall be eligible to continue to participate on the Effective Date.  After the Effective Date, any new Eligible Employee shall be eligible to participate in the Plan on the first day of the following fiscal year after the date of his or her designation by the Company as an Eligible Employee and upon the completion, filing and acceptance of all forms required by the Committee to become a Participant.  An Eligible Employee who becomes a Participant shall continue to be a Participant until such time as his Account has been completely distributed to him or his Beneficiary; provided, however, that an Eligible Employee shall cease to be eligible to make any deferrals under the Plan or to be entitled to allocations of Company contributions pursuant to Article 4 following his or her Separation from Service or upon his or her no longer being an Eligible Employee.

 

ARTICLE 4

DEFERRAL ELECTIONS/EMPLOYER CONTRIBUTIONS

 

(a)           In General. Except as specified in 4.01(b), bonus payments for services performed during a Plan Year may be deferred only if the election to defer such bonus payments and an election as to time and form of payment is made not later than the close of the Plan Year next preceding the Plan Year in which the service is rendered.  Each Participant may execute elections pursuant to this Article 4 in the form and manner prescribed by the Plan Administrator and at such time in advance as the Plan Administrator may require.  The Plan Administrator shall provide each Participant with the forms necessary to make such elections.  A Participant who has not timely submitted a valid Deferral Election may not defer his or her bonus for the applicable Plan Year.  A Participant shall submit a new Deferral Election for each Plan Year prior to the applicable Election Date.

(b)           Initial Year of Participation.  An Employee is eligible to participate in the Plan at any time during which, the Participant is eligible to accrue an amount of deferred compensation under the Plan other than earnings on amounts previously deferred, even if the Participant has elected not to accrue (or has not elected to accrue) an amount of deferred compensation.

(c)           Default. In the event that the Participant fails to make any election as to time and form of payment by the deadlines specified in this Article, the Participant shall be deemed to have elected to receive a single lump sum payment payable 90 days following Separation from Service.

(d)           Short-Term Deferrals. Procedures as specified in Treas. Reg. section 1.409A and any other guidance of general applicability issued thereunder shall apply with respect to short-term deferrals.

(e)           USERRA Rights. The requirements of Section 4.01 are deemed satisfied to the extent an initial deferral election is provided to satisfy the requirements of the Uniformed Service Employment and Reemployment Rights Act of 1994, as amended, 38 U.S.C. 4301-4334.

4.02          Employer Contributions .  In its sole discretion, the Company, by action of the Board, may from time to time allocate Employer contributions to Participants’ Accounts; provided, however, that all such Employer contributions, as determined  in the discretion of the Board, need not be allocated among all Participants on the same basis.

(a)            In General. Subsequent changes in the time and form of payment (whether changes are made by Participants, the Company or Beneficiaries) may be made pursuant to this Section. Except as expressly permitted by the Plan, Code section 409A, and applicable Regulations no Deferral Election shall accelerate the time or schedule of any payment under the Plan.

	(1)	Such election may not take effect until at least 12 months after the date on which the election is made.
	(2)	In the case of an election related to a payment other than a payment on account of Disability or death, the payment must be deferred for a period of not less than five years from the date such payment would otherwise have been paid (or in the case of installment payments, five years from the date the first amount was scheduled to be paid).
	(3)	An election related to a payment at a specified time or pursuant to a fixed schedule be made not less than 12 months before the date the payment is scheduled to be paid (or in the case of installment payments, 12 months before the date the first amount was scheduled to be paid).

(c)           The addition of Disability as a potentially earlier alternative payment event to an amount previously deferred will not be treated as resulting in an acceleration of a payment, even if such addition results in the payment being paid at an earlier time than such payment would have been made absent the addition of the payment event. However, the addition of such a payment event as a potentially later alternative payment event generally is subject to the rules governing changes in the time and form of payment in this Section.

(d)           Definition of Payments.

	(1)	In General. The term payment refers to each separately identified amount to which a Participant is entitled to payment under the Plan on a determinable date. An amount is separately identified only if the amount may be objectively determined under a nondiscretionary formula.
	(2)	Installment Payments. The entitlement to a series of installment payments is treated as the entitlement to a single payment. A series of installment payments refers to an entitlement to the payment of a series of substantially equal periodic amounts to be paid over a predetermined period of years, except to the extent any increase (or decrease) in the amount reflects reasonable earnings (or losses) through the date the amount is paid.

(e)           Domestic Relations Orders. Elections by individuals other than a Participant, with respect to payments to a person other than the Participant, to the extent such elections are reflected in, or made in accordance with, the terms of a domestic relations order (as defined in section 414(p)(1)(B)) are not changes in the time or form of payment under this Section.

(f)            Changes to Beneficiaries. An election to change the identity of a Beneficiary does not constitute a change in the time and form of payment merely because the election changes the identity of the recipient of the payment, if the time and form of the payment is not otherwise changed.

(g)           USERRA rights. The requirements of this Section 4.03 are deemed met to the extent an election to change the time or form of a payment of deferred compensation is provided to satisfy the requirements of the Uniformed Service Employment and Reemployment Rights Act of 1994, as amended, 38 U.S.C. 4301-4334.

4.04          Cancellation of Participant Contributions .

(a)           Separation from Service. Except as expressly otherwise provided by the Plan, a Participant's election regarding Participant Contributions shall be cancelled upon his or her Separation from Service for any reason.

(b)           Disability. A Participant's election regarding Participant Contributions may be cancelled, where such cancellation occurs by the later of the end of the taxable year of the Participant or the 15th day of the third month following the date the Participant incurs a Disability.

4.05          Remittance of Deferrals and Employer Contributions . The Company shall remit the participant deferrals and Company contributions (if any) to the Plan as soon as administratively feasible after the close of the calendar quarter for which such contributions were made.

ARTICLE 5

ACCOUNTS/VESTING/BENEFITS

 

5.01          Maintenance by Company of Accounts .  The Company will establish and maintain on its books an Account for each Participant.  Each Participant’s Account will be credited with the amount of the Participant’s Deferral for such Plan Year and with the amount of any Company Contribution or other contributions made on behalf of such Participant at the time or times as are provided herein and adjusted to reflect any investment gains or losses as provided in the Plan and with withdrawals or distributions during the Plan Year.  The amount in a Participant’s Account shall be adjusted for gain or loss as determined by the Plan Administrator, but no less frequently than on an annual basis.

5.02          Vesting of Accounts .  Participants will at all times be 100% vested in all of their Deferrals under the Plan and all earnings allocable thereto.  Participants will be vested in all Employer contributions under Article 4 of the Plan at a rate of 20% for each year of Credited Service, measured by Plan Year.  For purposes of this Plan, Credited Service means the Participant must have at least one thousand (1,000) hours of service (as defined in accordance with D.O.L. Regulation Section 2530.200(b)) in the Plan Year.  A Participant will automatically become 100% vested in the event of the Participant’s death or if the Participant becomes Disabled.  A Participant shall receive credit for all Years of Credited Service with the Employer, including Years of Credited Service accrued prior to the Effective Date of the Plan and prior to the commencement of his or her participation in the Plan.

5.03          Forfeitures of Accounts .  In the event a Participant has a Separation of Service prior to becoming 100% vested, his or her Non-Elective Contribution Account shall be forfeited to the extent not vested.  All forfeitures shall revert to the Company.

5.04          Investment of Accounts .  It is the intention of the Company that the Plan be an unfunded top hat plan for highly compensated and managerial employees within the meaning of Title I of ERISA.  The Company shall be free to invest or not invest Accounts as the Company in its sole discretion shall determine.  Any investments which the Company determines to make with respect to the assets allocated to the Accounts shall remain, until distributed to Participants and their Beneficiaries in accordance with the terms of the Plan, assets of the Company and subject to the general creditors of the Company.  The Company may in its discretion establish a trust, known as a “rabbi trust”, for use in funding the benefits under the Plan with a Trustee to be selected by the Company and in accordance with a trust agreement which fully or substantially meets the requirements of Rev. Proc. 92-64, as it may be amended or supplemented in the future.

At the discretion of the Board, the Company or the Committee may purchase life insurance on the lives of one or more Participants to assist in the funding of the Plan.  By agreeing to participate in the Plan, each Participant consents to having his or her life insured for the benefit of the Company, and agrees to execute an