<PAGE>
As filed with the Securities and Exchange Commission on July 16, 1996
Registration No. 333
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 FORM S-3
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
SYNTHETECH, INC.
(Exact name of Registrant as specified in its charter)
Oregon 84-0845771
(State of (I.R.S. Employer
Incorporation) Identification
No.)
1290 Industrial Way
Albany, Oregon 97321
(541) 967-6575
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive
Offices)
M. Sreenivasan
President and Chief Executive Officer
SYNTHETECH, INC.
1290 Industrial Way
Albany, Oregon 97321
(541) 967-6575
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent for Service)
Copies to:
Cynthia Clarfield Hess, David R. Clarke,
Esq. Esq.
Sehar S. Ahmad, Esq. VENTURE COUNSEL,
PERKINS COIE P.C.
1211 S.W. Fifth Avenue, Suite 250
Suite 1500 1230 S.W. First
Portland, OR 97204 Avenue
(503) 727-2000 Portland, Oregon
97204
(503) 225-9000
Approximate date of commencement of proposed sale to the
public:
As soon as practicable after the effective date of this
Registration Statement.
If any securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following box.
If any of the securities being registered on this form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest
reinvestment plans, check the following box. X
CALCULATION OF REGISTRATION FEE
Title of Each Amount to Proposed Proposed
Amount
Class be Maximum Maximum of
of Securities to Registered Offering Aggregate Registration
be Registered Price Per Offering
Share(1) Price(1) Fee
Common Stock, 850,000 $7.50 $6,375,000 $2,198.28
$.001 par value
(1) Estimated solely for the purpose of calculating the
registration fee under Rule 457. The offering price has been
estimated and the registration fee has been computed pursuant
to Rule 457(c). The price per share is estimated to be $7.50
based on the average of the bid and asked price quoted for the
Common Stock in the over-the-counter market on July 11, 1996
as reported on the Nasdaq Small Cap Market.
The Registrant hereby amends this Registration Statement
on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further
amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance
with Section 8(a)of the Securities Act of 1933, as amended, or
untilthis Registration Statement shall become effective on such date
as the Commission, acting pursuant to said Section 8(a), may
determine.
<PAGE>
850,000 Shares
SYNTHETECH, INC.
Common Stock
This Prospectus covers up to 850,000 shares of common stock,
$.001 par value per share (the "Shares") of Synthetech, Inc.,
an Oregon corporation (the "Company"), being sold by certain
shareholders of the Company (the "Selling Shareholders"). See
"Selling Shareholders." The Company will not receive any part
of the proceeds from the sale of the Shares in this offering
(the "Offering").
The Common Stock is currently traded over-the-counter on the
Nasdaq Small Cap Market under the symbol "NZYM." Application
has been made to have the Common Stock approved for trading on
the Nasdaq National Market. On July 11, 1996, the average of
the bid and asked price for the Common Stock was $7.50 per
share.
See "Risk Factors" beginning on page 3 of this Prospectus for a
discussion of certain factors that should be considered by
prospective purchasers of the Shares.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Price to Underwriting Proceeds Proceeds to
Public(1) Discounts to Selling
and Company Shareholders(2)
Commissions(1)
Per Share $7.50 $-- $0 $7.50
Total $6,375,00 $-- $0 $6,375,000
</TABLE>
(1)The Selling Shareholders may sell the Shares to or through dealers
at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. The
above computations are based on the average of the bid and asked
price of the Common Stock as of July 11, 1996 and do not
necessarily reflect the prices of shares to the public on the
dates the transactions are actually effected.
(2)Expenses of this Offering, estimated at $45,000, are payable by
the Company.
The date of this Prospectus is ________, 1996
<PAGE>
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with the Securities and Exchange
Commission (the "Commission"), Washington, D.C., with respect to the
Shares offered hereby. The Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits
thereto. For further information with respect to the Company and the
Shares, reference is made to the Registration Statement and the
exhibits thereto. Statements made in this Prospectus as to the
contents of any contract or other document referred to are not
necessarily complete, and in each instance reference is made to the
copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all
respects by such reference.
The Registration Statement is available for review at the
Commission's offices in Washington, D.C. All or part of the
Registration Statement may be inspected and copied, upon payment of
the prescribed fees, at the Public Reference Section of the
Commission, 450 Fifth Street N.W., Judiciary Plaza, Washington, D.C.
20549-1004.
In addition, the Company is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements
and other information with the Commission. Such reports, proxy
statements and other information can be inspected and copied at, and
copies of such material obtained at prescribed rates from, the public
reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549-1004 and at the
Commission's regional offices located at 7 World Trade Center, Suite
1300, New York, New York 10048 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511.
A copy of the Company's 1996 Annual Report containing financial
statements audited by the Company's independent public accountants
was first mailed to the Shareholders on June 19, 1996. The Company
intends to continue to furnish Annual Reports to its Shareholders.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission pursuant to the
Exchange Act are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-KSB for the year
ended March 31, 1996, including financial statements
incorporated by reference.
2. The description of the Company's Common Stock contained in
the Registration Statement on Form 8-A filed with the
Commission on November 8, 1984 under Section 12(g) of the
Exchange Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of this Offering shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof
from the date of filing of such documents (such documents, and the
documents enumerated above, being hereinafter referred to as
"Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed
to be modified or superseded for purposes of this Prospectus and the
Registration Statement of which it is a part to the extent that a
statement contained herein or in any other subsequently filed
Incorporated Document or in an accompanying prospectus supplement
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be
<PAGE>
deemed, except as so modified or superseded, to constitute a part of
this Prospectus or such Registration Statement.
The Company will provide without charge to each person to whom a copy
of this Prospectus has been delivered, on the written or oral request
of any such person, a copy of any or all of the Incorporated
Documents, other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference therein.
Requests should be directed to Charles B. Williams, Vice President of
Administration and Finance, Chief Financial Officer, Secretary and
Treasurer, at the Company's principal executive offices, Synthetech,
Inc., 1290 Industrial Way, Albany, Oregon 97321, telephone (541) 967
6575. The information relating to the Company contained in this
Prospectus does not purport to be comprehensive and should be read
together with the information contained in the Incorporated
Documents.
RISK FACTORS
Prospective investors should consider the following factors, among
others, in making a decision concerning purchase of the shares of
Common Stock offered hereby:
Uncertain Market for Products and Potential Quarterly Fluctuations.
The market for peptide building blocks is driven by the market for
the peptide-based drugs into which they are incorporated. The drug
development process is dictated by the marketplace, drug companies
and the regulatory environment. The Company has no control over the
pace of peptide-based drug development, which drugs get selected for
clinical trials, which drugs are approved by the Food and Drug
Administration ("FDA"), and, even if approved, the ultimate potential
of such drugs. Currently, most of the Company's products are used in
clinical-stage drugs which are subject to a significant risk of
suspension or early cancellation and only a very small percentage of
which are ultimately approved for market use. Due to the wide range
of drugs under development, sizable fluctuations in orders, and the
unpredictability of order or reorder cycles for products, the Company
does not have a stable baseload of demand for its products and cannot
estimate the potential market for its products. The Company's
customers vary substantially from year to year and the Company
currently cannot rely on any one customer as a constant source of
revenue. For the foregoing reasons, the Company has experienced in
the past, and is likely to experience in the future, significant
fluctuations in its quarterly results. Due to the small number of
approved peptide-based drugs, there can be no assurance that a market
for peptide building blocks will continue to exist.
Industry Cost Factors. The market for peptide building blocks
is dependent on the market for pharmaceuticals products. The levels
of revenues and profitability of pharmaceutical companies may be
affected by the continuing efforts of governmental and third party
payors to contain or reduce the cost of health care through various
means. For example, in certain foreign markets, pricing or
profitability of prescription pharmaceuticals is subject to
government control. In the United States, there have been, and the
Company expects that there will continue to be, a number of federal
and state proposals to implement similar government controls. In
addition, in both the United States and elsewhere, sales of
prescription pharmaceuticals are dependent in part on the
availability of reimbursement to the consumer from third party payors
such as government and private insurance plans. Third party payors
are increasingly challenging the prices charged for medical products
and services. There can be no assurance that peptide-based drugs
will be considered cost effective, and that reimbursement will be
available or sufficient to allow peptide-based drugs to be sold on a
profitable basis. In addition, as cost pressures in the
pharmaceutical industry have tightened, the cancellation rate for
drug development programs has increased. Because a majority of the
Company's revenues historically have come from peptide building
blocks used in drug development programs, such cancellations may have
a significant impact on the Company's business.
<PAGE>
Regulatory Matters. The Company is subject to a variety of
federal, state and local laws, rules and regulations related to the
discharge or disposal of toxic, volatile or other hazardous
chemicals. Although the Company believes that it is in compliance
with these laws, rules and regulations in all material respects, and
to date has not been required to take any action to correct any
noncompliance, the failure to comply with present or future
regulations could result in fines being imposed on the Company,
suspension of production or cessation of operations. Third parties
may also have the right to sue to enforce compliance. Moreover, it
is possible that increasingly strict requirements imposed by
environmental laws and enforcement policies thereunder could require
the Company to make significant capital expenditures. The operation
of a chemical manufacturing plant entails the inherent risk of
environmental damage or personal injury due to the handling of
potentially harmful substances, and there can be no assurance that
material costs and liabilities will not be incurred in the future
because of an accident or other event resulting in personal injury or
unauthorized release of such substances to the environment. In
addition, the Company generates hazardous materials and other wastes
which are disposed at various offsite facilities. The Company may be
liable, irrespective of fault, for material cleanup costs or other
liabilities incurred at these disposal facilities in the event of a
release of hazardous substances by such facilities into the
environment. The Company has obtained environmental risk insurance.
Potential Regulation. The peptide building blocks produced by
the Company are intermediate ingredients which are then processed by
the companies to which they are sold, and are therefore currently not
subject to the requirements of the FDA. The Company's customers do,
however, typically impose inspection and quality assurance programs
on the Company. These programs involve materials handling, record
keeping and other requirements. As many of the Company's customers
are requiring increased processing by the Company of its products,
the Company expects these compliance programs to become more
extensive. The Company may not be able to comply with the applicable
requirements or such requirements may require the expenditure of
significant capital.
Product Liability. Use of the Company's products in
pharmaceuticals and the subsequent testing, marketing and sale of
such pharmaceuticals involves an inherent risk of product liability.
In addition, research and development activities in amino acid
technology, and the production of fine chemicals (including organic
chemicals) may expose workers engaged in performing duties related to
such activities to health hazards. There can be no assurance that
claims for product liability will not be asserted against the Company
or that the Company would be able to successfully defend any claim
that may be asserted. A product liability claim could have a
material adverse effect on the business and/or financial condition of
the Company.
Competition. The Company does not have a significant amount of
direct competition because peptide-based pharmaceuticals,
particularly those which utilize synthetic amino acids, are
relatively new and the market for peptide building blocks is still
very small. As the market continues to grow with multi-ton order
sizes becoming more prevalent, the Company has begun to see more
competition. Current competition in the multi-kilo or smaller
quantities of natural amino acid based peptide building blocks comes
primarily from several European fine chemical companies. Multi-ton
order sizes of these natural peptide building blocks have begun to
attract a wider group of domestic and international chemical
companies. In the area of synthetic amino acid based peptide
building blocks, the Company has competition on a selective product
basis from fine chemical producers in Europe and Japan.
Competition also increases for supplying peptide building blocks
for drug development programs that reach late clinical trials and
move into an approved status as a result of increased quantities
typically required at these stages and pharmaceutical company
requirements to have second sources of material available. The
Company's competitors have technical, financial, selling and other
resources available to them that is significantly greater than those
available to the Company.
<PAGE>
Risks of Technological Change. The market for the Company's
products is characterized by rapid changes in both product and
process technologies. The Company's future results of operations
will depend upon its ability to improve and market its existing
products and to successfully develop, manufacture and market new
products. There can be no assurance that the Company will be able to
continue to improve and market its existing products or develop and
market new products, or that technological developments will not
cause the Company's products or technology to become obsolete or
noncompetitive.
Manufacturing Capacity. The Company currently manufactures peptide
building blocks. As a manufacturer, the Company will continually
face risks regarding the availability and costs of raw materials and
labor, the potential need for additional capital equipment, increased
maintenance costs, plant and equipment obsolescence and quality
control. Because the Company is facing manufacturing capacity
constraints in its existing facility, the Company is in the process
of constructing an additional plant at its Albany, Oregon location to
increase production capacity. There can be no assurance that
completion of the new facility will not be subject to delays and that
the existing facility will have sufficient capacity to meet the
demand for the Company's products, particularly in the event that
several of the peptide-based drugs for which the Company supplies
peptide building blocks simultaneously become commercially
successful. A disruption in the Company's production or distribution
could have a material adverse effect on the Company's financial
results.
Uncertain Ability to Manage Growth. The Company anticipates that in
order to remain successful in its industry, the Company will be
required to increase its production and employee base. The Company
anticipates these increases may place significant demands on the
Company's management, working capital and financial and management
control systems. The Company may not be able to meet the demands of
future growth. Any inadequacies in these areas could have a material
adverse effect on the Company's business, financial condition and
results of operations.
Dependence on Key Personnel. The Company is highly dependent on the
principal members of its senior management and key scientific and
technical personnel. The Company's success is also dependent upon
its ability to attract and retain additional qualified scientific,
technical and managerial personnel. Significant competition exists
for such personnel, and there can be no assurance that the Company
will retain its key employees or that it will be able to attract and
retain such other highly-qualified personnel as may be required in
the future. The Company does not have employment agreements with any
of its personnel or key man life insurance on the lives of any of its
personnel. The inability of the Company to successfully hire, train,
and retain qualified personnel could have an adverse effect on the
Company.
Risks of International Business. Sales to customers outside the
United States accounted for approximately 21% of the Company's net
sales during the year ended March 31, 1996. The Company expects that
international sales will continue to account for a significant
percentage of net sales. The Company's business is and will be
subject to the risks generally associated with doing business
internationally, including changes in demand resulting from
fluctuations in exchange rates, foreign governmental regulation and
changes in economic conditions. These factors, among others, could
influence the Company's ability to sell its products in international
markets. In addition, the Company's business is subject to the risks
associated with legislation and regulation relating to imports,
including quotas, duties or taxes and other charges, restrictions and
retaliatory actions on imports to other countries in which the
Company's products may be sold or manufactured.
Absence of Dividends. The Company has not paid any dividends on its
Common Stock since its inception and does not anticipate paying any
dividends in the foreseeable future. Earnings of the Company, if
any, are expected to be used to finance the development and expansion
of the Company's business. Any future decision with respect to
dividends will depend on future earnings, future capital needs and
the Company's operating and financial condition, among other factors.
See "Description of Securities--Common Stock."
<PAGE>
Volatility of Stock Price. There has been significant volatility in
the market price of the Company's common stock. Between July 1, 1995
and June 30, 1996, the bid price of the Company's common stock ranged
from $3.22 per share to $10.75 per share. The Common Stock is
currently traded on the Nasdaq Small Cap Market. Application has
been made to have the Common Stock approved for trading on the Nasdaq
National Market, which market has experienced, and is likely to
experience in the future, significant price and volume fluctuations
that could adversely affect the market price of the Common Stock
without regard to the Company's performance. The Company believes
factors such as fluctuations in financial results and developments in
its industry could contribute to the volatility of the price of
Common Stock. These factors, as well as general economic conditions
such as recessions or high interest rates, may adversely affect the
market price of the Common Stock.
Exercise of Warrants and Options; Potential Adverse Impact of Shares
Eligible for Future Sales. As of June 30, 1996, 1,044,260 shares of
Common Stock were subject to outstanding stock options under the
Company's Stock Option Plan at a weighted average exercise price of
$3.57 per share and 25,000 shares were issuable upon exercise of
outstanding warrants at a weighted average exercise price of $1.81
per share. While outstanding warrants and options are exercisable,
the holders thereof have the opportunity to profit from a rise in the
market price of the common stock. The Company may find it more
difficult to raise additional equity capital while the warrants and
options are outstanding. At any time when the holders might be
expected to exercise their warrants and options, the Company would
probably be able to obtain additional equity capital on terms more
favorable than those provided in the warrants and options being
exercised. Holders of warrants and options do not have any of the
rights or privileges of stockholders of the Company prior to exercise
of the warrants and options.
Sales of substantial amounts of the Company's common stock in the
public market by existing shareholders could adversely affect the
price of the common stock. In addition to the 850,000 shares of
common stock offered hereby, 8,417,791 shares are freely tradable
under the federal securities laws to the extent they are not held by
affiliates of the Company. At June 30, 1996, 4,222,865 shares were
eligible for resale under Rule 144. In general, under Rule 144 as
currently in effect, any person (or persons whose shares are
aggregated) who has beneficially owned restricted securities for at
least two years is entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of (i) 1% of the
then outstanding shares of the issuer's common stock and (ii) the
average weekly trading volume during the four calendar weeks
preceding such sale, provided that certain public information about
the issuer as required by Rule 144 is then available and the seller
complies with certain other requirements. A person who is not an
affiliate, has not been an affiliate within three months prior to
sale, and has beneficially owned the restricted securities for at
least three years is entitled to sell such shares under Rule 144(k)
without regard to any of the limitations described above.
<PAGE>
SELLING SHAREHOLDERS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Percentage of Outstanding
Selling Shares Shares Before After
Shareholders Beneficially Registered Sales Sales
Owned For
Sale
JB Partners 2,000,000 750,000 14.8% 9.3%
Eric D. 50,000 50,000 * 0%
Emanuel
Sheldon 50,000 50,000 * 0%
Kraft
</TABLE>
______________
*Less than 1%.
Pursuant to a Shareholders Agreement among JB Partners, a New York
limited partnership ("JB"), and the then current directors and
officers of the Company who held shares of the Company's Common
Stock, such shareholders have agreed to vote their shares in favor of
the election to the Board of Directors of a person nominated by JB.
Such agreement shall terminate on the earlier to occur of the
following: (i) JB's ownership of common stock is reduced to less
than 500,000 shares, (ii) the effectiveness of the registration
statement pursuant to JB's demand registration rights set forth in
its Stock and Warrant Purchase Agreement with the Company, as
amended, (iii) any merger, consolidation or reorganization of the
Company in which more than 50% of the voting power of the Company is
transferred or (iv) March 31, 1998.
DESCRIPTION OF SECURITIES
Common Stock
The authorized capital stock of the Company consists of
100,000,000 shares of common stock, $.001 par value per share. As of
May 30, 1996, there were 13,510,736 shares of common stock
outstanding. All of the outstanding shares of Common Stock are fully
paid and nonassessable.
Holders of Common Stock are entitled to receive dividends as may from
time to time be declared by the Board of Directors out of funds
legally available therefor and to one vote per share on all matters
on which the holders of Common Stock are entitled to vote. The
current policy of the Company is to retain earnings to provide funds
for the operation and expansion of its business. The Company has
never paid any cash dividends, and the Board of Directors does not
anticipate paying cash dividends in the foreseeable future. See
"Risk Factors--Absence of Dividends." Holders of common stock do not
have any cumulative voting rights or conversion, pre-emptive,
redemption or sinking fund rights. In the event of a liquidation,
dissolution or winding up of the Company, holders of Common Stock are
entitled to share equally and ratably in the Company's assets, if
any, remaining after the payment of all liabilities of the Company.
The holders of Common Stock are entitled to one vote for each share
held on all matters submitted to the shareholders.
<PAGE>
Indemnification of Directors
Article 7 of the Company's Articles provides that the Company is
required to indemnify current or former directors of the Company to
the fullest extent permitted by the Oregon Business Corporation Act
(the "Act").
The Company has entered into Indemnification Agreements with each
current and former officer and director documenting and detailing
such indemnification rights. The Company expects to enter into
similar agreements with future officers and directors. The Company
has obtained insurance for the protection of its directors and
officers against any liability asserted against them in their
official capacities, including coverage under the Securities Act.
The rights of indemnification under the Articles and the Act are not
exclusive of any other rights of indemnification to which the persons
indemnified may be entitled under any bylaw, agreement, vote of
shareholders or directors or otherwise. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to
directors, officers or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission (the "Commission")
such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
Oregon Control Share and Business Combination Statutes
The Company is subject to certain provisions of the Act that in
certain circumstances restrict the ability of significant
shareholders from exercising voting rights (the "Control Share Act").
The Control Share Act generally provides that a person (the
"Acquiring Person") who acquires voting stock of an Oregon
corporation in a transaction that results in the Acquiring Person's
holding more than 20%, 33 1/3% or 50% of the total voting power of
the corporation (a "Control Share Acquisition") cannot vote the
shares the Acquiring Person acquires in the Control Share Acquisition
("control shares") unless voting rights are accorded to the control
shares by (i) a majority of each voting group entitled to vote and
(ii) the holders of a majority of the outstanding voting shares,
excluding the control shares held by the Acquiring Person and shares
held by the corporation's officers and inside directors. The term
"Acquiring Person" is broadly defined to include persons acting as a
group.
The Acquiring Person may, but is not required to, submit to the
corporation a statement setting forth certain information about the
Acquiring Person and its plans with respect to the corporation. The
statement may also request that the corporation call a special
meeting of shareholders to determine whether voting rights will be
accorded to the control shares. If the Acquiring Person does not
request a special meeting of shareholders, the issue of the control
shares' voting rights will be considered at the next annual or
special meeting of shareholders. If the Acquiring Person's control
shares are accorded voting rights and represent a majority of all
voting power, shareholders who do not vote in favor of voting rights
for the control shares will have the right to receive the appraised
"fair value" of their shares, which may not be less than the highest
price paid per share by the Acquiring Person for the control shares.
The Company is subject to certain provisions of the Act that govern
business combinations between corporations and interested
shareholders, which generally provides that if a person or entity
acquires 15% or more of the voting stock of an Oregon corporation (an
"Interested Shareholder"), the corporation and the Interested
Shareholder, or any affiliated entity of the Interested Shareholder,
may not engage in certain business combination transactions for three
years following the date the person became an Interested Shareholder.
Business combination transactions for this purpose include (a) a
merger or plan of share exchange, (b) any sale, lease, mortgage or
other disposition of 10% or more of the assets of the corporation and
(c) certain transactions that result in the issuance of capital stock
of the corporation to the Interested Shareholder. These restrictions
do not apply if (i) the Interested Shareholder, as a result of the
transaction in which such person became an Interested Shareholder,
owns at least 85% of the outstanding voting stock of the corporation
(disregarding shares owned by directors who are also
<PAGE>
officers and certain employee benefit plans), (ii) the board of
directors approves the share acquisition or business combination
before the Interested Shareholder acquired 15% or more of the
corporation's outstanding voting stock or (iii) the board of
directors and the holders of at least two-thirds of the outstanding
voting stock of the corporation (disregarding shares owned by the
Interested Shareholder) approve the transaction after the Interested
Shareholder acquires 15% or more of the corporation's voting stock.
Transfer Agent and Registrar
The transfer agent and registrar for the Common Stock is American
Securities Transfer and Trust, Inc., Denver, Colorado.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Shareholders,
or by pledgees, donees, transferees or other successors in interest.
Such sales may be made in the over-the-counter market or otherwise at
prices and at terms then prevailing or at prices related to the then
current market price, or in negotiated transactions. The Shares may
be sold by one or more of the following: (a) a block trade in which
the broker or dealer so engaged will attempt to sell the Shares as
agent but may position and resell a portion of the block as principal
to facilitate the transaction; (b) a purchase by a broker or dealer
as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; and (c) ordinary brokerage transactions
and transactions in which the broker solicits purchasers. In
effecting sales, brokers or dealers engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate.
Brokers or dealers will receive commissions or discounts from the
Selling Shareholders in amounts to be negotiated immediately prior to
the sale. Such brokers or dealers and any other participating
brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In
addition, any Shares covered by this Prospectus that qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant
to this Prospectus.
Under agreements that may be entered into by the Selling
Shareholders, dealers who participate in the distribution of the
Shares may be entitled to indemnification by the Selling Shareholders
against certain liabilities, including liabilities under the
Securities Act.
Certain of the dealers may be customers of, including borrowers from,
engage in transactions with, and perform services for, the Company, a
Selling Shareholder or one or more of their affiliates in the
ordinary course of business.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon
by Perkins Coie, Portland, Oregon.
EXPERTS
The financial statements incorporated by reference in this Prospectus
and included in the Annual Report on Form 10-KSB for the year ended
March 31, 1996 have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect
thereto, and so incorporated herein in reliance upon the authority of
said firm as experts in auditing and accounting in giving said
report.
<PAGE>
- ---------------------------- -----------------------------
No dealer, salesperson or
any other person has been
authorized to give any 850,000 Shares
information or to make any
representations other than
those contained in this
Prospectus in connection SYNTHETECH, INC.
with the offer contained
herein, and, if given or Common Stock
made, such information or
representations must not be
relied upon as having been
authorized by the Company or
by any of the Selling
Shareholders. This
Prospectus does not
constitute an offer of any
securities other than those
to which it relates or an
offer to sell, or a
solicitation of an offer to
buy, those to which it
relates in any state to any
person to whom it is not
lawful to make such offer in
such state. The delivery of
this Prospectus at any time
does not imply that the
information herein is
correct as of any time
subsequent to its date.
TABLE OF CONTENTS
Page
Available Information 2
Incorporation of Certain
Documents by Reference 2 __________, 1996
Risk Factors 3
Selling Shareholders 7
Description of Securities 7
Plan of Distribution 9
Legal Matters 9
Experts 9
Additional Information II-1
- ----------------------------- ------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
<S> <C>
Item 14. Other Expenses of Issuance and Distribution
Amount
SEC Registration Fee $ 2,198.28
Accounting Fees and Expenses* 1,000.00
Legal Fees and Expenses* 30,000.00
Blue Sky Fees and Expenses* 7,000.00
Printing, including Registration
Statement, Prospectus, 1,500.00
etc.*
Miscellaneous Expenses* 3,301.72
----------
TOTAL EXPENSES* $45,000.00
==========
</TABLE>
_____________
*Estimated
Item 15. Indemnification of Directors and Officers
As an Oregon corporation the Registrant is subject to the Oregon
Business Corporation Act ("OBCA") and the exculpation from liability
and indemnification provisions contained therein. Pursuant to
Section 60.047(2)(d) of the OBCA, Article 7 of the Registrant's
Articles of Incorporation (the "Articles") eliminates the liability
of the Registrant's directors to the Registrant or its shareholders
except for any liability related to (i) breach of the duty of
loyalty; (ii) acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law; (iii) any
unlawful distribution under ORS 60.367; or (iv) any transaction from
which the director derived an improper personal benefit.
Section 60.391 of the OBCA allows corporations to indemnify their
directors and officers against liability where the director or
officer has acted in good faith and with a reasonable belief that
actions taken were in the best interests of the corporation or at
least not opposed to the corporation's best interests and, if in a
criminal proceeding, the individual had no reasonable cause to
believe the conduct in question was unlawful. Under the OBCA,
corporations may not indemnify against liability in connection with a
claim by or in the right of the corporation or for any improper
personal benefit in which the director or officer was adjudged liable
to the corporation. Section 60.394 of the OBCA mandates
indemnification for all reasonable expenses incurred in the
successful defense of any claim made or threatened whether or not
such claim was by or in the right of the corporation. Finally,
pursuant to the Section 60.401 of the OBCA, a court may order
indemnification in view of all the relevant circumstances, whether or
not the director or officer met the good-faith and reasonable belief
standards of conduct set out in Section 60.391 of the OBCA.
Section 60.414 of the OBCA also provides that the statutory
indemnification provisions are not deemed exclusive of any other
rights to which directors or officers may be entitled under a
corporation's articles of incorporation or bylaws, any agreement,
general or specific action of the board of directors, vote of
shareholders or otherwise.
<PAGE>
The Articles provide that the Registrant is required to indemnify its
current and former directors to the fullest extent permitted by law.
Indemnification Agreements executed by all directors and officers of
the Registrant obligate the Registrant to indemnify such individuals
for liabilities incurred by such individuals while serving as
directors or officers of the Registrant.
Item 16. Exhibits.
Exhibit Description
Number
5.1 Opinion of Perkins Coie regarding legality of the Common
Stock being registered*
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie (included in the opinion filed as
Exhibit 5.1)*
24.1 Power of Attorney (see signature page)
_________________
* To be filed by amendment.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement to include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Albany, State
of Oregon, on July 15, 1996.
SYNTHETECH, INC.
By:/s/ M. Sreenivasan
M. Sreenivasan
President and Chief Executive Officer
Each person whose individual signature appears below hereby
authorizes and appoints M. Sreenivasan and Charles B. Williams, and
each of them, with full power of substitution and full power to act
without the other as his or her true attorney-in-fact and agent to
act in his or her name, place and stead and to execute in the name
and on behalf of each person, individually and in each capacity
stated below, and to file any and all amendments to this Registration
Statement, including any and all post-effective amendments.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on July 15, 1996 by the
following persons in the capacities indicated:
Signature Title
/s/ M. Sreenivasan President, Chief Executive
M. Sreenivasan Officer and Director
(Principal Executive Officer)
/s/ Charles B. Williams Vice President of Finance
Charles B. Williams and Administration, Chief
Financial Officer, Secretary
and Treasurer (Principal
Financial Officer and
Principal Accounting
Officer)
/s/ Paul C. Ahrens Chairman of the Board
Paul C. Ahrens
/s/ Howard L. Farkas Director
Howard L. Farkas
/s/ Page E. Golsan, III Director
Page E. Golsan, III
<PAGE>
INDEX TO EXHIBIT
TO FORM S-3
FOR SYNTHETECH, INC.
Exhibit Description
Number
- ------ -----------
5.1 Opinion of Perkins Coie regarding legality of the Common
Stock being registered*
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Perkins Coie (included in the opinion filed
as Exhibit 5.1)
24.1 Power of Attorney (see signature page)
____________________
* To be filed by amendment.
Exhibit 23.1
to Form S-3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-3 registration statement,
registering up to 850,000 shares of common stock, of our report dated
May 16, 1996 included in Synthetech, Inc.'s Form 10-KSB for the year
ended March 31, 1996 and to all references to our firm included in
this registration statement.
ARTHUR ANDERSEN LLP
Portland, Oregon
July 15, 1996
